Hi Ladies and GentsI have reviewed the AGH financials in some...

Hi Ladies and Gents

I have reviewed the AGH financials in some detail and there are a few red flags which have come to light since they published their financials:

1. There has been huge amounts of investment in the Peak facility in Canada but they have never clarified the exact capex requirement

2. There has been huge amounts of performance shares awarded to Greg Battersby which is further diluting shareholders. Many of us bought in the last capital raise or when the stock price was at around $1.20. We have seen 75% of our investment fall in a few months.

3. There has been no financial forecasts suggesting when the Peak facility will have a prospect of becoming revenue generating but I am thinking this is at least 18-24 months away. Will AGH still be around at that time - with current cashburn, it seems unlikely.

4. There is an almost "prayer" like hope that the UK and/ or Germany are going to generate large amounts of revenue. Lets make it clear that the cost to acquire one patient in either of these up and coming jurisdictions will be well in excess of any revenue they will generate. Consider it a loss-making exercise for 12 months plus until then. IMHO, There is a serious chance that Althea will not still be around then.

5. The idea of scaling a loss making business where Gross Revenue is less than (COGS/ Cost of Sales/ Marketing Costs) is financial suicide and should be aborted immediately. Why do they need such a high payroll and high marketing costs?

My fear is that Althea is being run by a bunch of amateur business hacks trying to do a "Tim Ferris 4 hour business":

"Lets import Cannabis from Canada and try and sell in Australia"

Without realising that the Cost of Sales and Marketing are crippling this business.

IMHO, there is a significant risk of cashburn within 4 months.