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| LAKE > SEC Filings for LAKE > Form 8-K/A on 25-Jul-2008 | All Recent SEC Filings |
25-Jul-2008
Completion of Acquisition or Disposition of Assets, Financial Statement
On May 13, 2008, Lakeland completed the acquisition of Qualytextil and the other
transactions contemplated by the Stock Purchase Agreement. In connection with
the closing of such acquisition, a total of R$6.3 million (USD$3.9 million) was
used to repay outstanding debts of Qualytextil, R$7.8 million (USD$4.8 million)
was retained in the various escrow funds as described, and the balance of R$7.7
million (USD$4.7 million) was paid to the Sellers at closing. In accordance with
the Stock Purchase Agreement, the funds from the Purchase Price, after the
repayment of the outstanding debts of Qualytextil have been funded, will then
have several "retained amounts" held in escrow for varying periods. For purposes
of the Stock Purchase Agreement, "retained amounts" mean the aggregate of: (i)
up to R$649,000 (USD $395,000) to satisfy indemnification obligations under the
Stock Purchase Agreement regarding certain contingencies of Qualytextil, which
funds will remain in escrow for five (5) years or upon expiration of the statute
of limitations applicable to such contingencies (whichever occurs first) and
will only be released by mutual agreement between the parties to the Stock
Purchase Agreement (the "Parties"); (ii) the amounts of R$355,369 (USD $216,030)
corresponding to 10% of the receivables and R$268,874 (USD $163,449),
corresponding to 10% of the stocks of Qualytextil both on December 31, 2007, to
satisfy indemnification regarding contingencies of Qualytextil, which funds will
remain in escrow for a period of (a) six (6) months with respect to the
receivables, and (b) one (1) year with respect to the stocks, and will only be
released by mutual agreement between the Parties; (iii) 10% of the Purchase
Price to satisfy indemnifications for unknown contingencies, representations and
warranties, including but not limited to any tax issues, which funds will remain
in escrow for the period of two (2) years from the Closing Date, and will only
be released by mutual agreement between the Parties; and (iv) 20% of the
Purchase Price, which funds shall remain in escrow until the 2008 EBITDA is
determined, in order to satisfy the payment of potential 2008 Adjusted Purchase
Price. The above USD equivalents were calculated based on the actual exchange
rate on the date of the funds transfer of BRL1.645/$1 USD.
A copy of the Company's press release announcing completion of the acquisition
was attached as Exhibit 99 to the Company's initial 8-K filed on May 15, 2008
and is incorporated by reference herein.
(a) Financial Statements of Business Acquired.
The following historical financial information of Qualytextil, S.A. is attached to this Current Report and is incorporated by reference in this Item 9.01:
Exhibit Number
Independent Auditors' Report 10.23
Balance Sheets as of April 30, -----
2008 and December 31, 2007
Statements of Profit and Loss -----
for the period and year ended
April 30, 2008 and December 31,
2007
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Statements of Changes in
Shareholders' Equity for the -----
period and year ended on April
30, 2008 and December 31, 2007
Statements of Changes in Sources -----
and Uses of Funds for the period
and year ended on April 30, 2008
and December 31, 2007
Statements of Cash Flows for the -----
period and year ended on April
30, 2008 and December 31, 2007
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The above historical financial information has been prepared in accordance with generally accepted accounting principles adopted in Brazil, based on the Corporation Law, and the accounting procedures issued by CVM - Comissão de Valores Mobiliários (Brazilian Exchange Commission) and IBRACON - Instituto dos Auditores Independentes do Brasil (the Brazilian Independent Auditors Institute).
On December 28, 2007, Brazil enacted the law 11,638/07 which changed several aspects of Law 6,404 (Publicity Traded Company) effective beginning in 2008, in order to adjust accounting practices adopted in Brazil to the International Financial Reporting Standards (IFRS).
None of the financial statements contained herein have been prepared in compliance with IFRS.
The following Balance Sheets as of December 31, 2007 and April 30, 2008 and Statements of Income for the year and the four months then ended are also presented below as converted to US dollars ("USD") and reconciled to accounting principles generally accepted in the United States of America ("U.S. GAAP"). The unaudited condensed Statement of Income for the three months ended April 30, 2008 for Qualytextil, S.A. was prepared from internal information.
(b) Pro Forma Financial Information.
The following unaudited proforma financial information is attached to this Current Report and is incorporated by reference in this Item 9.01:
Exhibit Number
Unaudited Condensed Combined Pro 10.24
Forma Financial Statements
Unaudited Condensed Combined Pro
Forma Statement of Income for 10.25
the year ended January 31, 2008
Unaudited Condensed Combined Pro
Forma Statement of Income for 10.26
the three months ended April 30,
2008
Unaudited Condensed Combined Pro
Forma Balance Sheet as of April 10.27
30, 2008
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(c) Reconciliations to US GAAP.
The following statements for Qualytextil S.A. Exhibit are attached to this Current Report and are Number incorporated by reference in this Item 9.01: Reconciliation of Brazilian GAAP in Brazilian Currency to US GAAP expressed in US dollars: Balance Sheet as of April 30, 2008 10.28 Statement of Profit and Loss for the year ended 10.29 December 31, 2007 Statement of Profit and Loss for the three 10.30 months ended April 30, 2008 |
(d) Exhibits
10.1 Stock Purchase Agreement dated May 2, 2008 among Lakeland do Brasil
Empreendimentos e Participacoes Ltda. and Lakeland Industries, Inc. †*
10.2 Escrow Agreement, dated May 9, 2008, between Elder Marcos Vieira da
Conceicao, as holder of the escrow account and Lakeland do Brasil
Empreendimentos e Participacoes Ltda, as the escrow account beneficiary, and
Banco UBS Pactual S.A., as escrow agent.*
10.3 Escrow Agreement, dated May 9, 2008, between Marcia Cristina Vieira da
Conceicao Antunes, as holder of the escrow account and Lakeland do Brasil
Empreendimentos e Participacoes Ltda, as the escrow account beneficiary, and
Banco UBS Pactual S.A., as escrow agent.*
10.4 Escrow Agreement, dated May 9, 2008, between Miguel Antonio Dos Guimaraes
Bastos, as holder of the escrow account and Lakeland do Brasil
Empreendimentos e Participacoes Ltda, as the escrow account beneficiary, and
Banco UBS Pactual S.A., as escrow agent.*
10.5 Management Agreement between Elder Marcos Vieira da Conceicao and
Qualytextil, S.A. ‡*
10.6 Management Agreement between Marcia Cristina Vieira da Conceicao Antunes and
Qualytextil, S.A. ‡*
10.7 Management Agreement between Elton de Carvalho Antunes and Qualytextil, S.A.
‡*
10.8 Management Agreement between Miguel Antonio dos Guimaraes Bastos and
Qualytextil, S.A. ‡*
10.9 Second Amended and Restated Note between Lakeland Industries, Inc. and
Wachovia, N.A.*
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10.10 Third Modification to Note and Loan Agreement and Reaffirmation of Guaranty.*
10.11 Unconditional Guaranty between Lakeland do Brasil Empreendimentos e
Participacoes Ltda., Lakeland Industries, Inc., and Wachovia Bank, N.A.*
10.12 Unconditional Guaranty between Qualytextil, S.A., Lakeland Industries, Inc.,
and Wachovia Bank, N.A.*
10.13 Quota Pledge Agreement among Lakeland Industries, Inc., Christopher J. Ryan,
Wachovia Bank, N.A., Qualytextil S.A. and Lakeland do Brasil Empreendimentos
e Participacoes Ltda. *
10.14 Share Pledge Agreement among Lakeland do Brasil Empreendimentos e
Participacoes Ltda., Lakeland Industries, Inc., Wachovia Bank, N.A. and
Qualytextil S.A.*
10.15 Equipment Pledge and Security Agreement among Wachovia Bank, N.A.,
Qualytextil S.A., Lakeland do Brasil Empreendimentos e Participacoes Ltda.,
and Lakeland Industries, Inc. *
10.16 Power of Attorney, Qualytextil, S.A. appointing Wachovia Bank, N.A. to the
powers granted by the Bank in the Equipment Pledge and Security Agreement.*
10.17 Power of Attorney, Qualytextil, S.A. appointing Wachovia Bank, N.A. to the
powers granted by the Bank in the Inventory Pledge and Security Agreement.*
10.18 Inventory Pledge and Security Agreement among Wachovia Bank, N.A.,
Qualytextil S.A., Lakeland do Brasil Empreendimentos e Participacoes Ltda.,
and Lakeland Industries, Inc.*
10.19 Accounts Receivable and Bank Account Pledge Agreement By and Between
Qualytextil, S.A., as Pledgor and Wachovia Bank National Association, as
Pledgee.*
10.20 Accounts Receivable Pledge Agreement By and Between Qualytextil, S.A., as
Pledgor and Wachovia Bank National Association, as Pledgee.*
10.21 Debt Subordination Agreement for Lakeland do Brasil Empreendimentos e
Participacoes Ltda.*
10.22 Debt Subordination Agreement for Qualytextil, S.A.*
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10.23 Independent Auditors' Report °
10.24 Unaudited Condensed Combined Pro Forma Financial Statements °
10.25 Unaudited Condensed Combined Pro Forma Statement of Income for the year ended January 31, 2008 °
10.26 Unaudited Condensed Combined Pro Forma Statement of Income for the three months ended April 30, 2008 °
10.27 Unaudited Condensed Combined Pro Forma Balance Sheet as of April 30, 2008 °
10.28 Balance Sheet as of April 30, 2008 °
10.29 Statement of Profit and Loss for the year ended December 31, 2007 °
10.30 Statement of Profit and Loss for the three months ended April 30, 3008 °
99.1 Press Release issued by Lakeland Industries, Inc. on May 14, 2008, titled
"Lakeland Industries Completes Acquisition of Brazilian Protective Apparel
Supplier Qualytextil, S.A."*
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† All schedules and similar attachments to the Stock Purchase Agreement have been omitted. Copies of such schedules and similar attachments will be furnished supplementally to the SEC upon request.
‡ Management compensatory plan or arrangement.
* Incorporated by reference to original 8-K filing dated May 15, 2008.
° Filed herein
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