Document:

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 itemex10-29.htm

     

     

     

    Exhibit 10.29

    
      	 
      	 	 	 	 
      	 	 	 	 	 	 	 	
              FX
      rate =

            	 	 
      	 	 	 	 	 	 
	
              QUALYTEXTIL
      SA - reconciliation of Brazilian GAAP to US GAAP

            	 	 	 	 	 	 	 	 	1.94720	 	
              (g)

            	 	 	 	 	 	 
	
              Statement
      of Profit and Loss for the year ended December 31, 2007

            	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 
	 
      	 	

              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

            	 	 	 	 	 	 
      	 	 	 	 	 	 
	 
      	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 
	
              Gross
      Income

            	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 
	 
      	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 
	
              Gross
      sales

            	 	 	22,104,656	 	 
      	 	 	 	 	 	22,104,656	 	 	 	 	 	 
      	 	 	 	 	 	 
	
              Cancellation
      and taxes on sales

            	 	 	(5,517,669	)	 
      	 	 	 	 	 	(5,517,669	)	 	 	 	 	 
      	 	 	 	 	 	 
	
              Net
      sales

            	 	 	16,586,987	 	 
      	 	 	0	 	 	 	16,586,987	 	 	 	8,518,379	 	 
      	 	 	0	 	 	 	8,518,379	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Cost
      of sales

            	 	 	8,750,612	 	 
      	 	 	 	 	 	 	8,750,612	 	 	 	4,493,946	 	
               (f)

            	 	 	(169,642	)	 	 	4,324,304	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Gross
      profit

            	 	 	7,836,375	 	 
      	 	 	0	 	 	 	7,836,375	 	 	 	4,024,433	 	 
      	 	 	169,642	 	 	 	4,194,075	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Operating
      expenses (income):

            	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
                 General
      and administrative expenses

            	 	 	2,193,850	 	
              (a)

            	 	 	27,344	 	 	 	2,221,194	 	 	 	1,140,712	 	
               (e)

            	 	 	215,174	 	 	 	1,355,886	 
	
              Selling
      expenses

            	 	 	2,785,569	 	 
      	 	 	 	 	 	 	2,785,569	 	 	 	1,430,551	 	 
      	 	 	 	 	 	 	1,430,551	 
	
              Net
      financial

            	 	 	667,297	 	
              (b)

            	 	 	(1,320,714	)	 	 	(653,417	)	 	 	(335,567	)	
               (c
      )

            	 	 	335,567	 	 	 	0	 
	
              Depreciation

            	 	 	117,405	 	 
      	 	 	 	 	 	 	117,405	 	 	 	60,294	 	 
      	 	 	 	 	 	 	60,294	 
	
               
      Other (income) expense

            	 	 	27,344	 	
              (a)

            	 	 	(27,344	)	 	 	0	 	 	 	 	 	 
      	 	 	 	 	 	 	0	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Operating
      result

            	 	 	2,044,910	 	 
      	 	 	1,320,714	 	 	 	3,365,624	 	 	 	1,728,443	 	 
      	 	 	(381,099	)	 	 	1,347,344	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Interest
      expense

            	 	 	 	 	
              (b)

            	 	 	(1,325,238	)	 	 	(1,325,238	)	 	 	(680,586	)	 
      	 	 	 	 	 	 	(680,586	)
	
              Interest
      income

            	 	 	 	 	
              (b)

            	 	 	4,524	 	 	 	4,524	 	 	 	2,323	 	 
      	 	 	 	 	 	 	2,323	 
	
              Non
      operating other income / expense

            	 	 	27,564	 	 
      	 	 	 	 	 	 	27,564	 	 	 	14,155	 	 
      	 	 	 	 	 	 	14,155	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Profit
      (loss) for the year before income tax and social
    contribution

            	 	 	2,072,474	 	 
      	 	 	0	 	 	 	2,072,474	 	 	 	1,064,335	 	 
      	 	 	(381,099	)	 	 	683,236	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Provision
      for income tax and social contribution

            	 	 	470,417	 	 
      	 	 	 	 	 	 	470,417	 	 	 	241,586	 	
               (d)

            	 	 	(137,393	)	 	 	104,193	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Profit
      (loss) for the year

            	 	 	1,602,057	 	 
      	 	 	0	 	 	 	1,602,057	 	 	$	822,749	 	 
      	 	$	(243,706	)	 	$	579,043	 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
10.29

      

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

      Year
ended December 31, 2007

      
        	
                (a)
      Reclassify provison for bad debt allowance to administrative
      expense

              	 
      	 
      	 
      	 
      
	
                (b)
      Reclassify interest expense and interest income out of "net financial"
      Under Brazilian GAAP, the category "net financial" includes interest
      expense and interest income and government incentives on VAT
      taxes.

              	 
      	 
      	 
      
	
                (c)
      Not used

              	 
      	 
      	 
      	 
      
	
                (d)
      Government income tax incentives classified as capital contribution for
      Brazilian GAAP

              	 
      	 
      	
                (176,037)

              
	
                Adjust
      tax accrual to 15.25% of final US GAAP pretax income

              	 
      	 
      	 
      	
                38,644

              
	
                  net
      tax adjustment

              	 
      	 
      	
                (d)

              	
                (137,393)

              
	
                (e)
      Net adjustment to administrative expenses

              	 
      	 
      	 
      	 
      
	
                Legal
      fees not accrued under Brazilian GAAP

              	 
      	 
      	 
      	
                58,933

              
	
                Management
      compensation not accrued under brazilian GAAP

              	 
      	 
      	 
      	
                107,266

              
	
                Misc.
      labor accrual

              	 
      	 
      	 
      	
                5,646

              
	
                Installment
      plan taxes not accrued - outsourcing sales contractor

              	 
      	 
      	 
      	
                4,623

              
	
                Installment
      plan taxes not accrued - outsourcing labor contractor

              	 
      	 
      	 
      	
                15,776

              
	
                Outsourcing
      labor contractor invoices recorded one month in arrears - accrue December
      2007

              	 
      	
                22,930

              
	
                (e)
      Net adjustment to administrative expenses

              	 
      	 
      	(e)	
                215,174

              
	
                (f)
      Net adjustment to cost of goods sold

              	 
      	 
      	 
      	 
      
	
                inventory
      reserve not recorded under Brazilian GAAP - slow moving raw
      material

              	 
      	 
      	
                73,367

              
	
                inventory
      reserve not recorded under Brazilian GAAP - reserve for rework returned
      finished goods

              	 
      	
                29,295

              
	
                reclassify
      a government VAT tax incentive (ICMS) as a reduction of cost of goods
      sold

              	 
      	 
      	
                (335,567)

              
	
                Outsourcing
      labor contractor invoices recorded one month in arrears - accrue December
      2007

              	 
      	
                48,106

              
	
                Installment
      plan taxes not accrued - outsourcing labor contractor

              	 
      	 
      	 
      	
                15,157

              
	
                (f)
      Net translation of the adjustment to cost of goods sold from BRL into
      USD

              	 
      	 
      	
                (f)

              	
                (169,642)

              
	
                (g)
      The 2007 statement of profit and loss has been derived from the internally
      generated monthly financial statements. These financial statements have
      been translated using the rate applicable to each month. The exchange rate
      of $1.94720 represents a weighted average of the monthly rates
      used.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}]]