Althea shot the goose

Althea started with an amazing plan.

Lets get patient numbers and the capital markets will reward us with market value.

Lets buy other people's products, sell them for a loss, spend millions to acquire those patients and the capital markets will keep rewarding us with market cap increases.........

The red value (Gross Revenue) is less than the top Blue Value (Cost of goods) and when we add the second blue value (marketing to acquire those patients), there is a significant operating loss (close to $1m per quarter) and when we add the admin/ compliance and staffing costs, they are losing $4M per quarter.


If that wasn't the only red flag here suggesting reckless financial management, there is the suspected significant overpayment of former director, Greg Battersby and staff, of $7.85M:

Althea are a company who have spent millions acquiring patients in Australia and the UK.

They have bought an overpriced, uncompleted (non-GMP)manufacturing facility in Canada.

The learning curve to operate an extraction facility is 3-5 years to break even (Neptune, Medipharm, Valens are still not at break even yet!) and with the rate of cash burn ($4m per quarter) plus the remaining payments for the Peak facility, I see AGH needing a new capital raise in under a year.

This time with a stock price closer to 40-50c (not a dollar which they raised at only 2 months ago).