UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      DC  20549





**FORM
      10-K**





**x** **ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**




For
      the
      fiscal year ended June 30, 2008




or





**o** **TRANSITION
      REPORT UNDER 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 registrant as specified in its charter)*





**Nevada**
            **36-3526027***(State
                or other jurisdiction of*
              *incorporation
                or organization)*
            *(IRS
                Employer 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, Including Zip Code)***





Registrant’s
      telephone number: +86-29-88266368





Securities
      registered pursuant to Section 12(b) of the Act: None




Securities
      registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 Par
      Value





Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.  Yes o No **x**





Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Exchange
      Act.  Yes o No **x**





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such report(s)), and (2) has been subject to such filing requirements
      for the past 90 days.  Yes **x** No o




Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of Registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K. o









Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer or a smaller reporting company. 
See definitions of “large accelerated filer,” “accelerated filer,” and smaller
      reporting companies in Rule 12b-2 of the Exchange Act.





Large
                accelerated filero
            Accelerated
                fileroNon-accelerated
                filero
              Do
                not check if a smaller reporting company
            Smaller
                reporting companyx




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**




The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates of the registrant, based upon the closing sale price of the
      registrant’s common stock as reported on the Over the Counter Bulletin Board on
      September 25, 2008 was approximately $36,865,622. Shares of common stock held
      by
      each officer and director and by each person who owns 10% or more of the
      outstanding common stock have been excluded in that such persons may be deemed
      to be affiliates.




The
      number of outstanding shares of the registrant’s common stock on September 25,
      2008 was 18,381,702.





2




FORM
      10-K
      ANNUAL REPORT


FISCAL
      YEAR ENDED JUNE 30, 2008





**TABLE
      OF CONTENTS**


PAGEPART
                  IItem
                  1.
              Business
              4Item
                  2.
              Properties
              18Item
                  3.
              Legal

                  Proceedings
              19Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              19PART
                  IIItem
                  5.
              Market
                  for the Registrant’s Common Equity, Related Stockholder Matters and Issuer
                  Purchases of Equity Securities
              19Item
                  6.
              Selected
                  Financial Data
              21Item
                  7.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              21Item
                  7A.
              Quantitative
                  and Qualitative Disclosures about Market Risk
              28Item
                  8.
              Financial
                  Statements and Supplementary Data
              28Item
                  9.
              Changes
                  in and Disagreements with Accountants on Accounting and Financial
                  Disclosure
              28Item
                  9A.(T)
              Controls
                  and Procedures
              28Item
                  9B.
              Other
                  Information
              29PART
                  IIIItem
                  10.
              Directors,
                  Executive Officers and Corporate Governance
              29Item
                  11.
              Executive
                  Compensation
              34Item
                  12.
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholders Matters
              37Item
                  13.
              Certain
                  Relationships and Related Transactions, and Director
                  Independence
              39Item
                  14.
              Principal
                  Accountant Fees and Services
              40PART
                  IVItem
                  15.
              Exhibits
                  and Financial Statement Schedules
              41SIGNATURES
              S-1EXHIBIT
                  INDEX
              E-1FINANCIAL
                  STATEMENTS AND SUPPLEMENTARY DATA
              F-1




3




**FORWARD-LOOKING
      STATEMENTS AND ASSOCIATED RISK**





Certain
      statements in this Report, and the documents incorporated by reference herein,
      constitute "forward-looking statements". Such forward-looking statements include
      statements, which involve risks and uncertainties, regarding, among other
      things, (a) our projected sales, profitability, and cash flows, (b) our growth
      strategies, (c) anticipated trends in our industries, (d) our future financing
      plans, and (e) our anticipated needs for, and use of, working capital. They
      are
      generally identifiable by use of the words “may,” “will,” “should,”
“anticipate,” “estimate,” “plan,” “potential,” “project,” “continuing,”
“ongoing,” “expects,” “management believes,” “we believe,” “we intend,” or the
      negative of these words or other variations on these words or comparable
      terminology. These statements may be found under “Management’s Discussion and
      Analysis of Financial Condition and Results of Operations” and “Business,” as
      well as in this Report generally. Actual events or results may differ materially
      from those discussed in forward-looking statements as a result of various
      factors including matters described in this report generally. In light of these
      risks and uncertainties, there can be no assurance that the forward-looking
      statements contained in this filing will in fact occur. You should not place
      undue reliance on these forward-looking statements.





The
      forward-looking statements speak only as of the date on which they are made,
      and, except to the extent required by federal securities laws, we undertake
      no
      obligation to update any forward-looking statement to reflect events or
      circumstances after the date on which the statement is made or to reflect the
      occurrence of unanticipated events.




Unless
      otherwise noted, all currency figures in this filing are in U.S. dollars.
      References to "yuan" or "RMB" are to the Chinese yuan (also known as the
      renminbi). According to Xe.com as of September 25, 2008, US $1.00 = 6.82135
      yuan
      (or 1 yuan = US$ 0.14660).




The
      "Company", "we," "us," "our," and the "Registrant" refer to (i) *China
      Green Agriculture, Inc. (“Green Nevada”, formerly known as Discovery
      Technologies, Inc.), a corporation incorporated in the State of Nevada;(ii)
      Green Agriculture Holding Corporation (“Green New Jersey”), a wholly-owned
      subsidiary of Green Nevada incorporated in the State of New Jersey; (iii)
      Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“Techteam”), a
      wholly-owned subsidiary of Green New Jersey organized under the laws of the
      People’s Republic of China (the “PRC”); and (vi) Xi’an Jintai Agriculture
      Technology Development Company (“Jintai”), wholly-owned subsidiary of Techteam
      in the PRC.*





**PART
      I**





**ITEM
      1.****DESCRIPTION
      OF BUSINESS**





**Our
      History**





We,
      through Techteam and Jintai, our indirectly wholly owned subsidiaries, 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. Techteam has one of the most advanced automated humic acid
      production lines in China. It has a multi-tiered line of 119 fertilizer
      products. We believe that we are one of the top producers and suppliers of
      humic
      acid organic liquid compound fertilizer in China with an annual production
      capacity of approximately 10,000 metric tons currently. All of our humic acid
      fertilizer products are certified by the PRC government as green products for
      growing Grade AA “Green” foods.




4




Techteam’s
      wholly owned subsidiary, Jintai, was formed for researching and developing
      humic
      acid fertilizers. In the process of testing Techteam’s fertilizers, it produces
      agricultural products including top-grade flowers, vegetables, and colored
      seedlings which are sold to middle and high end consumers across
      China.





The
      Company was incorporated under the laws of the state of Kansas on February
      6,
      1987 under the name Videophone, Inc. The Company had no operations from December
      1996 to December 2007. In October 2007, the Company was reincorporated in the
      state of Nevada, and, on December 26, 2007, acquired all of the issued and
      outstanding capital stock of Green New Jersey which owns 100% of the capital
      stock of Techteam through a share exchange in which the Company issued an
      aggregate of 10,770,668 shares of common stock, par value $.001 per share to
      the
      three shareholders of Green New Jersey in exchange for 100% of the issued and
      outstanding shares of Green New Jersey’s capital stock (the “Share Exchange”).
      As a result of the Share Exchange, the Company owns 100% of Green New Jersey
      which is a holding company for Techteam.





The
      Share
      Exchange occurred simultaneous with a private placement on December 26, 2007,
      in
      which the company sold 6,313,616 shares of the Company’s common stock to 31
      accredited investors (the “Investors”) for a purchase price of $20,519,255 (the
“Private Placement”).





After
      the
      acquisition of Green New Jersey, the Company changed its name to China Green
      Agriculture, Inc., effective February 5, 2008. The trading symbol changed from
      DCOV.OB to CGAG.OB on the same day.





Our
      current corporate structure is set forth in the following diagram:











5




**Business
      Operations**





**Overview**





We
      have
      two business segments: (i) the research, development, production and
      distribution of humic acid organic liquid compound fertilizer; and (ii) the
      development, production and distribution of agricultural products, such as
      top-grade fruits, vegetables, flowers and colored seedlings. The fertilizer
      business is our main business which generated 83% and 88% of our total revenues
      in the fiscal year ended June 30, 2008 and June 30, 2007, respectively.





Our
      business is conducted through our indirect wholly-owned PRC based operating
      subsidiaries, Techteam (for the fertilizer business) and Jintai (for the
      agricultural products business). Jintai is wholly owned by Techteam.





Our
      humic
      acid organic liquid compound fertilizers contain humic acid as one of their
      major ingredients and our products are certified as Green Food Production
      Material by the China Green Food Development Center. We developed thirteen
      new
      types of fertilizers during the fiscal year ended June 30, 2008.





We
      distribute our fertilizer products through 480 distributors in 27 provinces
      in
      the PRC.





**Principal
      Products and Services**





*Fertilizer
      Products*





We
      believe that TechTeam has one of the most advanced automated humic acid
      production lines in China. Humic acid is a complex natural, organic ingredient
      that is essential for a balanced, fertile soil. It is one of the major
      constituents of organic matter in fertile soil, making a vital contribution
      to
      the quality of the soil’s composition. When plant or animal matter decomposes,
      it naturally turns into a form of humic acid-rich material, such as peat,
      lignite or weathered coal.





Humic
      acid exhibits a high capacity for cation exchange (a chemical process in which
      cations of like charge are exchanged equally between a solid and a solution.)
      which serves to chelate plant nutrient elements and release them as the plant
      requires. The chelation process holds the nutrients in the soil solution and
      prevents them from leaching and prevents runoff. Moreover, humic acids can
      bind
      soil toxins along with plant nutrients, thereby strongly stabilizing soils.
      The
      regular use of humic acid organic liquid compound fertilizer can reduce the
      use
      of fertilizer, insecticide, herbicide and water by 50% or more. This mechanism
      is important to environmental protection, because it can prevent contamination
      of water sources caused by runoff.





In
      nature, humic acid improves soil structure and aeration, nutrient absorption,
      water retention. It also increases soil’s buffering capacity against
      fluctuations in pH levels, and reduces soil crusting and erosion problems from
      wind and water as well as radical toxic pollutants. Humic acid promotes the
      development of root systems, seed germination, overall plant development. It
      also enhances health, resistance to stress and overall appearance of plants.
      We
      believe that there is no synthetic material currently known to match humic
      acid's effectiveness and versatility.





The
      pure
      humic acid used in TechTeam’s fertilizer is distilled and extracted from
      weathered coal by way of alkaline digestion and acid recrystallization. Our
      products are dark brown to black in color, and principally used as a foliar
      fertilizer (a liquid, water soluble fertilizer applied to a plant’s foliage by a
      fine spray so that the plant can absorb the nutrients through its leaves),
      or
      sprayed directly on soil or injected into the irrigation systems. Benefits
      of
      using TechTeam’s products are to stimulate growth, yield, and protect plants
      from drought, disease and temperature damage while improving soil structure
      and
      enhancing soil fertility. TechTeam has a multi-tiered product line which offers
      119 products, covering three product categories: Broad Spectrum Fertilizers
      for
      general use, Functional Fertilizers for the enhancement of certain
      characteristics and Tailored Fertilizers for very specific crops; which
      accounted for 15.8%, 48.3% and 35.9% of our total revenues from fertilizer
      products, respectively for the fiscal year ended June 30, 2008.




6




During
      the fiscal year ended June 30, 2008, we earned approximately $18,658,425 in
      gross revenues from our fertilizer products, or 83% of our total revenues.





*Agricultural
      Products*





Jintai,
      Techteam’s wholly owned subsidiary, was formed for the research and development
      of humic acid fertilizers produced by Techteam. In the process of testing
      Techteam’s fertilizers, it produces top-grade fruits, vegetables, flowers and
      colored seedlings for commercial sale. Jintai produces the following categories
      of products:





Top-grade
      flowers: including principally, faber cymbidium and phalaenopsis. Those two
      kinds of flowers are mainly distributed to the middle and high end consumers
      in
      Shaanxi Province and its adjacent areas. Their seedlings are distributed across
      the country, especially the southern regions of China.





Green
      vegetables and fruits: including, principally, Holland cucumbers, sweet and
      colored pimientos and eggplant and Japanese watermelons which are distributed
      to
      middle and high-end consumers in Shaanxi Province, especially in Xi’an
      city.





Multicolored
      seedlings: including, principally, photinia serrulata which are distributed
      to
      customers across China.





During
      the fiscal year ended June 30, 2008, we earned approximately $3,946,293 in
      gross
      revenues from our agricultural products, or 17% of our total
      revenues.




**Manufacturing
      Process**





Our
      production procedure is scientifically designed and our automated production
      line and strict quality control system ensures consistent high quality. Our
      fully-automated production line is run by a central control system and only
      needs the input of control technicians. The machinery and vats for the line
      are
      supplied by a local medical machinery manufacturer and the automated control
      systems were developed by us. Our access rights management system ensures that
      our proprietary ingredient mixes are protected at all times. Also, by linking
      our computer server with the electronic scales on each of the material input
      bins, the exact quantity of each element is delivered every time, thus
      maintaining quality and reducing waste.





Our
      factory occupies approximately 47,000 square meters of land. The production
      facility is housed in a 6,427 square meter building. This facility contains
      a
      total of 21 vats, 9 of which have a volume of 8 metric tons (1,000 kg), 2 with
      a
      volume of 12 metric tons, 8 with volume of 2 metric tons and 2 with volume
      of 1
      metric ton. Eleven employees are dedicated to production.





We
      have
      been constructing new production facilities in order to increase fertilizer
      production capacity from 10,000 tons per annum to 50,000 tons per annum. As
      of
      the date of this report, we have completed the foundation for the new facilities
      and are currently constructing the main building of 13,803 square meters. We
      have also finalized contracts for the purchase and installation of equipment
      that will be used in the manufacturing facility, including dryers, mixers and
      reactors, for $4.67 million. All the equipment were custom ordered from a third
      party medical machinery manufacturer to function in accordance with our
      proprietary automated control system, allowing us to manufacture high grade,
      high quality fertilizer products.




7




**Raw
      Materials and Suppliers**





*Fertilizer
      Products*





Among
      all
      the three materials that can be utilized to produce humic acid (weathered coal,
      lignite and peat), we have chosen weathered coal as our principal raw material
      because it is abundant and relatively cheap (about $50/metric ton). Although
      there are numerous weathered coal suppliers available to us, to date, we have
      been using, as our sole supplier Lupoling Coal Mine Industry and Trade Company
      of Jinzhong City located in the Shaanxi Province (“Lupoling”) because of the
      high quality weathered coal it provides and its closeness in location. We
      utilize spectral analysis technology to select the raw material with the best
      quality, and we have specially trained buyers to make sure that the quality
      and
      consistency of the raw materials are maintained.





In
      addition to weathered coal, we also use up to 60 different components in our
      production process, all of which can be readily obtained from numerous sources
      in local markets.





Our
      products are packaged in bottles, bags and boxes. Each type of packaging
      material, along with packaging labels, is purchased from 3 to 4 manufacturers.
      These materials are readily available.





*Agricultural
      Products*





The
      maternal plants of our top-grade flowers and multicolored seedlings are mainly
      planted and cultivated in our research and development center maintained by
      Jintai. We purchase the seeds of green vegetables and fruits from the agents
      who
      import them. We apply fertilizers produced to those products.





**Inventory**





For
      our
      fertilizer products, our efficient production methods allow for low inventory
      levels, which are typically less than one week’s finished stock, with the
      majority of orders being shipped directly to the client after production. We
      typically carry an inventory of six months of weathered coal.





For
      our
      agricultural products, we carry a significant amount of inventory because we
      need a significant amount of agricultural products to serve as our research
      and
      development base for our fertilizer research and development.





As
      of
      June 30, 2008, we have $368,444 in inventory for our fertilizer products and
      $4,451,634 in inventory for our agricultural products.




**Industry
      and Principal Markets**





*Market*





We
      currently market our fertilizer products to private wholesalers and retailers
      of
      agricultural farm products in 27 provinces in the PRC. The leading five
      provinces based on revenues for the fiscal year ended June 30, 2008 were
      Heilongjiang (9.53%), Shandong (7.55%), Anhui (6.71%), Xinjiang (6.52%), and
      Henan (6.51%). The geographically diverse distribution protects our leading
      national market position from regional competitors. Our agricultural products
      are distributed to the middle and high-end consumers all over China.





We
      utilize a multi-tiered product strategy which allows us to tailor our products
      to different needs and preferences of the different geographic regions across
      China with different climate and soil conditions which grow different crops
      with
      varied needs for fertilizers. 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 condition permits. Therefore, they can gain more
      return on investment from using more expensive and specialized fertilizers.
      In
      the Northwest areas, however, where farmers’ low profit margin crops prevent
      them from investing too much in fertilizer and therefore, we market a broader
      spectrum, low-cost fertilizer in that area.




8




We
      produce and sell approximately 10,000 metric tons of organic fertilizer products
      per year. Our fertilizers are very concentrated liquids which generally require
      an application of approximately 120 milliliter (“ml”) per mu (1 mu = .165
      acres).





Our
      research and development capabilities, described more fully below, allow us
      to
      develop products that are tailored to farmers’ specific needs in different
      regions, different crops, humidity, weather and soil conditions that require
      special fertilizers. For example, our “Red Medlar” product is specially designed
      for medlar (a small, brown, apple like fruit, hard and bitter when ripe and
      eaten only when partly decayed) in the Ningxia Autonomous Region. This product
      can effectively increase medlar yield and protect it from foliar disease (the
      most common culprit for decreased yields of medlar) and at the same time
      increase the quality of the fruit.





*Trend*





China
      is
      both the world’s largest manufacturer and consumer of fertilizer. As of 2005,
      Chinese fertilizer accounted for 33% of the total world output and 35% of the
      total world consumption (Source: China National Agricultural Means of Production
      Circulation Association). Fertilizers can be organic (composed of organic matter), or inorganic (made of
      simple, inorganic chemicals or minerals). Inorganic fertilizers or chemical
      fertilizers generally may lead to ecosystem degradation. Organic compound
      fertilizer comprises a balance of both organic and inorganic substances, thereby
      combining the speedy effectiveness of chemical fertilizers with the
      environmental benefits of the organic fertilizers.





Due
      to
      shrinking arable land in China with a rapidly growing population and various
      environmental concerns, we believe a greater emphasis will be put on the
      development of organic compound fertilizers in the future.





Today,
      with the rapid growth of PRC's economy and per capita income, people have become
      more health conscious. As a result, there is a growing market demand for Green
      food products. Fruits and vegetables labeled as Green are generally available
      in
      supermarkets throughout the PRC and are typically sold at higher
      prices.





According
      to the Journal of Organic Systems, a scientific journal particular to organic
      systems published by a group of professors in Australia and New Zealand, China
      may be at the onset of an organic agriculture revolution. From 2000 to 2006,
      China has moved from 45th to second position in the world in number of hectares
      under organic management. China now has more land under organic horticulture
      than any other country. In the year 2005/2006, China added 12% to the world's
      organic area. This accounted for 63% of the world's annual increase in organic
      land, and China now has 11% of the world's organically managed land.





All
      of
      our fertilizer products are certified by the PRC government as Green products
      for growing Grade AA “Green” foods. Green food certified by the China Green Food
      Research Center can be divided into 2 groups: grade A (allowed to use certain
      amount of chemical materials) and Grade AA (containing little or no chemical
      materials - also know as organic food). Our humic acid organic liquid compound
      fertilizer products have quickly gained market share and general acceptance
      due
      to their high, consistent quality and tailored advantages. We believe that
      we
      are one of the top producers and suppliers of humic acid organic liquid compound
      fertilizer in the PRC with an annual production capacity of 10,000 metric tons
      (1 metric ton=1,000kg). We currently produce a total of 119 different organic
      fertilizer products.




**Marketing**





Our
      sales
      staff is trained to closely work with distributors and customers, providing
      professional advice on customizing our products to the customers’ needs and
      offering extensive customer support. In addition, our sales staff educates
      and
      informs our customers by organizing training courses about agricultural
      techniques that are offered to the public on a regular basis.




9




We
      have a
      team of five marketing personnel in our principal office who collect and analyze
      marketing data from across the 27 provinces. By industry norms, we believe
      that
      our product development cycle of 3 to 9 months is relatively short. Because
      we
      collected information that includes the growth records of a variety of plants
      cultivated in different soil and climate conditions and feedbacks from our
      end
      users, we are able to conduct nationwide market analysis, ascertain new product
      needs, estimate demand and customer demographics and develop new products that
      are tailored to current market needs.





Although
      we utilize television advertisements and mass media, the majority of our
      marketing efforts are conducted through joint activities with our distributors.
      Through our distributors, TechTeam has contracted approximately 120 local
      personnel. Those local personnel conduct on-site marketing activities using
      pamphlets, brochures and posters at the point of sale outlets and provide after
      sales services. TechTeam employs 107 marketing personnel (including the five
      data collection staff we referred to in the paragraph immediately above). Our
      staff works with and trains distributors and retail clients through lectures
      and
      interactive meetings. Our staff emphasizes the technological components of
      our
      products to help end users understand the differences in products and how to
      use
      them. Word-of-mouth advertising and sample trials of new products in new areas
      are also an essential component of our marketing efforts. Also, we have set
      up
      nation-wide hotlines to answer customer questions and have constructed an SMS
      text message platform to have real-time interaction with farmers. We have
      recently commenced the use of the SMS platform which is currently available
      only
      in certain areas.





Our
      best
      selling fertilizers, which also have top sales volumes in the fiscal year ended
      June 30, 2008, are listed below:


Product Name
              
              Quantity sold in
                FY’08 (Unit:
                metric ton)
              
              Unit Price (US$ Per Ton)1x20x250ml
                  Gua Guo Peng Da Xing
              
              
              625
              
              
              2,315100ml
                  Jin Jia
              
              
              593
              
              
              2,3481x20x250ml
                  Guang Pu
              
              
              469
              
              
              2,3991x200x25ml
                  Da Kuai Tou
              
              
              392
              
              
              2,4431x20x250ml
                  Shenggen Zhuangmiao
              
              
              310
              
              
              2,414





**Revenues**





*Products*





Roughly
      20 million farmers in the PRC are using our products. We produced and sold
      approximately 10,000 metric tons of our fertilizer products for the fiscal
      year
      ended June 30, 2008.





The
      Chinese fertilizer market is generally a commoditized industry. We use our
      multi-tiered branding strategy to target different market segments with tailored
      products. Currently, “JINONG” is our high end product, “ZHIMEIZI,” “LEPUSHI” and
“LIBANGNONG” are our middle tier products and “WEIYINONG” is our lower tier
      product. The JINONG line has a total of 73 products, and accounted for
      approximately 70.8% of our sales revenue and 45.6% of our net income,
      respectively, for the fiscal year ended June 30, 2008.




*Geographical
      Areas*





We
      have
      developed more than 119 different fertilizer products. The leading five
      provinces by revenue for the fiscal year ended June 30, 2008 are Henan,
      Shandong, Heilongjiang, Anhui and Guangdong.





We
      also
      manufacture and export our humic acid organic liquid compound fertilizer to
      some
      foreign countries, including India, Ecuador, Pakistan and Lebanon through
      contracted distributors. Total revenues from exported products currently account
      for approximately 1% of TechTeam’s sales revenue. We anticipate that this amount
      can increase significantly as we have recently contracted with foreign
      distributors to sell our products.




10




*Seasonality*





Normally,
      our peak selling season for our fertilizer products are from March through
      October. As such, 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.
      During the fiscal year ended June 30, 2008, approximately 71% of our annual
      fertilizer sales volume came from the first quarter (summer) and the fourth
      quarter (spring), when demand for our fertilizer products typically peaks during
      planting season and prior to harvest. 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. The peak season for our agricultural
      products is from July to December, which generated approximately $2.7 million
      for the fiscal year ended June 30, 2008. The non-peak season for our
      agricultural products is from January to June with $1.2 million in revenue
      for
      the fiscal year ended June 30, 2008. The seasonally variation on the sales
      of
      our agricultural products was attributable to the nature of the plants: the
      first half of a calendar year is usually the planting season while the second
      half of a calendar year is usually the fruiting season.




**Distribution,
      Sales Network, Customers**




*Fertilizer
      Products*





Fertilizer
      product market is highly fragmented. Our strategy is to set up our own sales
      network by establishing our distribution through strategic relationships with
      distributors, who distribute our products to wholesalers and retailers, and
      ultimately, the end users.





Currently,
      we sell our products through a carefully constructed network of about 480
      regional distributors covering 27 provinces in China. We developed approximately
      80 new distributors during the fiscal year ended June 30, 2008 and terminated
      approximately 50 distributors based on our evaluation of their performance.





The
      distributors sell our products to the smaller, local wholesale and retail
      outlets who then sell to the end users (typically farmers). We do not grant
      provincial or regional exclusivity because there is currently no single
      distributor sufficiently strong enough to warrant exclusivity. We enter into
      non-exclusive written distribution agreements with chosen distributors who
      demonstrate their ability in local business experience and sufficient regional
      sales networks. The distribution agreements do not dictate distribution quantity
      because changes in local market condition and weather changes can dramatically
      affect sales quotas.





We
      have
      established representative offices and sales outlets in Beijing, Tianjin,
      Shanghai and Chongqing with each office having three to four representatives.
      These regional offices allow us to more effectively coordinate national sales
      and marketing teams. In addition, our sales department works closely with
      distributors in various provinces to promote our products, maintain our profile
      and to continue to cultivate relationships.





For
      the
      fiscal year ended June 30, 2008, sales through our top 10 distributors accounted
      for approximately 8.76% of our annual revenue, with the highest proportion
      of
      sales that any one customer represented accounting for approximately 1.09%
      of
      sales revenue. As we do not have a significant concentration of customers,
      we
      believe that the loss of any one customer would not have any significant effect
      on our business.





As
      of
      June 30, 2008, we have a backlog orders in the amount of $230,000 while we
      had
      $170,000 in backlog orders as of June 30, 2007.





11





*Agricultural
      Products*





We
      distribute our agricultural products as follows: The top-grade flowers are
      mainly distributed through our fertilizer distribution network; the green
      vegetables and fruits are mainly distributed to a variety of wholesale markets
      and supermarkets in Xi’an City while our multicolored seedlings are distributed
      to the seedling centers and planting companies in China with which we have
      had
      long term cooperation. The following is a list of our top five customers in
      terms of revenues for our agricultural products in the fiscal 2008. They
      generated approximately 40.4% revenues of the total revenues of our agricultural
      products.


Ranking
              
              Customer Names
              
              Revenues
                (US$)
              
              Percent in total
                Revenues of our
                Agricultural Products1
              
              Taiyuan
                Yuanlong Lvhua
              
              
              380,089
              
              
              9.63
              %2
              
              Chengdu
                Huadu Yuanyi
              
              
              345,130
              
              
              8.75
              %3
              
              Luxian
                Lvfeng Zhongzhichang
              
              342,464
              
              
              8.68
              %4
              
              Xianyang
                Qindu Nonglin Keji
              
              
              271,975
              
              
              6.89
              %5
              
              Yulin
                Tailong Yuanlin
              
              
              254,046
              
              
              6.44
              %Total
              
              
              
              
              1,593,703
              
              
              40.39
              %





**Research
      and Development**





We
      conduct our research and development activities through our wholly owned
      subsidiary Jiantai 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. We own a 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 special fertilizers.





In
      January 2007, we invested approximately $10 million to purchase and construct
      an
      advanced intelligent greenhouse to serve as our research and development base.
      We believe it has quickly become one of the leading green fertilizer research
      facilities in China. Flowers, fruits and vegetables that are grown for
      experimental testing of TechTeam’s humic acid organic liquid compound
      fertilizers in the greenhouses are of high quality and value and are sold to
      local supermarkets and airline companies. We sold approximately $3,946,293
      of
      these products during the fiscal 2008. We believe these sales, which make our
      research and development facility a profit center, provide us with a significant
      strategic advantage.





**New
      Product Development Process**





Quickly
      developing new products and reducing the product development cycles are the
      principal purposes of our research and development facilities. There are eight
      distinct phases in our fertilizer products development cycle:





1.  Market
      Research: Front line staff continually collects new field data relating to
      changes in market demand such as new product market size, price sensitivity
      and
      competition.




12




2.  Feasibility
      Study Report: A team of five staff members correlate the data from across China
      and compile a written feasibility study report on the basis of the information
      collected detailing the product, expected market size, pricing, segmentation,
      competition.





3.  Research
      and Development Budget: A budget is calculated for the potential revenue and
      cost of developing the new product.





4.  Research
      and Development Approval: The budget report is presented for the CEO’s
      approval.





5.  Laboratory
      Sample and Test: Samples are made and tested in the laboratory using advanced
      spectral analysis equipment.





6.  Field
      Experiments: Field experiments are carried out, usually in the
      greenhouse.





7.  Trial
      Sales.





8.  Mass
      Production.




**New
      Products**





With
      our
      strong and advanced research and development, we have developed more than 119
      products and continue to develop new products.





During
      the fiscal year of 2008, the following five new products were developed, which
      contributed $2,917,115 to the increase of our sales revenue for that
      period:





1.  *Guokangmei
      Green Nutriment Fertilizer* :
      Supplies nutrients to strengthen and enhance fruit size and sugar
      content.





2.  *Jinong
      Zhuangshi* :
      Balances the nutrients, stimulates the activity of plant enzymes and improves
      the quality and accelerates the growth of plants. Compared to *Zhuangshi* ,
      developed in fiscal year 2007, *Jinong
      Zhuangshi* has
      strong potential in a large number of elements, trace elements and humic acid
      on
      the basis of adding two types of plant growth regulators, and it has a quicker
      potential effect.





3.  *Libangnong
      Humic Acid Potassium Fertilizer (Broad Spectrum Type)* : ** Supplies
      potassium for the plants to improve the quality, and increase the vitamin and
      sugar content. It is more advanced than *Libangnong
      Potassium fertilizer* in the
      previous year, because the newer product mostly maintains a neutral PH value,
      which enables a better function when it’s combined with other
      pesticides.





4.  *Zhimeizi
      Organic Liquid Compound Fertilizer* :
      Meet
      the overall needs of plants for nitrogen, phosphor, and potassium efficiently,
      effectively and lastingly. Compared to Zhimeizi of previous year, the newly
      developed product contains a higher proportion of HA and organic contents,
      which
      are more than 40 g/L.





5.  *Yichongwang
      No.1* :
      Used
      through irrigation to stimulate seed germination and viability, and root
      respiration and formation.





6.  *Suxiao
      Chongshifei (Quick-impact fertilizer)* :
      Promotes the rapid growth of crops, raising output.





7.  *Boron
      Fertilizer:* Promotes
      flowering and enhances flowering fruit setting rates.





8.  *Calcium-rich
      Fertilizer:* Prevents
      calcium deficiency caused by diseases.





9.  *Potassium-calcium
      Anti-cracking fertilizer:* Prevents
      cracking of fruit and promotes coloring.




13




10.  *Yuzhuang:* Prevents
      the excessive growth of corn.





11.  *Wangting:* Prevents
      the excessive growth of peanuts and soybeans.





12.  *Yelvbao:* Adds
      trace elements to prevent the yellow disease, lobular disease, and other
      physiological diseases.





13.  *Libangnong:* Adds
      nutrients to accelerate growth, increases production of crops





In
      addition to developing new humic acid organic fertilizer products, we are
      carrying out some projects to develop derivatives from humic acid; examples
      are
      humic acid liquid film mulch and humic acid sodium fodder additives. Also,
      some
      soil-less seeding and breeding of colored-leaf plants, rare-flowers and new
      species of fruits and vegetables are in the research stages.





**Intellectual
      Property**





Techteam
      is the holder of the following trademarks registered with the PRC Trademark
      Offices of National Industrial and Commerce Administrative Bureau (the “PRC
      Trademark Offices”):





Trademark
            Registration
                Number
            Valid
                TermJinong
                (“Farmers’ Helper”)****
            No.
                1357523
              No.
                3906984
            01/28/2000—01/27/2010
              05/07/2007—05/06/2017Zhimeizi
                (“Make Plants Grow with Luster”)
            No.
                3724882
            07/21/2005—07/20/2015Lepushi
                (“Make Farming Pleasant”)
            No.
                3724883
            10/21/2005—10/20/2015





Techteam
      is in the process of applying for the following trademark:


Trademark
              
              Application
                  Type
              
              Application
                  Number
              
              Application
                  Receipt Date(as
                evidence
                  from Trademark
                Office’s
                  Acknowledgment
                Receipt)Libangnong
                  (“Farmer’s Mighty Helper”)
              
              Type
                  5 – for the application to pesticide and other chemical
                  products
              
              6253154
              
              10/17/2007Type
                  1 – for the application to fertilizer and other chemical
                  products
              
              6253155
              
              10/17/2007





A
      registered trademark is protected for a term of ten years, renewable for another
      term of ten years under the trademark law of the PRC, so long as an application
      for renewal is submitted to the PRC Trademark Offices within six months prior
      to
      the expiration of the initial term.





Techteam
      has also applied for two patents: one for a fertilizer formulation and one
      for
      our proprietary production line and manufacturing processes.




14




In
      addition to trademark and patent protection law in China, we also rely on
      contractual confidentiality provisions to protect our intellectual property
      rights and brand. Our research and development personnel and executive officers
      are subject to confidentiality agreements to keep our proprietary information
      confidential. In addition, they are subject to a covenant not to compete
      following the termination of employment with our Company and they agree that
      any
      work product belongs to our Company. We also take the further steps of limiting
      the number of people involved in production and, instead of making available
      lists of ingredients in fertilizers to production employees, we refer to them
      by
      numbers.





**Competition**





*Fertilizer
      Products*





The
      Chinese fertilizer industry is highly fragmented. In 2005, there were
      approximately 1,924 manufacturers, of which approximately 80% were small local,
      regional manufacturers (Source: Chinese Fertilizer Net). Currently, our
      competitors are numerous small-sized local manufacturers, 3-4 larger national
      competitors, such as China Agritech, Inc., Qiqihaer Fuer Agriculture Co., Ltd.,
      a company located at Heilongjiang Province in the PRC, Heze Exploitation Region
      Caozhou Chamurgy Co., Ltd. and Guangxi Beihai Penshibao Co., Ltd. and 2-3
      international companies.





Small
      competitors are generally amino acid compound fertilizer producers, who are
      very
      price competitive. The smaller companies, however, tend to lack sufficient
      quality control or process control technologies which lead to inconsistent
      quality.





The
      Chinese fertilizer market has been fully opened to foreign companies since
      December 2006, the time of China’s entry into the World Trade Organization.
      Accordingly, the PRC government has increased its fertilizer import quota and
      reduced the import tariffs on foreign fertilizer to 1% since January 2007;
      however, foreign fertilizers are generally more expensive than domestic
      fertilizers and they may lack the advantage in getting their products
      localized.





*Agricultural
      Products*





Top-grade
      flowers: (1) flowers: Our main competitors in Xi'an city and its surrounding
      regions are Western Lanhua Company, Ningdong Branch of State Forestry
      Administration and Sanbao Horticultural Company. Management believes that our
      flower products have comparative advantages in terms of the advanced
      technologies they are based on, the superior species of the seedlings we select
      and the efficiency and stability of our products; (2) Flower seedlings. The
      main
      competitors of nationwide market are Tianjin Goods Company, Shanghai Crystal
      Company, Beijing Sanyi Company, Jinri Company in Guangdong province and Yunnan
      QianHui Company. Our management believes that the qualities of our flower
      seedlings are superior and the performance of the seedlings is stable. In
      addition, unlike most of our competitors who are in lack of the comprehensive
      greenhouse facilities, our flower seedlings can be supplied all year long and
      not limited to the change of season.





Green
      Vegetables and Fruits: Our competitors are mainly the vegetable planting centers
      and planters in Shaanxi, Shangdong and Gansu provinces that produce vegetables
      such as cucumbers and peppers. Our selling point, which distinguishes us from
      other competitors is our Techteam Green Garden for pollution-free green
      vegetables and fruits. We apply our green fertilizer to our vegetables and
      fruits and the middle and high end consumers recognize the advantages on that.





Multicolored
      Seedlings: Our main competitors are Zhejiang Senhe Company and Jiangsu Xiaoshan
      Zhongtian Technology Company. Our multicolored seedlings, mainly, red photinia
      serrulata is pure in species. We offer a fair market price with quality plants
      that have higher survival rates.




15




**Competitive
      Position**





Our
      competitive position can be described in the following five aspects for our
      fertilizer products:





**1.
      Nation-wide sales network**





In
      this
      highly fragmented market, we were able to set up our own distribution channels
      with private distributors and link them together. We have over 480 distributors
      nation-wide across 27 provinces which sell its products to retail stores
      scattered in villages and townships across China. Our distribution system and
      sales network is one of the largest in the humic acid fertilizer products
      industry in China. Most of our competitors, including those larger competitors,
      do not have a sales team as large as ours which specializes in the sale of
      humic
      acid fertilizer products; however, certain of our larger competitors have better
      access in certain local markets due to years of cooperation they have had with
      particular local distributors. Despite of our existing wide sales network,
      we
      lack of full coverage in certain cities and counties. We are continuing to
      expand our sales network coverage to cover more areas where we have distributors
      and also expand our distribution to new areas.





**2.
      Strong Research and Development**





Our
      research and development is
      managed effectively. Typically, it takes only three to nine months from the
      decision to develop a new product to mass production, which ensures product
      flow
      and helps to maintain market share. Our strong
      research and development department is based at our intelligent greenhouse
      facilities. The advanced equipment and soil-free techniques in such facilities
      simulate the natural environment in different areas and control selected
      factors. As a result, 60%-70% of TechTeam’s experimental work can be done in the
      greenhouse, thereby speeding up product development cycles, and cutting costs
      without sacrificing accuracy of results. During the fiscal year ended June
      30,
      2008, we generated approximately $3,946,293 revenue from our research and
      development **** base
      (i.e. from the sale of Jintai’s agricultural products) and we anticipate that
      this source of revenue can grow in the future. For more information on our
      research and development activities, please refer to “Research and Development;
      Growth Strategy” of this annual report. We believe that our greenhouse facility
      is in the leading position among our competitors including larger competitors;
      however, our larger competitors may have better understanding in certain local
      markets where they have developed over the years and have specifically
      formulated fertilizers for local plant, soil and climate conditions. We are
      trying to diversify our fertilizers to benefit a wider range of
      plants.





**3.
      Well-known Brand**





TechTeam
      believes that its customers’ purchasing decisions are often based on strong
      brand recognition. We are well recognized by end users in our specialty humic
      acid fertilizers; however, certain large international fertilizer producers
      and
      traders who import fertilizers to China, such as Cuikang of Cuikang (Hong Kong)
      Co., Ltd., a distributor for a British fertilizer company, Yara Phosyn Ltd,
      PRC
      have strong brand recognition and domestic customers generally perceive the
      quality of the imported products as higher or more stable than fertilizers
      currently produced in China.





**4.
      Automated Production Line and Process**





All
      of
      our major production procedures are controlled by a centralized computer system
      that can only be accessed by authorized personnel as programmed by such system,
      and our 47,000
      square meter production facility’s production
      line is fully automated. Our automated systems ensure that content in each
      product is measured exactly according to its recipe by linking the computer
      server with the electronic weights on each of the material input bins. In
      addition, spectral analysis is used to accurately check the composition of
      materials. Management believes that our automated production line is one of
      the
      few advanced lines in our industry. We are applying for patent protection for
      our proprietary production line; however our large competitors may have
      production lines with larger production capacity than ours. Our existing
      production capacity may not match the market demand in peak season and we are
      constructing a new production line with an annual capacity of 40,000 metric
      tons
      to expand our production capacity.


16


**5.
      Customer Support**





We
      have
      contracted with more than 120 local sales people through our distributors to
      do
      on-site marketing for our products. The sales personnel speak local dialects
      and
      are familiar with local farmers’ needs. We have district managers, with each
      responsible for all the marketing personnel and services in each region. We
      believe our strong on-site marketing team with emphasis on after-sale services
      separates us from our competitors, including larger competitors.





Please
      refer to our description under “Competition - Agricultural Products” for
      analysis for competitive position for our agricultural products.





**Employees**





TechTeam
      has 145 full-time employees. Of that amount, 27 are in administration, finance
      and research and development, 11 in production and 107 in marketing and sales.
      Jintai has 40 full-time employees, among whom 15 are in research and
      development, 7 in management and administration and 23 in technology and
      marketing. Jintai also has approximately an average of 100 temporary employees
      per year.





**“Green”
      Certification**





All
      of
      our fertilizer products are certified by the PRC government as green products
      for growing Grade AA “Green” foods. Green foods certified by the China Green
      Food Development Center can be divided into 2 groups: Grade A (allowed to use
      certain amount of chemical materials) and Grade AA (containing little or no
      chemical materials - also know as organic foods). A green certification is
      valid
      for one year and renewable with an application within 90 days prior to the
      expiration. Our certification was issued on October 1, 2007 and will expire
      on
      September 30, 2008. We are applying for an extension now.





**Government
      Regulation**





Our
      products and services are subject to regulation by governmental agencies in
      the
      PRC and Shaanxi Province. Business and company registrations, along with the
      products, are certified on a regular basis and must be in compliance with the
      laws and regulations of the PRC and provincial and local governments and
      industry agencies, which are controlled and monitored through the issuance
      of
      licenses. Our licenses include:





**Operating
      license**





Our
      operating license enables us to undertake research and development, production,
      sales and services of humic acid liquid fertilizer, sales of pesticides, and
      export and import of products, technology and equipment. The registration No.
      is
      6100001020488, and it is valid from March 7, 2006 through March 6, 2010. Once
      the term has expired, the license is renewable.





**Fertilizer
      Registration**





Fertilizer
      registration is required for the production of liquid fertilizer and issued
      by
      the Ministry of Agriculture of the PRC. The registration numbers are:
      Agriculture Fertilizer No. 467, (2004) No. 0079, No. 1083, No. 1084 and No.
      1085. The term of a fertilizer registration certificate is five years.
      Fertilizer registration is renewable.


17





**Registration**
              **No.**
            
            **Trademark**
            
            **Product**
              **Name**
            
            **Main Technique Index**
            
            **Certificate**
              **Issuance Date**
            
            **Expiration**
              **Date**No. 079
            
            Ji
                Nong
            
            Yi
                Chong Wang Yi Hao
            
            N+P2O5+K2O≥150g/l;Humic
                Acid≥20 g/l
            
            12/31/2004.
            
            12/
                30/2009No.
                1085
            
            Ji
                Nong
            
            Ji
                Nong
            
            Fe+Mn+Zn+B+Mo≥20
                g/l; Amino acid
              ≥100
                g/l
            
            04/23/2008
            
            04/22/2013No.
                1083
            
            Ji
                Nong
            
            Ji
                Nong
            
            N+P2O5+K2O≥200g/l;Humic
                Acid≥40 g/l
            
            04/23/2003
            
            04/22/2013No.
                1084
            
            Ji
                Nong
            
            Ji
                Nong
            
            N+P2O5+K2O≥350g/l;Humic
                Acid≥30 g/l
            
            04/23/2003
            
            04/22/2013No.
                467
            
            Ji
                Nong
            
            Ji
                Nong
            
            N+P2O5+K2O≥23g/l;Humic
                Acid≥80g/l
              Cu+Fe+Mn+Zn+B+Mo≥60
                g/l
            
            04/23/2003
            
            04/22/2013





**ITEM
      2. PROPERTIES**





Principal
      Office and Manufacturing Facilities





Our
      principal executive offices are located at 3rd floor, Borough A, Block A. No.
      181, South Taibai Road, Xi’an, Shaanxi province, PRC, 710065. The office space
      is approximately 800 square meters in area. It was leased from the Group
      Company, which is controlled by Mr. Li, our Chairman, President and CEO, for
      a
      term of five years from January 2008 at the annual rent of $19,266, at the
      market rate in that area.





We
      own a
      factory in Yang Ling Agriculture High-tech Demonstration Zone, situated in
      No. 6
      Guhua 5 Road, Yangling, Xi’an, Shaanxi province, PRC, 712100. The factory
      occupies an aggregate of approximately 47,081 square meters of land and contains
      our production lines, office buildings, warehouses and research laboratories.
      The office buildings of 340 square meters were leased from the Group Company,
      which is controlled by Mr. Li, our Chairman, President and CEO, for a five-year
      term from July 1, 2007 at an annual rent of $4,091, at the market rate in that
      area. The production lines have a capacity of 10,000 tons of fertilizer per
      annum. As we plan to expand our production capacity, we are constructing a
      new
      40,000 ton capacity production line on the same premise of our existing facility
      by using approximately $13,797,000 from the Private Placement. We anticipate
      that our new production lines can commence trial production in March 2009.





TechTeam’s
      wholly owned subsidiary, Jintai, is located in Caotan Modern Agriculture
      Development Zone in the northern suburb area of Xi’an. Jintai has nine
      intelligent greenhouses and six affiliated buildings, occupying a total area
      of
      approximately 137,000 square meters. We plan to construct more research and
      development facilities by using $1,031,742 from our Private Placement in 2007.
      There is a mortgage on the Jintai buildings as of June 30, 2008 for a loan
      of
      $2,188,502 with Xi’an City Commercial Bank in China. There is no private
      ownership of land in China. All land ownership is held by the government of
      the
      PRC, its agencies and collectives.





Land
      use
      rights can be transferred upon approval by the land administrative authorities
      of the PRC (State Land Administration Bureau) upon payment of the required
      land
      transfer fee. We own the land use rights for the land on which our manufacturing
      facility is situated, which have a term of 50 years from 2001. There is a
      mortgage on the land use right as of June 30, 2008 for a loan of $2,188,502
      with
      Xi’an City Commercial Bank in China. We lease the 137,000 square meters of land
      used for our research and development facility from Xi’an Jinong Hi-tech
      Agriculture Demonstration Zone for 10 years from January 2008 with an annual
      rent of approximately $13,690.


18





**ITEM
      3**  **LEGAL PROCEEDINGS**





We
      know
      of no material, active, pending or threatened proceeding against us, Green
      New
      Jersey, TechTeam or Jintai, nor are we involved as a plaintiff in any material
      proceeding or pending litigation.





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**




There
      were no matters that were submitted during the fourth quarter of 2008 to a
      vote
      of security holders.





**PART
      II**




**ITEM
      5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES.**





**Market
      Information**





We
      have
      two classes of equity securities: (i) common stock, par value $.001 per share,
      18,381,702 shares of which are outstanding as of September 22, 2008, and (ii)
      preferred stock, par value $.001 per share, of which no shares are outstanding.
      Our common stock was approved for quotation on the over-the-counter Bulletin
      Board on August 27, 2007. It is currently quoted on the Over-the-Counter
      Bulletin Board ("OTC-BB") under the symbol “CGAG”.





The
      following table sets forth the high and low bid prices, in the OTC-BB market,
      as
      reported and summarized by Quarterly Trade and Quote Summary Report ordered
      from
      (https://www.otcbb.com/secure_asp/tradeact_report_request.asp?type=tandqm),
      for
      each fiscal quarter during each of the fiscal years ended June 30, 2008. These
      prices are based on inter-dealer prices, without retail markup, markdown or
      commission and may not represent actual transactions.





**Quarter
                Ended**
            
            **High**
            
            **Low**09/30/2007
            
            $
            0.00
            
            $
            0.0012/31/2007
            
            $
            0.00
            
            $
            0.0003/31/2008
            
            $
            25.75
            (2)
            $
            1.25
            (2)06/30/2008
            
            $
            30.00
            (2)
            $
            3.00
            (2)





(1)
            Common
                Stock not listed, quoted or traded.


(2)
            The
                High and Low are both recorded on low trading
                volumes.





**Holders**





As
      of
      September 22, 2008, there were approximately 666 shareholders of record of
      our
      common stock. This does not reflect the number of persons or entities who held
      stock in nominee or "street" name through various brokerage firms.





**Dividends**





Our
      board
      of directors has not declared a dividend on our common stock during the last
      two
      fiscal years or the subsequent interim period and we do not anticipate the
      payments of dividends in the near future as we intend to reinvest our profits
      to
      grow our business.


19


The
      payment of dividends, if any, is at the discretion of the Board of Directors
      and
      is contingent on the Company's revenues and earnings, capital requirements,
      financial conditions and the ability of our operating subsidiary, Techteam,
      to
      obtain approval to send monies out of the PRC. The PRC's national currency,
      the
      Yuan, is not a freely convertible currency.





**Securities
      Authorized for Issuance Pursuant to Option Agreement**





We
      currently do not have any formal equity compensation plans.





On
      January 31, 2008, our Board of Directors authorized the Company to grant each
      of
      the employees listed in the following table (the “Grantees”) an aggregate of
      123,000 options to purchase our common stock (the “Options”). Such Options have
      a term of three years, and are exercisable at $3.25. On June 24, 2008, the
      Grantees exercised 76,500 options on a cashless basis for an aggregate of 67,685
      shares of common stock.





Name
            
            Number of Common Stock
              Underlying the Options
            
            Number of Exercised
              OptionsYu
                Hao
            
            
            30,000
            
            
            20,000Jie
                Ma
            
            
            20,000
            
            
            15,000Xilong
                Wang
            
            
            20,000
            
            
            15,000Ale
                Fan
            
            
            6,000
            
            
            3,000Heng
                Song
            
            
            6,000
            
            
            3,000Yufan
                Zhang
            
            
            5,000
            
            
            2,500Jun
                Xu
            
            
            5,000
            
            
            2,500Wanjiao
                Wang
            
            
            5,000
            
            
            2,500Qiong
                Li
            
            
            5,000
            
            
            2,500Zhi
                Li
            
            
            5,000
            
            
            2,500Juan
                Liu
            
            
            2,000
            
            
            1,000Lixiang
                Chen
            
            
            2,000
            
            
            1,000Yingxia
                Ma
            
            
            2,000
            
            
            1,000Yong
                Liu
            
            
            2,000
            
            
            1,000Xiaoyan
                Huang
            
            
            2,000
            
            
            1,000Yan
                Zhuang
            
            
            2,000
            
            
            1,000Wei
                Pu
            
            
            2,000
            
            
            1,000Mingli
                Wang
            
            
            2,000
            
            
            1,000Total:
            
            
            123,000
            
            
            76,500





The
      following table sets forth the details of an aggregate of 75,000 our outstanding
      options granted to the directors and officers as of the date of this report.
      The
      options have a term of two years from the vesting dates.




Name of Grantee
            
            Exercise Price
            
            Number of
              Common Stock
              Underlying the
              Options
            
            Grant Date
            
            Vest DateYizhao Zhang
            
            $
            6.00
            
            
            3,000
            
            
            4/8/2008
            
            
            6/29/20087,000
            
            
            4/8/2008
            
            
            7/1/2009
                (1
            )10,000Barry
                Raeburn
            
            $
            6.00
            
            
            7,500
            
            
            4/8/2008
            
            
            6/29/200817,500
            
            
            4/8/2008
            
            
            7/1/2009(1
            )25,000Huan
                Chen (2)
            
            $
            6.00
            
            
            12,000
            
            
            4/23/2008
            
            
            6/29/2008Ying
                Yang
            
            $
            4.00
            
            
            28,000
            
            
            9/10/2008
            
            
            7/1/2009Total:
            
            
            
            
            
            75,000





20


(1)
            If
                the position of director or officer is terminated prior to the vesting
                date, such unvested options will terminate immediately on the date
                of such
                termination.


(2)
            Effective
                September 10, 2008, our former CFO, Mr. Huan Chen’s employment was
                terminated. Consequently, 28,000 unvested options were terminated
                effective September 10, 2008.





**Recent
      Sales of Unregistered Securities; Use of Proceeds from Unregistered
      Securities.**





During
      the fiscal year ended June 30, 2008, on June 24, 2008, a total of 67,685 shares
      of common stock were issued as a result of the exercise of 76,500 options on
      a
      cashless basis to the employees of the Company. The shares of common stock
      issued upon exercise were issued in reliance on Section 4(2) under the
      Securities Act of 1933 and/or Regulation S.





On
      December 26, 2007, the Company issued an aggregate of 6,313,616 shares of common
      stock in the Private Placement. The shares of common stock were issued upon
      reliance on Regulation D and Section 4(2) under the Securities Act of
      1933.





On
      December 26, 2007, in connection with the Redemption, as defined below, the
      Company issued 111,386 shares of common stock to Messrs Michael Friess and
      Sanford Schwartz, directors and officers of the Company prior to the Share
      Exchange. The issuance was in reliance on Section 4(2) under the Securities
      Act
      of 1933.





**Issuer
      Purchases of Equity Securities.**





Immediately
      prior to the Share Exchange, the Company redeemed 246,148 shares of common
      stock
      held by Messrs Michael Friess and Sanford Schwartz, directors and officers
      of
      the Company prior to the Share Exchange, for $550,000 (the
“Redemption”).




**ITEM
                6.**
            **SELECTED
                FINANCIAL DATA**





Not
      required.





**ITEM
                7.**
            **MANAGEMENT'S
                DISCUSSION AND ANALYSIS OR PLAN OF
                OPERATION**





*The
      following discussion and analysis of our financial condition and results of
      operations should be read in conjunction with our audited consolidated financial
      statements and the notes to those financial statements appearing elsewhere
      in
      this Form 10-K. This discussion and analysis contains forward-looking statements
      that involve significant risks and uncertainties. As a result of many factors,
      such as 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 the factors set
      forth elsewhere in this Form 10-K, our actual results may differ materially
      from
      those anticipated in these forward-looking statements. Unless the context
      indicates otherwise, as used in the following discussion, "Company”, "we,” "us,”
and "our,” refer to (i) China Green Agriculture, Inc. (“Green Nevada”, formerly
      known as Discovery Technologies, Inc.), a corporation incorporated in the State
      of Nevada; (ii) Green Agriculture Holding Corporation (“Green New Jersey”), a
      wholly-owned subsidiary of Green Nevada incorporated in the State of New Jersey;
      (iii) Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“Techteam”), a
      wholly-owned subsidiary of Green New Jersey organized under the laws of the
      People’s Republic of China (the “PRC”); and (vi) Xi’an Jintai Agriculture
      Technology Development Company (“Jintai”), wholly-owned subsidiary of Techteam
      in the PRC.*


21


**Overview**





We,
      through our wholly owned subsidiaries, Techteam and Jintai, have two business
      segments: (i) research, development, production and distribution of humic acid
      organic liquid compound fertilizer; and (ii) development, production and
      distribution of agricultural products, namely, top-grade fruits, vegetables,
      flowers and colored seedlings. The fertilizer business has been our main
      business which generated 83% and 88% of our total revenues in the fiscal years
      ended June 30, 2008 and June 30, 2007, respectively.





Fertilizers
      can be organic (composed of organic matter), or inorganic (made of simple,
      inorganic chemicals or minerals). Inorganic fertilizers or chemical fertilizers
      generally may lead to ecosystem degradation. Organic compound fertilizer
      comprises 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
      employ
      a multi-tiered product strategy in which we tailor our products to different
      needs and preferences of the different geographic regions across China. Each
      region has varying climate and soil conditions and grows different crops which
      require fertilizers which address local conditions. For example, in Southern
      and
      Eastern China, farmers are able to grow high margin crops such as fruits and
      seasonal vegetables where climate and rainfall permits, hence they can gain
      more
      return on investment from more expensive, specialized fertilizers, whereas
      in
      Northwest areas, farmers’ low profit margin crops disincentivize investment in
      fertilizer requiring that we market a more broad spectrum, low cost
      fertilizer.





Roughly
      20 million farmers are using our products. We produced and sold approximately
      10,677 and 8,358 metric tons of our fertilizer products for the fiscal years
      ended June 30, 2008 and June 30, 2007, respectively.





We
      have
      developed more than 119 different fertilizer products. The leading five
      provinces by revenue for the fiscal year ended June 30, 2008 are Heilongjiang,
      Shandong, Anhui, Xinjiang, and Henan.





We
      also
      export our humic acid organic liquid compound fertilizer to some foreign
      countries, including India, Ecuador, Pakistan and Lebanon through contracted
      distributors. Total revenues from exported products currently account for
      approximately 1% of our sales revenue.





We
      conduct our research and development activities through our wholly owned
      subsidiary, Jintai, through which we also sell high quality flowers, green
      vegetables and fruits to airlines, hotels and restaurants. Jintai has a 137,000
      square meter research and development facility where it tests new fertilizers
      and grows high quality flowers, vegetables and seedlings for commercial sale.





**Recent
      Development**





We
      are
      constructing new production facilities in order to increase our annual
      fertilizer production capacity from the current 10,000 metric tons to 50,000
      metric tons by using approximately $13 million from the proceeds we received
      in
      the private placement consummated in December 2007. We anticipate our new
      production lines will commence trial production in March 2009, and we seek
      to
      commence actual production in August 2009.





**Results
      of Operations**





The
      following table shows the operating results of the Company on a consolidated
      basis for the fiscal years ended June 30, 2008 and June 30,
      2007.


22


**Fiscal Year Ended**
              
              **Fiscal Year Ended****June 30, 2008**
              
              **June 30, 2007**Net
                  Sales
              
              $
              22,604,719
              
              $
              15,184,343Cost
                  of Goods Sold
              
              
              9,792,856
              
              
              6,598,606Gross
                  Profit
              
              
              12,811,862
              
              
              8,585,737Selling
                  Expenses
              
              
              927,285
              
              
              616,479Operating
                  and Administrative Expenses
              
              
              2,567,661
              
              
              395,207Operating
                  Income
              
              
              9,316,917
              
              
              7,574,051Total
                  Other Income (expense)
              
              
              (845,916
              )
              
              (360,297
              )Income
                  Before Income Taxes
              
              
              8,471,001
              
              
              7,213,754Provision
                  for Income Taxes
              
              
              692,474
              
              
              295,012Net
                  Income
              
              
              7,778,527
              
              
              6,918,742





*Net
      Sales*





Our
      net
      sales for the fiscal year ended June 30, 2008 were $22,604,719 (of which
      Techteam and Jintai contributed $18,658,426 and $3,946,293 respectively), an
      increase of $7,420,376, or 48.9%, from our net sales of $ 15,184,343
      for the fiscal year ended June 30, 2007 (of which Techteam and Jintai
      contributed $13,330,626 and $1,853,716 respectively). This increase, which
      was
      offset by lower than anticipated sales during the fourth quarter resulting
      from
      an earthquake in Sichuan in May 2008 and a flood occurred in fourteen provinces
      in June 2008, was attributable to: (i) an
      increase in sales volume of existing products due to the expansion of our sales
      network with increased distributors and sales personnel in the
      fiscal year ended June 30, 2008; (ii) the launch of thirteen new fertilizer
      products which accounted for approximately 13% net sales for the fiscal year
      ended June 30, 2008; and (iii) the production of our greenhouse facility which
      contributed $3,946,293 in net sales in the fiscal year ended June 30, 2008.
      Jintai generated $1,853,716 in revenue for the fiscal year ended June 30,
      2007.





*Cost
      of Goods Sold*





Cost
      of
      goods sold is primarily comprised of the cost of our raw materials and packaging
      materials, direct labor, manufacturing overhead expenses and inventory count
      loss. Our cost of goods sold for the fiscal year ended June 30, 2008 was
      $ 9,792,856 (of
      which Techteam and Jintai recorded $8,008,082 and $1,784,774, respectively),
      an
      increase of $ 3,194,250 ,
      or
      48.4%, as compared to $6,598,606 for the fiscal year ended June 30, 2007. Cost
      of goods sold as a percentage of net sales was 43.3% and 43.5% for the fiscal
      years ended on June 30, 2008 and 2007, respectively. The increase in cost of
      goods sold was primarily due to the increase in our sales volume, as the cost
      of
      goods sold as a percentage of net sales for the fiscal year ended June 30,
      2008
      remained steady. Techteam’s cost of goods sold as a percentage of net sales for
      the fiscal year ended June 30, 2008 was 42.9%, whereas Jintai’s cost of goods
      sold as a percentage of net sales for the fiscal year ended June 30, 2008 was
      45.2%.





*Gross
      Profit*





Our
      gross
      profit is equal to the difference between net sales and cost of goods sold.
      Our
      gross profit for the fiscal year ended June 30, 2008 was $12,811,862 (of which
      Techteam and Jintai contributed $10,650,343 and $2,161,519 respectively), an
      increase of $4,226,125, or 49.2%, compared to $8,585,737 in gross profit for
      the
      fiscal year ended June 30, 2007. The increase in gross profit was attributable
      to the increase in our net sales. Gross profit as a percentage of net sales
      was
      56.7% (57.1% for Techteam and 54.8% for Jintai) for the fiscal year ended June
      30, 2008, as compared to 56.5% for the fiscal year ended June 30, 2007. The
      gross profit margin remained at the similar level.


23





*Selling
      Expenses*





Our
      selling expenses consist primarily of salaries of sales personnel, advertising
      and promotion expenses, freight charges and related compensation. Selling
      expenses were $927,285 (among which Techteam and Jintai incurred $880,416 and
      $46,868 respectively) for the fiscal year ended June 30, 2008 as compared to
      $616,479 for the fiscal year ended June 30, 2007, an increase of $310,806 or
      approximately 50%. The increase was primarily attributable to the increase
      of
      market promotion, salary of sales personnel and freight charges. In addition,
      the rise in China’s consumer price index, the main gauge of inflation, increased
      approximately 7.7% in May 2008 from the same month in the prior year. This
      led
      is to have higher costs for marketing and salaries.





*Operating
      and Administrative Expenses*





Our
      operating and administrative expenses consisted primarily of rental expenses,
      related salaries, business development, depreciation and traveling expenses,
      legal and professional expenses. Operating and administrative expenses were
      $2,567,661 (among which Techteam and Jintai incurred $643,344 and $140,163
      respectively) for the fiscal year ended June 30, 2008, as compared to $395,207
      for the fiscal year ended June 30, 2007, an increase of $2,172,454. The increase
      of $1,784,154 included a one time charge of $ 662,279
      in connection with the Share Exchange we consummated in December 26, 2007, $ 532,987
      charges associated with our  stock
      options grant to directors and management members, and approximately $588,000
      professional services fees in connection with fulfilling our compliance
      obligations as a US public company, and the salaries of executive
      officers.





Total
      other expenses consisted of subsidy income from the government, interest income,
      interest expense and bank charges. Total other expenses for fiscal years ended
      June 30, 2008 and 2007 were $845,916 and $360,297, respectively. The $485,619
      increase was mainly due to the accrual of $506,142 in liquidated damages
      associated with the Private Placement. The liquidated damages were triggered
      by
      the fact that our registration statement on Form S-1 was not declared effective
      by the Securities and Exchange Commission by May 24, 2008, the deadline set
      forth in the Registration Rights Agreement by and among the Investors in the
      Private Placement.





*Operating
      Income*





Our
      operating income was $9,316,917 (of which Techteam and Jintai generated
      $9,126,583 and $1,974,488 respectively) for the fiscal year ended June 30,
      2008,
      as compared to $7,574,051 for the fiscal ended June 30, 2007, an increase of
      $1,742,866, or approximately 23%. The increase was primarily attributable to
      the
      increase in our sales of fertilizer products from Techteam and our agricultural
      products from Jintai.





*Income
      Taxes*





Techteam,
      our indirectly wholly owned operating subsidiary, incurred income tax expense
      of
      $692,474 for the fiscal year ended June 30, 2008 and $295,012 for the fiscal
      year ended June 30, 2007, representing an increase of $397,462, or 134.7%.
      The
      increase was due to the increased operating income.





Techteam
      is subject to preferable tax rate of 15% as a result of Techteam’s operation
      being classified as High-Tech project under the new Enterprise Income Tax Law
      (“EIT”) effective on January 1, 2008. Prior to that, Techteam enjoyed an income
      tax holiday from August 24, 2007, the date on which it was acquired by Green
      New
      Jersey until December 31, 2007 due to its status as a wholly foreign owned
      enterprise (“WFOE”) and the PRC regulations provided such tax incentive through
      December 31, 2007. Jintai is exempt from paying income tax for calendar year
      2008 as it produces the products which fall into the tax exemption list set
      out
      in EIT. Such exemption lasts as long as the related EIT does not
      change.


24


*Net
      Income*





Net
      income for the fiscal year ended June 30, 2008 was $7,778,527, an increase
      of
      $859,785 from $6,918,742, or 12.4% compared with that of the fiscal year ended
      June 30, 2007. The increase was attributable to the increase in net sales as
      analyzed 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 business plans with regard to
      marketing, research and development, production and sales along with financial
      budgets and allocation of resources. Then, each of the segments submits their
      proposed 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 of the plans. The Company’s CEO
      then receives the plans for final review and approval.





The
      Company also has a quarterly planning and monthly forecasting process to provide
      variation analysis to the annual plan. The process is subject to the same
      authorization process as the annual planning process.





**Liquidity
      and Capital Resources**





As
      of
      June 30, 2008, we had cash and cash equivalents of $16,612,416. Our current
      assets were $25,026,275 and our current liabilities were $ 11,738,686 as of
      June
      30, 2008, which resulted in a current
      ratio of
      approximately 2.13:1. Total stockholders' equity as of June 30, 2008 was
      $17,263,441.





Our
      management believes that the Company has sufficient cash, along with projected
      cash to be generated by the business of the Company to support its operations
      for the next twelve months.





The
      following table sets forth a summary of our cash flows for the periods
      indicated:





**Fiscal Year Ended June 30****2008**
            
            **2007**Net
                cash provided by / (used in) operating activities
            
            
            9,117,611
            
            
            8,783,528Net
                cash used in investing activities
            
            
            (10,623,021
            )
            
            (9,768,909
            )Net
                cash provided by financing activities
            
            
            17,258,183
            
            
            1,018,301Effect
                of exchange rate change on cash and cash equivalents
            
            
            777,927
            
            
            3,173Net
                increase in cash and cash equivalents
            
            
            16,530,700
            
            
            36,093Cash
                and cash equivalents, beginning balance
            
            
            81,716
            
            
            45,623Cash
                and cash equivalents, ending balance
            
            
            16,612,416
            
            
            81,716





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. We intend
      to use the proceeds of the Private Placement to buy capital equipment, expand
      our production and facilities and construct  a
      new
      production line for an annual production capacity of 40,000 metric
      tons .
      Thereafter our total production capacity shall achieve 50,000 metric tons per
      annum combining 10,000 metric tons from our existing production
      line.





*Operating
      Activities*





Net
      cash
      provided by operating activities was $9,117,611 for the fiscal year ended June
      30, 2008, an increase of $334,083 from $8,783,528 of net cash provided by
      operating activities for the fiscal year ended June 30, 2007. The increase
      was
      mainly due to the revenue recognized from increased sales volume described
      above.


25


*Investing
      Activities*





Net
      cash
      used in investing activities in the fiscal year ended June 30, 2008 was
      $10,623,021, which was an increase of $854,112 from $9,768,909 for the
      fiscal year ended June 30, 2007, due to advances made for the new production
      line with an annual production capacity of 40,000 metric tons and the
      improvement of research and development facilities.





*Financing
      Activities*





On
      December 26, 2007, we sold 6,313,617 shares of our common stock to 31 accredited
      investors for $20,519,255 of gross proceeds in the Private Placement, or
      $18,602,723 in net proceeds.





Net
      cash
      provided by financing activities in the fiscal year ended June 30, 2008 totaled
      $17,258,183 as compared to $1,081,301 provided by financing activities for
      the
      corresponding period ended June 30, 2007. The increased $16,239,882 of the
      cash provided by financing activities was mainly attributable to our engagement
      in capital raising activities on December 26, 2007.





As
      of
      June 30, 2008, our loans payable were as follows:





Short term loans
              payable:
            
            Amount
              Outstanding
            
            Repayment Terms
            
            Expiration DateXi’an
                Commercial Bank Xincheng Branch
            
            $
            2,188,502
            
            
            Annual Interest Rate:
              10.5825%, repaid on a
              monthly basis
            
            
            Initial Due Date:
              04/01/2008
              
              
              Renewed Due Date:
              04/01/2009Xi’an Beilin
                District Rural Credit Union Wenyibeilu Branch
            
            $
            554,421
            
            
            Annual
                Interest Rate:
              11.795%,
                repaid on a
              monthly
                basis
            
            
            Initial
                Due Date:
              09/16/2007
              
              
              Renewed
                Due Date:
              09/16/2009Agriculture
                Bank Yanglingshifangqu Branch
            
            $
            1,459,002
            
            
            Annual
                Interest Rate:
              9.71%,
                repaid on a
              monthly
                basis
            
            
            Due
                Date:
              12/28/2008Total
            
            $
            4,201,925





None
      of
      our officers or shareholders has made commitments to the Company for financing
      in the form of advances, loans or credit lines.





*Accounts
      Receivable*





We
      had
      $3,590,552 accounts receivable as of June 30, 2008, compared to $1,885,351
      as of
      June 30, 2007, an increase of $1,705,201. The increase was primarily due to
      the
      increase in our sales. The increase was also a result of the natural disasters
      in certain areas where our clients located such as the earthquake occurred
      in
      May 2008 at Sichuan province and the flood occurred in the fourth quarter in
      2008 in southern provinces in China. In reaction to such incidents, we provided
      an extended credit term of one month to certain distributors while in the past
      such distributors make the full payment upon delivery.


26


Our
      allowance for doubtful accounts was $96,065 as of June 30, 2008 compared with
      $218, 796 as of June 30, 2007, a decrease of $122,731 due to the efforts we
      made
      to collect accounts receivables.





*Inventories*





We
      had an
      inventory of $3,988,979 as of June 30, 2008 as compare to $1,773, 802, an
      increase of $2,215,177. The increase was due to the purchase of maternal plant
      of Photinia Serrulata which we may use to cultivate its baby plant and save
      costs for purchasing grown Photinia Serrulata in the future. The increase in
      inventory was also a result of the less than expected sales of flowers and
      seedlings in the fourth quarter of 2008 due to the natural disasters in certain
      areas where some of our clients located.





**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 estimates.





Revenue
      recognition





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
      discounts are normally not granted after products are delivered.





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.





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. Any accounts receivable that is
      outstanding for more than three months will be accounted as allowance for bad
      debts.


27





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.




During
      the fiscal year ended June 30, 2008, the Company was organized into two main
      business segments: (i) research, development, production and distribution of
      fertilizers (Techteam) and (ii) development, production and distribution of
      agricultural products (Jintai).





**ITEM
                7A.**
            **QUANTITATIVE
                AND QUALITATIVE DISCLOSURES ABOUT MARKET
                RISKS**





Not
      required.





**ITEM
                8.**
            **FINANCIAL
                STATEMENTS AND SUPPLEMENTARY
                DATA**





Balance
      sheets, as of June 30, 2008 and June 30, 2007, and statements of operations,
      stockholders’ equity and cash flows for each of the two years in the period
      ended June 30, 2008 and June 30, 2007, together with the related notes and
      the
      reports of independent registered public accounting firms, are set forth on
      the
“F” pages of this report.





**ITEM
                9.**
            **CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                DISCLOSURE**





None.





**ITEM 9A (T).**
            **CONTROLS
                AND PROCEDURES**





EVALUATION
      OF INTERNAL CONTROLS AND PROCEDURES





The
      Company's Chief Executive Officer and Chief Financial Officer have reviewed
      and
      evaluated the effectiveness of our disclosure controls and procedures, which
      included inquiries made to certain other of the Company's employees. Based
      on
      their evaluation, the Company's Chief Executive Officer and Chief Financial
      Officer have each concluded that, as of June 30, 2008, the Company's disclosure
      controls and procedures were effective and sufficient to ensure that we record,
      process, summarize and report information required to be disclosed by the
      Company in its periodic reports filed under the Securities and Exchange
      Commission's rules and forms.





MANAGEMENT
      REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING





Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting to provide reasonable assurance regarding
      the
      reliability of our financial reporting and the preparation of financial
      statement for external purposes in accordance with U.S. generally accepted
      accounting principles. Internal control over financial reporting includes those
      policies and procedures that (i) pertain to the maintenance of records that
      in
      reasonable detail accurately and fairly reflect the transactions and
      dispositions of the assets of the Company; (ii) provide reasonable assurance
      that transactions are recorded as necessary to permit preparation of financial
      statements in accordance with U.S. generally accepted accounting principles,
      and
      that receipts and expenditures of the Company are being made only in accordance
      with authorizations of management and directors of the Company; and
      (iii) provide reasonable assurance regarding prevention or timely detection
      of unauthorized acquisition, use, or disposition of the Company’s assets that
      could have a material effect on the financial statements.


28





Any
      system of internal control, no matter how well designed, has inherent
      limitations, including the possibility that a control can be circumvented or
      overridden and misstatements due to error or fraud may occur and not be detected
      in a timely manner. Also, because of changes in conditions, internal control
      effectiveness may vary over time. Accordingly, even an effective system of
      internal control will provide only reasonable assurance with respect to
      financial statement preparation. In addition, the design of any system of
      controls is based in part on certain assumptions about the likelihood of future
      events, and there can be no assurance that any design will succeed in achieving
      its stated goals under all potential future conditions. Over time, controls
      may
      become inadequate because of changes in conditions or deterioration in the
      degree of compliance with policies or procedures. Therefore, any current
      evaluation of controls can not and should not be projected to future periods.





Management
      assessed our internal control over financial reporting as of June 30, 2008,
      the
      end of our fiscal year of 2008. In making this assessment, management used
      the
      criteria set forth by the Committee of Sponsoring Organizations of the Treadway
      Commission (COSO) in "Internal Control-Integrated Framework." The COSO framework
      summarizes each of the components of a company’s internal control system,
      including (i) the control environment, (ii) risk assessment, (iii) control
      activities, (iv) information and communication, and (v) monitoring.





Based
      on
      management's assessment using the COSO criteria, management has concluded that
      the Company's internal control over financial reporting was effective as of
      June
      30, 2008 to provide reasonable assurance regarding the reliability of financial
      reporting and the preparation of financial statements for external reporting
      purposes in accordance with U.S. generally accepted accounting principles.





This
      Annual Report does not include an attestation report of registered public
      accounting firm, regarding internal control over financial reporting.
      Management’s report was not subject to attestation by the Company’s registered
      public accounting firm pursuant to temporary rules of the Securities and
      Exchange Commission that permit the Company to provide only management’s report
      in this Annual Report.





CHANGES
      IN INTERNAL CONTROLS





There
      were no changes in the Company’s internal control over financial reporting that
      occurred during our fourth fiscal quarter of 2008 that has materially affected
      or is reasonably likely to materially affect our internal control over financial
      reporting.





**ITEM
                9B.**
            **OTHER
                INFORMATION**





There
      is
      no information required to be disclosed in a report on Form 8-K during the
      fourth quarter of the year covered by this Form 10-K but not
      reported.





**PART
      III**





**ITEM
                10.**
            **DIRECTORS,
                EXECUTIVE OFFICERS AND CORPORATE
                GOVERNANCE**





**The
      Company’s Directors and Executive Officers**





Each
      of
      our current executive officers and each of our directors, except for Mr. Barry
      Raeburn, is a resident of the PRC. As a result, it may be difficult for
      investors to affect service of process within the United States upon them or
      to
      enforce court judgments obtained against them in the United States
      courts.


29





Directors and Executive Officers
            
            Position/Title
            
            AgeTao
                Li
            
            Chairman
                of Board of Directors,Chief
                Executive Officerand
                President
            
            42Ying
                Yang
            
            Chief
                Financial Officer
            
            33Yu
                Hao
            
            Director
            
            41Lianfu
                Liu
            
            Director
            
            69Chairman
                of Nominating CommitteeAudit
                Committee MemberCompensation
                Committee MemberBarry
                Raeburn
            
            Director
            
            36Chairman
                of Compensation CommitteeAudit
                Committee MemberCompensation
                Committee MemberYizhao
                Zhang
            
            Director
            
            37Chairman
                of Audit CommitteeCompensation
                Committee MemberNominating
                Committee Member




All
      of
      our directors hold office until the next annual meeting of shareholders, and
      until their successors have been qualified after being elected or
      appointed.





The
      following is a description of the business experience for at least the last
      five
      years regarding the above Officers and Directors.





Tao
      Li,
      Chairman of the Board of Directors, Chief Executive Officer and President.
      Mr.
      Li has served as the President and CEO of TechTeam since 2000. Mr. Li
      established Xi’an TechTeam Industry (Group) Co., Ltd. in 1996 and established
      TechTeam in 2000. He graduated from Northwest Polytechnic University and
      obtained his Master’s degree in heat and metal treatment. Mr. Li is the current
      Vice Chairman of the China Green Food Association. Previously, he has held
      positions at the World Bank Loan Office of China Education Commission, National
      Key Laboratory for Low Temperature Technology, and Northwest Polytechnic
      University. Mr. Li is active in Shaanxi Province business and trade
      organizations including as a member of the CPPCC Shaanxi Committee, the Shaanxi
      Provincial Decision-Making Consultation Committee, Vice Chairman of the Shaanxi
      Provincial Federation of Industry and Commerce, Vice President of the Shaanxi
      Overseas Friendship Association, Vice Chairman of the Shaanxi Provincial Credit
      Association, Vice Chairman of the Shaanxi Provincial Youth Entrepreneurs
      Association, Vice Chairman of the Xi’an Municipal Federation of Industry and
      Commerce and Vice Chairman of the Xi’an Municipal Youth Entrepreneurs
      Association.





Yu
      Hao,
      Director. Mr. Hao had served as interim Chief Financial Officer of the Company
      from December 26, 2007 through April 23, 2008. He has served as its Director
      of
      Finance at TechTeam since 2002. Prior to that, he was a financial manager for
      Shaanxi Fengxiang Automobile Repair Plant, and Shaanxi Baoji Xinsanwei Import
      & Export Trading Co., Ltd. Mr. Hao holds a degree in Accounting from
      Northwest Institute of Light Industry.


30




Lianfu
      Liu, Director, Chairman of Nominating Committee, Audit Committee Member and
      Compensation Committee Member. Mr. Liu has served as the Chairman of the China
      Green Food Association since 1998. From 1992 to 1998, Mr. Liu was a Director
      and
      Senior Engineer for the China Green Food Development Center. Prior to that,
      Mr.
      Liu was a Vice Director of the PRC Ministry of Agriculture. Mr. Li graduated
      from Beijing Forestry University and studied soil conservation.





Barry
      L.
      Raeburn, Director, Chairman of Compensation Committee, Audit Committee Member
      and Nominating Committee Member. Mr. Raeburn has been Chief Financial Officer
      and Chief Operating Officer of LS2, Inc., a government services contractor
      based
      in Reston, VA since November 2007. From September 2005 to October 2007, Mr.
      Raeburn was Executive Vice President of Finance and Corporate Development for
      Harbin Electric, a developer and manufacturer of customized linear motors and
      other special electric motors based in China. During his tenure at Harbin
      Electric as Head of U.S Operations, he led the company in their successful
      upgrade listing to the NASDAQ Stock Exchange, assisted in various M&A
      evaluations, and provided key leadership in the areas of finance, accounting,
      investor and public relations, SEC compliance, corporate governance, and
      administration. Mr. Raeburn has extensive experience in global public equity
      markets. From to April 2003 to September 2005, Mr. Raeburn worked as a specialty
      technology analyst an investment bank covering early stage companies within
      multiple industries. Mr. Raeburn spent the prior 6 years at a multi-billion
      dollar investment advisory firm as a financial analyst responsible for
      developing various quantitative ranking models and analyzing equity investments.
      His previous experience also includes forecasting and analysis of major macro
      economic activity. Mr. Raeburn graduated in 1996 with his BBA degree in Finance
      and Risk Management from Temple University. Mr. Raeburn has been a director
      of
      Fushi Copperweld, Inc. since June 15, 2007 (NASDAQ: FSIN).





Yizhao
      Zhang, Director, Chairman of Audit Committee, Compensation Committee Member
      and
      Nominating Committee Member. Mr. Zhang is the Chief Financial Officer of
      Energroup Holdings Corporation (OTC BB: ENHD) since September 2008. Mr. Zhang
      has over 13 years of experience in corporate finance, accounting, financial
      advisory and portfolio investment. From March 2005 to May 2008, Mr. Zhang
      consecutively held senior positions in Chinawe Asset Management Corporation
      (OTC
      BB: CHWE), China Natural Resources Incorporation (NASDAQ CM: CHNR) and Shengtai
      Pharmaceutical Incorporation (OTC BB: SGTI). From early 2004 to January 2005
      he
      was a financial consultant in Hendrickson Asset Management LLC. Previously
      from
      1993 to 1999 Mr. Zhang was employed by Guangdong South Financial Services
      Corporation in portfolio management and asset trading. He is a certified public
      accountant of Delaware, and a member of American Institute of Certified
      Accountants (AICPA). Mr. Zhang received a Bachelor degree in Economics from
      Fudan University, Shanghai in 1992 and obtained an MBA degree with Financial
      Analysis and Accounting concentrations from the State University of New York
      at
      Buffalo in 2003.Ying Yang, Chief Financial Officer. Immediately prior to her
      joining the Company, she worked as the Financial Reporting and Analysis Manager
      of Beckman Coulter, Inc. (“Beckman”), where she was employed since
      August 2006. From December 2004 through July 2006, Ms. Yang worked for the
      financial department of Ready Pac Foods, Inc., a supplier of fresh-cut produce
      in California. Prior to that, Ms. Yang was a senior business analyst for Neman
      Brothers Assoc. Inc., which is engaged in the textile and apparel industry
      from
      May 2003 through December 2004 and a business consultant for American Elite
      Professional Management, Inc. from July 2002 through April
      2003.  Prior to her arrival in the U.S., Ms. Yang worked
      for China National Chemical Fiber Corp. in Beijing. Ms. Yang graduated
      from University of California, Irvine in 2002 with a Master’s Degree in Business
      Administration (Majored in Finance). She received her bachelor’s degree in
      Economics from University of International Business & Economics in Beijing,
      China in June 1997. Ms. Yang has also received an Associate in
      Risk Management (ARM) designation.


31


**Directors
      and Executive Officers of TechTeam**




TechTeam’s
      current executive officers and Directors are as follows:





Directors and Executive Officers
            
            Position/Title
            
            AgeTao Li
            
            Director and Chief Executive Officerand President
            
            42Xianglan Li
            
            General Engineer
            
            68Yumin Liu
            
            Technical Director
            
            69Yu Hao
            
            Financial Manager
            
            41Feng Wang
            
            Sales Director
            
            31XiuPing Ren
            
            Director
            
            32HaiHong Xu
            
            Director
            
            34WanJiao Wang
            
            Director
            
            27Xue
                Tao Chen
            
            Director
            
            37





Xianglan
      Li, General Engineer. Professor Li has served as general engineer at TechTeam
      since 2000. Professor Li graduated from Northwest A&F University and is an
      expert in Chinese soil organic content.





Yumin
      Liu, Technical Director. Professor Liu has served as Technical Director at
      TechTeam since 2000. Professor Liu graduated from Northwest A&F University
      and is a well-known expert in Agriculture, Geography and Soil & Water
      Conservation.




Wang
      Feng, Sales Director. Mr. Wang is the Director of Sales at TechTeam and has
      been
      with us since August 2002. Mr. Wang previously was our sales manager in the
      Guangdong and Gansu areas.





Xiuping
      Ren, Director. Mr. Ren is the Deputy Director of the Group Office of TechTeam
      and has been with us since 2004. From 1999 to 2004 Mr. Ren held positions as
      Director of Human Resources and Director of Market Planning of Xi’an Minsheng
      Group.





Haihong
      Xu, Director. Mr. Xu has served as the Director of the Administrative Group
      of
      TechTeam since 2007. He previously held positions with Xi'an Techteam
      Engineering & Industry (Group) Co., Ltd., Shaanxi Tongli Information
      Technology Co., Ltd and Xi'an Minsheng Group.





Wanjiao
      Wang, Director. Ms. Wang has served as the Director of the Administrative Group
      of TechTeam since 2006. She previously held the position of Deputy Director
      of
      the Administration Office at Yangling Jinong Humic Acid Product Co., Ltd.





Xuetao
      Chen, Director. Mr. Chen has served as the General Manger of Shaanxi Tongli
      Computer System Co., Ltd since 2002. He previously held a position as Vice
      General Manger at Xi'an Yuansheng Investment Co., Ltd.





**Family
      Relationships**





There
      are
      no family relationships among our directors or executive officers. To our
      knowledge, none of our directors and executive officers (including the directors
      and executive officers of our subsidiaries) has been involved in any of the
      following proceeding during the past five years:





1.
            any
                bankruptcy petition filed by or against any business of which such
                person
                was a general partner or executive officer either at the time of
                the
                bankruptcy or within two years prior to that
                time;


2.
            any
                conviction in a criminal proceeding or being subject to a pending
                criminal
                proceeding (excluding traffic violations and other minor
                offenses);


3.
            being
                subject to any order, judgment, or decree, not subsequently reversed,
                suspended or vacated, of any court of competent jurisdiction, permanently
                or temporarily enjoining, barring, suspending or otherwise limiting
                his
                involvement in any type of business, securities or banking activities;
                or


4.
            being
                found by a court of competent jurisdiction (in a civil action), the
                SEC or
                the Commodity Futures Trading Commission to have violated a federal
                or
                state securities or commodities law, and the judgment has not been
                reversed, suspended or vacated.


32





**Section 16(a)
      Beneficial Ownership Reporting Compliance**





Section 16(a)
      of the Securities Exchange Act of 1934, as amended, requires the Company’s
      directors, executive officers and persons who own more than 10% of the Company’s
      Common Stock to file reports of ownership and changes in ownership on Forms
      3, 4
      and 5 with the Securities and Exchange Commission (the “SEC”). Directors,
      executive officers and greater than 10% stockholders are required by SEC rules
      to furnish the Company with copies of Section 16(a) forms they file. Based
      upon a review of the filings made on their behalf during the fiscal year ended
      June 30, 2008, as well as an examination of the Securities and Commission’s
      EDGAR system Form 3, 4, and 5 filings and the Company’s records, the following
      table sets forth exceptions to timely filings:


Name
              Reporting
                  EventYinshing
                  David To, the 10% stockholders
              Form
                  4s to be filed reporting the transfer of 3,267,838 shares of common
                  stock
                  from Yinshing David To to Mr. Tao on March 26, 2008Tao
                  Li, Chairman, CEO and PresidentYu
                  Hao, Director
              Form
                  3/A to be filed reporting the correction of his option shares from
                  20,000
                  to 30,000 options and
                Form
                  4 to be filed reporting the exercise of 20,000 options on June
                  24,
                  2008





***Codes
      of Ethics.*** On
      May 27, 2008, our board of directors adopted a Code of Ethics (the “Code”) for
      directors and all employees including executive officers.





As
      described in the Code, the Company does not permit activities that give rise
      to
      conflicts of interest by directors, executive officers or employees.





Our
      Code
      is listed in Exhibit 14.1 to this report. Any amendment to, or waiver from,
      a
      provision of the Code of ethics will be posted in a report on Form
      8-K.





**Meetings
      and Committees of the Board of Directors**




The
      Board
      of Directors met two times by telephone conference during the fiscal year ended
      June 30, 2008. The Board of Directors acted by written consent seven times.
      In
      addition, directors attended meetings of Board committees on which they served.
      The Board’s standing committees are the Audit, Compensation and Nominating
      Committees.




**Committee
      Membership**





***Audit
      Committee***





Our
      board
      of directors established an Audit Committee on May 27, 2008 and appointed
      Messrs. Yizhao Zhang, Barry Raeburn and Lianfu Liu. Mr. Yizhao Zhang was
      appointed as the Chairman of the Audit Committee. The Board of Directors has
      determined that each of our audit committee members is “independent” under the
      Rules of NASDAQ, Marketplace Rule 4200(a)(15) and under Section 803 of the
      Company Guide of American Stock Exchange. In addition, the Board has determined
      that each of Messrs Yizhao Zhang and Barry Raeburn qualifies as an “audit
      committee financial expert” as defined by the Securities and Exchange
      Commission.





The
      committee assists the Board in fulfilling its oversight responsibilities
      relating to:




· our
      auditing, accounting and reporting practices;


· the
      adequacy of our systems of internal controls;


· and
      the quality and integrity of publicly reported financial disclosures.





In
      this
      role, the committee appoints the independent auditors and reviews and approves
      the scope of the audit, the financial statements and the independent auditors’
fees. The Audit Committee met one time by telephone conference during the fiscal
      year ended June 30, 2008 since its establishment on May 28, 2008.




The
      Audit
      Committee exercises the powers of the Board of Directors in connection with
      our
      accounting and financial reporting practices, and provides a channel of
      communication between the Board of Directors and independent registered public
      accountants.


33





***Compensation
      Committee***





The
      Compensation Committee is comprised of three directors who meet the independence
      requirements of NASDAQ, are “non-employee directors” for purposes of Rule 16b-3
      under the Securities Exchange Act of 1934 and are “outside directors” for
      purposes of Section 162(m) of the Internal Revenue Code. The purpose of our
      compensation committee is to discharge the responsibilities of our board of
      directors relating to compensation of our executive officers. Specific
      responsibilities of our compensation committee include:




· reviewing
      and recommending approval of compensation of our executive
      officers;


· and
      reviewing and making recommendations to our board with respect to incentive
      compensation and equity plans.





The
      Compensation Committee met one time by telephone conference during the fiscal
      year ended June 30, 2008 since its establishment on May 28, 2008.





***Nominating
      Committee*** **.**





This
      committee is comprised of three directors who meet the independence requirements
      of NASDAQ. This committee identifies and recommends candidates for Board
      membership. The committee also considers the size, structure and general
      composition of the Board. The Nominating Committee met one time by telephone
      conference during the fiscal year ended June 30, 2008 since its establishment
      on
      May 28, 2008.





**ITEM
      11 EXECUTIVE COMPENSATION**





The
      following table sets forth information concerning cash and non-cash compensation
      paid by the Company and/or TechTeam to its Chief Executive Officer and former
      Chief Financial Officer for each of the two fiscal years ended June 30, 2008
      and
      June 30, 2007.


Name and
                Principal
                Position
              
              Year Ended
              
              Salary ($)
              
              Bonus
                ($)
              
              Stock
                Awards
              
              Non-Equity
                Incentive Plan
                Compensation
                (S)
              
              Non-
                Qualified
                Deferred
                Compensation
                Earnings
                ($)
              
              All Other
                Compensation
                ($)
              
              Total
                ($)Tao Li
                CEO and President
              
              
              06/30/2008
              
              $
              128,508
              
              
              -
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              128,508(PEO and Director)
              
              
              06/30/2007
              
              $
              4,863
              
              
              -
              
              -
              
              
              -
              
              
              -
              
              $
              2,963
              
              $
              7,627Former CFO
              
              
              06/30/2008
              (1)
              $
              150,000
              
              
              -
              
              See the table below
              
              
              -
              
              
              -(Former PFO)
              
              
              06/30/2007
              (2)
              $
              8,012
              
              
              -
              
              See
                the table below
              
              
              -
              
              
              -
              
              $
              986
              
              $
              8,998





(1)
            Mr.
                Huan Chen served as the Chief Financial Officer of the Company from
                April
                23, 2008 through September 10,
                2008.


(2)
            Mr.
                Yu Hao served as the Chief Financial Officer of the Company from
                December
                26, 2007 through April 22,
                2008.


34





Effective
      September 10, 2008, Ms. Ying Yang was appointed as the Company’s Chief Financial
      Officer and will receive the following compensation:





1.
            An
                annual salary of $130,000;


2.
            Options
                to purchase 28,000 shares – see details under “Outstanding Equity Awards
                at Fiscal Year End” below.




**Outstanding
      Equity Awards at Fiscal Year-End.**





On
      January 31, 2008, we granted 30,000 stock options to our then CFO, Mr. Yu Hao
      with a term of three years with an exercise price of $3.25. The Company granted
      option to Mr. Hao along with other management members as an award for their
      continuous services to the Company. Mr. Yu Hao continues to serve as the CFO
      of
      Techteam, our subsidiary.





On
      April
      23, 2008, we granted 40,000 stock options to our former CFO, Mr. Huan Chen,
      to
      purchase 40,000 shares of the common stock of the Company, exercisable at $6.00
      per share with 12,000 options vesting on June 29, 2008 and 28,000 options
      vesting on July 1, 2009, for an exercise term of two years. If his employment
      is
      terminated prior to the vesting date, any unvested options will be terminated.
      On September 10, 2008, Mr. Huan Chen’s employment was terminated and therefore
      the 28,000 unvested options were terminated on the same day.





On
      September 10, 2008, we granted 28,000 stock options to our newly appointed
      CFO,
      Ms. Ying Yang. The options are exercisable at $4.00 per share, to vest on the
      date of July 1, 2009. If her employment is terminated prior to the vesting
      date,
      any unvested options will be terminated. If her employment is terminated after
      the vesting date, any vested but unexercised options shall terminate on the
      91 st day
      following the date of the termination of her employment.





The
      following table provides information on all restricted stock and stock option
      awards held by our named executive officers as of the date of this
      report.


Option Awards
                  
                  Stock 
                      AwardsName
                  
                  Number of
                    Securities
                    Underlying
                    Unexercised
                    Options(#)
                    Exercisable
                  
                  Number of
                    Securities
                    Underlying
                    Unexercised
                    Options
                    (#)
                    Unexercisable
                  
                  Equity
                    Incentive
                    Plan
                    Awards:
                    Number of
                    Securities
                    Underlying
                    Unexercised
                    Unearned
                    Options
                    (#)
                  
                  Option
                    Exercise
                    Price
                    ($)
                  
                  Option
                    Expiration
                    Date
                  
                  Number
                    of
                    Shares
                    or Units
                    of
                    Stock
                    That
                    Have
                    Not
                    Vested
                    (#)
                  
                  Market
                    Value
                    of
                    Shares
                    or
                    Units
                    of
                    Stock
                    That
                    Have
                    Not
                    Vested
                    ($)
                  
                  Equity
                    Incentive
                    Plan
                    Awards:
                    Number
                    of
                    Unearned
                    Shares,
                    Units or
                    Other
                    Rights
                    That
                    Have Not
                    Vested
                    (#)
                  
                  Equity
                    Incentive
                    Plan
                    Awards:
                    Market
                    or Payout
                    Value of
                    Unearned
                    Shares,
                    Units or
                    Other
                    Rights
                    That
                    Have Not
                    Vested
                    ($)Yu
                      Hao
                    Former
                      CFO
                    (former
                      PFO), current CFO of our Subsidiary
                  
                  
                  30,000
                  
                  
                  —
                  
                  
                  —
                  
                  
                  3.25
                  
                  
                  01/29/2011
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —Huan
                      Chen CFO from 04/23/08 to 09/10/08 (former PFO)
                  
                  
                  12,000
                  
                  
                  —
                  
                  
                  —
                  
                  
                  6.00
                  
                  
                  06/28/2010
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —Ying
                      Yang
                    CFO
                      (PFO)
                  
                  
                  —
                  
                  
                  28,000
                  
                  
                  —
                  
                  
                  4.00
                  
                  
                  —
                  
                  
                  28,000
                  *
                  
                  79,800
                  
                  
                  —
                  
                  
                  —




*
Based
      on
      $2.85 per share sale price at the closing of market on September 25,
      2008.




35





**Employment
      Agreements**





Tao
      Li. Pursuant
      to an employment agreement between Techteam and Mr. Tao Li dated January 16,
      2008, Tao Li is employed by Techteam as its Chairman of the Board and Chief
      Executive Officer for a term of five years, automatically be renewed at the
      end
      of the term on the same term and conditions for additional five-year periods
      unless the Company or Mr. Tao Li gives the other party written notice indicating
      otherwise at least 60 days prior to the renewal date. The agreement is
      terminable immediately or with a 30 day prior notice under certain circumstances
      listed under Section 5 therein. Mr. Li’s salary is RMB60,000 (approximately
      $8,508) annually under the new employment agreement. Mr. Li’s previous
      employment agreement dated March 22, 2007 was superseded by the new employment
      agreement. In
      addition, Mr. Tao Li has an annual salary of $120,000 starting from January
      1,
      2008.





Yu
      Hao. Pursuant
      to an employment agreement between Techteam and Mr. Yu Hao dated October 15,
      2004 for a term of two years to October 14, 2006 and the one dated October
      15,
      2006 for a term of two years to October 14, 2008, Mr. Yu Hao is employed by
      Techteam as its Chief Financial Officer for a base salary of RMB 48,000
      (approximately $6,806) per annum, adjustable pursuant to his performance. The
      agreement is terminable by either party with 30 day prior written notice. On
      October 18 2007, Mr. Hao’s base salary was increased to RMB60,000 (approximately
      $8,508) per annum with other allowance (for transportation and communication)
      of
      RMB6,954 ( approximately $986).





Huan
      Chen. Pursuant
      to an employment agreement between the Company and Mr. Huan Chen, Mr. Chen
      served in the Company’s CFO position for a three-year term and will receive the
      compensation as described above. His employment can be terminated by either
      party by a written notice 30 days in advance. Effective September 10, 2008,
      Mr.
      Huan Chen’s employment was terminated.





Ying
      Yang .
      Pursuant to an employment agreement between the Company and Ms. Ying Yang,
      Ms.
      Yang  is
      to
      serve as CFO of the Company for a term of one year with a renewal option for
      an
      additional year for the compensation as described above. Her employment can
      be
      terminated by either party with a prior notice or the Company can terminate
      the
      agreement without any notice for Cause as defined in the employment agreement.
      Ms. Yang will receive the compensation as described above.





**Director
      Compensation**





No
      compensation was paid to our directors in the fiscal year ended June 30, 2007.


Our
      two
      independent directors, Mr. Yizhao Zhang and Mr. Barry Raeburn are compensated
      as
      follows:





1.
      Annual
      compensation of $15,000;





2.
      $500
      per full Board of Directors meeting attended and $250 per full Committee meeting
      attended in person (if he is to serve on any Committee the Board is to form
      soon), for Mr. Barry Raeburn;





3.
      Options at an exercise price of $6.00 as following:


36





a)
      25,000
      options to Mr. Barry Raeburn with 7,500 options to be vested on June 29, 2008
      and 17,500 options to be vested on July 1, 2009;





b)
      10,000
      options to Mr. Yizhao Zhang with 3,000 options to be vested on June 29, 2008
      and
      7,000 options to be vested on July 1, 2009.





The
      directors will also be reimbursed for all of their out-of-pocket expenses in
      traveling to and attending meetings of the Board of Directors and committees
      on
      which they serve.





**ITEM
                12.**
            **SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
                RELATED  STOCKHOLDERS
                MATTERS**





The
      following table sets forth certain information as of the date of this report
      with respect to the beneficial ownership of our common stock, the sole
      outstanding class of our voting securities, by (i) any person or group owning
      more than 5% of each class of voting securities, (ii) each director, (iii)
      each
      executive officer and (iv) all executive officers and directors as a
      group.





As
      of the
      date of this report, an aggregate of 18,381,702 shares of our common stock
      were
      outstanding.




Title of Class
            
            Name and Address of Beneficial Owners
              (1) (2)
            
            Amount and
              Nature of
              Beneficial
              Ownership
            
            Percent of Class
              (3)Greater Than 5%  ShareholdersCommon Stock
            
            Yinshing
              David To
            
            
            4,795,497
            (4)
            
            26.1
            %Common Stock
            
            Tao
              Li
            
            
            5,446,396
            (5)
            
            29.6
            %Directors and Executive OfficersCommon Stock
            
            Tao
                Li
              President,
                CEO and Chairman of the Board
            
            
            See
                the above.
            
            
            See
                the above.Common Stock
            
            Yu
                Hao
              CFO
                of subsidiary, Techteam
            
            
            30,000
            (6)
            
            0.2
            %Common Stock
            
            Ying
                Yang
              CFO
            
            
            0
            (7)
            
            0
            %Common Stock
            
            Lianfu
                Liu
              Director
            
            
            0
            
            
            0
            %Common Stock
            
            Barry
                Raeburn
              Director
            
            
            7,500
            (8)
            
            0.04
            %Common Stock
            
            Yizhao
                Zhang
              Director
            
            
            3,000
            (8)
            
            0.02
            %All executive officers and directors as a group
            
            
            5,486,896
            
            
            29.8
            %





(1) Pursuant
      to Rule 13d-3 under the Exchange Act, a person has beneficial ownership of
      any
      securities as to which such person, directly or indirectly, through any
      contract, arrangement, undertaking, relationship or otherwise has or shares
      voting power and/or investment power or as to which such person has the right
      to
      acquire such voting and/or investment power within 60 days.




(2) Unless
      otherwise stated, each beneficial owner has sole power to vote and dispose
      of
      the shares and the address of such person is c/o Shaanxi TechTeam Jinong Humic
      Acid Product Co., Ltd., at 3rd Floor, Borough A, Block A. No.181, South Taibai
      Road, Xian, Shaanxi Province, People’s Republic of China
      710065.


37





(3) In
      determining the percent of common stock owned by the beneficial owners, (a)
      the
      numerator is the number of shares of common stock beneficially owned by such
      owner, including shares the beneficial ownership of which may be acquired,
      within 60 days upon the exercise of the options, if any, held by the owner;
      and
      (b) the denominator is the sum of (i) the total 18,381,702 shares of common
      stock outstanding as of the date of this report, and (ii) the number of shares
      underlying the options, which the directors or the officers have the right
      to
      acquire upon the exercise of the options within 60 days (for those who have
      options).





(4) Among
      the
      4,795,497 shares of the common stock: (i) 1,089,280 shares of Common Stock
      are
      Earn In Shares pursuant to an agreement between Mr. Li and Mr. To as more fully
      described under footnote (5) below. Mr. Li has earned an aggregate of 5,446,396
      shares as a result of satisfying the first three conditions set forth in the
      table listed below in footnote (5) leaving 1,089,280 shares to be earned; (ii)
      3,156,808 shares of common stock are placed in an escrow account pursuant to
      the
      Make Good Escrow Agreement by and among the Company, Mr. To, the Investors
      and
      the escrow agent named therein. In the event that the Company does not achieve
      not less than $12,000,000 for after tax net income and $0.609 for earnings
      per
      share for our fiscal year ending June 30, 2009, respectively (the “2009
      Targets”), the 3,156,808 shares of common stock will be conveyed to the
      Investors for no additional consideration. In the event that the Company meets
      the 2009 Targets, the 3,156,808 shares will be transferred to Mr. Li because
      Mr.
      Li is the main management member of the Company; and (iii) Mr. To is the
      beneficial owner 549,409 shares of common stock.





(5) Pursuant
      to the Call Option Agreement entered into between our Chairman, President and
      Chief Executive Officer, Tao Li, and Yinshing David To, Mr. Li has the
      opportunity to acquire up to 6,535,676 shares of our common stock (the “Earn In
      Shares”), from Mr. To, upon the occurrence of the conditions described below. As
      of the date of this report, Mr. Li has met the first three conditions set forth
      below and earned a total of 5,446,396 shares of common stock, among which
      897,387 shares were gifted to Mr. Li’s wife and 897,387 shares were gifted to
      Mr. Li’s son.





Condition
            
            Number of Mr. To's
              Shares which may
              be acquiredEntry
                by Mr. Li and TechTeam into a new binding employment agreement for
                a term
                of not less than five years for Mr. Li to serve as TechTeam's Chief
                Executive Officer and Chairman of its Board of Directors.(Satisfied
                as of
                March 26, 2008)
            
            3,267,838
              (Acquired by Mr. Li
              as of March 26,
              2008)The
                U.S. Securities and Exchange Commission declaring a registration
                statement
                filed by the Company under the Securities Act of 1933 effective,
                or,
                investors who purchased common stock from the Company pursuant to
                the
                Securities Purchase Agreement dated as of December 24, 2007 being
                able to
                sell their common stock under Rule 144, as then effective under the
                U.S.
                Securities Act of 1933, as amended. (Satisfied as of August 6,
                2008)
            
            1,089,279
              (Acquired by Mr. Li
              as of August 6,
              2008)TechTeam
                achieving not less than $7,000,000 in pre tax profits, as determined
                under
                United States Generally Accepted Accounting Principles consistently
                applied (“US GAAP”) for the fiscal year ending June 30, 2008. (Satisfied
                as of September 19, 2008)
            
            1,089,279
              (Acquired by Mr. Li
              as of the date of this
              report)TechTeam
                achieving not less than $4,000,000 in pre tax profits, as determined
                under
                United States Generally Accepted Accounting Principles consistently
                applied (“US GAAP”) for the six months ended December 31,
                2008.
            
            1,089,280


38





The
      purposes of the arrangement between Mr. Li and Mr. To are: (i) to incentivize
      Mr. Li in connection with TechTeam’s business and (ii) to comply with PRC laws
      and rules which regulate the acquisition of PRC companies by non-PRC entities.





Mr.
      Li
      and Mr. To have also entered into a voting trust agreement, pursuant to which
      Mr. Li has the right to vote the Earn In Shares on all matters.





(6)  On
      January 31, 2008, we granted 30,000 shares of stock options to our former CFO,
      Mr. Yu Hao, who is the CFO of Techteam, our subsidiary, immediately exercisable
      in full, with an exercise price of $3.25 for a term of three years from the
      date
      of grant.




(7)  On
      September 10, 2008, we granted 28,000 stock options to our newly appointed
      CFO,
      Ms. Ying Yang, to purchase 28,000 shares of the common stock of the Company,
      exercisable at $4.00 per share. The options are to vest on July 1, 2009, for
      an
      exercise term of two years. Since the options are not exercisable within 60
      days
      from the date of this report, for the purposes of beneficial ownership pursuant
      to Rule 13d-3 under the Exchange Act, Ms. Yang has no voting shares as of the
      date of this report.




(8)  Barry
      Raeburn and Yizhao Zhang have each been granted 25,000 options and 10,000
      options on April 8, 2008, 7,500 options for Mr. Raeburn and 3,000 shares were
      vested and exercisable on June 29, 2008. The balance of the options is to be
      vested on July 1, 2009, which is beyond the 60 day period and therefore we
      do
      not include them into the table.





**ITEM
                13.**
            **CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
                INDEPENDENCE**





During
      the fiscal years ended June 30, 2007, the former shareholders of TechTeam
      advanced a total of $666,618 to TechTeam as unsecured, non-interest bearing
      loans which were due on demand. The loan was fully paid off as of December
      31,
      2007.





Our
      principal executive offices of approximately 800 square meters were leased
      from
      Xi’an Techteam Science and Technology Industry (Group) Co., Ltd. (the “Group
      Company”) which is controlled by Mr. Li, our Chairman, President and CEO, for a
      five-year term from January 2008, at the annual rent of $19,266, the market
      rate
      in that area. Techteam’s factory office buildings of 340 square meters were also
      leased from the Group Company for a five-year term from July 1, 2007 at an
      annual rent of $4,091, the market rate in that area.





Techteam’s
      former shareholders, namely, Xi’an Yuansheng Guarantee & Investment Co.,
      Ltd., wholly owned by Mr. Tao Li (owned 66% of Techteam), Mr. Xuetao Chen (owned
      17.5% of Techteam) and Ms. Wanjiao Wang (owned 16.5% of Techteam) are related
      to
      the Company because Mr. Tao Li is President and Chief Executive Officer of
      the
      Company, Mr. Xuetao Chen and Ms. Wanjiao Wang are directors of Techteam. They
      did not receive any consideration in exchange for their shares and only Mr.
      Li
      received the opportunity to acquire shares under the Call Option Agreement.
      As
      we described elsewhere in the prospectus effective August 6, 2008, Green New
      Jersey purchased 100% of the capital stock of Techteam from Techteam’s
      shareholders on August 24, 2007 for Techteam Purchase Price (approximately
      $4.09
      million) and obtained effective control of Techteam. On January 2, 2008,
      Techteam received the Techteam Purchase Price paid by Green New Jersey to
      Techteam’s former shareholders, who caused such payment to be delivered to
      Techteam for use as working capital pursuant to a Securities Purchase Agreement
      by and among the Company and the Investors in connection with the Private
      Placement.


39





**Issuance
      of Common Stock to Former Majority Shareholder**





On
      December 26, 2007, we acquired 100% capital stock of Green New Jersey, through
      a
      share exchange in which we issued 10,770,668 shares of our common stock to
      Green
      New Jersey’s shareholders in exchange for 100% of Green New Jersey’s shares of
      common stock (the “Share Exchange”). Immediately prior to the Share Exchange, we
      redeemed 246,148 shares of common stock held by Michael Friess and Sanford
      Schwartz for $550,000 and issued 111,386 new shares of common stock to Michael
      Friess and Sanford Schwartz.





**Procedures
      for Approval of Related Party Transactions**




Our
      policy is that our board of directors is charged with reviewing and approving
      all potential related party transactions.   All such related party
      transactions are then required to be reported under applicable SEC rules.
      Otherwise, we have not adopted procedures for review of, or standards for
      approval of, these transactions, but instead review such transactions on a
      case-by-case basis.





**ITEM
                14.**
            **PRINCIPAL
                ACCOUNTANT FEES AND
                SERVICES**




The
      Company paid or accrued the following fees in each of the prior two fiscal
      years
      to its principal accountants:





1.
      Kabani
& Company, Inc. (1)





Fiscal Year
              Ended
              June 30,
              2008
            
            Fiscal Year
              Ended
              June 30,
              2007Audit
                Fees
            
            $
            110,000
            
            $
            50,000Audit
                Related Fees
            
            
            -
            
            
            -Tax
                Fees
            
            
            -
            
            
            -All
                Other Fees
            
            
            -
            
            
            -Total
            
            $
            110,000
            
            $
            50,000




2.
      Schumacher & Associates, Inc. (2)





Fiscal Year
              Ended
              June 30,
              2008
            
            Fiscal Year
              Ended
              June 30,
              2007Audit
                Fees
            
            $
            9,500
            
            $
            10,000Audit
                Related Fees
            
            $
            500
            (3)
            $
            -Tax
                Fees
            
            
            -
            
            
            -All
                Other Fees
            
            
            -
            
            
            -Total
            
            $
            10,000
            
            $
            10,000





(1)
            Kabani
                & Company, Inc has been the Company’s auditor since January 28, 2008
                and the auditor of the Company’s subsidiaries Techteam and Jintai for the
                most recent two fiscal years.


(2)
            Schumacher
                & Associates, Inc. was the Company’s auditor prior to January 28,
                2008.


40


(3)
            Audit
                Related Fees were for Schumacher & Associates, Inc.’s review of the
                registration statement on Form S-1 effective August 6,
                2008.





In
      the
      event that we should require substantial non-audit services, the Board of
      Directors would approve such services and the fees therefore.




**PART
      IV**





**Item
                15.**
            **Exhibits
                and Financial Statement
                Schedules**





(a) The
      following documents are filed as part of this report:




Financial
      Statements





The
      following financial statements of China Green Agriculture, Inc. and Reports
      of
      Independent Registered Public Accounting Firms are presented in the “F” pages of
      this report:





Reports
                of Independent Registered Public Accounting Firms
            F-1Consolidated
                Balance Sheets - as of June 30, 2008 and 2007
            F-2Consolidated
                Statements of Income and Other Comprehensive
                Income -
              for
                the Years ended June 30, 2008 and 2007
            F-3Consolidated
                Statements of Shareholders’ Equity - for the Years ended
              June
                30, 2008 and 2007
            F-4Consolidated
                Statements of Cash Flows - for the Years ended June 30,
              2008
                and 2007
            F-5Notes
                to Consolidated Financial Statements
            F-6 - F-23




41


**CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 To
        the
        Board of Directors and Stockholders
 China
        Green Agriculture Inc. and its subsidiaries
 
 We
        have
        audited the accompanying balance sheets of China Green Agriculture Inc. and
        its
        subsidiaries as of June 30, 2008 and 2007, and the related consolidated
        statements of operations, stockholders' deficit, and cash flows for each
        of the
        two years in the period ended June 30, 2008. These financial statements are
        the
        responsibility of the Company's management. Our responsibility is to express
        an
        opinion on these financial statements based on our audits.
 
 We
        conducted our audits of these statements in accordance with the standards
        of the
        Public Company Accounting Oversight Board (United States). Those standards
        require that we plan and perform the audit to obtain reasonable assurance
        about
        whether the financial statements are free of material misstatement. An audit
        includes examining, on a test basis, evidence supporting the amounts and
        disclosures in the financial statements. An audit also includes assessing
        the
        accounting principles used and significant estimates made by management,
        as well
        as evaluating the overall financial statement presentation. We believe that
        our
        audits provide a reasonable basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of China Green Agriculture Inc.
        and
        its subsidiaries as of June 30, 2008 and 2007, and the results of its operations
        and its cash flows for each of the two years ended June 30, 2008, in conformity
        with accounting principles generally accepted in the United States of
        America.
   KABANI
        & COMPANY, INC.
 CERTIFIED
        PUBLIC ACCOUNTANTS
 
 Los
        Angeles, California
 September
        19, 2008
  F-1
  
 **CHINA
                  GREEN AGRICULTURE INC. AND SUBSIDIARIES****CONSOLIDATED
                  BALANCE SHEETS****AS
                  OF JUNE 30, 2008 AND 2007**
  **2008**
              
              **2007****ASSETS****Current
                  Assets**Cash
                  and cash equivalents
              
              $
              16,612,416
              
              $
              81,716Restricted
                  cash
              
              
              193,392
              
              
              -Accounts
                  receivable, net
              
              
              3,590,552
              
              
              1,885,351Inventories
              
              
              3,988,979
              
              
              1,773,802Other
                  assets
              
              
              128,091
              
              
              187,164Advances
                  to suppliers
              
              
              512,845
              
              
              208,026**Total
                  Current Assets**
              
              
              25,026,275
              
              
              4,136,059**Plant,
                  Property and Equipment, Net**
              
              
              18,199,456
              
              
              11,757,931**Construction
                  In Progress**
              
              
              5,115,492
              
              
              42,707**Intangible
                  Assets, Net**
              
              
              1,180,159
              
              
              1,163,078**Total
                  Assets**
              
              $
              49,521,382
              
              $
              17,099,775**LIABILITIES
                  AND SHAREHOLDERS' EQUITY****Current
                  Liabilities**Accounts
                  payable
              
              $
              232,417
              
              $
              221,592Unearned
                  revenue
              
              
              88,950
              
              
              81,341Other
                  payables and accrued expenses
              
              
              455,228
              
              
              301,625Registration
                  rights liability
              
              
              506,142Advances
                  from other unrelated companies
              
              
              344,628
              
              
              543,210Amount
                  due to related parties
              
              
              31,121
              
              
              666,618Taxes
                  payable
              
              
              5,878,275
              
              
              2,276,720Short
                  term loans
              
              
              4,201,925
              
              
              4,243,316**Total
                  Current Liabilities**
              
              
              11,738,686
              
              
              8,334,420**Common
                  Stock, $.001 par value, 6,313,617 shares subject to
                  redemption**
              
              
              20,519,255
              
              
              -**Commitment**
              
              
              -
              
              
              -**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, 12,068,085
                  shares
                  issued and outstanding
              
              
              12,068
              
              
              10,771Additional
                  paid-in capital
              
              
              1,200,077
              
              
              2,642,517Statury
                  reserve
              
              
              1,882,797
              
              
              880,252Retained
                  earning
              
              
              11,764,079
              
              
              4,988,097Accumulated
                  other comprehensive income
              
              
              2,404,419
              
              
              243,718Total
                  Stockholders' Equity
              
              
              17,263,441
              
              
              8,765,355**Total
                  Liabilities and Stockholders' Equity**
              
              $
              49,521,382
              
              $
              17,099,775
  The
                  accompanying notes are an integral part of these consolidated financial
                  statements.
  F-2
 
 **CHINA
                  GREEN AGRICULTURE INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME****FOR
                  THE YEARS ENDED JUNE 30, 2008 AND 2007**
  **2008**
              
              **2007****Net
                  sales**
              
              $
              22,604,719
              
              $
              15,184,343**Cost
                  of goods sold**
              
              
              9,792,856
              
              
              6,598,606**Gross
                  profit**
              
              
              12,811,862
              
              
              8,585,737**Operating
                  expenses**Selling
                  expenses
              
              
              927,285
              
              
              616,479General
                  and administrative expenses
              
              
              2,567,661
              
              
              395,207**Total
                  operating expenses**
              
              
              3,494,945
              
              
              1,011,686**Income
                  from operations**
              
              
              9,316,917
              
              
              7,574,051**Other
                  income (expense)**Other
                  income(expense)
              
              
              43,694
              
              
              957Interest
                  income
              
              
              50,106
              
              
              -Interest
                  expense
              
              
              (933,053
              )
              
              (361,254
              )Bank
                  charges
              
              
              (6,663
              )**Total
                  other income (expense)**
              
              
              (845,916
              )
              
              (360,297
              )**Income
                  before income taxes**
              
              
              8,471,001
              
              
              7,213,754Provision
                  for income taxes
              
              
              692,474
              
              
              295,012**Net
                  income**
              
              
              7,778,527
              
              
              6,918,742**Other
                  comprehensive income**Foreign
                  currency translation gain
              
              
              2,160,701
              
              
              261,432**Comprehensive
                  income**
              
              $
              9,939,228
              
              $
              7,180,173**Basic
                  weighted average shares outstanding**
              
              
              14,688,250
              
              
              10,770,669**Basic
                  net earnings per share**
              
              $
              0.53
              
              $
              0.64**Diluted
                  weighted average shares outstanding**
              
              
              14,695,626
              
              
              10,770,669**Diluted
                  net earnings per share**
              
              $
              0.53
              
              $
              0.64
  The
                  accompanying notes are an integral part of these consolidated financial
                  statements.
  F-3
 
 **CHINA
                  GREEN AGRICULTURE INC. AND SUBSIDIARIES****STATEMENTS
                  OF STOCKHOLDERS' EQUITY****FOR
                  THE YEARS ENDED JUNE 30, 2008 AND
                  2007**
 Additional
                
                
                
                
                
                Accumulated Other
                
                TotalNumber
                
                Common
                
                Paid In
                
                Statutory
                
                Retained
                
                Comprehensive
                
                Stockholders'Of Shares
                
                Stock
                
                Capital
                
                Reserve
                
                Earning
                
                Income (loss)
                
                EquityBALANCE,
                    JUNE 30, 2006
                
                
                10,770,669
                
                $
                10,771
                
                $
                2,574,915
                
                $
                -
                
                $
                (1,050,393
                )
                $
                (17,713
                )
                $
                1,517,579Net
                    income for the year ended June 30, 2007
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                6,918,742
                
                
                -
                
                
                6,918,742Contribution
                    by related parties
                
                
                -
                
                
                
                
                
                67,602
                
                
                -
                
                
                -
                
                
                -
                
                
                67,602Transfer
                    to statutory reserve
                
                
                -
                
                
                -
                
                
                -
                
                
                880,252
                
                
                (880,252
                )
                
                -
                
                
                -Accumulative
                    other comprehensive income
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                261,432
                
                
                261,432BALANCE,
                    JUNE 30, 2007
                
                
                10,770,669
                
                
                10,771
                
                
                2,642,517
                
                
                880,252
                
                
                4,988,097
                
                
                243,718
                
                
                8,765,355Recapitalization
                    for reverse merger
                
                
                251,784
                
                
                252
                
                
                (12,565
                )
                
                -
                
                
                -
                
                
                -
                
                
                (12,313
                )Stock
                    issued in relation to fund raising
                
                
                977,948
                
                
                978
                
                
                (978
                )
                
                -
                
                
                -
                
                
                -
                
                
                -Shares
                    issuance cost
                
                
                -
                
                
                -
                
                
                (1,916,532
                )
                
                -
                
                
                -
                
                
                -
                
                
                (1,916,532
                )Contribution
                    by related parties
                
                
                -
                
                
                -
                
                
                10,216
                
                
                -
                
                
                -
                
                
                -
                
                
                10,216Issuance
                    of stock options for compensation
                
                
                -
                
                
                -
                
                
                477,487
                
                
                -
                
                
                -
                
                
                -
                
                
                477,487Exercised
                    of stock options-cashless
                
                
                67,685
                
                
                68
                
                
                (68
                )
                
                -
                
                
                -
                
                
                -
                
                
                -Net
                    income for the year ended June. 30, 2008
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                7,778,527
                
                
                -
                
                
                7,778,527Transfer
                    to statutory reserve
                
                
                -
                
                
                -
                
                
                -
                
                
                1,002,545
                
                
                (1,002,545
                )
                
                -
                
                
                -Accumulative
                    other comprehensive loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                2,160,701
                
                
                2,160,701BALANCE,
                    JUNE 30, 2008
                
                
                12,068,086
                
                $
                12,068
                
                $
                1,200,077
                
                $
                1,882,797
                
                $
                11,764,079
                
                $
                2,404,419
                
                $
                17,263,441
  F-4
  **CHINA
                  GREEN AGRICULTURE INC. AND SUBSIDIARIES****STATEMENTS
                  OF CASH FLOWS****FOR
                  THE YEARS ENDED JUNE 30, 2008 AND
                  2007**
  **2008**
              
              **2007****Cash
                  flows from operating activities**Net
                  income
              
              $
              7,778,527
              
              $
              6,918,742Adjustments
                  to reconcile net income to net cashprovided
                  by operating activitiesShare
                  capital contribution - rental and interest paid by
                  shareholders
              
              
              10,216
              
              
              65,894Issuance
                  of stock options for compensation
              
              
              477,487
              
              
              -Depreciation
              
              
              988,240
              
              
              372,862Amortization
              
              
              105,266
              
              
              93,813Decrease
                  / (Increase) in current assetsAccounts
                  receivable
              
              
              (1,412,479
              )
              
              71,450Other
                  receivables
              
              
              89,759
              
              
              93,115Inventories
              
              
              (1,905,399
              )
              
              (578,072
              )Advances
                  to suppliers
              
              
              (265,955
              )
              
              (35,068
              )Other
                  assets
              
              
              (14,477
              )
              
              (8,038
              )(Decrease)
                  / Increase in current liabilitiesAccounts
                  payable
              
              
              (73,799
              )
              
              (169,063
              )Unearned
                  revenue
              
              
              (1,309
              )
              
              (42,983
              )Tax
                  payables
              
              
              3,161,272
              
              
              1,602,499Other
                  payables and accrued expenses
              
              
              180,261
              
              
              398,377**Net
                  cash provided by operating activities**
              
              
              9,117,611
              
              
              8,783,528**Cash
                  flows from investing activities**Acquisation
                  of plant, property, and equipment
              
              
              (5,840,159
              )
              
              (9,739,708
              )Additions
                  to construction in progress
              
              
              (4,782,862
              )
              
              (29,201
              )**Net
                  cash used in investing activities**
              
              
              (10,623,021
              )
              
              (9,768,909
              )**Cash
                  flows from financing activities**Repayment
                  of loan
              
              
              (481,914
              )
              
              (191,922
              )Shares
                  issuane cost
              
              
              (1,916,532
              )
              
              -Proceeds
                  issuance of shares subject to redemption
              
              
              20,519,255
              
              
              -Restricted
                  cash
              
              
              (193,392
              )
              
              -(Payments)/proceeds
                  to/from related parties
              
              
              (669,233
              )
              
              1,210,223**Net
                  cash provided by financing activities**
              
              
              17,258,183
              
              
              1,018,301**Effect
                  of exchange rate change on cash and cash
                  equivalents**
              
              
              777,927
              
              
              3,173**Net
                  increase in cash and cash equivalents**
              
              
              16,530,700
              
              
              36,093**Cash
                  and cash equivalents, beginning balance**
              
              
              81,716
              
              
              45,623**Cash
                  and cash equivalents, ending balance**
              
              $
              16,612,416
              
              $
              81,716**Supplement
                  disclosure of cash flow information**Interest
                  expense paid
              
              $
              (222,260
              )
              $
              322,734Income
                  taxes paid
              
              $
              -
              
              $
              -
  The
                  accompanying notes are an integral part of these consolidated financial
                  statements.
  F-5
  **CHINA** **GREEN
        AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
        TO 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..
 
 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").
 
 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
        reverse stock splits.
 
 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 a consultant.
  F-6
 
 **CHINA** **GREEN
        AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
        TO 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 its 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 cycles 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.
 
 The
        Company and its subsidiaries are engaged in the research and development,
        manufacture, distribution and technical support of green organic fertilizer.
        Techteam Jinong’s main business is to produce and sell fertilizers, and Xi’an
        Jintai’s main business is to sell the products which are the by- products (fruit
        and vegetables) from the development experiment of the fertilizers.
 
 F-7
 
 **CHINA** **GREEN
        AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  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**
 
 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 estimates.
  F-8
 **CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 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 reflected as
        liabilities in the balance sheet. As of June 30, 2008 and 2007, cash and
        cash
        equivalents amounted to $16,612,416 and $81,716 respectively.
 
 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 June 30, 2008 and 2007, the
        Company had accounts receivable of $3,590,552 and $1,885,351, net of allowance
        for doubtful accounts of $96,065 and $218,796 respectively.
 
 Advances
        to suppliers
 
 The
        Company makes advances to certain vendors for purchase of its materials.
        As of
        June 30, 2008 and 2007, the advances to suppliers amounted to $512,845 and
        $
        208,026 respectively.
 
 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 property, plant, 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:
  F-9
 **CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 Estimated Useful LifeBuilding
              
              
              10-40
                  yearsLeasehold
                  improvements
              
              
              3-5
                  yearsMachinery
                  and equipment
              
              
              5-15
                  yearsVehicles
              
              
              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 fiscal year
        ended June 30, 2008.
 
 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. As of June 30, 2008 and 2007, the Company had unearned revenues
        of
        $88,950 and $81,341, respectively.
 
 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
        discounts are normally not granted after products are delivered.
  F-10
 **CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 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 fiscal
        year
        ended June 30, 2008 and 2007 were $260,764 and $333,913,
        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 assets or liabilities in the PRC tax jurisdiction.
 
 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
        requires submitting a payment application form together with invoices, shipping
        documents and signed contracts.
  F-11
  **CHINA** **GREEN
        AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  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.
  During
        the fiscal year ended June 30, 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
        year-end balance sheet information for the fiscal years ended June 30, 2008
        and
        2007.
 For the fiscal year ended June 302008
                
                2007Revenues
                    from unaffiliated customers:Fertilizer
                
                $
                18,658,426
                
                $
                13,330,626Agricultural
                    products
                
                
                3,946,293
                
                
                1,853,716Consolidated
                
                $
                22,604,719
                
                $
                15,184,343Operating
                    income (expense) :Fertilizer
                
                $
                9,126,583
                
                $
                6,891,202Agricultural
                    products
                
                
                1,974,488
                
                
                682,849Reconciling
                    item (1)
                
                
                (588,888
                )
                
                -Reconciling
                    item (2)
                
                
                (1,195,266
                )
                
                -Consolidated
                
                $
                9,316,917
                
                $
                7,574,051Identifiable
                    assets:Fertilizer
                
                $
                43,930,733
                
                $
                15,627,865Agricultural
                    products
                
                
                4,601,269
                
                
                1,471,910Reconciling
                    item (1)
                
                
                795,988
                
                
                -Reconciling
                    item (2)
                
                
                193,392
                
                
                -Consolidated
                
                $
                49,521,382
                
                $
                17,099,775Net
                    income:Fertilizer
                
                $
                8,050,577
                
                $
                6,235,837Agricultural
                    products
                
                
                1,974,869
                
                
                682,905Reconciling
                    item (1)
                
                
                (574,499
                )
                
                -Reconciling
                    item (2)
                
                
                (1,672,420
                )
                
                -Consolidated
                
                $
                7,778,527
                
                $
                6,918,742Interest
                    expense:Fertilizer
                
                $
                426,478
                
                $
                361,254Agricultural
                    products
                
                
                -
                
                
                -Reconciling
                    item (1)
                
                
                433
                
                
                -Reconciling
                    item (2)
                
                
                506,142
                
                
                -Consolidated
                
                $
                933,053
                
                $
                361,254
  (1)
        Reconciling amounts refer to the unallocated assets or expenses of Green
        Agriculture.
  (2)
        Reconciling amounts refer to the unallocated assets or expenses of the parent
        Company.
  F-12
  **CHINA** **GREEN
        AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  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.
 
 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
        acquiree 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.
  F-13
 **CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  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.
 
 In
        May 0f
        2008, FSAB issued SFASB No.162, The Hierarchy of Generally Accepted Accounting
        Principles. The pronouncement mandates the GAAP hierarchy reside in the
        accounting literature as opposed to the audit literature. This has the practical
        impact of elevating FASB Statements of Financial Accounting Concepts in the
        GAAP
        hierarchy. This pronouncement will become effective 60 days following SEC
        approval. The company does not believe this pronouncement will impact its
        financial statements.
 
 In
        May of
        2008, FASB issued SFASB No. 163, Accounting for Financial Guarantee Insurance
        Contracts-an interpretation of FASB Statement No. 60. The scope of the statement
        is limited to financial guarantee insurance (and reinsurance) contracts.
        The
        pronouncement is effective for fiscal years beginning after December 31,
        2008.
        The company does not believe this pronouncement will impact its financial
        statements.
 
 **NOTE
        3 – INVENTORIES**
 
 Inventories
        consist of the following as of June 30, 2008 and 2007:
 
 2008
              
              2007Raw
                  materials
              
              $
              77,000
              
              $
              -Supplies
                  and packing materials
              
              
              207,138
              
              
              153,498Work
                  in progress
              
              
              3,570,127
              
              
              -Finished
                  goods
              
              
              134,714
              
              
              1,620,303Totals
              
              $
              3,988,979
              
              $
              1,773,802
 
 **NOTE
        4 – OTHER ASSETS**
 
 Other
        assets consist of the following as of June 30, 2008 and 2007
  2008
              
              2007Other
                  receivable
              
              $
              93,987
              
              $
              157,132Promotion
                  samples
              
              
              -
              
              
              30,032Promotion
                  material
              
              
              34,104
              
              
              -Total
              
              $
              128,091
              
              $
              187,164
 
 Other
        receivables represent advances made to non-related companies and employees
        for
        $79,397 and notes receivable from various customers for $14,590. The amounts
        were unsecured, interest free, and due on demand.
 
 F-14
 **CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **NOTE
        5 - PROPERTY, PLANT AND EQUIPMENT, AND CONSTRUCTION IN
        PROGRESS**
 
 Property,
        plant and equipment consist of the following as of June 30, 2008 and
        2007:
 
 2008
              
              2007Building
                  and improvements
              
              $
              8,795,804
              
              $
              7,223,219Vehicles
              
              
              23,753
              
              
              21,387Machinery
                  and equipment
              
              
              10,263,668
              
              
              5,165,338Agriculture
                  assets
              
              
              887,518
              
              
              -Total
              
              
              19,970,743
              
              
              12,409,944Less:
                  accumulated depreciation
              
              
              (1,771,287
              )
              
              (652,013
              )Total
                  property, plant and equipment
              
              $
              18,199,456
              
              $
              11,757,931
 
 Depreciation
        expenses for the fiscal years ended June 30, 2008 and 2007 were $988,240
        and
        $372,862, respectively.
 
 Agriculture
        assets consist of reproductive trees that are expected to be commercially
        productive
 for
        a
        period of eight years.
 
 Consrtuction
        in Progress:
 
 As
        of
        June 30, 2008 and 2007, construction in progress, representing construction
        for
        a new product line, amounted to $5,115,492 and $42,707,
        respectively.
 
 **NOTE
        6 - INTAGIBLE ASSETS**
 
 The
        intangible assets comprised of following as of June 30, 2008 and
        2007:
 
 2008
              
              2007Land
                  use right, net
              
              $
              915,864
              
              $
              844,623Technology
                  know-how, net
              
              
              264,295
              
              
              318,455Total
              
              $
              1,180,159
              
              $
              1,163,078
  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 an intangible asset and amortizing over a period of
        fifty
        years which was approved by the government.
 
 A
        shareholder contributed the land use rights on August 16, 2001. The land
        use
        right was recorded at cost of $1,062,898. The land use right is for fifty
        years.
        The land use right consists of the following as of June 30, 2008 and 2007:
  F-15
 **CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 2008
              
              2007Land
                  use right
              
              $
              1,062,898
              
              $
              881,497Less:
                  accumulated amortization
              
              
              (147,034
              )
              
              (36,874
              )Total
              
              $
              915,864
              
              $
              844,623
 
 TECHNOLOGY
        KNOW-HOW
 
 A
        shareholder contributed the technology know-how on August 16, 2001. The
        technology know-how is recorded at cost of $857,174. 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 June 30, 2008
        and
        2007:
 
 2008
              
              2007Technology
                  Know-how
              
              $
              857,174
              
              $
              771,819Less:
                  accumulated amortization
              
              
              (592,879
              )
              
              (453,364
              )Total
              
              $
              264,295
              
              $
              318,455
 
 Total
        amortization expenses of intangible assets for the fiscal years ended June
        30,
        2008 and 2007 amounted to $ 105,266 and $93,813, respectively.
 
 Amortization
        expenses of intangible assets for the next five years after June 30, 2008
        are
        as follows:
 
 1
                  year after
              
              $
              106,9752
                  year after
              
              
              106,9753
                  year after
              
              
              106,9754
                  year after
              
              
              28,4015
                  year after
              
              
              21,258**Total**
              
              $
              370,585
 
 **NOTE
        7 - RELATED PARTIES TRANSATIONS**
 
 The
        “Amount due to related parties” reprented the advances from the Company’s one
        shareholder (in 2008) and
        shareholder and subsidiaries owned by the shareholders (2007). The amounts
        were unsecured,
        non-interest bearing and due
        on
        demand .
        As of June
        30,
        2008 and 2007, amount
        due to related parties amounted to $31,121 and 666,618, respectively .
 
 **NOTE
        8 -** **ACCRUED
        EXPENSES** **AND OTHER PAYABLES**
 
 Accrued
        expenses and other payables of the following as of June 30, 2008 and
        2007:
 
 2008
              
              2007Payroll
                  payable
              
              $
              15,379
              
              $
              30,081Welfare
                  payable
              
              
              178,500
              
              
              173,376Accrued
                  expenses
              
              
              148,070
              
              
              61,315Other
                  levy payable
              
              
              113,279
              
              
              36,853**Total**
              
              $
              455,228
              
              $
              301,625
  F-16
 **CHINA** **GREEN
            AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **NOTE
        9 - LOANS PAYABLES**
 
 As
        of
        June 30, 2008 and 2007, the loan payables were as follows:
 
 2008
              
              2007Short
                  term loans payable:Xi’an
                  Commercial Bank Xincheng Branch
              
              $
              2,188,502
              
              $
              1,970,580Xi’an
                  Beilin District Rural Credit Union Wenyibeilu Branch
              
              
              554,421
              
              
              499,214Agriculture
                  Bank Yanglingshifangqu Branch
              
              
              1,459,002
              
              
              1,773,522Total
              
              $
              4,201,925
              
              $
              4,243,316
 
 At
        June
        30, 2008, the Company had a loan payable of $ 2,188,502 to Xi’an
        Commercial Bank Xincheng Branch in
        China, with an annual interest rate of 10.5825%, and due on April 1, 2009.
        The
        loan is pledged by the land use right and property of the Company.
 
 At
        June
        30, 2008, the Company had a loan payable of $ 554,421 to Xi’an
        Beilin District Rural Credit Union Wenyibeilu Branch with an
        annual interest rate of 11.795%, and due on September 16, 2009. The loan
        is
        guaranteed by a former shareholder.
 
 At
        June
        30, 2008, the Company had a loan payable of $ 1,459,002 to Agriculture
        Bank in China Yanglingshifangqu Branch ,
        with an
        annual interest rate of 9.71%, and due on December 28, 2008. The loan is
        guaranteed by the former shareholder.
 
 The
        interest expense was $426,911 and $361,254 for the fiscal years ended June
        30,
        2008 and 2007, repectively.
 
 **NOTE
        10 - TAXES PAYABLES**
 
 Taxes
        payables consist of the following as of June 30, 2008 and 2007:
 
 **2008**
              
              **2007**VAT
                  payable
              
              $
              4,495,140
              
              
              1,824,259Income
                  tax payable
              
              
              1,038,651
              
              
              302,907Other
                  levies
              
              
              344,484
              
              
              149,554$
              5,878,275
              
              
              2,276,720
 
 **NOTE
        11 – ADVANCES FROM UNRELATED COMPANIES**
 
 Advances
        from unrelated companies were $ 344,628 and $543,210 at June 30, 2008 and
        2007,
        respectively. The advances were due on demand, unsecured and non interest
        bearing .
  F-17
 **CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **NOTE
        12 – OTHER INCOME (EXPENSES)**
 
 Other
        income (expenses) mainly consists of interest expense and subsidy income
        from
        the 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
        provision for income taxes as of June 30, 2008 and 2007 consisted of the
        following:
 2008
                
                2007Current
                    income tax - Provision for China income and local tax
                
                $
                692,474
                
                $
                295,012Deferred
                    taxes
                
                
                -
                
                
                -Total
                    provision for income taxes
                
                $
                692,474
                
                $
                295,012
  The
        following table reconciles the U.S. statutory rates to the Company’s effective
        tax rate as of June 30, 2008 and 2007:
 
 2008
              
              2007Tax
                  at statutory rate
              
              
              34
              %
              
              34
              %Foreign
                  tax rate difference
              
              
              (19
              )%
              
              (19
              )%Net
                  operating loss in other tax jurisdiction for where no benefit is
                  realized
              
              
              (8
              )%
              
              (11
              )%Total
              
              
              7
              %
              
              4
              %
  F-18
 **CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  Beginning
          January 1, 2008, in the People's Republic of China (PRC) 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 and 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 15%. 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 fiscal year ended June 30, 2008 and 2007.
 
 **NOTE
        14 - 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.
 
 **MAJOR
        CUSTOMERS AND VENDORS**
 
 There
        were three vendors from which the Company purchased more than 10% of its
        raw
        materials for the fiscal year ended June 30, 2008 with each vendor individually
        accounting for about 12%, 10%, and 10%. Accounts payable to the venders amounted
        to $0, $26,907, and $0 as of June 30, 2008.
 
 There
        was
        no customer that accounted for over 10% of the total sales for the fiscal
        year
        ended June 30, 2008.
 
 **NOTE
        15– 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 of 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”.
  F-19
  **CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 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 and booked as restricted cash. The
        total of $4,250,000 in 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. The
                  Company
                  appointed a majority of independent directors in April 2008.
 3.
              $250,000
                  is for the retaining of an Investors Relation firm.
 
 As
        of
        June 30, 2008, the balance of restricted cash is $193,392.
 
 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 obligations 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.
  F-20
 **CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 Within
        45
        days of the closing of the Private Placement (the “Filing Date”), the Company
        was obligated to file a registration statement with the Commission covering
        and
        registering for re-sale all of the common stock offered and sold in the Private
        Placement. If a registration statement was not filed by the Filing Date,
        the
        company would have been obligated to pay the Investors liquidated damages
        equal
        in amount to one percent (1%) of the principal amount subscribed for by the
        Investors for each month (or part thereof) after the Filing Date until the
        registration statement is filed (“Filing Damages”).
 
 If
        the
        registration statement is not declared effective by the Commission within
        150
        days after the closing of the Private Placement (the “Effective Date”), the
        company will be obligated to pay liquidated damages to the Investors equal
        in
        amount to one percent (1%) of the principal amount subscribed for by the
        Investors for each month (or part thereof) after the Effective Date until
        the
        registration statement is effective (“Effectiveness Damages”). The aggregate of
        Filing Damages and Effectiveness Damages is subject to a cap of ten percent
        (10%).
 
 In
        accordance with this agreement the company has accrued $506,142 as registration
        right liability and interest expense for the year ended June 30, 2008. There
        will be additional expense of $198,353 recorded in the next
        quarter.
 
 **NOTE
        16–** **STATUTORY
        RESERVE**
 
 As
        stipulated by the Company Law of the People's Republic of China (PRC), net
        income after taxation can only be distributed as dividends after appropriation
        has been made for the following:
 
 i)
        Making
        up cumulative prior years' losses, if any;
 
 ii)
        Allocations to the "Statutory surplus reserve" of at least 10% of income
        after
        tax, as determined under PRC accounting rules and regulations, until the
        fund
        amounts to 50% of the Company's registered capital;
 
 iii)
        Allocations of 5-10% of income after tax, as determined under PRC accounting
        rules and regulations, to the Company's "Statutory common welfare fund",
        which
        is established for the purpose of providing employee facilities and other
        collective benefits to the Company's employees; and Statutory common welfare
        fund is no longer required per the new cooperation law executed in
        2006.
 
 iv)
        Allocations to the discretionary surplus reserve, if approved in the
        shareholders' general meeting.
 
 In
        accordance with the Chinese Company Law, the Company has allocated 10% of
        its
        net income to surplus. The amount allocated to the surplus reserve amounted
        to
        $1,002,545 and $880,252 for the fiscal years ended June 30, 2008 and 2007,
        respectively.
  F-21
 **CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **NOTE
        17– STOCK OPTIONS**
 
 Effective
        January 1, 2006, the Company adopted Statement of Financial Accounting
        Standards (SFAS) No. 123-R, “Share-Based Payment”**(“SFAS
        No. 123-R”), which requires the measurement and recognition of compensation
        expense for all share-based payment awards made to employees and directors,
        including stock options based on their fair values. SFAS No. 123-R supersedes
        Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
        Employees”**(“APB
        25”), which the Company previously followed in accounting for stock-based
        awards. In March 2005, the SEC issued Staff Accounting Bulletin
        No. 107**(SAB
        107)
        to provide guidance on SFAS No. 123-R. The Company has applied SAB 107 in
        its
        adoption of SFAS No. 123-R.
 
 On
        January 31, 2008, the Company issued 123,000 stock options to its employees
        with
        an exercise price of $3.25 and term of three years. Compensation expense
        as of
        June 30, 2008 recorded was $388,452. On June 24, 2008, the employees requested
        a
        cashless exercise of 76,500 options at an exercise price of $3.25 per share.
        Based on the formula provided in the options agreement, the employees received
        67,685 shares.
 The
        assumptions used in calculating the fair value of options granted using the
        Black-Scholes option pricing model are as follows:
 
 Risk-free
                  interest rate
              
              
              2.27
              %Expected
                  life of the options
              
              
              3
                  yearExpected
                  volatility
              
              
              252
              %Expected
                  dividend yield
              
              
              0
              %
 
 On
        April
        8, 2008, the Company issued 35,000 stock options to two directors with an
        exercise price of $6 and term of two years. 10,500 options vested on June
        29,
        2008, and 24,500 options vested on July 1, 2009. Compensation expense as
        of June
        30, 2008 recorded was $50,041.
 The
        assumptions used in calculating the fair value of options granted using the
        Black-Scholes option pricing model are as follows:
 
 Risk-free
                  interest rate
              
              
              1.87
              %Expected
                  life of the options
              
              
              2
                  yearExpected
                  volatility
              
              
              540
              %Expected
                  dividend yield
              
              
              0
              %
 
 On
        April
        23, 2008, the Company issued 40,000 stock options to the CFO with an exercise
        price of $6 and term of two years. 12,000 options vested on June 29, 2008,
        and
        28,000 options vested on July 1, 2009. Compensation expense as of June 30,
        2008
        recorded was $38,994.
 The
        assumptions used in calculating the fair value of options granted using the
        Black-Scholes option pricing model are as follows:
 
 Risk-free
                  interest rate
              
              
              2.22
              %Expected
                  life of the options
              
              
              2
                  yearExpected
                  volatility
              
              
              544
              %Expected
                  dividend yield
              
              
              0
              %
  F-22
  **CHINA** **GREEN
          AGRICULTURE INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 Options
        outstanding at June 30, 2008 and related weighted average price and intrinsic
        value is as follows:
 Exercise
                  Prices
                
                Total
                  Options
                  Outstanding
                
                Weighted
                  Average
                  Remaining
                  Life
                  (Years)
                
                Total
                  Weighted
                  Average
                  Exercise Price
                
                Options
                  Exercisable
                
                Weighted
                  Average
                  Exercise
                  Price
                
                Aggregate Intrinsic
                  Value$3.25-$6
                
                
                121,500
                
                
                2.19
                
                $
                4.95
                
                
                69,000
                
                $
                4.15
                
                
                23,250
  The
        following table summarizes the options outstanding as of June 30, 2008:
  Options
                OutstandingOutstanding,
                  July 1, 2007
              
              
              -Granted
              
              
              198,000Forfeited/Canceled
              
              
              -Exercised
              
              
              (76,500
              )Outstanding,
                  June 30, 2008
              
              
              121,500
 
 **NOTE
        18 - COMMITMENT**
  In
        July
        2007, the Company signed an office lease with the shareholder and started
        to pay
        the rent for $ 890 per
        month. The Company recorded annual rent expenses of $19,266 and $20,455 for
        the
        fiscal years ended June 30, 2008 and 2007, respectively. Rent expenses for
        the 5
        years after June 30, 2008 are as follows:
 
 1
                  year after
              
              $
              19,2662
                  year after
              
              
              19,2663
                  year after
              
              
              19,2664
                  year after
              
              
              19,2665
                  year after
              
              
              19,266Total
              
              $
              96,330
 
 F-23




(b) Exhibits





See
      the
      Exhibit Index following the signature page of this report, which Index is
      incorporated herein by reference.


42


**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the Registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.




China
                Green Agriculture, Inc.Date: September
                26, 2008
            By:
            /s/
                Tao LiTao
                Li, President and CEO
              (principal
                executive officer)/s/
                Ying YangYing
                Yang, Chief Financial Officer
              (principal
                financial officer and principal
              accounting
                officer)





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, this report has been signed below by the following persons on behalf
      of
      the Registrant and in the capacities and on the dates indicated.





September
                26, 2008
            
            /s/
                Tao LiTao
                Li, Chairman of the Board of DirectorsSeptember
                26, 2008
            
            /s/
                Yu HaoYu
                Hao, DirectorSeptember
                26, 2008
            
            /s/
                Lianfu LiuLianfu
                Liu, DirectorSeptember
                26, 2008
            
            /s/
                Yizhao ZhangYizhao
                Zhang, DirectorSeptember
                26, 2008
            
            /s/
                Barry RaeburnBarry
                Rayburn, Director




S-1


**China
      Green Agriculture, Inc.**


**Exhibit
      Index to Annual Report on Form 10-K**


**For
      the Year Ended June 30, 2008**





3.1
            Articles
                of Incorporation (1)





3.2
            Bylaws
                (1)





4.1
            Specimen
                Common Stock Certificate (2)





4.2
            Certificate
                of Change filed with the Secretary of State of the State of Nevada
                on
                December 18, 2007 (4)





4.3
            Certificate
                of Correction (5)





10.1
            Agreement
                and Plan of Merger between Discovery Technologies, Inc. and Discovery
                Technologies, Inc., dated August 27, 2007. (3)





10.2
            Securities
                Purchase Agreement by and among the Company, Green Agriculture Holding
                Corporation, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd.,
                and the
                investors named therein, dated December 24, 2007.
                (4)





10.3
            Share
                Exchange Agreement by and among Green Agriculture Holding Corporation,
                the
                Company and the shareholders of Green New Jersey named therein, dated
                December 24, 2007. (4)





10.4
            Registration
                Rights Agreement by and among the Company and the investors named
                therein,
                dated December 24, 2007. (4)





10.5
            Lock-Up
                Agreement between Mr. Yinshing David To, Mr. Tao Li and the Company,
                dated
                December 24, 2007.(4)





10.6
            Closing
                Escrow Agreement by and among Green Agriculture Holding Corporation,
                the
                investors named therein, and Tri-State Title & Escrow, LLC, as escrow
                agent, dated December 24, 2007.(4)





10.7
              Make
                  Good Escrow Agreement by and among the Company, the investors named
                  therein, Yinshing David To and Tri-State Title & Escrow, LLC, as
                  escrow agent, dated December 24,
                  2007.(4)





10.8
            Holdback
                Escrow Agreement by and among the Company, the investors named therein,
                and Tri-State Title & Escrow, LLC, as escrow agent, dated December 24,
                2007. (4)





10.9
            Call
                Option Agreement between Tao Li and Yinshing David To, dated December
                24,
                2007. (4)





10.10
            Waiver
                and Consent by and among the Company and a majority of the Investors
                dated
                April 4, 2008. (6)





10.11
            Stock
                Option Agreement by and among the Company and Barry Raeburn dated
                April 8,
                2008. (6)





10.12
            Stock
                Option Agreement by and among the Company and Yizhao Zhang dated
                April 8,
                2008.(6)





10.13
            Stock
                Option Agreement by and among the Company and Yu Hao dated January
                31,
                2008.(6)





10.14
            Form
                of Stock Option Agreement by and between the Company and the eighteen
                employees for the grant of an aggregate of 123,000 options.
                (8)


E-1





10.15
            Agreement
                by and between the Company and CCG Elite regarding investor relations
                service dated January 23, 2008. (7)




10.16
              Employment
                  Agreement, dated September 10, 2008, by and between the Company
                  and Ms.
                  Ying Yang. (9)
 10.17
                  Option
                        Agreement, dated September 10, 2008, by and between the Company
                        and Ms.
                        Ying Yang. (9)


14.1
            Code
                of Ethics *





16.1
            Letter
                dated January 29, 2008 from Schumacher & Associates, Inc., to the
                Securities Exchange Commission. (7)





21
            Description
                of Subsidiaries of the Company. (4)  31.1
            Certification
                of Tao Li pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a),
                as
                adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002*;  31.2
            Certification
                of Ying Yang pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a),
                as
                adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002*;  32.1
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.*




*
            Filed
                herewith.





(1)
            Incorporated
                by reference to our Quarterly Report on Form 10-QSB, for the quarter
                ended
                September 30, 2007, filed with the Commission on November 9,
                2007.





(2)
            Incorporated
                by reference to our Form 10-SB12G filed with the Commission on May
                24,
                2007.





(3)
            Incorporated
                by reference to our Annual Report on Form 10-KSB, for the year ended
                June
                30, 2007, filed with the Commission on October 1,
                2007.





(4)
            Incorporated
                by reference to our Current Report on Form 8-K filed with the Commission
                on January 2, 2008.





(5)
            Incorporated
                by reference to our Registration Statement on Form S-1 filed with
                the
                Commission on February 8, 2008.





(6)
            Incorporated
                by reference to our Amendment No. 1 to our Registration Statement
                on Form
                S-1 filed with the Commission on April 17,
                2008.





(7)
            Incorporated
                by reference to our Amendment No. 2 to our Registration Statement
                on Form
                S-1 filed with the Commission on May 19,
                2008.





(8)
            Incorporated
                by reference to our Amendment No. 3 to our Registration Statement
                on Form
                S-1 filed with the Commission on June 30,
                2008.


(9)
              Incorporated
                    by reference to our Current Report on Form 8-K filed with the
                    Commission
                    on September 11, 2008.


E-2