STOCKHOLDERS' EQUITY AND STOCK OPTIONS

12 Months Ended

Jan. 31, 2015

Share-Based Arrangements With Employees and Nonemployees [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

7. STOCKHOLDERS’ EQUITY AND STOCK OPTIONS

The Company has three main share-based payment plans: The Nonemployee Directors’ Option Plan (the “Directors’ Plan”) and two Restricted Stock Plans (the “2009 Equity Plan” and the “2012 Equity Plan”). Both the 2009 and 2012 Equity Plans have an identical structure. The below table summarizes the main provisions of each of these plans:

	Nature and terms
Nonemployee Director Stock Option Plan	The plan provides for an automatic one-time grant of options to purchase 5,000 shares of common stock to each nonemployee director newly elected or appointed. Options are granted at not less than fair market value, become exercisable commencing six months from the date of grant and expire six years from the date of grant. In addition, all nonemployee directors re-elected to the Company’s Board of Directors at any annual meeting of the stockholders will automatically be granted additional options to purchase 1,000 shares of common stock on that date. Such plan expired at December 31, 2012 as to any new awards. Existing options will expire based on individual award dates.
Restricted Stock Plan - employees	Long-term incentive compensation three-year plan. Employees are granted potential share awards at the beginning of the three-year cycle at baseline, maximum or zero amounts.  The level of award and final vesting is based on the Board of Directors’ opinion as to the performance of the Company and management in the entire three-year cycle.  All vesting is three-year “cliff” vesting - there is no partial vesting. The valuation is based on the stock price at the grant date and amortized to expense over the three-year period, which approximates the performance period.
Restricted Stock Plan - directors	Long-term incentive compensation-three-year plan. Directors are granted potential share awards at the beginning of the three-year cycle at baseline, maximum or zero amounts. The level of award and final vesting is based on the Board of Directors’ opinion as to the performance of the Company and management in the entire three-year cycle. All vesting is three-year “cliff” vesting - there is no partial vesting. The valuation is based on the stock price at the grant date and amortized to expense over the three-year period, which approximates the performance period.
Matching award program	All participating employees are eligible to receive one share of restricted stock awarded for each two shares of Lakeland stock purchased on the open market. Such restricted shares are subject to three-year time vesting. The valuation is based on the stock price at the grant date and amortized to expense over the three-year period, which approximates the performance period.
Bonus in stock program - employees	All participating employees are eligible to elect to receive any cash bonus in shares of restricted stock.  Such restricted shares are subject to two-year time vesting. The valuation is based on the stock price at the grant date and amortized to expense over the two-year period. Since the employee is giving up cash for unvested shares, the amount of shares awarded is 133% of the cash amount based on the grant date stock price. The Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of the Company all elected to take 30% of their cash compensation in restricted stock pursuant to this program, commencing in October 2012 and ended in June 2013.
Director fee in stock program	All directors are eligible to elect to receive any director fees in shares of restricted stock.  Such restricted shares are subject to two-year time vesting. The valuation is based on the stock price at the grant date and amortized to expense over the two-year period.  Since the director is giving up cash for unvested shares, the amount of shares awarded is 133% of the cash amount based on the grant date stock price, which approximates the performance period.

The following table represents stock options granted, exercised and forfeited during the fiscal year ended January 31, 2015.

			Weighted Average		Weighted Average		Aggregate
	Number		Exercise Price per		Remaining		Intrinsic
Stock Options	of Shares		Share		Contractual Term		Value
Outstanding at January 31, 2014		24,000	$	7.47		2.95 years		—
Granted during the year ended January 31, 2015		—		—		—		—
Exercised during the year ended January 31, 2015		(5,000)	$	6.44		—		—
Forfeited during the year ended January 31, 2015		(2,000)	$	13.10		—		—
Outstanding at January 31, 2015		17,000	$	7.11		1.83 years	$	54,580
Exercisable at January 31, 2015		17,000	$	7.11		1.83 years	$	54,580
Reserved for future issuance		0
Directors’ Plan (expired on December 31, 2012)

All stock-based option awards were fully vested at January 31, 2015 and 2014. There were no new grants during the year ended January 31, 2015, and this plan expired by its terms on December 31, 2012.

The 2009 Equity Plan and the 2012 Equity Plan

On June 17, 2009, the stockholders of the Company approved a restricted stock plan (the “2009 Equity Plan”). A total of 253,000 shares of restricted stock were authorized under this plan. On June 20, 2012, the stockholders of the Company authorized 310,000 shares under a new restricted stock plan (the “2012 Equity Plan”). Under these restricted stock plans, eligible employees and directors are awarded performance-based restricted shares of the Company common stock. The amount recorded as expense for the performance-based grants of restricted stock are based upon an estimate made at the end of each reporting period as to the most probable outcome of this plan at the end of the three-year performance period (e.g., baseline, maximum or zero). In addition to the grants with vesting based solely on performance, certain awards pursuant to the plan have a time-based vesting requirement, under which awards vest from two to three years after grant issuance, subject to continuous employment and certain other conditions. Restricted stock has voting rights, and the underlying shares are not considered to be issued and outstanding until vested.

Under the 2009 Equity Incentive Plan, all grants have been vested. There are no remaining unvested or ungranted shares available under the 2006 Equity Incentive Plan or the 2009 Restricted Stock Plan as of January 31, 2015.

Under the 2012 Equity Incentive Plan, the Company has issued 32,133 fully vested shares as of January 31, 2015. The Company has granted 264,406 of restricted stock awards as of January 31, 2015, assuming all maximum awards are achieved. All of these restricted stock awards are nonvested at January 31, 2015 (208,406 shares at “baseline”), and have a weighted average grant date fair value of $6.27 per share. The Company recognizes expense related to performance-based awards over the requisite service period using the straight-line attribution method based on the outcome that is probable.

As of January 31, 2015, unrecognized stock-based compensation expense related to restricted stock awards totaled $0 pursuant to the 2009 Equity Incentive Plan and $328,053 pursuant to the 2012 Equity Incentive Plan, before income taxes, based on the maximum performance award level, less what has been charged to expense on a cumulative basis through October 31, 2012, which was set to zero. The cost of these nonvested awards is expected to be recognized over a weighted-average period of three years. The performance based awards are not considered stock equivalents for earnings per share (“EPS”) calculation purposes.

Stock-Based Compensation

The Company recognized total stock-based compensation costs of $1,202,986 and $197,744 for the years ended January 31, 2015 and 2014, respectively, of which $20,707 and $17,192 result from the 2009 Equity Plan and $1,182,279 and $180,552 result from the 2012 Equity Plan for the years ended January 31, 2015 and 2014, respectively, and $0 and $0, respectively, from the Directors’ Plan. These amounts are reflected in selling, general and administrative expenses. The total income tax benefit recognized for stock-based compensation arrangements was $433,075 and $71,188 for the years ended January 31, 2015 and 2014, respectively.

 

	Shares		Outstanding		Shares				Vested or		Shares
	Authorized		Unvested		Remaining				Forfeited		Remaining
	Under 2012		Grants at		Available		Reallocation		Shares at		Available
Restricted Stock Plan	Plan as		Maximum at		for Future		by Board of		End of		for Future
2012 Equity Plan	Revised		End of FY15		Issuance		Directors		FY15		Issuance
Restricted stock grants - employees		173,000		147,500		25,500		(20,000)		(3,000)		8,500
Restricted stock grants - directors		50,000		49,500		500		—		—		500
Matching award program		9,000		17,600		(8,600)		10,000		—		1,400
Bonus in stock - employees		40,000		36,172		3,828		20,000		21,517		2,311
Retainer in stock - directors		38,000		13,634		24,366		(10,000)		6,601		7,765
Total restricted stock plan		310,000		264,406		45,594		—		25,118		20,476

	Outstanding								Outstanding
	Unvested Grants								Unvested Grants
	at Maximum at		Granted		Becoming		Forfeited		at Maximum at
	Beginning of		during		Vested during		during		End of
Total Restricted Shares	FY15		FY15		FY15		FY15		FY15
Restricted stock grants - employees		150,500		—		—		3,000		147,500
Restricted stock grants - directors		49,500		—		—		—		49,500
Matching award program		6,000		14,600		3,000		—		17,600
Bonus in stock - employees		55,189		2,500		21,517		—		36,172
Retainer in stock - directors		15,217		6,134		7,717		—		13,634
Total restricted stock plan		276,406		23,234		32,234		3,000		264,406

	Outstanding								Outstanding
	Unvested Grants								Unvested Grants
	at Maximum at		Granted		Becoming		Forfeited		at Maximum at
	Beginning of		during		Vested during		during		End of
Shares under 2012 Equity Plan	FY15		FY15		FY15		FY15		FY15
Restricted stock grants – employees		150,500		—		—		3,000		147,500
Restricted stock grants - directors		49,500		—		—		—		49,500
Matching award program		3,000		14,600		—		—		17,600
Bonus in stock - employees		55,189		2,500		21,517		—		36,172
Retainer in stock - directors		14,101		6,134		6,601		—		13,634
Total restricted stock plan		272,290		23,234		28,118		3,000		264,406

	Outstanding								Outstanding
	Unvested Grants								Unvested Grants
	at Maximum at		Granted		Becoming		Forfeited		at Maximum at
	Beginning of		during		Vested during		during		End of
Shares under 2009 Equity Plan	FY15		FY15		FY15		FY15		FY15
Restricted stock grants - employees		—		—		—		—		—
Restricted stock grants - directors		—		—		—		—		—
Matching award program		3,000		—		3,000		—		—
Bonus in stock - employees		—		—		—		—		—
Retainer in stock - directors		1,116		—		1,116		—		—
Total restricted stock plan		4,116		—		4,116		—		—

	Outstanding								Outstanding
	Unvested Grants								Unvested Grants
	at Maximum at		Granted		Becoming		Forfeited		at Maximum at
	Beginning of		during		Vested during		during		End of
Overall weighted average per share - all plans	FY15		FY15		FY15		FY15		FY15
Restricted stock grants – employees	$	6.44	$	—	$	—	$	6.44	$	6.44
Restricted stock grants - directors		6.44		—		—		—		6.44
Matching award program		6.48		8.82		7.99		—		8.16
Bonus in stock - employees		4.63		8.58		5.41		—		4.44
Retainer in stock - directors		5.67		8.24		6.65		—		6.27
Total restricted stock plan	$	6.04	$	8.64	$	5.95	$	6.44	$	6.27

	Outstanding								Outstanding
	Unvested								Unvested
	Grants								Grants
	at								at
	Maximum at		Granted		Becoming		Forfeited		Maximum at
	Beginning of		during		Vested during		during		End of
Shares under 2009 Equity Plan	FY15		FY15		FY15		FY15		FY15
Restricted stock grants - employees	$	—	$	—	$	—	$	—	$	—
Restricted stock grants - directors		—		—		—		—		—
Matching award program		7.99		—		7.99		—		—
Bonus in stock - employees		—		—		—		—		—
Retainer in stock - directors		10.45		—		10.45		—		—
Total restricted stock plan	$	8.66	$	—	$	8.66	$	—	$	—

Equity Financing

On October 29, 2014, the Company completed a private placement, pursuant to a Securities Purchase Agreement dated as of October 24, 2014, for the issuance and sale of 1,110,000 shares of its common stock, at a purchase price of $10.00 per share, to a number of institutional and other accredited investors, for gross proceeds of $11,100,000. Proceeds from the private placement, following the payment of offering-related expenses, were used by the Company to fully repay its 12% subordinated term loan with the Junior Lender in the approximate amount of $3.6 million.

The balance of the proceeds were and are continuing to be used for working capital and general corporate purposes, including supporting the increased demand for the Company’s safety products due to the EBOLA crisis. Pending such usage, the Company has temporarily paid down a portion of its Senior Debt with AloStar Bank of Commerce.

In connection with the private placement, the Company entered into a Registration Rights Agreement with the investors on October 24, 2014, pursuant to which it is required to file a registration statement with the Securities and Exchange Commission to register the resale of the shares of common stock sold to the investors within 30 calendar days of the date of such agreement. Such registration statement was filed on November 21, 2014.

At the closing of the private placement, the Company paid Craig-Hallum Capital Partners LLC, the exclusive placement agent for the private placement, a cash fee of $777,000 (equal to 7% of the gross proceeds of the offering), and issued a five-year warrant that is immediately exercisable to purchase up to 55,500 shares of the Company’s common stock at an exercise price of $11.00 per share. At the closing there was approximately $132,000 in professional fees incurred. Based on the October 31, 2014 market value of $14.10, the intrinsic value was $3.10 per share.