2. CONVERTIBLE PREFERRED STOCK:

During fiscal 2016, the holders of Series A Convertible Preferred Stock (“Series A”) and Series B Convertible Preferred Stock (“Series B”), (collectively, the “Preferred Stock”) converted all of their holdings into a total of 98,707 common shares of the Company pursuant to the terms provided in the Preferred Stock agreements. At September 2015, 100,000 shares of Series A and 16,000 shares of Series B were outstanding as set forth in the following table:


	Series A			Series B
Date of issuance:		June 17, 2004			October 8, 2004
Optionally redeemable beginning		June 18, 2006			October 9, 2006
Par value (gross proceeds):	$	2,500,000		$	400,000
Number of shares outstanding at September 2015:		100,000			16,000
Liquidation preference per share:	$	25.00		$	25.00
Conversion price per share:	$	30.31		$	24.65
Number of common shares in which to be converted:		82,480			16,227
Dividend rate:		6.785	%		6.37	%

Mr. Christopher Atayan, AMCON’s Chief Executive Officer and Chairman of the Board, owned all of the outstanding shares of the Series A Preferred Stock and 8,000 shares of the Series B Preferred Stock. The Company paid cash dividends of approximately $0.1 million and $0.2 million during fiscal 2016 and fiscal 2015, respectively, to Mr. Atayan related to his ownership of the Series A Convertible Preferred Stock and Series B convertible Preferred Stock.