Balance Sheet as of April 30, 2008

EX-10.28 7 ex10-28.htm EXHIBIT 10.28 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