Orchid Ventures Announces Financial Results for Period Ended September 30, 2021 - Seite 2

Management Commentary

Mr. Corey Mangold, CEO of Orchid Ventures commented, "Though the financial performance of the company was underwhelming, the company anticipated that Q1 was likely to be challenging in terms of revenue, which was the primary driver of our profit loss for the period. This was due to the fact that after the Company raised money in April, it needed to activate a brand awareness program that required investment in advertising agencies that would assist us in the creative and media process, targeting various digital media channels and social media platforms. The Company's marketing campaigns didn't launch until September 2021 and the sales cycle for PurTec products is averaging approximately 4-6 months. The company also expanded its sales team in order to build up the sales pipeline through outreach programs and trade shows that target both large and smaller sized companies in Cannabis and CBD. These investments are expected to start driving incremental revenue in Q2 as the development and build up phase has been completed and the company is focused 100% on accelerating topline revenue growth. Our short term goal remains the same - to achieve a breakeven position on the business by posting more consistent monthly and quarterly growth in sales and profits. We believe that we can achieve this in the next 60-90 days. To date, we have cut back operating expenses significantly and at this point our #1 focus is on revenue. Though we are lean, I feel that with the team we have and the resources that we are investing behind the business, we are in a strong position to expand the pipeline of opportunities and more efficiently secure new business. Our sales pipeline currently consists of more than 100 organizations, many of which are nearing the final phases of the sales cycle. We are also working on several other initiatives that are revenue generators, yet still synergistic with our expertise and leverage our core product formats and technologies. The company is steadfast in its efforts to achieve profitability and significantly increase revenues."

Summary of YTD FY2021 Developments

For three months ended September 30, 2021 ("Q1 2022"), the Company reported a net loss of $221,201 against revenues of $398,423 compared to a net profit of $97,276 against revenues of $1,953,991 for the three months ended September 30, 2020 ("Q1 2021").

Sales decreased by $1,555,568 from the comparative period and gross profits decreased $856,070. However, the revenue posted in Q1 was consistent with the trendline from the previous 3 quarters. A drop this quarter in sales versus the same period last year was expected as the Company last year was generating sales from managing the full operations of the Orchid brand in California and the company had secured a large Purtec hardware order, which drove the strong year ago revenue number. With our move in 2021 to license the Orchid Essentials brand in California and to focus on an expanded PurTec market approach with initiatives targeted at brand recognition and awareness, product design improvements and public relations, these measures were not expected to yield results in the short term.