As previously reported, on May 18, 2018, Regional Health Properties, Inc. and certain of its subsidiaries entered into a Forbearance Agreement with Pinecone Realty Partners II, LLC pursuant to which Pinecone agreed, subject to the terms and conditions in the Forbearance Agreement, to forbear for a specified period of time from exercising its default-related rights and remedies with respect to specified events of default under the Loan Agreement, dated as of February 15, 2018, among the company, certain of its subsidiaries and Pinecone. The forbearance period under the Forbearance Agreement terminated as of July 6, 2018 because the company did not satisfy the condition in the Forbearance Agreement to enter into an agreement with Pinecone to support a transaction or series of transactions to remedy the Specified Defaults. Accordingly, as of such date, Pinecone is no longer required to forbear from exercising its default-related rights and remedies with respect to the Specified Defaults and may exercise all of its rights and remedies under the Loan Agreement (including the application of an additional 5% interest on the outstanding loans under the Loan Agreement and the acceleration of such outstanding loans). On July 18, 2018, the company received a letter from Pinecone in which it states that, as a result of the termination of the forbearance period under the Forbearance Agreement, Pinecone can accelerate its $16,656,250 in outstanding loans under the Loan Agreement and the company is obligated to pay interest on such loans at the default interest rate of 18.50% per annum.