Orchid Ventures Announces Financial Results for Period Ended September 30, 2021 - Seite 3

Total operational expenses were $678,081 during Q1 2022 compared to $909,004 in Q1 2021, despite marketing expenses increasing over 2700% from $7,782 in Q1 2021 to $217,450 in Q1 2022. The increase reflects the marketing initiatives discussed above. Management has made a considerable effort to minimize overall costs and overheads, while building on the all-important marketing initiatives. The effects of the change are reflected in Q1 2022 results. Operational expenses for Q1 2022 include non-cash items such as depreciation and amortization of $1,323 (Q1 2021 - $55,521) and share-based payments of $Nil (Q1 2021 - $207,891). The primary reason for the decrease in operational expenses this year compared to Q1 2021 is due to decreases in legal and professional charges and share-based payments which were reduced from $165,598 and 207,891 respectively in Q1 2021 to $25,110 and $Nil in Q1 2022.

Path to Profitability

With fifteen states opening up to the recreational sale of cannabis, sales will continue to grow as new population groups, like Baby Boomers, Generation X and Millennials, realize the magnitude of cannabis applications and cannabis is accepted by more demographics. Expectation is that both medical and recreational Cannabis legislation will continue to open up new markets, accelerating the growth of Cannabis throughout North America, South America and Europe. Orchid plans to capitalize on the opportunity by launching several new initiatives, including the expansion of the Orchid Essentials Brand franchise through a licensing model and by expanding their vaporizer product portfolio, plus leveraging new technologies.

The Company has continued to focus on their strategy to build an Orchid Ecosystem that is non-cannabis touching and better focused on leveraging the Company's core strengths, capabilities and product innovations in order to better differentiate within markets and disrupt the status quo. The key pillars to the strategy involve 1) licensing the Orchid Essentials brand in the North America and Europe, expanding the Orchid product portfolio and commercializing new product innovation, 2) diversification beyond making cannabis products to servicing the cannabis industry with differentiated and disruptive hardware delivery systems, intellectual property development and strategic opportunities, plus 3) leveraging the Company's core capabilities to provide go-to-market services like marketing, sales and retail expertise, e-commerce, plus packaging and distribution.