Brad Nattrass: Perfect. First, Anthony, I’ll start with our backlog, the $93 million. That’s all with – both in the CEA side and also on the commercial side, both with very well-funded, strong companies on the CEA side proof of funds we’ve seen. So these are finance groups that are moving forward that don’t have to hit funding milestones in order to continue. On the – from affecting our customers overall, I’ve always said, because of state rights, when a license is awarded, those facilities will be built. And we haven’t – we had not had any issues on that countering that statement. But earlier on in Q1, we did have a client that was awarded a license that was still working to secure their funds. So – but that was before the recent banking follow We haven’t seen any – we haven’t experienced any issues in the last week with the recent events at all.
And because we’re on the larger design build contracts, these are, as I had mentioned, in the CEA space, 12 to 24 months, the money, there’s a large outlay that’s required at the start. And for the clients when they’re moving forward and especially when we bring them into our backlog, we know that those groups are well funded. From an equipment standpoint, existing clients that may be looking to retrofit their facility and upgrade their lighting, maybe moving to more energy-efficient LEDs, that’s where we’ve seen a large fall off as compared to the last three quarters, evidenced with 85% drop in equipment revenues in Q4 ’22 for us versus Q4 ’21. We don’t see those CapEx expenditures right now. They’re on pause. I believe our clients, single-state, multi-state operators in the cannabis space are really hunkering down.
Cash is king, and they’re focusing on maintaining and building their cash as much as they can. But in the design build contracts, those clients are funded to take their facility through to operation and equipment is a natural evolution 3 to 6 months after it starts. So we’re seeing, I guess, across the board some strength and then weakness in terms of existing facilities retrofitting. One more piece I’ll add on the commercial side. We’re working with large global companies. And when they cut a PO, they’ve already allocated capital to that project. And the commitments, the timing of the funds moving towards urban-gro on a percentage of completion basis, we’ve never had any issues whatsoever there.
Anthony Vendetti: Okay. Excellent. That’s helpful. I’ll hop back in the queue. Appreciate it.
Brad Nattrass: Okay. Thanks, Anthony.
Operator: Our final question is from Eric Beder with SCC Research. Please proceed with your question.
Eric Beder: Good afternoon. So I guess I have two different questions kind of different areas. First of all, could you give us a little feel on besides you read the same, I guess, pieces about Germany potentially becoming legalizing cannabis. When you look at Europe, what is the timing of it and how does urban-gro have, I guess, the competitive advantage in content where there’s a lot of very large players in the agriculture sector?
Brad Nattrass: Eric, in the cannabis space in Europe, there’s a lot of momentum before the pandemic and – but there wasn’t enough to pull it through aggressively like we experienced in North America or in the U.S. So I look at Europe as where the U.S. was probably 6 years ago now. There is less North American influence in the cannabis market in Europe than there was before the pandemic. And clients are looking for that know-how. They don’t want to make mistakes. That’s the single point of responsibility that and accountability that urban-gro brings allows them to proceed further down the path without having to hire this expertise in-house. So it’s great for them as far as OpEx savings are concerned. But so far in Europe, it’s been all design contracts for us, a little bit of equipment, but predominantly all of the business so far has been in architecture, engineering and cultivation design.