China Valves Tech (NASDAQ:CVVT)

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All Analyst Reports Auditor trail CFO Trail Comments & Business Outlook Contract Awards Corporate Governance Deal Flow Financial Target Agreements GeoBargain Notes Investor Alert Liquidity Requirements

Friday, February 6, 2009

Key financial targets in connection with the Share Exchange on August 26, 2008:

Management entered into a 'make good agreement' and has placed 25,166,064 of its shares in escrow to secure its obligations to meet specific Financial Targets for 2008 and 2009. If the targets are not achieved, a number of shares derived from a formula will be transferred pro-rata to the investors in the private placement.

Financial Targets

Date	* After-Tax Net Income Targets		Fully Diluted EPS Based Target
December, 2008	$10,500,000		NA
December, 2009	$23,000,000	or	$0.369
December, 2010	$31,000,000	or	$0.497

*The GeoTeam® assumed that the above targets utilized the company's 2007 tax rate of 15.68%. In 2007 the company earned net income of $7,142,592 and EPS of $0.18.

Source: SEC Form 8K ( August 26, 2008)

Financial Targets Adjusting for a standard tax rate of 36%

Date	After-Tax Net Income Targets		Fully Diluted EPS Based Target
December, 2008	$8,366,400		NA
December, 2009	$18,326,400	or	$0.29
December, 2010	$24,700,800	or	$0.40

Adjusting 2007 financials for a standard tax rate:

Net income: $5,691,217
EPS: $0.14

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