SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
Amendment No. 1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2004
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from__________to__________.
Commission File No. 0-27929
ETERNAL TECHNOLOGIES GROUP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 62-1655508
- --------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Sect. D, 5/F, Block A. Innotech Tower,
235 Nanjing Rd. Heping District, Tianjin 300052
---------------------------------------------------
(Address of principal executive offices)
011-86-22-2750-1802
-------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES X NO ____
As of November 5, 2004, 29,387,380 shares of Common Stock of the issuer
were outstanding.
Eternal Technologies Group, Inc.
INDEX
Page
Number
PART I -
FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets - September 30, 2004 (unaudited) and
December 31, 2003 (audited) 3
Unaudited Consolidated Statements of Income - For the
three months and nine months ended September 30, 2004 and 2003 5
Unaudited Consolidated Statements of Cash Flows- For the nine months
ended September 30, 2004 and 2003 6
Notes to (unaudited) Consolidated Financial Statements 8
Item 2. Management Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 3. Controls and Procedures 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 13
Certifications 14
Part I
Financial Information
Item 1. Financial Statements
ETERNAL TECHNOLOGIES GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 2004 and December 31, 2003
(UNITED STATES DOLLARS)
September 30 December 31
------------- -------------
2004 2003
------------- -------------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash and Cash equivalents $19,204,031 $16,302,464
Accounts receivable 5,371,626 -
Inventories 34,226 1,214,182
Other receivable 3,274,418 3,399,995
Receivable due from related company - 617,825
Receivable - Property sold 632,530 -
Prepayments and deposits 143,976 145,190
Property held for sale - 2,192,071
------------- -------------
TOTAL CURRENT ASSETS 28,660,807 23,871,727
FIXED ASSETS (NET) 6,032,117 6,416,341
(net of accumulated depreciation of $2,328,054 in 2004
and $1,943,831 in 2003
LAND USE RIGHTS (NET) 5,006,740 5,193,039
------------- -------------
(net of accumulated amortization of $993,260 in 2004
and $806,961 in 2003)
TOTAL ASSETS $39,699,664 $35,481,107
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes Payable $443,366 $503,857
Accounts payable and accrued expenses 1,738,087 1,133,462
Payable to related company - 205,957
Amounts due to related parties 286,267 417,617
------------- -------------
TOTAL CURRENT LIABILITIES 2,467,720 2,260,893
------------- -------------
SHAREHOLDERS' EQUITY
Preferred shares - 5,000,000 authorized $.001 par -
none issued - -
Common shares - 95,000,000 shares authorized, at
$.001 par, 29,387,380 and 29,177,396 shares issued and
outstanding at September 30, 2004 and December 31, 2003, respectively 29,387 29,177
Paid - in capital 8,344,310 8,088,159
Stock subscription receivable (10,176) (10,176)
Retained earnings 28,868,423 25,113,054
------------- -------------
TOTAL SHAREHOLDERS' EQUITY 37,231,944 33,220,214
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $39,699,664 $35,481,107
============= =============
The accompanying notes are an integral part of these financial statements
ETERNAL TECHNOLOGIES GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(UNITED STATES DOLLARS)
Three Months Ended Nine Months Ended
September 30 September 30
----------------------------- ----------------------------------
2004 2003 2004 2003
------------ ------------- -------------- ---------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
SALES $9,074,651 $ - $15,215,482 $119,460
COST OF SALES 5,764,096 _ 9,714,594 _
------------- -------------- --------------- -------------
GROSS PROFIT 3,310,555 _ 5,500,888 119,460
DEPRECIATION AND AMORTIZATION 190,167 213,469 570,522 640,407
SELLING AND ADMINISTRATIVE EXPENSES 415,133 102,068 1,205,096 397,226
OTHER INCOME (EXPENSE)
Interest Income 29,035 _ 83,615 _
Impairment Loss _ _ (53,517) _
------------- -------------- --------------- ------------
NET INCOME BEFORE INCOME TAXES 2,734,290 (315,537) 3,755,368 (918,173)
INCOME TAXES _ _ _ _
------------- -------------- --------------- ------------
NET INCOME $2,734,290 ($315,537) $3,755,368 ($918,173)
============= ============== =============== ============
EARNINGS (LOSS) PER SHARE $0.09 ($0.01) $0.13 ($0.03)
============= ============== =============== ============
Weighted average number of common
shares outstanding
Basic and diluted 29,387,380 26,917,661 29,370,774 26,238,287
============= ============== =============== ============
The accompanying notes are an integral part of these financial statements
ETERNAL TECHNOLOGIES GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(UNITED STATES DOLLARS)
September 30
2004 2003
(Unaudited) (Unaudited)
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 3,755,369 ($918,172)
Depreciation and amortization 570,523 640,407
Impairment loss 53,517 -
Stock issued for services 90,000 -
Other 27,200 -
(Increase) decrease in assets:
Inventories 1,179,956 -
Deferred costs - (5,500,000)
Accounts receivable (5,371,626) 4,483,855
Other receivable 125,577 -
Receivable due from related parties 617,825 -
Prepayment and deposit 1,214 (5,295)
Increase (decrease) in liabilities:
Accounts payable for construction work - 54,578
Accounts payable and accrued expenses 604,625 (98,370)
Account payable to related parties (131,350) -
Advanced by related parties - 26,703
Account payable to related company (205,957) (36,902)
Prepayments - 1,060,241
------------- - ---------
Net cash provided by (used in) operating activities 1,316,873 (292,955)
--------- ---------
CASH FLOW FROM INVESTING ACTIVITIES
Cash received from sale of property held for sale 1,506,024 -
--------- ---------------
Net cash provided by investing activities 1,506,024 -
--------- ---------------
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of common stock - 1,633,639
Capital contributed 78,670 -
Notes payable - (278,876)
--------------- ---------
Net cash provided by financing activities 78,670 1,354,763
------ ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,901,567 1,061,808
Cash and cash equivalents, beginning of period 16,302,464 7,135,559
---------- ---------
Cash and cash equivalents, at end of period $19,204,031 $8,197,367
=========== ==========
SUPPLEMENTARY CASH FLOWS DISCLOSURES
1. Interest paid - -
Taxes paid - -
2. During the nine months ended September 30, 2004, 109,984 shares were issued
for the payment of notes payable of $60,491 and 100,000 shares were
issued related to services totaling $90,000.
The accompanying notes are an integral part of these financial statements
NOTES
1. Reporting entity
Pursuant to an exchange agreement, Eternal Technologies Group, Inc., ("Company")
formerly known as Waterford Sterling Corporation, completed its acquisition of a
100% interest of Eternal Group Limited and Subsidiaries on December 12, 2002.
The Company has treated the transaction as a reverse merger for accounting
purposes. Following the acquisition, the former shareholders of Eternal
Technology Group Limited, a British Virgin Islands limited liability company,
now owns approximately 85% of the issued and outstanding common shares of
Eternal Technologies Group Inc.
Eternal Phoenix Company Limited was incorporated in the British Virgin Islands
with limited liability on March 3, 2000. Pursuant to a resolution passed on June
17, 2000 Eternal Phoenix Company Limited changed its name to ETERNAL TECHNOLOGY
GROUP LTD., ("Eternal"). Eternal is a holding company for investments in
operating companies.
Eternal acquired a 100% equity interest in Willsley Company Limited
("Willsley"), a company incorporated in the British Virgin Island with limited
liability on May 16, 2000.
Willsley's principal activity is investments and owns 100% interest in Inner
Mongolia Aershan Agriculture & Husbandry Technology Co., Ltd ("Aershan").
Aershan was incorporated in the People's Republic of China ("the PRC") with
limited liability on July 11, 2000 and its principal activities are to run a
breeding center, transplant embryos, and to propagate quality meat sheep and
other livestock breeds in Inner Mongolia.
2. Condensed financial statements and footnotes
The interim consolidated financial statements presented herein have been
prepared by the Company and include the unaudited accounts of the Company and
its subsidiaries. All significant inter-company accounts and transactions have
been eliminated in the consolidation. These condensed financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-QSB and Item 310
(b) Regulation S-B. Certain information and footnote disclosures normally
included in financial statements presented in accordance with generally accepted
accounting principles have been condensed or omitted. The Company believes the
disclosures made are adequate to make the information presented not misleading.
The condensed consolidated financial statements should be read in conjunction
with the Company's consolidated financial statements for the year ended December
31, 2003 and notes thereto included in the Company's Form 10-KSB.
In the opinion of management, the unaudited condensed consolidated financial
statements reflect all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position of the Company
as of September 30, 2004, the results of operations for the three and nine
months ended September 30, 2004 and 2003, respectively. Interim results are not
necessarily indicative of full year performance because of the impact of
seasonal and short-term variations.
3. Cash
At September 30, 2004, approximately $19,184,876 of cash is to be exclusively
used for operations in the Peoples' Republic of China.
4. Receivable - Property sold
On April 30, 2004, the Company and a local government entity reached an
agreement on the final purchase price and terms related to the Company's
reception center and certain equipment that is recorded as "Property held for
Sale" at December 31, 2003 and March 31, 2004. At December 31, 2003, the Company
had recorded an estimated impairment loss of $300,000. At March 31, 2004, the
Company recorded an additional impairment loss of $53,517 based on the amount
the Company had recorded of $2,192,071 and the final purchase price of
$2,138,554. The agreement calls for cash payments of $620,482 and the remainder
will be paid in livestock of $1,518,072. The Company accounts for non-monetary
transactions in accordance with APB Opinion No. 29. As of September 30, 2004,
$421,687 had been received in cash and livestock with a value of $1,084,337 had
been received.
5. Public relations agreements
During January 2004, the Company entered into a six-month public relations
agreement with PMR and Associates, LLC (PMR). As consideration for public
relations services, the Company shall compensate PMR the equivalent of $90,000
in shares subject to Rule 144. During February 2004, the Company issued 100,000
shares to PMR for these services. For the nine months ended September 30, 2004,
the Company expensed $90,000 associated with this agreement.
On August 1, 2004, the Company entered into a six-month public relations
agreement with Empire Relations Group, Inc. ("Empire"). As consideration for
public relations services, the Company shall compensate Empire 100,000 shares of
Eternal subject to Rule 144 as follows: 50,000 shares upon the execution of this
agreement and 10,000 shares per month beginning with the second month of the
contract and extending through the six months. For the nine months ended
September 30, the Company expensed approximately $27,000 associated with this
agreement.
6. Notes payable
The Company's promissory notes payable are in default at September 30, 2004. The
Company and its attorneys are performing an additional detailed review of all
expenditures prior to the merger. The balances of the notes are subject to
change pending the outcome of the review of these expenditures. The Company
believes it has meritorious defenses to portions of the promissory notes.
7. Contingencies
In conjunction with certain subscription agreements entered into during 2003,
the Company has agreed to register the shares issued under a Form SB-2
registration statement. There are penalties for not timely meeting filing and
effectiveness deadlines, and the Company has received claims related to these
penalties. For the nine months ended September 30, 2004, the Company has accrued
expenses for penalties of $239,097.
8. Segment Reporting
The company has identified two reportable segments:
Agricultural Genetics/Animal husbandry and Bio-engineering operations. The
amounts reported at September 30, 2004 and for the three and nine month periods
ended September 30, 2004 and 2003 related to our Agricultural Genetics / Animal
husbandry segment.
9. Professional Consulting Agreements
On August 16, 2004, the Company executed contracts with professionals who
specialize in livestock genetics, animal husbandry and financial consulting.
Each contract is for a period of one year and requires varying amounts of
sevices. Each contract requires an annual payment of $10,000.
10. Subsequent events
As disclosed in a Form 8-K filing with the Securities and Exchange Commission,
on October 30, 2004, the Board of Directors approved the acquisition of Shenzhen
E-Sea Biomedical Engineering Co., Ltd. (E-Sea), a company located at the City of
Shenzhen, Guangdong Province, China. E-Sea manufactures and sells medical
equipment used for the detection of breast cancer.
Item 2. Management discussion and Analysis of Financial Condition and Result of
Operations
The following is derived from, and should be read in conjunction with, our
unaudited condensed consolidated financial statements, and related notes, as of
and for the three and nine months ended September 30, 2004 and 2003.
Historically, the company's operations have been highly seasonal with nearly all
of its revenue and earnings derived during the fourth quarter of the year.
However, because of a shift in the company's business to marketing processed
lamb meat and embryo transplants into dairy cattle as opposed to goats, the
company's business has become less seasonal. The subsequent described results of
operations for both the three months and nine months ended September 30, 2004
should be read in this context.
Three Months Ended September 30, 2004 Compared to Three months Ended September
30, 2003
Revenues
Revenues for the three months ended September 30, 2004 are $9,074,651. There
were no revenues for the corresponding period of the prior year. The increase
resulted from an increase in the sale of lamb meat of $4,066,265 and an increase
of $4,915,633 in fees earned from cattle embryo transfers and an increase in the
sale of sheep in stock of $92,723. The revenues for the previous year occurred
in the fourth quarter.
Cost of Sales
Cost of sales for the three months ended September 30, 2004 increased by
$5,764,096 to $5,764,096 from $0 for the corresponding period of the prior year.
This increase resulted from costs incurred in the sales of lamb meat of
$2,897,494 and cost incurred in the cattle embryo transfers of $2,757,879 and
cost in the sale of sheep in stock of $108,723. The gross profit margin from the
sale of lamb meat was 28.74% and the gross profit margin on embryo transfers was
43.89%.
Depreciation and Amortization
Depreciation and amortization expenses decreased by $23,302 or 10.9% to $190,167
from $213,469 for the corresponding period of the prior year. This decrease
resulted from the fact that certain equipment had been fully depreciated and
accordingly there was no depreciation charge against such equipment for the
three months ended September 30, 2004.
Selling and Administrative Expenses
Selling and administrative expenses increased by $313,064 or 306.7% to $415,132
from $102,068 for the corresponding period of the prior year. This increase
resulted from an increase in salaries of $149,171, an increase in professional
fees of $58,854, an increase in penalties of $93,878 and an increase in
miscellaneous expenses of $20,656 which was partially offset by a decrease in
marketing fees of $9,495.
Other Income (Expense)
For the three months ended September 30, 2004 the company had other income of
$29,035, all of which was interest income. There was no other income for the
corresponding period of the prior year.
As a result of the foregoing, the company had net income of $2,734,290 or $.09
per share for the three months ended September 30, 2004 compared to a net loss
of $315,537 or $.01 per share for the corresponding period of the prior year.
Nine Months Ended September 30, 2004 As Compared to Nine Months Ended September
30, 2003.
Revenues
Revenues for the nine months ended September 30, 2004 increased by $15,096,022
or 12,637% to 15,215,482 from $119,460 for the corresponding period of the prior
year. This increase is attributable to an increase in the sale of lamb meat of
$7,502,277 and an increase in cattle embryo transfer fees of $7,614,458.
Cost of Sales
Cost of sales for the nine months ended September 30, 2004 increased to
$9,714,594 from $0 for the corresponding period of the prior year. This increase
resulted from the costs incurred in the sale of lamb meat of $5,351,024 and the
cost incurred in cattle embryo transfers of $4,281,778. The gross profit margin
on the sale of lamb meat was 28.67% and the gross profit margin from cattle
embryo transfers was 43.77%.
Depreciation and Amortization
Depreciation and amortization expenses for the nine months ended September 30,
2004 decreased by $69,885 or 10.9% to $570,522 from $640,407 for the
corresponding period of the prior year. This decrease resulted from certain
equipment being fully depreciated in a prior period and accordingly no charge to
depreciation was made against such equipment during the nine months ended
September 30, 2004.
Selling and Administrative Expenses
Selling and administrative expenses for the nine months ended September 30, 2004
increased by $807,869 or 203.38% to $1,205,096 from $397,226 for the
corresponding period of the prior year. This increase resulted from an increase
in salaries of $396,330 marketing expenses of $74,724, penalties of $239,097,
professional fees of 22,296 and miscellaneous expenses of $75,423.
Other Income (Expense)
Other income increased by $83,615 for the nine months ended September 30, 2004
to $83,615 from $0 for the corresponding period of the prior year. All of the
other income for the nine months ended September 30, 2004 is attributable to
interest income. Other expense increased by $53,517 for the nine months ended
September 30, 2004 to $53,517 from $0 for the corresponding period of the prior
year. All of the other expense is an impairment loss which resulted from the
anticipated loss from the sale of the reception center and certain equipment
located on the Company's farm in Inner Mongolia.
As a result of the foregoing, the Company had net income of $3,755,368 or $.13
per share for the nine months ended September 30, 2004 compared to a net loss of
$918,173 or $.03 per share for the corresponding period of the prior year.
Liquidity and Capital Resources
As of September 30, 2004, the Company had cash and cash equivalents of
$19,204,031 and working capital of $26,193,087. This compares with cash and cash
equivalents of $16,302,464 and working capital of $21,610,834 as of December 31,
2003.
Cash flows from operating activities totaled $1,316,873 for the nine months
ended September 30, 2004. This compares with cash flows used in operating
activities of $292,955 for the corresponding period of the prior year. This
increase primarily resulted from an increase in earnings from operating
activities of $4,673,541, a net increase of non-cash expense of $100,833 offset
by a change in net current accounts of ($3,179,736) for the nine months ended
September 30, 2004 compared to a change in net current accounts of ($15,190) for
the nine months ended September 30, 2003.
Cash flows from investing activities totaled $1,506,024 for the nine months
ended September 30, 2004 compared to $0 for the nine months ended September 30,
2003. All of the cash from investing activities during the nine months ended
September 30, 2004 was from the sale of property.
Cash flows from financing activities for the nine months ended September 30,
2004 totaled $78,670 all from capital contributed . This compares with cash
flows from financing activities of $1,354,763 for the nine months ended
September 30, 2003.
At September 30, 2004, the Company had notes payable of $443,366 that are due
December 11, 2005. Interest on the notes shall be payable semi-annually
commencing 180 days after the date of the note (December 11, 2002) at 8% per
annum. The notes are payable from the first dollars received from any proceeds
of any offering subsequent to the acquisition of Eternal Technologies Group Ltd.
or at the option of the lender, convertible into post reverse split common
shares at a rate equal to the mean of the high and low share price as of the
December 31, 2003, the principal balances on the notes was $503,857 and during
2004, the Company issued 109,984 shares which reduced the balance on the notes
to $443,366. Although these notes are recorded at $443,366, an outside review
was conducted to determine if all amounts accrued are properly chargeable to the
Company. These findings have been forwarded to outside counsel for resolution.
Although the Company has a cash and bank balance of $19,204,031, all but
approximately $19,000 is to be exclusively used by management for operations
within the People's Republic of China. Therefore, if the Company is to expand
outside the PRC, as it anticipates doing, or pay its non-PRC obligation, it will
have to sell additional shares of its stock or borrow funds from third parties.
Unless it is able to either borrow funds or sell additional shares, it will have
insufficient resources to carry out its business objectives outside the PRC for
the next twelve (12) months.
Item 3. Controls and Procedures
As of the end of the period covered by this report, we have evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures under the supervision of and with the participation of our Chief
Executive Officer ("CEO") and our Chief Financial Officer ("CFO"). Based on this
evaluation, our management, including our CFO and CEO, concluded that our
disclosure controls and procedures were effective, and that there have been no
significant changes in our internal controls or in other factors that could
significantly affect internal controls subsequent to the evaluation.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds
None
Item. 3. Defaults Upon Senior Securities
None
Item 4. Submissions of Matters to a Vote of Security Holders
On July 27, 2000, at the annual meeting, the shareholders elected the following
seven persons as directors to serve until the next annual meeting.
1. JiJun Wu 2. Jiansheng Wei 3. Shien Zhu 4. James Q.Wang 5. XingJian Ma 6.
Genchang Li 7. Shicheng Fu
In addition to the election of directors, the shareholders also adopted the
Company's 2004 Stock Option Plan ("Plan") which provided for the issuance of a
maximum of 500,000 incentive stock options. The Plan was adopted by 18,568,500
shares voting in favor of the plan and 7,800 shares voting against the plan. The
shareholders also ratified the appointment of Thomas Leger & Co. as independent
auditors for the year ending December 31, 2004 by a vote of 18,144,800 in favor
421,500 against and 10,000 abstaining.
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
None
b) Reports on Form 8-K
1. Form 8-K dated July 27, 2004 reporting the results of the
shareholder meeting.
Signature
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto authorized.
ETERNAL TECHNOLOGIES GROUP, INC.
/s/ Jiansheng Wei
-------------------------------------
August 16, 2005 Jiansheng Wei, Chief Executive Officer
/s/ Xingjian Ma
August 16, 2005 -------------------------------------
Xingjian Ma, Chief Financial Officer
CERTIFICATIONS
I, Jiansheng Wei, certify that:
1. I have reviewed this Form 10-QSB of Eternal Technologies Group, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))**
for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the small business issuer, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;**
(c) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the small business issuer's internal
control over financial reporting that occurred during the small business
issuer's most recent fiscal quarter (the small business issuer's fourth fiscal
quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and
5. The small business issuer's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the small business issuer's auditors and the audit committee of
the small business issuer's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business issuer's
internal control over financial reporting.
Date: August 16, 2005
/s/ Jiansheng Wei
Jiansheng Wei
Chief Executive Officer
I, Xingjian Ma, certify that:
1. I have reviewed this Form 10-QSB of Eternal Technologies Group, Inc.;
4. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
5. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))**
for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the small business issuer, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;**
(c) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the small business issuer's internal
control over financial reporting that occurred during the small business
issuer's most recent fiscal quarter (the small business issuer's fourth fiscal
quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and
5. The small business issuer's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the small business issuer's auditors and the audit committee of
the small business issuer's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business issuer's
internal control over financial reporting.
Date: August 16, 2005
/s/ Xingjian Ma
Xingjian Ma
Chief Financial Officer
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS
ADOPTED PURSUANT TO SECTION 906 OF TEHE SARBANES-OXLEY ACT OF 2002
- --------------------------------------------------------------------------------
I, Jiansheng Wei, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report of Eternal Technologies Group, Inc. on Form 10-QSB for the quarterly
period ended September 30, 2004 fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934 and that information
contained in such Form 10-QSB fairly presents in all material respects the
financial condition and results of operations of Eternal Technologies Group,
Inc.
By: /s/ Jiansheng Wei
- ----------------------------
Name: Jiansheng Wei
Title: Chief Executive Officer
August 16, 2005
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS
ADOPTED PURSUANT TO SECTION 906 OF TEHE SARBANES-OXLEY ACT OF 2002
- --------------------------------------------------------------------------------
I, Xingjian Ma, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of
Eternal Technologies Group, Inc. on Form 10-QSB for the quarterly period ended
September 30, 2004 fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934 and that information contained in
such Form 10-QSB fairly presents in all material respects the financial
condition and results of operations of Eternal Technologies Group, Inc.
By: /s/ Xingjian Ma
- ----------------------------
Name: Xingjian Ma
Title: Chief Financial Officer
August 16, 2005