10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the fiscal year ended April 30, 2022

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 Number 0-1678 

BUTLER NATIONAL CORPORATION

(Exact name of Registrant as specified in its charter)

Kansas	41-0834293
(State of Incorporation)	(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

inSecurities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.01 Par Value
(Title of Class)

Indicate by check if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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, 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, 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 ☐ Accelerated filer ☐ Non-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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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

The aggregate market value of the voting stock and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the Registrant's most recently completed second fiscal quarter was approximately $39,797,724 at October 29, 2021, when the closing price of such stock was $0.68.

The number of shares outstanding of the registrant's common stock, $0.01 par value, as of July 15, 2022, was 76,458,146 shares.

DOCUMENTS INCORPORATED BY REFERENCE: Portions of the definitive proxy statement to be filed within 120 days of April 30, 2022 , pursuant to Regulation 14A under the Securities Exchange Act of 1934 for the Annual Meeting of Shareholders to be held on September 27, 2022, have been incorporated by reference into Part III of this Form 10-K.

1

BUTLER NATIONAL CORPORATION

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED April 30, 2022

TABLE OF CONTENTS

PART I
ITEM 1.	Business	4
ITEM 1A.	Risk Factors	9
ITEM 1B.	Unresolved Staff Comments	16
ITEM 2.	Properties	16
ITEM 3.	Legal Proceedings	16
ITEM 4.	Mine Safety Disclosures	16
PART II
ITEM 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	17
ITEM 6.	Reserved	18
ITEM 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
ITEM 7A.	Quantitative and Qualitative Disclosure About Market Risk	25
ITEM 8.	Financial Statements and Supplementary Data	25
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	25
ITEM 9A.	Controls and Procedures	25
ITEM 9B.	Other Information	25
PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	26
ITEM 11.	Executive Compensation	26
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	26
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	26
ITEM 14.	Principal Accounting Fees and Services	26
PART IV
ITEM 15.	Exhibits, Financial Statement Schedules	27
	Signatures	29
	Financial Statements	30

2

Forward-Looking Statements

Statements made in this report, other reports and proxy statements filed with the Securities and Exchange Commission, communications to stockholders, press releases, and oral statements made by representatives of the Company that are not historical in nature, or that state the Company or management intentions, hopes, beliefs, expectations or predictions of the future, may constitute "forward-looking statements" within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements can often be identified by the use of forward-looking terminology, such as "could," "should," "will," "intended," "continue," "believe," "may," "expect," "hope," "anticipate," "goal," "forecast," "plan," "guidance" or "estimate" or the negative of these words, variations thereof or similar expressions. Forward-looking statements are not guarantees of future performance or results. They involve risks, uncertainties, and assumptions. It is important to note that any such performance and actual results, financial condition or business, could differ materially from those expressed in such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Item 1A. Risk Factors and elsewhere herein or in other reports filed with the SEC. Other unforeseen factors not identified herein could also have such an effect. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial condition or business over time.

The forward-looking statements in this report are only predictions and actual events or results may differ materially. In evaluating such statements, a number of risks, uncertainties and other factors could cause actual results, performance, financial condition, cash flows, prospects and opportunities to differ materially from those expressed in, or implied by, the forward-looking statements. These risks, uncertainties and other factors include those set forth in Item 1A (Risk Factors) of this Annual Report on Form 10-K, including the following factors:

● the geographic location of our casino;

● customer concentration risk;

● executive officers are family members;

● industrial business cycles;

● fixed-price contracts;

● development, production, testing and marketing of new products;

● loss of key personnel;

● risks associated with international sales;

● future acquisitions and investments;

● change of control restrictions;

● launching new online gaming or sports wagering channels;

● ability to generate returns on sports wagering operations;

● fraud theft, and cheating;

● cyber-security threats;

● extensive regulation across our industries;

● evolving government regulations and law;

● changes in regulations of financial reporting;

● the stability of economic markets;

● potential impairment losses;

● marketability restrictions of our common stock;

● the possibility of a reverse-stock split;

● stock dilution caused by the annual employer match to our 401(k) plan;

● market competition;

● acts of terrorism and war;

● inclement weather and natural disasters;

● pandemics or other national health crisis (including COVID-19);

● fluctuating fuel and energy costs;

● rising inflation;

● extensive taxation;

Except as expressly required by the federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this report. Results of operations in any past period should not be considered indicative of the results to be expected for future periods. Fluctuations in operating results may also result in fluctuations in the price of the Company's common stock.

Investors should also be aware that while the Company, from time to time, communicates with securities analysts; Company policy is to not disclose any material non-public information or other confidential commercial information. Accordingly, shareholders should not assume that the Company agrees with any statement or report issued by any analyst irrespective of the content of the statement or report. Furthermore, the Company has a policy against issuing or confirming financial forecasts or projections issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not the responsibility of Butler National Corporation.

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PART I

Item 1. BUSINESS

General

Butler National Corporation (“Butler National” the “Company”, “we”, “us”, or “our”) was incorporated in 1960. Our companies design, engineer, manufacture, sell, integrate, install, repair, modify, overhaul, service and distribute a broad portfolio of aerostructures, aircraft components, avionics, accessories, subassemblies and systems (“Aerospace Products”). We serve a broad, worldwide spectrum of the aviation industry, including owners and operators, of single-engine, commercial, regional, business and military aircraft.

In addition, our companies provide management services in the gaming industry, which includes owning the land and building for the Boot Hill Casino and Resort in Dodge City, Kansas (“Professional Services”).

Products and Services

The Company has two operating segments for financial reporting purposes: (a) Aerospace Products, whose companies’ revenues are derived from system design, engineering, manufacturing, sale, distribution, integration, installation, repairing, modifying, overhauling and servicing of aerostructures, avionics, aircraft components, accessories, subassemblies and systems; and (b) Professional Services, whose companies provide professional management services in the gaming industry, and professional architectural and engineering services.

Aerospace Products. The Aerospace Products segment includes the manufacture, sale and service of electronic equipment and systems and technologies to enhance and support products related to aircraft. Additionally, we also operate several Federal Aviation Administration (the “FAA”) Repair Stations. Companies in Aerospace Products concentrate on Learjets, Beechcraft King Air, Cessna turbine engine, Cessna multi-engine piston and Dassault Falcon 20 aircraft. Specifically, the design, distribution and support for products for older aircraft, or “Classic” aircraft are areas of focus for companies in Aerospace Products.

Products. The products that the companies within this group design, engineer, manufacture, integrate, install, repair and service include:

●	Aerial surveillance products	●	GARMIN GTN Global Position System Navigator with Communication Transceiver
●	Aerodynamic enhancement products	●	J.E.T. autopilot products
●	Airspeed and altimeter systems	●	Electrical systems and switching equipment
●	Avcon Fins	●	Noise suppression systems
●	ADS-B (transponder) systems	●	Rate gyroscopes
●	Conversion of passenger configurations to cargo	●	Replacement vertical accelerometers
●	Cargo/sensor carrying pods and radomes	●	Provisions for external stores
●	Electronic navigation instruments, radios and transponders	●	Attitude and heading reference systems

4

Modifications. The companies in Aerospace Products have authority, pursuant to Federal Aviation Administration Supplemental Type Certificates (“STCs”) and Parts Manufacturer Approval (“PMA”), to build required parts and subassemblies and to make applicable installations. Companies in Aerospace Products perform modifications in the aviation industry including:

●	Aerial photograph capabilities	●	Extended tip fuel tanks
●	Aerodynamic improvements	●	Radar systems
●	Avionics systems	●	ISR – Intelligence Surveillance Reconaissance
●	Cargo doors	●	Special mission modifications
●	Conversion from passenger to freighter configuration	●	Stability enhancements
●	Extended doors	●	Traffic collision avoidance systems

Special Mission Electronics. We supply defense-related, commercial off-the-shelf products to various commercial entities and government agencies and subcontractors in order to update or extend the useful life of aircraft with older components and technology. These products include:

●	Cabling	●	HangFire Override Modules
●	Electronic control systems	●	Test equipment
●	Gun Control Units for Apache and Blackhawk helicopters	●	Gun Control Units for land and sea based military vehicles

Professional Services. The Professional Services segment includes the management of a gaming facility and related dining and entertainment facilities in Dodge City, Kansas. Boot Hill Casino and Resort features approximately 450 slot machines and 14 table games. Companies in Professional Services also provide licensed architectural services, including commercial and industrial building design, and engineering services.

Boot Hill. Butler National Service Corporation (“BNSC”), and BHCMC, LLC (“BHCMC”), a company in Professional Services, manages The Boot Hill Casino and Resort in Dodge City, Kansas (“Boot Hill”) pursuant to the Lottery Gaming Facility Management Contract, by and among BNSC, BHCMC and the Kansas Lottery, as subsequently amended (“Boot Hill Agreement”). As required by Kansas law, all games, gaming equipment and gaming operations, including sports wagering, at Boot Hill are owned and operated by the Kansas Lottery. In July 2022, in anticipation of the legalization of sports wagering in the state of Kansas, the Company has entered into provider contracts for sports wagering platforms with DraftKings and Bally Corporation subject to regulatory approval.

Architectural and Engineering Services. Companies in Professional Services provide licensed architectural, including commercial and industrial building design, and engineering services.

Proprietary Rights

We do not currently hold any patents, franchises or concessions. In our overhaul and repair business, original equipment manufacturers (“OEMs”) of equipment that we maintain for our customers often include language in repair manuals that relate to their equipment, asserting broad claims of proprietary rights to the contents of the manuals used in our operations. There can be no assurance that OEMs will not try to enforce such claims, including the possible use of legal proceedings. In the event of such legal proceedings, there can be no assurance that such actions against the Company will be unsuccessful. However, we believe that our use of OEM manufacture and repair manuals is lawful.

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Seasonality

Our Aerospace Products businesses are generally not seasonal. We believe that our Professional Services businesses, however, are subject to seasonality based on local weather conditions, agricultural and petroleum prices, employment levels and the travel habits of visitors in the market service area.

Raw Materials and Replacement Parts

We purchase raw materials, primarily consisting of sheet and plate aluminum, from various vendors. We also purchase replacement parts, which are utilized in our various repair and overhaul operations. We believe that the availability of raw materials to us is adequate to support our Aerospace Products operations.

Backlog

Our backlog as of April 30, 2022 and 2021 was as follows:

Industry Segment
(in thousands)	2022		2021
Aerospace Products	$	21,758	$	19,409
Professional Services		309		427
Total backlog	$	22,067	$	19,836

Our backlog as of July 1, 2022 totaled $24,165; consisting of $23,883 and $282, respectively, for Aerospace Products and Professional Services. The backlog includes firm pending and contract orders, which may not be completed within the next fiscal year. A portion of this backlog may be delivered after fiscal year 2023. This is standard for the industry in which modifications services and related contracts may take several months or years to complete. Such actions force backlog as additional customers request modifications, but must wait for other projects to be completed. There can be no assurance that all orders will be completed or that some may ever commence.

Dependence on Significant Customers

During the fiscal year ending April 30, 2022 we derived 34.1% of our revenue from five customers, and we had two "major customers" (10 percent or more of consolidated revenue) that provided 25.0% of total revenue. At April 30, 2022, we had one customer that accounted for 44.8% of our total accounts receivable.

Competition

We compete in the aerospace and casino gaming industries. In the aerospace industry, we compete against peer companies of which some are divisions or subsidiaries of other large companies, in the manufacture of aircraft structures, systems components, subassemblies, detail parts and aircraft modifications. Competition for the repair and overhaul of aviation components comes from three primary sources, some of whom possess greater financial and other resources than we have: OEMs, governmental support depots, and other independent repair and overhaul companies. OEMs also maintain service centers which provide repair and overhaul services for the components they manufacture. Many governments maintain aircraft support depots in their military organizations that maintain and repair the aircraft they operate. Other independent service organizations also compete for the repair and overhaul business. Participants in the aerospace industry compete primarily based on size of business and technical capabilities, quality, turnaround time, capacity and price.

The casino entertainment business is highly competitive. The industry is comprised of a diverse group of competitors that vary considerably in size and geographic diversity, quality of facilities and amenities available, marketing and growth strategies and financial condition. We compete with other casino facilities in the Kansas region. We also compete with other non-gaming resorts and vacation destinations, various other entertainment businesses, and other forms of gaming, such as state lotteries, on-track and off-track wagering, video lottery terminals and card parlors.

6

Government Regulation and Industry Oversight

The aerospace industry is highly regulated in the United States by the FAA and in other countries by similar agencies. We must be certified by the FAA to design, engineer, test and certify replacement and service parts and components used in specific aircraft models.

We must also satisfy the requirements of our customers that are subject to FAA regulations, and provide these customers with products and repair services that comply with the applicable government regulations. The FAA regulates flight operations and requires that aircraft components meet FAA stringent standards. In addition, the FAA requires that various maintenance routines be performed on aircraft components. We currently satisfy these maintenance standards allowing component repair and overhaul services at our FAA-approved repair stations.

Generally, the FAA only grants licenses for the manufacture or repair of a specific aircraft component, rather than the broader licenses that have been granted in the past. The FAA licensing process may be costly and time-consuming. To obtain an FAA license, an applicant must satisfy all applicable regulations of the FAA governing repair stations. These regulations require that an applicant have experienced personnel, inspection systems, suitable facilities and equipment. In addition, the applicant must demonstrate a need for the license. Because an applicant must procure manufacturing and repair manuals relating to each particular aircraft component in order to obtain a license with respect to that component, the application process may involve substantial time and cost.

Our Professional Services businesses are subject to various federal, state and local laws and regulations in addition to gaming regulations. These laws and regulations include, but are not limited to, restrictions and conditions concerning employment, alcoholic beverages, food service, smoking, currency transactions, taxation, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results.

Our operations are also subject to a variety of worker and community safety laws. For example, the Occupational Safety and Health Act of 1970, or OSHA, mandates general requirements for safe workplaces for all employees in the United States. We believe that our operations are in material compliance with OSHA's health and safety requirements.

Moreover, our gaming operations are regulated largely by the Kansas Racing and Gaming Commission and the Kansas Lottery. The gaming industry, in general, is highly regulated and we must maintain our licenses and pay gaming taxes to continue our operations. Each gaming facility is subject to extensive regulation under the laws, rules and regulations where it is located. These laws, rules and regulations generally relate to the responsibility, financial stability, integrity and character of the owners, managers and persons with financial interests in the gaming operations.

Human Capital Resources

Other than persons employed by our gaming management subsidiaries there were 107 full time and 5 part time employees on April 30, 2022 compared to 113 full time and 5 part time employees on April 30, 2021. As of July 8, 2022, staffing was 111 full time and 6 part time employees. Our staffing at Boot Hill Casino on April 30, 2022 was 180 full time and 60 part time employees and 172 full time employees and 60 part time employees on April 30, 2021. As of July 8, 2022 our staffing at Boot Hill Casino was 191 full time employees and 56 part time employees.

We believe our success as a company depends on the strength of our workforce.  Our Vice-President, reporting to our President and Chief Executive Officer, is responsible for developing and executing our human capital strategy.  This includes recruiting, hiring, training and retention as well as the development of our compensation and benefits programs.

As the success of our business is fundamentally connected to the well-being of our people, we offer benefits that support their physical, financial and emotional well-being. We provide our employees with access to affordable and convenient medical programs intended to meet their physical and emotional needs and the needs of their families.  To foster retention, employees with fifteen or more years of service receive an annual retention bonus.

As an added benefit for employees, we offer a 401(k) savings plan with a Company match as well as paid vacation and personal days. These benefits are in addition to the Company’s market-based compensation program designed to maintain competitive compensation packages for all employees.

None of our employees are subject to collective bargaining agreements.

7

Executive Officers of the Registrant

Our executive officers are:

Name	Age	Position
Clark D. Stewart	82	President and Chief Executive Officer since 1989.
Craig D. Stewart	48	Vice President since 2013.
Christopher J. Reedy	56	Vice President since 2000 and Secretary since 2005.
Tad M. McMahon	55	Chief Financial Officer since 2017.

Officers are elected by the Board of Directors of Butler National Corporation and serve at the discretion of the Board. All of the officers of the Company are subject to an employment agreement with the Company.

Available Information

For more information about us, visit our website at www.butlernational.com. The contents of the website are not part of this Annual Report on Form 10-K. Our electronic filings with the Securities and Exchange Commission ("SEC") (including all Forms 10-K, 10-Q and 8-K, and any amendments to these reports) are available free of charge through our website immediately after we electronically file with or furnish them to the SEC. These filings may also be read and copied at the SEC's Public Reference Room which is located at 100 F Street, N.E., Washington, D.C. 20549. Information about the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers who file electronically with the SEC at www.sec.gov.

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Item 1A.  RISK FACTORS

The following statements on risk factors contain "forward looking statements" within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended. Forward-looking statements can often be identified by the use of forward-looking terminology, such as "could," "should," "will," "intended," "continue," "believe," "may," "expect," "hope," "anticipate," "goal," "forecast," "plan," "guidance" or "estimate" or the negative of these words, variations thereof or similar expressions. Forward looking statements are not guarantees of future performance or result and involve risks, uncertainties, and assumptions. Stockholders should be aware of certain risks, including those described below and elsewhere in this Form 10-K, which could adversely affect the value of their holdings and could cause our actual results to differ materially from those projected in any forward looking statements. We undertake no obligation to update or revise forward looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial condition or business over time.

Business and Operational Risks

We may face risks related to the geographic location of our casino.

Boot Hill Casino is located in Dodge City, Kansas. Consequently, a significant portion of our gaming business is subject to the general economic health of the region around Dodge City, Kansas. The economy of Dodge City, Kansas is significantly influenced by the agricultural sector of the national and local economy, which includes both agricultural farming but also meat processing. As a result, changes in the economic climate, weather patterns, and market fluctuations for agricultural and petroleum products could negatively influence our revenues from gaming and have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.

Our Aerospace business is subject to significant customer concentration risk. 

During the fiscal year ending April 30, 2022 we derived 34.1% of our revenue from five customers, and we had two "major customers" (10 percent or more of consolidated revenue) that provided 25.0% of total revenue. At April 30, 2022, we had one customer that accounted for 44.8% of our total accounts receivable. A loss of business from, or the bankruptcy or insolvency of, one or more of these major customers may have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. 

We face risks associated with having executive officers who are family members.

Our executive team is made up of four (4) individuals who have extensive industry and general business experience. This includes Clark D. Stewart, President and Chief Executive Officer, and Clark’s son, Craig D. Stewart, Vice President. Companies with multiple family members serving on the same executive team can be predisposed to unique internal conflicts, nepotism and/or strategic family alliances. In light of the family relationship within the executive officers of the Company, certain prospective investors may be unwilling to purchase our common stock, which may have a negative effect on our share price.

We operate in a cyclical industry and an economic downturn could negatively impact our operations.

Historically, adverse conditions in the local, regional, national and global economies have negatively affected our operations, and may continue to negatively affect our operations in the future. During periods of economic contraction, our revenues may decrease while some of our costs remain fixed or even increase, resulting in decreased earnings.

The gaming activities that we offer represent discretionary expenditures and participation in such activities may decline during economic downturns, during which consumers generally earn less disposable income. Even an uncertain economic outlook may adversely affect consumer spending in our gaming operations and related facilities, as consumers spend less in anticipation of a potential economic downturn. 

Our Aerospace business activities and operations are subject to the general health of the aviation industry, which can be cyclical. During periods of economic expansion, when capital spending normally increases, we generally benefit from greater demand for our aviation products and services. During periods of economic contraction, when capital spending normally decreases, we generally are adversely affected by declining demand for our Aerospace products and services. Aviation industry conditions are impacted by numerous factors over which we have no control, including political, regulatory, economic and military conditions, environmental concerns, weather conditions and fuel pricing. Any prolonged cyclical downturn could have a material adverse effect on our Aerospace business, and the Company’s financial condition, results of operations, liquidity and cash flows.

9

We face risks due to our fixed-price contracts.

We sell certain products and services to commercial, government, and defense customers under firm contracts providing for fixed units prices, regardless of costs incurred by us. The costs of producing products or providing services may be adversely affected by increases in the cost of labor, materials, fuel, overhead, and other unknown variants, including manufacturing and other operational inefficiencies and differences between assumptions used by us to price a contract and actual results. Increased costs may result in cost overruns and losses on such contracts, which could adversely affect our financial condition, results of operations, liquidity and cash flows.

Difficulties or delays in the development, production, testing and marketing of products, could adversely affect our business.

Our Aerospace business is subject, in part, to regulatory procedures and administration enacted by and/or administered by the FAA. Accordingly, our business may be adversely affected in the event the Company is unable to comply with such regulations relative to its current products and/or if any new products and/or services to be offered by the Company are not formally approved by such agency. Our proposed aviation modification products depend upon the issuance by the FAA of a Supplemental Type Certificate with related parts manufacturing authority. Such certifications for future aircraft modification products may not be issued within our expected time frames or issued at all, which would have a material adverse effect on our business. Similarly, the loss of one or more of our current licenses or certifications could also have a material adverse effect on the Company’s financial condition, results of operations, liquidity and cash flows.

The loss of key personnel could adversely affect our business.

Our inability to retain key personnel may be critical to our ability to achieve our objectives. Key personnel are particularly important in maintaining relationships with the operations related to the FAA and the State of Kansas. Loss of any such personnel could adversely affect our financial condition, results of operations, liquidity and cash flows.

Our success depends heavily upon the continued contributions of these key persons, whose knowledge, leadership and technical expertise would be difficult to replace, and on our ability to attract and retain experienced professional staff. While we currently have an employment agreement with our CEO, Clark D. Stewart, and other key management personel, if we were to lose the services of Mr. Stewart or other key persons, our ability to execute our business plan would be harmed and we may be forced to cease operations until such time as we could hire suitable replacements.

We are exposed to risks associated with our international sales.

Our international sales may be subject to local government laws, regulations and procurement policies and practices which may differ from U.S. Federal Government regulation, including regulations related to products being installed on aircraft, exchange controls, as well to varying currency, geo-political and economic risks. We are also exposed to risks associated with any relationships with foreign representatives, consultants, partners and suppliers for international sales and operations. Our ability to arrange safe travel to visit our international customers may put our ability to sell to such customers at risk, which could adversely affect our financial condition, results of operations, liquidity and cash flows.

Future acquisitions and investments may expose us to certain risks.

We continually review, evaluate and consider potential investments and acquisitions in pursuing our business strategy. In evaluating such transactions, we are making difficult judgments regarding the value of business opportunities, technologies and other assets, and the risk and cost of potential liabilities. Acquisitions and investments involve certain other risks and uncertainties, including the difficulty in integrating newly-acquired businesses, the challenges in reaching our strategic objectives, benefits expected from acquisitions or investments, cost and revenue synergies, and risk that markets do not evolve as anticipated and the targeted opportunity or technology do not prove to be those needed to be successful in those markets. Other risks include the diversion of our attention and resources from our current operations, the potential of impairment of acquired assets and the potential loss of key employees of acquired businesses.

We are subject to certain change of control restrictions, which could make it more difficult to be acquired.

Some provisions of our Articles of Incorporation and our Shareholder Rights Agreement could make it more difficult for a potential acquirer to acquire a majority of our outstanding voting stock. This includes, but is not limited to, provisions that: provide for a classified Board of Directors, prohibit stockholders from taking action by written consent, and restrict the ability of stockholders to call special meetings. We are also subject to provisions of Kansas law K.S.A. 17-6427 that prohibit us from engaging in any business combination with any interested stockholder for a period of three years from the date the person became an interested stockholder, unless certain conditions are met, which could have the effect of delaying or preventing a change of control. In light of the highly regulated nature of our business and the authority of the regulatory agencies that monitor business to monitor the composition of our shareholders, the Board has consistently believed these restrictions are appropriate. Nonetheless, these restrictions may result in missed opportunities for the Company and could result in a reduced share price of our common stock, which would harm our business.

10

We face a number of challenges prior to launching new online gaming or sports wagering channels, which may lead to increased costs and delays in anticipated revenues.

We have recently signed agreements with DraftKings and Bally Corporation to facilitate online and mobile sports wagering. No assurance can be given that, when we endeavor to launch new online gaming or sports wagering channels, the expected timetables for opening such channels will be met in light of the uncertainties inherent in the development of the regulatory framework, construction, the licensing process, legislative action and litigation. In addition, as we seek to launch online gaming and sports wagering applications in Kansas, we may need to hire additional qualified employees, such as engineers, IT professionals and other compliance personnel. Given the significant competition in this area for qualified candidates, we may be unable to hire qualified candidates.

There can be no assurance that we will be able to compete effectively or generate sufficient returns on our new sports wagering operations.

Kansas has recently legalized intra-state sports wagering and has established extensive state licensing and regulatory requirements governing any such intra-state sports wagering. We expect to launch our online and mobile sports wagering applications by the fall of 2022. Our sports wagering operations will compete in a rapidly evolving and highly competitive market against an increasing number of competitors.

Additionally, we have entered into agreements with sports wagering operators such as DraftKings and Bally Corporation and may enter into additional agreements with strategic partners and other third-party vendors to provide market access in certain jurisdictions. In addition, there can be no assurance that the Kansas audience will engage in sports wagering and online gaming products to the extent that we expect. Further, the success of our proposed sports wagering operations is dependent on a number of additional factors, many of which are beyond our control, including the ultimate tax rates and license fees charged by local and state jurisdictions in Kansas; our ability to gain market share in a new market; the timeliness and the technological and popular viability of our products; our ability to compete with new entrants in the market; changes in consumer demographics and public tastes and preferences; cancellations and delays in sporting seasons and sporting matches as a result of events such as players strikes or lockouts or related to the COVID-19 pandemic; and the availability and popularity of other forms of entertainment. There can be no assurance that we will be able to compete effectively or that our offerings will be successful and generate sufficient returns on our investment.

Any of the factors above could prevent us from receiving the expected returns of our development and investment in mobile and online sports wagering, cause the market price of our common stock to decline, and have a material adverse effect on our financial condition, results of operations, and cash flows.

We face the risk of fraud, theft, and cheating.

For our casino operations, we face the risk that gaming customers may attempt or commit fraud or theft or cheat in order to increase winnings. Such acts of fraud, theft, or cheating could involve the use of counterfeit chips or other tactics, possibly in collusion with our employees. Internal acts of cheating could also be conducted by employees through collusion with dealers, surveillance staff, floor managers, or other casino or gaming area staff. Additionally, we also face the risk that customers may attempt or commit fraud or theft with respect to our non-gaming offerings or against other customers. Such risks include stolen credit or charge cards or cash, falsified checks, theft of retail inventory and purchased goods, and unpaid or counterfeit receipts. Failure to discover such acts or schemes in a timely manner could result in losses in our operations. Negative publicity related to such acts or schemes could have an adverse effect on our reputation, potentially causing a material adverse effect on our business, financial condition, results of operations, and cash flows

11

Data Privacy, Security and Intellectual Property Risks

Cyber-security threats or other disruptions to our technology infrastructure could harm our business.

To perform our professional services, we make extensive use of online services and centralized data processing, including through third-party service providers. The secure maintenance and transmission of customer information is a critical element of our operations. Our information technology and other systems, or those of service providers and business partners, that maintain and transmit customer or employee information may be compromised by a malicious third-party penetration of our network security, or that of a third-party service provider or business partner, or impacted by intentional or unintentional actions or inactions by our employees, or those of a third-party service provider or business partner. As a result, our customers’ or employee’s information may be lost, disclosed, accessed or taken without our customers’ or employees’ consent.

In addition, third-party service providers and other business partners process and maintain proprietary business information and data related to our employees, customers, suppliers and other business partners. Our information technology and other systems that maintain and transmit this information, or those of service providers or business partners, may also be compromised by a malicious third-party penetration of our network security or that of a third-party service provider or business partner, or impacted by intentional or unintentional actions or inactions by our employees or those of a third-party service provider or business partner. As a result, our business information or customer, supplier and other business partner data may be lost, disclosed, accessed or taken without consent.

Any such loss, disclosure or misappropriation of, or access to, customers’ or business partners’ information or other breach of our information security can result in legal claims or legal proceedings, including regulatory investigations and actions, may have a serious impact on our reputation and may adversely affect our business, operating results and financial condition. Furthermore, the loss, disclosure or misappropriation of our business information may adversely affect our reputation, business, operating results and financial condition.

For both our aerospace and professional services divisions, our use of electronic data storage, automated systems and technology for our operations and records management gives rise to cyber-security risks. Although we and our third-party providers have preventive systems and processes in place designed to protect against the risk of system failure and cyber-attacks, a security breach of our systems or those of our third-party providers may cause a disruption of our business or expose us to a loss of information or litigation which could have a material adverse effect on our financial condition, reputation and results of operations.

Legal and Regulatory Risks

We face extensive regulation across our industries, which could have a materially adverse effect on our business and limit the prospect of new shareholders acquiring our shares.

Our Aerospace business is subject to regulation by the Federal Aviation Administration ("FAA"). We manufacture products and parts under FAA Parts Manufacturing Authority requiring qualification and traceability of all materials and vendors used by us. We make aircraft modifications pursuant to the authority granted by Supplemental Type Certificates issued by the FAA. We repair aircraft parts pursuant to the authority granted by our FAA Authorized Repair Station. New or more stringent government regulations may be adopted in the future. Related costs of compliance with or liability for violations of existing or future regulations could adversely affect our financial condition, results of operations, liquidity and cash flows.

Gaming licenses and/or background investigations ("license") are required in connection with our management of a State of Kansas owned Lottery Gaming Facility (a casino). Our management personnel, Butler National and/or the managing subsidiaries, the key personnel of all entities may be required to have a state-issued gaming license. Moreover, our present and future stockholders are, and will continue to be, subject to review by regulatory agencies. The failure of the Company or the key personnel to obtain or retain a license could have a material adverse effect on the Company or on its ability to obtain or retain these licenses in other jurisdictions. Each such State Gaming Agency has broad discretion in granting, renewing, and revoking licenses. Obtaining such licenses and approvals will be time consuming and may be unsuccessful or involve considerable expense, which could adversely affect our ability to successfully operate our business.

The State of Kansas has approved state-owned Lottery Gaming Facilities, pari-mutuel dog and/or horse racing for non-Indian organizations. The State of Kansas operates a state lottery, keno games and state-owned Lottery Gaming Facilities for the benefit of the State. The Lottery Gaming Facility management contract approval process requires that any entity or person owning directly or indirectly five percent (5%) of the ownership interest of the management company must be found suitable to be an owner by the State of Kansas. 

If found unsuitable by any Agency, the stockholder must offer all of the interest in Company stock held by such stockholder to the Company for cash at the current market bid price less a fifteen percent (15%) administrative charge and the Company must purchase such Interest within six (6) months of the offer. The stockholder is required to pay all costs of investigation with respect to a determination of his/her suitability. In addition, regardless of ownership, each member of the Board of Directors and certain officers of the Company are subject to a finding of suitability by any Agency on a regular basis.

We are subject to evolving government regulation and law, which may adversely affect our business.

Gaming management operations are and will be subject to extensive gaming laws and regulations, many of which were recently adopted and have not been the subject of definitive interpretations and are still subject to proposed amendments and regulation. The political and regulatory environment in which the Company is and will be operating, with respect to gaming activities, is dynamic and rapidly changing. Adoption and/or changes in gaming laws and regulations could adversely affect our financial condition, results of operations, liquidity and cash flows. Interference with the execution of the steps defined by the gaming laws and regulations by interested third parties, although not included by the regulations, may interfere with and or significantly slow the approval process.

Changes in governmental regulations of financial reporting could have a materially adverse effect on our business.

The Company reports information to its stockholders and the general public pursuant to the regulations of various Federal and State Commissions and Agencies. These regulations require conformance by the Company to Generally Accepted Accounting Principles, to pronouncements of the Public Company Accounting Oversight Board ("PCAOB"), and to accounting and reporting directives issued by the commissions and agencies. The political and regulatory environment in which the Company operates is dynamic and rapidly changing, and adoption and/or changes in regulations defining accounting procedures or reporting requirements could increase expenditures to report required financial information, which may adversely affect our financial condition, results of operations, liquidity and cash flows.

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Financial Risks

Our business requires financing and financing is dependent upon the stability of economic markets.

The Company depends upon financial institutions for financing to continue operations and to finance and develop new opportunities. The status of the national economy and its growth outlook could be affected by volatility and/or a disruption of capital and credit markets, which could negatively impact our financial performance and our ability to access credit financing. As a result, we may not be able to secure credit financing on terms attractive to us and if we are able to secure financing arrangements, the amount may be insufficient to meet all of our current and future needs to continue operations and finance and develop new opportunities.

We may be required in the future to record impairment losses related to assets we currently carry on our balance sheet.

We evaluate intangible assets for impairment annually during the fourth quarter and in any interim period in which circumstances arise that indicate our intangible asset may be impaired. Indicators of impairment include, but are not limited to, the loss of significant business and/or significant adverse changes in industry or market conditions. No events occurred during the periods presented indicated the existence of an impairment with respect to our intangible assets. Preparation of forecasts for use in the long-range plan and the selection of the discount rate involve significant judgments that we base primarily on existing firm orders, expected future orders and general market conditions. Significant changes in these forecasts or the discount rate selected could affect the estimated fair value and could result in an impairment charge in a future period.

Risks Related to our Stock

Because our common stock is deemed a low-priced "Penny" stock, an investment in our common stock should be considered high risk and subject to marketability restrictions.

Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Exchange Act, it will be more difficult for investors to liquidate their investment. Until the trading price of the common stock increases so that it no longer qualifies as a “penny stock,” if ever, trading in the common stock is subject to the penny stock rules of the Exchange Act. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

● Deliver to the customer, and obtain a written receipt for, a disclosure document;

● Disclose certain price information about the stock;

● Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;

● Send monthly statements to customers with market and price information about the penny stock; and

● In some circumstances, approve the purchaser's account under certain standards and deliver written statements to the customer with information specified in the rules.

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

We may conduct a reverse-stock split, which could expose us to certain risks.

The possibility of the Company undergoing a reverse-stock split has been discussed at prior annual meetings as a means to increase the common stock share price. We operate in competitive industries and the Company must consider all strategies to increase our common stock share price for stockholders. A reverse stock-split and subsequent increase in the common stock price could elicit a positive market reaction and attract new investors to the Company. There are also risks with a reverse stock-split. The market could react negatively to the consolidation and our common stock could come under renewed selling pressure, which would negatively affect the trading price of our common stock.

Our 401(k) profit sharing plan results in new shares being issued each year, which could have a materially adverse effect on our business.

Subject to the annual approval of the Board of Directors, 100% of every pre-tax dollar an employee contributes, up to 6% of the employee’s salary, and a portion of the Company’s profits is matched by the Company. Employees are 100% vested in the Company’s contributions immediately and our matching contribution, as approved by the Board of Directors is paid on an annual basis with common stock of the Company. Competitive retirement plans are a requirement for hiring and retention of employees in the Company’s business segments. The Company’s 401(k) profit sharing plan also encourages employee participation in the 401(k) plan and encourages overall loyalty to the Company. Matching employee contributions with common stock of the Company does lead to a dilution of outstanding common stock, which may result in a lower trading price of our common stock in the future. Historically the Company has attempted to mitigate this dilutive effect by repurchasing the Company’s outstanding common stock through stock buy-back plans; however, the effectiveness of stock buy-back plans is limited due to volume and timing restrictions found in Rule 10b-18 of the Exchange Act. Stock repurchase plans are also subject to reauthorization by the Board of Directors from time to time and the Company’s available cash flow.

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General Risks

We operate in competitive markets, and competitive pressures could adversely affect our business.

Increased competition, including the entry of new competitors, the introduction of new products by new and existing competitors or price competition, could adversely affect our financial condition, results of operations, liquidity and cash flows. Additionally, because of the rapid rate at which the gaming industry has expanded, and continues to expand, the gaming industry may be at risk of market saturation, both as to specific areas and generally. Overbuilding of gaming facilities by others at particular sites in competitive markets may have a material adverse effect on our ability to compete and on our operations. Competition for the disposable income dollars from the State of Kansas through the Kansas Lottery operating iLottery and sports wagering may have a material adverse effect on our business.

Acts of terrorism and war could disrupt our business.

Terrorist attacks and other acts of war or hostility create many economic and political uncertainties. We cannot predict the extent to which terrorism, security alerts, war, or hostilities throughout the world will continue to directly or indirectly impact our business and operating results. Because of the threat of terrorist attacks and other acts of war or hostility in the future, premiums for certain insurance products have increased, and some types of insurance are no longer available. Given current conditions in the global insurance markets, we are substantially uninsured for losses and interruptions caused by terrorist acts and acts of war. If any such event were to affect our properties, it would likely adversely affect our financial condition, results of operations, liquidity and cash flows.

Inclement weather, natural disasters and other conditions could seriously disrupt our business and operations.

Our gaming operations are subject to the weather and other conditions that could disrupt or reduce the number of customers who visit our casino. If weather conditions limit consumer access to our casino or otherwise adversely impact our ability to operate our casino at full capacity, our revenue could suffer, which would adversely affect our financial condition, results of operations, liquidity and cash flows.

We also face risks that the weather and other conditions could adversely affect the local industries in Dodge City, Kansas, where the Boot Hill Casino is located. The local economy in Dodge City is primarily fueled by the agriculture, meat processing and oil and gas industries. In the event the weather and/or other conditions severely disrupt these industries, we could see a reduction in the number of customers who visit our casino, which would adversely affect our financial condition, results in operations, liquidity and cash flows.

In addition, natural disasters such as major fires, floods, tornados and earthquakes could also adversely impact our business and operating results. Such events could lead to the loss of use of one or more of the facilities for which we provide management services for an extended period of time and disrupt our ability to attract customers to certain of our gaming facilities. If any such event were to affect our properties, we would likely be adversely impacted.

In most situations, we have insurance that should provide coverage for portions of any losses from a natural disaster, but it is subject to deductibles and maximum payouts in many cases. Although we may be covered by insurance from a natural disaster, the timing of our receipt of insurance proceeds, if any, is beyond our control.

The global spread of COVID-19 has impacted our business and may cause further disruptions to our business, financial performance and operating results.

As of the date of this annual report, there continues to be uncertainty around the COVID-19 pandemic, its duration, and its impact on U.S. and global economic activity and consumer behavior. The omicron variant of COVID-19, which appears to be the most transmissible and contagious variant to date, has caused an increase in COVID-19 cases globally. The impact of the omicron variant, its subvariants, or of any other variants that may emerge, cannot be predicted at this time, and could depend on numerous factors, including the availability of vaccines, vaccination rates among the population, the effectiveness of COVID-19 vaccines against the variants, and the response by governmental bodies to reinstate mandated business closures, orders to “shelter in place,” occupancy limitations, and travel and transportation restrictions. While restrictions have eased throughout 2021 and in early 2022, new restrictions to combat the spread of the variants, such as restrictions and bans on travel or transportation, stay-at-home directives, limitations on the size of gatherings, closures of work facilities, schools, public buildings and businesses, cancellation of events, including sporting events, concerts, conferences and meetings, and quarantines and lock-downs may be put into place in the future. The impact of this pandemic has had, and may continue to have, a material adverse effect on our business, employees, suppliers, and customers. We also experienced a decrease in the number of patrons at our Boot Hill Casino & Resort since the start of the pandemic, which may continue for the foreseeable future.

Demand for our aircraft modification business may decrease in correlation to the general health of the U.S. economy. We are experiencing longer supply chain lead times that affect our ability to deliver products to our customers. The continued impact on our business as a result of the COVID-19 pandemic (directly or indirectly) could materially adversely affect our results of operations, financial condition, and cash flows in the near-term and beyond fiscal 2022. 

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We face risks related to fluctuating fuel and energy costs.

Our business depends on the use of aircraft fuel for business transportation, freight transportation, and special mission applications. Fluctuations in the global supply of crude oil and the possibility of changes in government policy on aircraft fuel production make it impossible to predict the future availability, price volatility and cost of aircraft fuel. Depending on various global factors that are out of our control, there could be reductions in the production or importation of crude oil and significant increases in the cost of aircraft fuel. This could deter our customers from purchasing fuel and/or inhibit their ability to pass on disproportionate costs to their customers. As a result, the use of business and military aircrafts, the value of aircraft related assets and the revenue related to aircraft equipment and aircraft modifications could decrease. These potential consequences from fluctuating fuel and energy costs could adversely affect our financial condition, results of operations, liquidity and cash flows.

Our gaming business also depends on the use of automotive fuels for travel to our casino locations in agricultural communities. Increased fuel prices could cause our customers to determine that fuel is not available or too expensive to justify travel, which may cause our gaming business to be adversely affected.

Rising inflation has increased costs related to materials and labor which has adversely impacted our operational capacity and lowered profitability.

The COVID pandemic caused a global recession and the sustainability of the economic recovery remains unclear. The COVID pandemic has also significantly increased economic and demand uncertainty, has caused inflationary pressure in the U.S. and elsewhere, and has led to disruption and volatility in demand for our services.

The Bureau of Labor Statistics reported that the Consumer Price Index increased 7 percent in 2021, indicating the largest increase since 1982. Many of our operating expenses are sensitive to increases in inflation including equipment prices, fuel costs, and employee-related costs. Insurance costs have also significantly increased with most major carriers. Furthermore, inflationary pressures the market is currently experiencing may increase costs for materials, supplies, and services. Rising inflation may also drive demand for increases in compensation for employees which may result in increase in labor costs. With increasing costs, we may have to increase our prices to maintain the same level of profitability.

We are subject to extensive taxation policies, which could adversely affect our business.

The federal government has, from time to time, considered a federal tax on casino revenues and may consider such a tax in the future. If such an increase were to be enacted, our ability to incur additional indebtedness in the future to finance casino development projects could be materially and adversely affected. In addition, gaming companies are currently subject to significant state and local taxes and fees, in addition to normal federal and state corporate income taxes, and such taxes and fees are subject to increase at any time.

Boot Hill Casino, pursuant to its Management Contract with the State of Kansas pays total taxes between 27% and 31% of gross gaming revenue, based on achievement of the following revenue levels: 27% on gross gaming revenue up to $180 million, 29% on amounts from $180 million to $220 million, and 31% on amounts above $220 million in gross gaming revenue. Boot Hill Casino is contractually obligated to pay its proportionate share of certain expenses incurred by the Kansas Lottery Commission and the Kansas Racing and Gaming Commission, which amounted to $2.0 million during fiscal year ended April 30, 2022.

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Item 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

Item 2.  PROPERTIES

Corporate:

Our corporate headquarters are located in a 9,000 square foot owned facility for office and storage space at 19920 West 161st Street, in Olathe, Kansas.

Aerospace Products (dollars in thousands):

Butler National Corporation has an office and manufacturing operations at 4654 South Ash Ave, Tempe, Arizona in a 16,110 square foot owned facility.

Butler Avionics, Inc. and Butler National Aviation Certification Center are located at One Aero Plaza, New Century, Kansas in a 36,000 square foot facility with hangar space at the New Century Airport in New Century, Kansas.

Avcon Industries, Inc. is located at 714 North Oliver Road, Newton, Kansas, in a 47,000 square foot facility of hangar and office space at the municipal airport in Newton, Kansas. In addition, Avcon Industries, Inc. owns a 12,000 square foot hangar and office space at the municipal airport in Newton, Kansas.

Professional Services (dollars in thousands):

BHCMC, LLC is located at 4000 W. Comanche in Dodge City, Kansas in a 60,000 square foot owned building known as the Boot Hill Casino facility. 

BHCMC, LLC has an administration center located at 2601 N. 14th Avenue in Dodge City, Kansas in a 29,000 square foot owned facility.

BCS Design, Inc. is located at 19930 W. 161^st, Olathe, Kansas in a 10,800 square foot owned facility.

Management believes our properties have been well maintained, are suitable and adequate for us to operate at present levels, and the current productive capacity. The utilization of these facilities is appropriate for our existing real estate requirements. However, significant increases in customer orders, changes in product lines, and/or future acquisitions may require expansion of our current properties or the addition of new properties.

Item 3.  LEGAL PROCEEDINGS

As of July 15, 2022, there are no significant known legal proceedings pending against us. We consider all such unknown proceedings, if any, to be ordinary litigation incident to the character of the business. We believe that the resolution of any claims will not, individually or in the aggregate, have a material adverse effect on the financial position, results of operations, or liquidity of the Company.

Item 4.  MINE SAFETY DISCLOSURES.

Not applicable.

16

PART II

Item 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

COMMON STOCK (BUKS):

(a)	Market Information: Our shares are exclusively quoted on OTCQB platform under the symbol "BUKS".
The range of the high and low bid prices per share of the common stock, for fiscal years 2022 and 2021, as reported by OTC Markets Group, is set forth below. Such market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not necessarily represent actual transactions.

	Year Ended April 30, 2022				Year Ended April 30, 2021
	Low		High		Low		High
First quarter	$	0.52	$	0.63	$	0.45	$	0.55
Second quarter	$	0.52	$	0.70	$	0.45	$	0.54
Third quarter	$	0.65	$	0.89	$	0.46	$	0.56
Fourth quarter	$	0.66	$	0.97	$	0.51	$	0.72

(b)	Holders: The approximate number of holders of record of our common stock, as of July 8, 2022, was 2,500. The price of the stock as of July 8, 2022 was approximately $0.87 per share.
(c)	Dividends: We have not paid any cash dividends on common stock, and the Board of Directors does not expect to declare any cash dividends in the foreseeable future.

SECURITIES CONVERTIBLE TO COMMON STOCK:

As of July 15, 2022, there were no Convertible Preferred shares or Convertible Debenture notes outstanding.

Changes in Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased		Average Price Paid per Share		Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased under the Plans or Programs
May 1, 2021 through April 30, 2022		0	$	0.00	$	0.00
Total		0	$	0.00	$	0.00

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STOCK REPURCHASE PROGRAM

The Board of Directors approved a stock purchase program authorizing the repurchase of up to $4.0 million of its common stock. The timing and amount of any share repurchases will be determined by Butler National’s management based on market conditions and other factors. The program is currently authorized through May 1, 2023.

The table below provides information with respect to common stock purchases by the Company during the year ended April 30, 2022.

Period	Total Number of Shares Purchased		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
Program authorization							$	4,000
Shares purchased in prior periods		2,721,415	$	0.36		2,721,415	$	3,019
Quarter ended July 31, 2020 (a)		212,000	$	0.51		212,000	$	2,911
Quarter ended October 31, 2020 (a)		152,915	$	0.50		152,915	$	2,835
Quarter ended January 31, 2021 (a)		-	$	-		-	$	2,835
Quarter ended April 30, 2021 (a)		17,303	$	0.65		17,303	$	2,823
Quarter ended July 31, 2021 (a)		-	$	-		-	$	2,823
Quarter ended October 31, 2021 (a)		6,290	$	0.62		6,290	$	2,819
Quarter ended January 31, 2022 (a)		-	$	-		-	$	2,819
Month ended February 28, 2022 (a)		-	$	-		-	$	2,819
Month ended March 31, 2022 (a)		-	$	-		-	$	2,819
Month ended April 30, 2022 (a)		180,503	$	0.91		180,503	$	2,655
Total		3,290,426	$	0.41		3,290,426

(a) These shares of common stock purchased were purchased through private transactions

Item 6.  RESERVED

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management Discussion and Analysis (MD&A) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes to the consolidated financial statements (Notes).

Our fiscal year ends on April 30. Fiscal years 2022 and 2021 consisted of 52 weeks and ended on April 30, 2022 and April 30, 2021, respectively. All references to years in this MD&A represent fiscal years unless otherwise noted.

Management Overview

Management is focused on increasing long-term shareholder value from increased cash generation, earnings growth, and prudently managing capital expenditures. We plan to do this by continuing to drive increased revenues from product and service innovations, strategic acquisitions, and targeted marketing programs.

We have two separate reporting segments: Aerospace Products and Professional Services. Aerospace Products and Professional Services do not share the same customers and suppliers and have substantially distinct businesses. The Aerospace Products operating segment provides products and services in the aerospace industry. Companies in Aerospace Products derive their revenue from system design, engineering, manufacturing, integration, installation, repairing, overhauling, servicing and distribution of aerostructures, avionics, aircraft components, accessories, subassemblies and systems. The Professional Services operating segment provides services in the gaming industry. Professional Services companies manage a gaming and entertainment facility and provide architectural and engineering services. These reporting segments operate through various subsidiaries and affiliates listed on Exhibit 21 to this Form 10-K.

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COVID-19 Overview:

The pandemic caused by COVID-19 has caused volatility in world-wide financial markets since 2020, primarily due to uncertainty with respect to the severity and duration of the pandemic. Although many experts believe the pandemic has ended in 2022, the threat of outbreaks and new variations of the virus continue to affect operations and finances of businesses like ours.

We have experienced lower customer headcount, which has been off-set by a larger net revenue per customer. We are experiencing, and expect to continue experiencing, lower demand for our professional services and increased costs and other challenges related to COVID-19 that adversely affects our business.

The COVID-19 pandemic has impacted our business operations and financial results and continues to impact us in fiscal 2022. We face numerous uncertainties in estimating the direct and indirect effects on our present and future business operations, financial condition, results of operations, and liquidity. Due to several rapidly changing variables related to the COVID-19 pandemic, we cannot reasonably estimate future economic trends and the timing of when stability will return. Refer to Item 1A. “Risk Factors” for a disclosure of risk factors related to COVID-19.

As the economy in general slowly recovers, and vaccinations rates in our operating territory improve and new infections decline, we have continued to see improvements in customer headcount. However, the unpredictable nature of the pandemic could again lead to closures, decreased traffic and demand, and increased COVID-19- related operating expenses, for the foreseeable future. While COVID-19 has resulted in, and will continue to bring, significant challenges and uncertainty to our operating environment, we believe that our resilient business model and the strength of our brand and balance sheet position us well to emerge from the pandemic.

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Results Overview

Our fiscal 2022 revenue increased 20% to $73.5 million compared to $61.5 million in fiscal 2021. In fiscal 2022 the Professional Services revenue increased 30%. There was an increase of 10% in the Aerospace Products revenue in fiscal 2022.

Our fiscal 2022 net income was $12.2 million compared to net income of $2.5 million in fiscal 2021. Earnings per share was $0.14 for fiscal 2022 compared to $0.02 in fiscal 2021. We continue focusing on our margin expansion initiatives, including efficiencies in our implementation and operational processes and controlling general and administrative expenses. The fiscal 2022 operating income was $16.1 million, an increase from $5.9 million in fiscal 2021.

RESULTS OF OPERATIONS

Fiscal 2022 compared to Fiscal 2021

(dollars in thousands)	2022		Percent of Total Revenue			2021		Percent of Total Revenue			Percent Change 2021-2022
Revenue:
Professional Services	$	39,147		53	%	$	30,205		49	%		30	%
Aerospace Products		34,326		47	%		31,275		51	%		10	%
Total revenues		73,473		100	%		61,480		100	%		20	%
Costs and expenses:
Cost of professional services		15,798		21	%		14,214		23	%		11	%
Cost of aerospace products		22,434		30	%		23,293		38	%		-4	%
Marketing and advertising		5,236		7	%		3,752		6	%		40	%
Employee benefits		2,573		4	%		2,571		4	%		0	%
Depreciation and amortization		2,815		4	%		3,542		6	%		-21	%
General, administrative and other		8,488		12	%		8,208		13	%		3	%
Total costs and expenses		57,344		78	%		55,580		90	%		3	%
Operating income	$	16,129		22	%	$	5,900		10	%		173	%

Revenue:

Revenue increased  to $73.5 million in fiscal 2022, compared to $61.5 million in fiscal 2021. See "Operations by Segment" below for a discussion of the primary reasons for the increase in revenue.

Professional Services derives its revenue from (a) professional management services in the gaming industry through Butler National Service Corporation ("BNSC") and BHCMC, LLC ("BHCMC"), and (b) professional architectural, engineering and management support services through BCS Design, Inc. ("BCS"). Revenue from Professional Services increased 30% to $39.1 million in fiscal 2022 compared to $30.2 million in fiscal 2021. We increased our marketing effort into an expanded market area. We believe this resulted in an increase in patron visits and an increase in the average spend per visit.

Aerospace Products derives its revenue by designing, engineering, manufacturing, installing, servicing and repairing products for classic and current production aircraft. Aerospace Products revenue increased 10% to $34.3 million in fiscal 2022 compared to $31.3 million in fiscal 2021. The increase in revenue is primarily due to an increase in aircraft avionics and special mission electronics business of $3.4 million and a decrease in aircraft modification business of $351.

Costs and expenses:

Costs and expenses related to Professional Services and Aerospace Products include the cost of engineering, labor, materials, equipment utilization, control systems, security and occupancy.

Costs and expenses increased 3% in fiscal 2022 to $57.3 million compared to $55.6 million in fiscal 2021. Costs and expenses were 78% of total revenue in fiscal 2022, compared to 90% of total revenue in fiscal 2021.

Marketing and advertising expenses as a percent of total revenue was 7% in fiscal 2022, as compared to 6% in fiscal 2021. These expenses increased 40% to $5.2 million in fiscal 2022, from $3.8 million in fiscal 2021. Marketing and advertising expenses include advertising, sales and marketing labor, gaming development costs, and casino and product promotions. The increase is primarily due to increasing our marketing efforts into an expanded market area.

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Employee benefits expenses as a percent of total revenue was 4% in fiscal 2022, compared to 4% in fiscal 2021. These expenses remained constant at $2.6 million in fiscal 2022 and fiscal 2021. These expenses include the employers' share of all federal, state and local taxes, paid time off for vacation, holidays and illness, employee health and life insurance programs and employer matching contributions to retirement plans.

Depreciation and amortization as a percent of total revenue was 4% in fiscal 2022, compared to 6% in fiscal 2021. These expenses decreased to $2.8 million in fiscal 2022, from $3.5 million in fiscal 2021. These expenses include depreciation related to owned assets being depreciated over various useful lives and amortization of intangible items including the Kansas privilege fee related to the Boot Hill Casino being expensed over the term of the gaming contract with the State of Kansas. BHCMC, LLC depreciation and amortization expense for fiscal 2022 was $2.3 million compared to $3.1 million in fiscal 2021.

General, administrative and other expenses as a percent of total revenue was 12% in fiscal 2022, compared to 13% in fiscal 2021. These expenses increased 3% to $8.5 million in fiscal 2022, from $8.2 million in fiscal 2021.

Other income (expense):

Interest and other income (expense) were ($613) in fiscal 2022 compared with interest and other income (expense) of ($3.1)million in fiscal 2021, a decrease of $2,518, from fiscal 2021 to fiscal 2022. The decrease is due primarily to the forgiveness of the Paycheck Protection Program loan of $2.0 million from the Small Business Administration, a gain on the sale of an airplane of $75, and a reduction of interest of $449.

Operations by Segment

We have two operating segments, Professional Services and Aerospace Products. The Professional Services segment includes revenue contributions and expenditures associated with casino management services and professional architectural, engineering and management support services. Aerospace Products derives its revenue by designing, engineering, manufacturing, installing, servicing and repairing products for classic and current production aircraft.

The following table presents a summary of our operating segment information for fiscal years 2022 and 2021:

(dollars in thousands)	2022		Percent of Revenue			2021		Percent of Revenue			Percent Change 2021-2022
Professional Services
Revenue
Boot Hill Casino	$	38,769		99	%	$	29,951		99	%		29	%
Management/Professional Services		378		1	%		254		1	%		49	%
Revenue		39,147		100	%		30,205		100	%		30	%
Costs of Professional Services		15,798		41	%		14,214		47	%		11	%
Expenses		13,378		34	%		10,945		36	%		22	%
Total costs and expenses		29,176		75	%		25,159		83	%		16	%
Professional Services operating income before noncontrolling interest in BHCMC, LLC	$	9,971		25	%	$	5,046		17	%		98	%

(dollars in thousands)	2022		Percent of Revenue			2021		Percent of Revenue			Percent Change 2021-2022
Aerospace Products
Revenue	$	34,326		100	%	$	31,275		100	%		10	%
Costs of Aerospace Products		22,434		65	%		23,293		74	%		-4	%
Expenses		5,734		17	%		7,128		23	%		-20	%
Total costs and expenses		28,168		82	%		30,421		97	%		-7	%
Aerospace Products operating income	$	6,158		18	%	$	854		3	%		621	%

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Professional Services

● Revenue from Professional Services increased 30% to $39.1 million in fiscal 2022 from $30.2 million in fiscal 2021. We increased our marketing effort into an expanded market area. We believe this resulted in an increase in patron visits and an increase in the average spend per visit.

In fiscal 2022 Boot Hill Casino received gross receipts for the State of Kansas of $50.2 million compared to $39.3 million in fiscal 2021. Mandated fees, taxes and distributions reduced gross receipts by $15.8 million resulting in gaming revenue of $34.4 million in fiscal 2022 compared to $26.8 million in fiscal 2021, an increase of 28%.  Non-gaming revenue at Boot Hill Casino was $4.4 million in fiscal 2022 compared to $3.1 million in fiscal 2021.

The remaining management and Professional Services revenue includes professional management services in the gaming industry, and licensed architectural services. Professional Services revenue excluding Boot Hill Casino increased 49% to $378 in fiscal 2022 compared to $254 in fiscal 2021.

● Costs increased 11% in fiscal 2022 to $15.8 million compared to $14.2 million in fiscal 2021. Costs were 41% of segment total revenue in fiscal 2022, compared to 47% of segment total revenue in fiscal 2021. 

● Expenses increased 22% in fiscal 2022 to $13.4 million compared to $10.9 million in fiscal 2021. Expenses were 34% of segment total revenue in fiscal 2022, compared to 36% of segment total revenue in fiscal 2021. The increase is due primarily to 1) an increase in marketing efforts into an expanded market area, and 2) Professional Services growing at a faster rate than Aerospace Products and were allocated a larger portion of the corporate allocation pool.

Aerospace Products

● Revenue increased 10% to $34.3 million in fiscal 2022 compared to $31.3 million in fiscal 2021. This $3.1 million increase was due to an increase in our aircraft avionics and special mission electronics business of $3.4 million and a decrease in our aircraft modification business of $351. We have invested in the development of several STCs. These STCs are state of the art avionics and we are aggressively marketing both domestically and internationally.

● Costs decreased 4% to $22.4 million in fiscal 2022 compared to $23.3 million in fiscal 2021. Costs were 65% of segment total revenue in fiscal 2022, compared to 74% of segment total revenue in fiscal 2021. The decrease in costs is due primarily to a change in product mix in the aircraft modification business.

● Expenses decreased 20% in fiscal 2022 to $5.7 million compared to $7.1 million in fiscal 2021. Expenses were 17% of segment total revenue in fiscal 2022, compared to 23% of segment total revenue in fiscal 2021. The decrease is due primarily to the revenue of Aerospace Products growing at a slower rate than Professional Services and were allocated a smaller portion of the corporate allocation pool.

Liquidity and Capital Resources (in thousands)

At April 30, 2022, the Company has a line of credit with Kansas State Bank in the form of a promissory note with an intereset rate 3.65% totaling $2,000. The unused line at April 30, 2022 was $2,000. There were no advances made on the line of credit during the year ended April 30, 2022. The line of credit is due on demand and is collateralized by a first and second position on all assets of the Company.

One note with Academy Bank, N.A. for $32,667 collateralized by all of BHCMC's assets and compensation under the State management contract with an interest rate of 5.32% payable over seven years with an initial twenty-year amortization and a balloon payment of $19,250 at the end of seven years. The second note with Academy Bank, N.A. for $12,721 collateralized by all of BHCMC's assets and compensation under the State management contract with an interest rate of 5.75% payable in full over five years. These notes contain a covenant to maintain a debt service coverage ratio of 1.3 to 1.0. These notes also contain a liquidity covenant requiring the Company to maintain an aggregate sum of $1.5 million of unrestricted cash. We are in compliance with these covenants at April 30, 2022.

At April 30, 2022, there is one note with 1st Source Bank with an interest rate of 6.25% collateralized by an aircraft security agreement totaling $534. This note was used to purchase an aircraft. This note matures in January 2023.

One note with Fidelity State Bank and Trust Company for $181 remains for real estate purchased in Dodge City, Kansas.  The interest rate on this note is 6.25%. This note matures in June 2024.

At April 30, 2022, there is a note payable with Bank of America, N.A. collateralized by real estate with a balance of $1,106. The interest rate on this note is at SOFR plus 1.75%. This note matures in March 2029.

At April 30, 2022, there is a note payable with Bank of America, N.A. collateralized by real estate with a balance of $507. The interest rate on this note is at SOFR plus 1.75%. This note matures in March 2029.

At April 30, 2022, there is a note payable with Patriots Bank with an interest rate of 4.35% collateralized by aircraft security agreements totaling $1,197. This note matures in March 2029.

At April 30, 2022, there is a note payable with an interest rate of 8.13% totaling $52 collateralized by equipment. This note matures in October 2025.

We are not in default of any of our notes as of April 30, 2022 or July 15, 2022.

We believe that our current banks will provide the necessary capital for our business operations. However, we continue to maintain contact with other banks that have an interest in funding our working capital needs to continue our growth in operations in 2022 and beyond.

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During fiscal 2022 our cash position decreased by $9.5 million. Net income was $12.2 million. Cash flows from operating activities provided $11.0 million. Non-cash activities consisting of depreciation and amortization contributed $5.3 million, 401(k) stock issues contributed $807, gain on sale of airplanes used $75, forgiveness of debt used $2.0 million and deferred compensation contributed $585. Deferred income taxes increased our cash position by $174. Accounts receivable decreased our cash position by $1.7 million. Inventories decreased our cash position by $304. Accounts payable and contract liability decreased our cash position by $4.1 million. Contract assets decreased our cash position by $1.0 million. Prepaid expenses and other assets increased our cash by $141, while gaming facility mandated payments increased our cash by an additional $172. Accrued liabilities, other liabilities and income tax payable increased our cash position by $832.

Cash used in investing activities was $9.5 million. We invested $1.1 million towards STCs, $5.2 million in construction of a new hangar, $1.2 million to purchase a new hangar, and $2.0 million on equipment and furnishings. We received $75 in proceeds from the sale of an airplane.

Cash used in financing activities was $11.1 million. We increased our debt by $1.3 million. We made repayments on our debt of $4.4 million. We used $7.7 million to purchase the noncontrolling interest of BHCMC, LLC. We reduced our lease liability by $108. We purchased company stock of $168. The stock acquired was placed in treasury.

The Company anticipates capital expenditures in fiscal year 2023 to be approximately $4.8 million, consisting of $1.3 million on STC's, $700 on the construction of a new hangar, $2.0 million on equipment and furnishings, and $800 on the implementation of sports wagering. We anticipate our cash balance will be sufficient to cover cash requirements through the current fiscal year.

The COVID pandemic caused a global recession and the sustainability of the economic recovery remains unclear. The COVID pandemic has also significantly increased economic and demand uncertainty, has caused inflationary pressure in the U.S. and elsewhere, and has led to disruption and volatility in demand for our services. The COVID pandemic may negatively affect our capital resources and operations.

The Bureau of Labor Statistics reported that the Consumer Price Index increased 7 percent in 2021, indicating the largest increase since 1982. Many of our operating expenses are sensitive to increases in inflation including equipment prices, fuel costs, and employee-related costs. Insurance costs have also significantly increased with most major carriers. Furthermore, inflationary pressures the market is currently experiencing may increase costs for materials, supplies, and services. Rising inflation may also drive demand for increases in compensation for employees which may result in increase in labor costs. With increasing costs, we may have to increase our prices to maintain the same level of profitability.

Critical Accounting Estimates:

We believe that there are several accounting policies that are critical to understanding our historical and future performance, as these policies affect the reported amount of revenue and other significant areas involving management judgments and estimates. These significant accounting policies relate to revenue recognition, the use of estimates, long-lived assets, and Supplemental Type Certificates. These policies and our procedures related to these policies are described in detail below and under specific areas within this "Management Discussion and Analysis of Financial Condition and Results of Operations." In addition, Note 1 to the consolidated financial statements expands upon discussion of our accounting policies.

Revenue Recognition: Revenue Recognition: ASC Topic 606, “Revenue from Contracts with Customers”

Under ASC 606, revenue is recognized when a customer obtains control of promised services in an amount that reflects the consideration we expect to receive in exchange for those services. To achieve this core principal, the Company applies the following five steps:

1) Identify the contract, or contracts, with a customer

A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

2) Identification of the performance obligations in the contract

At contract inception, an entity shall assess the goods or services promised in a contract with a customer and shall identify as a performance obligation each promise to transfer to the customer. Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation.

3) Determination of the transaction price

The transaction price is the amount that an entity allocates to the performance obligations identified in the contract and, therefore, represents the amount of revenue recognized as those performance obligations are satisfied. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.

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4) Allocation of the transaction price to the performance obligations in the contract

Once a contract and associated performance obligations have been identified and the transaction price has been determined, ASC 606 requires an entity to allocate the transaction price to each performance obligation identified. This is generally done in proportion to the standalone selling prices of each performance obligation (i.e., on a relative standalone selling price basis). As a result, any discount within the contract generally is allocated proportionally to all the separate performance obligations in the contract. The Company is applying the right to invoice practical expedient to recognize revenue. As a result, the entity bypasses the steps of determining the transaction price, allocating that transaction price and determining when to recognize revenue as it will recognize revenue as billed by multiplying the price assigned to the good or service, by the units.

5) Recognition of revenue when, or as, we satisfy a performance obligation

Revenue is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control transfers either over time or at a point in time. Revenue is recognized when control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

Aircraft modifications are performed under fixed-price contracts. Revenue from fixed-priced contracts are recognized on the percentage-of-completion method, measured by the direct labor incurred compared to total estimated direct labor. Using direct labor best represents the progress on a contract.

Revenue from Avionics products are recognized when shipped. Payment for these Avionics products is due within 30 days of the invoice date after shipment. Revenue from Gaming Management and other Corporate/Professional Services is recognized as the service is rendered.

Regarding warranties and returns, our products are special order and are not suitable for return. Our products are unique upon installation and tested prior to their release to the customer and acceptance by the customer. In the rare event of a warranty claim, the claim is processed through the normal course of business and may include additional charges to the customer. In our opinion, any future warranty work would not be material to the consolidated financial statements.

Gaming revenue is the gross gaming win as reported by the Kansas Lottery casino reporting systems, less the mandated payments by and for the State of Kansas. Electronic games-slots and table games revenue is the aggregate of gaming wins and losses. Liabilities are recognized for chips and "ticket-in, ticket-out" coupons in the customers' possession, and for accruals related to anticipated payout of progressive jackpots. Progressive gaming machines, which contain base jackpots that increase at a progressive rate based on the number of coins played, are deducted from revenue as the value of jackpots increase. Food, beverage, and other revenue is recorded when the service is received and paid.

Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Future events and their effects cannot be determined with certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and any such differences may be material to our consolidated financial statements. Significant estimates include assumptions about collection of accounts receivable, the valuation, and recognition of stock-based compensation expense, valuation for deferred tax assets and useful life of fixed assets. We believe any changes in these estimates will not result in a materially adverse affect to the Company's financial position or results of operations.

Long-lived Assets: The Company accounts for its long-lived assets in accordance with ASC Topic 360-10, "Accounting for the Impairment or Disposal of Long-Lived Assets." ASC Topic 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value or disposable value.

Supplemental Type Certificates: Supplemental Type Certificates (STCs) are authorizations granted by the Federal Aviation Administration (FAA) for specific modification of a certain aircraft. The STC authorizes us to perform modifications, installations, and assemblies on applicable customer-owned aircraft. Costs incurred to obtain STCs are capitalized and subsequently amortized over a seven year life. The legal life of an STC is indefinite.

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Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable. 

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements of the Registrant are set forth on pages 30 through 48 of this report.

Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A.  CONTROLS AND PROCEDURES

We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms. Our principal executive and financial officers have evaluated our disclosure controls and procedures as of the end of the period covered by this report on Form 10-K and have determined that such disclosure controls and procedures are effective, based on criteria in the Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

Evaluation of disclosure controls and procedures: Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.

In connection with the preparation of this Form 10-K, our Chief Executive Officer and our Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of April 30, 2022. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of April 30, 2022.

Internal Control Over Financial Reporting

Management Report on Internal Control Over Financial Reporting: Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal controls over financial reporting based on the framework in Internal Control - Integrated Framework issued by ("COSO"). Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of April 30, 2022.

Our internal control over financial reporting includes policies and procedures that (1) pertain to maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Company assets that could have a material effect on the financial statements.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting because it is not required for a smaller reporting company.

Limitations on Controls

Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Changes in Internal Control Over Financial Reporting: In our opinion, there were no material changes in the Company internal controls over financial reporting during the three months ended April 30, 2022 that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

Item 9B.  OTHER INFORMATION

None. 

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PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information required by this Item 10 will be presented in the Company’s definitive proxy statement for its annual meeting of shareholders, which will be held on September 27, 2022, and is incorporated herein by reference. Certain information regarding executive officers of Butler National Corporation is included above in Part I of this Form 10-K under the caption “Executive Officers of the Registrant” pursuant to Instruction 3 to Item 401(b) of Regulation S-K and General Instruction G(3) of Form 10-K.

Item 11. EXECUTIVE COMPENSATION

Information required by this Item 11 regarding executive compensation will be presented in the Company’s definitive proxy statement for its annual meeting of shareholders, which will be held on September 27, 2022, and is incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table provides information about our common stock that may be issued under our equity compensation plan as of April 30, 2022.

Plan Category	Securities to be issued upon exercise of outstanding options and rights		Weighted average exercise price per share		Securities available for future issuance
Equity compensation plans approved by security holders		-		-		5,000,000
Equity compensation plans not approved by security holders		-		-		-
Total		-		-		5,000,000

Information regarding security ownership of certain beneficial owners and management and related stockholder matters will be presented in the Company’s definitive proxy statement for its annual meeting of stockholders, which will be held on September 27, 2022, and is incorporated herein by reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information required by this Item 13 regarding certain relationships, related party transactions and director independence will be presented in the Company’s definitive proxy statement for its annual meeting of shareholders, which will be held on September 27, 2022, and is incorporated herein by reference.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Information required by this Item 14 regarding accounting fees and services will be presented in the Company’s definitive proxy statement for its annual meeting of stockholders, which will be held on September 27, 2022, and is incorporated herein by reference.

26

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Documents Filed as Part of Form 10-K Report.

(1)	Financial Statements:
	Description	Page No.
	Report of Independent Registered Public Accounting Firm	30
	Consolidated Balance Sheets as of April 30, 2022 and 2021	32
	Consolidated Statements of Operations for the years ended April 30, 2022 and 2021	33
	Consolidated Statements of Stockholders' Equity for the years ended April 30, 2022 and 2021	34
	Consolidated Statements of Cash Flows for the years ended April 30, 2022 and 2021	35
	Notes to Consolidated Financial Statements	36

All other financial statements and schedules not listed have been omitted because the required information is inapplicable or the information is presented in the financial statements or related notes.

(2) Exhibits Index:

No.	Description
3.1	Articles of Incorporation, as amended and restated, are incorporated by reference to Exhibit A of our Form DEF 14A filed on December 26, 2001 (File No. 000-01678).
3.2	Bylaws, as amended, are incorporated by reference to Exhibit 3.2 of our Form 10-Q for the period ended January 31, 2013 filed on March 12, 2013 (File No. 000-01678).
4.1	The Shareholder Rights Agreement between Butler National Corporation and UMB Bank, N.A. as Rights Agent, dated August 2, 2011, incorporated by reference to Exhibit 4.1 of the Company's registration statement on Form 8-A dated August 2, 2011, and as refiled as Exhibit 4.1 to the Company's Form 10-Q for the period ended October 31, 2016 (File No. 000-01678).
4.2	Amendment One to Rights Agreement between Butler National Corporation and UMB Bank, N.A. dated July 22, 2021, incorporated by reference to Exhibit 4.2 of our Form 8-K filed on July 26, 2021 (File No. 000-01678).
4.3	Description of Securities.
10.1	Employment Agreement between Butler National Corporation and Clark D. Stewart dated February 4, 2020, incorporated by reference to Exhibit 10.1 of our Form 8-K, dated February 4, 2020 (File No. 000-01678).*
10.2	Employment Agreement between Butler National Corporation and Christopher J. Reedy dated February 4, 2020, incorporated by reference to Exhibit 10.2 of our Form 8-K, dated February 4, 2020 (File No. 000-01678).*
10.3	Employment Agreement between Butler National Corporation and Craig D. Stewart dated February 4, 2020, incorporated by reference to Exhibit 10.3 of our Form 8-K, dated February 4, 2020 (File No. 000-01678).*
10.4	Employment Agreement between Butler National Corporation and Tad M. McMahon dated February 4, 2020, incorporated by reference to Exhibit 10.4 of our Form 8-K, dated February 4, 2020 (File No. 000-01678).*
10.5	Lottery Gaming Facility Management Contract between the State of Kansas and Butler National Service Corporation, approved by the Kansas Racing and Gaming Commission on December 8, 2008, incorporated by reference to Exhibit 10.6 of our Form 10-Q for the period ended July 31, 2012 (File No. 000-01678).

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10.6	First Amendment to the Lottery Gaming Facility Management Contract between the State of Kansas and Butler National Service Corporation, dated December 29, 2009, incorporated by reference to Exhibit 10.7 of our Form 10-Q for the period ended July 31, 2012 (File No. 000-01678).
10.7	Renewal of Lottery Gaming Facility Management Contract between the State of Kansas, BNSC, and BHCMC effective December 15, 2019, incorporated by reference to Exhibit 10.1 of our Form 8-K dated December 9, 2019 (File No. 000-01678).
10.8	Third Amendment to the Lottery Gaming Facility Management Contract between the State of Kansas, BNSC, and BHCMC effective December 15, 2019, incorporated by reference to Exhibit 10.1 of our Form 8-K dated December 9, 2019 (File No. 000-01678).
10.9	Written Consent for Renewal of the Lottery Gaming Facility Management Contract between the State of Kansas, BNSC and BHCMC effective December 15, 2019, incorporated by reference to Exhibit 10.3 of our Form 8-K dated December 9, 2019 (File No. 000-01678).
10.10	Bill of Sale dated April 30, 2013, by and among Butler National Services, Inc. and Beadle Enterprises LLC, incorporated by reference to Exhibit 10.1 of our Form 8-K filed on May 2, 2013 (File No. 000-01678).
10.11	Promissory Note dated April 29, 2015, by and among BHCMC, L.L.C. and KS StateBank, incorporated by reference to Exhibit 10.23 of our Form 10-K filed on July 29, 2015 (File No. 000-01678).
10.12	Butler National Corporation 2016 Equity Incentive Plan, incorporated by reference to Exhibit A of the Company's Definitive Proxy Statement filed September 29, 2016 (File No. 000-01678).
10.13	Form of Registered Stock Agreement under the Butler National Corporation 2016 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 of our Form 8-K filed on April 17, 2019 (File No. 000-01678).
10.14	Promissory Note dated February 27, 2019, by Butler National, Inc. and First Source Bank, incorporated by reference to Exhibit 10.18 of our Form 10-K filed on July 19, 2019 (File No. 000-16780).
10.15	Loan Agreement dated December 17, 2020 by BHCMC, L.L.C., BHCRE LLC, and Academy Bank, N.A., incorporated by reference to Exhibit 10.1 of our Form 10-Q filed on March 12, 2021 (File No. 000-16780).
10.16	Sale and Purchase Agreement for Preferred Membership Interest Units in BHCMC, L.L.C., dated September 13, 2021, incorporated by reference to Exhibit 10.1 of our Form 8-K filed on October 20, 2021.
10.17	Loan Modification Agreement dated October 18, 2021 between BHCMC, L.L.C. and Academy Bank N.A., incorporated by reference to Exhibit 10.2 of our Form 8-K filed on October 20, 2021.
14	Standards of Business Conduct and Ethics, incorporated by reference to Exhibit 14 of the Company's Form 10-K for the year ended April 30, 2008 (File No. 000-01678).
21	List of Subsidiaries.
23.1	Consent of Independent Registered Public Accountants RBSM LLP.
31.1	Certificate furnished pursuant to 18 U.S.C 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certificate furnished pursuant to 18 U.S.C 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certifications of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from the Company's Annual Report on Form 10-K for the year ended April 30, 2022, formatted in Inline XBRL (eXtensible Business Reporting Language) includes; (i) Consolidated Balance Sheets as of April 30, 2022 and 2021; (ii) Consolidated Statements of Operations for the years ended April 30, 2022 and 2021; (iii) Consolidated Statements of Stockholders' Equity for the years ended April 30, 2022 and 2021; (iv) Consolidated Statements of Cash Flows for the years ended April 30, 2022 and 2021, and (v) the Notes to Consolidated Financial Statements, with detail tagging.
104	Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

* Relates to management contract, compensatory plan or arrangement.

28

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

July 15, 2022

BUTLER NATIONAL CORPORATION

/s/ Clark D. Stewart
Clark D. Stewart, President
and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated:

Signature	Title	Date
/s/ Clark D. Stewart	President, Chief Executive Officer and Director	July 15, 2022
Clark D. Stewart	(Principal Executive Officer)
/s/ Tad M. McMahon	Chief Financial Officer	July 15, 2022
Tad M. McMahon	(Principal Financial Officer and Principal Accounting Officer)
/s/ R. Warren Wagoner	Chairman of the Board and Director	July 15, 2022
R. Warren Wagoner
/s/ David B. Hayden	Director	July 15, 2022
David B. Hayden
/s/ Bradley K. Hoffman	Director	July 15, 2022
Bradley K. Hoffman
/s/ Craig D. Stewart	President - Aerospace and Director	July 15, 2022
Craig D. Stewart
/s/ John M. Edgar	Director	July 15, 2022
John M. Edgar
/s/ Joe A. Peters	Director	July 15, 2022
Joe A. Peters

29

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Butler National Corporation and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Butler National Corporation and Subsidiaries (collectively, the “Company”) as of April 30, 2022 and 2021, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended April 30, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended April 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

30

Description of the Matter

Revenue recognition – Estimated Costs at Completion

As described in Note 1 to the consolidated financial statements, a significant portion of the Company’s revenues are from fixed-price contracts to deliver aircraft modifications built to customer specifications. These services and products are provided by its wholly-owned subsidiary, Avcon Industries, Inc. A portion of the Company’s total revenues of $19.5 million for the year ended April 30, 2022 are from such contracts having a duration from 1 to 32 months. Performance obligations related to delivering complex airplane modification built to customer specifications under these contracts are recognized over time as these performance obligations do not create assets with an alternative use to the Company and the Company has an enforceable right to payment for performance to date. To measure the transfer of control, revenue is recognized based on the extent of progress towards completion of the performance obligation. The Company generally uses the cost-to-cost measure of progress for its contracts because that best depicts the transfer of control to the customer which occurs as the Company incurs costs on its contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Estimating the total costs at completion of a performance obligation requires management to make estimates related to items such as direct labor hours and productivity, material costs and, and the costs of overhead. The Company estimates the percentage completed based on actual direct labor hours spent compared to estimated direct labor hours and applying this completion percentage to the entire contract.

The principal considerations for our determination that performing procedures relating to revenue recognition – estimated direct labor hours and costs at completion is a critical audit matter.  Significant judgments by management when developing the estimated costs at completion on individual fixed-price contracts, in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating evidence related to the estimated costs at completion, including the evaluation of management’s judgment as it relates to the direct labor hours, material costs and the costs of overhead.

How We Addressed the Matter in Our Audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included gaining an understanding of controls relating to the revenue recognition process, including controls over the completeness and accuracy of estimated costs at completion. The procedures also included, among others, evaluating and understanding management’s process for developing estimates of total estimated costs at completion for long-term contracts for a sample of contracts. This included testing the completeness and accuracy of costs incurred to date and evaluating the reasonableness of significant estimates used by management, including labor costs, material costs, and overhead costs, and considering factors that could affect the accuracy of those estimates. Evaluating the reasonableness of the significant assumptions used involved assessing management’s ability to reasonably estimate costs at completion by (i) assessing the reasonableness of estimates of total costs at completion in comparison to actual total costs incurred to date, (ii) assessing the reasonableness of the estimated labor and recalculating overhead (iii) obtaining an understanding of the contract and the performance obligations to test the allocation of the total transaction price to the performance obligation in the contract , and (iv) evaluating the timely identification of circumstances that may warrant a modification to estimated costs to complete, including actual costs in excess of estimates.

/s/ RBSM LLP

We have served as the Company’s auditor since 2015.

Las Vegas, NV

July 15, 2022

PCAOB ID 587

31

BUTLER NATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF April 30, 2022 and 2021

(in thousands, except per share data)

	April 30, 2022			April 30, 2021
ASSETS
CURRENT ASSETS:
Cash	$	12,487		$	22,022
Accounts receivable, net of allowance for doubtful accounts		3,636			1,961
Inventories
Parts and raw materials		4,722			4,829
Work in process		4,080			3,657
Finished goods		70			82
Total inventory, net of allowance		8,872			8,568
Contract asset		1,470			421
Prepaid expenses and other current assets		1,361			1,496
Total current assets		27,826			34,468
PROPERTY, PLANT AND EQUIPMENT:
Lease right-to-use assets		3,240			3,099
Construction in progress		6,417			1,170
Land		4,751			4,751
Building and improvements		40,962			39,747
Aircraft		8,719			9,138
Machinery and equipment		4,917			4,253
Office furniture and fixtures		11,826			10,699
Leasehold improvements		4,032			4,032
		84,864			76,889
Accumulated depreciation		(23,290	)		(20,519	)
Total property, plant and equipment		61,574			56,370
SUPPLEMENTAL TYPE CERTIFICATES (net of accumulated amortization of $9,336 at April 30, 2022 and $8,041 at April 30, 2021)		8,018			8,211
OTHER ASSETS:
Other assets (net of accumulated amortization of $11,575 at April 30, 2022 and $10,886 at April 30, 2021)		1,621			2,872
Deferred tax asset, net		1,770			-
Total other assets		3,391			2,872
Total assets	$	100,809		$	101,921
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	5,165		$	5,972
Current maturities of lease liability		106			107
Accounts payable		2,773			1,893
Contract liability		820			5,798
Gaming facility mandated payment		1,630			1,458
Compensation and compensated absences		1,911			1,862
Income tax payable		1,049			212
Other current liabilities		211			265
Total current liabilities		13,665			17,567
Long-term debt, net of current maturities		43,411			39,816
Lease liability, net of current maturities		2,899			2,759
Deferred tax liability, net		-			400
Total long-term liabilities		46,310			42,975
Total liabilities		59,975			60,542
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Butler National Corporation's stockholders' equity
Preferred stock, par value $5: Authorized 50,000,000 shares, all classes Designated Classes A and B 200,000 shares $100 Class A, 9.8%, cumulative if earned liquidation and redemption value $100, no shares issued and outstanding		-			-
$1,000 Class B, 6%, convertible cumulative, liquidation and redemption value $1,000, no shares issued and outstanding		-			-
Common stock, par value $.01: authorized 100,000,000 shares issued 80,348,572 shares, and outstanding 76,458,146 shares at April 30, 2022 and issued 79,070,382 shares, and outstanding 75,366,749 shares at April 30, 2021		803			790
Capital contributed in excess of par		12,160			16,900
Treasury stock at cost, 3,890,426 shares at April 30, 2022 and 3,703,633 shares at April 30, 2021		(2,077	)		(1,909	)
Retained earnings		29,948			19,580
Total Butler National Corporation's stockholders' equity		40,834			35,361
Noncontrolling interest in BHCMC, LLC		-			6,018
Total stockholders' equity		40,834			41,379
Total liabilities and stockholders' equity	$	100,809		$	101,921

The accompanying notes are an integral part of these consolidated financial statements

32

BUTLER NATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED April 30, 2022 and 2021

(in thousands, except per share data)

	2022			2021
REVENUES:
Professional services	$	39,147		$	30,205
Aerospace products		34,326			31,275
Total revenues		73,473			61,480
COSTS AND EXPENSES:
Cost of professional services		15,798			14,214
Cost of aerospace products		22,434			23,293
Marketing and advertising		5,236			3,752
Employee benefits		2,573			2,571
Depreciation and amortization		2,815			3,542
General, administrative and other		8,488			8,208
Total costs and expenses		57,344			55,580
OPERATING INCOME		16,129			5,900
OTHER INCOME (EXPENSE):
Interest expense		(2,689	)		(3,138	)
Forgiveness of debt		2,001
Gain on sale of airplanes		75			-
Other		-			7
Total other income (expense)		(613	)		(3,131	)
INCOME BEFORE INCOME TAXES		15,516			2,769
PROVISION (BENEFIT) FOR INCOME TAXES
Provision for income taxes		3,102			536
Deferred income tax (benefit)		174			(225	)
NET INCOME		12,240			2,458
Net (income) loss attributable to noncontrolling interest in BHCMC, LLC		(1,872	)		(1,025	)
NET INCOME ATTRIBUTABLE TO BUTLER NATIONAL CORPORATION	$	10,368		$	1,433
BASIC EARNINGS PER COMMON SHARE ATTRIBUTABLE TO BUTLER NATIONAL CORPORATION	$	.14		$	.02
WEIGHTED AVERAGE SHARES USED IN PER SHARE CALCULATION		75,340,131			74,144,957
DILUTED EARNINGS PER COMMON SHARE ATTRIBUTABLE TO BUTLER NATIONAL CORPORATION	$	.14		$	.02
WEIGHTED AVERAGE SHARES USED IN PER SHARE CALCULATION		75,340,131			74,144,957

The accompanying notes are an integral part of these consolidated financial statements 

33

BUTLER NATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED April 30, 2022 and 2021

(dollars in thousands)

	Shares of Common Stock			Common Stock			Capital Contributed in Excess of Par			Shares of Treasury Stock		Treasury Stock at Cost			Retained Earnings		Total Stock-holders’ Equity BNC			Non controlling Interest in BHCMC			Total Stock-holders’ Equity
Balance, April 30, 2020		77,719,677		$	777		$	15,600			3,321,415	$	(1,713	)	$	18,147	$	32,811		$	4,993		$	37,804
Issuance of stock benefit plan		1,400,705			14			707			-		-			-		721			-			721
Stock repurchase		-			-			-			382,218		(196	)		-		(196	)		-			(196	)
Deferred compensation, restricted stock		(50,000	)		(1	)		593			-		-			-		592			-			592
Net Income		-			-			-			-		-			1,433		1,433			1,025			2,458
Balance, April 30, 2021		79,070,382			790			16,900			3,703,633		(1,909	)		19,580		35,361			6,018			41,379
Issuance of stock benefit plan		1,328,190			13			794			-		-			-		807			-			807
Stock repurchase		-			-			-			186,793		(168	)		-		(168	)		-			(168	)
Purchase of non-controlling interest in BHCMC, LLC		-			-			(6,119	)		-		-			-		(6,119	)		(7,890	)		(14,009	)
Deferred compensation, restricted stock		(50,000	)		-			585			-		-			-		585			-			585
Net Income		-			-			-			-		-			10,368		10,368			1,872			12,240
Balance, April 30, 2022		80,348,572		$	803		$	12,160			3,890,426	$	(2,077	)	$	29,948	$	40,834		$	-		$	40,834

The accompanying notes are an integral part of these consolidated financial statements. 

34

BUTLER NATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED April 30, 2022 and 2021

(dollars in thousands)

	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	12,240		$	2,458
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		5,281			5,856
Forgiveness of debt		(2,001	)		-
Stock issued for benefit plan		807			721
Deferred income tax expense (benefit)		174			(225	)
Gain on sale of airplanes		(75	)		-
Deferred compensation, restricted stock		585			592
Changes in operating assets and liabilities
Accounts receivable		(1,675	)		823
Inventories		(304	)		47
Contract asset		(1,049	)		(226	)
Prepaid expenses and other assets		141			123
Accounts payable		880			931
Contract liability		(4,978	)		3,609
Lease liability		-			(659	)
Accrued liabilities		49			(709	)
Gaming facility mandated payment		172			120
Income tax payable		837			6
Other liabilities		(54	)		(9	)
Net cash provided by operating activities		11,030			13,458
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(9,579	)		(6,992	)
Proceeds from sale of airplanes		75			-
Net cash used in investing activities		(9,504	)		(6,992	)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings of long-term debt		1,262			2,479
Repayments of long-term debt		(4,388	)		(3,380	)
Payments on lease liability		(108	)		(140	)
Repurchase of common stock		(168	)		(196	)
Purchase of noncontrolling interest in BHCMC, LLC		(7,659	)		-
Net cash used in financing activities		(11,061	)		(1,237	)
NET INCREASE (DECREASE) IN CASH		(9,535	)		5,229
CASH, beginning of year		22,022			16,793
CASH, end of year	$	12,487		$	22,022
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	2,684		$	3,034
Income taxes paid	$	2,265		$	535
NON CASH INVESTING AND FINANCING ACTIVITY
Secured notes payable for purchase of noncontrolling interest in BHCMC, LLC, net	$	7,914		$	-
Notes receivable forgiven as part of purchase of noncontrolling interest in BHCMC, LLC	$	780		$	-
Deferred tax asset relating to the purchase of noncontrolling interest in BHCMC, LCC	$	2,344		$	-
Purchase of noncontrolling interest - note receivable and other liabilities	$	6,350		$	-
Secured notes payable for purchase of leased assets, net	$	-		$	41,205
Lease right-of-use assets purchased	$	247		$	38,622
Lease liability for purchase of assets under lease	$	-		$	39,709

The accompanying notes are an integral part of these consolidated financial statements. 

35

BUTLER NATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data)

1. NATURE OF OPERATIONS, ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:

The accompanying consolidated financial statements include the accounts of Butler National Corporation (BNC) and its wholly-owned active subsidiaries, Avcon Industries, Inc., BCS Design, Inc., Butler National Service Corporation, Butler National Corporation-Tempe, Butler Avionics, Inc., Butler National, Inc., Butler Temporary Services, Inc., Kansas International Corporation, Kansas International DDC, LLC, and BHCMC, LLC (collectively, The Company). These consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”), expressed in U.S. dollars. All amounts are in thousands, except share and par values, unless otherwise noted. All significant intercompany balances and transactions have been eliminated in consolidation. The fiscal year end of the Company is April 30.

Avcon Industries, Inc. modifies business category aircraft at its Newton, Kansas facility. Modifications can include passenger-to-freighter configuration, addition of aerial photography capability, ISR modifications, and stability enhancing modifications. Butler Avionics, Inc. sells, installs and repairs avionics equipment (airplane radio equipment and flight control systems). Butler National, Inc. acquires airplanes, principally Learjets, to refurbish and sell. Butler Temporary Services, Inc. processes company payroll. Kansas International Corporation and Kansas International DDC, LLC own property. Butler National Corporation-Tempe is primarily engaged in the manufacture electronic upgrades for classic weapon control systems used by the military. Butler National Service Corporation is a management consulting and administrative services firm providing business planning and financial coordination to Indian tribes interested in owning and operating casinos under the terms of the Indian Gaming Regulatory Act of 1988. BHCMC, LLC provides management services for the Boot Hill Casino under a management agreement with the State of Kansas. BCS Design, Inc. provides professional architectural services.

SIGNIFICANT ACCOUNTING POLICIES:

a) Accounts receivable: Accounts receivable are carried on a gross basis, with no discounting, less the allowance for doubtful accounts. Management estimates the allowance for doubtful accounts based on existing economic conditions, the financial conditions of the customers, and the amount and the age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted. Allowance for doubtful accounts are calculated on the historical write-off of doubtful accounts of the individual subsidiaries. Invoices are generally considered a doubtful account if no payment has been made in the past 90 days. We review these policies on a quarterly basis, and based on these reviews, we believe we maintain adequate reserves.

b) Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Future events and their effects cannot be determined with certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and any such differences may be material to our financial statements. Significant estimates include assumptions about collection of accounts receivable, the valuation and recognition of stock-based compensation expense, valuation for deferred tax assets and useful life of fixed assets.

c) Inventories: Inventories are priced at the lower of cost, determined on a first-in, first-out basis, or net realizable value. Inventories include material, labor and factory overhead required in the production of our products.

Inventory obsolescence is examined on a regular basis. When determining our estimate of obsolescence, we consider inventory that has been inactive for five years or longer and the probability of using that inventory in future production. The obsolete inventory generally consists of Falcon and Learjet parts and electrical components.  At April 30, 2022 and 2021, the estimate of obsolete inventory was $240 and $691 respectively.

d) Property and Related Depreciation: Machinery and equipment are recorded at cost and depreciated over their estimated useful lives. Depreciation is provided on a straight-line basis. The lives used for the significant items within each property classification range from 3 to 39 years.

Maintenance and repairs are charged to expense as incurred. The cost and accumulated depreciation of assets retired are removed from the accounts and any resulting gains or losses are reflected as income or expense.

36

 

e) Long-Lived Assets: The Company accounts for its long-lived assets in accordance with ASC Topic 360-10, "Accounting for the Impairment or Disposal of Long-Lived Assets." ASC Topic 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value or disposable value.

f) Other Assets: Our other asset account includes assets of $5,500 related to the Kansas Expanded Lottery Act Management Contract privilege fee, $6,151 of gaming equipment we were required to pay for ownership by the State of Kansas Lottery, and JET autopilot intellectual property of $1,417, and miscellaneous other assets of $128.  BHCMC expects the $5,500 privilege fee to have a value over the remaining life of the initial Management Contract with the State of Kansas which will end in December 2024.  The State of Kansas approved a renewal management contract and an amendment to the current management contract for our professional services company BNSC via BHCMC. The renewal will take effect December 15, 2024, and continue until 2039, another 15 years. The Managers Certificate asset for use of gaming equipment is being amortized over a period of three years based on the estimated useful life of gaming equipment.  The JET intellectual property is being amortized over a period of fifteen years. Amortization relating to other assets in the year ended  April 30, 2022 and 2021 was $689 and $733, respectively.

Other assets net values are as follows:

(dollars in thousands)	2022		2021
Privilege fee	$	5,500	$	5,500
Less amortized costs		4,372		3,949
Privilege fee balance	$	1,128	$	1,551
Intangible gaming equipment	$	6,151	$	5,927
Less amortized costs		5,868		5,696
Intangible gaming equipment balance	$	283	$	231
JET autopilot intellectual property	$	1,417	$	1,417
Less amortized costs		1,335		1,241
JET autopilot intellectual property balance	$	82	$	176

g) Supplemental Type Certificates: Supplemental Type Certificates (STCs) are authorizations granted by the Federal Aviation Administration (FAA) for specific modification of a certain aircraft. The STC authorizes us to perform modifications, installations, and assemblies on applicable customer-owned aircraft. Costs incurred to obtain STCs are capitalized and subsequently amortized over seven years. The legal life of an STC is indefinite. We believe we have enough future sales to fully amortize our STC development costs. Amortization relating to STC's in the year ended  April 30, 2022 and 2021 was $1,295 and $1,012, respectively. Consultant costs, as shown below, include costs of engineering, legal and aircraft specialists. STC capitalized costs are as follows:

(dollars in thousands)	2022		2021
Direct labor	$	3,342	$	3,387
Direct materials		5,227		4,108
Consultant costs		3,083		2,983
Overhead		5,702		5,774
		17,354		16,252
Less-amortized costs		9,336		8,041
STC balance	$	8,018	$	8,211

h) Revenue Recognition: ASC Topic 606, “Revenue from Contracts with Customers”

Under ASC 606, revenue is recognized when a customer obtains control of promised services in an amount that reflects the consideration we expect to receive in exchange for those services. To achieve this core principal, the Company applies the following five steps:

1)    Identify the contract, or contracts, with a customer

A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

37

 

2)    Identification of the performance obligations in the contract

At contract inception, an entity shall assess the goods or services promised in a contract with a customer and shall identify as a performance obligation each promise to transfer to the customer. Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation.

3)    Determination of the transaction price

The transaction price is the amount that an entity allocates to the performance obligations identified in the contract and, therefore, represents the amount of revenue recognized as those performance obligations are satisfied. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.

4)    Allocation of the transaction price to the performance obligations in the contract

Once a contract and associated performance obligations have been identified and the transaction price has been determined, ASC 606 requires an entity to allocate the transaction price to each performance obligation identified. This is generally done in proportion to the standalone selling prices of each performance obligation (i.e., on a relative standalone selling price basis). As a result, any discount within the contract generally is allocated proportionally to all the separate performance obligations in the contract. The Company is applying the right to invoice practical expedient to recognize revenue. As a result, the entity bypasses the steps of determining the transaction price, allocating that transaction price and determining when to recognize revenue as it will recognize revenue as billed by multiplying the price assigned to the good or service, by the units.

5)  Recognition of revenue when, or as, we satisfy a performance obligation

Revenue is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control transfers either over time or at a point in time. Revenue is recognized when control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

Aircraft modifications are performed under fixed-price contracts. Revenue from fixed-priced contracts are recognized on the percentage-of-completion method, measured by the direct labor incurred compared to total estimated direct labor. Using direct labor best represents the progress on a contract.

Revenue from Avionics products are recognized when shipped. Payment for these Avionics products is due within 30 days of the invoice date after shipment. Revenue from Gaming Management and other Corporate/Professional Services is recognized as the service is rendered.

Regarding warranties and returns, our products are special order and are not suitable for return. Our products are unique upon installation and tested prior to their release to the customer and acceptance by the customer. In the rare event of a warranty claim, the claim is processed through the normal course of business and may include additional charges to the customer. In our opinion, any future warranty work would not be material to the consolidated financial statements.

Gaming revenue is the gross gaming win as reported by the Kansas Lottery casino reporting systems, less the mandated payments by and for the State of Kansas. Electronic games-slots and table games revenue is the aggregate of gaming wins and losses. Liabilities are recognized for chips and "ticket-in, ticket-out" coupons in the customers' possession, and for accruals related to anticipated payout of progressive jackpots. Progressive gaming machines, which contain base jackpots that increase at a progressive rate based on the number of coins played, are deducted from revenue as the value of jackpots increase. Food, beverage, and other revenue is recorded when the service is received and paid.

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i) Fair Value Measurements: Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.

Level 3 - Unobservable inputs that are supported by little or no market activities.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

For certain financial instruments, including cash and cash equivalents, short-term investments, accounts receivable, marketable securities, notes payable,  and accounts payable, the carrying amounts approximate fair value.  We do not have financial assets and liabilities that are measured at fair value on a recurring basis.  Other financial assets and liabilities are carried at cost with fair value disclosed, if required.

We measure certain other instruments, including stock-based compensation awards settled in the stock also at fair value. The determination of fair value involves the use of appropriate valuation methods and relevant inputs into valuation models.

j) Slot Machine Jackpots: If the casino is not required to make payment of the jackpot (i.e. the incremental amount on a progressive machine) due to legal requirements, the jackpot is accrued as the obligation becomes unavoidable. This liability is accrued over the time period in which the incremental progressive jackpot amount is generated with a related reduction in casino revenue. No liability is accrued with respect to the base jackpot.

k) Gaming Facility Mandated Payment: Boothill Casino is contractually obligated to pay its proportionate share of certain expenses incurred by the Kansas Lottery Commission and the Kansas Racing and Gaming Commission, which amounted to $1,968 and $1,868 in the fiscal year ended April 30, 2022 and 2021, respectively.

l) Advanced Payments and Billings in Excess of Costs Incurred: We receive advances, performance-based payments and progress payment from customers which may exceed costs incurred on certain contracts. We classify advance payments and billings in excess of costs incurred, other than those reflected as a reduction of contracts in process, as contract liability in current liabilities.

m) Earnings Per Share: Earnings per common share is based on the weighted average number of common shares outstanding during the year.

The computation of the Company basic and diluted earnings per common share is as follows:

(in thousands, except share and per share data)	2022		2021
Net income attributable to Butler National Corporation	$	10,368	$	1,433
Weighted average common shares outstanding		75,340,131		74,144,957
Dilutive effect of non-qualified stock option plans		-		-
Weighted average common shares outstanding, assuming dilution		75,340,131		74,144,957
Potential common shares if all options were exercised and shares issued		75,340,131		74,144,957
Basic earnings per common share	$	0.14	$	0.02
Diluted earnings per common share	$	0.14	$	0.02

n) Stock-based Compensation: The Company accounts for stock-based compensation under ASC 718, "Accounting for Stock-Based Compensation." These standards define a fair value based method of accounting for stock-based compensation. The cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Black-Scholes option-pricing model, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.

o) Income Taxes: The Company utilizes ASC 740, Accounting for Income Taxes. Amounts provided for income tax expense are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable under tax laws. Deferred taxes, which arise principally from temporary differences between the period in which certain income and expense items are recognized for financial reporting purposes and the period in which they affect taxable income, are included in the amounts provided for income taxes. Under this method, the computation of deferred tax assets and liabilities give recognition to enacted tax rates in effect in the year the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to amounts that we expect to realize.

p) Cash and Cash Equivalents: Cash and cash equivalents consist primarily of cash and investments in a money market fund. We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. We maintain cash in bank deposit accounts that, at times, may exceed federally insured limits. At April 30, 2022 and 2021, we had $7,835 and $16,883, respectively in bank deposits that exceeded the federally insured limits.

q) Concentration of Credit Risk: We extend credit to customers based on an evaluation of their financial condition and collateral is not required. We perform ongoing credit evaluations of our customers and maintain an allowance for doubtful accounts.

r) Research and Development: We invested in research and development activities. The amount invested in the year ended April 30, 2022 and 2021 was $2,352 and $3,493 respectively.

s) Reclassifications: Certain reclassifications within the financial statement captions have been made to maintain consistency in presentation between years. These reclassifications have no impact on the reported results of operations.

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2. DISAGGREGATION OF REVENUE:

In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.

	Year Ended April 30, 2022
	Professional Services		Aerospace Products		Total
Geographical Markets
North America	$	39,147	$	29,258	$	68,405
Europe		-		2,803		2,803
Asia		-		1,228		1,228
Australia and Other		-		1,037		1,037
	$	39,147	$	34,326	$	73,473
Major Product Lines
Casino Gaming Revenues	$	34,411	$	-	$	34,411
Casino Non-Gaming Revenues		4,358		-		4,358
Professional Services		378		-		378
Aircraft Modification		-		21,399		21,399
Aircraft Avionics		-		2,373		2,373
Special Mission Electronics		-		10,554		10,554
	$	39,147	$	34,326	$	73,473
Contract Types / Revenue Recognition Timing
Percentage of completion contracts	$	-	$	19,507	$	19,507
Goods or services transferred at a point of sale		39,147		14,819		53,966
	$	39,147	$	34,326	$	73,473

	Year Ended April 30, 2021
	Professional Services		Aerospace Products		Total
Geographical Markets
North America	$	30,205	$	25,537	$	55,742
Europe		-		3,427		3,427
Asia		-		1,332		1,332
Australia and Other		-		979		979
	$	30,205	$	31,275	$	61,480
Major Product Lines
Casino Gaming Revenues	$	26,811	$	-	$	26,811
Casino Non-Gaming Revenues		3,140		-		3,140
Professional Services		254		-		254
Aircraft Modification		-		21,750		21,750
Aircraft Avionics		-		2,583		2,583
Special Mission Electronics		-		6,942		6,942
	$	30,205	$	31,275	$	61,480
Contract Types / Revenue Recognition Timing
Percentage of completion contracts	$	-	$	19,280	$	19,280
Goods or services transferred at a point of sale		30,205		11,995		42,200
	$	30,205	$	31,275	$	61,480

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3. ACCOUNTS RECEIVABLE, NET, CONTRACT ASSET AND CONTRACT LIABILITY:

Accounts Receivables, net, contract asset and contract liability were as follows (in thousands):

	2022		2021
Accounts Receivable, net	$	3,636	$	1,961
Contract Asset		1,470		421
Contract Liability		820		5,798

Accounts Receivables, net consist of $3,636 and $1,961 from customers as of April 30, 2022 and April 30, 2021, respectively. At  April 30, 2022, and 2021, the allowance for doubtful accounts was $205 and $143, respectively.

Contract assets are net of progress payments and performance based payments from our customers as well as advance payments from customers totaling $1,470 and $421 as of April 30, 2022 and 2021. Contract assets increased $1,049 during 2022, primarily due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during 2022 for which we have not yet billed our customers. There were no significant impairment losses related to our contract assets during 2022 and 2021. We expect to bill our customers for the majority of the April 30, 2022 contract assets during fiscal year end 2023.

Contract liabilities decreased $4,978 during 2022, primarily due to payments received in excess of revenue recognized on these performance obligations. During 2022, we recognized $5,798 of our contract liabilities at April 30, 2021 as revenue. During 2021, we recognized $2,189 of our contract liabilities at April 30, 2020 as revenue.

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4. DEBT:

Principal amounts of debt at April 30, 2022 and 2021, consist of the following (in thousands):

Promissory Notes	2022		2021
Bank line of credit, available LOC $2.0 million interest at 3.65% due on demand, collateralized by a first and second position on all assets of the Company.		-		-
	$	-	$	-
Long-Term Debt
Note payable, interest at 6.25% due January 2023, collateralized by an Aircraft Security Agreement.		534		1,138
Note payable, interest at 6.25%, due June 2024, collateralized by real estate.		181		202
Note payable, interest at 4.5%, paid off in 2022.		-		21
Note payable, interest at SOFR plus 1.75% due March 2029, collateralized by real estate.		1,106		1,267
Note payable, interest at SOFR plus 1.75% due March 2029 collateralized by real estate.		507		581
Note payable, interest at 5.32%, this note matures in December 2027, with a balloon payment of $19,250, collateralized by all of BHCMC's assets and compensation due under the State Management Contract.		32,667		34,417
Note payable, interest at 5.75%, this note matures October 2026, collateralized by all of BHCMC's assets and compensation due under the State Management Contract.		12,721		6,533
Note payable, interest at 4.35%, due March 2029, collateralized by Aircraft Security Agreements		1,197		-
Note payable, interest at 8.13%, due October 2025, collateralized by equipment		52		-
Paycheck Protection Program loan, interest at 1%, this loan was received for the professional services segment. In June 2021, the Company received notice of forgiveness from the Small Business Administration.		-		2,001
		48,965		46,160
Less: Origination fees		389		372
		48,576		45,788
Less: Current maturities		5,165		5,972
	$	43,411	$	39,816

Maturities of long-term debt are as follows:

Year Ending April 30	Amount
2023	$	5,242
2024		4,874
2025		5,047
2026		5,228
2027		3,790
Thereafter		24,784
	$	48,965

Financial and Other Covenants

We are in compliance with our covenants at April 30, 2022. 

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5. LEASE RIGHT-TO-USE:

On May 1, 2019, the Company adopted ASU 2016-02 Leases – Topic 842. ASU 2016-02 requires that on the balance sheet a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.

We lease the casino as well as hangar and office space with initial lease terms of two, five, and fifty years.

	April 30, 2022		April 30, 2021
Finance lease right-of-use assets	$	3,240	$	3,099
Less accumulated depreciation		512		436
Total	$	2,728	$	2,663

Future minimum lease payments for assets under capital leases at April 30, 2022 are as follows:

2023	$	259
2024		263
2025		139
2026		116
2027		118
Thereafter		7,721
Total minimum lease payments		8,616
Less amount representing interest		5,611
Present value of net minimum lease payments		3,005
Less current maturities of finance lease liability		106
Finance lease liability, net of current maturities	$	2,899

	April 30, 2022			April 30, 2021
Finance lease cost:
Amortization of right-of-use assets	$	181		$	225
Interest on lease liabilities		148			158
Total finance lease cost	$	329		$	383
	April 30, 2022			April 30, 2021
Weighted average remaining lease term - Financing leases	45 years			44 years
Weighted average discount rate - Financing leases		5	%		5	%

6. PURCHASE OF NONCONTROLLING INTEREST:

On  October 18, 2021, Butler National Service Corporation (“BNSC”), a wholly-owned subsidiary of Butler National Corporation (“Company”), acquired the remaining BHCMC equity and the Company now indirectly owns 100% of BHCMC. BNSC acquired the remaining BHCMC equity from BHC Investment Company L.C. (“Seller”) for approximately $16.4 million paid at closing (the “Transaction”).

The closing was effected pursuant to a Sale and Purchase Agreement for Preferred Member Interest Units between Seller and BNSC (“Purchase Agreement”). BNSC and Seller agreed to utilize an effective date for the Transaction of  August 1, 2021. 

The Transaction purchase price was paid by a combination of available cash and an $8.0 million borrowing on a commercial loan with Academy Bank, N.A. (“Academy Bank”). BHCMC executed a Loan Modification Agreement with Academy, dated  October 18, 2021 (“Manager Loan”) and BNSC executed a guaranty of the obligations thereunder. The Manager Loan amended and restated the original $7.0 million loan executed   December 22, 2020 with Academy to acquire the casino land and buildings. The other $35 million loan executed in connection with the casino land acquisition in 2020 was unchanged by the Transaction. As of  April 30, 2022,  approximately $12.7 million is outstanding under the Manager Loan and it remains collateralized by real estate in Dodge City with an interest rate of 5.75% fully amortizing over five years. The Manager Loan will now mature on  October 18, 2026. 

The following table summarizes the purchase price and accounting of the transaction:

Purchase Price Summary:
Secured notes payable, net of financing costs	$	7,914
Forgiven note receivable from seller		780
Cash paid		7,659
Total	$	16,353
Accounting Summary:
Capital contributed in excess of par	$	6,119
Book basis of the noncontrolling interest in BHCMC, LLC		7,890
Deferred tax asset related to step up in basis		2,344
Total	$	16,353

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7. Boot Hill Casino Building and Land Purchase:

On December 19, 2020, we completed the purchase of our Boot Hill Casino located in Dodge City, Kansas, for a purchase price of $41,250, and was funded with two secured bank long-term loans totaling $42,000. We incurred direct financing costs of approximately $400. Prior to our purchase, we were leasing the property under an operating lease. We had recorded a right-of-use asset and the related lease liability upon the adoption ASC 842, Leases, on May 1, 2019. Pursuant to ASC 805-50, Asset Acquisition, the cost was allocated to land, building and improvements, based on the relative fair values. Furthermore, pursuant to ASC 842-20-40-2, Leases – Purchase of Underlying Asset, the difference between the purchase price and the carrying amount of the lease liability immediately before the purchase was recorded by us as the lessee as an adjustment of approximately $2,628 to the carrying amount of the assets.

Purchase price of casino building and related land	$	41,250
Note payable, collaterialized by all of BHCMC's assets and compensation due under the State Management Contract. The interest rate is 5.32%. This note matures in December 2027, with a balloon payment of $19,250.	$	35,000
Note payable, collaterialized by all of BHCMC's assets and compensation due under the State Management Contract. This loan has subsequently been amended as part of the purchase of noncotrolling interest (See Footnote 6).	$	7,000
Total	$	42,000
Lease right-to-use asset	$	41,250
Accumulated depreciation	$	(4,169	)
Net	$	37,081
Lease liability	$	39,709

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8. INCOME TAXES:

Deferred taxes are determined based on the estimated future tax effects of differences between the financial statements and tax basis of assets and liabilities given the provision of the enacted tax laws. Significant components of the Company's deferred tax liabilities and assets as of April 30, 2022 and 2021 are as follows (in thousands):

	April 30, 2022			April 30, 2021
Deferred tax liabilities:
Depreciation and amortization	$	-		$	(643	)
Deferred compensation, restricted stock		(358	)		(521	)
Total deferred tax liabilities		(358	)		(1,164	)
Deferred tax assets:
Depreciation and amortization	$	1,365		$	-
Accounts receivable allowance		55			39
Inventory and other allowances		65			187
Lease right-to-use		472			451
Vacation accruals		60			37
Jackpot reserves		111			50
Total deferred tax assets		2,128			764
Less valuation allowance		-			-
Net deferred tax asset (liability)	$	1,770		$	(400	)

The reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

	April 30, 2022			April 30, 2021
Statutory federal income tax rate expense, net of noncontrolling interest		21.00	%		21.00	%
State income tax, net of federal benefits		5.38	%		5.59	%
Permanent tax		-1.12	%		5.36	%
Other		-1.25	%		-15.00	%
		24.01	%		16.95	%
Income tax expense:
Deferred income tax (benefit)	$	174		$	(225	)
Current income tax		3,102			536
Total income tax expense	$	3,276		$	311

Current income tax expense of $3,102 and $536 are comprised of $2,279 and $328 in federal income tax and $823 and $208 in state income tax for the years ended April 30, 2022 and 2021, respectively.

The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on its financial condition, results of operations or cashflow. Therefore, no reserve for uncertain income tax position, interest or penalties, have been recorded. 

The Company files income tax returns in the U.S. Federal jurisdiction and various state jurisdictions. The Company is no longer subject to U.S. Federal tax examinations for tax years beginning on May 1, 2018 and prior. There are no current tax examinations.

9. STOCKHOLDERS' EQUITY:

Common Stock Transactions

During the year ended April 30, 2022, we issued 1,328,190 shares valued at $807 as the contribution to the Company 401(k) profit sharing plan.

During the year ended April 30, 2021, we issued 1,400,705 shares valued at $721 as the contribution to the Company 401(k) profit sharing plan.

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10. STOCK OPTIONS AND INCENTIVE PLANS

In November 2016, the shareholders approved and adopted the Butler National Corporation 2016 Equity Incentive Plan. The maximum number of shares of common stock that may be issued under the Plan is 12.5 million.

On April 12, 2019, the Company granted 2.5 million restricted shares to employees. These shares have voting rights at date of grant and become fully vested and non-forfeitable on April 11, 2024. The restricted shares were valued at $0.38 per share, for a total of $950. On March 17, 2020, the Company granted 5.0 million restricted shares to employees. These shares have voting rights at date of grant and become fully vested and non-forfeitable on March 16, 2025. The restricted shares were valued at $0.41 per share, for a total of $2.0 million. The deferred compensation related to these grants will be expensed on the financial statements over the five year vesting period. No other equity awards have been made under the plan. During the year ended April 30, 2022, 50,000 shares were forfeited. During the year ended April 30, 2021, 50,000 shares were forfeited. At April 30, 2022, total compensation cost related to nonvested awards not recognized is $1,551, and the weighted average period over which it is expected to be recognized is 3.5 years.

For the year ended  April 30, 2022 and 2021, the Company expensed $585 and $592, respectively.

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at April 30, 2020		7,500,000		$	0.40
Forfeited during the year ended April 30, 2021		(50,000	)	$	0.40
Forfeited during the year ended April 30, 2022		(50,000	)	$	0.40
Total		7,400,000		$	0.40

11. STOCK REPURCHASE PROGRAM:

The Board of Directors approved a stock purchase program authorizing the repurchase of up to $4,000 of its common stock. The timing and amount of any share repurchases will be determined by Butler National’s management based on market conditions and other factors. The program is currently authorized through May 1, 2023.

The table below provides information with respect to common stock purchases by the Company during the year ended April 30, 2022.

Period	Total Number of Shares Purchased		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
Program authorization							$	4,000
Shares purchased in prior periods		2,721,415	$	0.36		2,721,415	$	3,019
Quarter ended July 31, 2020 (a)		212,000	$	0.51		212,000	$	2,911
Quarter ended October 31, 2020 (a)		152,915	$	0.50		152,915	$	2,835
Quarter ended January 31, 2021 (a)		-	$	-		-	$	2,835
Quarter ended April 30, 2021 (a)		17,303	$	0.65		17,303	$	2,823
Quarter ended July 31, 2021 (a)		-	$	-		-	$	2,823
Quarter ended October 31, 2021 (a)		6,290	$	0.62		6,290	$	2,819
Quarter ended January 31, 2022 (a)		-	$	-		-	$	2,819
Quarter ended April 30, 2022 (a)		180,503	$	0.91		180,503	$	2,655
Total		3,290,426	$	0.41		3,290,426

(a) These shares of common stock purchased were purchased through private transactions

12. COMMITMENTS AND CONTINGENCIES:

Litigation:

From time to time we may be a defendant and/or plaintiff in various other legal proceedings arising in the normal course of our business. We are currently not a party to any material legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. In addition, we are not aware of any known litigation or liabilities involving the operators of our properties that could affect our operations. Furthermore, as of July 15, 2022, our management is not aware of any proceedings to which any of our directors, officers, or affiliates, or any associate of any such director, officer, affiliate, or security holder is a party averse to our company or has a material interest averse to us. 

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13. RELATED-PARTY TRANSACTIONS:

The Company paid consulting fees of $135 and $135 to David Hayden, a director of Butler National Corporation in fiscal year ended April 30, 2022 and 2021 respectively.

The Company paid Edgar Law Firm, LLC, owned by John M. Edgar, a director of Butler National Corporation $214 and $129 in fiscal year ended  April 30, 2022 and 2021 respectively.

Included in accrued liabilities are $482 and $659 as of April 30, 2022 and 2021 respectively for amounts owed to our CEO for accrued compensation.

In fiscal 2022, there were three related-person transactions under the relevant standards: Butler National employed the brother (Wayne Stewart as an engineer), son (Craig Stewart as a Vice President) and son-in-law (Jeff Shinkle as an architect) of Clark D. Stewart, an executive officer. Compensation for these related-persons was calculated in the same manner as the Summary Compensation table shown in the most recent Proxy Statement resulting in compensation of $292, $484 and $247, respectively, for fiscal 2022 and $353, $503 and $255, respectively, for fiscal 2021.

The policies and procedures for payment of goods and services for related transactions follow our normal course of business standards and require the necessary review and approval process as outlined in our Policies and Procedures manual and as set forth by our Compensation Committee.

14. 401(k) PROFIT SHARING PLAN:

We have a defined contribution plan authorized under Section 401(k) of the Internal Revenue Code. All benefits-eligible employees with at least thirty days of service are eligible to participate in the plan; however, there are only two entry dates per calendar year. The Plan may match subject to the annual approval of the Board of Directors, 100 percent of every pre-tax dollar an employee contributes up to 6 percent of the employee's salary, and a portion of the Company’s profits. Employees are 100 percent vested in the employer's contributions immediately. Our matching contribution, as approved by the Board of Directors was paid in common stock of the Company.  The contribution amount was valued at a weekly weighted average market price of the stock contributed in 2022 and 2021 and was approximately $807 and $721 respectively. 

15. SEGMENT REPORTING AND SALES BY MAJOR CUSTOMER:

Industry Segmentation

Current Activities - The Company focuses on two primary activities, Professional Services and Aerospace Products.

Aerospace Products:

Aircraft Modifications principally includes the modification of customer and company owned business-size aircraft from passenger to freighter configuration, radar systems, addition of aerial photography capabilities, ISR modifications, and stability enhancing modifications for Learjet, Beechcraft, Cessna, and Dassault Falcon aircraft along with other specialized modifications. We provide these services through our subsidiary, Avcon Industries, Inc. ("Aircraft Modifications" or "Avcon").

Special mission electronics principally includes the manufacture, sale, and service of electronics upgrades for classic weapon control systems used on military aircraft and vehicles. We provide the products through our subsidiary, Butler National Corporation - Tempe, Arizona.

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Butler Avionics sells, installs and repairs aircraft avionics equipment (airplane radio equipment and flight control systems). These systems are flight display systems which include intuitive touchscreen controls with large display to give users unprecedented access to high-resolution terrain mapping, graphical flight planning, geo-referenced charting, traffic display, satellite weather and much more. Butler Avionics is also recognized nationwide for its troubleshooting and repair work particularly on autopilot systems.

Professional Services:

Butler National Service Corporation ("BNSC") provides management services to the Boot Hill Casino, a "state-owned casino".

BCS Design, Inc. provides licensed architectural services. These services include commercial and industrial building design.

Year Ended April 30, 2022	Gaming		Aircraft Modification		Aircraft Avionics		Special Mission Electronics		Other		Total
Revenues from customers	$	38,769	$	21,399	$	2,373	$	10,554	$	378	$	73,473
Interest expense		2,440		215		-		23		11		2,689
Depreciation and amortization		2,283		181		5		161		185		2,815

Year Ended April 30, 2021	Gaming		Aircraft Modification		Aircraft Avionics		Special Mission Electronics		Other		Total
Revenues from customers	$	29,951	$	21,750	$	2,583	$	6,942	$	254	$	61,480
Interest expense		2,847		251		-		27		13		3,138
Depreciation and amortization		3,060		191		7		135		149		3,542

Our Chief Operating Decision Maker (CODM) does not evaluate operating segments using asset or liability information.

Major Customers: Revenue from major customers (10 percent or more of consolidated revenue) were as follows:

	2022			2021
Aerospace Products – two customers in 2022, one customer in 2021		25.0	%		10.6	%
Professional Services		-			-

In fiscal 2022 the Company derived 34.1% of total revenue from five Aerospace customers. The top customer provided 14.3% of total revenue while the next top four customers ranged from 2.7% to 10.7%. At April 30, 2022, we had one customer that accounted for 44.8% of our accounts receivable.

16. SUBSEQUENT EVENTS:

In June 2022, board member John M. Edgar was awarded 400,000 shares of Butler National Corporation stock as an "other stock-based award" pursuant to the Corporation's 2016 Equity Incentive Plan and $140,000 in cash compensation. The award is for future Board of Directors work related to future financing and public relations. The award is to be paid three business days after the filing of this 10-K.

The Company evaluated its April 30, 2022 consolidated financial statements for subsequent events through July 15, 2022, the filing date of this report. The Company is not aware of any other subsequent events that would require recognition or disclosure in the consolidated financial statements. 

48

EX-21

Exhibit 21 

Subsidiaries

Avcon Industries, Inc., a Kansas Corporation

Avcon ISR Solutions, Inc., a Kansas Corporation

Avcon Leasing Inc., a Kansas Corporation

BCS Design, Inc., a Kansas Corporation

Butler Avionics, Inc., a Kansas Corporation

Butler National, Inc., a Nevada Corporation

Butler Temporary Services, Inc., a Kansas Corporation

Butler National Corporation, a Nebraska Corporation

Kansas International Corporation, a Kansas Corporation

Kansas International DDC, LLC, a Kansas Limited Liability Company

Butler National Service Corporation, a Kansas Corporation

AVT Corporation, a Texas Corporation

Indian Gaming Corporation, a Kansas Corporation

Indian Gaming Services, Inc., a Kansas Corporation

BHCMC, LLC, a Kansas Limited Liability Company

BHCRRE, LLC, a Kansas Limited Liability Company

EX-23.1

Exhibit 23.1 

Consent of Independent Registered Public Accountants

We consent to the incorporation by reference in the Form S-8 Registration Statements, File Numbers, 033-65256, 033-65254, 033-65890, 333-07735, 333-46791, 333-46795, 333-46797, and 333-46809 of our report dated July 15, 2022 with respect to the consolidated financial statements of Butler National Corporation included in the Annual Report Form 10-K for the years ended April 30, 2022 and 2021.

/s/ RBSM, LLP

Las Vegas, NV

July 15, 2022

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Clark D. Stewart, certify that:

1. I have reviewed this report for the year ended April 30, 2022 on Form 10-K of Butler National Corporation.

2. Based on my knowledge, this report does not contain any untrue statement of 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;

4. The registrant's other certifying officer(s) 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:

a. Designed such disclosure controls and procedures, or caused such disclosure 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;

b. 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;

c. 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

d. 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(s) 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 registrant's board of directors (or persons performing the equivalent function):

a. 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

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: July 15, 2022	/s/Clark D. Stewart
	Clark D. Stewart
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Tad M. McMahon, certify that:

1. I have reviewed this report for the year ended April 30, 2022 on Form 10-K of Butler National Corporation.

2. Based on my knowledge, this report does not contain any untrue statement of 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;

4. The registrant's other certifying officer(s) 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:

a. Designed such disclosure controls and procedures, or caused such disclosure 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;

b. 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;

c. 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

d. 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(s) 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 registrant's board of directors (or persons performing the equivalent function):

a. 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

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: July 15, 2022	/s/ Tad M. McMahon
	Tad M. McMahon
	Chief Financial Officer

EX-32.1

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 annual report of Butler National Corporation (the "Company") on Form 10-K for the period ending April 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Clark D. Stewart, Chief Executive Officer of the Company, certify, (to the best of my knowledge), pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002 that;

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

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

/s/Clark D. Stewart

Clark D. Stewart

President and Chief Executive Officer

Butler National Corporation

July 15, 2022

"A signed original of this written statement required by Section 906 has been provided to Butler National Corporation and will be retained by Butler National Corporation and furnished to the Securities and Exchange Commission or its staff upon request."

EX-32.2

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 annual report of Butler National Corporation (the "Company") on Form 10-K for the period ending April 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Tad M. McMahon, Chief Financial Officer of the Company, certify, (to the best of my knowledge), pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002 that;

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

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

/s/ Tad M. McMahon

Tad M. McMahon

Chief Financial Officer

Butler National Corporation

July 15, 2022

"A signed original of this written statement required by Section 906 has been provided to Butler National Corporation and will be retained by Butler National Corporation and furnished to the Securities and Exchange Commission or its staff upon request."

EX-4.3

Exhibit 4.3

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

Butler National Corporation, a Kansas corporation (herein “Company” or “BNC”), has two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). One class consists of 100,000,000 authorized shares of common stock, par value $0.01 per share (“Common Stock”). The other class consists of preferred share purchase rights that currently are not separately traded or transferrable apart from the Common Stock.

This description of the Company’s securities is based on BNC’s Amended and Restated Articles of Incorporation (the “Articles”), amended bylaws (“Bylaws”), the Shareholder Rights Agreement dated August 2, 2011 as amended from time to time (the “Rights Agreement”), and provisions of applicable Kansas law. The following description does not purport to be complete and is subject to, and qualified in its entirety by, the full text of BNC’s Articles, Bylaws, and Rights Agreement, each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit is a part.

Authorized Capital

The Company’s authorized capital stock consists of 100,000,000 shares of Common Stock and 50,000,000 shares of Preferred Stock. There are no shares of Preferred Stock outstanding.

Voting Rights

Holders of Common Stock are entitled to one vote per share on all matters voted on by the stockholders, including the election of directors. Common Stock does not have cumulative voting rights.

Dividends

Subject to the rights of holders of Preferred Stock (if any), holders of Common Stock are entitled to receive dividends when, as and if declared by the Company’s Board of Directors out of funds legally available for that purpose.

Liquidation

In the event of any liquidation, dissolution or winding-up of the Company, subject to the rights of holders of Preferred Stock (if any), holders of Common Stock are entitled to receive the remaining assets available for distribution to stockholders.

No Preemptive or Similar Rights

Common Stock is not entitled to preemptive rights, conversion or other rights to subscribe for additional securities and there are no redemption or sinking fund provisions applicable to Common Stock.

Fully Paid and Non-assessable

All of the outstanding shares of Common Stock are fully paid and non-assessable.

Listing

The Common Stock is traded on OTCQB under the trading symbol “BUKS”.

Transfer Agent and Registrar

The transfer agent and registrar for Common Stock is EQ by Equiniti.

Classified Board

The Company’s Board of Directors is divided into three classes. Stockholders elect the directors of each class for three-year terms upon the expiration of the term of a respective class. Stockholders elect only one class of directors each year.

Advance Notice for Stockholder Proposals and Nominations

The Company’s Bylaws contain provisions requiring advance notice be delivered to the Company of any business to be brought by a stockholder before an annual meeting and providing for procedures to be followed by stockholders in nominating persons for election to BNC’s Board of Directors. A stockholder must give notice not less than 120 days before the first anniversary of the mailing date of the notice of the preceding year’s annual meeting. The notice must contain the information required by the Bylaws, and the stockholder(s) and nominee(s) must comply with the other information requirements outlined in the Bylaws.

Limitations on Ability of Stockholders to Call a Special Meeting by Act or by Written Consent

BNC’s Bylaws provide that a special meeting of the stockholders may be called only by the Chairman of the Board of Directors, the Vice Chairman of the Board, if any, the Chief Executive Officer, the President or the Board of Directors. Any action required by law to be taken at any annual or special meeting of stockholders of the Company, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the holders of outstanding stock entitled to vote thereon.

Authorized But Unissued Shares

BNC may issue additional shares of Common Stock or Preferred Stock without stockholder approval, subject to applicable law, for a variety of corporate purposes, including future public or private offerings to raise capital, corporate acquisitions, and employee benefit plans and equity grants. The existence of unissued and unreserved Common Stock and Preferred Stock may enable the Company to issue shares to persons who are friendly to current management, which could discourage an attempt to obtain control of the Company.

Shareholder Rights Plan

Each share of Common Stock carries with it one preferred share purchase right (each a “Right”) to acquire one-two hundredth of a share of Series C Participating Preferred Stock, par value $5.00 per share. Until a person or group of persons acquires, or obtains the right to acquire, 15% or more of the outstanding shares of voting stock of the Company without the prior express written consent of the Company (a “Triggering Event”), the Rights are transferred with and only with the Company’s Common Stock. Prior to a Triggering Event, ownership of any Right shall not entitle such holder to vote, receive dividends, have any of the rights of a stockholder of the Company, any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting, or be deemed for any purpose the holder of Preferred Stock, Common Stock or any other securities of the Company. The terms of the Rights may be amended by the Board of Directors of the Company without the consent of the holders of the Right. A summary of the Rights are included in the Company’s Form 8-A filed on August 2, 2011 and incorporated herein by reference.

Requirements to Amend Bylaws

BNC’s Articles and Bylaws expressly authorize the Board of Directors to amend, alter, repeal or adopt the Bylaws of the Company. The Bylaws of the Corporation may from time to time be repealed, amended or altered, or new Bylaws may be adopted, in either of the following ways: (i) by the vote of a majority of the stockholders entitled to vote at any annual or special meeting thereof; and (ii) by resolution adopted by a majority of the members of the Board of Directors then in office; provided, however that the power of the directors to suspend, repeal, amend or otherwise alter the Bylaws or any portion thereof may be denied as to any Bylaws or portion thereof enacted by the stockholders if at the time of such enactment the stockholders shall so expressly provide.

XML

Document And Entity Information - USD ($)	12 Months Ended
	Apr. 30, 2022	Jul. 15, 2022	Oct. 31, 2021
Document Information [Line Items]
Entity Central Index Key	0000015847
Entity Registrant Name	BUTLER NATIONAL CORP
Amendment Flag	false
Current Fiscal Year End Date	--04-30
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2022
Document Type	10-K
Document Annual Report	true
Document Period End Date	Apr. 30, 2022
Document Transition Report	false
Entity File Number	0-1678
Entity Incorporation, State or Country Code	KS
Entity Tax Identification Number	41-0834293
Entity Address, Address Line One	19920 West 161st Street
Entity Address, City or Town	Olathe
Entity Address, State or Province	KS
Entity Address, Postal Zip Code	66062
City Area Code	913
Local Phone Number	780-9595
Title of 12(b) Security	Common Stock $.01 Par Value
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
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
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 39,797,724
Entity Common Stock, Shares Outstanding		76,458,146
Auditor Name	RBSM LLP
Auditor Location	Las Vegas, NV
Auditor Firm ID	587

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Apr. 30, 2022	Apr. 30, 2021
CURRENT ASSETS:
Cash	$ 12,487	$ 22,022
Accounts receivable, net of allowance for doubtful accounts	3,636	1,961
Inventories
Parts and raw materials	4,722	4,829
Work in process	4,080	3,657
Finished goods	70	82
Total inventory, net of allowance	8,872	8,568
Contract asset	1,470	421
Prepaid expenses and other current assets	1,361	1,496
Total current assets	27,826	34,468
PROPERTY, PLANT AND EQUIPMENT:
Lease right-to-use asset	3,240	3,099
Construction in progress	6,417	1,170
Land	4,751	4,751
Building and improvements	40,962	39,747
Aircraft	8,719	9,138
Machinery and equipment	4,917	4,253
Office furniture and fixtures	11,826	10,699
Leasehold improvements	4,032	4,032
Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, before Accumulated Depreciation and Amortization	84,864	76,889
Accumulated depreciation	(23,290)	(20,519)
Total property, plant and equipment	61,574	56,370
SUPPLEMENTAL TYPE CERTIFICATES (net of accumulated amortization of $9,336 at April 30, 2022 and $8,041 at April 30, 2021)	8,018	8,211
OTHER ASSETS:
Other assets (net of accumulated amortization of $11,575 at April 30, 2022 and $10,886 at April 30, 2021)	1,621	2,872
Deferred tax asset, net	1,770	0
Total other assets	3,391	2,872
Total assets	100,809	101,921
CURRENT LIABILITIES:
Current maturities of long-term debt	5,165	5,972
Current maturities of lease liability	106	107
Accounts payable	2,773	1,893
Contract liability	820	5,798
Gaming facility mandated payment	1,630	1,458
Compensation and compensated absences	1,911	1,862
Income tax payable	1,049	212
Other current liabilities	211	265
Total current liabilities	13,665	17,567
Long-term debt, net of current maturities	43,411	39,816
Lease liability, net of current maturities	2,899	2,759
Deferred tax liability, net	0	400
Total long-term liabilities	46,310	42,975
Total liabilities	59,975	60,542
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, par value $.01: authorized 100,000,000 shares issued 80,348,572 shares, and outstanding 76,458,146 shares at April 30, 2022 and issued 79,070,382 shares, and outstanding 75,366,749 shares at April 30, 2021	803	790
Capital contributed in excess of par	12,160	16,900
Treasury stock at cost, 3,890,426 shares at April 30, 2022 and 3,703,633 shares at April 30, 2021	(2,077)	(1,909)
Retained earnings	29,948	19,580
Total Butler National Corporation's stockholders' equity	40,834	35,361
Noncontrolling interest in BHCMC, LLC	0	6,018
Total stockholders' equity	40,834	41,379
Total liabilities and stockholders' equity	100,809	101,921
Preferred Class A [Member]
STOCKHOLDERS' EQUITY:
Preferred stock	0	0
Preferred Class B [Member]
STOCKHOLDERS' EQUITY:
Preferred stock	$ 0	$ 0

XML

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Supplemental type certificates, accumulated amortization	$ 9,336	$ 8,041
Other assets, accumulated amortization	$ 11,575	$ 10,866
Preferred stock, par value (in dollars per share)	$ 5	$ 5
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	80,348,572	79,070,382
Common stock, shares outstanding (in shares)	76,458,146	75,366,749
Treasury stock, shares (in shares)	3,890,426	3,703,633
Preferred Class A [Member]
Preferred stock, stated value (in dollars per share)	$ 100	$ 100
Preferred stock, dividend rate	9.80%	9.80%
Preferred stock, liquidation value	$ 100	$ 100
Preferred stock, redemption value	$ 100	$ 100
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Preferred stock, designated classes (in shares)	200,000	200,000
Preferred Class B [Member]
Preferred stock, stated value (in dollars per share)	$ 1,000	$ 1,000
Preferred stock, dividend rate	6.00%	6.00%
Preferred stock, liquidation value	$ 1,000	$ 1,000
Preferred stock, redemption value	$ 1,000	$ 1,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Preferred stock, designated classes (in shares)	200,000	200,000

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
REVENUES:
Revenues	$ 73,473	$ 61,480
COSTS AND EXPENSES:
Marketing and advertising	5,236	3,752
Employee benefits	2,573	2,571
Depreciation and amortization	2,815	3,542
General, administrative and other	8,488	8,208
Total costs and expenses	57,344	55,580
OPERATING INCOME	16,129	5,900
OTHER INCOME (EXPENSE):
Interest expense	(2,689)	(3,138)
Forgiveness of debt	(2,001)	0
Gain on sale of airplanes	75	0
Other	0	7
Total other income (expense)	(613)	(3,131)
INCOME BEFORE INCOME TAXES	15,516	2,769
PROVISION (BENEFIT) FOR INCOME TAXES
Provision for income taxes	3,102	536
Deferred income tax (benefit)	174	(225)
NET INCOME	12,240	2,458
Net (income) loss attributable to noncontrolling interest in BHCMC, LLC	(1,872)	(1,025)
NET INCOME ATTRIBUTABLE TO BUTLER NATIONAL CORPORATION	$ 10,368	$ 1,433
BASIC EARNINGS PER COMMON SHARE ATTRIBUTABLE TO BUTLER NATIONAL CORPORATION (in dollars per share)	$ 0.14	$ 0.02
WEIGHTED AVERAGE SHARES USED IN PER SHARE CALCULATION (in shares)	75,340,131	74,144,957
DILUTED EARNINGS PER COMMON SHARE ATTRIBUTABLE TO BUTLER NATIONAL CORPORATION (in dollars per share)	$ 0.14	$ 0.02
WEIGHTED AVERAGE SHARES USED IN PER SHARE CALCULATION (in shares)	75,340,131	74,144,957
Professional Services [Member]
REVENUES:
Revenues	$ 39,147	$ 30,205
COSTS AND EXPENSES:
Cost of services and products	15,798	14,214
Aerospace Products [Member]
REVENUES:
Revenues	34,326	31,275
COSTS AND EXPENSES:
Cost of services and products	$ 22,434	$ 23,293

XML

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Parent [Member]	Noncontrolling Interest [Member]	Total
Balance (in shares) at Apr. 30, 2020	77,719,677		3,321,415
Balance at Apr. 30, 2020	$ 777	$ 15,600	$ (1,713)	$ 18,147	$ 32,811	$ 4,993	$ 37,804
Issuance of stock benefit plan (in shares)	1,400,705		0				1,400,705
Issuance of stock benefit plan	$ 14	707	$ 0	0	721	0	$ 721
Stock repurchase (in shares)	0		382,218
Stock repurchase	$ 0	0	$ (196)	0	(196)	0	(196)
Deferred compensation, restricted stock	(1)	593	0	0	592	0	592
Net Income	$ 0	0	$ 0	1,433	1,433	1,025	2,458
Balance (in shares) at Apr. 30, 2021	79,070,382		3,703,633
Balance at Apr. 30, 2021	$ 790	16,900	$ (1,909)	19,580	35,361	6,018	$ 41,379
Issuance of stock benefit plan (in shares)	1,328,190		0				1,328,190
Issuance of stock benefit plan	$ 13	794	$ 0	0	807	0	$ 807
Stock repurchase (in shares)	0		186,793
Stock repurchase	$ 0	0	$ (168)	0	(168)	0	(168)
Deferred compensation, restricted stock	0	585	0	0	585	0	585
Net Income	0	0	0	10,368	10,368	1,872	12,240
Purchase of non-controlling interest in BHCMC, LLC	$ 0	(6,119)	$ 0	0	(6,119)	(7,890)	(14,009)
Deferred compensation, restricted stock (in shares)	(50,000)		0
Balance (in shares) at Apr. 30, 2022	80,348,572		3,890,426
Balance at Apr. 30, 2022	$ 803	$ 12,160	$ (2,077)	$ 29,948	$ 40,834	$ 0	$ 40,834

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 12,240	$ 2,458
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	5,281	5,856
Forgiveness of debt	(2,001)	0
Stock issued for benefit plan	807	721
Deferred income tax (benefit)	174	(225)
Gain on sale of airplanes	(75)	0
Deferred compensation, restricted stock	585	592
Changes in operating assets and liabilities
Accounts receivable	(1,675)	823
Inventories	(304)	47
Contract asset	(1,049)	(226)
Prepaid expenses and other assets	141	123
Accounts payable	880	931
Contract liability	(4,978)	3,609
Lease liability	0	(659)
Accrued liabilities	49	(709)
Gaming facility mandated payment	172	120
Income tax payable	837	6
Other liabilities	(54)	(9)
Net cash provided by operating activities	11,030	13,458
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(9,579)	(6,992)
Proceeds from sale of airplanes	75	0
Net cash used in investing activities	(9,504)	(6,992)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings of long-term debt	1,262	2,479
Repayments of long-term debt	(4,388)	(3,380)
Payments on lease liability	(108)	(140)
Repurchase of common stock	(168)	(196)
Net cash used in financing activities	(11,061)	(1,237)
NET INCREASE (DECREASE) IN CASH	(9,535)	5,229
CASH, beginning of year	22,022	16,793
CASH, end of year	12,487	22,022
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	2,684	3,034
Income taxes paid	2,265	535
NON CASH INVESTING AND FINANCING ACTIVITY
Notes receivable forgiven as part of purchase of noncontrolling interest in BHCMC, LLC	780	0
Deferred tax asset relating to the purchase of noncontrolling interest in BHCMC, LCC	2,344	0
Purchase of noncontrolling interest - note receivable and other liabilities	6,350	0
Lease right-of-use assets purchased	247	38,622
Lease liability for purchase of assets under lease	0	39,709
Notes Payable to Bank [Member]
NON CASH INVESTING AND FINANCING ACTIVITY
Secured notes payable for purchase of noncontrolling interest in BHCMC, LLC, net	7,914	0
Notes Payable [Member]
NON CASH INVESTING AND FINANCING ACTIVITY
Secured notes payable for purchase of noncontrolling interest in BHCMC, LLC, net	0	41,205
BHCMC, LLC [Member]
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of noncontrolling interest in BHCMC, LLC	$ (7,659)	$ 0

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Note 1 - Nature of Operations, Organization and Significant Accounting Policies

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. NATURE OF OPERATIONS, ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:

The accompanying consolidated financial statements include the accounts of Butler National Corporation (BNC) and its wholly-owned active subsidiaries, Avcon Industries, Inc., BCS Design, Inc., Butler National Service Corporation, Butler National Corporation-Tempe, Butler Avionics, Inc., Butler National, Inc., Butler Temporary Services, Inc., Kansas International Corporation, Kansas International DDC, LLC, and BHCMC, LLC (collectively, The Company). These consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”), expressed in U.S. dollars. All amounts are in thousands, except share and par values, unless otherwise noted. All significant intercompany balances and transactions have been eliminated in consolidation. The fiscal year end of the Company is April 30.

Avcon Industries, Inc. modifies business category aircraft at its Newton, Kansas facility. Modifications can include passenger-to-freighter configuration, addition of aerial photography capability, ISR modifications, and stability enhancing modifications. Butler Avionics, Inc. sells, installs and repairs avionics equipment (airplane radio equipment and flight control systems). Butler National, Inc. acquires airplanes, principally Learjets, to refurbish and sell. Butler Temporary Services, Inc. processes company payroll. Kansas International Corporation and Kansas International DDC, LLC own property. Butler National Corporation-Tempe is primarily engaged in the manufacture electronic upgrades for classic weapon control systems used by the military. Butler National Service Corporation is a management consulting and administrative services firm providing business planning and financial coordination to Indian tribes interested in owning and operating casinos under the terms of the Indian Gaming Regulatory Act of 1988. BHCMC, LLC provides management services for the Boot Hill Casino under a management agreement with the State of Kansas. BCS Design, Inc. provides professional architectural services.

SIGNIFICANT ACCOUNTING POLICIES:

a) Accounts receivable: Accounts receivable are carried on a gross basis, with no discounting, less the allowance for doubtful accounts. Management estimates the allowance for doubtful accounts based on existing economic conditions, the financial conditions of the customers, and the amount and the age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted. Allowance for doubtful accounts are calculated on the historical write-off of doubtful accounts of the individual subsidiaries. Invoices are generally considered a doubtful account if no payment has been made in the past 90 days. We review these policies on a quarterly basis, and based on these reviews, we believe we maintain adequate reserves.

b) Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Future events and their effects cannot be determined with certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and any such differences may be material to our financial statements. Significant estimates include assumptions about collection of accounts receivable, the valuation and recognition of stock-based compensation expense, valuation for deferred tax assets and useful life of fixed assets.

c) Inventories: Inventories are priced at the lower of cost, determined on a first-in, first-out basis, or net realizable value. Inventories include material, labor and factory overhead required in the production of our products.

Inventory obsolescence is examined on a regular basis. When determining our estimate of obsolescence, we consider inventory that has been inactive for five years or longer and the probability of using that inventory in future production. The obsolete inventory generally consists of Falcon and Learjet parts and electrical components.  At April 30, 2022 and 2021, the estimate of obsolete inventory was $240 and $691 respectively.

d) Property and Related Depreciation: Machinery and equipment are recorded at cost and depreciated over their estimated useful lives. Depreciation is provided on a straight-line basis. The lives used for the significant items within each property classification range from 3 to 39 years.

Maintenance and repairs are charged to expense as incurred. The cost and accumulated depreciation of assets retired are removed from the accounts and any resulting gains or losses are reflected as income or expense.

e) Long-Lived Assets: The Company accounts for its long-lived assets in accordance with ASC Topic 360-10, "Accounting for the Impairment or Disposal of Long-Lived Assets." ASC Topic 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value or disposable value.

f) Other Assets: Our other asset account includes assets of $5,500 related to the Kansas Expanded Lottery Act Management Contract privilege fee, $6,151 of gaming equipment we were required to pay for ownership by the State of Kansas Lottery, and JET autopilot intellectual property of $1,417, and miscellaneous other assets of $128.  BHCMC expects the $5,500 privilege fee to have a value over the remaining life of the initial Management Contract with the State of Kansas which will end in December 2024.  The State of Kansas approved a renewal management contract and an amendment to the current management contract for our professional services company BNSC via BHCMC. The renewal will take effect December 15, 2024, and continue until 2039, another 15 years. The Managers Certificate asset for use of gaming equipment is being amortized over a period of three years based on the estimated useful life of gaming equipment.  The JET intellectual property is being amortized over a period of fifteen years. Amortization relating to other assets in the year ended  April 30, 2022 and 2021 was $689 and $733, respectively.

Other assets net values are as follows:

(dollars in thousands)	2022		2021
Privilege fee	$	5,500	$	5,500
Less amortized costs		4,372		3,949
Privilege fee balance	$	1,128	$	1,551
Intangible gaming equipment	$	6,151	$	5,927
Less amortized costs		5,868		5,696
Intangible gaming equipment balance	$	283	$	231
JET autopilot intellectual property	$	1,417	$	1,417
Less amortized costs		1,335		1,241
JET autopilot intellectual property balance	$	82	$	176

g) Supplemental Type Certificates: Supplemental Type Certificates (STCs) are authorizations granted by the Federal Aviation Administration (FAA) for specific modification of a certain aircraft. The STC authorizes us to perform modifications, installations, and assemblies on applicable customer-owned aircraft. Costs incurred to obtain STCs are capitalized and subsequently amortized over seven years. The legal life of an STC is indefinite. We believe we have enough future sales to fully amortize our STC development costs. Amortization relating to STC's in the year ended  April 30, 2022 and 2021 was $1,295 and $1,012, respectively. Consultant costs, as shown below, include costs of engineering, legal and aircraft specialists. STC capitalized costs are as follows:

(dollars in thousands)	2022		2021
Direct labor	$	3,342	$	3,387
Direct materials		5,227		4,108
Consultant costs		3,083		2,983
Overhead		5,702		5,774
		17,354		16,252
Less-amortized costs		9,336		8,041
STC balance	$	8,018	$	8,211

h) Revenue Recognition: ASC Topic 606, “Revenue from Contracts with Customers”

Under ASC 606, revenue is recognized when a customer obtains control of promised services in an amount that reflects the consideration we expect to receive in exchange for those services. To achieve this core principal, the Company applies the following five steps:

1)    Identify the contract, or contracts, with a customer

A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

2)    Identification of the performance obligations in the contract

At contract inception, an entity shall assess the goods or services promised in a contract with a customer and shall identify as a performance obligation each promise to transfer to the customer. Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation.

3)    Determination of the transaction price

The transaction price is the amount that an entity allocates to the performance obligations identified in the contract and, therefore, represents the amount of revenue recognized as those performance obligations are satisfied. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.

4)    Allocation of the transaction price to the performance obligations in the contract

Once a contract and associated performance obligations have been identified and the transaction price has been determined, ASC 606 requires an entity to allocate the transaction price to each performance obligation identified. This is generally done in proportion to the standalone selling prices of each performance obligation (i.e., on a relative standalone selling price basis). As a result, any discount within the contract generally is allocated proportionally to all the separate performance obligations in the contract. The Company is applying the right to invoice practical expedient to recognize revenue. As a result, the entity bypasses the steps of determining the transaction price, allocating that transaction price and determining when to recognize revenue as it will recognize revenue as billed by multiplying the price assigned to the good or service, by the units.

5)  Recognition of revenue when, or as, we satisfy a performance obligation

Revenue is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control transfers either over time or at a point in time. Revenue is recognized when control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

Aircraft modifications are performed under fixed-price contracts. Revenue from fixed-priced contracts are recognized on the percentage-of-completion method, measured by the direct labor incurred compared to total estimated direct labor. Using direct labor best represents the progress on a contract.

Revenue from Avionics products are recognized when shipped. Payment for these Avionics products is due within 30 days of the invoice date after shipment. Revenue from Gaming Management and other Corporate/Professional Services is recognized as the service is rendered.

Regarding warranties and returns, our products are special order and are not suitable for return. Our products are unique upon installation and tested prior to their release to the customer and acceptance by the customer. In the rare event of a warranty claim, the claim is processed through the normal course of business and may include additional charges to the customer. In our opinion, any future warranty work would not be material to the consolidated financial statements.

Gaming revenue is the gross gaming win as reported by the Kansas Lottery casino reporting systems, less the mandated payments by and for the State of Kansas. Electronic games-slots and table games revenue is the aggregate of gaming wins and losses. Liabilities are recognized for chips and "ticket-in, ticket-out" coupons in the customers' possession, and for accruals related to anticipated payout of progressive jackpots. Progressive gaming machines, which contain base jackpots that increase at a progressive rate based on the number of coins played, are deducted from revenue as the value of jackpots increase. Food, beverage, and other revenue is recorded when the service is received and paid.

i) Fair Value Measurements: Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.

Level 3 - Unobservable inputs that are supported by little or no market activities.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

For certain financial instruments, including cash and cash equivalents, short-term investments, accounts receivable, marketable securities, notes payable,  and accounts payable, the carrying amounts approximate fair value.  We do not have financial assets and liabilities that are measured at fair value on a recurring basis.  Other financial assets and liabilities are carried at cost with fair value disclosed, if required.

We measure certain other instruments, including stock-based compensation awards settled in the stock also at fair value. The determination of fair value involves the use of appropriate valuation methods and relevant inputs into valuation models.

j) Slot Machine Jackpots: If the casino is not required to make payment of the jackpot (i.e. the incremental amount on a progressive machine) due to legal requirements, the jackpot is accrued as the obligation becomes unavoidable. This liability is accrued over the time period in which the incremental progressive jackpot amount is generated with a related reduction in casino revenue. No liability is accrued with respect to the base jackpot.

k) Gaming Facility Mandated Payment: Boothill Casino is contractually obligated to pay its proportionate share of certain expenses incurred by the Kansas Lottery Commission and the Kansas Racing and Gaming Commission, which amounted to $1,968 and $1,868 in the fiscal year ended April 30, 2022 and 2021, respectively.

l) Advanced Payments and Billings in Excess of Costs Incurred: We receive advances, performance-based payments and progress payment from customers which may exceed costs incurred on certain contracts. We classify advance payments and billings in excess of costs incurred, other than those reflected as a reduction of contracts in process, as contract liability in current liabilities.

m) Earnings Per Share: Earnings per common share is based on the weighted average number of common shares outstanding during the year.

The computation of the Company basic and diluted earnings per common share is as follows:

(in thousands, except share and per share data)	2022		2021
Net income attributable to Butler National Corporation	$	10,368	$	1,433
Weighted average common shares outstanding		75,340,131		74,144,957
Dilutive effect of non-qualified stock option plans		-		-
Weighted average common shares outstanding, assuming dilution		75,340,131		74,144,957
Potential common shares if all options were exercised and shares issued		75,340,131		74,144,957
Basic earnings per common share	$	0.14	$	0.02
Diluted earnings per common share	$	0.14	$	0.02

n) Stock-based Compensation: The Company accounts for stock-based compensation under ASC 718, "Accounting for Stock-Based Compensation." These standards define a fair value based method of accounting for stock-based compensation. The cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Black-Scholes option-pricing model, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.

o) Income Taxes: The Company utilizes ASC 740, Accounting for Income Taxes. Amounts provided for income tax expense are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable under tax laws. Deferred taxes, which arise principally from temporary differences between the period in which certain income and expense items are recognized for financial reporting purposes and the period in which they affect taxable income, are included in the amounts provided for income taxes. Under this method, the computation of deferred tax assets and liabilities give recognition to enacted tax rates in effect in the year the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to amounts that we expect to realize.

p) Cash and Cash Equivalents: Cash and cash equivalents consist primarily of cash and investments in a money market fund. We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. We maintain cash in bank deposit accounts that, at times, may exceed federally insured limits. At April 30, 2022 and 2021, we had $7,835 and $16,883, respectively in bank deposits that exceeded the federally insured limits.

q) Concentration of Credit Risk: We extend credit to customers based on an evaluation of their financial condition and collateral is not required. We perform ongoing credit evaluations of our customers and maintain an allowance for doubtful accounts.

r) Research and Development: We invested in research and development activities. The amount invested in the year ended April 30, 2022 and 2021 was $2,352 and $3,493 respectively.

s) Reclassifications: Certain reclassifications within the financial statement captions have been made to maintain consistency in presentation between years. These reclassifications have no impact on the reported results of operations.

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Note 2 - Disaggregation of Revenue

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Disaggregation of Revenue [Text Block]

2. DISAGGREGATION OF REVENUE:

In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.

	Year Ended April 30, 2022
	Professional Services		Aerospace Products		Total
Geographical Markets
North America	$	39,147	$	29,258	$	68,405
Europe		-		2,803		2,803
Asia		-		1,228		1,228
Australia and Other		-		1,037		1,037
	$	39,147	$	34,326	$	73,473
Major Product Lines
Casino Gaming Revenues	$	34,411	$	-	$	34,411
Casino Non-Gaming Revenues		4,358		-		4,358
Professional Services		378		-		378
Aircraft Modification		-		21,399		21,399
Aircraft Avionics		-		2,373		2,373
Special Mission Electronics		-		10,554		10,554
	$	39,147	$	34,326	$	73,473
Contract Types / Revenue Recognition Timing
Percentage of completion contracts	$	-	$	19,507	$	19,507
Goods or services transferred at a point of sale		39,147		14,819		53,966
	$	39,147	$	34,326	$	73,473

	Year Ended April 30, 2021
	Professional Services		Aerospace Products		Total
Geographical Markets
North America	$	30,205	$	25,537	$	55,742
Europe		-		3,427		3,427
Asia		-		1,332		1,332
Australia and Other		-		979		979
	$	30,205	$	31,275	$	61,480
Major Product Lines
Casino Gaming Revenues	$	26,811	$	-	$	26,811
Casino Non-Gaming Revenues		3,140		-		3,140
Professional Services		254		-		254
Aircraft Modification		-		21,750		21,750
Aircraft Avionics		-		2,583		2,583
Special Mission Electronics		-		6,942		6,942
	$	30,205	$	31,275	$	61,480
Contract Types / Revenue Recognition Timing
Percentage of completion contracts	$	-	$	19,280	$	19,280
Goods or services transferred at a point of sale		30,205		11,995		42,200
	$	30,205	$	31,275	$	61,480

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Note 3 - Accounts Receivable, Net, Contract Asset and Contract Liability

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

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

3. ACCOUNTS RECEIVABLE, NET, CONTRACT ASSET AND CONTRACT LIABILITY:

Accounts Receivables, net, contract asset and contract liability were as follows (in thousands):

	2022		2021
Accounts Receivable, net	$	3,636	$	1,961
Contract Asset		1,470		421
Contract Liability		820		5,798

Accounts Receivables, net consist of $3,636 and $1,961 from customers as of April 30, 2022 and April 30, 2021, respectively. At  April 30, 2022, and 2021, the allowance for doubtful accounts was $205 and $143, respectively.

Contract assets are net of progress payments and performance based payments from our customers as well as advance payments from customers totaling $1,470 and $421 as of April 30, 2022 and 2021. Contract assets increased $1,049 during 2022, primarily due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during 2022 for which we have not yet billed our customers. There were no significant impairment losses related to our contract assets during 2022 and 2021. We expect to bill our customers for the majority of the April 30, 2022 contract assets during fiscal year end 2023.

Contract liabilities decreased $4,978 during 2022, primarily due to payments received in excess of revenue recognized on these performance obligations. During 2022, we recognized $5,798 of our contract liabilities at April 30, 2021 as revenue. During 2021, we recognized $2,189 of our contract liabilities at April 30, 2020 as revenue.

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Note 4 - Debt

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

4. DEBT:

Principal amounts of debt at April 30, 2022 and 2021, consist of the following (in thousands):

Promissory Notes	2022		2021
Bank line of credit, available LOC $2.0 million interest at 3.65% due on demand, collateralized by a first and second position on all assets of the Company.		-		-
	$	-	$	-
Long-Term Debt
Note payable, interest at 6.25% due January 2023, collateralized by an Aircraft Security Agreement.		534		1,138
Note payable, interest at 6.25%, due June 2024, collateralized by real estate.		181		202
Note payable, interest at 4.5%, paid off in 2022.		-		21
Note payable, interest at SOFR plus 1.75% due March 2029, collateralized by real estate.		1,106		1,267
Note payable, interest at SOFR plus 1.75% due March 2029 collateralized by real estate.		507		581
Note payable, interest at 5.32%, this note matures in December 2027, with a balloon payment of $19,250, collateralized by all of BHCMC's assets and compensation due under the State Management Contract.		32,667		34,417
Note payable, interest at 5.75%, this note matures October 2026, collateralized by all of BHCMC's assets and compensation due under the State Management Contract.		12,721		6,533
Note payable, interest at 4.35%, due March 2029, collateralized by Aircraft Security Agreements		1,197		-
Note payable, interest at 8.13%, due October 2025, collateralized by equipment		52		-
Paycheck Protection Program loan, interest at 1%, this loan was received for the professional services segment. In June 2021, the Company received notice of forgiveness from the Small Business Administration.		-		2,001
		48,965		46,160
Less: Origination fees		389		372
		48,576		45,788
Less: Current maturities		5,165		5,972
	$	43,411	$	39,816

Maturities of long-term debt are as follows:

Year Ending April 30	Amount
2023	$	5,242
2024		4,874
2025		5,047
2026		5,228
2027		3,790
Thereafter		24,784
	$	48,965

Financial and Other Covenants

We are in compliance with our covenants at April 30, 2022. 

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Note 5 - Lease Right-to-use

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Lessee, Finance Leases [Text Block]

5. LEASE RIGHT-TO-USE:

On May 1, 2019, the Company adopted ASU 2016-02 Leases – Topic 842. ASU 2016-02 requires that on the balance sheet a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.

We lease the casino as well as hangar and office space with initial lease terms of two, five, and fifty years.

	April 30, 2022		April 30, 2021
Finance lease right-of-use assets	$	3,240	$	3,099
Less accumulated depreciation		512		436
Total	$	2,728	$	2,663

Future minimum lease payments for assets under capital leases at April 30, 2022 are as follows:

2023	$	259
2024		263
2025		139
2026		116
2027		118
Thereafter		7,721
Total minimum lease payments		8,616
Less amount representing interest		5,611
Present value of net minimum lease payments		3,005
Less current maturities of finance lease liability		106
Finance lease liability, net of current maturities	$	2,899

	April 30, 2022			April 30, 2021
Finance lease cost:
Amortization of right-of-use assets	$	181		$	225
Interest on lease liabilities		148			158
Total finance lease cost	$	329		$	383
	April 30, 2022			April 30, 2021
Weighted average remaining lease term - Financing leases	45 years			44 years
Weighted average discount rate - Financing leases		5	%		5	%

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Note 6 - Purchase of Noncontrolling Interest

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Business Combination Disclosure [Text Block]

6. PURCHASE OF NONCONTROLLING INTEREST:

On  October 18, 2021, Butler National Service Corporation (“BNSC”), a wholly-owned subsidiary of Butler National Corporation (“Company”), acquired the remaining BHCMC equity and the Company now indirectly owns 100% of BHCMC. BNSC acquired the remaining BHCMC equity from BHC Investment Company L.C. (“Seller”) for approximately $16.4 million paid at closing (the “Transaction”).

The closing was effected pursuant to a Sale and Purchase Agreement for Preferred Member Interest Units between Seller and BNSC (“Purchase Agreement”). BNSC and Seller agreed to utilize an effective date for the Transaction of  August 1, 2021. 

The Transaction purchase price was paid by a combination of available cash and an $8.0 million borrowing on a commercial loan with Academy Bank, N.A. (“Academy Bank”). BHCMC executed a Loan Modification Agreement with Academy, dated  October 18, 2021 (“Manager Loan”) and BNSC executed a guaranty of the obligations thereunder. The Manager Loan amended and restated the original $7.0 million loan executed   December 22, 2020 with Academy to acquire the casino land and buildings. The other $35 million loan executed in connection with the casino land acquisition in 2020 was unchanged by the Transaction. As of  April 30, 2022,  approximately $12.7 million is outstanding under the Manager Loan and it remains collateralized by real estate in Dodge City with an interest rate of 5.75% fully amortizing over five years. The Manager Loan will now mature on  October 18, 2026. 

The following table summarizes the purchase price and accounting of the transaction:

Purchase Price Summary:
Secured notes payable, net of financing costs	$	7,914
Forgiven note receivable from seller		780
Cash paid		7,659
Total	$	16,353
Accounting Summary:
Capital contributed in excess of par	$	6,119
Book basis of the noncontrolling interest in BHCMC, LLC		7,890
Deferred tax asset related to step up in basis		2,344
Total	$	16,353

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Note 7 - Boot Hill Casino Building and Land Purchase

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Casino Building and Land Purchase [Text Block]

7. Boot Hill Casino Building and Land Purchase:

On December 19, 2020, we completed the purchase of our Boot Hill Casino located in Dodge City, Kansas, for a purchase price of $41,250, and was funded with two secured bank long-term loans totaling $42,000. We incurred direct financing costs of approximately $400. Prior to our purchase, we were leasing the property under an operating lease. We had recorded a right-of-use asset and the related lease liability upon the adoption ASC 842, Leases, on May 1, 2019. Pursuant to ASC 805-50, Asset Acquisition, the cost was allocated to land, building and improvements, based on the relative fair values. Furthermore, pursuant to ASC 842-20-40-2, Leases – Purchase of Underlying Asset, the difference between the purchase price and the carrying amount of the lease liability immediately before the purchase was recorded by us as the lessee as an adjustment of approximately $2,628 to the carrying amount of the assets.

Purchase price of casino building and related land	$	41,250
Note payable, collaterialized by all of BHCMC's assets and compensation due under the State Management Contract. The interest rate is 5.32%. This note matures in December 2027, with a balloon payment of $19,250.	$	35,000
Note payable, collaterialized by all of BHCMC's assets and compensation due under the State Management Contract. This loan has subsequently been amended as part of the purchase of noncotrolling interest (See Footnote 6).	$	7,000
Total	$	42,000
Lease right-to-use asset	$	41,250
Accumulated depreciation	$	(4,169	)
Net	$	37,081
Lease liability	$	39,709

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Note 8 - Income Taxes

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8. INCOME TAXES:

Deferred taxes are determined based on the estimated future tax effects of differences between the financial statements and tax basis of assets and liabilities given the provision of the enacted tax laws. Significant components of the Company's deferred tax liabilities and assets as of April 30, 2022 and 2021 are as follows (in thousands):

	April 30, 2022			April 30, 2021
Deferred tax liabilities:
Depreciation and amortization	$	-		$	(643	)
Deferred compensation, restricted stock		(358	)		(521	)
Total deferred tax liabilities		(358	)		(1,164	)
Deferred tax assets:
Depreciation and amortization	$	1,365		$	-
Accounts receivable allowance		55			39
Inventory and other allowances		65			187
Lease right-to-use		472			451
Vacation accruals		60			37
Jackpot reserves		111			50
Total deferred tax assets		2,128			764
Less valuation allowance		-			-
Net deferred tax asset (liability)	$	1,770		$	(400	)

The reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

	April 30, 2022			April 30, 2021
Statutory federal income tax rate expense, net of noncontrolling interest		21.00	%		21.00	%
State income tax, net of federal benefits		5.38	%		5.59	%
Permanent tax		-1.12	%		5.36	%
Other		-1.25	%		-15.00	%
		24.01	%		16.95	%
Income tax expense:
Deferred income tax (benefit)	$	174		$	(225	)
Current income tax		3,102			536
Total income tax expense	$	3,276		$	311

Current income tax expense of $3,102 and $536 are comprised of $2,279 and $328 in federal income tax and $823 and $208 in state income tax for the years ended April 30, 2022 and 2021, respectively.

The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on its financial condition, results of operations or cashflow. Therefore, no reserve for uncertain income tax position, interest or penalties, have been recorded. 

The Company files income tax returns in the U.S. Federal jurisdiction and various state jurisdictions. The Company is no longer subject to U.S. Federal tax examinations for tax years beginning on May 1, 2018 and prior. There are no current tax examinations.

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Note 9 - Stockholders' Equity

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

9. STOCKHOLDERS' EQUITY:

Common Stock Transactions

During the year ended April 30, 2022, we issued 1,328,190 shares valued at $807 as the contribution to the Company 401(k) profit sharing plan.

During the year ended April 30, 2021, we issued 1,400,705 shares valued at $721 as the contribution to the Company 401(k) profit sharing plan.

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Note 10 - Stock Options and Incentive Plans

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

10. STOCK OPTIONS AND INCENTIVE PLANS

In November 2016, the shareholders approved and adopted the Butler National Corporation 2016 Equity Incentive Plan. The maximum number of shares of common stock that may be issued under the Plan is 12.5 million.

On April 12, 2019, the Company granted 2.5 million restricted shares to employees. These shares have voting rights at date of grant and become fully vested and non-forfeitable on April 11, 2024. The restricted shares were valued at $0.38 per share, for a total of $950. On March 17, 2020, the Company granted 5.0 million restricted shares to employees. These shares have voting rights at date of grant and become fully vested and non-forfeitable on March 16, 2025. The restricted shares were valued at $0.41 per share, for a total of $2.0 million. The deferred compensation related to these grants will be expensed on the financial statements over the five year vesting period. No other equity awards have been made under the plan. During the year ended April 30, 2022, 50,000 shares were forfeited. During the year ended April 30, 2021, 50,000 shares were forfeited. At April 30, 2022, total compensation cost related to nonvested awards not recognized is $1,551, and the weighted average period over which it is expected to be recognized is 3.5 years.

For the year ended  April 30, 2022 and 2021, the Company expensed $585 and $592, respectively.

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at April 30, 2020		7,500,000		$	0.40
Forfeited during the year ended April 30, 2021		(50,000	)	$	0.40
Forfeited during the year ended April 30, 2022		(50,000	)	$	0.40
Total		7,400,000		$	0.40

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Note 11 - Stock Repurchase Program

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Treasury Stock [Text Block]

11. STOCK REPURCHASE PROGRAM:

The Board of Directors approved a stock purchase program authorizing the repurchase of up to $4,000 of its common stock. The timing and amount of any share repurchases will be determined by Butler National’s management based on market conditions and other factors. The program is currently authorized through May 1, 2023.

The table below provides information with respect to common stock purchases by the Company during the year ended April 30, 2022.

Period	Total Number of Shares Purchased		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
Program authorization							$	4,000
Shares purchased in prior periods		2,721,415	$	0.36		2,721,415	$	3,019
Quarter ended July 31, 2020 (a)		212,000	$	0.51		212,000	$	2,911
Quarter ended October 31, 2020 (a)		152,915	$	0.50		152,915	$	2,835
Quarter ended January 31, 2021 (a)		-	$	-		-	$	2,835
Quarter ended April 30, 2021 (a)		17,303	$	0.65		17,303	$	2,823
Quarter ended July 31, 2021 (a)		-	$	-		-	$	2,823
Quarter ended October 31, 2021 (a)		6,290	$	0.62		6,290	$	2,819
Quarter ended January 31, 2022 (a)		-	$	-		-	$	2,819
Quarter ended April 30, 2022 (a)		180,503	$	0.91		180,503	$	2,655
Total		3,290,426	$	0.41		3,290,426

(a) These shares of common stock purchased were purchased through private transactions

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Note 12 - Commitments and Contingencies

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

12. COMMITMENTS AND CONTINGENCIES:

Litigation:

From time to time we may be a defendant and/or plaintiff in various other legal proceedings arising in the normal course of our business. We are currently not a party to any material legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. In addition, we are not aware of any known litigation or liabilities involving the operators of our properties that could affect our operations. Furthermore, as of July 15, 2022, our management is not aware of any proceedings to which any of our directors, officers, or affiliates, or any associate of any such director, officer, affiliate, or security holder is a party averse to our company or has a material interest averse to us. 

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Note 13 - Related-party Transactions

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

13. RELATED-PARTY TRANSACTIONS:

The Company paid consulting fees of $135 and $135 to David Hayden, a director of Butler National Corporation in fiscal year ended April 30, 2022 and 2021 respectively.

The Company paid Edgar Law Firm, LLC, owned by John M. Edgar, a director of Butler National Corporation $214 and $129 in fiscal year ended  April 30, 2022 and 2021 respectively.

Included in accrued liabilities are $482 and $659 as of April 30, 2022 and 2021 respectively for amounts owed to our CEO for accrued compensation.

In fiscal 2022, there were three related-person transactions under the relevant standards: Butler National employed the brother (Wayne Stewart as an engineer), son (Craig Stewart as a Vice President) and son-in-law (Jeff Shinkle as an architect) of Clark D. Stewart, an executive officer. Compensation for these related-persons was calculated in the same manner as the Summary Compensation table shown in the most recent Proxy Statement resulting in compensation of $292, $484 and $247, respectively, for fiscal 2022 and $353, $503 and $255, respectively, for fiscal 2021.

The policies and procedures for payment of goods and services for related transactions follow our normal course of business standards and require the necessary review and approval process as outlined in our Policies and Procedures manual and as set forth by our Compensation Committee.

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Note 14 - 401(k) Profit Sharing Plan

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Retirement Benefits [Text Block]

14. 401(k) PROFIT SHARING PLAN:

We have a defined contribution plan authorized under Section 401(k) of the Internal Revenue Code. All benefits-eligible employees with at least thirty days of service are eligible to participate in the plan; however, there are only two entry dates per calendar year. The Plan may match subject to the annual approval of the Board of Directors, 100 percent of every pre-tax dollar an employee contributes up to 6 percent of the employee's salary, and a portion of the Company’s profits. Employees are 100 percent vested in the employer's contributions immediately. Our matching contribution, as approved by the Board of Directors was paid in common stock of the Company.  The contribution amount was valued at a weekly weighted average market price of the stock contributed in 2022 and 2021 and was approximately $807 and $721 respectively. 

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Note 15 - Segment Reporting and Sales by Major Customer

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

15. SEGMENT REPORTING AND SALES BY MAJOR CUSTOMER:

Industry Segmentation

Current Activities - The Company focuses on two primary activities, Professional Services and Aerospace Products.

Aerospace Products:

Aircraft Modifications principally includes the modification of customer and company owned business-size aircraft from passenger to freighter configuration, radar systems, addition of aerial photography capabilities, ISR modifications, and stability enhancing modifications for Learjet, Beechcraft, Cessna, and Dassault Falcon aircraft along with other specialized modifications. We provide these services through our subsidiary, Avcon Industries, Inc. ("Aircraft Modifications" or "Avcon").

Special mission electronics principally includes the manufacture, sale, and service of electronics upgrades for classic weapon control systems used on military aircraft and vehicles. We provide the products through our subsidiary, Butler National Corporation - Tempe, Arizona.

Butler Avionics sells, installs and repairs aircraft avionics equipment (airplane radio equipment and flight control systems). These systems are flight display systems which include intuitive touchscreen controls with large display to give users unprecedented access to high-resolution terrain mapping, graphical flight planning, geo-referenced charting, traffic display, satellite weather and much more. Butler Avionics is also recognized nationwide for its troubleshooting and repair work particularly on autopilot systems.

Professional Services:

Butler National Service Corporation ("BNSC") provides management services to the Boot Hill Casino, a "state-owned casino".

BCS Design, Inc. provides licensed architectural services. These services include commercial and industrial building design.

Year Ended April 30, 2022	Gaming		Aircraft Modification		Aircraft Avionics		Special Mission Electronics		Other		Total
Revenues from customers	$	38,769	$	21,399	$	2,373	$	10,554	$	378	$	73,473
Interest expense		2,440		215		-		23		11		2,689
Depreciation and amortization		2,283		181		5		161		185		2,815

Year Ended April 30, 2021	Gaming		Aircraft Modification		Aircraft Avionics		Special Mission Electronics		Other		Total
Revenues from customers	$	29,951	$	21,750	$	2,583	$	6,942	$	254	$	61,480
Interest expense		2,847		251		-		27		13		3,138
Depreciation and amortization		3,060		191		7		135		149		3,542

Our Chief Operating Decision Maker (CODM) does not evaluate operating segments using asset or liability information.

Major Customers: Revenue from major customers (10 percent or more of consolidated revenue) were as follows:

	2022			2021
Aerospace Products – two customers in 2022, one customer in 2021		25.0	%		10.6	%
Professional Services		-			-

In fiscal 2022 the Company derived 34.1% of total revenue from five Aerospace customers. The top customer provided 14.3% of total revenue while the next top four customers ranged from 2.7% to 10.7%. At April 30, 2022, we had one customer that accounted for 44.8% of our accounts receivable.

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Note 16 - Subsequent Events

12 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Subsequent Events [Text Block]

16. SUBSEQUENT EVENTS:

In June 2022, board member John M. Edgar was awarded 400,000 shares of Butler National Corporation stock as an "other stock-based award" pursuant to the Corporation's 2016 Equity Incentive Plan and $140,000 in cash compensation. The award is for future Board of Directors work related to future financing and public relations. The award is to be paid three business days after the filing of this 10-K.

The Company evaluated its April 30, 2022 consolidated financial statements for subsequent events through July 15, 2022, the filing date of this report. The Company is not aware of any other subsequent events that would require recognition or disclosure in the consolidated financial statements. 

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Significant Accounting Policies (Policies)

12 Months Ended

Apr. 30, 2022

Accounting Policies [Abstract]

Accounts Receivable [Policy Text Block]

a) Accounts receivable: Accounts receivable are carried on a gross basis, with no discounting, less the allowance for doubtful accounts. Management estimates the allowance for doubtful accounts based on existing economic conditions, the financial conditions of the customers, and the amount and the age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted. Allowance for doubtful accounts are calculated on the historical write-off of doubtful accounts of the individual subsidiaries. Invoices are generally considered a doubtful account if no payment has been made in the past 90 days. We review these policies on a quarterly basis, and based on these reviews, we believe we maintain adequate reserves.

Use of Estimates, Policy [Policy Text Block]

b) Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Future events and their effects cannot be determined with certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and any such differences may be material to our financial statements. Significant estimates include assumptions about collection of accounts receivable, the valuation and recognition of stock-based compensation expense, valuation for deferred tax assets and useful life of fixed assets.

Inventory, Policy [Policy Text Block]

c) Inventories: Inventories are priced at the lower of cost, determined on a first-in, first-out basis, or net realizable value. Inventories include material, labor and factory overhead required in the production of our products.

Inventory obsolescence is examined on a regular basis. When determining our estimate of obsolescence, we consider inventory that has been inactive for five years or longer and the probability of using that inventory in future production. The obsolete inventory generally consists of Falcon and Learjet parts and electrical components.  At April 30, 2022 and 2021, the estimate of obsolete inventory was $240 and $691 respectively.

Property, Plant and Equipment, Policy [Policy Text Block]

d) Property and Related Depreciation: Machinery and equipment are recorded at cost and depreciated over their estimated useful lives. Depreciation is provided on a straight-line basis. The lives used for the significant items within each property classification range from 3 to 39 years.

Maintenance and repairs are charged to expense as incurred. The cost and accumulated depreciation of assets retired are removed from the accounts and any resulting gains or losses are reflected as income or expense.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

e) Long-Lived Assets: The Company accounts for its long-lived assets in accordance with ASC Topic 360-10, "Accounting for the Impairment or Disposal of Long-Lived Assets." ASC Topic 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value or disposable value.

Other Assets Policy [Policy Text Block]

f) Other Assets: Our other asset account includes assets of $5,500 related to the Kansas Expanded Lottery Act Management Contract privilege fee, $6,151 of gaming equipment we were required to pay for ownership by the State of Kansas Lottery, and JET autopilot intellectual property of $1,417, and miscellaneous other assets of $128.  BHCMC expects the $5,500 privilege fee to have a value over the remaining life of the initial Management Contract with the State of Kansas which will end in December 2024.  The State of Kansas approved a renewal management contract and an amendment to the current management contract for our professional services company BNSC via BHCMC. The renewal will take effect December 15, 2024, and continue until 2039, another 15 years. The Managers Certificate asset for use of gaming equipment is being amortized over a period of three years based on the estimated useful life of gaming equipment.  The JET intellectual property is being amortized over a period of fifteen years. Amortization relating to other assets in the year ended  April 30, 2022 and 2021 was $689 and $733, respectively.

Other assets net values are as follows:

(dollars in thousands)	2022		2021
Privilege fee	$	5,500	$	5,500
Less amortized costs		4,372		3,949
Privilege fee balance	$	1,128	$	1,551
Intangible gaming equipment	$	6,151	$	5,927
Less amortized costs		5,868		5,696
Intangible gaming equipment balance	$	283	$	231
JET autopilot intellectual property	$	1,417	$	1,417
Less amortized costs		1,335		1,241
JET autopilot intellectual property balance	$	82	$	176

Supplemental Type Certificates [Policy Text Block]

g) Supplemental Type Certificates: Supplemental Type Certificates (STCs) are authorizations granted by the Federal Aviation Administration (FAA) for specific modification of a certain aircraft. The STC authorizes us to perform modifications, installations, and assemblies on applicable customer-owned aircraft. Costs incurred to obtain STCs are capitalized and subsequently amortized over seven years. The legal life of an STC is indefinite. We believe we have enough future sales to fully amortize our STC development costs. Amortization relating to STC's in the year ended  April 30, 2022 and 2021 was $1,295 and $1,012, respectively. Consultant costs, as shown below, include costs of engineering, legal and aircraft specialists. STC capitalized costs are as follows:

(dollars in thousands)	2022		2021
Direct labor	$	3,342	$	3,387
Direct materials		5,227		4,108
Consultant costs		3,083		2,983
Overhead		5,702		5,774
		17,354		16,252
Less-amortized costs		9,336		8,041
STC balance	$	8,018	$	8,211

Revenue from Contract with Customer [Policy Text Block]

h) Revenue Recognition: ASC Topic 606, “Revenue from Contracts with Customers”

Under ASC 606, revenue is recognized when a customer obtains control of promised services in an amount that reflects the consideration we expect to receive in exchange for those services. To achieve this core principal, the Company applies the following five steps:

1)    Identify the contract, or contracts, with a customer

A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

2)    Identification of the performance obligations in the contract

At contract inception, an entity shall assess the goods or services promised in a contract with a customer and shall identify as a performance obligation each promise to transfer to the customer. Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation.

3)    Determination of the transaction price

The transaction price is the amount that an entity allocates to the performance obligations identified in the contract and, therefore, represents the amount of revenue recognized as those performance obligations are satisfied. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.

4)    Allocation of the transaction price to the performance obligations in the contract

Once a contract and associated performance obligations have been identified and the transaction price has been determined, ASC 606 requires an entity to allocate the transaction price to each performance obligation identified. This is generally done in proportion to the standalone selling prices of each performance obligation (i.e., on a relative standalone selling price basis). As a result, any discount within the contract generally is allocated proportionally to all the separate performance obligations in the contract. The Company is applying the right to invoice practical expedient to recognize revenue. As a result, the entity bypasses the steps of determining the transaction price, allocating that transaction price and determining when to recognize revenue as it will recognize revenue as billed by multiplying the price assigned to the good or service, by the units.

5)  Recognition of revenue when, or as, we satisfy a performance obligation

Revenue is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control transfers either over time or at a point in time. Revenue is recognized when control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

Aircraft modifications are performed under fixed-price contracts. Revenue from fixed-priced contracts are recognized on the percentage-of-completion method, measured by the direct labor incurred compared to total estimated direct labor. Using direct labor best represents the progress on a contract.

Revenue from Avionics products are recognized when shipped. Payment for these Avionics products is due within 30 days of the invoice date after shipment. Revenue from Gaming Management and other Corporate/Professional Services is recognized as the service is rendered.

Regarding warranties and returns, our products are special order and are not suitable for return. Our products are unique upon installation and tested prior to their release to the customer and acceptance by the customer. In the rare event of a warranty claim, the claim is processed through the normal course of business and may include additional charges to the customer. In our opinion, any future warranty work would not be material to the consolidated financial statements.

Gaming revenue is the gross gaming win as reported by the Kansas Lottery casino reporting systems, less the mandated payments by and for the State of Kansas. Electronic games-slots and table games revenue is the aggregate of gaming wins and losses. Liabilities are recognized for chips and "ticket-in, ticket-out" coupons in the customers' possession, and for accruals related to anticipated payout of progressive jackpots. Progressive gaming machines, which contain base jackpots that increase at a progressive rate based on the number of coins played, are deducted from revenue as the value of jackpots increase. Food, beverage, and other revenue is recorded when the service is received and paid.

Fair Value Measurement, Policy [Policy Text Block]

i) Fair Value Measurements: Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.

Level 3 - Unobservable inputs that are supported by little or no market activities.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

For certain financial instruments, including cash and cash equivalents, short-term investments, accounts receivable, marketable securities, notes payable,  and accounts payable, the carrying amounts approximate fair value.  We do not have financial assets and liabilities that are measured at fair value on a recurring basis.  Other financial assets and liabilities are carried at cost with fair value disclosed, if required.

We measure certain other instruments, including stock-based compensation awards settled in the stock also at fair value. The determination of fair value involves the use of appropriate valuation methods and relevant inputs into valuation models.

Slot Machine Jackpots [Policy Text Block]

j) Slot Machine Jackpots: If the casino is not required to make payment of the jackpot (i.e. the incremental amount on a progressive machine) due to legal requirements, the jackpot is accrued as the obligation becomes unavoidable. This liability is accrued over the time period in which the incremental progressive jackpot amount is generated with a related reduction in casino revenue. No liability is accrued with respect to the base jackpot.

Gaming Facility Mandated Payment [Policy Text Block]

k) Gaming Facility Mandated Payment: Boothill Casino is contractually obligated to pay its proportionate share of certain expenses incurred by the Kansas Lottery Commission and the Kansas Racing and Gaming Commission, which amounted to $1,968 and $1,868 in the fiscal year ended April 30, 2022 and 2021, respectively.

Advanced Payments and Billings in Excess of Costs Incurred [Policy Text Block]

l) Advanced Payments and Billings in Excess of Costs Incurred: We receive advances, performance-based payments and progress payment from customers which may exceed costs incurred on certain contracts. We classify advance payments and billings in excess of costs incurred, other than those reflected as a reduction of contracts in process, as contract liability in current liabilities.

Earnings Per Share, Policy [Policy Text Block]

m) Earnings Per Share: Earnings per common share is based on the weighted average number of common shares outstanding during the year.

The computation of the Company basic and diluted earnings per common share is as follows:

(in thousands, except share and per share data)	2022		2021
Net income attributable to Butler National Corporation	$	10,368	$	1,433
Weighted average common shares outstanding		75,340,131		74,144,957
Dilutive effect of non-qualified stock option plans		-		-
Weighted average common shares outstanding, assuming dilution		75,340,131		74,144,957
Potential common shares if all options were exercised and shares issued		75,340,131		74,144,957
Basic earnings per common share	$	0.14	$	0.02
Diluted earnings per common share	$	0.14	$	0.02

Share-Based Payment Arrangement [Policy Text Block]

n) Stock-based Compensation: The Company accounts for stock-based compensation under ASC 718, "Accounting for Stock-Based Compensation." These standards define a fair value based method of accounting for stock-based compensation. The cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Black-Scholes option-pricing model, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.

Income Tax, Policy [Policy Text Block]

o) Income Taxes: The Company utilizes ASC 740, Accounting for Income Taxes. Amounts provided for income tax expense are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable under tax laws. Deferred taxes, which arise principally from temporary differences between the period in which certain income and expense items are recognized for financial reporting purposes and the period in which they affect taxable income, are included in the amounts provided for income taxes. Under this method, the computation of deferred tax assets and liabilities give recognition to enacted tax rates in effect in the year the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to amounts that we expect to realize.

Cash and Cash Equivalents, Policy [Policy Text Block]

p) Cash and Cash Equivalents: Cash and cash equivalents consist primarily of cash and investments in a money market fund. We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. We maintain cash in bank deposit accounts that, at times, may exceed federally insured limits. At April 30, 2022 and 2021, we had $7,835 and $16,883, respectively in bank deposits that exceeded the federally insured limits.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

q) Concentration of Credit Risk: We extend credit to customers based on an evaluation of their financial condition and collateral is not required. We perform ongoing credit evaluations of our customers and maintain an allowance for doubtful accounts.

Research and Development Expense, Policy [Policy Text Block]

r) Research and Development: We invested in research and development activities. The amount invested in the year ended April 30, 2022 and 2021 was $2,352 and $3,493 respectively.

Reclassification, Comparability Adjustment [Policy Text Block]

s) Reclassifications: Certain reclassifications within the financial statement captions have been made to maintain consistency in presentation between years. These reclassifications have no impact on the reported results of operations.

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Note 1 - Nature of Operations, Organization and Significant Accounting Policies (Tables)

12 Months Ended

Apr. 30, 2022

Notes Tables

Schedule of Other Assets [Table Text Block]

(dollars in thousands)	2022		2021
Privilege fee	$	5,500	$	5,500
Less amortized costs		4,372		3,949
Privilege fee balance	$	1,128	$	1,551
Intangible gaming equipment	$	6,151	$	5,927
Less amortized costs		5,868		5,696
Intangible gaming equipment balance	$	283	$	231
JET autopilot intellectual property	$	1,417	$	1,417
Less amortized costs		1,335		1,241
JET autopilot intellectual property balance	$	82	$	176

Supplemental Type Certificates Capitalized Costs [Table Text Block]

(dollars in thousands)	2022		2021
Direct labor	$	3,342	$	3,387
Direct materials		5,227		4,108
Consultant costs		3,083		2,983
Overhead		5,702		5,774
		17,354		16,252
Less-amortized costs		9,336		8,041
STC balance	$	8,018	$	8,211

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

(in thousands, except share and per share data)	2022		2021
Net income attributable to Butler National Corporation	$	10,368	$	1,433
Weighted average common shares outstanding		75,340,131		74,144,957
Dilutive effect of non-qualified stock option plans		-		-
Weighted average common shares outstanding, assuming dilution		75,340,131		74,144,957
Potential common shares if all options were exercised and shares issued		75,340,131		74,144,957
Basic earnings per common share	$	0.14	$	0.02
Diluted earnings per common share	$	0.14	$	0.02

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Note 2 - Disaggregation of Revenue (Tables)

12 Months Ended

Apr. 30, 2022

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Year Ended April 30, 2022
	Professional Services		Aerospace Products		Total
Geographical Markets
North America	$	39,147	$	29,258	$	68,405
Europe		-		2,803		2,803
Asia		-		1,228		1,228
Australia and Other		-		1,037		1,037
	$	39,147	$	34,326	$	73,473
Major Product Lines
Casino Gaming Revenues	$	34,411	$	-	$	34,411
Casino Non-Gaming Revenues		4,358		-		4,358
Professional Services		378		-		378
Aircraft Modification		-		21,399		21,399
Aircraft Avionics		-		2,373		2,373
Special Mission Electronics		-		10,554		10,554
	$	39,147	$	34,326	$	73,473
Contract Types / Revenue Recognition Timing
Percentage of completion contracts	$	-	$	19,507	$	19,507
Goods or services transferred at a point of sale		39,147		14,819		53,966
	$	39,147	$	34,326	$	73,473

	Year Ended April 30, 2021
	Professional Services		Aerospace Products		Total
Geographical Markets
North America	$	30,205	$	25,537	$	55,742
Europe		-		3,427		3,427
Asia		-		1,332		1,332
Australia and Other		-		979		979
	$	30,205	$	31,275	$	61,480
Major Product Lines
Casino Gaming Revenues	$	26,811	$	-	$	26,811
Casino Non-Gaming Revenues		3,140		-		3,140
Professional Services		254		-		254
Aircraft Modification		-		21,750		21,750
Aircraft Avionics		-		2,583		2,583
Special Mission Electronics		-		6,942		6,942
	$	30,205	$	31,275	$	61,480
Contract Types / Revenue Recognition Timing
Percentage of completion contracts	$	-	$	19,280	$	19,280
Goods or services transferred at a point of sale		30,205		11,995		42,200
	$	30,205	$	31,275	$	61,480

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Note 3 - Accounts Receivable, Net, Contract Asset and Contract Liability (Tables)

12 Months Ended

Apr. 30, 2022

Notes Tables

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

	2022		2021
Accounts Receivable, net	$	3,636	$	1,961
Contract Asset		1,470		421
Contract Liability		820		5,798

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Note 4 - Debt (Tables)

12 Months Ended

Apr. 30, 2022

Notes Tables

Schedule of Debt [Table Text Block]

Promissory Notes	2022		2021
Bank line of credit, available LOC $2.0 million interest at 3.65% due on demand, collateralized by a first and second position on all assets of the Company.		-		-
	$	-	$	-
Long-Term Debt
Note payable, interest at 6.25% due January 2023, collateralized by an Aircraft Security Agreement.		534		1,138
Note payable, interest at 6.25%, due June 2024, collateralized by real estate.		181		202
Note payable, interest at 4.5%, paid off in 2022.		-		21
Note payable, interest at SOFR plus 1.75% due March 2029, collateralized by real estate.		1,106		1,267
Note payable, interest at SOFR plus 1.75% due March 2029 collateralized by real estate.		507		581
Note payable, interest at 5.32%, this note matures in December 2027, with a balloon payment of $19,250, collateralized by all of BHCMC's assets and compensation due under the State Management Contract.		32,667		34,417
Note payable, interest at 5.75%, this note matures October 2026, collateralized by all of BHCMC's assets and compensation due under the State Management Contract.		12,721		6,533
Note payable, interest at 4.35%, due March 2029, collateralized by Aircraft Security Agreements		1,197		-
Note payable, interest at 8.13%, due October 2025, collateralized by equipment		52		-
Paycheck Protection Program loan, interest at 1%, this loan was received for the professional services segment. In June 2021, the Company received notice of forgiveness from the Small Business Administration.		-		2,001
		48,965		46,160
Less: Origination fees		389		372
		48,576		45,788
Less: Current maturities		5,165		5,972
	$	43,411	$	39,816

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

Year Ending April 30	Amount
2023	$	5,242
2024		4,874
2025		5,047
2026		5,228
2027		3,790
Thereafter		24,784
	$	48,965

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Note 5 - Lease Right-to-use (Tables)

12 Months Ended

Apr. 30, 2022

Notes Tables

Lessee, Finance Lease, Right of Use Assets [Table Text Block]

	April 30, 2022		April 30, 2021
Finance lease right-of-use assets	$	3,240	$	3,099
Less accumulated depreciation		512		436
Total	$	2,728	$	2,663

Finance Lease, Liability, Fiscal Year Maturity [Table Text Block]

2023	$	259
2024		263
2025		139
2026		116
2027		118
Thereafter		7,721
Total minimum lease payments		8,616
Less amount representing interest		5,611
Present value of net minimum lease payments		3,005
Less current maturities of finance lease liability		106
Finance lease liability, net of current maturities	$	2,899

Lease, Cost [Table Text Block]

	April 30, 2022			April 30, 2021
Finance lease cost:
Amortization of right-of-use assets	$	181		$	225
Interest on lease liabilities		148			158
Total finance lease cost	$	329		$	383
	April 30, 2022			April 30, 2021
Weighted average remaining lease term - Financing leases	45 years			44 years
Weighted average discount rate - Financing leases		5	%		5	%

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Note 6 - Purchase of Noncontrolling Interest (Tables)

12 Months Ended

Apr. 30, 2022

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

Purchase Price Summary:
Secured notes payable, net of financing costs	$	7,914
Forgiven note receivable from seller		780
Cash paid		7,659
Total	$	16,353
Accounting Summary:
Capital contributed in excess of par	$	6,119
Book basis of the noncontrolling interest in BHCMC, LLC		7,890
Deferred tax asset related to step up in basis		2,344
Total	$	16,353

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Note 7 - Boot Hill Casino Building and Land Purchase (Tables)

12 Months Ended

Apr. 30, 2022

Notes Tables

Casino Building and Land Purchase Price and Lease Allocation [Table Text Block]

Purchase price of casino building and related land	$	41,250
Note payable, collaterialized by all of BHCMC's assets and compensation due under the State Management Contract. The interest rate is 5.32%. This note matures in December 2027, with a balloon payment of $19,250.	$	35,000
Note payable, collaterialized by all of BHCMC's assets and compensation due under the State Management Contract. This loan has subsequently been amended as part of the purchase of noncotrolling interest (See Footnote 6).	$	7,000
Total	$	42,000
Lease right-to-use asset	$	41,250
Accumulated depreciation	$	(4,169	)
Net	$	37,081
Lease liability	$	39,709

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Note 8 - Income Taxes (Tables)

12 Months Ended

Apr. 30, 2022

Notes Tables

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	April 30, 2022			April 30, 2021
Deferred tax liabilities:
Depreciation and amortization	$	-		$	(643	)
Deferred compensation, restricted stock		(358	)		(521	)
Total deferred tax liabilities		(358	)		(1,164	)
Deferred tax assets:
Depreciation and amortization	$	1,365		$	-
Accounts receivable allowance		55			39
Inventory and other allowances		65			187
Lease right-to-use		472			451
Vacation accruals		60			37
Jackpot reserves		111			50
Total deferred tax assets		2,128			764
Less valuation allowance		-			-
Net deferred tax asset (liability)	$	1,770		$	(400	)

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	April 30, 2022			April 30, 2021
Statutory federal income tax rate expense, net of noncontrolling interest		21.00	%		21.00	%
State income tax, net of federal benefits		5.38	%		5.59	%
Permanent tax		-1.12	%		5.36	%
Other		-1.25	%		-15.00	%
		24.01	%		16.95	%
Income tax expense:
Deferred income tax (benefit)	$	174		$	(225	)
Current income tax		3,102			536
Total income tax expense	$	3,276		$	311

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Note 10 - Stock Options and Incentive Plans (Tables)

12 Months Ended

Apr. 30, 2022

Notes Tables

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

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at April 30, 2020		7,500,000		$	0.40
Forfeited during the year ended April 30, 2021		(50,000	)	$	0.40
Forfeited during the year ended April 30, 2022		(50,000	)	$	0.40
Total		7,400,000		$	0.40

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Note 11 - Stock Repurchase Program (Tables)

12 Months Ended

Apr. 30, 2022

Notes Tables

Class of Treasury Stock [Table Text Block]

Period	Total Number of Shares Purchased		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
Program authorization							$	4,000
Shares purchased in prior periods		2,721,415	$	0.36		2,721,415	$	3,019
Quarter ended July 31, 2020 (a)		212,000	$	0.51		212,000	$	2,911
Quarter ended October 31, 2020 (a)		152,915	$	0.50		152,915	$	2,835
Quarter ended January 31, 2021 (a)		-	$	-		-	$	2,835
Quarter ended April 30, 2021 (a)		17,303	$	0.65		17,303	$	2,823
Quarter ended July 31, 2021 (a)		-	$	-		-	$	2,823
Quarter ended October 31, 2021 (a)		6,290	$	0.62		6,290	$	2,819
Quarter ended January 31, 2022 (a)		-	$	-		-	$	2,819
Quarter ended April 30, 2022 (a)		180,503	$	0.91		180,503	$	2,655
Total		3,290,426	$	0.41		3,290,426

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Note 15 - Segment Reporting and Sales by Major Customer (Tables)

12 Months Ended

Apr. 30, 2022

Notes Tables

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

Year Ended April 30, 2022	Gaming		Aircraft Modification		Aircraft Avionics		Special Mission Electronics		Other		Total
Revenues from customers	$	38,769	$	21,399	$	2,373	$	10,554	$	378	$	73,473
Interest expense		2,440		215		-		23		11		2,689
Depreciation and amortization		2,283		181		5		161		185		2,815

Year Ended April 30, 2021	Gaming		Aircraft Modification		Aircraft Avionics		Special Mission Electronics		Other		Total
Revenues from customers	$	29,951	$	21,750	$	2,583	$	6,942	$	254	$	61,480
Interest expense		2,847		251		-		27		13		3,138
Depreciation and amortization		3,060		191		7		135		149		3,542

Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]

	2022			2021
Aerospace Products – two customers in 2022, one customer in 2021		25.0	%		10.6	%
Professional Services		-			-

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Note 1 - Nature of Operations, Organization and Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands	12 Months Ended		24 Months Ended
	Apr. 30, 2022	Apr. 30, 2021	Apr. 30, 2022
Duration after Which Invoices Are Considered to Be Doubtful (Day)			90 days
Duration During Which Inventory If Inactive Taken as Obsolete (Year)			5 years
Inventory Valuation Reserves	$ 240	$ 691	$ 240
Period for Payment Due (Day)			30 days
Cash, Uninsured Amount	7,835	16,883	$ 7,835
Research and Development Expense, Total	2,352	3,493
Kansas Lottery Commission and the Kansas Racing and Gaming Commission [Member]
Accrued Liabilities, Total	1,968	1,868	1,968
Kansas Expanded Lottery Act Management Contract Privilege Fee [Member]
Finite-Lived Intangible Assets, Gross, Total	5,500	5,500	5,500
Gaming Equipment [Member]
Finite-Lived Intangible Assets, Gross, Total	6,151	5,927	$ 6,151
Finite-Lived Intangible Asset, Useful Life (Year)			3 years
JET Autopilot Intellectual Property [Member]
Finite-Lived Intangible Assets, Gross, Total	1,417	1,417	$ 1,417
Finite-Lived Intangible Asset, Useful Life (Year)			15 years
Other Miscellaneous Long-Term Assets [Member]
Finite-Lived Intangible Assets, Gross, Total	128		$ 128
Amortization of Intangible Assets	689	733
Supplemental Type Certificates [Member]
Finite-Lived Intangible Asset, Useful Life (Year)			7 years
Amortization of Intangible Assets	$ 1,295	$ 1,012
Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)			3 years
Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)			39 years

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Note 1 - Nature of Operations, Organization and Significant Accounting Policies - Schedule of Other Assets (Details) - USD ($) $ in Thousands	Apr. 30, 2022	Apr. 30, 2021
Kansas Expanded Lottery Act Management Contract Privilege Fee [Member]
Other assets intangible	$ 5,500	$ 5,500
Less amortized costs	4,372	3,949
Other assets net intangible, net	1,128	1,551
Gaming Equipment [Member]
Other assets intangible	6,151	5,927
Less amortized costs	5,868	5,696
Other assets net intangible, net	283	231
JET Autopilot Intellectual Property [Member]
Other assets intangible	1,417	1,417
Less amortized costs	1,335	1,241
Other assets net intangible, net	$ 82	$ 176

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Note 1 - Nature of Operations, Organization and Significant Accounting Policies - Supplemental Type Certificates Capitalized Costs (Details) - USD ($) $ in Thousands	Apr. 30, 2022	Apr. 30, 2021
Direct labor	$ 3,342	$ 3,387
Direct materials	5,227	4,108
Consultant costs	3,083	2,983
Overhead	5,702	5,774
Supplemental Type Certificates, Capitalized Gross	17,354	16,252
Supplemental type certificates, accumulated amortization	9,336	8,041
STC balance	$ 8,018	$ 8,211

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Note 1 - Nature of Operations, Organization and Significant Accounting Policies - Computation of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Net income attributable to Butler National Corporation	$ 10,368	$ 1,433
Weighted average common shares outstanding (in shares)	75,340,131	74,144,957
Dilutive effect of non-qualified stock option plans (in shares)	0	0
Weighted average common shares outstanding, assuming dilution (in shares)	75,340,131	74,144,957
Potential common shares if all options were exercised and shares issued (in shares)	75,340,131	74,144,957
Basic earnings per common share (in dollars per share)	$ 0.14	$ 0.02
Diluted earnings per common share (in dollars per share)	$ 0.14	$ 0.02

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Note 2 - Disaggregation of Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Revenues	$ 73,473	$ 61,480
Percentage of Completion Contracts [Member]
Revenues	19,507	19,280
Transferred at Point in Time [Member]
Revenues	53,966	42,200
Casino [Member]
Revenues	34,411	26,811
Casino Non-gaming [Member]
Revenues	4,358	3,140
Professional Services [Member]
Revenues	378	254
Aircraft Modification [Member]
Revenues	21,399	21,750
Aircraft Avionics [Member]
Revenues	2,373	2,583
Special Mission Electronics [Member]
Revenues	10,554	6,942
Professional Services [Member]
Revenues	39,147	30,205
Professional Services [Member] | Percentage of Completion Contracts [Member]
Revenues	0	0
Professional Services [Member] | Transferred at Point in Time [Member]
Revenues	39,147	30,205
Professional Services [Member] | Casino [Member]
Revenues	34,411	26,811
Professional Services [Member] | Casino Non-gaming [Member]
Revenues	4,358	3,140
Professional Services [Member] | Professional Services [Member]
Revenues	378	254
Professional Services [Member] | Aircraft Modification [Member]
Revenues	0	0
Professional Services [Member] | Aircraft Avionics [Member]
Revenues	0	0
Professional Services [Member] | Special Mission Electronics [Member]
Revenues	0	0
Aerospace Products [Member]
Revenues	34,326	31,275
Aerospace Products [Member] | Percentage of Completion Contracts [Member]
Revenues	19,507	19,280
Aerospace Products [Member] | Transferred at Point in Time [Member]
Revenues	14,819	11,995
Aerospace Products [Member] | Casino [Member]
Revenues	0	0
Aerospace Products [Member] | Casino Non-gaming [Member]
Revenues	0	0
Aerospace Products [Member] | Professional Services [Member]
Revenues	0	0
Aerospace Products [Member] | Aircraft Modification [Member]
Revenues	21,399	21,750
Aerospace Products [Member] | Aircraft Avionics [Member]
Revenues	2,373	2,583
Aerospace Products [Member] | Special Mission Electronics [Member]
Revenues	10,554	6,942
North America [Member]
Revenues	68,405	55,742
North America [Member] | Professional Services [Member]
Revenues	39,147	30,205
North America [Member] | Aerospace Products [Member]
Revenues	29,258	25,537
Europe [Member]
Revenues	2,803	3,427
Europe [Member] | Professional Services [Member]
Revenues	0	0
Europe [Member] | Aerospace Products [Member]
Revenues	2,803	3,427
Asia [Member]
Revenues	1,228	1,332
Asia [Member] | Professional Services [Member]
Revenues	0	0
Asia [Member] | Aerospace Products [Member]
Revenues	1,228	1,332
Australia and Other [Member]
Revenues	1,037	979
Australia and Other [Member] | Professional Services [Member]
Revenues	0	0
Australia and Other [Member] | Aerospace Products [Member]
Revenues	$ 1,037	$ 979

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Note 3 - Accounts Receivable, Net, Contract Asset and Contract Liability (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Accounts Receivable, after Allowance for Credit Loss, Total	$ 3,636	$ 1,961
Accounts Receivable, Allowance for Credit Loss, Ending Balance	205	143
Contract with Customer, Asset, after Allowance for Credit Loss, Total	1,470	421
Increase (Decrease) in Contract with Customer, Asset	1,049	226
Increase (Decrease) in Contract with Customer, Liability	(4,978)	3,609
Contract with Customer, Liability, Revenue Recognized	$ 5,798	$ 2,189,000

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Note 3 - Accounts Receivable, Net, Contract Asset and Contract Liability - Accounts Receivable, Net, Contract Asset and Contract Liability (Details) - USD ($) $ in Thousands	Apr. 30, 2022	Apr. 30, 2021
Accounts Receivable, net	$ 3,636	$ 1,961
Contract Asset	1,470	421
Contract Liability	$ 820	$ 5,798

XML

Note 4 - Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Apr. 30, 2022	Apr. 30, 2021
Notes payable	$ 48,965	$ 46,160
Less: Origination fees	389	372
Long-Term Debt, Total	48,576	45,788
Less: Current maturities	5,165	5,972
Long-Term Debt, Excluding Current Maturities, Total	43,411	39,816
Note Collateralized by Real Estate [Member]
Line of Credit, Current	0	0
Long-Term Debt, Excluding Current Maturities, Total	43,411	39,816
Notes Collateralized by Aircraft Security Agreements, Due January 2023 [Member]
Notes payable	534	1,138
Note Collateralized by Real Estate Due June 2024 [Member]
Notes payable	181	202
Note Collateralized by Equipment Due April 2022 [Member] | Note Collateralized by Equipment Due April 2022 [Member]
Notes payable	0
Notes Repaid In 2022 [Member] | Note Collateralized by Equipment Due April 2022 [Member]
Notes payable		21
Note One Collateralized by Real Estate Due March 2029 [Member]
Notes payable	1,106	1,267
Note Two Collateralized by Real Estate Due March 2029 [Member]
Notes payable	507	581
Notes Collateralized by BHCMC's Assets and Compensation Due under State Management Contract Due December 2027 [Member]
Notes payable	32,667	34,417
Note Collateralized By All Of BHCMC's Assets and Compensation due under the State Management Contract Due October 2026 [Member]
Notes payable	12,721	6,533
Notes Collateralized by Aircraft Security Agreements, Due March 2029 [Member]
Notes payable	1,197	0
Note Collateralized by Equipment Due October 2025 [Member]
Notes payable	52	0
Paycheck Protection Program CARES Act [Member] | Professional Services [Member]
Notes payable	$ 0	$ 2,001

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Note 4 - Debt - Maturities of Long-term Debt (Details) - USD ($) $ in Thousands	Apr. 30, 2022	Apr. 30, 2021
2023	$ 5,242
2024	4,874
2025	5,047
2026	5,228
2027	3,790
Thereafter	24,784
Long-Term Debt, Gross	$ 48,965	$ 46,160

XML

Note 5 - Lease Right-to-use (Details Textual)	Apr. 30, 2022
Casino, Hangar, and Office Space, Three [Member]
Lessee, Finance Lease, Term of Contract (Year)	50 years
Casino, Hangar, and Office Space, One [Member]
Lessee, Finance Lease, Term of Contract (Year)	2 years
Casino, Hangar, and Office Space, Two [Member]
Lessee, Finance Lease, Term of Contract (Year)	5 years

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Note 5 - Lease Right-to-use - Finance Lease Right-of-use Assets (Details) - USD ($) $ in Thousands	Apr. 30, 2022	Apr. 30, 2021	Dec. 19, 2020
Lease right-to-use asset	$ 3,240	$ 3,099	$ 41,250
Less accumulated depreciation	512	436	4,169
Net	$ 2,728	$ 2,663	$ 37,081

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Note 5 - Lease Right-to-use - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Apr. 30, 2022	Apr. 30, 2021	Dec. 19, 2020
2023	$ 259
2024	263
2025	139
2026	116
2027	118
Thereafter	7,721
Total minimum lease payments	8,616
Less amount representing interest	5,611
Present value of net minimum lease payments	3,005		$ 39,709
Less current maturities of finance lease liability	106	$ 107
Finance lease liability, net of current maturities	$ 2,899	$ 2,759

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Note 5 - Lease Right-to-use - Lease Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Amortization of right-of-use assets	$ 181	$ 225
Interest on lease liabilities	148	158
Total finance lease cost	$ 329	$ 383
Weighted average remaining lease term - Financing leases (Year)	45 years	44 years
Weighted average discount rate - Financing leases	5.00%	5.00%

XML

Note 6 - Purchase of Noncontrolling Interest (Details Textual) - USD ($) $ in Thousands		12 Months Ended
	Oct. 18, 2021	Dec. 31, 2020	Apr. 30, 2022	Jan. 31, 2022	Apr. 30, 2021
Long-Term Debt, Total			$ 48,576		$ 45,788
BNSC [Member] | Academy Bank, N.A. [Member] | Manager Loan [Member]
Long-Term Debt, Total			$ 12,700
Debt Instrument, Interest Rate, Stated Percentage	5.75%
BHCMC, LLC [Member] | BNSC [Member]
Business Combination, Step Acquisition, Equity Interest in Acquiree, including Subsequent Acquisition, Percentage, Total				100.00%
Business Combination, Consideration Transferred, Total	$ 16,400
BHCMC, LLC [Member] | BNSC [Member] | Academy Bank, N.A. [Member] | Manager Loan [Member]
Business Combination, Consideration Transferred, Liabilities Incurred	7,000	$ 35,000
BHCMC, LLC [Member] | BNSC [Member] | Commercial Loan [Member] | Academy Bank, N.A. [Member]
Business Combination, Consideration Transferred, Liabilities Incurred	$ 8,000

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Note 6 - Purchase of Noncontrolling Interest - Purchase Price and Accounting of Transaction (Details) - BHCMC [Member] - BNSC [Member] $ in Thousands	Oct. 18, 2021 USD ($)
Secured notes payable, net of financing costs	$ 7,914
Forgiven note receivable from seller	780
Cash paid	7,659
Business Combination, Consideration Transferred, Total	16,353
Capital contributed in excess of par	6,119
Book basis of the noncontrolling interest in BHCMC, LLC	7,890
Deferred tax asset related to step up in basis	2,344
Total	$ 16,353

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Note 7 - Boot Hill Casino Building and Land Purchase (Details Textual) $ in Thousands	Dec. 19, 2020 USD ($)
Payments to Acquire Building and Related Land	$ 41,250
Number of Notes	2
Finance Lease, Adjustment, Carrying Amount of Assets	$ 2,628
Secured Debt [Member]
Notes Payable, Total	42,000
Debt Issuance Costs, Net, Total	$ 400

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Note 7 - Boot Hill Casino Building and Land Purchase - Lease liability (Details) - USD ($) $ in Thousands	Dec. 19, 2020	Apr. 30, 2022	Apr. 30, 2021
Purchase price of casino building and related land	$ 41,250
Lease right-to-use asset	41,250	$ 3,240	$ 3,099
Accumulated depreciation	(4,169)	(512)	(436)
Net	37,081	2,728	$ 2,663
Lease liability	39,709	$ 3,005
Notes Collateralized by BHCMC's Assets and Compensation Due under State Management Contract Due December 2027 [Member]
Note, payable	35,000
Notes Collateralized by Bhcmc's Assets and Compensation Due Under State Management Contract Subsequently Amended As Part of Purchase of Noncontrolling Interest [Member]
Note, payable	7,000
Secured Debt [Member]
Note, payable	$ 42,000

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Note 8 - Income Taxes (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Current Income Tax Expense (Benefit), Total	$ 3,102	$ 536
Current Federal Tax Expense (Benefit)	2,279	328
Current State and Local Tax Expense (Benefit)	$ 823	208
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total		$ 0

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Note 8 - Income Taxes - Components of Deferred Tax Liabilities and Assets (Details) - USD ($) $ in Thousands	Apr. 30, 2022	Apr. 30, 2021
Deferred tax liabilities:
Depreciation and amortization	$ 0	$ (643)
Deferred compensation, restricted stock	(358)	(521)
Total deferred tax liabilities	(358)	(1,164)
Deferred tax assets:
Depreciation and amortization	1,365	0
Accounts receivable allowance	55	39
Inventory and other allowances	65	187
Lease right-to-use	472	451
Vacation accruals	60	37
Jackpot reserves	111	50
Total deferred tax assets	2,128	764
Less valuation allowance	0	0
Net deferred tax asset	$ 1,770
Net deferred tax liability		$ (400)

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Note 8 - Income Taxes - Reconciliation of the Federal Statutory Income Tax Rate to the Effective Tax Rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Statutory federal income tax rate expense, net of noncontrolling interest	21.00%	21.00%
State income tax, net of federal benefits	5.38%	5.59%
Permanent tax	(1.12%)	5.36%
Other	(1.25%)	(15.00%)
Effective Income Tax Rate Reconciliation, Percent, Total	24.01%	16.95%
PROVISION (BENEFIT) FOR INCOME TAXES
Deferred income tax (benefit)	$ 174	$ (225)
Current Income Tax Expense (Benefit), Total	3,102	536
Total income tax expense	$ 3,276	$ 311

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Note 9 - Stockholders' Equity (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Stock Issued During Period, Shares, Employee Benefit Plan (in shares)	1,328,190	1,400,705
Stock Issued During Period, Value, Employee Benefit Plan	$ 807	$ 721

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Note 10 - Stock Options and Incentive Plans (Details Textual) - USD ($)			12 Months Ended
	Mar. 17, 2020	Apr. 12, 2019	Apr. 30, 2022	Apr. 30, 2021	Nov. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period (in shares)			50,000	50,000
Share-Based Payment Arrangement, Expense			$ 585,000	$ 592,000
Butler National Corporation 2016 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)					12,500,000
Stock Issued During Period, Value, Restricted Stock Award, Gross	$ 2,000,000.0	$ 950,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)		0
Butler National Corporation 2016 Equity Incentive Plan [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	5,000,000.0	2,500,000
Share Price (in dollars per share)	$ 0.41	$ 0.38
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)		5 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period (in shares)			50,000	50,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total			$ 1,551
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)			3 years 6 months

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Note 10 - Stock Options and Incentive Plans - Restricted Stock Options Activity (Details) - $ / shares	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Outstanding, shares (in shares)		7,500,000
Outstanding, weighted average fair value (in dollars per share)		$ 0.40
Forfeited during the year ended April 30, 2021 (in shares)	(50,000)	(50,000)
Forfeited during the year ended April 30, 2021 (in dollars per share)	$ 0.40	$ 0.40
Outstanding, shares (in shares)	7,400,000
Outstanding, weighted average fair value (in dollars per share)	$ 0.40

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Note 11 - Stock Repurchase Program (Details Textual) $ in Millions	Apr. 30, 2022 USD ($)
Stock Repurchase Program, Authorized Amount	$ 4

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Note 11 - Stock Repurchase Program - Schedule of Stock Purchases (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												48 Months Ended	72 Months Ended
	Apr. 30, 2022	Oct. 31, 2021	Jul. 31, 2021	[1]	Apr. 30, 2021	[1]	Jan. 31, 2021	[1]	Oct. 31, 2020	[1]	Jul. 31, 2020	[1]	Apr. 30, 2020	Apr. 30, 2022	Jan. 31, 2022	Dec. 31, 2016
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan or Programs	$ 2,655	$ 2,819	$ 2,823		$ 2,823		$ 2,835		$ 2,835		$ 2,911		$ 3,019	$ 2,655	$ 2,819	$ 4,000
Number of Shares Purchased (in shares)	180,503	6,290	0		17,303		0		152,915		212,000		2,721,415	3,290,426
Average Price Paid per Share (in dollars per share)	$ 0.91	$ 0.62			$ 0.65		$ 0		$ 0.50		$ 0.51		$ 0.36	$ 0.41
Number of Shares Purchased as Part of Publicly Announced Plans or Programs (in shares)	180,503	6,290	0		17,303		0		152,915		212,000		2,721,415	3,290,426

[1] These shares of common stock were purchased through a private transaction

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Note 13 - Related-party Transactions (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Director David Hayden [Member] | Consulting Fees [Member]
Related Party Transaction, Amounts of Transaction	$ 135	$ 135
Edgar Law Firm LLC [Member]
Related Party Transaction, Amounts of Transaction	214	129
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party	484
Chief Executive Officer [Member]
Accrued Liabilities, Current, Total	482	659
Wayne Stewart [Member]
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party	292	353
Jeff Shinkle [Member]
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party	$ 247	255
Craig Stewart [Member]
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party		$ 503

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Note 14 - 401(k) Profit Sharing Plan (Details Textual) $ in Thousands	12 Months Ended
	Apr. 30, 2022 USD ($)	Apr. 30, 2021 USD ($)
Number of Days of Service Eligible to Participate in Plan (Day)	30 days
Number of Entry Dates per Calendar Year to Participate in Plan	2
Defined Contribution Plan Matching Contribution, as Percent of Every Pretax Dollar	100.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	6.00%
Defined Contribution Plan, Employers Matching Contribution, Annual Vesting Percentage	100.00%
Defined Contribution Plan, Cost	$ 807	$ 721

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Note 15 - Segment Reporting and Sales by Major Customer (Details Textual)	12 Months Ended
	Apr. 30, 2022
Number of Operating Segments	2
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | The Five Aerospace Customers [Member]
Concentration Risk, Percentage	34.10%
Number of Major Customers	5
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Top Customer [Member]
Concentration Risk, Percentage	14.30%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Next Top Four Customers [Member] | Minimum [Member]
Concentration Risk, Percentage	2.70%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Next Top Four Customers [Member] | Maximum [Member]
Concentration Risk, Percentage	10.70%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member]
Concentration Risk, Percentage	44.80%
Number of Major Customers	1

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Note 15 - Segment Reporting and Sales by Major Customer - Professional Services (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Revenues	$ 73,473	$ 61,480
Interest expense	2,689	3,138
Depreciation and amortization	2,815	3,542
Gaming [Member]
Revenues	38,769	29,951
Interest expense	2,440	2,847
Depreciation and amortization	2,283	3,060
Aircraft Modification [Member]
Revenues	21,399	21,750
Interest expense	215	251
Depreciation and amortization	181	191
Aircraft Avionics [Member]
Revenues	2,373	2,583
Interest expense	0	0
Depreciation and amortization	5	7
Special Mission Electronics [Member]
Revenues	10,554	6,942
Interest expense	23	27
Depreciation and amortization	161	135
Product and Service, Other [Member]
Revenues	378	254
Interest expense	11	13
Depreciation and amortization	$ 185	$ 149

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Note 15 - Segment Reporting and Sales by Major Customer - Schedule of Revenue by Major Customers by Reporting Segments (Details) - Customer Concentration Risk [Member] - Revenue Benchmark [Member]	12 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Aerospace Products [Member]
Concentration risk percentage	25.00%	10.60%
Professional Services [Member]
Concentration risk percentage	0.00%	0.00%

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Note 16 - Subsequent Events (Details Textual) - Subsequent Event [Member] - Board Member [Member]	1 Months Ended
	Jun. 30, 2022 USD ($) shares
Compensation Expense, Excluding Cost of Good and Service Sold | $	$ 140,000
Butler National Corporation 2016 Equity Incentive Plan [Member] | Other Stock-based Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | shares	400,000