$BUKS Risk Factor changes from 00/07/23/24/2024 to 00/07/03/25/2025

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, except as expressly required by federal securities laws. 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:•customer concentration risk;•dependence on government spending;•industry specific business cycles;•regulatory hurdles in the launch of new products;•loss of key personnel;•the geographic location of our casino;•fixed-price contracts;•international sales;•changing U.S. trade policy and impacts of tariffs;•future acquisitions;•supply chain and labor issues;•customer demand;•insurance costs and insufficient insurance for aircraft modifications;•cyber security threats;•fraud, theft and cheating at our casino;•dependence on third-party platforms to offer sports wagering;•outside factors influence the profitability of sports wagering and legacy gaming;•change of control restrictions;•significant and expensive governmental regulation across our industries;•failure by the corporation or its stockholders to maintain applicable gaming licenses;•evolving political and legislative initiatives in gaming;•extensive and increasing taxation of gaming revenues;•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;•market competition by larger competitors;•acts of terrorism and war;•climate change, inclement weather and natural disasters; and •rising inflation.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. 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.4Table of ContentsPART IItem 1. 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 also serve commercial weapon manufacturers and suppliers to governments and their agencies. Additionally, we operate Federal Aviation Administration (the “FAA”) Repair Stations. 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: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 systems. These products include:Professional Services. The Professional Services segment includes the management of a gaming and related dining and entertainment facility in Dodge City, Kansas. Butler National Service Corporation (“BNSC”), and BHCMC, LLC (“BHCMC”), companies in Professional Services, manage 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. On September 1, 2022, sports wagering became legal in the State of Kansas. Sports wagering is managed through the four lottery gaming facility managers. The Company entered into a provider contract with DraftKings for interactive/mobile sports wagering. Prior to its closure in January 2024, a subsidiary of the Company provided licensed architectural services, including commercial and industrial building design as part of the Professional Services segment. 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.6Table of ContentsSeasonalityOur Aerospace Products businesses are generally not seasonal. We purchase casted packaging for our gun controls for which our vendor sources raw aluminum. We also purchase replacement parts, which are utilized in our various repair and overhaul operations. In some cases, we redesign products to accommodate alternative methods and/or materials. The backlog includes orders with signed contracts which may not be completed within the next fiscal year. There can be no assurance that all orders will be completed or that some may ever commence.4% of our revenue from five customers, and we had one "major customer" (10 percent or more of consolidated revenue) that provided 14.8% of total revenue.2% of total revenue.4% and 42.5%, respectively, of our total accounts receivable.CompetitionWe compete in the aerospace and casino gaming industries. Competition in the aerospace business is not for only customers, but also for experienced talent in high demand. We compete against both original equipment manufacturers, independent aircraft modification and maintenance facilities and educational institutions for such staffing. 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 strategies and financial condition. With respect to staffing at the gaming facility, we compete against local businesses for qualified talent. Our products and aircraft modifications must be certified by the FAA or meet FAA requirements. FAA certification involves designing, engineering, and testing of specific aircraft models modified with our products.S. government or through its contractors, can be subject to various laws and regulations governing pricing and other factors. We currently satisfy these maintenance standards allowing component repair and overhaul services at our FAA-approved repair stations. To obtain an FAA license, an applicant must satisfy all applicable regulations of the FAA governing repair stations. 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. Such licenses, which are ongoing in duration, are required for us to perform authorized maintenance, repair, and overhaul services for our customers and are subject to revocation by the government for non-compliance with applicable regulations. We believe that we possess all licenses and certifications that are material to the conduct of our business.S. sales are subject to both U.S. and non-U.S. governmental regulations and procurement policies and practices, including regulations relating to import-export control, tariffs, investment, exchange controls, anti-corruption and repatriation of earnings. Non-U.S. sales are also subject to varying currency, political and economic risks. 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. 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. Each gaming facility is subject to extensive regulation under the laws, rules and regulations where it is located. Authorities have broad discretion and may require any beneficial holder of our securities directly or indirectly owing five percent 5% of the ownership interest to file an application, make personal or confidential disclosures, be investigated, and be subject to a determination of suitability. If such beneficial holder is found unsuitable, these restrictions may require a holder of our securities to dispose of the securities, or, if the holder refuses or is unable to dispose of the securities, we may be required to repurchase the securities. The Company from time to time incurs costs in the ordinary course of business in connection with maintaining compliance with these evolving and at times overlapping regulatory regimes. 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. These benefits are in addition to the Company’s market-based compensation program designed to maintain competitive compensation packages for all employees.Executive Officers of the RegistrantOur executive officers are:a.Mr. Reedy was appointed President, Chief Executive Officer and Secretary in January 2025. Mr. Reedy previously served as President and Chief Executive Officer from May 2023 to January 2025. Mr. Reedy served as Chief Operating Officer and Secretary from January 2023 to May 2023 and as Vice President and Secretary from 2005 to January 2023.b.Mr. Sefchick was appointed Vice President and Chief Financial Officer in May 2025. Prior to working with the Company, Mr. Sefchick served as Chief Accounting Officer during his employment at Jack Cooper Investments, Inc., a specialty transportation and logistics provider from 2015 to 2025. Prior to Jack Cooper Investments, Mr. Sefchick served as Controller at SmartVet Holdings, Inc. from 2014 to 2015 and as an Audit Senior Manager from 2002 to 2014 at Grant Thornton, LLP.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.9Table of ContentsAvailable InformationFor 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 or incorporated into any other filings we make with the SEC. 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.sec.gov.10Table of ContentsItem 1A.

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, except as expressly required by federal securities laws.4% of our revenue from five customers, and we had one "major customer" (10 percent or more of consolidated revenue) that provided 14.8% of total revenue.2% of total revenue.4% and 42.5%, respectively, of our total accounts receivable. Our business operations in Tempe, Arizona sell almost entirely to one customer. A loss of business from, or the bankruptcy or insolvency of, one or more of any of these major customers may have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.S. government and friendly foreign countries spending for a significant portion of our revenues.S. Government, its agencies and to friendly foreign countries. We rely heavily on government spending for a significant portion of our business. The United States financing or assistance in facilitating foreign objectives around the world impacts our business at our Avcon Industries, Inc. and Butler National - Tempe subsidiaries. If the flow of United States support globally would decrease, it would have a detrimental impact. We depend upon U.S. military spending and the demand for military equipment upgrades. If the U.S. Such adverse economic conditions include recessionary economic cycles and downturns in customer business cycles, labor and supply shortages, global uncertainty and instability, inflation, changes in U.S. social, political, and regulatory conditions, tariffs and disruptions in the gaming and aerospace markets. During periods of economic contraction, our revenues may decrease while some of our costs remain fixed or even increase, resulting in decreased earnings. 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. Similarly, the availability of aircraft from manufacturers has an impact on the orders received from customers requiring new aircraft. Such conditions may also inhibit our ability to obtain products and materials from our suppliers or may negatively impact the affordability of such products and materials. Any prolonged cyclical downturn may adversely affect customer demand in our Aerospace Products business and may have a material adverse effect on the Company’s financial condition, results of operations, liquidity and cash flows. Accordingly, our business may be adversely affected in the event the Company is unable to comply with such regulations relative to its current products or if any new products or services to be offered by the Company are not formally approved by such agency. 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 may have a material adverse effect on our business. Similarly, the loss of one or more of our current licenses or certifications may also have a material adverse effect on the Company’s financial condition, results of operations, liquidity and cash flows.We rely on highly skilled personnel and, if we are unable to retain or motivate key personnel or hire qualified personnel, our results of operations could be impacted. Our cost-effective and quality products and services depend on well-trained employees. The continued success of our gaming business depends upon our recruitment and retention of experienced personnel in the technology industry. The Company relies on various engineering resources, both internally and externally, to perform engineering and certification work to develop new products. The new products have been vital to our growth and sustained revenues and are critical to satisfying customer requirements. Certain individuals in the Company hold specific expertise in engineering. We devote significant resources to identifying, hiring, training, and successfully integrating and retaining these employees. A loss of consultants or engineers could adversely affect the financials of the Company. Additionally, key personnel are particularly important in maintaining relationships with the operations related to the FAA and the State of Kansas. Our airplane modification operations are dependent upon our Company Designated Engineering Representatives (“DERs”). If we are unable to obtain FAA approval for DERs to approve airplane modification work when our existing DERs retire or are unable to work, our business operations may suffer. The failure to recruit and retain such key employees may have a material adverse effect on the Company’s financial condition, results of operations, liquidity and cash flows. Our continued growth and success are dependent on the leadership of these key personnel. The Company does not have employment contracts with our executive officers. The departure, death or disability of any one of our executive officers or other extended or permanent loss of any of their services, or any negative industry perception with respect to any of them or their loss, could have a material adverse effect on our business. 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. The unexpected loss of services of any of our key personnel, or our failure to manage executive succession successfully, may have a material adverse effect on the Company’s financial condition, results of operations, liquidity and cash flows. Consequently, a significant portion of our gaming business is dependent upon attracting local residents, for both patronage and employees, as well as out of town visitors and is subject to the general economic health of the region around Dodge City. This may have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. Our Aerospace Products business generated approximately 58% of its 2025 revenue from fixed-price contracts. Increased costs may result in cost overruns and losses on such contracts, which may adversely affect our financial condition, results of operations, liquidity and cash flows.S. policies on trade relations and trade policy, including implementation of or changes in trade sanctions, tariffs, and embargoes. Our international sales may be subject to local 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, and export and exchange controls. 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 may adversely affect our financial condition, results of operations, liquidity and cash flows.Changing trade policy in the U.S. and other nations and the impact of recently announced tariffs may continue to adversely impact our Company. Changing policies and priorities in the U.S. government and other nations’ administrations, including recently announced tariffs, may continue to adversely impact our operations. U.S. trade policy has recently been significantly changed. On April 2, 2025, the U.S. government implemented a baseline tariff of 10% on product imports from almost all countries and individualized higher tariffs on certain other countries. Following the announcement of the tariffs, limited exceptions and temporary pauses have been enacted, such as the 90-day pause on the country-specific tariffs for all countries except China, while maintaining the 10% baseline tariff. Certain foreign governments have either taken or are threatening to take retaliatory actions in response.These changes in U.S. trade policy and tariffs have caused uncertainty and volatility in financial markets. Tariffs (imposed or threatened), sanctions, embargoes, export and import controls, and other trade restrictions, along with any retaliatory measures, could increase our costs, decrease demand for our products and services, disrupt our supply chain, adversely 13Table of Contentsaffect our operations, or adversely affect our ability to meet contractual and financial obligations. Tariffs or other trade restrictions may also lead to continuing uncertainty and volatility in U.S. and global financial and economic conditions, declining consumer confidence, inflation or an economic slowdown. Tariffs or other trade restrictions could create adverse political relations with our global customers which could result in the termination of certain contracts or a decrease in international customers. These tariffs or other trade restrictions, including other countries’ retaliatory measures, could continue to cause a reduction in our profit margins. Tariffs or other trade restrictions may cause equipment prices to significantly increase, which could adversely affect our growth efforts. Tariffs or other trade restrictions imposed on the importation of parts, raw materials, and products may impact the sale and delivery of products and may increase our costs, which may adversely affect our financial condition, results of operations, liquidity and cash flows.We may make future acquisitions and our business may suffer if we are unable to successfully integrate such acquisitions into our Company or otherwise manage the growth associated with investments and acquisitions. 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, interest rates and financial conditions, 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. Acquisitions or other investments may also result in unanticipated costs or expenses, including post-closing asset impairment charges, expenses associated with eliminating duplicate facilities, employee retention, litigation and other liabilities. Failure to realize the benefits of an acquisition may adversely affect our financial condition, results of operations, liquidity and cash flows. Customer projects are often scheduled based upon the availability of certain components and specific airplane models. These components are frequently acquired by the customer or by our Avcon Industries, Inc. subsidiary. Operational issues, including delays or defects in parts or supplier components, failure to meet internal performance plans, or delays or failures to achieve required regulatory approval, could result in additional out-of-sequence work and increased production costs, as well as delayed deliveries to customers. We and our suppliers have been experiencing supply chain disruptions as a result of global supply chain constraints and labor instability. Supply chain issues could impact overall productivity and may adversely affect our financial condition, results of operations, liquidity and cash flows. If customer demand for Avcon modifications decreases generally, from the issues we may face from being able to meet customer demand for new components, or from the leasing of Avcon-modified airplanes offered by other entities, this may adversely affect our financial condition, results of operations, liquidity and cash flows. We also expressly disclaim all expressed and implied warranties at law in most of our contracts in which we provide airplane modification services. While our airplane modification service contracts specifically disclaim certain warranties, and contain limitations on our liability, courts may still hold us liable for such claims if asserted against us. This may have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. In addition, third-party service providers and other business partners process and maintain our proprietary business information and data. Our collection of such data is subject to extensive regulation by private groups, such as the payment card industry, as well as governmental authorities, including gaming regulatory authorities. Privacy regulations continue to evolve, and we have taken, and will continue to take, steps to comply by implementing processes designed to safeguard the confidential and personal information of our business, employees and customers. Our reliance on information technology and other systems may have a material adverse effect on the Company’s financial condition, results of operations, liquidity and cash flows. The steps we take to deter and mitigate the risks of breaches may not be successful, and any resulting compromise or loss of data or systems could adversely impact operations or regulatory compliance and could result in remedial expenses, fines, litigation, disclosures, and loss of reputation, potentially impacting our financial results. Compromised security or loss of data or systems may also have a material adverse effect on the Company’s financial condition, results of operations, liquidity and cash flows. Increased instances of cyber-attacks may also have a negative reputational impact that may result in a loss of customer confidence. Any failure to prevent or mitigate security breaches or cyber risk could result in interruptions to the services we provide and cause our customers to lose confidence in our products and services. The unauthorized access, acquisition or disclosure of consumer information could compel us to comply with disparate breach notification laws and otherwise subject us to proceedings by governmental entities, including gaming regulatory authorities, or others and substantial legal and financial liability. This could harm our business and reputation, disrupt our relationships with partners and diminish our competitive position. Cyber-attacks and costs expended on deterrence measures may have a material adverse effect on the Company’s financial condition, results of operations, liquidity and cash flows. We could also be subject to systems failures, including network, software, or hardware failures, whether caused by us, third-party service providers, intruders or hackers, computer viruses, natural disasters, power shortages, or terrorist attacks. The failure or disruption of our communications or utilities could cause us to interrupt or suspend our operations or otherwise adversely affect our business. Although we utilize various procedures and controls to monitor and mitigate the risk of these threats, there can be no assurance that these procedures and controls will be sufficient. Any cybersecurity incident or breach of our data or information systems may adversely affect our financial condition, results of operations, liquidity and cash flows. Such acts of fraud, theft, or cheating could involve the use of counterfeit chips or other tactics, which may or may not occur 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. Any incidents of fraud, theft or cheating may adversely affect our financial condition, results of operations, liquidity and cash flows.15Table of ContentsWe are dependent on third-party platforms to offer sports wagering.We have an agreement with DraftKings to facilitate online and mobile sports wagering. If we cannot renew, we may have to enter into a similar contract with a different service provider. There is no guarantee that we will be able to negotiate favorable terms in any renewal or new contract. Our management contract with the Kansas Lottery also expires in 2027. Uncertainty in the future of Kansas’ sports betting market may interrupt our gaming business operations. In April 2025, the Kansas Legislature included a ban in the state budget bill prohibiting the Kansas Lottery from spending state money on negotiating any renewals, extensions or new contracts with sports wagering managers until July 2026. We offer the sports wagering on behalf of the Kansas Lottery pursuant to state statute and a sports wagering management contract that was effective September of 2022 and has a five-year term.The Kansas legislature placed a proviso on a budget bill during the 2025 legislative session that restricts the renewal or extension of sports wagering management contracts for the next two years to approval by the legislature. We have no assurances with respect to the renewal or extension of our sports wagering management contract. We launched online and mobile sports wagering applications in the fall of 2022. There can be no assurance that the Kansas audience will continue to engage in sports wagering and online gaming products to the extent that we expect. 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 that impede sports wagering may adversely affect our financial condition, results of operations, liquidity and cash flows.Some provisions of our Articles of Incorporation, our Bylaws and state of Kansas regulations could make it more difficult for a potential acquirer to acquire a majority of our outstanding voting stock. 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 our business to monitor the composition of our shareholders, the Board has consistently believed these restrictions are appropriate. This process requires that any entity or person directly or indirectly owning five percent (5%) of the ownership interest of a 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 months of the offer. 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. Before we sell any of our products that are to be installed on an aircraft, they must meet certain standards of airworthiness established by the FAA or the equivalent regulatory agencies in certain other countries. New, more stringent government regulations, or different interpretations of current regulations may be adopted in the future. Changes in the regulations that impact our ability to export modifications may also harm our operations. Likewise, adverse determinations or policy directives from the United States government with respect to controls and classifications of our Avcon Industries, Inc. products could adversely affect the financial condition of the Company. Our failure to comply with applicable regulations could result in the termination of or our disqualification from some of our material contracts, licenses, certificates, authorizations, or approvals, which could have a material adverse effect on our operations and financial condition. Related costs of compliance with, or liability for violations of, existing or future regulations may adversely affect our financial condition, results of operations, liquidity and cash flows.The online gaming industry is heavily regulated and the Company’s failure to obtain or maintain applicable licensure or approvals, or otherwise comply with applicable requirements, could be disruptive to our business and could adversely affect our operations. Kansas gaming authorities may require our management personnel, the Company and the managing subsidiaries, and key personnel of all entities to maintain a state-issued license or undergo background checks. Each State Gaming Agency has broad discretion in granting, renewing, and revoking licenses. Obtaining such licenses and approvals could be time consuming and may be unsuccessful or involve considerable expense, which could adversely affect our ability to successfully operate our business. Further, the failure of the Company or 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. We are subject to the Lottery Gaming Facility management contract approval process in the state of Kansas. This process requires that any entity or person directly or indirectly owning five percent (5%) of the ownership interest of a 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 months of the offer. The stockholder is required to pay all costs of investigation with respect to a determination of his, her or their suitability. Any such forced sale may negatively affect the trading price and liquidity of our shares. 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. If a Board member or officer were found unsuitable, we may be forced to dissociate with such person. Such forced dissociation may adversely affect our financial condition, results of operations, liquidity and cash flows. The political and regulatory environment in which the Company is and will be operating with respect to gaming activities is dynamic and rapidly changing. For example, in April 2025, the Kansas Legislature included a ban in the state budget bill prohibiting the Kansas Lottery from spending state money on negotiating any renewals, extensions or new contracts with sports wagering operators until July 2026. Additional gaming would increase competition for discretionary income from our gaming patrons. The State of Kansas may enact new legislation involving the expansion of gaming including with respect to internet and mobile gaming. We may not be able to respond quickly or effectively to regulatory, legislative, and other developments, and these changes may in turn impair our ability to offer our existing or proposed products and services or increase our expenses in providing these products and services. Adoption or changes in gaming laws and regulations could adversely affect our financial condition, results of operations, liquidity and cash flows. 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 adversely affected. Additionally, 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. The Boot Hill Casino, pursuant to its Management Contract extension with the State of Kansas, pays a total revenue share of 29% of gross legacy gaming revenue (sports wagering revenue share is 10% to the State). The 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 $2.7 million during fiscal year ended April 30, 2025. On December 15, 2024, the tax rate to the state increased by 2% and we begin our second 15-year management contract for traditional gaming at Boot Hill Casino. The Company is subject to guidance from the FASB (Financial Accounting Standards Board) and the Securities Exchange Commission. The political and regulatory environment in which the Company operates is dynamic and rapidly changing, and adoption 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. Access to financing may be limited by various factors, including the condition of overall credit markets, the current high interest rate environment, general economic factors, state of the aviation or gaming industry, our financial performance, and credit ratings. Financing may not continue to be available to us on favorable terms, or at all. If we are unable to obtain additional capital when required, or on satisfactory terms, we may be precluded from maintaining or enhancing our properties, taking advantage of future opportunities, growing our business, acquiring new properties, or responding to competitive pressures.We may be required in the future to record impairment losses related to assets we currently carry on our balance sheet. Recurring losses in certain operations could require us to evaluate the recoverability of the carrying value of the related assets and recognize an impairment charge through earnings to reduce the carrying value. In addition, if aircraft for which we offer replacement parts, components, or supply maintenance services are retired and there are fewer aircraft that require these parts or services, our revenues in the future may decline from historical trends. Indicators of impairment include, but are not limited to, the loss of significant business or significant adverse changes in industry or market conditions. No events occurred during the periods presented indicating 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. Differences between actual results and the assumptions utilized by us when determining the recoverability of our assets could result in impairment charges in future periods, which may adversely affect our results of operations, financial condition, liquidity and cash flows. 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. These additional procedures could also limit our ability to raise additional capital in the future. We operate in competitive industries and the Company must consider all strategies to increase our common stock share price for stockholders. 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.General Risk FactorsWe operate in competitive markets, and competitive pressures could adversely affect our business. While we believe that we have unique products and proprietary designs that provide a competitive advantage to other modification businesses, the risk exists that other businesses could expand into the marketplace of our Aerospace Products business. Some of our competitors have substantially greater financial and other resources than we have, and others may price their products and services below our 19Table of Contentsselling prices. These competitive markets also create pressure on our ability to hire and retain qualified technicians and other skilled labor needs. These competitive pressures may adversely affect our financial condition, results of operations, liquidity and cash flows. 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. Other forms of entertainment, such as television, movies, sporting events and the Kansas Lottery operating iLottery, are more well-established and may be perceived by our users to offer greater variety, affordability, interactivity and enjoyment. We compete with these other forms of entertainment for the discretionary time and income of our users. It is possible that these secondary competitors could reduce the number of visitors to our facilities or the amount they are willing to wager with us, which may adversely affect our financial condition, results of operations, liquidity and cash flows. 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 may adversely affect our financial condition, results of operations, liquidity and cash flows. Our Company and our customers are vulnerable to the increasing impact of climate change. Climate change may increase the severity or frequency of extreme weather conditions. Volatile changes in weather conditions, including extreme heat or cold, could increase the risk of wildfires, floods, blizzards, hurricanes, tornadoes, storms and other weather-related disasters. Natural or human-caused disasters or other catastrophic events could 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 our gaming facilities. Such events could also result in loss or damage to employee homes or inability to relocate key employees. Additionally, damage from severe weather to our aircraft modification facilities could have an adverse impact on our business if we are unable to continue performing aircraft modifications. 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. 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, current inflationary pressures may increase costs for materials, supplies, and services. Rising inflation may also drive demand for increases in compensation for employees, which may result in increased labor costs. With increasing costs, we may have to increase our prices to maintain the same level of profitability. If we are unable to increase our prices sufficiently to offset increasing expenses, then inflation may have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.20Table of ContentsItem 1C. These processes, technologies and controls are part of the Company’s overall enterprise risk management process.S. defense subcontractor, we are additionally obligated to comply with Department of Defense regulations such as Defense Federal Acquisition Regulation Supplement. We conduct cybersecurity assessments using third-party service providers, and we require them to promptly notify the Company of any cybersecurity risks, threats or incidents that might impact us. Although our risk factors include further detail about the material cybersecurity risks we face, we believe that risks from cybersecurity threats have not materially affected our business to date. We can provide no assurance that there will not be incidents in the future or that they will not materially affect us, including our business strategy, results of operations or financial condition. For more information about the cybersecurity risks we face, see the risk factor entitled “Cyber security attacks, internal system or service failures, and misappropriation of data or other breaches of information security may adversely impact our business and operations” in Item 1A. Risk Factors. Cybersecurity measures that pertain specifically to Company’s Boot Hill subsidiary have been delegated to Boot Hill’s Board of Managers, a committee comprised of directors and officers of the Company and officers of Boot Hill. This committee is responsible for ensuring compliance with Kansas Racing and Gaming Commission regulations. The Board has delegated oversight responsibility for certain risks to its committees, including delegation to the Board’s Nominating and Governance Committee oversight of the Company’s major non-financial reporting enterprise risk assessment and management processes not retained by the Board. The Board routinely receives reports from the Company’s Chief Executive Officer, with the assistance of the Company’s IT department, concerning the Company’s cybersecurity risk management and strategies and related processes, technologies and controls..

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