1166389--3/28/2008--CHINA_AGRITECH

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An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this report, before making an investment decision. If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. If we fail to effectively expand our operations and capacity to satisfy demand for our fertilizer products, our results of operations and business prospects could be impaired. We face risks associated with recent and future investments or acquisitions Our rapid expansion could significantly strain our resources, management and operational infrastructure which could impair our ability to meet increased demand for our products and hurt our business results. If we fail to accurately project market demand for our products, our business expansion plan could be jeopardized and our financial condition and results of operations will suffer. Our business will be harmed if our major distributors reduce their orders or discontinue doing business with us. We depend heavily on Mr. Yu Chang, our CEO, President, Secretary and director, and without his services our prospects would be severely limited. We face risks associated with recent and future investments or acquisitions. If we fail to effectively expand our operations and capacity to satisfy demand for our fertilizer products, our results of operations and business prospects could be impaired We depend heavily on skilled personnel, and any loss of such personnel, or the failure to continue to attract such personnel in the future, could harm our business. Any disruption of the operations in our factories would damage our business. We currently rely on a small number of third parties to supply the key raw materials we use to produce our products. If we cannot protect the proprietary formula and manufacturing processes for our concentrated organic liquid compound fertilizer it could increase our competition and cause our operating results to suffer. Certain of our officers and directors' associations with other business enterprises could impede their ability to devote ample time to our business and could pose conflicts of interest. e may be exposed to potential risks relating to our internal controls over financial reporting and our ability to have those controls attested to by our independent auditors. We may need to raise additional capital in the foreseeable future and may not be able to do so on terms favorable to us or you or at all. Our holding company structure may limit the payment of dividends. Our operating results will suffer if the price of raw materials increases and we cannot pass the increased cost through to our customers. If we fail to accurately project market demand for our products, our business expansion plan could be jeopardized and our financial condition and results of operations will suffer If we cannot renew our fertilizer registration certificate, which expired in December, 2007, or we cannot maintain our manufacturing license we will be unable to sell some of our products which will cause our sales revenues to significantly decrease. Adverse weather conditions could reduce demand for fertilizer products. Competition in the fertilizer industry in China and elsewhere is intense. The fertilizer products that we manufacture pose safety risks and could expose us to product liability claims. Adverse changes in political and economic policies of the PRC government could impede the overall economic growth of China, which could reduce the demand for our products and damage our business. Uncertainties with respect to the PRC legal system could limit the legal protections available to you and us. Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident stockholders to personal liability, limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, limit our PRC subsidiaries ability to distribute profits to us or otherwise materially adversely affect us. We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business. Our business will suffer if we lose our land use rights. Accounting laws in China mandate accounting practices which may not be consistent with U.S. generally accepted accounting principles and therefore our financials and their interpretation involve uncertainties. Restrictions on currency exchange may limit our ability to receive and use our sales revenue effectively. Fluctuations in exchange rates could hurt our business and the value of our stock. We own our PRC subsidiaries rather than merely having a contractual relationship with such entities. The market price for our common stock may be volatile which could result in a complete loss of your investment. Certain of our stockholders hold a significant percentage of our outstanding voting securities. Our common stock is quoted on the OTC bulletin board which may have an unfavorable impact on our stock price and liquidity. We are subject to penny stock regulations and restrictions.

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1166389--3/28/2008--CHINA_AGRITECH_INC