**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-QSB**





(Mark
      One)





x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934.





For
      the
      quarterly period ended **March
      31, 2008**




o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934.





For
      the
      transition period from ____________ to ____________





Commission
      File Number 000-18606





**CHINA
      GREEN AGRICULTURE, INC.**


(Exact
      name of small business issuer as specified in its charter)




Nevada
            
            36-3526027(State
                or other jurisdiction of
            
            (IRS
                Employerincorporation
                or organization)
            
            Identification
                No.)





3 rd Floor, Borough A, Block A. No.181, South Taibai Road, Xi’an, Shaanxi
      Province,


People’s
      Republic of China 710065


(Address
      of principal executive offices)





+86-29-88266368


(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 o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No x





APPLICABLE
      ONLY TO CORPORATE ISSUERS





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date:  18,314,017 shares of Common Stock,
      $.001 par value, were outstanding as of May 15, 2008.





Transitional
      Small Business Disclosure Format (check one); Yes o No x









TABLE
      OF
      CONTENTS





PagePART
                I
            FINANCIAL
                INFORMATION
            3Item
                1.
            Financial
                Statements
            3Consolidated
                Balance Sheets As of March 31, 2008 (Unaudited)
            3Consolidated
                Income Statements For the Three and Nine Months Ended March 31, 2008
                and
                2007 (Unaudited)
            4Consolidated
                Statements of Cash Flows For the Nine Months Ended March 31, 2008
                and 2007
                (Unaudited)
            5Notes
                to Consolidated Financial Statements as of March 31, 2008
                (Unaudited)
            6Item
                2.
            Management’s
                Discussion and Analysis or Plan of Operation.
            23Item
                3.
            Controls
                and Procedures
            31PART
                II
            OTHER
                INFORMATION
            31Item
                6.
            Exhibits
            31Signatures
            
            32Exhibits/Certifications


2




**PART
      I - FINANCIAL INFORMATION**





**Item
      1.** **Financial
      Statements**




**CHINA
                  GREEN AGRICULTURE INC. AND SUBSIDIARIES****CONSOLIDATED
                  BALANCE SHEET****AS
                  OF March 31, 2008****(UNAUDITED)**
  **ASSETS****Current
                  Assets**Cash
                  and cash equivalents
              
              $
              13,986,395Restricted
                  cash
              
              
              4,228,641Accounts
                  receivable, net
              
              
              1,729,049Inventories
              
              
              5,819,014Other
                  assets
              
              
              137,327Advances
                  to suppliers
              
              
              273,289**Total
                  Current Assets**
              
              
              26,173,715**Plant,
                  Property and Equipment, net**
              
              
              17,202,971**Advances
                  for Construction In Progress**
              
              
              431,689**Construction
                  In Progress**
              
              
              68,118**Intangible
                  Assets, net**
              
              
              1,179,708**Total
                  Assets**
              
              $
              45,056,201**LIABILITIES
                  AND SHAREHOLDERS' EQUITY****Current
                  Liabilities**Accounts
                  payable
              
              $
              443,191Unearned
                  revenue
              
              
              123,651Other
                  payables and accrued expenses
              
              
              340,800Advances
                  from other unrelated companies
              
              
              304,279Amount
                  due to related parties
              
              
              1,300Taxes
                  payable
              
              
              4,410,059Short
                  term loans
              
              
              4,107,245**Total
                  Current Liabilities**
              
              
              9,730,525**Common
                  Stock, $.001 par value, 6,313,617 shares subject to
                  redemption**
              
              
              20,519,255Commitment
              
              
              -**Stockholders'
                  Equity**Preferred
                  Stock, $.001 par value, 20,000,000 shares authorized, Zero shares
                  issued
                  and outstanding
              
              
              -Common
                  stock, $.001 par value, 780,000,000 shares authorized, 12,000,400
                  shares issued and outstanding
              
              
              12,000Additional
                  paid-in capital
              
              
              737,270Retained
                  earning
              
              
              12,302,191Accumulated
                  other comprehensive income
              
              
              1,754,960Total
                  Stockholders' Equity
              
              
              14,806,421**Total
                  Liabilities and Stockholders' Equity**
              
              $
              45,056,201
  The
          accompanying notes are an integral part of these consolidated financial
          statements.
 3
  **CONSOLIDATED
                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME****FOR
                  THE THREE AND NINE MONTHS ENDED MARCH 31, 2008 AND 2007****(UNAUDITED)**
  Nine
                  Months Ended March 31,
              
              Three
                  Months Ended March 31,2008
              
              2007
              
              2008
              
              2007**Net
                  sales**
              
              $
              15,382,089
              
              $
              9,070,972
              
              $
              4,434,926
              
              $
              2,198,615**Cost
                  of goods sold**
              
              
              6,377,066
              
              
              3,687,416
              
              
              1,982,084
              
              
              1,003,035**Gross
                  profit**
              
              
              9,005,023
              
              
              5,383,555
              
              
              2,452,841
              
              
              1,195,580**Operating
                  expenses**Selling
                  expenses
              
              
              614,646
              
              
              400,108
              
              
              142,808
              
              
              27,428Operating
                  and administrative expenses
              
              
              1,430,762
              
              
              463,482
              
              
              256,800
              
              
              184,130**Total
                  operating expenses**
              
              
              2,045,408
              
              
              863,590
              
              
              399,608
              
              
              211,558**Income
                  from operations**
              
              
              6,959,615
              
              
              4,519,965
              
              
              2,053,233
              
              
              984,022**Other
                  income (expense)**Other
                  income(expense)
              
              
              39,647
              
              
              (1,457
              )
              
              655
              
              
              1,514Interest
                  income
              
              
              27,224
              
              
              20,559
              
              
              11,697
              
              
              122Interest
                  expense
              
              
              (284,361
              )
              
              (270,551
              )
              
              (86,761
              )
              
              (90,190
              )Bank
                  charges
              
              
              (6,442
              )
              
              (425
              )
              
              (4,939
              )
              
              (63
              )**Total
                  other income (expense)**
              
              
              (223,933
              )
              
              (251,875
              )
              
              (79,348
              )
              
              (88,618
              )**Income
                  before income taxes**
              
              
              6,735,682
              
              
              4,268,090
              
              
              1,973,886
              
              
              895,405Provision
                  for income taxes
              
              
              301,841
              
              
              266,006
              
              
              301,841
              
              
              -**Net
                  income**
              
              
              6,433,842
              
              
              4,002,084
              
              
              1,672,045
              
              
              895,405**Other
                  comprehensive income**Foreign
                  currency translation gain
              
              
              1,511,242
              
              
              20,041
              
              
              957,245
              
              
              9,465**Comprehensive
                  income**
              
              $
              7,945,084
              
              $
              4,022,125
              
              $
              2,629,290
              
              $
              904,869**Basic
                  and diluted weighted average shares outstanding**
              
              
              10,201,325
              
              
              10,770,669
              
              
              9,625,724
              
              
              10,770,669**Basic
                  and diluted net earnings per share***
              
              $
              0.63
              
              $
              0.37
              
              $
              0.17
              
              $
              0.08
  *Basic
          and diluted shares are the same because there are no anti dilutive effect
 The
          accompanying notes are an integral part of these consolidated financial
          statements.
  4
  **CHINA
                  GREEN AGRICULTURE INC. AND SUBSIDIARIES****STATEMENTS
                  OF CASH FLOWS****FOR
                  THE NINE MONTHS ENDED MARCH 31, 2008 AND 2007****(UNAUDITED)**
  2008
              
              2007**Cash
                  flows from operating activities**Net
                  income
              
              $
              6,433,842
              
              $
              4,002,084Adjustments
                  to reconcile net income to net cash provided by operating
                  activitiesShare
                  capital contribution - rental and interest paid by
                  shareholders
              
              
              32,656
              
              
              43,224Depreciation
              
              
              703,271
              
              
              266,556Amortization
              
              
              78,693
              
              
              73,921Decrease
                  / (Increase) in current assetsAccounts
                  receivable
              
              
              256,854
              
              
              77,917Other
                  receivables
              
              
              79,100
              
              
              -Inventories
              
              
              (3,696,399
              )
              
              (1,028,026
              )Advances
                  to suppliers
              
              
              (45,061
              )
              
              (22,200
              )Other
                  assets
              
              
              (16,581
              )
              
              206,762(Decrease)
                  / Increase in current liabilitiesAccounts
                  payable
              
              
              131,130
              
              
              (186,446
              )Unearned
                  revenue
              
              
              33,561
              
              
              52,726Tax
                  payables
              
              
              1,855,704
              
              
              930,634Other
                  payables and accrued expenses
              
              
              (365,254
              )
              
              4,964,995**Net
                  cash provided by operating activities**
              
              
              5,481,516
              
              
              9,382,146**Cash
                  flows from investing activities**Acquisition
                  of plant, property, and equipment
              
              
              (4,917,610
              )
              
              (9,677,692
              )Advances
                  for construction in progress
              
              
              (409,841
              )
              
              -Additions
                  to construction in progress
              
              
              (20,655
              )
              
              (22,527
              )**Net
                  cash used in investing activities**
              
              
              (5,348,106
              )
              
              (9,700,220
              )**Cash
                  flows from financing activities**Repayment
                  of loan
              
              
              (1,827,836
              )
              
              (1,907,759
              )Borrows
                  of loan
              
              
              1,353,952
              
              
              1,716,983Proceeds
                  from private placement
              
              
              18,602,720
              
              
              -Restricted
                  cash put in escrow
              
              
              (4,228,641
              )
              
              -(Payments)/proceeds
                  to/from related parties
              
              
              (642,342
              )
              
              511,744**Net
                  cash provided by financing activities**
              
              
              13,257,854
              
              
              320,968**Effect
                  of exchange rate change on cash and cash
                  equivalents**
              
              
              513,415
              
              
              20,041**Net
                  increase in cash and cash equivalents**
              
              
              13,904,679
              
              
              22,935**Cash
                  and cash equivalents, beginning balance**
              
              
              81,716
              
              
              45,623**Cash
                  and cash equivalents, ending balance**
              
              $
              13,986,395
              
              $
              68,558**Supplement
                  disclosure of cash flow information**Interest
                  expense paid
              
              $
              (222,260
              )
              $
              (231,572
              )Income
                  taxes paid
              
              $
              -
              
              $
              -
  The
        accompanying notes are an integral part of these consolidated financial
        statements.


5


**CHINA** **GREEN
        AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
        TO** **UNAUDITED
        CONSOLIDATED FINANCIAL STATEMENTS**




**NOTE
        1 -** **ORGANIZATION
        AND DESCRIPTION OF BUSINESS**
 
 China
        Green Agriculture Inc. (the “Company”, “we”, “us”) was incorporated as
        Videophone, Inc. in 1987 under the laws of the State of Kansas (It later
        changed
        its name to Discovery Systems, Inc. till June 13, 1990 and Discovery
        Technologies, Inc. from June 14, 1990 to February 4, 2008). On November 30,
        1996, the Company was suspended from being a Kansas corporation as a result
        of
        non-filing of required documents by the state of Kansas. From December 1996
        to
        December 2007, the Company did not engaged in any operations and was dormant.
        The Company had been dormant from April 1991 until, the Company revived its
        charter effective December 4, 2006 and commenced activities to again become
        a
        reporting company with the SEC with the intention to become a publicly trading
        company.
 
 On
        August
        27, 2007 the Board of Directors unanimously adopted resolutions announcing
        a
        special meeting of shareholders to consider and act upon a proposed Agreement
        and Plan of Merger, to reincorporate Discovery Technologies, Inc. (“Discovery
        Technologies”) in the State of Nevada by merger with and into a Nevada
        corporation with the same name ("Discovery Technologies Nevada") which Discovery
        Technologies formed for such purpose (the "Migratory Merger"). Effective
        September 24, 2007, shareholders approved the Agreement and Plan of Merger
        as
        described in the definitive proxy materials filed with the Securities and
        Exchange Commission.
 
 In
        accordance with the Agreement and Plan of Merger, Discovery Technologies
        adopted
        the capital structure of Discovery Technologies Nevada, which includes total
        authorized capital stock of 800,000,000 shares, of which 780,000,000 are
        common
        stock, with a par value of $.001 per share (the "Discovery Technologies Nevada
        Common Stock") and 20,000,000 shares are blank check preferred stock, with
        a par
        value of $.001 per share (the "Preferred Stock"). In addition, on the Effective
        Date described below, the issued and outstanding shares of our Common Stock
        automatically converted into shares of Discovery Technologies Nevada Common
        Stock at a ratio of nine (9) shares of our currently outstanding Common Stock
        for one (1) share of Discovery Technologies Nevada Common Stock.
 
 As
        a
        result of the reverse stock split of registrant's common stock, registrant's
        outstanding shares of common stock were reduced from 18,746,196 shares to
        2,083,339 shares. The Migratory Merger and reverse split became effective
        on
        October 16, 2007, (the "Effective Date"). The new trading symbol for Discovery
        Technologies, Inc. on the Over the Counter Bulletin Board is DCVT.
 
 Further
        on December 18, 2007, the Company had another reverse stock split at a ratio
        of
        6.771:1. As a result, registrant's outstanding shares of common stock were
        reduced from 2,083,339 shares to 308,084 shares. All references in the
        accompanying financial statements to the number of common shares and per
        share
        amounts have been retroactively restated to reflect the stock
        split.
 
 On
        December 26, 2007, the Company acquired all of the issued and outstanding
        capital stock (the “Green Agriculture Shares”) of Green Agriculture Holding
        Corporation, a New Jersey corporation (“Green Agriculture” or “Green New
        Jersey”), through a share exchange (the “Share Exchange”) in which the Company
        issued 10,770,669 number of shares of its common stock, par value $.001 per
        share (the “Common Stock”) to Green Agriculture’s shareholders in exchange for
        the Green Agriculture Shares. Immediately prior to the Share Exchange, the
        Company redeemed 246,148 shares of Common Stock held by Michael Friess and
        Sanford Schwartz (the “Redemption”) for $550,000 and issued 111,386 new shares
        of Common Stock to Messrs. Schwartz and Friess, two of our directors, who
        then
        appointed Tao Li as the Company’s Director and Chief Executive Officer who
        proceeded to effect the Share Exchange. In connection to the redemption share
        issuance, the Company also issued 78,462 shares of common stock to the Company’s
        agent.
  6
 **CHINA** **GREEN
            AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
            TO** **UNAUDITED
            CONSOLIDATED FINANCIAL STATEMENTS**
 The
        exchange of shares with the Company has been accounted for as a reverse
        acquisition under the purchase method of accounting because the stockholders
        of
        Green Agriculture obtained control of the Company. Accordingly, the exchange
        of
        shares by the two companies has been recorded as a recapitalization of the
        Company, with the Company (Green Agriculture) being treated as the continuing
        entity. The historical financial statements presented are those of Green
        Agriculture. As a result of the reverse acquisition transaction described
        above
        the historical financial statements presented are those of Green Agriculture,
        the operating entity. Pro-forma information is not presented because the
        public
        shell’s assets are immaterial. Transaction costs incurred in the reverse
        acquisition have been charged to expense.
 
 On
        August
        24, 2007, Green Agriculture Holding Corporation acquired 100% outstanding
        shares
        of Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“Techteam Jinong”)
        which owns 100% equity of Xi’an Jintai Agriculture Technology Development
        Company (“Xi’an Jintai” or “Jintai”). Green Agriculture was incorporated on
        January 27, 2007 under the laws of the State of New Jersey with initially
        two
        shareholders owning 89% and 11% of its stock. As of December 25, 2007,
        immediately prior to the share exchange between the Company and Green Holding,
        Yinshing David To (95.1%), Paul Hickey (2.45%) and Greg Freihofner (2.45%),
        (collectively, the “Green Holding Stockholders”) owned 100% of the outstanding
        capital stock of Green Holding. Green Agriculture, through its Chinese
        subsidiaries Techteam Jinong and Xi’an Jintai is engaged in the research and
        development, manufacture, distribution and sale of green organic fertilizer.
        The
        exchange of shares with Techteam has been accounted for as a reverse acquisition
        under the purchase method of accounting since the stockholders of the Techteam
        obtained control of the consolidated entity. Accordingly, the merger of the
        two
        companies has been recorded as a recapitalization of Techteam, with Teahteam
        being treated as the continuing entity. Inter-company amounts and balances
        have
        been eliminated.
 
 Yangling
        Techteam Jinong Humic Acid Product Co., Ltd. was founded in the People’s
        Republic of China on June 19, 2000. On Febuary 28, 2006, Yangling Techteam
        Jinong Humic Acid Product Co., Ltd changed name to be Shaanxi Techteam Jinong
        Humic Acid Product Co., Ltd. (“Techteam Jinong” or “Jinong”).
 
 On
        January 19, 2007, Techteam Jinong incorporated Xi’an Jintai which provides
        testing and experimental data collection base for the function and feature
        of
        the new fertilizer products produced by Techteam Jinong by imitating the
        various
        growing conditions and stages or cycle for a variety of plants, such as flowers,
        vegetables and seedlings which the fertilizers apply on. Xi’an Jintai also sells
        such plants themselves to the customers and generates sales.
  7
 **CHINA** **GREEN
            AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
            TO** **UNAUDITED
            CONSOLIDATED FINANCIAL STATEMENTS**
 The
        Company and its subsidiaries are engaged in the research and development,
        manufacture, distribution and technique support of green organic fertilizer.
        Xian Jonong’s main business is to produce and sell fertilizers, and Xi’an
        Jintai’s main business is to sell the product which are the by- product (fruit
        and vegetables) from the experiments of developing the fertilizers.
 
 Effective
        February 5, 2008, the Company changed its name from Discovery Technologies,
        Inc.
        to China Green Agriculture, Inc. to better reflect its business. Related
        to the
        name change, the trading symbol changed from DCOV.OB to CGAG.OB on the same
        day.
 
 The
        Company’s current structure is set forth in the diagram below:
  
  **NOTE
        2 - BASIS OF PRESETATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
        POLICIES**
 
 The
        accompanying unaudited financial statements of the Company have been prepared
        in
        accordance with generally accepted accounting principles for interim financial
        information. Accordingly, they do not include all of the information required
        by
        generally accepted accounting principles for complete financial statements.
        In
        the opinion of management, all adjustments (consisting of normal recurring
        adjustments) considered necessary for a fair presentation have been included.
        Operating results for the interim periods are not necessarily indicative
        of the
        results for any future period. These statements should be read in conjunction
        with the Company's audited financial statements and notes thereto for the
        fiscal
        year ended June 30, 2007. The results of the nine month period ended March
        31,
        2008 are not necessarily indicative of the results to be expected for the
        full
        fiscal year ending June 30, 2008.
  8
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 Principles
        of consolidation
 
 The
        accompanying consolidated financial statements include the accounts of the
        Company and its wholly-owned subsidiaries—Green Agriculture, Techteam Jinong and
        Xi’an Jintai. All significant inter-company accounts and transactions have been
        eliminated in consolidation.
 
 Use
        of
        estimates
 
 The
        preparation of consolidated financial statements in conformity with accounting
        principles generally accepted in the United States of America requires
        management to make estimates and assumptions that affect the reported amounts
        of
        assets and liabilities and disclosure of contingent assets and liabilities
        at
        the date of the consolidated financial statements and the amount of revenues
        and
        expenses during the reporting periods. Management makes these estimates using
        the best information available at the time the estimates are made. However,
        actual results could differ materially from those results.
 
 Cash
        and cash equivalents
 
 For
        statement of cash flows purposes, the Company considers all cash on hand
        and in
        banks, , certificates of deposit and other highly-liquid investments with
        maturities of three months or less, when purchased, to be cash and cash
        equivalents. Cash overdraft as of balance sheet date will be reflecting as
        liabilities in the balance sheet. As of March 31, 2008, cash and cash
        equivalents amounted to $13,986,395 and no cash over draft.
 
 Accounts
        receivable
 
 The
        Company's policy is to maintain reserves for potential credit losses on accounts
        receivable. Management reviews the composition of accounts receivable and
        analyzes historical bad debts, customer concentrations, customer credit
        worthiness, current economic trends and changes in customer payment patterns
        to
        evaluate the adequacy of these reserves. As of March 31, 2008, the Company
        had
        accounts receivable of $1,729,049, net of allowance for doubtful accounts
        of
        $256,570. This
        reserve was comprised of one receivable from a unrelated party amounting
        $68,815
        and the rest of amount from many various customers.
 
 Advances
        to suppliers
 
 The
        Company makes advances to certain vendors for purchase of its material. As
        of
        March 31, 2008, the advances to suppliers amounted to $273,289
 
 Advances
        for construction in progress
 
 The
        Company makes advances to certain vendors for construction in progress. As
        of
        March 31, 2008, the advances to suppliers amounted to $431,689.
  9
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 Inventories
 
 Inventory
        is valued at the lower of cost (determined on a weighted average basis) or
        net
        realizable value. Management compares the cost of inventory with the net
        realizable value and an allowance is made for writing down the inventory
        to its
        net realizable value, if lower than the cost.
 
 Property,
        plant and equipment
 
 Property,
        plant and equipment are recorded at cost. Gains or losses on disposals are
        reflected as gain or loss in the year of disposal. The cost of improvements
        that
        extend the life of plant, property, and equipment are capitalized. These
        capitalized costs may include structural improvements, equipment, and fixtures.
        All ordinary repair and maintenance costs are expensed as incurred.
 
 Depreciation
        for financial reporting purposes is provided using the straight-line method
        over
        the estimated useful lives of the assets:
 
 EstimatedUseful
                  LifeBuilding
              10-40
                  yearsLeasehold
                  improvements
              3-5
                  yearsMachinery
                  and equipments
              5-15
                  yearsVehicle
              3-5
                  years
 
 Leasehold
        improvements are amortized over the lease term or the estimated useful life,
        whichever is shorter.
 
 Impairment
 
 The
        Company applies the provisions of Statement of Financial Accounting Standard
        No.
        144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("FAS
        No.
        144"), issued by the Financial Accounting Standards Board ("FASB"). FAS No.
        144
        requires that long-lived assets be reviewed for impairment whenever events
        or
        changes in circumstances indicate that the carrying amount of an asset may
        not
        be recoverable through the estimated undiscounted cash flows expected to
        result
        from the use and eventual disposition of the assets. Whenever any such
        impairment exists, an impairment loss will be recognized for the amount by
        which
        the carrying value exceeds the fair value.
 
 The
        Company tests long-lived assets, including property, plant and equipment
        and
        intangible assets subject to periodic amortization, for recoverability at
        least
        annually or more frequently upon the occurrence of an event or when
        circumstances indicate that the net carrying amount is greater than its fair
        value. Assets are grouped and evaluated at the lowest level for their
        identifiable cash flows that are largely independent of the cash flows of
        other
        groups of assets. The Company considers historical performance and future
        estimated results in its evaluation of potential impairment and then compares
        the carrying amount of the asset to the future estimated cash flows expected
        to
        result from the use of the asset. If the carrying amount of the asset exceeds
        estimated expected undiscounted future cash flows, the Company measures the
        amount of impairment by comparing the carrying amount of the asset to its
        fair
        value. The estimation of fair value is generally measured by discounting
        expected future cash flows as the rate the Company utilizes to evaluate
        potential investments. The Company estimates fair value based on the information
        available in making whatever estimates, judgments and projections are considered
        necessary. There was no impairment of long-lived assets for the three months
        ended March 31, 2008.
  10
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 Revenue
        recognition
 
 The
        Company's revenue recognition policies are in compliance with Staff accounting
        bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to
        customers when a formal arrangement exists, the price is fixed or determinable,
        the delivery is completed, no other significant obligations of the Company
        exist
        and collectibility is reasonably assured. Payments received before all of
        the
        relevant criteria for revenue recognition are satisfied are recorded as unearned
        revenue.
 
 The
        Company's revenue consists of invoiced value of goods, net of a value-added
        tax
        (VAT). No product return or sales discount allowance is made as products
        delivered and accepted by customers are normally not returnable and sales
        discount is normally not granted after products are delivered.
 
 Advertising
        costs
 
 The
        Company expenses the cost of advertising as incurred or, as appropriate,
        the
        first time the advertising takes place. Advertising costs for the three months
        ended March 31, 2008 and 2007, were $2,731 and $ 1,296, respectively.
        Advertising costs for the nine months ended March 31, 2008 and 2007 were
        $231,411 and $250,040, respectively.
 
 Income
        taxes
 
 The
        Company accounts for income taxes using an asset and liability approach which
        allows for the recognition and measurement of deferred tax assets based upon
        the
        likelihood of realization of tax benefits in future years. Under the asset
        and
        liability approach, deferred taxes are provided for the net tax effects of
        temporary differences between the carrying amounts of assets and liabilities
        for
        financial reporting purposes and the amounts used for income tax purposes.
        A
        valuation allowance is provided for deferred tax assets if it is more likely
        than not these items will either expire before the Company is able to realize
        their benefits, or that future deductibility is uncertain.
 
 The
        Company records a valuation allowance for deferred tax assets, if any, based
        on
        its estimates of its future taxable income as well as its tax planning
        strategies when it is more likely than not that a portion or all of its deferred
        tax assets will not be realized. If the Company is able to utilize more of
        its
        deferred tax assets than the net amount previously recorded when unanticipated
        events occur, an adjustment to deferred tax assets would increase the Company
        net income when those events occur. The Company does not have any significant
        deferred tax asset or liabilities in the PRC tax jurisdiction.
  11
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 Foreign
        currency translation
 
 The
        functional currency of the Company is RMB. The Company uses the United States
        dollar ("U.S. dollars") for financial reporting purposes. The Company's
        subsidiaries maintain their books and records in their functional currency,
        being the primary currency of the economic environment in which their operations
        are conducted. In general, for consolidation purposes, the Company translates
        the subsidiaries' assets and liabilities into U.S. dollars using the applicable
        exchange rates prevailing at the balance sheet date, and the statement of
        income
        is translated at average exchange rates during the reporting period. Gain
        or
        loss on foreign currency transactions are reflected on the income statement.
        Gain or loss on financial statement translation from foreign currency are
        recorded as a separate component in the equity section of the balance sheet,
        as
        component of comprehensive income. The functional currency of the Company
        is
        Chinese Renminbi. In particular, Renminbi ("RMB"), the PRC's official currency,
        is the functional currency of the Company. Until July 21, 2005, RMB had been
        pegged to US$ at the rate of RMB8.28: US$1.00. On July 21, 2005, the PRC
        government reformed the exchange rate system into a managed floating exchange
        rate system based on market supply and demand with reference to a basket
        of
        currencies. In addition, the exchange rate of RMB to US$ was adjusted to
        RMB8.11: US$1.00 as of July 21, 2005. The People's Bank of China announces
        the
        closing price of a foreign currency such as US$ traded against RMB in the
        inter-bank foreign exchange market after the closing of the market on each
        working day, which will become the unified exchange rate for the trading
        against
        RMB on the following working day. The daily trading price of US$ against
        RMB in
        the inter-bank foreign exchange market is allowed to float within a band
        of 0.3%
        around the unified exchange rate published by the People's Bank of China.
        This
        quotation of exchange rates does not imply free convertibility of RMB to
        other
        foreign currencies. All foreign exchange transactions continue to take place
        either through the Bank of China or other banks authorized to buy and sell
        foreign currencies at the exchange rates quoted by the People's Bank of China.
        Approval of foreign currency payments by the Bank of China or other institutions
        required submitting a payment application form together with invoices, shipping
        documents and signed contracts.
 
 Fair
        values of financial instruments
 
 Statement
        of Financial Accounting Standard No. 107, "Disclosures about Fair Value of
        Financial Instruments", requires that the Company disclose estimated fair
        values
        of financial instruments.
 The
        Company's financial instruments primarily consist of cash and cash equivalents,
        accounts receivable, other receivables, advances to suppliers, accounts payable,
        other payable, tax payable, and related party advances and
        borrowings.
 
 As
        of the
        balance sheet dates, the estimated fair values of the financial instruments
        were
        not materially different from their carrying values as presented on the balance
        sheet. This is attributed to the short maturities of the instruments and
        that
        interest rates on the borrowings approximate those that would have been
        available for loans of similar remaining maturity and risk profile at respective
        balance sheet dates.
 
 Segment
        reporting
 
 Statement
        of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure About
        Segments of an Enterprise and Related Information" requires use of the
        "management approach" model for segment reporting. The management approach
        model
        is based on the way a company's management organizes segments within the
        company
        for making operating decisions and assessing performance. Reportable segments
        are based on products and services, geography, legal structure, management
        structure, or any other manner in which management disaggregates a
        company.
  12
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 During
        the six month ended December 31, 2006, the company was organized in one segment.
        During the nine months ended March 31, 2008, the Company was organized into
        two
        main business segments: produce fertilizer (Jinong) and agricultural products
        (Jintai). The following table presents a summary of operating information
        and
        certain year-end balance sheet information for the nine months ended March
        31,
        2008.
 For
                    the nine months end March 312008
                
                2007(Unaudited)
                
                (Unaudited)Revenues
                    from unaffiliated customers:Fertilizer
                
                $
                11,852,614
                
                $
                8,669,469Agricultural
                    products
                
                
                3,529,475
                
                
                401,503Consolidated
                
                $
                15,382,089
                
                $
                9,070,972Operating
                    income :Fertilizer
                
                $
                5,850,358
                
                $
                4,348,414Agricultural
                    products
                
                
                1,835,514
                
                
                171,551Reconciling
                    item (1)
                
                
                (69,588
                )
                
                -Reconciling
                    item (2)
                
                
                (656,669
                )
                
                -Consolidated
                
                $
                6,959,615
                
                $
                4,519,965Identifiable
                    assets:Fertilizer
                
                $
                36,865,674
                
                $
                15,529,427Agricultural
                    products
                
                
                3,707,995
                
                
                1,873,967-Reconciling
                    item (1)
                
                
                253,891
                
                
                -Reconciling
                    item (2)
                
                
                4,228,641
                
                
                -Consolidated
                
                $
                45,056,201
                
                $
                17,403,395
  13
 **CHINA** **GREEN
                AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
                TO** **UNAUDITED
                CONSOLIDATED FINANCIAL STATEMENTS**
 Net
                    incomeFertilizer
                
                $
                5,312,719
                
                $
                3,830,533Agricultural
                    products
                
                
                1,835,760
                
                
                171,551Reconciling
                    item (1)
                
                
                (57,968
                )
                
                -Reconciling
                    item (2)
                
                
                (656,669
                )
                
                -Consolidated
                
                $
                6,433,842
                
                
                4,002,084Interest
                    expense:Fertilizer
                
                $
                284,361
                
                $
                270,551Agricultural
                    products
                
                
                -
                
                
                -Consolidated
                
                $
                284,361
                
                $
                270,551
  (1)
          Reconciling amounts refer to the unallocated assets or expenses of Green
          Agriculture.
  (2)
        Reconciling amounts to the unallocated assets or expenses of the parent
        Company.
  Statement
        of cash flows
 
 In
        accordance with Statement of Financial Accounting Standards No. 95, "Statement
        of Cash Flows," cash flows from the Company's operations is calculated based
        upon the local currencies. As a result, amounts related to assets and
        liabilities reported on the statement of cash flows may not necessarily agree
        with changes in the corresponding balances on the balance sheet.
 
 Recent
        accounting pronouncements
 In
        December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
        Consolidated Financial Statements”, which is an amendment of Accounting Research
        Bulletin (“ARB”) No. 51.  This statement clarifies that a
        noncontrolling interest in a subsidiary is an ownership interest in the
        consolidated entity that should be reported as equity in the consolidated
        financial statements.  This statement changes the way the consolidated
        income statement is presented, thus requiring consolidated net income to
        be
        reported at amounts that include the amounts attributable to both parent
        and the
        noncontrolling interest.  This statement is effective for the fiscal
        years, and interim periods within those fiscal years, beginning on or after
        December 15, 2008.  Based on current conditions, the Company does not
        expect the adoption of SFAS 160 to have a significant impact on its results
        of
        operations or financial position.
  14
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 In
        December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
        Combinations.”  This statement replaces FASB Statement No. 141,
“Business Combinations.” This statement retains the fundamental requirements in
        SFAS 141 that the acquisition method of accounting (which SFAS 141 called
        the purchase method) be used for all business combinations and for an acquirer
        to be identified for each business combination. This statement defines the
        acquirer as the entity that obtains control of one or more businesses in
        the
        business combination and establishes the acquisition date as the date that
        the
        acquirer achieves control. This statement requires an acquirer to recognize
        the
        assets acquired, the liabilities assumed, and any noncontrolling interest
        in the
        acquired at the acquisition date, measured at their fair values as of that
        date,
        with limited exceptions specified in the statement. This statement applies
        prospectively to business combinations for which the acquisition date is
        on or
        after the beginning of the first annual reporting period beginning on or
        after
        December 15, 2008. The Company does not expect the adoption of SFAS 160 to
        have
        a significant impact on its results of operations or financial
        position.
 
 In
        March,
        2008, the FASB issued FASB Statement No. 161, “Disclosures about Derivative
        Instruments and Hedging Activities”. The new standard is intended to improve
        financial reporting about derivative instruments and hedging activities by
        requiring enhanced disclosures to enable investors to better understand their
        effects on an entity’s financial position, financial performance, and cash
        flows. It is effective for financial statements issued for fiscal years and
        interim periods beginning after November 15, 2008, with early application
        encouraged. The new standard also improves transparency about the location
        and
        amounts of derivative instruments in an entity’s financial statements; how
        derivative instruments and related hedged items are accounted for under
        Statement 133; and how derivative instruments and related hedged items affect
        its financial position, financial performance, and cash flows.
 FASB
        Statement No. 161 achieves these improvements by requiring disclosure of
        the
        fair values of derivative instruments and their gains and losses in a tabular
        format. It also provides more information about an entity’s liquidity by
        requiring disclosure of derivative features that are credit risk-related.
        Finally, it requires cross-referencing within footnotes to enable financial
        statement users to locate important. Based on current conditions, the Company
        does not expect the adoption of SFAS 161 to have a significant impact on
        its
        results of operations or financial position.
  15
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 **NOTE
        3 - INVENTORIES**
 
 Inventories
        consist of the following as of March31, 2008:
 
 Raw
                  materials
              
              $
              603,672Supplies
                  and packing materials
              
              
              558,503Work
                  in progress
              
              
              3,205,892Finished
                  goods
              
              
              1,450,947Totals
              
              $
              5,819,014
  **NOTE
        4 - OTHER ASSETS**
 
 As
        of
        March 31, 2008, other assets comprised of following:
 Other
                    receivables
                
                $
                100,708Promotion
                    samples
                
                
                36,619Total
                
                $
                137,327
  Other
        receivables represent advances made to non-related companies and employees
        for
        $87,259 and notes receivable from various customers for $13,449. The amounts
        were unsecured, interest free, and due on demand.
 Promotion
        samples are promotion material the company kept in the office.
 
 **NOTE
        5 - PROPERTY, PLANT AND EQUIPMENT, AND CONSTRUCTION IN
        PROGRESS**
 
 Property,
        plant and equipment consist of the following as of March 31, 2008:
 
 Building
                  and improvements
              
              $
              8,597,610Vehicle
              
              
              23,217Machinery
                  and equipments
              
              
              10,030,707Totals
              
              
              18,651,533Less:
                  accumulated depreciation
              
              
              (1,448,562
              )$
              17,202,971
 
 Depreciation
        expenses for the three months ended March 31, 2007 and 2008 were $198,523
        and
        $300,489, respectively. Depreciation expenses for the nine months ended March
        31, 2007 and 2008 were $266,556 and $703,271, respectively.
  16
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 **NOTE
        6 - INTAGIBLE ASSETS**
 
 The
        intangible assets comprised of following at March 31, 2008:
 
 Land use right, net
              
              $
              900,422Technology know-how, net
              
              
              279,286Total
              
              $
              1,179,708
  LAND
        USE RIGHTS
 
 Under
        the
        People's Republic of China's governmental regulations, the Government owns
        all
        land. However, the government grants the user a “land use right” (the Right) to
        use land. The Company has recognized the amounts paid for the acquisition
        of
        rights to use land as intangible asset and amortizing over a period of fifty
        years which was approved by government.
 
 A
        shareholder contributed the land use rights on August 16 th ,
        2001.
        The land use right was recorded at cost of $1,038,947. The land use right
        is for
        fifty years. The land use right consist of the followings as of March 31,
        2008:
 
 Land
                  use right
              
              $
              1,038,947Less:
                  accumulated amortization
              
              
              (138,525
              )$
              900,422
 
 TECHNOLOGY
        KNOW-HOW
 
 A
        shareholder contributed the technology know-how on August 16, 2001. The
        technology know-how is recorded at cost of $837,859. This technology is the
        special formula to produce humid acid. The technology know-how is valid for
        10
        years. The technology know-how consists of the following as of March 31,
        2008:
 
 Technology
                  Know-how
              
              $
              837,859Less:
                  accumulated amortization
              
              
              (558,573
              )$
              279,286
 
 Total
        amortization expenses of intangible assets for the nine months ended March
        31,
        2008 and 2007 amounted to $78,693 and $73,921, respectively. Total amortization
        expenses of intangible assets for the three months ended March 31, 2008 and
        2007
        amounted to $29,784 and $31,365 respectively. Amortization expenses of
        intangible assets for next five years after March 31, 2008 are as follows:
 
 1
                  year after
              
              $
              102,4182
                  year after
              
              
              102,4183
                  year after
              
              
              102,4184
                  year after
              
              
              102,4185
                  year after
              
              
              102,418Total
              
              $
              512,090
  17
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 As
        of
        March 31, 2008, construction in progress amounted to $68,118. Construction
        in
        progress is the construction for new product line.
 
 **NOTE
        7 - RELATED PARTIES TRANSATIONS**
 
 The
        amount due to related parties were the advances from the Company’s one
        shareholder, and was unsecured, non-interest bearing and due
        on
        demand .
        As of March
        31,
        2008, amount
        due to related parties amounted to $1,300 .
 
 **NOTE
        8 -** **ACCRUED
        EXPENSES** **AND OTHER PAYABLES**
 
 Accrued
        expenses and other payables of the following as of March 31, 2008:
 
 Payroll
                  payable
              
              $
              20,575Welfare
                  payable
              
              
              197,211Interest
                  and other accrued expenses
              
              
              22,528Other
                  levy payable
              
              
              100,485Total
              
              $
              340,800
 
 **NOTE
        9 - LOAN PAYABLES**
 
 As
        of
        March 31, 2008, the loan payables are as follows:
 
 Short
                  term loans payable:Xian
                  City Commercial Branch
              
              $
              2,139,190Xian
                  Agriculture Credit Union
              
              
              541,928Agriculture
                  Bank
              
              
              1,426,127Total
              
              $
              4,107,245
 
 At
        March
        31, 2008, the Company had a loan payable of $ 2,139,190 to
        Xi’an
        City Commercial Bank in China, with an annual interest rate of 9.585%, and
        due
        on April 1, 2008. The loan was renewed for one year till April 1, 2009 with
        a
        new annual interest rate of 10.5825%. The loan is pledge by the land use
        right
        and property of the Company.
 
 At
        March
        31, 2008, the Company had a loan payable of $ 541,928 to Xi’an
        Agriculture Credit Union ,
        with an
        initial annual interest rate of 9.216%, and due on September 26, 2007. On
        September 10, 2007, the loan was extended to September 16, 2008 with an annual
        interest rate of 11.795%. The loan is guaranteed by a former shareholder.
        The
        Company’s shareholder paid interest expenses of $27,464 and $22,126 for the nine
        months ended March 31, 2008 and 2007 for this loan. The Company has recorded
        the
        interest expenses paid by the shareholder as contributed capital.
  18
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 At
        March
        31, 2008, the Company had a loan payable of $ 1,426,127 to
        Agriculture Bank in China, with an annual interest rate of 9.711%, and due
        on
        December 29, 2008. The loan is guaranteed by the former
        shareholder.
 
 The
        interest expenses are $86,761 and $90,190 for three months ended March 31,
        2008
        and 2007. The interest expenses are $284,361 and $270,551 for nine months
        ended
        March 31, 2008 and 2007.
 
 **NOTE
        10 - TAX PAYABLES**
 
 Tax
        payables consist of the following as of March 31, 2008:
 
 VAT
                  payable
              
              $
              3,516,136Income
                  tax payable
              
              
              630,666Other
                  levies
              
              
              263,257$
              4,410,059
 
 **NOTE
        11 - ADVANCE FROM UNRELATED COMPANIES**
 Advance
        from unrelated companies as of March 31, 2008 was $304,279 from the unrelated
        parties. The advances were due on demand, no interest bearing and due on
        demand.
 
 **NOTE
        12 - OTHER INCOME (EXPENSES)**
 
 Other
        income (expenses) mainly consist of interest expenses and subsidy income
        from
        government.
 
 **NOTE
        13 - INCOME TAXES**
 
 The
        Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires
        the
        recognition of deferred tax assets and liabilities for the expected future
        tax
        consequences of events that have been included in the financial statements
        or
        tax returns. Under this method, deferred income taxes are recognized for
        the tax
        consequences in future years of differences between the tax bases of assets
        and
        liabilities and their financial reporting amounts at each period end based
        on
        enacted tax laws and statutory tax rates applicable to the periods in which
        the
        differences are expected to affect taxable income. Valuation allowances are
        established, when necessary, to reduce deferred tax assets to the amount
        expected to be realized.
 
 The
        Company is subject to PRC Enterprise Income Tax at a rate of 33% on the net
        income. For the year 2007, the company can enjoy tax-free benefit because
        it
        becomes a foreign invested company according to the PRC tax law. The income
        tax
        expenses for the nine months ended March 31, 2008 and 2007 are $301,841 and
        $266,006 respectively. The income tax expenses for the three months ended
        March
        31, 2008 and 2007 are $301,841 and $66,126 respectively.
  19
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 The
        following table reconciles the U.S. statutory rates to the Company’s effective
        tax rate at March 31, 2008 and 2007:
 
 2008
              
              2007Tax
                  at statutory rate
              
              34%
              
              34%Foreign
                  tax rate difference
              
              -16%
              
              -19%Net
                  operating loss in other tax jurisdiction for where no benefit is
                  realized
              
              -14%
              
              -15%4%
              
              0%
 
 Beginning
        January 1, 2008, the new Enterprise Income Tax (“EIT”) law will replace the
        existing laws for Domestic Enterprises (“DES”) and Foreign Invested Enterprises
        (“FIEs”). The new standard EIT rate of 25% will replace the 33% rate currently
        applicable to both DES and FIEs. The two years tax exemption, three years
        50%
        tax reduction tax holiday for production-oriented FIEs will be eliminated. From
        January 1, 2008, Techteam
        Jinong is
        subject to income tax at a rate of 18%. Xi’an Jintai is exempt from paying
        income tax for calendar 2007 as it is a wholly owned subsidiary of Techteam
        which was exempt from income tax. Jintai is also exempt from paying income
        tax
        for calendar 2008 as it produces the products which fall into the tax exemption
        list newly issued by the government.
 Due
        to
        non-operation in U.S. and tax free status in China, the Company had no deferred
        tax for the nine months ended March 31, 2008 and 2007.
 
 **NOTE
        13 - CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS**
 
 The
        Company's operations are all carried out in the PRC. Accordingly, the Company's
        business, financial condition and results of operations may be influenced
        by the
        political, economic and legal environments in the PRC, and by the general
        state
        of the PRC's economy.
 
 The
        company's operations in the PRC are subject to specific considerations and
        significant risks not typically associated with companies in the North America
        and Western Europe. These include risks associated with, among others, the
        political, economic and legal environments and foreign currency exchange.
        The
        Company's results may be adversely affected by changes in governmental policies
        with respect to laws and regulations, anti-inflationary measures, currency
        conversion and remittance abroad, and rates and methods of taxation, among
        other
        things.
  20
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 **MAJOR
        CUSTOMERS AND VENDORS**
 
 There
        were three vendors from which we purchased more than 10% of our raw materials
        for the nine months ended March 31, 2008 with each vendor individually
        accounting for about 19%, 15% and 10%. Accounts payable to the venders amounted
        to $0, $385, and $49,697 as of March 31, 2008. There was one vendor that
        was
        over 10% of the total purchases for the nine months ended March 31, 2007
        with
        accounting for approximately 60%. Accounts payable to the vendors amounted
        to $0
        as of March 31, 2007.
 
 There
        WAs
        no customer that is accounted over 10% of the total sales as of the nine
        months
        ended March 31, 2008 and 2007.
 
 **NOTE 14
        - STOCKHOLDERS’ EQUITY**
  6,313,617
        shares of common stock were issued to 31 accredited investors (the “Investors”)
        at $3.25 per share in a private placement of the Company’s common stock that was
        completed on December 26, 2007. .If any governmental agency in the PRC
        challenges or otherwise takes any action that adversely affects the transactions
        contemplated by the Exchange Agreement, and the Company cannot undo such
        governmental action or otherwise address the material adverse effect to the
        reasonable satisfaction of the Investors within sixty (60) days of the
        occurrence of such governmental action, then, upon written demand from an
        Investor, the Company shall promptly, and in any event within thirty (30)
        days
        from the date of such written demand, pay to that Investor, as liquidated
        damages, an amount equal to that Investor’s entire Investment Amount with
        interest thereon from the Closing date until the date paid at the rate of
        10%
        per annum. As a condition to the receipt of such payment, the Investor shall
        return to the Company for cancellation the certificates evidencing the Shares
        acquired by the Investor under the Agreement. In accordance with EITF D-98:
        Classification and Measurement of Redeemable Securities, the Company has
        classified the equity as temporary equity, as “Common Stock, $.001 par value,
        6,313,617 shares subject to redemption”.
  977,948
        shares were issued to the consultants relating to the private placement.
        Net
        proceeds from the private placement were $18,602,723, of which $188,388 was
        received in January, 2008. The direct costs related to this placement, including
        legal and professional fees, were deducted from the related proceeds and
        the net
        amount in excess of par value was recorded as additional paid-in capital.
        The
        total of $4,250,000 was placed in escrow cash and booked as restricted cash.
        The
        total of $4,250,000 in the escrow is pursuant to a Securities Purchase Agreement
        and the Holdback Make Good Agreement entered into in connection with the
        placement for the following:
 
 1.
              $2,000,000
                  is held pending the company hiring a qualified CFO. The Company
                  appointed
                  a CFO in April 2008.
 2.
              $2,000,000
                  is held pending the company hiring two independent directors, therefore
                  constituting a majority independent directors in the board. T he
                  Company
                  appointed a majority of independent directors in April 2008.
 3.
              $250,000
                  is for the retaining of an Investors Relation firm.
 
 As
        of
        March 31, the balance of restricted cash is $4,228,641.
  21
 **CHINA** **GREEN
              AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
              TO** **UNAUDITED
              CONSOLIDATED FINANCIAL STATEMENTS**
 In
        connection with the Securities Purchase Agreement and the Private Placement,
        the
        Company also entered into a registration rights agreement (the “Registration
        Rights Agreement”) and a lockup agreement (the “Lockup Agreement”). Among other
        things, the Securities Purchase Agreement: (i) establishes targets for after
        tax
        net income and earnings per share for our fiscal year ending June 30, 2009
        at
        not less than $12,000,000 and $0.609, respectively (the “2009 Targets”); (ii)
        provides for liquidated damages in the event that PRC governmental policies
        or
        actions have a material adverse effect on the transactions contemplated by
        the
        Share Exchange Agreement (a “Material Adverse Effect”); and (iii) requires us to
        hire a new, fully qualified chief financial officer (“CFO”) satisfactory to the
        Investors. In order to secure our obligation to meet the 2009 profit target
        and
        earnings per share target, Mr. To has placed 3,156,808 shares of Common Stock
        (“2009 Make Good Shares”) into an escrow account pursuant to the terms of the
        Make Good Escrow Agreement by and among us, Mr. To, the Investors and the
        escrow
        agent named therein. In the event we do not achieve either of the 2009 Targets,
        the 3,156,808 shares of Common Stock will be conveyed to the Investors pro-rata
        in accordance with their respective investment amount for no additional
        consideration. In the event that we meet the 2009 Targets, the 3,156,808
        shares
        will be transferred to Mr. Tao Li. If PRC governmental actions or policies
        result in a Material Adverse Effect, as defined in the Securities Purchase
        Agreement, that cannot be reversed or cured to the Investors’ reasonable
        satisfaction, we will be obligated to pay to the Investors as liquidated
        damages
        the entire principal amount of their investment, with interest at 10% per
        annum.
 
 **NOTE
        15 - COMMITMENTS AND LEASES**
  A
        Company’s shareholder provided free office space for the Company for the six
        months ended December 31, 2006. The Company has recorded the free lease as
        rent
        expenses and contributed capital based on Xi’an house rental market. From July
        2007, the company signed an office lease with the shareholder and started
        to pay
        the rent for $910 per month. The company recorded rent expenses of $4,578
        and
        $13,675 for the three and nine months ended March 31, 2007 as contributed
        capital and $2,739 and $7,908 as rent expenses for the three and nine months
        ended March 31, 2008. Rent expenses for the 5 years after March 31, 2008
        is as
        follows:
 
 1
                  year after
              
              $
              2,7302
                  year after
              
              
              03
                  year after
              
              
              04
                  year after
              
              
              05
                  year after
              
              
              0Total
              
              $
              2,730


22




**Item
      2.** **Management’s
      Discussion and Analysis or Plan of Operation**




*The
        following discussion and analysis of the consolidated financial condition
        and
        results of operations should be read with our consolidated financial statements
        and related notes appearing elsewhere in this report. This discussion and
        analysis contains forward-looking statements that involve risks, uncertainties
        and assumptions. The actual results may differ materially from those anticipated
        in these forward-looking statements as a result of certain factors, including,
        but not limited to, the competition in the fertilizer industry and the impact
        of
        such competition on pricing, revenues and margins, the weather conditions
        in the
        areas where our customers are based, the cost of attracting and retaining
        highly
        skilled personnel, the prospects for future acquisitions and other factors
        set
        forth in our reports on Forms 10-K and 10-Q.*
  **Overview**
 
 China
        Green Agriculture, Inc. (formerly known as Discovery Technologies, Inc.)
        (the
“Company,” “we” or “us”) owns all of the issued and outstanding capital stock of
        Green Agriculture Holding Corporation (“Green New Jersey”) which owns 100% of
        the capital stock of Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd.,
        a
        company incorporated under the laws of the People’s Republic of China
        (“Techteam”).
 
 We,
        through Techteam, research, develop, manufacture and distribute humic acid
        organic liquid compound fertilizer in 27 provinces in China. Humic acid is
        an
        essential natural, organic ingredient for a balanced, fertile soil, and it
        is
        one of the major constituents of organic matter. China is both the world’s
        largest manufacturer and consumer of fertilizers.
 
 In
        2005,
        compound fertilizers accounted for 27% of the total fertilizers consumed
        in
        China. However, the quality of such fertilizers in China is generally very
        low
        leading to ecosystem degradation. (Source: Ministry of Agriculture of the
        PRC).
        Organic compound fertilizers provide a balance of both organic and inorganic
        substances, thereby combining the speedy effectiveness of chemical fertilizers
        with the environmental benefits of the organic fertilizers.
 
 We
        have a
        multi-tiered product strategy which allows us to tailor our products to
        different needs and preferences of the Chinese fertilizer market, which vary
        greatly across the country. For example, in Southern and Eastern China, farmers
        are able to grow high margin crops such as fruit and seasonal vegetables
        where
        climate and rainfall permits, hence they can gain more return on investment
        from
        more expensive, specialized fertilizers. In the Northwest areas, farmers’ low
        profit margin crops prevent them from investing too much in fertilizer thereby
        necessitating a broader spectrum, low cost fertilizer.
  We
        have
        developed more than 100 different fertilizer products. The leading five
        provinces by revenue for the fiscal quarter ended March 31, 2008 were Henan,
        Shandong, Heilongjiang, Anhui and Guangdong.
 
 Normally,
        our peak selling seasons for our fertilizer products is in spring and summer,
        from March through October (the rest of the months in a year are non-peak
        season). We experience seasonal variations in our revenues and our operating
        costs. Periods of cold weather may delay the application of the fertilizer,
        or
        render it unnecessary thereby reducing demand for our products. Historically
        we
        have experienced sales variations of up to 30% when compared to the sales
        of our
        peak season or non-peak season to that of our average revenues in fiscal
        2007.
        We plan to develop our customer base in southern China such as Hainan province,
        which has a warm winter to mitigate the seasonal variations in our future
        revenues.
 
 We
        conduct our research and development activities through Techteam’s wholly owned
        subsidiary, Xi’an Jintai Agriculture Technology Development Company (“Jintai”)
        through which we also sell high quality flowers and green vegetables and
        fruits
        which are grown in our research greenhouses to airlines, hotels and restaurants.
        Jintai owns its 137,000 square meter research and development facility. The
        functions of the green research and development facility are two-fold: (i)
        it
        provides testing and experimental data collection base for the function and
        feature of the new fertilizer products by imitating the various growing
        conditions and stages or cycle for a variety of plants, such as flowers,
        vegetables and seedlings which the fertilizers apply on and (ii) such plants
        themselves can be sold to the customers and generate sales. Our research
        and
        development capabilities allow us to develop products that are tailored to
        farmers’ specific needs in different regions, different crops, humidity, weather
        and soil conditions that require specialized fertilizers.
  23
  **Recent
        Development**
 
 On
        December 26, 2007, we acquired all of the issued and outstanding capital
        stock
        of Green Agriculture Holding Corporation, a New Jersey holding company which
        owns 100% of the capital stock of Techteam (the “Reverse Merger”) simultaneous
        with a private placement of 6,313,616 shares of our common stock for $20,519,255
        in gross proceeds (the “Private Placement”). We intend to use the proceeds of
        the Private Placement to buy capital equipment and expand our production
        and
        facilities, such as construction of our new production lines which we anticipate
        will provide us with an annual production capacity of 40,000 metric
        tons.
 
 **Results
        of Operations**
 
 **THREE
        MONTHS ENDED MARCH 31, 2008 COMPARED WITH THREE MONTHS ENDED MARCH 31,
        2007.**
 
 The
        following table shows our operating results for the three months ended March
        31,
        2008 and March 31, 2007.
 
 **Three
                  Months ended**
                **March
                  31, 2008**
                **(unaudited)
                  ($)**
              
              **Three
                  Months ended**
                **March
                  31, 2007**
                **(unaudited)
                  ($)**Net
                  Sales
              
              
              4,434,926
              
              
              2,198,615Cost
                  of goods sold
              
              
              1,982,084
              
              
              1,003,035Gross
                  profit
              
              
              2,452,841
              
              
              1,195,580Selling
                  Expenses
              
              
              142,808
              
              
              27,428Operating
                  and Administrative Expenses
              
              
              256,800
              
              
              184,130Operating
                  Income
              
              
              2,053,234
              
              
              984,022Total
                  Other Income (expense)
              
              
              (79,348
              )
              
              (88,618
              )Income
                  Before Income Taxes
              
              
              1,973,886
              
              
              895,405Provision
                  for Income Taxes
              
              
              (301,841
              )
              
              -Net
                  Income
              
              
              1,672,045
              
              
              895,405
  *Net
        Sales*
 
 Our
        net
        sales for the three months ended March 31, 2008 were $4,434,926 (of which
        Jintai
        contributed $914,633), an increase of $2,236,311, or 102%, from $2,198,615,
        which we had in the corresponding period in 2007. The increase was attributable
        to the following factors: (i) an increase in sales volume of our fertilizer
        products due to increase of our sales by existing distributors which contributed
        a $1,321,678 increase in our revenues as compared to that of the same period
        in
        2007; and (ii) the addition of our greenhouse facility which contributed
        $914,633 of sales for the three months ended March 31, 2008. The greenhouse
        facility is operated by our wholly-owned subsidiary, Jintai, formed in January
        2007 and which has been generating revenues since March 2007. It produces
        flowers, vegetables and fruits.
 
 *Cost
        of Goods Sold*
 
 Cost
        of
        goods sold is primarily comprised of the cost of our raw materials and packaging
        materials, direct labor and manufacturing overhead expenses. Our cost of
        goods
        sold for the three months ended March 31, 2008 was $1,982,084 (of which Techteam
        and Jintai recorded $1,462,274 and $519,810 respectively), an increase of
        $979,049, or 98%, as compared to $1,003,035 for the corresponding period
        in
        2007. Cost of goods sold as a percentage of net sales was 45% and 46% for
        the
        three-month periods ended on March 31, 2008 and 2007, respectively. The increase
        in cost of goods sold was primarily due to the increase in our sales, while
        the
        cost of goods sold as a percentage of net sales for the three months ended
        March
        31, 2008 remained constant year over year despite increased sales volume.
  24
  *Gross
        Profit*
 
 Our
        gross
        profit is equal to the difference between our net sales and our cost of goods
        sold. Our gross profit for the three months ended March 31, 2008 was $2,452,841
        (of which Techteam and Jintai recorded $2,058,019 and $394,823 respectively),
        an
        increase of $1,257,261 (of which Techteam and Jintai recorded $1,037,623
        and
        $219,639 respectively), or 105%, compared with $1,195,580 (of which Techteam
        and
        Jintai recorded $1,020,396 and $175,184 respectively) for the corresponding
        period in 2007. The increase in our gross profit was due to the increase
        in our
        sales revenues generated in both Jinong and Jintai. Gross profit as a percentage
        of net sales was 55% for the three months ended March 31, 2008, as compared
        to
        54% during the same period in 2007.
 
 *Selling
        Expenses*
 
 Our
        selling expenses consist primarily of salary of sales personnel, advertising
        and
        promotion expenses, freight charges and related compensation. Selling expenses
        were $142,808 (of which Jintai incurred $29,722) for the three-month period
        ended March 31, 2008 as compared to $27,428 for the period ended March 31,
        2007,
        an increase of $115,380 or approximately 421%. The increase was primarily
        attributable to the significant increase in the aggregate salaries and travel
        expenses for our sales department, marketing personnel and technical service
        personnel.
 
 *Operating
        and Administrative Expenses*
 
 Our
        operating and administrative expenses consist primarily of rental expenses,
        related salaries, business development, depreciation and travel expenses,
        legal
        and professional expenses. Operating and administrative expenses were $256,800
        (of which Jintai incurred $7,120) for the three-month period ended March
        31,
        2008, as compared to $184,130 for the period ended March 31, 2007, an increase
        of $72,670. The increase was primarily attributable to accounting and legal
        expenses incurred during the three months ended March 31, 2008 as we made
        the
        transition to being a public company.
 
 *Operating
        Income*
 
 Our
        operating income was $2,053,233 for the three month period ended March 31,
        2008,
        as compared to $984,022 for the period ended March 31, 2008, an increase
        of
        $1,069,211, or approximately 109%. The increase was primarily attributable
        to
        the increase in the sales of our fertilizer products and agricultural products
        from our greenhouse facility. The greenhouse facility is operated by Jintai,
        which generated operating income of $357,981 for the three month period ended
        March 31, 2008.
 
 *Income
        Taxes*
 
 Techteam,
        our indirectly wholly owned operating subsidiary, had $301,841 income tax for
        the
        three months ended March 31, 2008 and $0 for the three months ended March
        31,
        2007. Both Techteam and Jintai did not owe any taxes as a wholly foreign
        owned
        entity under PRC law in Calendar 2007. Beginning January 1, 2008, Techteam
        will
        become subject to income tax at a rate of 18%. Jintai is exempt under PRC
        law
        from paying income tax for calendar 2008 as it produces products which enable
        it
        to claim an exemption from taxes under PRC law.
 
 *Net
        Income*
 
 Net
        income for the three months ended March 31, 2008 was $1,672,045, an increase
        of
        $776,640, or 87% from $895,405 for the comparable period in 2007. The increase
        was principally attributable to the increase in our sales revenue.
  25
  **NINE
        MONTHS ENDED MARCH 31, 2008 COMPARED WITH NINE MONTHS ENDED MARCH 31,
        2007**
 
 The
        following table shows our operating results for the nine months ended March
        31,
        2008 and March 31, 2007.
 
 **Nine
                  Months ended**
                **March
                  31, 2008**
                **(unaudited)
                  ($)**
              
              **Nine
                  Months ended**
                **March
                  31, 2007**
                **(unaudited)
                  ($)**Net
                  Sales
              
              
              15,382,089
              
              
              9,070,972Cost
                  of goods sold
              
              
              6,377,066
              
              
              3,687,416Gross
                  profit
              
              
              9,005,023
              
              
              5,383,555Selling
                  Expenses
              
              
              614,646
              
              
              400,108Operating
                  and Administrative Expenses
              
              
              1,430,762
              
              
              463,482Operating
                  Income
              
              
              6,959,615
              
              
              4,519,965Total
                  Other Income (expense)
              
              
              (223,933
              )
              
              (251,875
              )Income
                  Before Income Taxes
              
              
              6,735,682
              
              
              4,268,090Provision
                  for Income Taxes
              
              
              (301,841
              )
              
              (266,006
              )Net
                  Income
              
              
              6,433,842
              
              
              4,002,084
 
 *Net
        Sales*
 
 Our
        net
        sales for the nine months ended March 31, 2008 were $15,382,089, an increase
        of
        $6,311,117, or 70%, from $9,070,972, which we had in the corresponding period
        in
        fiscal 2007. This increase
        was attributable to the following factors: (i) an increase in sales volume
        in
        our fertilizer products which contributed a $1,823,492 increase in our revenues
        as compared to that of the same period in fiscal 2007; (ii) the launch of
        our
        new products which contributed $958,150 in revenues as compared to that of
        the
        same period in fiscal 2007; and (iii) the addition of our newly acquired
        greenhouse facility, which contributed $3,529,475 of sales for the
        nine months ended March 31, 2008.
 
 *Cost
        of Goods Sold*
 
 Cost
        of
        goods sold is primarily comprised of the cost of our raw materials and packaging
        materials, direct labor and manufacturing overhead expenses. Our cost of
        goods
        sold for the nine months ended March 31, 2008 was $6,377,066, an increase
        of
        $2,689,650, or 73%, as compared to $3,687,416 for the corresponding period
        in
        fiscal 2007. Cost of goods sold as a percentage of net sales were both 41%
        for
        the nine-month periods ended on March 31, 2008 and 2007. The increase in
        cost of
        goods sold was primarily due to the increase in our sales volume, while the
        cost
        of goods sold as a percentage of net sales for the nine months ended March
        31,
        2008 remained constant.
  *Gross
        Profit*
 
 Our
        gross
        profit is equal to the difference between our net sales and our cost of goods
        sold. Our gross profit for the nine months ended March 31, 2008 was $9,005,023,
        an increase of $3,621,468, or 67%, compared with $5,383,555 for the
        corresponding period in 2007. The increase in our gross profit was due to
        the
        increase in our sales revenue. Gross profit margin for both nine-month periods
        ended March 31, 2008 and 2007 was 59%.The increase in sales of Techteam and
        Jintai contributed equally in the total sales increase.
 
 *Selling
        Expenses*
 
 Our
        selling expenses consist primarily of salaries of sales personnel, advertising
        and promotion expenses, freight charges and related compensation. Selling
        expenses were $614,646 for the nine-month period ended March 31, 2008 (of
        which,
        the selling expenses of Jintai were $39,920) as compared to $400,108 for
        the
        same period ended March 31, 2007, an increase of $214,538 or approximately
        54%.
        The increase was primarily attributable to increased advertising expenses,
        promotion costs incurred and higher salaries and travel expenses as a result
        of
        increased employees and sales activities.
  26
  *Operating
        and Administrative Expenses*
 
 Our
        operating and administrative expenses consist primarily of rental expenses,
        related salaries, business development, depreciation and travel expenses,
        and
        legal and professional expenses. Operating and administrative expenses were
        $1,430,762 for the nine-month period ended March 31, 2008 (of which, $124,026
        was Jintai’s operating and administrative expenses), as compared to $463,482 for
        the same period ended March 31, 2007, an increase of $967,280. The increase
        was
        primarily due to the expenses incurred in connection with the Reverse Merger
        and
        Private Placement transactions consummated by us on December 26, 2007.
 
 *Operating
        Income*
 
 Our
        operating income was $6,959,615 for the nine month period ended March 31,
        2008
        (with Jintai was generating $ 1,835,514 ),
        as
        compared to $4,519,965 for the same period ended March 31, 2007, an increase
        of
        $2,439,650, or approximately 54%. The increase was primarily attributable
        to the
        increase in our sales of our fertilizer products and the addition of sales
        of
        agricultural products through Jintai.
 
 *Income
        Taxes*
 
 Techteam,
        our indirectly wholly owned operating subsidiary, had
        $301,841of income tax for the nine months ended March 31, 2008 while
        $ 266,006 of
        income tax was incurred for the same period ended March 31, 2007. For the
        six
        months ended December 31, 2007, Techteam was qualified for a tax holiday
        pursuant to the PRC laws and regulations governing foreign invested enterprises
        as a result of its conversion from a domestic PRC enterprise to a wholly
        foreign
        owned enterprise status in August 2007. From January 1, 2008, Techteam is
        subject to income tax at a rate of 18%. Jintai was exempt from paying income
        tax
        for calendar 2007 as it is a wholly owned subsidiary of Techteam which was
        exempt from income tax. Jintai is also exempt from paying income tax for
        calendar 2008 as it produces products which qualify for a tax exemption under
        PRC law.
 
 *Net
        Income*
 
 Net
        income for the nine months ended March 31, 2008 was $6,433,842 (with Jintai
        earning $ 1,835,760 ),
        an
        increase of $2,431,758, or 61% from $4,002,084 for the comparable period
        in
        2007. The increase was primarily the result of our increased net sales described
        above.
 
 *Discussion
        of Segment Profitability Measures*
 
 Our
        business consists of two segments - the sale of fertilizer products through
        Techteam and the sale of agricultural products through Jintai. Each of the
        segments prepares its own quarterly or annual plans including marketing,
        research and development, production and sales along with budgets and resources
        allocation. Then, each of the segments submits their drafted plan to the
        Company’s planning department which consists of personnel from finance
        department who review and discuss it with the management team of each segment
        to
        ensure accuracy and feasibility. The Company’s CEO then receives the plans for
        final review and approval.
 
 The
        Company also has a quarterly budgeting and monthly forecasting process to
        make
        adjustments to the annual budget. The process is subject to the same approvals
        as the annual budgeting process.
 
 **Liquidity
        and Capital Resources**
 
 As
        of
        March 31, 2008, we had cash and cash equivalents of $13,986,395 and restricted
        cash of $4,228,641. Our current assets were $26,173,715 and our current
        liabilities are $9,730,525, including $4,107,245 short term loans, which
        resulted in a current ratio of approximately 2.78. Our total stockholders’
equity as of March 31, 2008 was $14,806,421.
  27
  We
        have
        historically financed our operations and capital expenditures principally
        through bank loans and cash provided by operations. On December 26, 2007,
        we
        raised a total of approximately $20,519,255 from a Private Placement. Pursuant
        to the terms of the Private Placement, an aggregate of $4,250,000 of the
        proceeds from the Private Placement were held in an escrow account. The release
        of the escrowed fund was conditioned on our hiring of a qualified permanent
        CFO
        and two independent directors and hiring an investor relations firm. As of
        March
        31, 2008, there was an aggregate of $4,228,641 in escrow. As of the date
        of this
        report, we have satisfied all of the escrow release requirements.
 
 *Cash
        Flows*  *(in
        U.S. Dollars)*
 Nine
                  Months Ended March 31,2008
              
              2007Net
                  cash provided by (used in) operating activities
              
              
              5,481,516
              
              
              9,382,146Net
                  cash provided by (used in) investing activities
              
              
              (5,348,106
              )
              
              (9,700,220
              )Net
                  cash provided (used in) by financing activities
              
              
              13,257,854
              
              
              320,968
  *Operating
        Activities*
 
 Net
        cash
        provided by operating activities for the nine months ended March 31, 2008
        was
        $5,481,516 as compared with $9,382,146 for the same period in fiscal 2007,
        a
        decrease of $3,900,630. The decrease was mainly due to the increase of our
        inventory of $3,696,399 in our non-peak season in order to prepare for the
        market demand in the coming peak season.
 
 *Investing
        Activities*
 
 Net
        cash
        used in investing activities for the nine months ended March 31, 2008 totaled
        $5,348,106, a decrease of $4,352,114 from $9,700,220 for the same period
        in
        2007. The higher amount in 2007 was due to expenditures on Jintai’s greenhouse
        facility.
 
 *Financing
        Activities*
 
 Net
        cash
        provided by financing activities for the nine months ended March 31, 2008
        was
        $13,257,854, an increase of $12,936,886 compared with the net cash used by
        financing activities of $320,968 for the same period in 2007. The increase
        was
        principally due to the Private Placement.
  As
        of
        March 31, 2008, our loans payable were as follows:
 
 Short
                  term loans payable:
              Amount
                  Outstanding
              Repayment
                  Terms
              Expiration
                  DateXi’an
                  City Commercial Bank in China
              $2,139,190
              Annual
                  Interest Rate:9.585%, repaid on a monthly basis
                Renewed
                  Annual Interest Rate: 10.5825%
              Initial
                  Due Date: 04/01/2008
                Renewed
                  Due Date:
                04/01/2009Xi’an
                  Agriculture Credit Union in China
              $541,928
              Initial
                  Annual Interest Rate: 9.216% repaid on a monthly basis
                Renewed
                  Annual Interest Rate: 11.795%repaid on a monthly basis
              Initial
                  Due Date: 09/26/2007
                Renewed
                  Due Date: 09/16/2008Agriculture
                  Bank in China
              $1,426,127
              Annual
                  Interest Rate: 9.711%;repaid
                  on a monthly basis
              12/29/2008Total
              $4,107,245
  Note:
        the
        reason for the bigger outstanding amounts for the loans with Xi’an City
        Commercial Bank in China and with Xi’an Agriculture Credit Union in China as
        compared to those as of December 31, 2007 is because of the appreciation
        of RMB
        against dollar from December 31, 2007 through March 31, 2008. The outstanding
        loan with Agriculture Bank of China is less than that as of December 31,
        2007
        because the Company paid more than the appreciation amount.
  28
  None
        of
        our officers or shareholders has made commitments to the Company for financing
        in the form of advances, loans or credit lines. The
        Company does not have any revolving credit lines or letters of
        credit.
 
 *Accounts
        Receivable*
 
 As
        of
        March 31, 2008, the Company had accounts receivable of $1,729,049, net of
        allowance for doubtful accounts of $256,570. The ratio of the doubtful accounts
        as against the accounts receivable was 14.8% as of March 31, 2008 which was
        lower than 17.9% as of December 31, 2007 due to the following factors: (i)
        the
        Company had larger accounts receivables as of March 31, 2008 as compared
        to
        $1,134,238 as of December 31, 2007; and (ii) the doubtful accounts increased
        not
        at the same pace as the increase of the accounts receivables ($246,630) as
        of
        December 31, 2007. In other words, the doubtful debts (debts payable beyond
        90
        days) increased slower than the increase of the accounts receivables in
        general.
 
 *Advance
        from Unrelated Companies*
 
 Advance
        from unrelated companies as of March 31, 2008 was $304,279. They are prepayments
        from several parties such as prepayments from our distributors and deposits
        for
        the guarantee for loss of goods from transportation companies.
 
 **Off-Balance
        Sheet Arrangements**
 
 We
        do not
        have any off-balance sheet arrangements.
 
 **Critical
        Accounting Policies and Estimates**
 
 Management's
        discussion and analysis of its financial condition and results of operations
        are
        based upon our consolidated financial statements, which have been prepared
        in
        accordance with United States generally accepted accounting principles. Our
        financial statements reflect the selection and application of accounting
        policies which require management to make significant estimates and judgments.
        See Note 2 to our consolidated financial statements, “Basis of Presentation and
        Summary of Significant Accounting Policies.” We believe that the following
        paragraphs reflect the more critical accounting policies that currently affect
        our financial condition and results of operations:
 
 Use
        of
        estimates
 
 The
        preparation of consolidated financial statements in conformity with accounting
        principles generally accepted in the United States of America requires
        management to make estimates and assumptions that affect the reported amounts
        of
        assets and liabilities and disclosure of contingent assets and liabilities
        at
        the date of the consolidated financial statements and the amount of revenues
        and
        expenses during the reporting periods. Management makes these estimates using
        the best information available at the time the estimates are made. However,
        actual results could differ materially from those results.
 
 Cash
        and cash equivalents
 
 For
        statement of cash flows purposes, the Company considers all cash on hand
        and in
        banks, certificates of deposit and other highly-liquid investments with
        maturities of three months or less, when purchased, to be cash and cash
        equivalents. As of March 31, 2008, cash and cash equivalents amounted to
        $13,986,395.
  29
  Accounts
        receivable
 
 The
        Company's policy is to maintain reserves for potential credit losses on accounts
        receivable. Management reviews the composition of accounts receivable and
        analyzes historical bad debts, customer concentrations, customer credit
        worthiness, current economic trends and changes in customer payment patterns
        to
        evaluate the adequacy of these reserves. As of March 31, 2008, the Company
        had
        accounts receivable of $1,729,049, net of allowance for doubtful accounts
        of
        $256,570.
 
 Advances
        for construction in progress
 
 The
        Company makes advances to certain vendors for construction in progress. As
        of
        March 31, 2008, the advances to suppliers amounted to $431,689.
 
 Inventory
 
 Inventory
        is valued at the lower of cost (determined on a weighted average basis) or
        net
        realizable value. Management compares the cost of inventory with the net
        realizable value and an allowance is made for writing down the inventory
        to its net realizable value, if lower than the cost.
 
 Property,
        plant and equipment
 
 Property,
        plant and equipment are recorded at cost. Gains or losses on disposals are
        reflected as gain or loss in the year of disposal. The cost of improvements
        that
        extend the life of plant, property, and equipment are capitalized. These
        capitalized costs may include structural improvements, equipment, and fixtures.
        All ordinary repair and maintenance costs are expensed as incurred.
 
 Depreciation
        for financial reporting purposes is provided using the straight-line method
        over
        the estimated useful lives of the assets:
 
 EstimatedUseful
                  LifeBuilding
              10-40
                  yearsLeasehold
                  improvements
              3-5
                  yearsMachinery
                  and equipments
              5-15
                  yearsVehicle
              3-5
                  years
 
 Leasehold
        improvements are amortized over the lease term or the estimated useful life,
        whichever is shorter.
  Revenue
        recognition
 
 The
        Company's revenue recognition policies are in compliance with Staff accounting
        bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to
        customers when a formal arrangement exists, the price is fixed or determinable,
        the delivery is completed, no other significant obligations of the Company
        exist
        and collectibility is reasonably assured. Payments received before all of
        the
        relevant criteria for revenue recognition are satisfied are recorded as unearned
        revenue.
  The
        Company's revenue consists of invoiced value of goods, net of a value-added
        tax
        (VAT). No product return or sales discount allowance is made as products
        delivered and accepted by customers are normally not returnable and sales
        discount is normally not granted after products are delivered.
 
 Segment
        reporting
 
 Statement
        of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure About
        Segments of an Enterprise and Related Information" requires use of the
        "management approach" model for segment reporting. The management approach
        model
        is based on the way a company's management organizes segments within the
        company
        for making operating decisions and assessing performance. Reportable segments
        are based on products and services, geography, legal structure, management
        structure, or any other manner in which management disaggregates a company.
        Our
        primary profitability measure is “operating income (loss)”.
  During
        the nine month ended March 31, 2007, the company was mainly organized in
        one
        segment. During the nine months ended March 31, 2008, the Company was organized
        into two main business segments: fertilizer production (Techteam) and
        agricultural product sales (Jintai).





30




**Item
      3.** **Controls
      and Procedures**




(a)   *Evaluation
      of disclosure controls and procedures* .
      At the
      conclusion of the period ended March 31, 2008 we carried out an evaluation,
      under the supervision and with the participation of our management, including
      our Chief Executive Officer and Chief Financial Officer, of the effectiveness
      of
      the design and operation of our disclosure controls and procedures (as defined
      in the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rules
      13a-15e and 15d-15e). Based upon that evaluation, our Chief Executive Officer
      and Chief Financial Officer concluded that as of the end of the period covered
      by this report, our disclosure controls and procedures were effective and
      adequately designed to ensure that the information required to be disclosed
      by
      us in the reports we submit under the Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in the applicable
      rules and forms and that such information was accumulated and communicated
      to
      our Chief Executive Officer and Chief Financial Officer, in a manner that
      allowed for timely decisions regarding required disclosure.





(b)  *Changes
      in internal controls* .
      During
      the period covered by this report, there was no change in our internal control
      over financial reporting that has materially affected, or is reasonably likely
      to materially affect our internal control over financial reporting.








**PART
      II OTHER INFORMATION**





**Item
      6.** **Exhibits**





(a)
      Exhibits





31.1
      -
      Certification of Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002 by Mr. Tao Li.





31.2
      -
      Certification of Chief Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002 by Mr. Huan Chen.





32.1
      -
      Certification of Chief Executive Officer and Chief Financial Officer pursuant
      to
      Section 906 of the Sarbanes-Oxley Act of 2002 by Mr. Tao Li and Mr. Huan
      Chen.





31





SIGNATURES





Pursuant
      to the requirements of the Securities Act of 1934, the Registrant has duly
      caused this report to be signed on its behalf by the undersigned there unto
      duly
      authorized.




Date:
      May
      15, 2008




CHINA
              GREEN
              AGRICULTURE, INC.By:
            /s/ Tao
              LiTao
                Li
              President
                and Chief Executive Officer
              (principal
                executive officer)


By:
              /s/ Huan
                ChenHuan
                    Chen
                  Chief
                    Financial Officer
                  (principal
                    financial officer and accounting officer)
  32