Document:

Exhibit 10.26

     

    
      
        	
                PROFORMA
      UNAUDITED CONDENSED COMBINED STATEMENTS OF INCOME

              	 	 	 	 	 	 	
                Combined

              	 
	 
      	 	
                Historical

              	 	 	 	 	 	 	 	
                Pro
      forma

              	 
	
                 ($000
      USD)

              	 	 	 	 	
                Qualytextil

              	 	 	 	 	 	 	 	 	 	 
	
                For
      the three months ended April 30, 2008

              	 	
                AS
      REPORTED

              	 	 	
                US
      GAAP /USD

              	 	 	
                Adjustment

              	 	 	
                Adjustment

              	 	 	
                Three
      months ended

              	 
	
                Income
      Statement Data:

              	 	
                4/30/08

              	 	 	
                4/30/08

              	 	 	 	(1	)	 	 	(2	)	 	
                4/30/08

              	 
	
                Net
      sales

              	 	$	27,280	 	 	$	1,965	 	 	$	-	 	 	$	-	 	 	$	29,245	 
	
                Cost
      of goods sold

              	 	 	20,601	 	 	 	756	 	 	 	-	 	 	 	-	 	 	 	21,357	 
	
                Gross
      profit

              	 	 	6,679	 	 	 	1,209	 	 	 	-	 	 	 	-	 	 	 	7,888	 
	
                Operating
      expenses

              	 	 	5,231	 	 	 	830	 	 	 	-	 	 	 	-	 	 	 	6,061	 
	
                Operating
      profit

              	 	 	1,448	 	 	 	379	 	 	 	-	 	 	 	-	 	 	 	1,827	 
	
                Interest
      expense

              	 	 	(100	)	 	 	(206	)	 	 	(131	)	 	 	206	 	 	 	(231	)
	
                Interest
      income

              	 	 	30	 	 	 	59	 	 	 	-	 	 	 	-	 	 	 	89	 
	
                Income
      before income taxes

              	 	 	1,378	 	 	 	232	 	 	 	(131	)	 	 	206	 	 	 	1,685	 
	
                Income
      tax expense

              	 	 	485	 	 	 	35	 	 	 	(47	)	 	 	31	 	 	 	504	 
	
                Net
      Income

              	 	$	893	 	 	$	197	 	 	$	(84	)	 	$	175	 	 	$	1,181	 
	
                Net
      income per share

              	 	$	0.16	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	0.22	 
	
                   #
      shares used for basic EPS

              	 	 	5,487,260	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5,487,260	 
	
                ACCRETIVE
      TO EPS:

              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	0.06	 

      

    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
10.26

      

      

      

      NOTES TO:
PROFORMA UNAUDITED CONDENSED COMBINED STATEMENTS OF INCOME

      Three
months ended April 30, 2008

         

      
        
          	 
      	 	
                  Adjustment

                  Needed

                	 
	 	 	 	 	 
	
                  (1)
      Adjustment to reflect interest- Expense that would have been incurred on
      loan to finance purchase of Qualytextil

                	 	$	13,344	 
	 	 	 	 	 
	
                  Interest
      rate assumed on proforma loan.  Used Lakeland’s actual weighted
      average interest rate for the period + 40 BPS which is the pricing
      adjustment created by the higher leverage resulting from the purchase
      price borrowing

                	 	 	3.93	%
	 	 	 	 	 
	
                  Additional
      interest expense on purchase loan pro forma

                	 	$	131	 
	 	 	 	 	 
	
                  Tax
      rate - The Company considers the rate of 36% to be appropriate as it
      represents the applicable tax effect on interest expense incurred on the
      loan assumed in USD. The Company did not use the effective tax rate which
      is 25.0%, since the rate is affected by various factors not relevant to
      the current transaction including income from various foreign
      subsidiaries, deductions etc.

                	 	 	36	%
	 	 	 	 	 
	
                  Tax
      benefit on additional interest expense

                	 	$	47	 
	 	 	 	 	 
	
                   (2)
      Adjustment to add back interest expense on Qualytextil books  as
      the debt has been repaid as a result of this transactionExhibit 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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]