Item 1.01. Entry into a Material Definitive Agreement.

On May 31, 2007, China Organic Agriculture Inc. ("we" or the "Company") entered into a Fixed Price Standby Equity Distribution Agreement with six investors listed therein (each, an "Investor", collectively, the "Investors"). Pursuant to the Fixed Price Standby Equity Distribution Agreement, the Company may, at its discretion, periodically sell to the Investors up to 20 million shares of the Company's common stock, par value $.001 per share, for a total purchase price of up to $21 million (a per share purchase price of $1.05 per share). The Investors' obligation to purchase shares of common stock under the Fixed Price Standby Equity Distribution Agreement is subject to certain conditions, including the Company obtaining an effective registration statement for the resale of the common stock sold under the Fixed Price Standby Equity Distribution Agreement. The maximum amount of advance under the Fixed Price Standby Equity Distribution Agreement cannot exceed $5 million. In no event can the number of shares issued to any Investor pursuant to an advance cause any Investor to own more than 9.9% of the shares of common stock outstanding.

The commitment period under the Fixed Price Standby Equity Distribution Agreement commences on the earlier to occur of (i) the date that the Registration Statement is declared effective by the Securities and Exchange Commission (the "Effective Date"), or (ii) such earlier date as we and the Investors may mutually agree in writing.

The commitment period under the Fixed Price Standby Equity Distribution Agreement expires upon the earliest to occur of (i) the date on which the Investors have purchased an aggregate amount of $20 million shares of our common stock under the Fixed Price Standby Equity Distribution Agreement, (ii) the date occurring 24 months after the Effective Date, or (iii) the date the Agreement is earlier terminated.

Item 9.01. Exhibits.

99.1 Form of Standby Equity Distribution Agreement