Donovan Schafer: Okay. Okay, that’s helpful. And then I want to ask about the $4.1 million revenue adjustment, the earnout adjustment on the 75 megawatt Poland projects. If – I believe those projects are usually lower than the Rule of Thumb is like $1 a megawatt. It’s probably more like $0.60 or maybe even – maybe $0.60, $0.70, $0.80 per watt. But if we assume $1 dollar a watt, then a $4.1 million amount, that becomes 5 percentage points, sort of a reduction in margin by straight up 5 percentage points. And if it’s $0.60 a watt, that becomes like a 9 percentage point reduction in gross margins. So I’m curious if you guys can talk maybe about what it is that caused that change? Like, if I’m thinking about it the right way, why that revenue just – why you didn’t get that revenue? And if these are projects you still would have taken on or if this makes them the economics where you would not necessarily want to do these projects otherwise?
Yumin Liu: The construction of the 75 megawatt projects are in the normal schedule. And, in fact, about one-third – over one-third of them has already reached COD. But this $4.1 million write-off is based on the earnout structure, which – was designed based on the last, especially last year’s suddenly price surge in the market. And we were – we are benefiting from the price difference from the traditional PPA market compared to the surged priced merchant market. And we designed a structure we can share those additional revenue with the buyer. But one thing that did not happen is that the surge did benefit the other merchant players, but our construction did not get too much sooner completion to enjoy such a to be recognized earnout. That is why the construction of the finished projects could not enjoy that much of the earnout we booked. And now we have to write it off. You see, I don’t know if you understand my explanation.
Donovan Schafer: I think I understand. Yeah. Okay, all right that’s good. Thank you guys –
Yumin Liu: Thank you, Donovan –
Donovan Schafer: Yeah, I’ll take the rest of my questions offline.
Yumin Liu: Thank you.
Operator: Thank you. [Operator Instructions] Our next question comes from Amit Dayal with H.C. Wainwright. You may proceed.
Amit Dayal: Thank you. Good afternoon, everyone. So, Yumin, with respect to some of the regulatory uncertainties you highlighted in your press release, you may have faced in 2023 in the US and Europe, can you give any examples of what some of these challenges were and with respect to your outlook in 2024, are these issues resolved? How are you dealing with some of these challenges that may have been in place in 2023 from a project execution perspective?
Yumin Liu: Yes, some issue are resolved, some issue are still pending. I can give you a couple very typical examples. One is, as you can see, our press release, we closed a deal, 29 megawatts in Spain, setting [inaudible] back to last year, and we expect to receive the approval by the end of last year. But the approval did not come and we, based on the government policy at that time, we expect the deal will be closed in Q1 this year. But unfortunately, the government just in Q1 announced a new policy which give the old administrative office a 14-month cycle to make approvals, okay. So now, we expect the deal will be closed anytime from now till end of the year, which is the end of the 14 months. That’s why I mentioned earlier that one of the six deals we supposed to close in 2023 will be most likely pushed into second half of this year.
That I mean, this deal, that is the 29 megawatts closing in Spain. The second one is that, in Hungary, after experiencing the long delays of the first projects portfolio, 53 megawatts as we announced earlier, we have another 52 megawatts in the sales process and after the government of Hungary issue a right of first refusal language by the local national asset management group, it’s hard for us to secure any foreign buyers to buy this portfolio. So our solution is our local team is working with several local investors, which when we do this one, we don’t need to have government approvals, although we have to go through the National Equity Asset Management or Asset Investment Corporation for the lawful right of first refusal situation. But the situation will be a lot straightforward.
So although the process are the buyers pool get limited, but our quality projects are really good in the market, so people are still fighting to get those deals as even in the local market, from the local buyers. So those are the two typical examples. And similar things happen in other places that in Italy, the same thing – very similar thing. The government administrative approvals delays. But, in general, I see that the older delays happened last year, we experienced that. We learn from it. We now try to manage that in a more – more timely to manage all those processes. So we – that is why we feel so confident to present the numbers we present today for the 2024 guidance.
Amit Dayal: Got it. Thank you. Last question for me. With the balance sheet we have right now, $113 million in debt and $70 million in cash, what level of revenues on an annual basis with this type of balance sheet? Can you – what level of revenues can be generated with this balance sheet if you execute exceptionally well? I know your guidance is for $150 million to $160 million, but in a scenario where everything goes well for you, how much revenues can the company potentially generate with this balance sheet?
Ke Chen: Yes, Amit, first of all, let’s look at our pipeline, again, we have three – over 3 gigawatt advanced solar pipeline, 5 gigawatt storage pipeline, and we, talking about the monetize every year 400 to 500 megawatts a year. So that’s our target for 2024, that generate $150 million to $160 million revenue. Going forward, our pipeline, actually our focus, we mentioned we’re going to focus on monetizing this pipeline and going forward, this pipeline is maturing and we should monetize them all year-over-year. So, we do expect again 20% to 30% growth from here with this type of balance sheet.
