Labor and other contingencies in Brazil Lakeland and Lake Brasil Industri E Comercio de Roupas E Equipamentos de Protecao Individual LTDA (Lakeland Brazil), the Companys former subsidiary, are currently named in four labor proceedings in Brazilian courts. The first case was initially filed in 2010 claiming US $100,000 owed to plaintiff. This case is on its final appeal to the Brazilian Supreme Court, having already been ruled upon in favor of Lakeland three times, most recently by the Labor Court Supreme Court. The claimant having lost four times previously, management firmly believes that Lakeland will continue to prevail in this case. A second case filed against Lakeland by a former principal in the Brazilian Company purchased by Lakeland (Qualytextil), was filed in Labor court in 2014 claiming Lakeland owed US $300,000. The Labor Court ruled in the fiscal year ended January 31, 2018 that the claimants case was outside of the scope of the Labor Court and the case was dismissed. The claimant is appealing within the Labor Court system. A third case filed by a former Lakeland Brazil manager in 2014 was ruled upon in civil court and awarded the claimant US $100,000. Both the claimant and Lakeland have appealed this decision. In the last case a former employee of our former Brazilian subsidiary filed a claim seeking approximately US $700,000 that he alleges is due him against an unpaid promissory note. Management firmly believes these claims to be without any merit and does not anticipate a negative outcome resulting in significant expense to us. The Company recorded a liability totaling $150,000 in the fiscal year ended January 31, 2018 to reflect this contingency. The accrual on the balance sheet at October 31, 2018 is $0.1 million. Two new claims against our former subsidiary have recently arisen relating to the business of Lakeland Brazil prior to the date of the Shares Transfer Agreement. One relates to a claim of storage fees, including penalties, totaling approximately US $155,000. The other is a VAT tax claim of approximately US $120,000. The risk of exposure to the Company is expected to diminish as the former subsidiary continues to operate and settle its own obligations, as the labor cases filed by former employees are concluded, and as pre-Shares Transfer Agreement liabilities are satisfied. The Company understands that under the laws of Brazil, a parent company may be liable for the liabilities of a former Brazilian subsidiary in the event of fraud, misconduct or comingling of assets, Although the Company would have assured the right of full defense in case of a potential litigation, there can be no assurance as to the findings of the courts of Brazil. At this point, management does not believe that an estimate of any additional liability is required at this time. 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 Companys financial position, results of operations or cash flows; however, there can be no assurance as to the ultimate outcome of these matters. As of October 31, 2018, to the best of the Companys knowledge, there were no outstanding claims or litigation, except for the labor contingencies in Brazil described above.