Total loss (exclude impairment losses on intangible assets and property, plant and equipment) widen by 55.3% from approximately HK$77.6 million last year to approximately HK$120.6 million for the Year. The increase in loss was mainly caused by two reasons. Firstly, we have seen mounting pressure on the pricing of Pinup®, hence the Group has been optimizing its salesforce since last year in an effort to achieve maximum sales efficiency. The sales team has been expanding rapidly, and the distribution channels have also expanded significantly leading to a higher cost in the short term. By the time the Group secure the threshold of drug consistency evaluation, which should be by 2020, more resources will be deployed on marketing and distributing Pinup®. This should bring promising revenue in the near future. Furthermore, given that the Group has been restructuring the salesforce, enlarging direct sales channels, expanding and increasing sales and marketing expenses on the promotion and advertising of Bokangtai, therefore, selling and distribution expenses saw substantial increment. The Group is confident that the investment into building a sales platform should begin to payoff with more hospitals are secured. We have also seen repercussions resulting from an isolated incident.
As of 31 December 2018, the Company’s bank balance and cash amounted to approximately HK$38.8 million. The Company’s financing need depends on the cooperation forms and progress of our projects. Specifically, we may cooperate with our partners in different ways. For example, we may consider acquiring the patents for self-operation, or otherwise adopting a profit-sharing model for certain products, the need for cash flow of which may vary from case to case. Overall, the Company enjoys sound operations at present and our financing need depends on future funding requirement. We will closely monitor the market conditions and explore the best alternative when needs arise.
