ex10-28.htm


    
      
        Exhibit 10.28

         

         

        
          	 
      	 	 	 	 
      	 	 	 	 	 	 	 	

                  FX
      rate =

                	 	 	
                   

                	 	 	 	 	 	 	 
	
                  QUALYTEXTIL
      SA - reconciliation of Brazilian GAAP to US GAAP

                	 	 	 	1.6872	 	 	 	 	 	 	 	 	 	 
	
                  Balance
      sheet as of April 30, 2008

                	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	

                  Brazilian
      GAAP

                	 	
                   

                	 	
                  Reclass-

                	 	 	
                  As

                	 	 	

                  Translated

                	 	 	
                   

                	 	 	
                  Adjustments

                	 	 	
                  US
      GAAP

                	 
	 
      	 	
                  per
      Audit

                	 	
                  Notes

                	 	
                  ifications

                	 	 	
                  reclassified

                	 	 	
                  to
      USD

                	 	 	
                  Notes

                	 	 	
                  in
      USD

                	 	 	
                  in
      USD

                	 
	 
      	 	

                  report
      in BRL

                	 	
                   

                	 	 	 	 	
                  in
      BRL

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  ASSETS

                	 	
                  2008

                	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Current
      assets

                	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Cash
      and cash equivalents

                	 	 	57,244	 	 
      	 	 	-	 	 	 	57,244	 	 	$	33,928	 	 	 	 	 	$	-	 	 	$	33,928	 
	
                  Clients

                	 	 	2,023,192	 	 
      	 	 	-	 	 	 	2,023,192	 	 	 	1,199,142	 	 	 	 	 	 	-	 	 	 	1,199,142	 
	
                  Inventories

                	 	 	3,653,348	 	 
      	 	 	-	 	 	 	3,653,348	 	 	 	2,165,332	 	 	
                  (a)

                	 	 	 	1,143,590	 	 	 	3,308,922	 
	
                  Taxes
      recoverable

                	 	 	202,570	 	 
      	 	 	-	 	 	 	202,570	 	 	 	120,063	 	 	 	 	 	 	-	 	 	 	120,063	 
	
                  Prepaid
      expenses

                	 	 	130,013	 	
                  (f)

                	 	 	(130,013	)	 	 	-	 	 	 	-	 	 	 	 	 	 	-	 	 	 	-	 
	
                  Other
      receivables

                	 	 	232,612	 	
                  (f)

                	 	 	(80,865	)	 	 	151,747	 	 	 	89,940	 	 	 	 	 	 	-	 	 	 	89,940	 
	 
      	 	 	6,298,979	 	 
      	 	 	(210,878	)	 	 	6,088,101	 	 	 	3,608,405	 	 	 	 	 	 	1,143,590	 	 	 	4,751,995	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Long
      term assets

                	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Taxes
      recoverable

                	 	 	796,325	 	 
      	 	 	-	 	 	 	796,325	 	 	 	471,980	 	 	 	 	 	 	-	 	 	 	471,980	 
	
                  Judicial
      deposits

                	 	 	197,925	 	 
      	 	 	-	 	 	 	197,925	 	 	 	117,310	 	 	 	 	 	 	-	 	 	 	117,310	 
	
                  Other
      receivables

                	 	 	27,401	 	 
      	 	 	-	 	 	 	27,401	 	 	 	16,240	 	 	 	 	 	 	-	 	 	 	16,240	 
	 
      	 	 	1,021,651	 	 
      	 	 	-	 	 	 	1,021,651	 	 	 	605,530	 	 	 	 	 	 	-	 	 	 	605,530	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Permanent
      assets - net

                	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Intangible
      assets - trademarks

                	 	 	-	 	
                  (f)

                	 	 	313,094	 	 	 	313,094	 	 	 	185,570	 	 	 	 	 	 	-	 	 	 	185,570	 
	
                  Fixed
      assets

                	 	 	2,189,117	 	
                  (f)

                	 	 	(86,335	)	 	 	2,102,782	 	 	 	1,246,315	 	 	 	 	 	 	-	 	 	 	1,246,315	 
	 
      	 	 	2,189,117	 	 
      	 	 	226,759	 	 	 	2,415,876	 	 	 	1,431,885	 	 	 	 	 	 	-	 	 	 	1,431,885	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Total
      Assets

                	 	 	9,509,747	 	 
      	 	 	15,881	 	 	 	9,525,628	 	 	$	5,645,820	 	 	 	 	 	$	1,143,590	 	 	$	6,789,410	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  LIABILITIES
      AND SHAREHOLDERS' EQUITY

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Current
      liabilities

                	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Suppliers

                	 	 	1,327,681	 	 
      	 	 	 	 	 	 	1,327,681	 	 	$	786,914	 	 	
                   (a-1)

                	 	 	$	1,172,885	 	 	$	1,959,799	 
	
                  Loans
      and financing

                	 	 	1,040,087	 	
                  (g)

                	 	 	(1,040,087	)	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	
                  Debentures
      bonds and loans

                	 	 	4,177,976	 	
                  (g)

                	 	 	1,040,087	 	 	 	5,218,063	 	 	 	3,092,735	 	 	 	 	 	 	 	 	 	 	 	3,092,735	 
	
                  Taxes
      and contribution

                	 	 	1,190,582	 	 
      	 	 	 	 	 	 	1,190,582	 	 	 	705,656	 	 	
                  (b)

                	 	 	 	42,090	 	 	 	747,746	 
	
                  Salaries
      and social charges

                	 	 	328,644	 	 
      	 	 	 	 	 	 	328,644	 	 	 	194,787	 	 	 	 	 	 	 	 	 	 	 	194,787	 
	
                  Other
      debts

                	 	 	304,929	 	 
      	 	 	 	 	 	 	304,929	 	 	 	180,730	 	 	
                  (c
      )

                	 	 	 	393,964	 	 	 	574,694	 
	 
      	 	 	8,369,899	 	 
      	 	 	-	 	 	 	8,369,899	 	 	 	4,960,822	 	 	 	 	 	 	 	1,608,939	 	 	 	6,569,761	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Long
      term liabilities

                	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Other
      debts

                	 	 	138,663	 	 
      	 	 	-	 	 	 	138,663	 	 	 	82,185	 	 	 	 	 	 	 	-	 	 	 	82,185	 
	 
      	 	 	138,663	 	 
      	 	 	-	 	 	 	138,663	 	 	 	82,185	 	 	 	 	 	 	 	-	 	 	 	82,185	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Shareholders'
      equity

                	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Paid
      in Capital

                	 	 	1,507,701	 	 
      	 	 	 	 	 	 	1,507,701	 	 	 	893,611	 	 	 	 	 	 	 	 	 	 	 	893,611	 
	
                  Capital
      reserves

                	 	 	712,909	 	 
      	 	 	 	 	 	 	712,909	 	 	 	422,540	 	 	
                  (e)

                	 	 	 	(47,944	)	 	 	374,596	 
	
                  Accumulated
      losses

                	 	 	(1,219,426	)	 
      	 	 	15,881	 	 	 	(1,203,545	)	 	 	(713,338	)	 	
                  (d)

                	 	 	 	(417,405	)	 	 	(1,130,743	)
	 
      	 	 	1,001,184	 	 
      	 	 	15,881	 	 	 	1,017,065	 	 	 	602,813	 	 	 	 	 	 	 	(465,349	)	 	 	137,464	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Total
      Liabilities and Shareholders` Equity

                	 	 	9,509,746	 	 
      	 	 	15,881	 	 	 	9,525,627	 	 	$	5,645,820	 	 	 	 	 	 	$	1,143,590	 	 	$	6,789,410	 


        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
10.28

      NOTES
TO: QUALYTEXTIL SA - reconciliation of Brazilian GAAP to US GAAP

      Balance
sheet as of April 30, 2008

      


      
        
          	
                   (a)

                	
                  Inventory
      reserve

                	 	 
      	
                  (29,295)

                
	 	 	 	 	 
	 
      	
                  Inventory
      in transit (a-1)

                	 	
                   (a-1)

                	
                  1,172,885

                
	 	 	 	 	 
	 
      	
                  Total
      adjustment to inventory

                	 	
                  (a)

                	
                  1,143,590

                
	 	 	 	 	 
	
                  (b)

                	
                  Tax
      accrual based on US GAAP income

                	 	
                  (b)

                	
                  42,090

                
	 	 	 	 	 
	
                  (c)

                	
                  Legal
      fees not accrued under Brazilian GAAP

                	 	 
      	
                  53,343

                
	 	 	 	 	 
	 
      	
                  Misc.
      labor accrual

                	 	 
      	
                  9,888

                
	 
      	
                  Installment
      plan taxes not accrued - outsourcing sales contractor

                	 	 
      	
                  271,353

                
	 
      	
                  Installment
      plan taxes not accrued - outsourcing labor contractor

                	 	 
      	
                  43,923

                
	 	 	 	 	 
	 
      	
                  Sales
      representative commission not accrued

                	 
      	 
      	 
      	
                  15,457

                
	 	 	 	 	 	 
	 
      	
                  Total
      adjustment to other debts

                	 
      	 
      	
                  (c)

                	
                  393,964

                
	 	 	 	 	 	 
	
                  (d)

                	
                  Tax
      accrual based on US GAAP income

                	 
      	 
      	 
      	
                  (42,090)

                
	 	 	 	 	 	 
	 
      	
                  Various
      accruals per  (c ) above

                	 
      	 
      	 
      	
                  (393,964)

                
	 	 	 	 	 	 
	 
      	
                  Capital
      reserve reversal recognized as income

                	 
      	 
      	 
      	
                  47,944

                
	 	 	 	 	 	 
	 
      	
                  Inventory
      reserve

                	 
      	 
      	 
      	
                  (29,295)

                
	 	 	 	 	 	 
	 
      	
                     Net
      adjustment to accumulated losses

                	 
      	 
      	
                  (d)

                	
                  (417,405)

                
	 	 	 	 	 	 
	
                  (e)

                	
                  Capital
      reserve reversal recognized as income

                	 
      	 
      	
                  (e)

                	
                  (47,944)

                
	 	 	 	 	 	 
	
                  (f)

                	
                  To
      reclassify as intangible assets for trademarks and
    tradenames

                	 
      	 
      	 
      	 
      
	 	 	 	 	 	 
	
                  (g)

                	
                  To
      combine debt onto one line item