7. LEGAL PROCEEDINGS

The Company and/or its affiliated subsidiaries provide patient care at or through their facilities. As such, the Company and its affiliated subsidiaries are subject from time to time to claims of negligence resulting in injury or death to residents. The Company maintains comprehensive general liability insurance and professional liability insurance in sufficient amounts to cover most material exposure resulting from these claims. The cost of defense is generally covered by these liability policies subject to reasonable reserves and deductibles. Nevertheless the Company does have exposure to these claims which in some cases can be material. There can be no assurance that the Company’s portfolio of insurance products will be adequate to cover all potential exposure or prevent material adverse financial losses.

The following represent some of the matters pending as of the date of this Report:

Hines v. Global Abbeville LLC, d/b/a Glen Eagle, et al, Superior Court of Warren County, State of Georgia, Civil Action No.2023-CV-094

This is a personal injury lawsuit filed on September 11, 2023 against various defendants arising from injuries several months after being admitted to the Glen Eagle facility. The complaint alleges that the facility was negligent in the care administered to the plaintiff which resulted in the injuries, which the Company denies. The Company has referred the litigation to its insurance company for management and believes that its exposure in this matter is de minimus.

Hunter v. Global Abbeville LLC, d/b/a Glen Eagle, et al, State Court of Fulton County, State of Georgia

This is a wrongful death lawsuit filed on June 20, 2023 against various defendants alleging negligence that led to the death of the plaintiff’s mother who had been admitted to the facility. The complaint alleges that the Company deviated from the standard of care that caused injuries that ultimately led to the death of the patient, which the Company denies. The Company has referred the litigation to its insurance company for management and believes that its exposure in this matter is de minimus.