On September 5, 2023 Appreciate Holdings, Inc. received a letter from its senior lender St. Cloud Capital Partners III SBIC, LP (?St. Cloud?).

The letter noted that as a result of the Company?s failure to satisfy certain conditions, St. Cloud considers the previously executed Forbearance Agreement terminated. The letter indicates that St.

Cloud has determined to exercise its rights and remedies under the Loan Agreement dated January 2, 2019, and accelerates amounts due under the Loan Agreement. As of August 1, 2023 the amounts due to St. Cloud, including the Forbearance fee and costs and expenses, totaled $10.6 million.

The Company is in active discussions with St. Cloud concerning these matters. If the Company is unable to reach agreement with St.

Cloud regarding a new forbearance agreement or accommodation, there is a risk that St. Cloud could exercise its rights and remedies as a secured lender, including potentially foreclosing on its collateral, which includes substantially all of the Company?s assets.