14. COMMITMENTS AND CONTINGENCIES

Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been or is probable of being incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

We comply with American laws such as the Foreign Corrupt Practices Act (FCPA) and Sarbanes-Oxley, and also with anti-corruption legislation in the UK.

Employment Contracts

The Company has employment contracts expiring through fiscal year ending January 31, 2019, with four principal officers. Pursuant to such contracts, the Company is committed to aggregate annual base remuneration of $1,120,000, $544,750 and $268,750 for FY17, FY18 and FY19, respectively.

Leases

Total rental costs under all operating leases are summarized as follows:

	Gross rental
Year ended January 31,
2017	$	540,193
2016	$	503,089

Minimum annual rental commitments for the remaining term of the Company’s noncancelable operating leases relating to manufacturing facilities, office space and equipment rentals at January 31, 2017, including lease renewals subsequent to year end, are summarized as follows:

Year ending January 31,

2018	$	471,694
2019		338,020
2020		171,026
2021		107,286
2022		80,586
and thereafter		89,902
Total	$	1,258,514

Labor contingencies in Brazil

Lakeland Brazil, the Company’s former subsidiary, is currently named in numerous labor proceedings in Brazilian courts and, due to certain liability assumption provisions specified in the Shares Transfer Agreement, the Company recorded a liability totaling $238,000 in the fiscal year ended January 31, 2016 to reflect this contingency. The accrual on the balance sheet at January 31, 2017 is $0.1 million and the Company believes these claims will be settled for less than this amount. Should the former subsidiary stay in operations for a period of two years from the Closing Date, the Company believes the risk will be eliminated. See Note 13 for a further description of the Shares Transfer Agreement.

General litigation contingencies

The Company is involved in various litigation proceedings arising during the normal course of business which, in the opinion of the management of the Company, will not have a material effect on the Company’s financial position, results of operations or cash flows; however, there can be no assurance as to the ultimate outcome of these matters. As of January 31, 2017, to the best of the Company’s knowledge, there were no outstanding claims or litigation, except for the labor contingencies in Brazil described above.