What changed in this filing

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Item 9A. Controls and Procedures

2025-04-17 compared with 2024-04-11 · 97 added, 53 removed, 191 unchanged (44% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Based on their evaluation as of the end of the period covered by this Form 10-K, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Remediation of Material Weakness

In connection with our audit of the fiscal year 2023 consolidated financial statements, we and our independent registered public accounting firm determined that we had material weaknesses in our internal control over financial reporting.

These material weaknesses primarily pertained to process-level controls over foreign subsidiary currency translation or remeasurement to ensure the foreign subsidiary’s account balances were accurately stated in the consolidated financial statements.

During the year ended January 31, 2024, we implemented enhanced procedures to remediate the deficiencies in our internal control over financial reporting that resulted in the material weakness.

Specific remedial actions undertaken by management included, without limitation:

Enhancing the existing monthly financial statement management review by including a reconciliation of key account balances on the general ledger back to the originally reported balances from the foreign subsidiary sub-ledgers (translated to USD);

Reconfiguring the trial balance import process for its Argentina subsidiary to import and remeasure account balances in a manner consistent with other foreign subsidiaries;

Developing enhancements to the foreign subsidiary financial reporting packages by specifically quantifying and reviewing the currency fluctuation impact to the overall financial statements.

We have completed the process of implementing the aforementioned enhancements and believe that we have remediated the material weaknesses in our internal control over financial reporting with respect to the foreign subsidiary currency translation.

In connection with the preparation of this report, an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Securities and Exchange Commission’s (SEC) Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of January 31, 2025 was carried out by certain members of Company management, with the participation of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”).

Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the CEO and CFO, to allow timely decisions regarding required disclosures.

Due to a material weakness in internal control over financial reporting described below, management concluded the Company’s disclosure controls and procedures were not effective as of January 31, 2025.

Notwithstanding the existence of this material weakness, management believes the consolidated financial statements in this Annual Report on Form 10-K present, in all material respects, the Company’s financial condition as reported in conformity with United States Generally Accepted Accounting Principles (“GAAP”).

Management’s Report on Internal Control over Financial Reporting

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In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013).

Based on our assessment and those criteria, management has concluded that the Company maintained effective internal control over financial reporting as of January 31, 2024.

The Company acquired Pacific Helmets NZ Limited on November 30, 2023, which represented approximately 7% and 6% of the Company's net assets and total assets as of January 31, 2024 and 1% of total sales, for the year ended January 31, 2024.

As the Pacific Helmets NZ Limited acquisition was completed during the fourth quarter of fiscal 2024, the scope of the Company's fiscal 2024 assessment of the effectiveness of its internal control over financial reporting does not include the acquired Pacific Helmets NZ Limited business.

As a result of this assessment, management has concluded controls were not effective.

A material weakness is a control deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Management identified the following material weakness in its internal controls over financial reporting:

The Company has undergone significant changes in size, complexity and geographic footprint primarily due to multiple acquisitions and has numerous systems that process financially relevant data.

Of these systems, Sage X3 (United States, Canada and the United Kingdom) and Kingdee (China and Hong Kong), were in the Company’s scope for testing of information technology general controls (“ITGCs") in support of management’s assessment of internal control over financial reporting.

The Company’s consolidation process is manual and based upon reporting packages submitted by the various locations.

For those locations where the financially relevant systems were not in-scope and not subject to the Company’s testing of ITGCs, the financial reporting controls, as designed, do not adequately address the completeness and accuracy of the foreign reporting packages.

The reporting packages form the basis of multiple controls, including a key management review control designed to detect a material misstatement in the Company’s consolidated financial statements as well as other controls.

Additionally, the Company did not update the control activities documentation for numerous locations and, in some cases, did not change control processes to reflect changes in operating structure.

This contributed to the material weakness described herein in the Company’s internal controls.

As a result of the material weakness identified, the Company’s management concluded that, as of January 31, 2025, the Company’s internal control over financial reporting was not effective based on the criteria in the 2013 COSO Internal Control – Integrated Framework.

The Company acquired Jolly Scarpe S.p.A.

and Jolly Scarpe Romania S.R.L.

(collectively, “Jolly”) on February 5, 2024;

LHD Group Deutschland GmbH, LHD Group Australia Pty Ltd and LHD Group Hong Kong Ltd., (collectively “LHD”) on July 1, 2024;

and Veridian Limited on December 16, 2024, whose total assets and net loss represent approximately 37% and 5%, respectively, of the related consolidated financial statements as of and for the year ended January 31, 2025.

The scope of the Company's fiscal 2025 assessment of the effectiveness of its internal control over financial reporting does not include the acquired businesses detailed above.

This exclusion is pursuant to the SEC's general guidance that an assessment of a recently acquired business' internal control over financial reporting may be omitted from the scope of the Company's assessment of its internal control over financial reporting for twelve months following the date of acquisition.

Remediation of Material Weakness

Management is committed to remediating the material weakness described above and continuing to improve the Company’s internal control over financial reporting.

Management has identified, implemented, and continues to implement, the actions described below to remediate the underlying causes that gave rise to the material weakness.

Until the remediation efforts described below (including any additional measures management identifies as necessary) are completed, the material weakness described above will continue to exist.

To address the material weakness described above, management has completed, or is in the process of:

Implementing an enterprise resource planning (“ERP”) system, which is expected to roll out in phases over the next several years.

Phase I should be completed by the end of the next fiscal year;

Establishing a technology committee of the Board of Directors to oversee the role of technology in executing the Company’s business strategy and risks associated with technology strategies, major technology investments, operational performance and technology trends;

Migrating substantially all of our operations to a common accounting system and utilizing a common chart of accounts and improved accounting close and revise procedures.

While some of these measures have been completed as of the date of this report, management has not completed and tested all of the planned corrective processes, enhancements, procedures and related evaluation necessary to determine whether the material weakness has/have been fully remediated.

Moreover, the corrective actions and controls need to be in operation for a sufficient period of time for management to conclude that the control environment is operating effectively and has been adequately tested by management.

Accordingly, the material weakness has/have not been fully remediated as of the date of this report.

As the Company continues its evaluation and remediation efforts, management may modify the actions described above or identify and take additional measures to address the material weakness.

Management will continue to assess the effectiveness of remediation efforts in connection with its ongoing evaluation of internal control over financial reporting.

Changes in Internal Control over Financial Reporting

Other than the remediation efforts described above, which were ongoing during the last fiscal quarter ended January 31, 2024, there were no changes in the Company’s internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(f) and 15d-15(f) of the Exchange Act during the quarter ended January 31, 2024 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

We are currently undertaking a significant multi-year ERP implementation to upgrade our information technology platforms and

business processes.

The implementation began in December of FY25 and is occurring in phases over several years.

We expect to complete the first phase by the end of FY26.

As a result of this multi-year implementation, we expect certain changes to our processes and procedures, which, in turn, will result in changes to our internal control over financial reporting.

While we expect this implementation to strengthen our internal control over financial reporting by automating certain manual processes and standardizing business processes and reporting across our organization, we will continue to evaluate and monitor our internal control over financial reporting as processes and procedures in the affected areas evolve.

Other than the remediation efforts and ERP implementation described above, there were no changes in the Company’s internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(f) and 15d-15(f) of the Exchange Act during the quarter ended January 31, 2025 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

OTHER INFORMATION

From time to time, members of the Company’s Board and officers of the Company may enter into Rule 10b5-1 trading plans, which allow for the purchase or sale of common stock under pre-established terms at times when directors and officers might otherwise be prevented from trading under insider trading laws or because of self-imposed blackout periods.

Such trading plans are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act and comply with the Company’s insider trading policy.

During the three months ended January 31, 2025, none of the Company’s directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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The information required by Part III:

Item 10, Directors, Executive Officers and Corporate Governance;

Item 10, Directors, Executive Officers and Corporate Governance (except for the information required by Item 408(b) of Regulation S-K, which is set forth below);

Item 11, Executive Compensation;

2 unchanged sentences

Information relating to the executive officers of the Registrant appears under Item 1 of this report.

Code of Ethics for CEO and Senior Financial Officers

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer and controller.

This code of ethics is posted at our internet website, www.lakeland.com, under Investor Relations.

Any amendments to, or waivers of, this code of ethics will be disclosed on our website promptly following the date of such amendment or waiver.

Insider Trading Policy

We are committed to promoting high standards of ethical business conduct and compliance with applicable laws, rules and regulations.

As part of this commitment, we have adopted our Global Policy on Insider Trading governing the purchase, sale, and/or other dispositions of our securities by our directors, officers, and employees, which we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, as well as the applicable rules and regulations of The Nasdaq Stock Market, LLC.

A copy of our Global Policy on Insider Trading is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

EXECUTIVE COMPENSATION

5 unchanged sentences

Information relating to the executive officers of the Registrant appears under Item 1 of this report.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information regarding security ownership of certain beneficial owners and management that is required to be included pursuant to this Item 12 is included in and incorporated by reference to Lakeland’s definitive proxy statement in connection with its Annual Meeting of Stockholders scheduled to be held in June 2025.

29 unchanged sentences

Agreement for the Sale and Purchase of the Issued Shares of Eagle Technical Products Limited, by and between Lakeland Global Safety, Ltd as Buyer and Longworth Limited as Seller, dated as of December 2, 2022 (incorporated by reference to Exhibit 2.1 of Lakeland Industries, Inc.’s Form 10-K filed April 18, 2023).

Share Sale and Purchase Agreement, by and between Pacific Helmets NZ Limited and Lakeland NZ Limited, dated as of November 30, 2023 (filed herewith).

Share Sale and Purchase Agreement, by and between Pacific Helmets NZ Limited and Lakeland NZ Limited, dated as of November 30, 2023 (incorporated by reference to Exhibit 2.2 of Lakeland Industries, Inc.’s Form 10-K filed April 11, 2024).

Share Purchase Agreement, by and between Minerva Manufacture de chaussures S.A.

and Lakeland Global Safety, Ltd., dated as of February 5, 2024 (filed herewith).

and Lakeland Global Safety, Ltd., dated as of February 5, 2024 (incorporated by reference to Exhibit 2.3 of Lakeland Industries, Inc.’s Form 10-K filed April 11, 2024).

Share Sale and Purchase Agreement, by and between Kantaras Investments Pte.

Ltd., Lakeland Global Safety, Ltd., dated April 2, 2024 (incorporated by reference to Exhibit 2.2 of Lakeland Industries, Inc.’s Form 10-Q filed on June 6, 2024).

Stock Purchase Agreement, by and between William A.

Van Lent and Lakeland Industries, Inc., dated as of December 16, 2024 (filed herewith).

Restated Certificate of Incorporation of Lakeland Industries, Inc., as amended (incorporated by reference to Exhibit 4.1 of Lakeland Industries, Inc.’s Registration Statement on Form S-8 filed on September 3, 2021) .

1 unchanged sentence

Description of Securities of the Registrant (incorporated by reference to Exhibit 4.1 of Lakeland Industries, Inc.’s Form 10-K filed April 18, 2023) .

Employment Agreement dated February 11, 2021, between Allen E.

Dillard and the Company (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.

Form 8-K filed February 16, 2021) .*

Employment Agreement dated January 27, 2020, between Charles D.

Roberson and the Company (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.

Form 8-K filed January 29, 2020) .*

Form of Stock Option Certificate and Agreement (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.

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(incorporated by reference to Exhibit 10.4 of Lakeland Industries, Inc.’s Form 8-K filed June 30, 2020) .

Employment Agreement, dated December 30, 2020, between Lakeland Industries, Inc.

and Steven L.

Harvey (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 8-K filed January 5, 2021).*

Amendment No.

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Lakeland Industries, Inc.

2017 Equity Incentive Plan, inclusive of all amendments through June 16, 2021 (incorporated by reference to Exhibit 4.3 of Lakeland Industries, Inc.’s Registration Statement on Form S-8 filed on September 3, 2021).*

2017 Equity Incentive Plan, inclusive of all amendments through June 13, 2024 (incorporated by reference to Exhibit 10.2 of Lakeland Industries, Inc.’s Form 8-K filed on June 17, 2024).*

Lakeland Industries, Inc.

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Form 10-Q for fiscal quarter ended July 31, 2021).*

Amendment to Employment Letter Agreement of Charles D.

Roberson (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 8-K filed January 6, 2022).*

Amendment to Agreement for Purchase of Debts, dated effectively as of March 3, 2022, between HSBC Invoice Finance (UK) Limited and Lakeland Industries Europe Limited (incorporated by reference to Exhibit 10.2 of Lakeland Industries, Inc.’s Form 10-Q filed June 7, 2023).

Investment Agreement, dated as of October 18, 2021, by and among Lakeland Industries, Inc., Inova Design Solutions LTD and the other parties thereto (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 8-K filed on October 20, 2021) .

Lease Agreement, by and between Morena de la Garza Gonzalez and Alejandro Mario Gonzalez Quezada and Lakeland Industries, Inc.(incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 8-K filed August 17, 2022)

Lease Agreement, by and between Morena de la Garza Gonzalez and Alejandro Mario Gonzalez Quezada and Lakeland Industries, Inc.

(incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 8-K filed August 17, 2022) .

Continuing Guaranty, dated as of July 6, 2022, by Lakeland Industries, Inc.

2 unchanged sentences

Form of Director Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.4 of Lakeland Industries, Inc.’s Form 10-Q filed September 8, 2022).

Employment Agreement, dated January 30, 2023, by and between Lakeland Industries, Inc.

Shannon (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 8-K filed February 2, 2023) *

Employment Agreement, dated September 1, 2022, by and between Lakeland Industries, Inc.

and Hui An (incorporated by reference to Exhibit 10.30 of Lakeland Industries, Inc.’s Form 10-K filed April 18, 2023)*

Debt Purchase Facility Agreement, dated as of April 6, 2021, between HSBC Invoice Finance (UK) Limited and Lakeland Industries Europe Limited (incorporated by reference to Exhibit 10.2 of Lakeland Industries, Inc.’s Form 10-Q filed June 7, 2023).

General Release and Severance Agreement, by and between Lakeland Industries, Inc.

Dillard (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 10-Q filed June 7, 2023) *

Transition to Retirement Agreement and General Release, dated May 11, 2023, by and between Lakeland Industries, Inc.

and Steven L.

Harvey (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 10-Q filed September 6, 2023) *

General Release and Separation Agreement, dated October 19, 2023, by and between Lakeland Industries, Inc.

and Charles D.

Roberson (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 10-Q filed December 7, 2023) *

Amendment No.

1 unchanged sentence

and Bank of America, N.A.

(filed herewith)

(incorporated by reference to Exhibit 10.36 of Lakeland Industries, Inc.’s Form 10-K filed April 11, 2024).

Amendment No.

1 unchanged sentence

and Bank of America, N.A.

(incorporated by reference to Exhibit 10.37 of Lakeland Industries, Inc.’s Form 10-K filed April 11, 2024).

Lakeland Industries, Inc.

Employee Stock Purchase Plan, as approved by shareholders of the Company on June 13, 2024 (incorporated by reference to Exhibit 10.2 of Lakeland Industries, Inc.’s Form 8-K filed on June 17, 2024).

Amendment No.

4 to Loan Agreement, dated as of March 28, 2024, by and between Lakeland Industries, Inc.

and Bank of America, N.A.

(incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 10-Q filed on June 6, 2024).

Lakeland Industries, Inc.

Amended and Restated Severance and Change in Control Plan, dated as of October 31, 2024 (incorporated by reference to Exhibit 10.1 of Lakeland Industries, Inc.’s Form 10-Q filed on December 9, 2024).

Letter Agreement, by and between Lakeland Industries, Inc.

and Helena An, dated October 31, 2024 (incorporated by reference to Exhibit 10.2 of Lakeland Industries, Inc.’s Form 10-Q filed on December 9, 2024).

Amendment No.

5 to Loan Agreement, dated as of December 12, 2024, by and between Lakeland Industries, Inc.

and Bank of America, N.A.

(filed herewith).

Lakeland Industries, Inc.

Code of Ethics, as amended on September 29, 2017 (incorporated by reference to Exhibit 14.1 of Lakeland Industries, Inc.’s Form 10-K filed April 16, 2019).

Code of Ethics for CEO and Senior Financial Officers (filed herewith).

Letter furnished by Deloitte & Touche LLP, dated October 18, 2024 (incorporated by reference to Exhibit 16.1 of Lakeland Industries, Inc.’s Form 8-K filed October 18, 2024).

Global Policy on Insider Trading (filed herewith).

Subsidiaries of Lakeland Industries, Inc.

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(Moscow, Russia)

Art Prom, LLC (Kazakhstan, Russia)

Art Prom, LLC (Kazakhstan)

SpecProtect LLC (St.

Petersburg, Russia)

Lakeland (Vietnam) Industries Co., Ltd.

Lakeland Industries Co., Ltd.

(Nam Dinh, Vietnam)

2 unchanged sentences

Eagle Technical Products Limited (Manchester, United Kingdom)

(Delaware, United States)

Lakeland MX Holdings, Inc.

(f/k/a SALH1, Inc.) (Delaware, United States)

Lakeland MX Operations, Inc.

(f/k/a SALH2, Inc.) (Delaware, United States)

Lakeland Safety MX Monterrey, S.A.

4 unchanged sentences

Jolly Scarpe Romania S.R.L.

LHD Group Deutschland GmbH (Germany)

LHD Group Australia Pty Ltd (Australia)

LHD Group Hong Kong Limited (Hong Kong)

Veridian Fire Protective Gear, LLC (f/k/a Veridian Limited) (Delaware, United States)

Lakeland Global Safety Ltd (East Yorkshire, United Kingdom)

Consent of Deloitte & Touche LLP, independent registered public accounting firm (filed herewith).

Consent of RSM US LLP, independent registered public accounting firm (filed herewith).

Certification of the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

Compensation Recoupment Policy (filed herewith)

Compensation Recoupment Policy (incorporated by reference to Exhibit 97.1 of Lakeland Industries, Inc.’s Form 10-K filed on April 11, 2024).

Interactive Data Files for the Registrant’s Form 10-K for the period ended January 31, 2025, formatted in Inline XBRL.

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FORM 10-K SUMMARY

_________________SIGNATURES_________________

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

2 unchanged sentences

/s / James M.

Acting President and Chief Executive Officer and Executive Chairman

President and Chief Executive Officer and Executive Chairman

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Acting President and Chief Executive Officer and Executive Chairman

President and Chief Executive Officer and Executive Chairman

April 16, 2025

16 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures