Alberto Recchi: Maybe I can take that Greg?
Greg Kress: Yeah, I was just about to say, Alberto can probably answer that.
Alberto Recchi: Thanks. Yes. Hey, Jim. Look, I think you should look at it this way. I think Q4 probably a decent indicator over SG&A will be in Q1, right? And so some of the factors also side in my opening remarks, right, that contributed to the increase in SG&A expense will remain valid and will be felt in Q1. So specifically there’ll be some spillover restructuring costs related to our move out of the Long Island City facility. Professional fees just being a big bucket of those costs and other spending related to being a public company, which I say remain in line as the previous quarters. Even though some of these things, we were able to reduce actually significantly, be in always is a perfect example. From a personal cost perspective, you should not expect any further increase.
Jim Ricchiuti: And any since Alberto about cash burn on a go forward basis, what should we be thinking along those lines?
Alberto Recchi: Yes, so perhaps let me make a couple remarks here around cash burn cash position, how do we see the past to profitability? I think this will help you model out the rest of the year. So, we closed the year with a strong cash balance, right of more than $40 million cash, which I think provides the company with sufficient liquidity to do a couple things, right? First of all, support the ongoing execution of our strategic plan, which Greg just outlined, support our normalized cash burn, which I’ll talk about in a second, and also positions as well on our path to profitability. Now, as Greg said, we’ll keep aligning our resources right, with the highest opportunity areas to drive revenue growth while, tightly managing our cost structure and aiming to maintain our growth margin levels aligned to what they’ve been historically.
Okay. Now from a cash burn perspective, we’re looking to solve for a normalized average cash burn in the range of $4 million to $5 million per quarter. Okay. Now this will overall decrease a little bit throughout the year as revenue grow. That said, we did point out in the previous call €“ in last earnings that cash burn in Q4 of last year was going to be slightly higher, right. And that’s exactly what happened, again, mainly due to our relocation expenses. I related to the move to Long Island City €“ from Long Island City to Livonia and some annual expenses that happened usually in the end and first part of the year. Again, a good example is the D&O insurance, right. Okay. I cited a second ago, we were able to reduce that by 40% compared to the peaks of two years ago.
Now looking prospectively and to give you some color around Q1 2023 burn, again, we do expect to land above the normalized burn. Again, mainly due to some carryover cost related to our manufacturing facility consolidation here in the U.S. So hopefully this helps you give you some perspective.
Jim Ricchiuti: Got it. Okay. Thanks very much.
Alberto Recchi: Sure.
Operator: Our next question will come from Troy Jensen with Lake Street Capital. You may now go ahead.
Troy Jensen: Hey, gentlemen. Thanks for taking my question here. I just wanted to dive in a little bit more the Detroit move and just kind of how it ties in with gross margins. Greg, I think you said it’s roughly the same in Q1 when we bounce back up in Q2. But maybe Alberto, I mean, are you guys kind of endorsing like a 41% gross margin for March? Do we go back to 43-ish or does it go higher now because Michigan facilities can be less expensive and better margin profile than the New York? So give us a little color on how you think gross margins trend throughout the year?
