ex10-27.htm


    Exhibit 10.27

     

    
      	
              PROFORMA
      UNAUDITED CONDENSED COMBINED BALANCE SHEETS

            	 	 	 	 	 	 	 	 
	 
      	 	
              Historical

            	 	 	 	 	 	 	 	 	 	 	 	 	 	
              Pro
      forma

            	 
	
               ($000
      USD)

            	 	 	 	 	
              Qualytextil

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              APRIL
      30, 2008

            	 	
              AS
      REPORTED

            	 	 	
              US
      GAAP /USD

            	 	 	
              Adjustment

            	 	 	
              Adjustment

            	 	 	
              Adjustment

            	 	 	
              Adjustment

            	 	 	 	 
	 
      	 	
              4/30/08

            	 	 	
              4/30/08

            	 	 	 (1)	 	 (2)	 	 (3)	 	 (4)	 	
              4/30/08

            	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Current
      assets:

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Cash
      and cash equivalents

            	 	$	3,001	 	 	$	34	 	 	$	(13,344	)	 	$	13,344	 	 	$	-	 	 	$	-	 	 	$	3,035	 
	
              Accounts
      receivable, net

            	 	 	17,374	 	 	 	1,199	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	18,573	 
	
              Inventories

            	 	 	40,658	 	 	 	3,309	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	43,967	 
	
              Deferred
      income taxes

            	 	 	1,970	 	 	 	 	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,970	 
	
              Other
      current assets

            	 	 	2,401	 	 	 	210	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	2,611	 
	
                   Total
      current assets

            	 	 	65,404	 	 	 	4,752	 	 	 	(13,344	)	 	 	13,344	 	 	 	-	 	 	 	-	 	 	 	70,156	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Investment
      in subsidiaries

            	 	 	-	 	 	 	-	 	 	 	13,694	 	 	 	-	 	 	 	-	 	 	 	(13,694	)	 	 	-	 
	
              Property
      and equipment, net

            	 	 	13,255	 	 	 	1,246	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	110	 	 	 	14,611	 
	
              Good
      will

            	 	 	871	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	9,595	 	 	 	10,466	 
	
              Other
      assets

            	 	 	119	 	 	 	791	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	910	 
	 
      	 	$	79,649	 	 	$	6,789	 	 	$	350	 	 	$	13,344	 	 	$	0	 	 	$	(3,989	)	 	$	96,143	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                     LIABILITIES
      AND STOCKHOLDER’S EQUITY:

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Current
      liabilities:

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Current
      maturities-long term debt

            	 	$	94	 	 	$	3,093	 	 	$	-	 	 	$	-	 	 	$	(3,093	)	 	$	-	 	 	$	94	 
	
              Accounts
      payable

            	 	 	3,754	 	 	 	1,960	 	 	 	350	 	 	 	 	 	 	 	 	 	 	 	-	 	 	 	6,064	 
	
              Accrued
      expenses and other current liabilities

            	 	 	1,732	 	 	 	1,517	 	 	 	-	 	 	 	-	 	 	 	(759	)	 	 	-	 	 	 	2,490	 
	
                   Total
      current liabilities

            	 	 	5,580	 	 	 	6,570	 	 	 	350	 	 	 	-	 	 	 	(3,852	)	 	 	-	 	 	 	8,648	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Construction
      loan payable

            	 	 	1,810	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,810	 
	
              Other
      Liabilities

            	 	 	-	 	 	 	82	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	82	 
	
              Bank
      Debt & debentures

            	 	 	3,467	 	 	 	-	 	 	 	-	 	 	 	13,344	 	 	 	-	 	 	 	 	 	 	 	16,811	 
	
                   Total
      liabilities

            	 	 	10,857	 	 	 	6,652	 	 	 	350	 	 	 	13,344	 	 	 	(3,852	)	 	 	 	 	 	 	27,351	 
	
              STOCKHOLDERS
      EQUITY:

            	 	 	 	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
              Common
      Stock

            	 	 	55	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	55	 
	
              Less
      treasury stock at cost

            	 	 	(1,084	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(1,084	)
	
              Other
      comprehensive income

            	 	 	12	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	12	 
	
              Additional
      paid-in capital

            	 	 	49,274	 	 	 	1,269	 	 	 	-	 	 	 	-	 	 	 	3,852	 	 	 	(5,121	)	 	 	49,274	 
	
              Retained
      earnings

            	 	 	20,535	 	 	 	(1,132	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,132	 	 	 	20,535	 
	
                   Total
      stockholders’ equity

            	 	 	68,792	 	 	 	137	 	 	 	-	 	 	 	-	 	 	 	3,852	 	 	 	(3,989	)	 	 	68,792	 
	 
      	 	$	79,649	 	 	$	6,789	 	 	$	350	 	 	$	13,344	 	 	$	0	 	 	$	(3,989	)	 	$	96,143	 


    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      Exhibit
10.27

      NOTES TO:
PROFORMA UNAUDITED CONDENSED COMBINED BALANCE SHEETS

      
        	
                APRIL
      30, 2008

              


      

      


      
        	 
      	 	 	 	 	
                Transaction
      Amount

              	 
	 	 	 	 	 	 	 	 
	
                (1)
      Record intitial purchase price paid by Lakeland

              	 	 	 	 	$	13,344	 
	 	 	 	 	 	 	 	 
	
                 (1a)
      Estimated transaction costs:

              	 	 	 	 	 	 	 
	
                    Brazil
      tax on incoming capital

              	 	 	50	 	 	 	-	 
	 	 	 	 	 	 	 	 	 
	
                    Estimated
      legal & accounting fees

              	 	 	300	 	 	 	350	 
	 	 	 	 	 	 	 	 	 
	
                 (2)
      Record bank borrowing by Lakeland to cover cash out

              	 	 	 	 	 	 	-	 
	 	 	 	 	 	 	 	 	 
	
                 (3)
      Record repayments of Qualytextil debt from purchase price
      proceeds

              	 	 	 	 	 	 	(3,852	)
	 	 	 	 	 	 	 	 	 
	
                (4)
      Consolidation entries serve to eliminate the investment in subsidiaries
      against the underlying net assets acquired of $137,000. Such acquired
      assets are adjusted for estimated fair value of real estate at closing
      resulting in a revaluation of $110,000. The difference is reflected as
      goodwill. The Company is in the process of identifying intangible assets
      arising from this transaction. The identified intangible assets if any
      will be assigned values and amortized over their useful lives for assets
      with finite lives. Intangible assets identified with infinite lives will
      be tested for impairment annually. The goodwill of $9,595,000 will be
      adjusted accordingly for the intangible assets recognized during this
      process.

              	 	 	 	 	 	 	(137
(110	)
)
	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	$	9,595