Item 8.01. Other Events
On July 7, 2014, the holder of 30,000 shares of Series C Convertible Preferred
Stock of Transcontinental Realty Investors, Inc. (the "Issuer" or the "Company"
or "TCI") surrendered all of such shares for conversion into Common Stock. Under
the Certificate of Designation, 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 five Business 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 $12.9384 per share.
As of the surrender date, the 30,000 shares of Series C Convertible Preferred
Stock of TCI also had accumulated dividend entitlements, 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 304,298 Shares issued upon conversion to such holder. The issuance
of 304,298 Shares of Common Stock on July 7, 2014, increased the number of
issued and outstanding shares of Common Stock of TCI from 8,413,469 shares to
8,717,767 shares. No significant effect occurred with respect to the balance
sheet of TCI except that certain dividends payable were eliminated as a
liability by crediting same amount to stockholders' equity.