September 30, 2008

China Organic Agriculture Inc has finalised the terms for the previously announced acquisition of Dalian Huiming Industry Ltd.

China Organic Agriculture Inc, a growth-driven agricultural products company, has finalised the terms for the previously announced acquisition of Dalian Huiming Industry Ltd with the counterparty's major shareholders.

Dalian Huiming is a major agriculture products trading company with broad distribution throughout the northeastern provinces of China.

The terms of the deal is for China Organic to acquire 60 percent of Dalian Huiming for US$10.6 million in cash that, as stated in the second quarter financials, has already been deposited in a joint bank account with Dalian Huiming's shareholders.

No CNOA shares will be issued in relation to the completion of this transaction and the deal is scheduled to close after the fiscal third quarter.

Since the announcement of his appointment as Chief Executive Officer on September 24, 2008, Jinsong Li has already had several discussions with the major shareholders of Dalian Huiming to assure the deal gets finalized. One of his primary goals as new CEO is to finalize this, as well as future acquisitions in a smooth and timely manner.

Mr Li said Dalian Huiming is a highly profitable company that provides many synergies with the company's current business model. The acquisition will help CNOA further diversify its agricultural offerings and based on the company's sizable reach and influence in the Northeast's agriculture market, help China Organic make further accretive acquisitions around Dalian.

Dalian Huiming is engaged in grain procurement, trading, wholesale sales, and food delivery logistic services. It focuses on soy, corn and cereal crops that are major products from the northeastern part of China.

Dalian Huiming is one of the top-tier agricultural trading companies in the Northeast provinces of China with regards to net income.

For fiscal year 2007, revenue was US$40.2 million and net income was US$2.7 million, a fourfold increase from the comparable period in 2006. China Organic expects to gain operating efficiencies through the acquisition, while also expanding the diversity of the products it offers.