James Lieberman: I wanted to let you know that we had a family trip and required good coverage for sun product. And we end up using the color science no show product. And it was wonderful in the sense that it just rubbed right in, it was very, it was — everyone was stunned at how well and they liked it. And I’m wondering, are you able to give any other names of products that are out there if you wanted to sort of for people who might want to experiment and maybe have a chest full of these kind of products for family and friends?
Kevin Cureton: Yes, there is one that surprised — to our surprise and to our benefit I guess just recently launched and they actually used our trade name in their marketing on social media. It’s a company by the name of Tatcha that sells primarily through Sephora. It’s a prestige brand. They launched, really relaunched a product that we had developed for them into some enhanced packaging. So that’s another one of those products that’s available out there. And there are a few others but that’s a quick one right off the top of my head here, Jim, for you to consider.
James Lieberman: And also, are you able to give any further color than what you’ve already talked about regarding the BASF negotiations? I’m beginning to feel a little comforted by the reduced legal expenses and like you said that you’re making progress. Is that something that is — that you’re hoping to go away or is that a relationship that could actually still build on some level?
Jess Jankowski: Definitely a relationship that is still going to build. We’re not hoping it goes away at all. We’ve never stopped the commercial relationship with BASF. And we have — one of the reasons that the legal fees are going down isn’t as much that we’re not in contact with them, it’s that the contact is between typically Kevin and I and then their top commercial people more than it is lawyers. So I think our — we’re on salary. So it is what it is. But I expect that — I also expect their business — that business is going to move and expand over time, and we are also working on new products with them as well. And I think that’s an important thing. I think they recognized the value of minerals based products as well as everybody else.
And so I’m not looking to that — we’re not looking for that to go away at all. I just think they had a down period and a lot of that is the markets they’re in are also different. I mean one of the nice things about — if you look at our company, from 1,000 feet up, you might say to yourself, gee, this whole company is about sunscreen or sun care. In reality, the API, active pharmaceutical ingredients business that we sell to BASF is going into some daily wear sunscreens and going into baby care, people with sensitive skin, leisure wear sunscreens. That market didn’t do as well last year as the cosmetics market that has sun protection, which is where we play with Solésence. So we kind of have — we’ve taken our expertise in an area and branched out into a series of markets and also a series of roles.
As we mentioned earlier, we have a little more control, a little more leverage over this lessons business, which is helpful. So I’m hopeful that both of the leisure market will move forward in the daily wear, more mass market products will move forward. And I know the prestige cosmetics markets are moving forward.
Operator: [Operator Instructions] It comes from Ron Richards.
Unidentified Analyst: Jess, I was just wondering more about the BASF’s litigation. Is it scheduled for trial? When, if it is,a nd what’s the exact status of that if it’s not scheduled for trial?
Jess Jankowski: It’s not currently scheduled. We’re in a period — we’ve got a period where we held off. And we agreed to withdraw the suit on a temporary basis. The end of April would be the time that we would have to do something relative to starting up discovery again if we were going to do that. So there really is not a lot of pressure from that end of it to get it done, even though we both companies feel a lot of pressure to get this done just to get on with the business that we’re much better at than litigation.
Unidentified Analyst: When you say you withdrew the suit, is that [Multiple Speakers] you and they…
Jess Jankowski: Yes. We did a filing and agreed to hold off on the suit and also to hold off on any further discovery. And so we’ll have to — we’ve got a month and half to get to the point where we might have to do something else if things don’t work out, but I think we’re both confident that things will work out prior to that.
Unidentified Analyst: My next question is a lot of your process this year were on the cost of legal fees. Yet in the third quarter, legal fees went down but the earnings did not improve. What am I missing here?
Jess Jankowski: I’d say the legal fees stand out on an annual basis just because it’s such a big number and it’s all sitting in SG&A. I think the biggest thing — I mean that — without those, we would have been in better shape globally because that sucked a lot of cash out of the business and working capital has been a grind. I think the biggest issue for the second half, as Kevin mentioned, was not being able to deliver on time and having shortages due to supply chain issues. And when you compound that with — we were building a new team in there, we made some changes. We also did a reorganization in Q4 and we were short on cash. So we weren’t in the position to a traditional way to deal with those problems, it’s just order a lot of material and have it available and it wasn’t something that we could do freely to mitigate that.
