"Eternal Technologies Group, Inc. (OTC BB: ETLT) Purchase Price Reduced on the Two Recent Acquisitions
On September 13, 2007 the company announced that it had acquired a 30% equity interest, respectively, in Hainan Futian Green Agriculture Co., Ltd. (“Mango Farm”) and Maoming Huatong Orchard Trading Co., Ltd. (“Lychee”).
The purchase price for these two acquisitions was based on evaluation reports which initially valued the Mango farm at RMB 231,000,000 (USD30,800,000, 1:7.5). The company agreed to pay for its 30% equity interest, 70% in cash (US$6.4 million) and issue 30% (2.97 million shares, US$0.90/share) in shares of its common stock. The initial valuation of the Lychee Farm was RMB210,000,000 (US$28,000,000). The company agreed to pay for its 30% equity interest, 70% in cash (5.8 million) and issue 30% in shares of its common stock (2.8 million, US$0.90/share).
After challenging the valuations, the transactions were renegotiated. The value was reduced to RMB158,000,000 (US$21,000,000) for the Mango farm and RMB175,000.000 (US$23,300,000) for the Lychee Farm.
For the acquisition of the 30% equity interest in the Mango farm, the company will pay 70% in cash (US$4,400,000) and 30% in its common stock (2.3 million shares, US$0.90/share). For the acquisition of the 30% equity interest in the Lychee farm, the company will pay 70% in cash (US$4,800,000) and 30% in its common stock (2.64 million shares, US$0.90/share). Both acquisitions will be accretive to earnings in 2008."
