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 legal counsel assess such contingent liabilities, which inherently involve 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 consolidated financial statements. If the assessment indicates that a potential 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.

In June 2025, the Company initiated legal action against the landlord seeking rescission of the lease due to unremediated structural defects on the newly constructed facility in Monterrey, Mexico that prevented the Company from effectively utilizing the facility for its intended purpose. In July 2026, the Company reached a settlement with the landlord that terminated the lease in its entirety and concluded the related litigation.

As a result of the settlement and lease termination, the Company released the remaining lease liability and recognized a gain of approximately $1.9 million during the three months ended July 31, 2026.

The Company is involved in various claims, actions, and legal proceedings arising in the ordinary course of business, including multiple lawsuits involving allegations that plaintiffs were exposed to Per- and polyfluoroalkyl substances (“PFAS”) during their careers as firefighters. Plaintiffs allege personal injuries from exposure to PFAS contained in aqueous film forming foam (“AFFF”) and firefighter turnout gear. The vast majority of these cases are pending in the AFFF multi-district litigation consolidated in the United States District Court of South Carolina, Charleston Division. The Company is also named alongside several defendants in a class action regarding firefighter turnout gear pending in the United States District Court of Connecticut, styled as Uniformed Professional Fire Fighters Association of Connecticut et al. v. 3M Company et al., Case No. 3:24-CV-01101. The case seeks certification of a fire fighter class, a nationwide purchaser class, and a Connecticut purchaser subclass. On August 18, 2026, the Judicial Panel on Multidistrict Litigation established a separate multidistrict litigation in the United States District Court for the District of Minnesota for non-AFFF firefighter turnout gear claims, and the above-referenced Connecticut action is now subject to a conditional transfer order that, absent other action by the Panel, is expected to result in its transfer to that proceeding for coordinated pretrial proceedings. The Company is also a defendant in Crady v. 3M Co., a personal injury action pending in Missouri state court in which Jason Crady and his wife allege that occupational exposure to PFAS-containing firefighter gear and equipment caused his thyroid cancer and related damages. Because the Crady action was remanded to state court, it is not eligible for transfer to the new multi-district litigation. The Company’s exposure in these matters to losses, if any, is not reasonably estimable at this time.

A putative class action was filed on February 23, 2026 (and subsequently amended on July 24, 2026) against Lakeland Industries, Inc. and certain current and former senior officers in the United States District Court for the Southern District of New York, purportedly on behalf of a class of the Company's investors who purchased or otherwise acquired our publicly traded securities between September 4, 2024 and December 9, 2025. Lead counsel was appointed on May 15, 2026. The Company's deadline to respond to the amended complaint is September 24, 2026. The complaint alleges that the defendants made materially false and misleading statements about the Company’s business and operations, including an alleged failure to account properly for intercompany transactions. Plaintiffs bring their claims under Sections 10(b) and 20(a) of the Exchange Act. The Company intends to vigorously defend against these actions, which the Company believes to be without merit. The potential impact of these actions, which seek unspecified damages, attorneys’ fees and expenses, is uncertain.

Lakeland Industries, Inc. is a nominal defendant in a derivative action filed on May 4, 2026 in the Southern District of New York by ES Trust against Lakeland’s officers and directors, captioned ES Trust vs. James Jenkins, et al. The case alleges violations of Section 14(a) of the Exchange Act and that the Company’s officers and directors breached their fiduciary duties in permitting the allegedly wrongful conduct to occur. The class action and derivative cases have been identified as related and assigned to the same judge, and the parties to the derivative case have agreed to stay its proceedings pending the outcome of a motion to dismiss in the putative class action. The derivative case is in its early stage, and a potential loss cannot yet be estimated.

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 July 31, 2026 and January 31, 2026, to the best of the Company’s knowledge, there were no significant outstanding claims or litigation.