Black Sea Property AS

Legal Proceedings Report • May 12, 2022

Black Sea Property AS – Company update – May 2022

Black Sea Property AS – Company update – May 2022

Reference is made to earlier stock exchange notices from Black Sea Property AS (the "Company", and together with its consolidated subsidiaries, the "Group"), including the stock exchange notice dated 28 January 2022, regarding the work to complete an opening of the Sunrise Gardens Resort (the "Resort") with limited activities for the 2022 summer season.

The ongoing war in Ukraina implies various challenges for the Company and the Resort, both in terms of building costs and anticipated market situation. Therefore it must be expected that the cost to complete the Resort will be somewhat higher than previously anticipated. It must also be expected that the total tourism market in Bulgaria will decrease somewhat due to the ongoing war. Despite these challenges, the Company is still working according to its plan for a limited opening of the Resort for the summer season of 2022, in order to achieve a sufficient number of bed nights to satisfy an important condition prior to disbursement of new loan financing. However, the Company expect that completion of the Resort will be slightly delayed compared to the plans announced earlier and opening of the Resort is now estimated for the middle of July 2022.

In light of the war in Ukraina and the consequences this has for the tourism in Bulgaria, the Company and its local partner, Boyan Bonev, is assessing various strategies for the opening of the Resort, including facilitating for accommodating Ukrainian refugees at the Resort. It is currently approximately 50,000 refugees in the vicinity of the Resort, where a material number of these are temporarily accommodated in hotels that will want to free up capacity towards the summer in order to welcome ordinary guests.

To complete the Resort, as well as various running costs and interest payments, Boyan Bonev will contribute with up to EUR 1 million in financing. It is expected that this will be sufficient until the opening of the Resort, but the Company will still require some additional capital in connection with operations both in Norway and Bulgaria in the period following the opening of the Resort. The Board will assess various sources of financing in respect of this.

For further information, please contact:

Egil Melkevik, Chairman

Tel: +47 90 77 09 76

E-mail: em@ms-solutions.no

About Black Sea Property AS:

Black Sea Property AS is a real estate company with holdings in a real estate project on the Black Sea

coast called Sunrise Gardens. Sunrise Gardens Resort is a partially completed project and will upon completion comprise approximately 950 apartments as well as significant commercial space. Black Sea Property AS owns indirectly 75% of the project. Black Sea Property AS will work to finalize Sunrise Gardens Resort, to realize the project's added value through the sale of residential units and hotel operations.