STOCKHOLDERS' EQUITY

12 Months Ended

Jan. 31, 2020

Equity [Abstract]

STOCKHOLDERS' EQUITY

The 2017 Plan

On June 21, 2017, the stockholders of the Company approved the Lakeland Industries, Inc. 2017 Equity Incentive Plan (the “2017 Plan”) at the Annual Meeting of Stockholders. The executive officers and all other employees and directors of the Company, including its subsidiaries, are eligible to participate in the 2017 Plan. The 2017 Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”), except that with respect to all non-employee directors, the Committee shall be deemed to include the full Board. The 2017 Plan provides for the grant of equity-based compensation in the form of stock options, restricted stock, restricted stock units, performance shares, performance units, or stock appreciation rights (“SARS”).

The Committee has the authority to determine the type of award, as well as the amount, terms and conditions of each award, under the 2017 Plan, subject to the limitations and other provisions of the 2017 Plan. An aggregate of 360,000 shares of the Company’s common stock are authorized for issuance under the 2017 Plan, subject to adjustment as provided in the 2017 Plan for stock splits, dividends, distributions, recapitalizations and other similar transactions or events. If any shares subject to an award are forfeited, expire, lapse or otherwise terminate without issuance of such shares, such shares shall, to the extent of such forfeiture, expiration, lapse or termination, again be available for issuance under the 2017 Plan. The following tables summarize the unvested shares granted on June 7, 2018 and December 4, 2019 which have been made under the 2017 Plan.

Granted June 7, 2018

	Number of shares awarded total
	Minimum		Target		Maximum		Cap
Employees		17,834		26,753		35,670		42,805
Non-Employee Directors		7,168		10,752		14,336		17,204
Total		25,002		37,505		50,006		60,009

	Value at grant date (numbers below are rounded to the nearest 100)
	Minimum		Target		Maximum		Cap
Employees	$	248,800	$	373,200	$	497,600	$	597,120
Non-Employee Directors		100,000		150,000		200,000		240,000
Total	$	348,800	$	523,200	$	697,600	$	837,120

Granted December 4, 2019

	Number of shares awarded total
	Minimum		Target		Maximum
Employees		48,186		74,133		88,960
Non-Employee Directors		16,360		25,168		30,204
Total		64,546		99,301		119,164

	Value at grant date (numbers below are rounded to the nearest $100)
	Minimum		Target		Maximum
Employees	$	497,800	$	765,800	$	918,960
Non-Employee Directors		169,000		260,000		312,000
Total	$	666,800	$	1,025,800	$	1,230,960

The Company recognized total stock-based compensation costs, which are reflected in operating expenses:

	Year Ended January 31,
	2020			2019
2017 Plan:
Restricted Stock Program	$	(443,441	)	$	721,111
Stock Options		27,577			-----
Cash-based Bonus		38,677			-----
	$	(377,187	)	$	721,111
Stock appreciation rights	$	(25,559	)	$	22,646
Total stock-based compensation	$	(402,746	)	$	743,757
Total income tax benefit (expense) recognized for stock-based compensation arrangements	$	(85,577	)	$	267,752

Restricted Stock Units

Under the 2017 Plan, as described above, the Company awarded performance-based and service based restricted stock units to eligible employees and directors. The following table summarizes the activity under the 2017 Plan for the year ended January 31, 2020. This table reflects the amount of awards granted at the maximum number of shares that would be issued if the Company were to achieve the maximum performance level under the December 2019 grants.

	Performance-Based		Service-Based		Total		Weighted Average Grant Date Fair Value
Outstanding at January 31, 2019		-		-		-		-
Awarded		109,234		9,930		119,164	$	10.33
Vested		-		-		-		-
Forfeited		-		-		-		-
Outstanding at January 31, 2020		109,234		9,930		119,164	$	10.33

The actual number of shares of common stock of the Company, if any, to be earned by the award recipients is determined over a three year performance measurement period based on measures that include Earnings Before Interest Taxes Depreciation and Amoritzation (“EBITDA”) with respect to the June 7, 2018 grant and revenue growth, EBITDA margin, and cash flow for the December 4, 2019 grant. The performance targets have been set for each of the Minimum, Target, and Maximum levels.The actual performance amount achieved is determined by the Board and may be adjusted for items determined to be unusual in nature or infrequent in occurrence, at the discretion of the Board.

The compensation cost is based on the fair value at the grant date, is recognized over the requisite performance/service period using the straight-line method, and is periodically adjusted for the probable number of shares to be awarded. The Company is recognizing expense related to the December 2019 grants under the 2017 Plan at Target, and these expenses were approximately $153,000 for the year ended January 31, 2020 As of January 31, 2020, unrecognized stock-based compensation expense totaled $912,000 pursuant to the 2017 Plan based on outstanding awards under the Plan. This expense is expected to be recognized over approximately two years.

The following table reflects the amount of awards granted at the maximum number of shares that would be issued if the Company were to achieve the maximum performance level in relation to the September 2017 and June 2018 grants

Shares issued under 2017	Outstanding Unvested Grants at Maximum at Beginning of FY20		Granted during FY20		Becoming Vested during FY20		Forfeited during FY20		Outstanding Unvested Grants at Maximum at End of January 31, FY20
Restricted stock grants – employees		84,126		-----		-----		48,456		35,670
Restricted stock grants – non-employee directors		28,829		-----		-----		14,493		14,336
Retainer in stock – non-employee directors		25,044		7,292		7,568		----		24,768
Total restricted stock		137,999		7,292		7,568		62,949		74,774
Weighted average grant date fair value		13.77		10.44		14.72		13.82		11.53

During the year ended January 31, 2020, the Company revised its estimate of grants that will be earned for certain performance periods ending on or before January 31, 2021.  Based on actual performance achieved by the Company to date, grants issued on September 12, 2017 expired on January 31, 2020. Also, based on actual performance to date, it was deemed improbable that the Company would meet even the performance level required for the June 7, 2018 grants to vest.  As a result, stock-based compensation expense was adjusted to account for this change in estimate.  The total amount of previously recognized stock-based compensation attributable to those grants that has been reversed is approximately $835,000.

Stock Options

During the year ended January 31, 2020 a stock option was granted pursuant to the Company’s 2017 Equity Incentive Plan in the amount of 24,900 shares at an exercise price of $11.17 per share. Such shares will vest at 8,300 shares on each of August 12, 2020, August 12, 2021 and August 12, 2022.

The following table represents stock options granted, exercised and forfeited during the year ended January 31, 2020.

Stock Options	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 31, 2019		-----	$	-----		-----	$	-----
Granted		24,900	$	11.17		-----		-----
Outstanding at January 31, 2020		24,900	$	11.17		9.53		-----
Exercisable at January 31, 2020		-----	$	-----		-----	$	-----

The Company recognized approximately $26,000 of stock-based compensation expense during the year ended January 31, 2020 associated with the grant of the stock option. As of January 31, 2020 there is approximately $149,000 of unrecognized stock-based compensation expense.

The Company estimates the fair value of each stock option award on the grant date using the Black-Scholes option-pricing model. The assumptions used to calculate the fair value of the options granted during the year ended January 31, 2020 are as follows:

	FY20
Expected volatility		53	%
Expected life in years		10
Expected dividend yield		0.00	%
Risk-free interest rate		1.65	%

Other Compensation Plans/Programs

Pursuant to the Company’s restricted stock program, all directors are eligible to elect to receive any director fees in shares of restricted stock in lieu of cash. Such restricted shares are subject to a two-year vesting period. The valuation is based on the stock price at the grant date and is amortized to expense over the two-year period, which approximates the performance period. Since the director is giving up cash for unvested shares, and is subject to a vesting requirement, the amount of shares awarded is 133% of the cash amount based on the grant date stock price. As of January 31, 2020, unrecognized stock-based compensation expense related to these restricted stock awards totaled $30,087 for the 2017 Plan. The cost of these non-vested awards is expected to be recognized over a two-year weighted-average period. In addition, as of January 31, 2020, the Company issued 7,568 shares and granted awards for up to an aggregate of 24,768 shares under the 2017 Plan.

Stock Repurchase Program

On July 19, 2016, the Company’s board of directors approved a stock repurchase program under which the Company may repurchase up to $2,500,000 of its outstanding common stock. During the year ended January 31, 2020, the Company repurchased 47,153 shares of stock, for approximately $506,000, inclusive of commissions. The Company has repurchased 152,801 shares of stock under this program as of January 31, 2020 for $1,671,188, inclusive, of commissions.

Warrant

In October 2014, the Company 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. During FY20, such warrant expired.

Shelf Registration

On March 24, 2017, the Company filed a shelf registration statement on Form S-3 (File No. 333-216943) which was declared effective by the SEC on April 11, 2017 (the “Shelf Registration Statement”). The shelf registration statement permits the Company to sell, from time to time, up to an aggregate of $30.0 million of various securities, including shares of common stock, shares of preferred stock, debt securities, warrants to purchase common stock, preferred stock, debt securities, and/or units, rights to purchase common stock, preferred stock, debt securities, warrants and/or units, units of two or more of the foregoing, or any combination of such securities, not to exceed, should the value of our common stock held by non-affiliates be less than $75.0 million, one-third of the Company's public float in any 12-month period.