BPG Half Year Results

Blackpearl | Level 1 60 Cuba Street
Wellington 6011 | New Zealand
hello@blackpearlgroup.com | +64 480 39390


29 November 2023


Black Pearl Group Limited FY2024 Interim Results Announcement

ARR Soaring by 221% and Gross Profit Up 284%: Blackpearl Groups' Record-Breaking 2023

Introduction

Blackpearl Group (BPG) today announced financial results for the six months to 30
September 2023, showcasing significant growth driven by strategic initiatives and
technological advancements.

Key Highlights

• Subscription Revenue: Achieved a 163% increase year-on-year reaching $1.5 million
as at 30 September 2023.
• Annual Recurring Revenue (ARR): Achieved a 221% increase year-on-year, reaching
$4.6 million as of 30 September 2023.
• Gross Profit: Grew by 284% year-over-year, reflecting our operational efficiencies
and strategic investments.
• Gross profit margin increased from 46% to 67% year-on-year
• $3 million of liability removed from the balance sheet in the 6 months since 31
March 2023
• Revenue Per Employee: Demonstrated a significant increase of 187%, highlighting
our team's productivity and effectiveness.
• Total Expenses: Increased by $1.3 million from the 6 month period to 30 September
2022, primarily due to growth-related activities including the Newoldstamp
acquisition, NZX Listing, and revenue growth related costs.

BPG’s Chief Executive Nick Lissette commented on the results, saying: “Over the past half-
year, Blackpearl Group has balanced exponential growth with a drive towards consistent
and recurring profitability. Our $25 million investment in core technology serves as a
catalyst that bridges this gap, enabling us to thrive. The rapid success of pearldiver.io,
achieving over $1 million in ARR within 5 months of its launch, exemplifies our strategic
focus and capability.”

Financial Update

Blackpearl Group's fiscal performance has been notable, with subscription revenue reaching
$1.5 million – a 163% increase year-on year and ARR soaring to $4.6 million — a 221% year-
on-year increase. Our gross profit reached over $1 million, reflecting a 284% increase. These
achievements demonstrate the efficiency of our business model and our strategic focus. The
increase in expenses by $1.3 million reflects investments in market development and
technology. Our strategic financial management has set us on a path towards sustained
profitability and market leadership.


Strategic Achievements

In the past financial half-year, BPG has realized remarkable progress in key strategic
domains, notably in financial growth, market penetration, and innovation:

• Financial Growth: We've seen an extraordinary increase in subscription revenue, up
by 163%, with Annual Recurring Revenue (ARR) soaring by 221%. Our gross profit
surged by 284%, reflecting substantial operational efficiencies.
• Market Penetration: Our targeted strategy in the US SME sector has solidified our
position, with a diversified portfolio of over 3,800 clients contributing to our stability
and a remarkable low revenue churn rate of 3.3%.
• Innovation and Expansion: The strategic acquisition of Newoldstamp and listing on
NZX, along with a $1.3 million investment in operational growth, have been
cornerstones of our expansion strategy, strengthening our market presence and
resource base.

Technological Advancements and Product Innovation:

BPG’s relentless commitment to innovation over the last decade is exemplified by our
strategic advancements:

• Pearl Engine Development: With an investment exceeding $25 million, our
proprietary Pearl Engine has become the cornerstone of our product offerings,
enabling us to fortify our market position through advanced technology.
• Product Excellence and Operational Efficiency: The Pearl Engine has revolutionized
our product suite, ensuring each product is robust and scalable while facilitating
cost-effective integration. This has resulted in enhanced service capabilities,
improved profit margins, and reinforced our operational excellence.
• Innovation and Competitive Edge: The Pearl Engine serves as a dynamic data and AI
hub, driving our platform’s efficiency and establishing the bedrock for BPG’s
continuous growth, innovation, and a sharpened competitive edge.

• Diversification of Offerings: Leveraging the power of the Pearl Engine, we have
significantly expanded our product suite, enhancing our ability to address evolving
market needs with innovative and next-generation solutions.

Future Outlook

Looking forward, Blackpearl Group (BPG) continues to navigate a path of robust growth and
assured profitability. Our focus remains firmly on the strategic pillars of innovation, market
expansion, and customer-centric product development. This approach has not only
solidified our position but also set the stage for significant expansions and new ventures.

Our investment in core technologies, particularly the Pearl Engine, is a cornerstone of our
strategy. This technology has been instrumental in bridging the often challenging divide
between growth and profitability, as evidenced by the swift success of pearldiver.io. From
production initiation in March 2023 to market delivery in April 2023, the product achieved
its first $1 million in annual recurring revenue (ARR) in July 2023. This is a testament to our
effective use of data and innovation.

As we continue to strengthen our presence in the US SME sector, we are well-prepared to
leverage our diverse customer base for further growth. Our business model, which enables
multiple avenues for profitability, is designed not just for modest results but for significant
achievements.

The year ahead promises to be one of strategic scaling, where we aim to amplify our reach
while upholding the financial discipline that has been a hallmark of our journey. With a clear
vision and a proven strategy, Blackpearl Group is set to not just meet but exceed
expectations, as we continue to chart our course towards a future marked by exceptional
growth and profitability.

Other Notable Achievements
• Achieved $5 million ARR as of 31 October 2023.
• Raised $3.8 million post-30th September 2023 from placements to wholesale
investors and a Share Purchase Plan to retail investors.

For and on behalf of the board,
Karen Cargill
Chief Financial Officer
For further information, please contact:
karen.cargill@blackpearlmail.com | +64 21 135 5183
ENDS

About Blackpearl Group

Blackpearl Group is a data technology company, relentlessly focused on unlocking the
potential of data for small and medium-sized businesses.

It builds, acquires, and markets cutting-edge, cloud-based services that empower businesses
to make data-driven decisions, drive productivity, and generate demand.

Its suite of tools and applications are designed to help businesses of all sizes manage their
data, facilitating better decisions and unlocking new revenue opportunities.

Founded in 2012, Blackpearl Group is based in Wellington, New Zealand, and Phoenix,
Arizona.

Blackpearlgroup.com

---

Hyper
Growth.
Black Pearl Group Limited - Interim Report
Interim Report for the 6 month period ended 30 September 2023

Contents:
04
Contents:
14
06
16
Foreword from the CEO
Diversifying Our Product Suite for Market Growth
Highlights
Maximising resources - Costs
08
18
24
Profitability is Inevitable
Expenses
Incremental & New Technologies
10
21
26
29
Revenue Growth
Balance Sheet
The people behind Blackpearl Group
Consolidated Financial Statements
12
23
Scalability & Platform efficiency
Customer Retention & Resilience
3
Blackpearl Group - September 2023 Interim ReportBlackpearl Group - September 2023 Interim Report

Dear Shareholders,
Over the past half-year, Blackpearl Group has struck a perfect balance,
experiencing exponential growth while actively driving towards consistent and
recurring profitability.
For me, this is best demonstrated through achieving a 221% increase in ARR over the
previous reporting period, while also surpassing $1 million in gross profitability—a
284% increase from the same period as the previous year.
The juxtaposition of growth and profitability in SaaS business models is a common
conundrum, but our $25 million investment in core technology serves as the catalyst
that bridges this gap, enabling us to thrive on both fronts. For almost a decade, we
have been collating and analyzing rare data sets. This data is the fuel driving the
creation and evolution of pearldiver.io, which was able to secure over $1 million in
annual recurring revenue within 90 days of launch.
Our business model gives us multiple levers which have ensured that profitability
is an inevitability, but we did not start this business to pursue modest results.
Our unwavering commitment to innovation and strategic growth has been the
cornerstone of our success.
In a global market where many businesses are slowing down, Blackpearl Group
continues to accelerate, positioning profitability as an inevitable milestone on our
journey. As we move forward, our focus remains on expanding our technological
capabilities, deepening customer relationships, and exploring new markets. This
approach not only solidifies our current achievements but also paves the way for
future successes.
We are grateful for your continued support and look forward to sharing our progress
in the upcoming periods. Together, we are on a trajectory that not only promises
growth but also redefines excellence in our industry.
Thank you for being part of this exciting journey.
Foreword from the - CEO
Nick Lissette
Founder | CEO
5
Blackpearl Group - September 2023 Interim Report

Pre 30 September 2023
Highlights
Raised
$3.8 million
$3.8m raised post 30th September 2023 from Placements to wholesale
investors and a Share Purchase Plan to retail investors.
As of 30 September 2023
During the six-month period ending in
September 2023
Achieved
$5 million
Achieved $5m ARR at 31 October 2023
Increased subscription revenue YoY
163%
Increased gross profit YoY
Average revenue per employee
284%
187%
Increase in ARR YoY
221%
Groupwide Revenue Churn
3.3%
Note: Comparative figures relate to the 6 month period ended 30 September 2022.
Post 30 September 2023
7
Blackpearl Group - September 2023 Interim Report
7
Blackpearl Group - September 2023 Interim Report

Delivering on our strategy – Profitability
Blackpearl Group is a market leading data
technology company that pioneers AI
driven, sales and marketing solutions for
the US market.
Specifically engineered for small-medium sized
businesses (SMEs), BPG consistently delivers
exceptional value to its customers. Our mantra
is simple: ‘Better Growth Together’. When our
customers win, we win.
Over the last decade, BPG has invested over
25m in its proprietary Data Platform - the Pearl
Engine. This data engine enables the rapid
creation and delivery of AI-driven sales and
marketing solutions. A standout example is our
latest release, pearldiver.io. From production
initiation in March 2023 to market delivery in
April 2023, the product achieved its first $1
million in annual recurring revenue (ARR) in
July 2023.

Ad Astra - to the stars.
Profitability
is Inevitable
9
Blackpearl Group - September 2023 Interim Report

Revenue
Growth
Subscription revenue grew 163% year on year
to $1.5m for the half year ended 30 September
2023. This was due to the success of Pearl
Diver, our signature product released in March
2023. Pearl Diver provides data transparency
and empowers businesses to unlock the full
potential of their data.
BPG’s applications follow a monthly recurring
billing model, generating regular and
predictable revenue. As the customer base
grows through new sign-ups, each additional
Delivering on our strategy – Profitability
subscriber contributes to the overall revenue.
This continuous growth is not limited to one-
time purchases but compounds over time.
Recurring revenue models focus on future
revenue, while Profit and Loss statements
only capture historical revenue without
accounting for projected revenue resulting
from past expenses. Consequently, the Profit
and Loss statement does not account for
BPG’s projected revenue resulting from past
expenses.
BPG’s annual recurring revenue increased by 221%
year on year to $4.6m at 30 September 2023.
The compounding nature of our revenue supports
our drive to profitability.
Subscription Revenue surged by 163% year-on-
year, hitting $1.5 million as of 30 September 2023.
This substantial growth reflects our robust,
compounding revenue model, propelling us towards
greater profitability.
Highlight
221%
163%
Total ARR NZD
Oct
2023
5m
4.5m
4m
3.5m
3m
2.5m
2m
1.5m
1m
0.5m
0
MarNovApr
DecMayAugJanJunSepFebJulOct
BPG’s Annual Recurring Revenue
11
Blackpearl Group - September 2023 Interim Report
11

Scalability
& Platform
efficiency
Delivering on our strategy – Profitability
Powers the entire suite of products within the
Blackpearl Group.
Serves as the cornerstone of Blackpearl's next-
generation products, generating vast data
resources and leveraging AI for exceptional
customer success.
Seamlessly integrates data ingestion, AI,
microservices, and design components with
near-zero marginal cost. Drives platform efficiency and forms the
foundation for Blackpearl's innovation and
growth.
Enables Blackpearl Group to scale its volume,
leading to increased margins.
Fueling Blackpearl Group's Products:Proprietary Data and Services Hub:
Cost-Effective Integration:
Efficiency at the Core:
Scalability with Margin Gains:
67%
Sept 2023
46%
Sept 2022
Gross profit increased by 284% year on year.
Highlight
284%
One-Year Gross Profit
Margin Enhancement
The Blackpearl Group’s private platform the Pearl Engine, is the cornerstone of
organic growth for both built and acquired technologies.
Key enablers
Our North Star
13
Blackpearl Group - September 2023 Interim Report

Diversifying Our
Product Suite for
Market Growth
Delivering on our strategy – Profitability
100% BPM
September 2022
53% BPM
47% NOS
November 2022
43% PD
27% BPM
30% NOS
September 2023
A standout example is our latest release, pearldiver.io.
From production initiation in March 2023 to market deliv-
ery in April 2023, the product achieved its first $1 million in
annual recurring revenue (ARR) in July 2023.
Highlight
43%
BPM NOSPD
Black Pearl MailNewoldstampPearl Diver
15
Blackpearl Group - September 2023 Interim Report

Maximising
resources
- Costs
The effective utilization of global resourcing has
played a pivotal role in the significant increase in
average revenue per employee. Offshoring certain
functions allows 24/7 customer support and
enhances customer experience and satisfaction.
Delivering on our strategy – Profitability
ARR
2023
$160 k
$140 k
$120 k
$100 k
$80 k
$60 k
$40 k
$20 k
$0 k
Apr
MayAugJunSepJulOct
Average revenue (ARR) per employee has increased by
187% in the 6 months to September 2023.
Highlight
187%
Average Revenue (ARR) per Employee
17
Blackpearl Group - September 2023 Interim Report
17

Personnel, Operating and Admin costs have increased
$1.3m from the 6 month period to 30 September 2022.
Why?
Three primary reasons were all growth related:
Expenses
November 2022 Newoldstamp acquisition
– increased offshore resourcing
December 2022 NZX Listing
– increased compliance costs
Revenue growth related costs
Delivering on our strategy – Profitability
19
Blackpearl Group - September 2023 Interim Report

$3 million of Liability removed from the balance sheet in
the 6 months since 31 March 2023 due to:
Balance
Sheet
Conversion of the Crown BP Holdings, LLC
shareholder loan to equity
Newoldstamp contract variation
0.69
0.34
Debt Ratio Improvement Results:
31 March 2023
30 September 2023
Delivering on our strategy – Profitability
21
Blackpearl Group - September 2023 Interim Report

Delivering on our strategy – Profitability
Customer
Retention &
Resilience
Our strategic focus on the US SME market, coupled with a diverse customer base
of over 3,800 clients, ensures our stability and growth. Importantly, we avoid
dependency on large customers, enhancing our overall resilience.
Diverse Customer base of
Target market
No reliance on large customers
3800+
US SME
Zero
Groupwide revenue churn
3.3%
23
Blackpearl Group - September 2023 Interim ReportBlackpearl Group - September 2023 Interim Report

Delivering on our strategy – Profitability
Incremental
& New
Technologies
BPM
• Branding
• Tracking
• Human-Click AI
• Routing
+ Email as a plug-in
+ Campaign Management
+ AI Identity Resolution Network
+ Pearl Enrich
+ Audience Creation
+ Flows Action Board
+ Pearl LLM
+ Data Platform 2.0
+ AI Assist
BPM & NOSBPM, NOS & PD
What's next
ConceptionNovember 2022March 2023Future Outlook
25
Blackpearl Group - September 2023 Interim Report
25
Blackpearl Group - September 2023 Interim Report

Meeting the Executive Team & Board
The people
behind
Blackpearl
Group
Hugo Fisher
Non-Executive Director
Independent
Sam Daish
Chief Technology Officer
Karen Cargill
Tori Colebourne
Chief Financial Officer
Chief Marketing Officer
Johnson Saju
VP of Operations
Cherryl Pressley
Cherryl Pressley
Chief Revenue officer &
Executive director
Chief Revenue officer &
Executive director
Mark Osborne
Non-Executive Director
Independent
Nick Lissette
Nick Lissette
Blackpearl Group CEO
Blackpearl Group CEO
Tim Crown
Blackpearl Group Chairman
Our Board of Directors
Our Executive Team
27
Blackpearl Group - September 2023 Interim Report

Consolidated
Financial
Statements
Black Pearl Group Limited - Interim Report
29
Blackpearl Group - September 2023 Interim Report

Black Pearl Group Interim Financial Statements
Consolidated Statement of Profit or Loss
For the six months ended 30 September 2023
Consolidated Statement of Other
Comprehensive Income
For the six months ended 30 September 2023
Notes
6 months ended
30 September

2023
6 months ended
30 September
2022
UnauditedUnaudited
$$
Subscription revenue51,547,943 588,807
Cost of sales
Reseller commissions(112,120)(20,246)
Personnel expenses(145,022)(83,891)
Hosting and server costs(184,599)(194,149)
Merchant bank fees (67,646)(19,720)
Gross profit1,038,556 270,801
Other revenue84,796 -
Personnel expenses(1,735,050)(1,561,352)
Operating expenses(1,949,886)(1,174,436)
Administrative expenses(825,905)(470,291)
Gain on reduction of contingent consideration - liability classified 61,002,950-
Gain on deferral of payments for the shareholder loan 8322,170-
Finance costs(155,928)(12,797)
Loss before income tax(2,215,653)(2,948,076)
Net income tax credit - -
Loss for the year attributable to owners of the parent(2,215,653)(2,948,076)
Earnings per share
2023
$
2022 Restated
$
Basic loss for the year attributable to owners10(0.06)(0.10)
Diluted loss for the year attributable to owners10(0.06)(0.10)
*prior year earnings per share figures have been restated as a result of a share split - see Note 9
Notes
6 months ended
30 September

2023
6 months ended
30 September
2022
UnauditedUnaudited
$$
Loss for the year(2,215,653)(2,948,076)
Other comprehensive income that may be subsequently reclassified
through profit or loss
Exchange differences on translation of foreign operations(318,754)(13,006)
Total comprehensive loss for the year attributable to owners of
the parent
(2,534,407)(2,961,082)
The accompanying notes form part of these consolidated financial statements.
31
Blackpearl Group - September 2023 Interim Report

Consolidated Statement of Financial Position
As at 30 September 2023
Notes
30 September
2023
31 March
2023
UnauditedAudited
$$
Assets
Current assets
Cash and cash equivalents766,979 1,759,268
Trade and other receivables267,550 301,599
Income tax receivable- 3,846
Prepayments159,536 69,828
Total current assets 1,194,065 2,134,541
Non-current assets
Property, plant and equipment30,968 21,597
Goodwill2,872,493 2,872,493
Intangible assets1,510,024 1,659,872
Total non-current assets 4,413,485 4,553,962
Total assets 5,607,550 6,688,503
Liabilities
Current liabilities
Trade and other payables 694,615 511,008
Employee entitlements 229,628 195,313
Current contingent consideration6 35,136 576,941
Current loans and borrowings8 92,344 1,291,790
Contract liabilities 498,555 481,402
Total current liabilities 1,550,278 3,056,454
Non-current liabilities
Non-current contingent consideration630,451 481,919
Non-current loans and borrowings8304,507 1,093,907
Total non-current liabilities 334,958 1,575,826
Total liabilities 1,885,236 4,632,280
Consolidated Statement of Financial Position
As at 30 September 2023
Notes
30 September
2023
31 March
2023
UnauditedAudited
$$
Equity
Share capital23 33,105,741 28,545,173
Accumulated losses (31,062,203) (29,796,748)
Share based payment reserve25 1,414,703 2,687,853
Shareholder warrants reserve26 478,394 515,511
Foreign currency translation reserve (214,320) 104,434
Equity attributable to the owners 3,722,314 2,056,223
Total liabilities and equity 5,607,550 6,688,503
Signed for and on behalf of the board:
Nicholas Lissette
Date: 29 November 2023
Timothy Crown
Date: 29 November 2023
The accompanying notes form part of these consolidated financial statements.
Black Pearl Group Interim Financial Statements
33
Blackpearl Group - September 2023 Interim Report

Consolidated Statement of Changes in Equity
For the six months ended 30 September 2023
NotesShare
capital
Accumulated
losses
Share
based
payment
reserve
Share
warrants
reserve
Foreign
currency
translation
reserve
Tota l
$$$$$$
Balance at 1 April 202328,545,173(29,796,748)2,687,853515,511104,4342,056,223
Loss for the period-(2,215,653)---(2,215,653)
Translation differences
of foreign operations
----(318,754)(318,754)
Transactions with owners in their capacity as owners
Issue of share capital92,223,510----2,223,510
Shares issued on
conversion of loan
91,800,736----1,800,736
Direct costs incurred in
issuing shares
9(2,000)----(2,000)
Issuance of shares
from share based
payments
9501,205-(501,205)---
Exercise of warrants937,117-(37,117)--
Share based payments11-- 178,253 --178,253
Amendments
to contingent
consideration - equity
classified
11-950,198(950,198)---
Balance at
30 September 2023
33,105,741(31,062,203)1,414,703478,394(214,320)3,722,314
Balance at 1 April 202222,012,727(22,672,146)1,419,248-208,159967,988
Loss for the period-(2,948,076)---(2,948,076)
Translation differences
of foreign operations
--
--(13,006)(13,006)
Transactions with owners in their capacity as owners
Issue of share capital92,905,638----2,905,638
Employee share based
payments
11--127,087--127,087
Balance at
30 September 2022
24,918,365(25,620,222)1,546,335-195,1531,039,631
The accompanying notes form part of these consolidated financial statements.
Notes6 months ended
30 September
2023
6 months ended
30 September
2022
UnauditedUnaudited
$$
Cash flows from operating activities
Cash receipts from customers1,589,100 588,291
Cash paid to resellers for their commission(245,692)(20,246)
Cash paid to suppliers and employees(4,451,024)(3,297,499)
Receipt of government grants109,225 180,244
GST payments(15,896)(42,737)
US Federal taxes refund/(paid)1,443 (421)
NZ Income tax refund3,846 -
Net cash used in operating activities (3,008,997)(2,592,368)
Cash flows from investing activities
Purchase of property, plant and equipment(17,033)(8,128)
Acquisition and development of intangible assets(199,770)-
Interest received3 308
Net cash used in investing activities (216,800)(7,820)
Cash flows from financing activities
Repayment of loans and borrowings(5,200)-
Direct costs incurred in issuing equity(2,000)-
Cash receipts from issue of share capital2,223,510 2,905,638
Net cash from financing activities 2,216,310 2,905,638
Net increase/(decrease) in cash and cash equivalents(1,009,487)305,450
Opening cash and cash equivalents at beginning of the period1,759,268 900,588
Effect of exchange rate fluctuations on cash held17,198 849
Cash and cash equivalents at period end766,979 1,206,887
Consolidated Statement of Cash Flows
For the six months ended 30 September 2023
Black Pearl Group Interim Financial Statements
35
Blackpearl Group - September 2023 Interim Report

Notes to the interim financial statements
For the six months ended 30 September 2023
1. REPORTING ENTITY
Black Pearl Group Limited (the 'Company') is a limited liability company incorporated and domiciled in New Zealand,
registered under the Companies Act 1993.

The Company is a profit-oriented entity and are engaged in the business of building, acquiring, and marketing data-driven
cloud services, consisting of a suite of productivity and demand generation applications for small and medium-sized
businesses.
2. BASIS OF PREPARATION
The unaudited interim financial statements comprise the results and financial position of the Company and its wholly
owned subsidiaries, Black Pearl Mail Incorporated and Newoldstamp Limited (together the 'Group') for the six months
ended 30 September 2023.

The unaudited interim financial statements have been prepared in accordance with New Zealand Generally Accepted
Accounting Practice ('NZ GAAP') and comply with the requirements of the New Zealand Equivalent to International
Accounting Standard 34: interim Financial Reporting and International Accounting Standard 34: Interim Financial Reporting.
The Group is a for-profit entity for the purposes of complying with NZ GAAP.

The unaudited interim financial statements require judgements and estimates that impact the application of the same
accounting policies and methods of computation, and should be read with, the financial statements and related notes
included in the Group's annual report for the year ended 31 March 2023.

These financial statements have been prepared on a going concern basis which assumes continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the normal course of business - for more detail
refer to Note 13.
3. CHANGES IN ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS
In preparing these consolidated financial statements, estimates and assumptions have been made concerning the future.
These estimates and assumptions may differ from the subsequent actual results. The following is a summary of new and/
or changes in significant accounting estimates, assumptions and judgements reported in the Group's annual report for the
year ended 31 March 2023:
• Fair value estimation of contingent consideration as part of the Newoldstamp acquisition - Note 6
• Estimation of prevailing market interest rate for below-market term loans - Note 8
Management has exercised the following critical judgement in applying accounting policies:
• Accounting policy choice on the initial measurement of equity instruments issued on the exercise of a convertible loan
- Note 8
4. OPERATING SEGMENTS
Accounting policy
Operating segments are components of an entity, engaged in business activities which may earn revenues and incur
expenses, whose operating results are:
• regularly reviewed by an entity's chief operating decisions makers ('CODM');
• used by the CODM to make decisions about resources to be allocated to the segment;
• used by the CODM to assess the performance of the segment; and
• where discrete financial information is available.
Basis for operating segments
The Group has two reportable segments based off the Group's major product subscriptions available during the year:
Black Pearl Mail and Newoldstamp (Newoldstamp was acquired in November 2022 so is nil for the comparative period).
These segments have been determined based on how the CODM reviews financial and operational performance, and the
allocation of resources across the Group. The Group's CODM is the chief executive officer and the board of directors.
Financial performance information reviewed by CODM
The financial information presented for the reportable segments are the main financial performance indicators the CODM
reviews for allocation of resources and reviewing performance. The main information the CODM reviews is the subscription
fees, marketing costs and personnel expenses. This information is reviewed at least quarterly along with the metrics below.

*revenue does not include intra-group or intra-segment amounts
Black Pearl Group Interim Financial Statements
30 September 2023 30 September 2022
For the six
months ended
Black Pearl MailNewoldstampGroupBlack Pearl MailNewoldstampGroup
$$$$$$
Subscription
fees - cash
collected
934,794654,3061,589,100 588,291 - 588,291
Subscription
fees - accrual
adjustment
71,577(112,734)(41,157) 516 - 516
Other revenue
streams
84,796 - 84,796 - - -
Total revenue* 1,091,167 541,572 1,632,739 588,807 - 588,807
Marketing499,218 107,256 606,474 628,606 - 628,606
Personnel
expenses and
contractor
costs
1,721,032 872,542 2,593,574 1,458,690 - 1,458,690
Other
expenses
605,611 42,733 648,344 1,449,587 - 1,449,587
Net loss
before tax
(1,734,695)(480,959)(2,215,653)(2,948,076)- (2,948,076)
37
Blackpearl Group - September 2023 Interim Report

5. SUBSCRIPTION REVENUE
The following is a breakdown of total subscription revenue by direct sales vs. reseller sales
The following is a breakdown of the total value of shares owed to the Newoldstamp sellers under the new terms. The
amount recognised is the discounted value and the table below includes the face value and discounted value of those
shares on the date of the contract amendment:
Black Pearl Group Interim Financial Statements
For the six months ended 30 September 2023
September
2023
September
2022
$%$%
Total direct sales1,455,31194%524,20889%
Total reseller sales92,6326%64,59911%
Total subscription revenue1,547,943100%588,807100%
The Group reviewed the requirements of NZ IFRS 15 Revenue from Contracts with Customers on a portfolio basis, being
contracts for sales directly with customers (‘Direct Sales’) and customers obtained through resellers (‘Reseller Sales’). This
is because the Black Pearl Mail and Newoldstamp performance obligations for all Direct Sales are identical, and all its
performance obligations under Reseller Sales are largely identical. The Group has no significant financing components in
any of its contracts with customers.
6. CONTINGENT CONSIDERATION LIABILITY
30 September
2023
31 March
2023
$$
Variable share issue from the Newoldstamp acquistion1,058,8601,043,084
Fair value remeasurement 9,67715,776
Modification of the deferred consideration(1,002,950)-
Total contingent consideration65,5871,058,860
Current contingent consideration 35,136 576,941
Non-current contingent consideration 30,451 481,919
Total contingent consideration65,5871,058,860
Discounted valueFace value
$$
12 months from acquisition date 29,952 57,600
24 months from acquisition date 25,958 49,920
Total contingent consideration liability 55,910 107,520
In August 2023, the Group varied certain terms relating to the November 2022 acquisition of its Newoldstamp division. Refer
to the March 2023 annual financial statements for full details of the original acquisition and contingent consideration.
The contractual obligation was changed to reduce the value of shares that were required to be issued. There was no
change to the assets or liabilities acquired by the Group in the original business combination or the expectation of the
vendor meeting the conditions of the original contingent consideration (see the 31 March 2023 annual financial statements
for details of the original assumptions). As such, the Group has derecognised the original contingent consideration
liability and recognised a new liability based on the expected contingent consideration to be paid based on the original
expectations of the vendor meeting the conditions. This results in a gain in the profit or loss of $1m on the extinguishment of
the contingent consideration liability.
Refer to note 11 for details of the amendments to the equity classified contingent consideration.
7. IMPAIRMENT OF CASH GENERATING UNITS
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other
assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset's fair value less cost of disposal ('FVLCOD') and
value in use ('VIU').
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets i.e. cash
generating units (CGUs). Non-financial assets, other than goodwill that suffered an impairment, are reviewed for possible
reversal of impairment at the end of each reporting period.
Key assumptions of impairment testing
The Group have tested impairment by measuring each CGU's VIU. The calculations are based on cash flow projections
covering a five-year period and operating expenses reflecting the financial budgets approved by management and the
Board.
Black Pearl Mail CGU has a carrying value of $4.1 million. The Black Pearl Mail CGU includes Pearl Diver as they leverage
the same technology base. The Group operates the Pearl Diver and Black Pearl Mail technology collectively, with business
activities and strategic decisions made at the Group level. As part of estimating its VIU, different revenue growth and
inflation rates were used but the estimation is most sensitive to the growth seen in the first two years. For example, if the
revenue growth rate for the first year was 95% of what was used in the VIU calculation, then the Group would need to
consider whether there is impairment. To determine the terminal value a 2.1% long-term growth rate was applied. A post tax
discount rate of 17% was used to establish the recoverable amount under the VIU model. The Group have determined that
no impairment is required to the Black Pearl Mail CGU.

Newoldstamp CGU was determined to have a carrying value of $1.4 million using an average revenue growth rate of 2.6%.
The lower growth rate compared to the Black Pearl Mail CGU reflects management's focus on the Black Pearl Mail CGU for
marketing expenditure and new development. To determine the terminal value a 2.3% growth rate was applied. A post tax
discount rate of 17% was used to establish the recoverable amount under the VIU model. The Group have determined that
no impairment is required to the Newoldstamp CGU.
39
Blackpearl Group - September 2023 Interim Report

Management has determined the values of its key assumptions in its VIU calculations for both Black Pearl Mail CGU and
Newoldstamp CGU as follows:
• Revenue growth rate - based on the number of sales leads, the conversion of those leads to billable customers, and
marketing expenditure.
• Long-term growth rate - using published international technology industry growth rates, particular those in the United
States.
• Post-tax discount rate - reflecting the specific circumstances and risks of the Group, and benchmarked against NZX
listed technology companies.
Result of impairment testing
Following the assessment of the recoverable amount of goodwill allocated to both Black Pearl Mail and Newoldstamp,
the directors consider the recoverable amounts of goodwill to be the most sensitive to the achievements of the budget.
Budgets comprise of forecast subscription revenue, marketing, staff costs and overheads based on current and
anticipated market conditions that have been considered and approved by the Board.
Impact of possible changes in key assumptions
The Group has conducted an analysis of the sensitivity of impairment test to changes in the key assumptions used to
determine the recoverable amount for each of the Group's CGUs to which goodwill is allocated. The directors believe that
any reasonably possible changes in the key assumptions on which the recoverable amount is based would not cause the
aggregate carrying amount to exceed the aggregate recoverable amount of the related CGUs.
8. LOANS AND BORROWINGS
Below-market term loan from the Group's shareholder
In September 2023, the terms of the shareholder loan were amended to add a conversion feature giving the shareholder
an option, at their sole discretion, to convert the outstanding loan balance into ordinary shares in the Company at any
date before maturity. The shareholder fully converted the loan (exercise price of $0.63) on 6 September 2023 resulting in the
issuance of 3,839,788 ordinary shares and the loan balance being fully extinguished. As allowable under the accounting
standards, the Company has taken an accounting policy choice to recognise the ordinary shares at the carrying value of
the loan on conversion date.
The Group had a below market-term loan from its shareholder, Crown BP Holdings LLC. The difference between the face
value and the present value of the expected future cashflows of the loan on initial recognition was taken through equity,
representing the warrants issued by the Group in exchange for the below market-terms of the loan. Refer to the March 2023
annual financial statements for full details of the shareholder loan. The loan incurred $130k of interest during the period
(2022: nil).
The loan was subsequently measured at amortised cost using the effective interest rate method. The principal amount of
the loan was $2,400k with interest charged at 1% per annum. Interest was payable quarterly, with 50% of the principal due
after 13 months from the date of signing, with the rest due when the loan matures (originally January 2025). In April 2023 the
repayment dates of the loan were deferred for a period of 12 months (all other terms remained the same). This deferral was
recorded as a substantial loan modification resulting in a gain of $322k through profit or loss when the carrying value of
the loan was derecognised and the new loan was recognised based on the discounted cash flows under the new terms.

9. SHARE CAPITAL
Black Pearl Group Interim Financial Statements
30 September
2023
31 March
2023
$$
Current portion
Credit card balances17,657 24,651
Below market-term loans from the government74,687 39,621
Shareholder loan- 1,227,518
Total current portion 92,344 1,291,790
Non-current portion
Below market-term loans from the government304,507 328,998
Shareholder loan- 764,909
Total non-current portion 304,507 1,093,907
Total loans and borrowings 396,852 2,385,697
6 months ended
30 September
2023
12 months ended
31 March
2023
$$
Opening shareholder loan balance1,992,427 -
Loan issuance- 1,884,489
Interest incurred in the period130,480 107,938
Reduction from modifications(322,171) -
Conversion of the loan to ordinary shares(1,800,736) -
Closing shareholder loan balance - 1,992,427
41
Blackpearl Group - September 2023 Interim Report

Exercise of shareholder warrants
On 13 September 2023 Crown BP Holdings LLC exercised 180,000 warrants (2,320,000 warrants remaining), at an exercise
price of one cent, resulting in 180,000 ordinary shares being issued. In line with the Group's accounting policy, a portion of
the shareholder warrant reserve was transferred to share capital based on the number of warrants exercised.
Refer to the March 2023 annual financial statements for full details of the shareholder warrants.
Net tangible assets per quoted equity security
The net tangible assets per quoted equity security for the 6 months to 30 September 2023 were $(0.014594) (30 September
2022: $0.024204).
10. BASIC AND DILUTED EARNINGS PER SHARE
Total comprehensive income/(loss) for the period
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares.
Basic EPS is calculated by dividing the net loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares on issue.
Diluted EPS is determined by adjusting the net loss attributable to ordinary shareholders and the weighted average
number of the ordinary shares on issue for the effects of all potential dilution to ordinary shares and options. Instruments
are only treated as dilutive when their conversion to ordinary shares would decrease EPS or increase the loss per share.
Black Pearl Group Interim Financial Statements
For the six months ended
30 September
2023
30 September
2022
$$
Total loss attributable to owners(2,215,653)(2,948,076)
Weighted average number of ordinary shares for basic EPS 36,789,656 30,627,763
Dilution from share based compensation options - -
Weighted average number of ordinary shares adjusted for the effect of dilution 36,789,656 30,627,763
Basic loss per share(0.06)(0.10)
Diluted loss per share(0.06)(0.10)
The number of shares presented is after the share split in November 2022 and the comparative figures have been restated
to reflect the amounts after the share split. Refer to the March 2023 annual financial statements for full details of the share
split.
6 months ended
30 September
2023
12 months ended
31 March
2023
$$
On issue at beginning of the year 28,545,173 22,012,727
Issue of ordinary shares 2,223,510 6,082,758
Equity transaction costs(2,000)(382,811)
Shareholder warrants exercised 37,117 -
Conversion of shareholder loan to ordinary shares - see Note 8 1,800,736 -
Distribution to owners for pre-dividend loan - 223,954
Exercise of employee share options - see Note 11 501,205 608,545
Total share capital ($) 33,105,741 28,545,173
Ordinary share capital 33,105,741 28,545,173
Total share capital ($) 33,105,741 28,545,173
Fully paid total shares at the beginning of the year 35,363,459 20,295
Issue of ordinary shares 5,250,407 -
Conversion of shareholder loan to ordinary shares - see Note 8 3,839,788 -
Shareholder warrants exercised 180,000 -
Issue of ordinary shares pre-share split - 3,243
Issue of ordinary shares as part of share split - 34,266,617
Issue of ordinary shares post-share split - 320,943
Exercise of employee share options - see Note 11 603,919 752,361
Total share capital (#) 45,237,573 35,363,459
Total value per share $0.73 $0.81
Share capital consists of the following class:
Share capital consists of the following class:
Ordinary share capital 45,237,573 35,363,459
Total share capital (#) 45,237,573 35,363,459
9. SHARE CAPITAL
43
Blackpearl Group - September 2023 Interim Report

11. SHARE BASED PAYMENT RESERVE
The Company effectively has four types of share based compensation arrangements:
• One-off share based compensation without vesting conditions
Share issues which are used as a bonus to compensate employees for past services. These do not have vesting
conditions and are immediately recorded as share capital once issued.
• Employee contractual share based compensation with vesting periods
Contractual arrangements entered into with key employees to provide share rights with vesting periods for a defined
service period. All vested employee rights have a nil exercise price.
Rights outstanding at 30 September 2023 have no expiration date. Rights can be exercised at any time after vesting.
The Group has no legal or constructive obligation to repurchase or settle the rights in cash. Any share to be issued on
the exercise of the right will be issued on the same terms which rank equally in all respects with the ordinary shares in
the Company on issue.
• Equity-based contingent consideration in the acquisition purchase price
The purchase price for the Newoldstamp business acquistion includes the issue of shares, contingent criteria and a
service period outlined in the agreement. The Group considers the 'fixed shares' to be an equity transaction. Refer to
the March 2023 annual financial statements for full details of the original acquisition and contingent consideration
These amounts will be transferred to share capital, once the vesting conditions are met and the shares are issued.
• Other contractual share based compensation with vesting periods and non-market performance conditions
Contractual arrangements entered, in lieu of cash payment, to provide shares with vesting periods for a defined
period. These are not share rights or options. Once the vesting period and conditions have been met, the Company
will issue shares which rank equally in respect with the ordinary shares in the Company on issue. These include
contractual arrangements to provide key contractors with shares subject to defined vesting periods and non-market
performance conditions. These were issued as part of the acquisition of Newoldstamp. Similar to the contingent
consideration amendment referred in to Note 6, the volume of shares to be issued to the NewOldStamp shareholders
reduced during the year resulting in a reduction in the equity obligation recognised in the reserve. The Group has
recorded this reduction as a transfer between the share based payment reserve and retained losses, resulting in no
gain through profit or loss.
The following table summarises movements in the reserve related to progress towards vesting of share rights:

6 months ended
30 September
2023
12 months ended
31 March
2023
$$
Opening balance2,687,8531,419,248
Share rights exercised during the year - transfer to share capital(501,205)(608,545)
Equity-based purchase price contingent consideration (950,198)1,118,094
Employee contractual share-based compensation - progress toward share rights*178,253197,899
Other contractual share based compensation - progress toward shares*-561,157
Closing balance 1,414,703 2,687,853
*these amounts were recognised through profit or loss as personnel expenses
As discussed in Note 6, the Group varied terms related to the acquisition of Newoldstamp in August 2023. The contractual
obligation was changed to reduce the value of shares that were required to be issued. There was no change to the assets
or liabilities acquired by the Group in the original business combination or the expectation of the vendor meeting the
conditions of the original contingent consideration (see the 31 March 2023 annual financial statements for details of the
original assumptions). This reduction was accounted for as an equity transaction by transferring $950k from the share
based payment reserve to the accumulated losses reserve.
The following table illustrates the number of, and movements in, total share rights and the total shares issued during the
year subject to the vesting conditions:
During the period, Newoldstamp entered into a service agreement with the Group and were partially remunerated through
share-based payments. The Group expects to issue 600,000 of ordinary shares from this arrangement.
Share rightsOrdinary shares
30 September
2023
31 March
2023
30 September
2023
31 March
2023
Opening balance 1,415,357 2,167,718 1,883,156 -
Granted during the period- - 600,000 1,883,156
Exercised during the period(603,919)(752,361)- -
Modification of the Newoldstamp deferred
consideration
--(761,456) -
Forfeited during the period(43,704)-(364,200) -
Closing balance 767,734 1,415,357 1,357,500 1,883,156
Black Pearl Group Interim Financial Statements
45
Blackpearl Group - September 2023 Interim Report

12. RELATED PARTY TRANSACTIONS

During the period, group companies entered into the following material transactions with related parties who are not
members of the Group:
Crown BP Holdings LLC
Exercise of shareholder warrants - refer to Note 9
Interest charged on the below-market term loan - refer to Note 8
Amendment to below-market term loan and conversion of the loan to shares in the Company - refer to Note 8
Payments to Prospect Desk LLC (an associate of Crown BP Holdings LLC) for the supply of data, and associated services, for
the Pearl Diver product - $62,855 (2022: nil)
Newoldstamp Incorporated
Share based payment arrangement - refer to Note 11
Contractual amendments to contingent consideration obligations - Notes 6 and 11
The Group signed a service agreement with Newoldstamp resulting in a revenue sharing arrangement. Under the terms
of the agreement, the Group will pay 50% of the revenue earned by the Newoldstamp division as consideration for the
services provided - payments under the agreement begin from October 2023, therefore there no expense recognised in the
current period
13. GOING CONCERN
The Group prepares its financial statements on a going concern basis, which assumes the Group has the ability and
intention to continue operations for a period of at least 12 months from the date the consolidated financial statements are
approved.

In the six months ended 30 September 2023, the Group had operating cash outflows of $3,008,997 (2022: $2,592,368) and the
cash balance at year end was $766,979 (2022: $1,759,268). The Group incurred a total comprehensive loss for the 6 months of
$2,534,407 (2022: $2,961,082 loss). At 30 September 2023 the Group’s current liabilities exceeded its current assets by $356,213.

As a result of these factors there is a material uncertainty related to events or conditions that may cast significant
doubt on the entity’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and
discharge its liabilities in the normal course of business.

To address this in November 2023 the Group successfully completed a capital raise. This consisted of wholesale investor
placements and a share purchase plan for existing shareholders and retail investors. The total amount raised was $3.8
million. As such the Groups cash position is substantially improved.

At 31 March 2023 when assessing the Group’s going concern the Board’s key judgements related to the Group’s ability to:
• Achieve revenue growth anticipated and to raise capital; or
• Reduce operating expenses if planned revenue growth is delayed or capital not raised.

The 2024 business plan assumed accelerated revenue growth driven by the Group’s new service, Pearl Diver. As at 31
October 2023 the Group’s annual recurring revenue was $5 million which now provides a substantial amount of the required
revenue to achieve recurring cash profitability.

The subscription revenue as at 30 September 2023 has surpassed the whole financial year ended 31 March 2023. The
subscription revenue increase from 30 September 2022 to 30 September 2023 is 163%.

The Group’s financial strategy focuses on growing a strong and reliable source of monthly recurring revenue, ensuring
consistent and predictable revenue. As the customer base grows through new sign-ups, each additional subscriber
contributes to the overall revenue.

This ongoing growth is not limited to a one-time occurrence. The annual recurring revenue of the Group at 30 September
2023 was $4.6 million compared to $1.4 million at 30 September 2022.

The Group’s gross profit in the 6 months to 30 September 2023 grew by 284% from the previous year to $1,038,556. The Group’s
recurring revenue along with its gross profitability provides the Group the flexibility to retrench to a net profit position if the
Group chooses not to continue its growth strategy.

The Group can reduce its operating expenditure to conserve cash. The Group’s business model has been designed to
enable this flexibility and includes limiting fixed expenditure and ensuring contracts are highly flexible in nature (for
example the use of contractors over permanent employees).

Additionally, in the Annual Shareholders’ Meeting in September 2023, the shareholders approved the conversion of the
Crown BP Holdings, LLC $2.4 million loan into equity.

The Directors consider the Group to be a going concern and believe the Group will continue to achieve its financial
forecast.
14. EVENTS AFTER BALANCE DATE

Black Pearl Group Limited successfully completed a capital raise in November 2023. This consisted of wholesale investor
placements and a share purchase plan for existing shareholders and retail investors. The total raised was $3.8 million.
Black Pearl Group Interim Financial Statements
Company Directory
Incorporation Number
4064918
Registered Office
Level 5, 50 Customhouse Quay
Wellington Central
Wellington 6011
New Zealand
Share Registrar
Link Market Services Limited
80 Queen Street
Auckland 1010
New Zealand
Auditor
William Buck Audit (NZ) Limited
Level 4, 21 Queen Street
Auckland 1010
New Zealand
Directors
Nicholas Lissette
Timothy Crown
Mark Osborne
Cherryl Pressley
Hugo Fisher (appointed 18 July 2023)
Accountants
Deloitte Limited
Level 12, 20 Customhouse Quay
Wellington 6140
New Zealand
47
Blackpearl Group - September 2023 Interim Report

Black Pearl Group Limited - Interim Report
Blackpearl Group - September 2023 Interim Report

---

Results announcement
(for Equity Security issuer/Equity and Debt Security
issuer)

Updated as at June 2023




Results for announcement to the market
Name of issuer Black Pearl Group Limited
Reporting Period 6 months to 30 September 2023
Previous Reporting Period 12 months to 31 March 2023
Currency New Zealand Dollar
Amount (000s) Percentage change
Revenue from continuing
operations
$1,548 Increased by 163%
Total Revenue $1,633 Increased by 177%
Net profit/(loss) from
continuing operations
$(2,216) Decreased by 25%
Total net profit/(loss) $(2,216) Decreased by 25%
Interim/Final Dividend
Amount per Quoted Equity
Security
Black Pearl Group does not propose to pay a dividend
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$(0.014594) $0.024204
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to BPG FY2024 Interim Report and BPG FY2024
Interim Report Market Release
Authority for this announcement
Name of person

authorised
to make this announcement
Karen Cargill
Contact person for this
announcement
Karen Cargill
Contact phone number 021 135 5183
Contact email address karen.cargill@blackpearl.com
Date of release through MAP

29/11/2023

Unaudited financial statements accompany this announcement.