ARL American Realty Investors Inc

Item 8.01. Other Events

By letter dated October 20, 2017, the holder of 200,000 shares of Series A Cumulative Convertible Preferred Stock (the “ Series A Preferred Stock ”) of American Realty Investors, Inc. (the “ Issuer ” or the “ Company ” or “ ARL ”) surrendered 200,000 shares for conversion into Common Stock. Under the Articles of Incorporation, the “ Conversion Date ” was the date of surrender and the calculated “ Conversion Price ” was 90% of the simple average of the daily closing price of the Common Stock for the twenty Trading Days immediately prior to the date of conversion on the New York Stock Exchange (“ NYSE ”), which yielded an average closing price, resulting in a Conversion Price of $7.90 per share. As of the Conversion Date, the 200,000 shares of Series A Preferred Stock of ARL also had accumulated dividends, which yielded additional accrued dividends to be added to the aggregate liquidation value, which, when divided by the Conversion Price, yielded a base amount, which was rounded up to 482,716 shares of Common Stock issued upon conversion to such holder. The issuance of 482,716 shares of Common Stock, which actually occurred on January 12, 2018, increased the number of issued and outstanding shares of Common Stock from 15,543,690 shares to 16,026,406 shares of Common Stock. No significant effect occurred with respect to the balance sheet of ARL except that certain dividends payable were eliminated as a liability by crediting the same amount to stockholders’ equity.