Eternal Technologies Group Inc (GREY:ETLT)

The company seems to be encountering some legal difficulties:

A final Judgment and Writ of Execution in the amount of $732,290 against Eternal Technologies Group, Inc. (OTCBB: ETLT) have been issued in favor of Western Securities Corporation. The judgment was rendered in the U.S. District Court of the Southern District of Texas, Civil Action Number H-O5-02504 on October 31, 2007.

This was the result of a trial held in May 2007 over debtor notes the Company entered into, recorded in their audited filings with the Securities & Exchange Commission, but refused to honor. Michael A. Barragan of Dallas, Texas represented Western Securities in the successful prosecution of this claim against the China-based company.

The Writ of Execution commands the United States Marshall to "take of the goods, land and choses-in-action of the judgment debtor enough to pay the judgment in full and the costs of this writ."

Until the judgment is satisfied, ETLT can not open a facility or conduct any operations in the United States. All of its assets will be immediately subject to seizure and any funds will be subject to garnishment until the judgment has been satisfied.


As far as their business is concerned the company seems optimistic about its growth prospects:

For 2008, the Company anticipates additional earning growth as the 2007 acquisition begins to contribute to the Company’s earnings.

The real opportunity may be the potential spinoff of one of their subsidiaries:

"Jijun Wu, Chairman of the Board also advised the shareholders that the company will undergo a reorganization whereby up to 70% of the shares of E-Sea Biological Engineering Co. International Ltd. will be distributed to the shareholders of Eternal Technologies Group Inc. and will be traded as a separate company. This will allow E-Sea to better focus on medical technologies, pharmaceuticals and family network diagnoses and allow Eternal Technologies to focus on the agro genetics area and keep its leadership in agricultural genetics R&D in China. It is anticipated that the reorganization will occur in the second quarter of 2008 or when all regulatory requirements have been met."

"Although E-sea had revenues in excess of 3.6 million U.S. dollars, with the addition of the generation of medical equipment and the marketing of the new video media devices, the company hopes to significantly exceed to the 2007 revenue and earning number in 2008."

Unfortunately the current legal problems may hamper or delay the company's ability to execute its spinoff plans.

Source ( press: November 29, 2007. November 29, 2007. December 5, 2007,.April 14,2008. )

The Geo Team will follow the developments of ETLT, but there seems to be too many uncertainties at this time to warrant significant investment consideration. Also of concern is the wide volatility in quarterly revenues over past three years.