And now we’re moving towards certification and final design. So it’s in about. In terms of a product in a P22 stage, 80% of final. But the engineering aspects, including the silicon carbide modules, that part is all done. And then it’s the determination of our manufacturing partner to build that charger with us. So it’s a great question, Craig, but that’s where we sit today.
Craig Irwin: Excellent. And then, Michael, I really appreciate the clarity on the gross margins. 30% is an impressive number for any producer in this industry. Can you maybe help us with some of the items that were impacting this fourth quarter gap versus the adjusted number? Do you have those details to share with us?
Michael Rama: Yes. As we noted in the prepared remarks, a majority, I’d say about a $1 million to a $1.5 million represented. I’ll call it warranty and maintenance expenses or additional warranty and maintenance expenses, as well as we had to expense certain discontinued components from the older as we’re transitioning from the outsourced or contract manufactured product over to the in house manufactured. So there’s components that we had that were basically not using as much or just had it kind of expensed throughout at the end of the year. So it’s a combination of a few things, but mostly on the warranty, maintenance, as well as discontinued components.
Craig Irwin: Okay. And then just a little bit more detail there. Can you give us a little color on what the warranty was on? Is this sort of legacy product from many years ago, or is this something that is just a minor correction for more recent product?
Brendan Jones: Yes, it’s a combination.
Michael Rama: No, go ahead, Brendan.
Brendan Jones: No, you’re doing fine. Okay, I’ll take it then. So there’s two phases to it. There was the — a lot of it had to do with legacy equipment in the field, and it’s a two pronged approach. You still have customers out there that have the legacy equipment. We honored warranty to ensure that uptime and quality of those chargers because as you may know, that’s one of the number one concerns in the industry. So that increased our warranty expense a little bit. Also, when we go through the exercise of replacing those legacy chargers and the customer still wants that type of charger, one of the nuance we’re faced with is normally we bring in chargers and we just do a basic rehab. But a lot of these chargers, instead of doing the basic rehab on them, we have to pull out some old components now, which adds to component expense that can’t be reused.
We’re going to get through most of that. So it’s going to be a onetime expense, but it particularly hit in Q4, so a lot of older componentry being upgrade and some additional warranty expense to maintain quality out in the field. Now, there’s also a correlation to significant revenue and higher charger sales. And then we need to reserve more in warranty as well. That played into that. So it was a bit of a multivariable equation that ended up with that result.
Craig Irwin: Excellent. And then last question, if I may. Buy in America, right. This is something that your friends at the Department of Energy is big on. Obviously, President is big on. You guys are now, I believe, the best positioned company as far as Level 2 supply into North America. With the Bowie, Maryland facility, can you maybe give us a little bit of color as far as the breadth of demand that you’re seeing? I know we’ve talked a few times about going 12,000 to 50,000 units in capacity, and I think there’s a plan to go to 100,025. You obviously see tremendous opportunity. Can you maybe unpack that for us because investors have a tremendous around the – yes?
Brendan Jones: Absolutely. So we met with federal, state, and local reps all this week. There is a tremendous amount of interest in the Buy America product. It resonated through whether it was meeting with Governor Moore or a meeting that took place in the White House just yesterday with the Board of Directors from Blink and key management. But all of them emphasized that they believe the volume of buying America product they need is exponential in terms of growth. Now, what the Bowie, Maryland facility allows us to do is service the U.S. market plus the Buy America, while we can also begin to manufacture chargers for our global markets out of our facility in India. And so basically, we take the same design and we have a global version and we have a U.S. version, and then we’re compliant for everywhere we need to be.
And additionally, this flexibility in our manufacturing facilities allows us to move, as we’ve stated. Craig one of our goals is to remove the last vestiges of all third-party equipment on an L2 level. We’re going to replicate the same strategy in Europe, which is going to bring better gross margin and get her to scale faster, not just in the United States, but across the globe. Now, one of the things that you might imagine is the U.S. Post Office deal is a testament to getting towards scale. They were at the grand opening. They were more than happy with seeing what we’re doing and they’re going to suck up a pretty good percent of those chargers made there. And what a better story that they’re all made in North America right here at Blink’s facility outside the nation’s capital.
So we’re really excited about that.
Craig Irwin: Fantastic. Well, congratulations on the progress. I’ll hop back in the queue.
Brendan Jones: Perfect.
Operator: Thank you. Our next question is coming from Sameer Joshi with H.C. Wainwright. Your line is live.
Sameer Joshi: Thanks. Good afternoon. Congrats on the progress so far. Just a few questions and clarifications on the revenue outlook. What is the contribution from products versus, say, network fees and charging revenue that is being reflected in this 165 to 175 outlook?
Brendan Jones: Michael?
