GOODWILL, INTANGIBLE AND OTHER ASSETS, NET AND GOODWILL IMPAIRMENT

Intangible assets consist of the following at January 31, 2013:

	2013		2012
Trademarks and tradenames, resulting from Qualytextil acquisition, per appraisal	$	312,238	$	4,282,100

Appraised value of customer contracts acquired in Qualytextil acquisition, amortized over estimated remaining life of 2 months from January 31, 2013, net of accumulated amortization of $349,095 at January 31, 2013, and $224,667 at January 31, 2012		31,779		148,228

Bank fees net of accumulated amortization of $92,104 at 2012 and $142,639 at 2011		133,183		97,007

	$	477,200	$	4,527,335

Amortization expense included in general and administrative expense was $235,828 and $212,260 for FY13 and FY12, respectively.

Amortization expense for the next five years is as follows: Bank fees: $133,183 for 2014, $0 for 2015 through 2018.

Total amortization for intangibles and other assets is scheduled for approximately USD$19,000 for FY13 and USD$458,200 for FY14, subject to exchange rate fluctuations.

However, there will be substantial new transaction costs incurred upon the closing of the potential transaction (see Note 6 in the Financial Statements) which will result in a substantial amortization for FY14.

The changes in the carrying amount of trademarks and trade names during the fiscal years 2012 and 2013 are summarized in the following table:

	Balance Beginning of Year		Changes Resulting from Foreign Exchange Differences		Changes from Impairment Charges		Balance End of Year

Year ended January 31, 2012	$	4,450,221	$	(168,121)	$	0	$	4,282,100
Year ended January 31, 2013	$	4,282,100	$	(615,614)	$	(3,354,248)	$	312,238

Goodwill

On August 1, 2005, the Company purchased Mifflin Valley, Inc., a Pennsylvania manufacturer. This acquisition resulted in the recording of $0.9 million in goodwill as of January 31, 2006. Management has determined this did not meet “more likely than not” threshold for impairment at January 31, 2012. This goodwill is included in the US segment for reporting purposes.

In May 2008, the Company acquired Qualytextil, a Brazilian manufacturer, as discussed in Note 4. In connection with the acquisition, the Company recorded $5.7 million of goodwill. In view of the recent operating losses incurred by Lakeland Brazil,

Management determined that the carrying amount of the goodwill related to our Brazil subsidiary (“Lakeland Brasil”) exceeded its fair value, which was estimated based on the present value of expected future cash inflows. Accordingly, the Company has recorded an impairment charge at year-end against the Goodwill and Intangible assets relating to its Brazil subsidiary of $9.8 million in fiscal year 2013 made up of goodwill of $4.0 million, intangibles of $3.4 million and reclassification from other comprehensive income of $1.8 million.

The changes in the carrying value of goodwill during the fiscal years 2013 and 2012 are summarized in the following table:

	USA		Brazil		Total
Balance as of January 31, 2011	$	871,296	$	5,426,455	$	6,297,751
During fiscal year 2012:
Effect of foreign currency translation		—		(164,797)		(164,797)
Balance as of January 31, 2012		871,296		5,261,658		6,132,954
During fiscal year 2013:
Effect of foreign currency translation		—		(526,073)		(526,073)
Rounding		1		—		1
Goodwill and other intangibles impairment charge		—		(4,735,585)		(4,735,585)
Balance as of January 31, 2013	$	871,297	$	—	$	871,297

For Brazilian tax purposes, the Company is deducting over a five-year period which commenced with the merger of its holding company into the operating company in Brazil, which took place in November 2008.