CORRESP 1 filename1.htm Unassociated Document
CHINA GREEN AGRICULTURE, INC.
3rd Floor, Borough A, Block A. No.181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China 710065

June 18, 2010                                                                      
 

Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Mail Stop: 3561
Washington, D.C. 20549
Attention:  David R. Humphrey, Branch Chief

Re:
China Green Agriculture, Inc.
Form 10-K for the fiscal year ended June 30, 2009
File No.: 001-34260

Dear Mr. Humphrey:
 
China Green Agriculture, Inc., a Nevada corporation (the “Company”), is in receipt of the letter from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) dated May 10, 2010 (the “Comment Letter”) to the Company, with respect to the Company’s Annual Report on Form 10-K for the year ended June 30, 2009 (the “Form 10-K”).  We hereby file via EDGAR our response to the Comment Letter.  The text of the Staff's comments is set forth in italics below, followed by the responses of the Company.  Capitalized terms contained in the Company’s responses not otherwise defined herein shall have the meaning ascribed to them in the Form 10-K.

Form 10-K for the Fiscal Year Ended June 30, 2009
Notes to Consolidated Financial Statements
Note 14 – Income Taxes, page F-17

1.
You indicated that, due to your non-operating status in the U.S. and tax free status in China, you had no deferred taxes for the fiscal year ended June 30, 2009 and 2008. However, we note that Techteam Jinong is taxed at a 15% rate. In addition, your disclosure in the first paragraph of Note 14 indicates that deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of your assets and liabilities and the related financial reporting amounts at the end of each period. As such, please clarify your position that you had no deferred taxes due to your non-operating status in the U.S. and tax free status in China. Also, please tell us, in detail, how your current disclosures comply with the disclosure requirements set forth in paragraphs 43-49 of SFAS 109.
 
 
1
 

CHINA GREEN AGRICULTURE, INC.
3rd Floor, Borough A, Block A. No.181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China 710065

Response:
 
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. The Company has nominal deferred tax assets or liabilities relative to its Chinese operations, and, therefore, such deferred tax assets or liabilities are not reported.  TechTeam Jinong became subject to income tax in China at a rate of 15% beginning January 1, 2008 as a result of the expiration of its tax exemption on December 31, 2007, and accordingly, it made provision for income taxes as of June 30, 2009 and 2008 of $2,331,548 and $692,474, respectively, which is mainly due to the operating income from TechTeam Jinong.
 
Although the Company did not have any operating income in the U.S. for the fiscal years in question, it incurred various expenses in the U.S. including but not limited to stock exchange application and listing fees, registration fees of the Commission, legal and investor relations fees, professional fees payable to qualified tax consultants and auditors and compensation expenses to the Company’s officers and independent directors.  The Company believes that it is unlikely that it will be able to realize the deferred tax benefits in future years. Accordingly, the Company’s U.S. operations have deferred taxes in the form of net operating losses (“NOLs”), but due to uncertainty about their realization, the Company has recorded a full valuation allowance against these assets. Therefore, the Company recorded deferred taxes, but on a net basis after the allowance the Company did not report any deferred taxes.
 
           The following is an analysis of paragraphs 43-49 of SFAS 109 as applicable to the Company’s specific facts:

In SFAS 109:

43. The Company incurred net operating losses in U.S. for fiscal year 2009 and 2008. The losses were attributable to the fact that the Company has no profit-generating operation in the U.S.  Instead, it paid various expenses in U.S. such as fees for exchange listing and legal services, compensation to officers and board directors, etc. The Company has no plan to develop any revenue operation in the foreseeable future. As such, the Company does not expect to benefit from any deferred tax asset as tax credit carryforward. The Company will disclose these deferred tax assets separately in the upcoming annual report for the fiscal year ended June 30, 2010.
 
44.  The Company does not have any unrecognized deferred tax liability because of the exceptions stated in paragraph 44. Thus, paragraph 44 is not applicable to the Company.
 
45. The Company has properly disclosed income tax expense attributable to continuing operations in its historical financial statements included in its annual reports on Form 10-K. The Company disclosed tax expense of $2.3 million and $0.7 million for fiscal years 2009 and 2008, respectively.

 
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CHINA GREEN AGRICULTURE, INC.
3rd Floor, Borough A, Block A. No.181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China 710065
 
46.  As the Company has no revenue-generating operations in the U.S., paragraph 46 is not applicable to the Company. The Company recorded deferred taxes in the form of NOLs due to uncertainty about their realization.

47.  The Company’s revenue solely comes from continuing operations of its China-based subsidiaries: TechTeam Jinong Humic Acid Prodcut Co. and TechTeam Jintai Agriculture Technology Development Co. Techteam Jinong, the Company’s fertilizer business which account for 82.1% of the Company’s revenue for the fiscal year ended June 30, 2009, is subject to 15% income tax rate in China. Jintai, the Company’s agriculture products business which accounted for 17.9% of the Company’s revenue for the fiscal year ended June 30, 2009, is currently exempt from income tax in China. In its financial statements for the year ended June 30, 2009, the Company reported consolidated pre tax income of $16.8 million with $2.3 million income tax provision. Thus, the effective tax rate after reconciliation with the U.S. statutory rate was 12.82%. The Company also had various expenses incurred in the U.S., however, the U.S. operations are non-income generating and the Company has no plans for any  income-generating operations in the U.S. for the foreseeable future. Therefore, on a net basis after the allowance the Company did not report any deferred taxes.

The table below provides detail on how the Company reconciled its U.S. statutory tax rate with its effective tax rate:

FY 2008
  
China
    
United States
        
   
15%
    
34%
    
Total
  
                               
Pretax income (loss)
     10,717,921             (2,246,920 )           8,471,001  
                                     
Expected incom tax expense (benefit)
     1,607,688       15.00 %     (763,953 )     34.00 %        
Nontaxable income on Jintai
     (296,230 )     -2.76 %                        
Nontaxable income on Jinong
     (618,984 )     -5.78 %                        
Change in valuation allowance on deferred tax asset from US tax benefit
                     763,953       -34.00 %        
Actual tax expense
     692,474       6.46 %     0       0.00 %        

FY 2009
  
China
    
United States
        
   
15%
    
34%
    
Total
  
                               
Pretax income (loss)
     18,188,877             (1,392,907 )           16,795,970  
                                     
Expected incom tax expense (benefit)
     2,728,332       15.00 %     (473,588 )     34.00 %        
Nontaxable income on Jintai
     (366,936 )     -2.02 %                        
Nontaxable income on Jinong
     (29,848 )     -0.16 %                        
Change in valuation allowance on deferred tax asset from US tax benefit
                     473,588       -34.00 %        
Actual tax expense
     2,331,548       12.82 %     0       0.00 %        

48.  In its Financial Statements for the years ended June 30, 2009 and 2008, the Company reported NOLs with regard to its U.S. operations due to expenses incurred. As the Company has no plans to develop revenue-generating operations in the U.S., the Company expects no recovery from such loss in the U.S. for the foreseeable future.  In the last two fiscal years, the Company had net loss from its U.S. operations as below:

 
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CHINA GREEN AGRICULTURE, INC.
3rd Floor, Borough A, Block A. No.181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China 710065

 
U.S. operations ($)
 
Year
  
Pretax Loss
    
Net Operating Loss
  
Actual Tax Expense
FY2008
     (2,246,920 )     (1,263,290 )
NONE
FY2009
     (1,392,907 )     (953,751 )
NONE

 
With no business plan for revenue development in the U.S., the Company is unable to carry forward or utilize these tax credits to offset future tax liability. The Company does not expect it will be able to realize the tax benefits and thus does not expect to recover the loss incurred in fiscal year 2008 by fiscal year 2015, or the loss incurred in fiscal year 2009 by fiscal year 2016.
 
49. In fiscal years 2008 and 2009, the Company filed its U.S. corporation income tax returns. The Company reported each of its companies’ income and tax in the consolidated filing as below:

FY2008
  
Pretax
Income/(Loss)
    
Taxable
Income/(NOL)
    
Tax
Expense
  
U.S. operations
     (2,246,920 )     (1,263,290 )  
NONE
  
Jinong
     8,743,052       4,616,493       692,474  
Jintai
     1,974,869       1,974,869    
NONE
  
Consolidated
     8,471,001       5,328,072       692,474  

FY2009
  
Pretax
Income/(Loss)
    
Taxable
Income/(NOL)
    
Tax
Expense
  
U.S. operations
     (1,392,907 )     (953,751 )  
NONE
  
Jinong
     15,742,639       15,543,660       2,331,549  
Jintai
     2,446,238       2,446,238    
NONE
  
Consolidated
     16,795,970       17,036,147       2,331,549  

In conclusion, the Company recorded deferred taxes in the form of “NOLs” due to uncertainty about their realization. Furthermore, as analyzed above, the Company believes it is in compliance with the disclosure requirements set forth in paragraphs 44-49 of SFAS 109 and will disclose its deferred tax assets separately in the incoming annual report for the fiscal year ended June 30, 2010 to be in compliance with paragraph 43 of SFAS 109.

2.
We note that you reconciled the U.S. statutory rate to your effective tax rate. In this regard, it is not clear why you used the U.S. statutory rate when all of your operations are conducted in the People’s Republic of China. Please advise.
 
 
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CHINA GREEN AGRICULTURE, INC.
3rd Floor, Borough A, Block A. No.181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China 710065

Response:
 
As explained in the Company’s response to the prior comment, the Company does have continuing operating expenses incurred in the U.S.  Therefore, the Company is required by paragraph 47 of SFAS 109 to reconcile the U.S. statutory rate to the effective tax rate using the percentages.  Please refer to the Company’s analysis in its response to the prior comment.
 
3.
You indicate that you have a net operating loss in other tax jurisdictions. However, you disclose that all of your operations are conducted in the People’s Republic of China. As such, please tell us the other tax jurisdictions in which you operate as well as the nature of the losses incurred in such jurisdictions.
 
Response:
 
The only tax jurisdiction in which the Company has NOLs was the U.S.  As indicated in our response to Comment No. 1, as a public company listed on a stock exchange in the U.S., the Company incurred expenses including but not limited to stock exchange application and listing fees, registration fees of the Commission, legal and investor relations fees, professional fees payable to qualified tax consultants and auditors and compensation expenses to the Company’s officers and independent directors.
 
Note 16 – Stockholders Equity, page F-18

4.
We note your disclosure with respect to the 2009 Make Good Shares, and the transfer of those 3,156,808 shares to Mr. Tao Li in the event the 2009 Targets were met. We also note that, according to your Form 8-K, dated December 26, 2007, filed in connection with the Securities Purchase Agreement and the Private Placement, Mr. Tao Li was given the opportunity to acquire up to 6,535,676 additional shares (the “Earn In Shares”), if certain conditions were met. The first of these conditions was the entry by Mr. Tao Li into a binding employment agreement for a term of not less than five years. Additional conditions included the achievement of defined profit levels for the fiscal year ending June 30, 2008. Based on the table of ownership included in your most recent Proxy Statement, it appears that Mr. Tao Li has received all of the 2009 Make Good Shares as well as all of the Earn In Shares. In this regard, we note your disclosure in the aforementioned Form 8-K, dated December 26, 2007, that one of the purposes of the arrangements with respect to the Earn In Shares was to incentivize Mr. Tao Li in connection with TechTeam’s business. Accordingly, since Mr. Tao Li did in fact enter into a binding five-year employment agreement in early 2008, it appears his receipt of shares in connection with his employment could be viewed as compensatory. This would include shares received upon the achievement of defined profit levels for the fiscal years ending June 30, 2008 and 2009. Please tell us why your results of operations for the fiscal years ending June 30, 2008 and 2009 do not reflect any compensation expense relating to these arrangements. In your response, include a discussion of the accounting literature you relied upon in reaching your conclusions.
 
 
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CHINA GREEN AGRICULTURE, INC.
3rd Floor, Borough A, Block A. No.181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China 710065

Response:
 
Background
 
In connection with the corporate restructuring of Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“TechTeam”) and in anticipation of becoming a U.S. public company, Green Agriculture Holding Corporation, a New Jersey corporation (“Green Agriculture”) was formed as part of the legal restructuring.  Mr. Yinshing David To was issued a majority of the shares in Green Agriculture as nominee shareholder for the shareholders of TechTeam, mainly, Mr. Tao Li (the “Former Techteam Shareholders”).  On August 24, 2007, Green Agriculture acquired the right to purchase 100% of the capital stock of TechTeam for a purchase price of approximately $4,000,000 (the “Purchase Price”), such Purchase Price was not retained to the Former Techteam Shareholders, instead, it was used by Techteam as working capital. In lieu of receiving the Purchase Price, Mr. Tao Li received shares indirectly in the form of the Earn In Shares and the Make Good Shares as explained more in our following paragraphs.   Subsequently, on December 26, 2007, through a share exchange (the “Share Exchange”), the Company acquired 100% of the outstanding shares of Green Agriculture in which the Company issued a controlling number of shares of its common stock, par value $.001 per share ( “Common Stock”), to the shareholders of Green Agriculture.  Simultaneously with the Share Exchange, the Company consummated a private placement (the “Private Placement”).
 
Immediately thereafter, Mr. Tao Li entered into a Call Option Agreement (the “Call Option”) with Mr. To obtain 6,535,676 shares of Common Stock (the “Earn In Shares”), which shares were being held by Mr. To as nominee shareholder on behalf of Mr. Li.  Mr. Li, Mr. To and the investors in the Private Placement also entered into the Make Good Escrow Agreement (the “Make Good Escrow Agreement”) which was a condition to the investors’ purchase of the shares in the Private Placement in order to secure certain obligations of the Company under the Securities Purchase Agreement with the investors.  Pursuant to the Make Good Share Agreement, 3,156,808 shares of Common Stock (the “Make Good Shares”) were placed in escrow by Mr. To (which shares were also being held by Mr. To as nominee shareholder on behalf of Mr. Li).  Mr. Li had the right to receive the Make Good Shares from escrow if certain financial targets were achieved, otherwise such shares would be distributed to the investors pro rata.  The relevant targets were achieved and all of the Earn In Shares and the Make Good Shares were delivered to Mr. Li.  Ultimately, the Earn In Shares and the Make Good Shares were the only consideration Mr. Li received in exchange for transferring his controlling equity interest in TechTeam to Green Agriculture. The Earn In Shares and the Make Good Shares were properly recorded as a debit to equity to reflect the treatment of reduction in proceeds. The use of these purchase and option agreements for the Make Good Shares and Earn In Shares was an integrated arrangement in the entire purchase transaction, rather than part of Mr. Li’s compensation for his services.
 
Analysis of Earn In Shares
 
Generally, a call option agreement containing vesting conditions is an important and commonly used component in the legal restructuring process of a private operating company in the PRC that is preparing itself to become a public company in the United States. The use of the call option in such a legal restructuring was developed by PRC legal practitioners to accomplish the restructuring in a manner that complies with PRC regulations that restrict PRC residents from owning offshore entities (i.e. shares in the public entity) in direct exchange of their shares in the PRC operating company.  These regulations include the Notice on Issues Relating to the Administration of Foreign Exchange in Fund-raising and Reverse Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, issued by the State Administration of Foreign Exchange (“SAFE”) in the PRC, which became effective as of November 1, 2005, and its interpretation, Circular 106, which was issued on May 29, 2007 and the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors issued by six ministries in the PRC, which became effective on September 8, 2006 (collectively, the “PRC Rules”).

 
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CHINA GREEN AGRICULTURE, INC.
3rd Floor, Borough A, Block A. No.181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China 710065

On the advice of the Company’s PRC legal counsel and as part of the restructuring of TechTeam in a manner that complies with PRC Rules, Mr. Li entered into the Call Option that gave him the right to acquire shares in the Company over a period of time upon the occurrence of certain events, or vesting conditions, such that Mr. Li would acquire relatively the same ownership interest in the Company as he held in TechTeam.  The Call Option provided assurance to Mr. Li that he could retain control in the public entity, even though such shares are held under the nominee’s name immediately following the Share Exchange.  Furthermore, the Call Option was a mechanism designed to “return” Mr. Li’s shares.  The Call Option was not intended to provide compensation and, in fact, did not provide compensation for the employment services to be performed.  Instead, the full amount of the compensation payable to Mr. Li for his services to be performed for the past two fiscal years is set forth pursuant to a verbal agreement for an annual compensation of $120,000 and pursuant to an employment agreement he entered into with Techteam for an annual cash compensation of approximately (considering foreign exchange rate variations) $9,000 as we disclosed in the Company’s proxy statement filed with the Commission on December 11, 2009. The compensation expenses above were properly accounted in the Company’s financial statements.
 
The existence of the vesting conditions in the Call Option was merely to assure proper compliance with PRC Rules, and for no other purpose.  The selected conditions to the full vesting of the option all had an extremely high probability of occurrence.  Although the Company believed the use of vesting conditions was required to effect the reorganization under PRC rules, the selection of the entry into an employment agreement as a condition was not a required condition to comply with PRC Rules. Rather, it was merely an event that was expected to occur following the restructuring and, thus, served as a suitable vesting condition to allow the later transfer of a portion of the shares as is necessary under the PRC Rules.  The Company believed there was no effective risk of forfeiture or non-vesting of the condition under any reasonable circumstance, including upon any failure to perform the services.
 
 In further support the Company makes reference to Accounting Standards Codification (“ASC”) 805-10-55-24 to 25.  Even though ASC 805-10-55-24 to 25 is not directly applicable to the Company’s situation, through analogy the Company believes its conclusions are consistent with GAAP based upon the following factor analysis pursuant to ASC 805-10-55-24 to 25 for purposes of determining whether characteristics of compensation exist:
 
(a) Continuing Employment: As the Company indicated above, although entry into an employment agreement is a vesting condition contained in the Call Option, there exists no forfeiture provisions in the employment agreement and, as such, continued employment is not a condition to Mr. Li’s ownership of the Earn In Shares.

 
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CHINA GREEN AGRICULTURE, INC.
3rd Floor, Borough A, Block A. No.181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China 710065

(b) Duration of continuing employment. See the Company’s response to paragraph (a) above.
 
(c) Level of Compensation. As the Company indicated above, the full amount of the compensation payable to Mr. Li for his services is reasonable in relation to the nature of his services and is fully set forth in his employment agreements (both written and verbal, as disclosed in the proxy statement filed with the Commission on December 11, 2009).  The Call Option provides no performance reward or incentive for such services and only served as a customary mechanism for delivery to Mr. Li of shares in the Company in exchange for transferring his equity interest in TechTeam to Green Agriculture.
 
(d) Incremental payments to employees.  As the Company indicated above, Mr. Li received the Call Option (and the Make Good Escrow Agreement) giving him the ability to acquire shares in the Company such that he would receive the same relative ownership percentage in the Company as he held in TechTeam.
 
(e) Number of shares owned.  See the Company’s response to paragraph (a) above.
 
(f) Linkage to the valuation. The Company does not believe that this is applicable. The future receipt of Earn In Shares is in fact the legal formality of restoring Mr. Li’s direct controlling ownership in the Company instead of indirect controlling ownership, not additional compensation or additional consideration.
 
(g) Formula for determining consideration. The Company does not believe that this is applicable.  Even though there are earnings thresholds contained in the Call Option, all of which were intentionally easily attainable, the Earn In Shares that were “earned” were in fact just the transfer of the form of ownership from Mr. Li’s indirect to direct ownership of those same shares.
 
(h) Other agreements and issues. The Company does not believe that this is applicable.

For the reasons discussed above, the Company believes its accounting treatment of the Earn In Shares properly followed the legal and accounting assessment of the Call Option as not possessing the characteristics of compensation.

 
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CHINA GREEN AGRICULTURE, INC.
3rd Floor, Borough A, Block A. No.181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China 710065

Analysis of Make Good Shares

The Company believes that the Make Good Shares also are not compensatory is nature.  This belief is supported by the Financial Accounting Standard Board’s (FASB) Accounting Standards Updated No. 2010-05 (“ASU 2010-05”) published in January 2010.  According to ASU 2010-05, the staff of the Commission stated at the Emerging Issues Task Force Meetings that while an escrowed share arrangement involving the release of shares to certain shareholders based on performance-related criteria is presumed compensatory, such presumption can be overcome.  The Commission staff stated that when evaluating whether compensation has occurred, registrants should consider the substance of the arrangement, including whether it was entered into for purposes unrelated to and not contingent on continued employment.  Specifically, ASU 2010-05 states:
 
If the escrowed shares will be released or cancelled without regard to continued employment, specific facts and circumstances may indicate that the arrangement is in substance an inducement made to facilitate the transaction on behalf of the company, rather than as compensatory.  In such cases, the SEC generally believes that the arrangement should be recognized and measured according to its nature and reflected as a reduction of the proceeds allocated to the newly-issue securities.
 
The Make Good Escrow Agreement was entered into as a condition to the investors purchase of shares in the Private Placement and as a means to secure the Company’s obligation contained in the Securities Purchase Agreement with the investors that the Company meet certain financial targets.  The delivery of the Make Good Shares was not at all contingent on Mr. Li’s continued employment with the Company. Once the Company reached the financial performance targets, the Make Good Shares were released from escrow to Mr. Li.  Upon the release of the Make Good Shares, Mr. Li merely received the remaining consideration owing to him in connection with the Company’s reverse merger.  Again, the Earn In Shares combined with the Make Good Shares represent the only consideration Mr. Li received upon transferring his controlling interest in TechTeam to Green Agriculture.  Thus, the Company believes these transactions were properly recorded as capital transactions and there was no requirement for the Company to record any compensation expense.
 
5.
Please provide us with a copy of the employment agreement with respect to Mr. Tao Li, and tell us why this employment agreement was not filed as an exhibit to your Form 10-K.
 
Response:
 
As requested, enclosed herewith is a copy of Mr. Li’s employment agreement.  In response to this comment, the Company will file such employment agreement as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ending June 30, 2010.
 
6.
We note the disclosure that you incurred Effectiveness Damages of $704,494 resulting from the late effectiveness of your Registration Statement on Form S-1. Please tell us how these damages are reflected on your consolidated statements of income. In this regard, on page 35, you refer to a “one-time” charge of $506,142 that appears to relate to the same matter. Also, if amounts related to liquidated damages are included in interest expense, consider revising your consolidated statements of income in future filings to reflect such amounts as a separate line item since these amounts do not represent interest incurred with respect to borrowings.
 
 
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CHINA GREEN AGRICULTURE, INC.
3rd Floor, Borough A, Block A. No.181, South Taibai Road, Xi’an, Shaanxi Province, People’s Republic of China 710065

Response:
 
According to the terms of the Registration Rights Agreement dated December 24, 2007 between the Company and the investors in the Private Placement, the Company incurred a total of $704,494 in liquidated damages for the period from May 24, 2008 to August 6, 2008 resulting from the late effectiveness of the Company’s Registration Statement on Form S-1. The amounts of $198,352 and $506,142 were recorded within the interest expense in the fiscal years ended June 30, 2009 and 2008, respectively. Accordingly, the Company has recorded the amount of $506,142 and $704,494 as liabilities resulting from such liquidated damage penalties as of June 30, 2008 and December 31, 2008, respectively. On January 16, 2009, the Company issued an aggregate of 213,484 shares of Common Stock to the investors on a pro rata basis in lieu of the payment of $704,494 in cash in accordance with a supplement agreement entered into with the holders of a majority shares issued in the Private Placement. In response to this comment, if the Company incurs any additional liquidated damages in the future, the Company will reflect such liquidated damages as a separate line item in the Company’s consolidated statements of income.

Signatures, page S-1

7.
In future filings, please include the signatures of your principal executive, principal financial and principal accounting officers in the second signature block with those of the majority of your board of directors. Refer to General Instruction D to the Form 10-K.
 
Response:
 
In response to this comment, the Company will include the signatures of our principal executive, principal financial and principal accounting officers in the second signature block with those of the majority of our board of directors in future filings.
 
***

 
We acknowledge that we are responsible for the adequacy and accuracy of the disclosure in the Form 10-K.  We further acknowledge that Staff comments or changes to disclosure in response to Staff comments in the Form 10-K do not foreclose the Commission from taking any action with respect to the Form 10-K, and that we may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
 
 
Sincerely,
   
 
/s/ Ken Ren
 
Ken Ren
 
Chief Financial Officer

Encl:

Employment Agreement by and between Techteam Jinong and Mr. Tao Li pursuant to comment 5.

 
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