AGH Posts $5.4M Receipts, $2.53M Capital Raise, 33% Canadian Market Share

Quarterly Performance Amid Challenges

Althea Group Holdings Limited (ASX – AGH) delivered a solid performance for the quarter ending September 2025, recording $5.4 million in customer receipts. This marks a notable increase from prior periods, underscoring the company’s robust demand for its THC-infused beverage products. However, the quarter was not without its challenges, as a province-wide strike in British Columbia, one of Peak Canada’s largest markets, disrupted order processing for over four weeks, delaying shipments and impacting revenues by an estimated $750,000.

Despite this disruption, Peak Canada maintained a strong 98% on-time and in-full delivery rate, reflecting operational resilience and commitment to customer satisfaction. The company’s gross margins dipped to 31% from 39% in the previous quarter, primarily due to lower-than-expected revenues and one-off inventory write-offs, but management expects margins to rebound in the coming quarter.

Strategic Growth and Market Positioning

Peak Canada continues to dominate the Canadian THC-infused beverage market with a 33% share, representing nearly 28% of all brands nationwide. The company is actively investing in capital expenditure projects, including upgrades to underground utilities and production facilities, aimed at driving cost efficiencies and supporting sustained revenue growth.

Meanwhile, Peak USA, AGH’s wholly owned subsidiary, is rapidly scaling its commercial manufacturing operations. Having produced 560,000 cans since January 2025, Peak USA secured additional orders for 300,000 cans scheduled for November production. The US hemp-derived THC beverage market is expanding swiftly, with retail milestones such as Target’s pilot launch and Circle K’s planned national rollout signaling growing mainstream acceptance. Peak USA’s extensive production experience and regulatory compliance position it well to capitalize on this momentum.

Leadership and Financial Stability

Leadership changes marked the quarter, with Barry Katzman appointed as Interim CEO following the resignation of Joshua Fegan. Katzman brings over two decades of industry experience and a track record of tripling revenues during his prior tenure at Peak Processing Solutions. The board also saw the retirement of Alan Boyd and the appointment of Manik Pujara as a non-executive director.

Financially, AGH strengthened its position through a successful $2.53 million capital raise, which will fund growth initiatives, customer development, and capital expenditure projects. The company ended the quarter with $2.98 million in available funding and an estimated cash runway of 14.5 quarters, providing a solid buffer to support ongoing operations and strategic investments.

Navigating Legacy and Operational Efficiencies

AGH’s Australian subsidiary, Althea Company Pty Ltd, remains in voluntary administration with a Deed of Company Arrangement in place, marking a continued focus on streamlining the group’s operations. The company is also implementing a rightsizing strategy expected to reduce overheads by over $1 million annually through staff cost savings and operational efficiencies.

Looking ahead, AGH is focused on leveraging its proprietary product portfolio, which generated early revenues of approximately $0.2 million this quarter, with forecasts projecting growth to over $1 million by fiscal year-end. Strategic partnerships and new customer onboarding in both Canada and the US signal promising avenues for revenue expansion.