Item 1.01 Entry into a Material Definitive Agreement.

On June 2, 2009, Ballantyne of Omaha, Inc. ("the Company") entered into an agreement with a financial institution with whom the Company has a banking relationship to sell, at the Company's option, all or a portion of its outstanding auction-rate securities ("ARS") at par plus accrued interest. Total par value of the ARS outstanding as of June 2, 2009 amounted to $9,375,000. In addition, the sale agreement provides for a provision on confidentiality, and a release of the financial institution from claims related to the Company's purchase, ownership and sale of the securities.

On June 4, 2009, the Company closed the sale of all of its outstanding ARS. Proceeds from the sale amounted to $9,375,000 plus accrued interest which will be recorded during the current quarter. As a result of the sale of the ARS, the borrowings available under the Company's interim extension of credit ("Interim Credit Facility") have been reduced to zero. The Interim Credit Facility is set to expire in August 2009. On June 8, 2009, the Company issued a press release announcing the closing of the sale transaction, a copy of which is furnished to this Form 8-K as Exhibit 99.1.