Discovery Technologies, Inc. Acquires Green Agriculture Holding Corporation
Discovery Technologies, Inc. completes $20.519 million private placement
SHAANXI, China, Dec. 27 -- Discovery Technologies, Inc. (the "Company") (BULLETIN BOARD: DCOV). On December 26, 2007, Discovery Technologies, Inc., a Nevada corporation acquired all of the issued and outstanding capital stock (the "Green Agriculture Shares") of Green Agriculture Holding Corporation, a New Jersey corporation ("Green Agriculture") through a share exchange (the "Share Exchange").
Green Agriculture through its wholly owned subsidiary, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., a company organized under the law of People's Republic of China ("TechTeam"), is engaged in the research, development, production and distribution of humic acid organic liquid compound fertilizer ("HA organic liquid compound fertilizer"). TechTeam's products are used to stimulate growth, yield, and protect plants from drought, disease and temperature damage while improving soil structure and enhancing soil fertility.
Simultaneous with the Share Exchange on December 26, 2007, the Company completed a private placement with institutional and accredited investors which resulted in gross proceeds to the Company of approximately $20.5 million through the issuance of approximately 6.3 million shares of common stock of the Company at $3.25 per share. As part of the private placement, approximately 3.157 million of shares of common stock issued in connection with the Share Exchange were placed in escrow and will be issued to the investors in the private placement if the Company's after tax net income and earnings per share for the fiscal year ending June 30, 2009 are not at least $12 million and $0.609, respectively. Hickey Freifoner Capital, a division of Brill Securities, Inc., member FINRA, MSRB, SIPC, acted as the Company's placement agent for the private placement.
Mr. Tao Li, the Company's CEO and Chairman of the Board stated: "The completion of our financing and reverse acquisition gives us the working capital to expand our production capacity to meet the growing market demand." "We will use the proceeds of our private placement to build a new facility, and purchase new equipment and technology to improve both our operating efficiency and profitability. In addition, we intend to expand and strengthen our distribution and sales network in China, while continuing to focus on new product development efforts."
China is both the world's largest manufacturer and the biggest consumer of fertilizers. As of 2005, Chinese fertilizers accounted for 33% of the total world output and 35% of the total world consumption. However, only 25% of the fertilizers used in China's agricultural industry were organic in the year 2003 (Source: Agriculture Technology Promotion Centre), and compound fertilizers accounted for 27% of the total fertilizers consumed in China. Organic compound fertilizers comprise a balance of both organic and inorganic substances, thereby combining the speedy effectiveness of chemical fertilizers with the environmental benefits of the organic ones, thus ensuring significant potential for its future development in the Chinese agricultural production system.
About TechTeam
TechTeam's core product is humic acid ("HA") organic liquid compound fertilizer. It produces and sells approximately 10,000 metric tons of 106 different kinds of organic fertilizer products per year. All of TechTeam's fertilizer products are certified by the PRC government as organic and suitable for growing Grade AA "Green" foods, also known as organic food that contains little or no chemical materials, certified by China Green Food Research Center. TechTeam's fertilizers are very concentrated liquids which require an application of approximately 120 ml per mu, per year. Its average customer has approximately 4 mu of land (1 mu = .165 acres).
TechTeam currently markets its fertilizer products to private wholesalers and retailers of agricultural farm products in 27 provinces in the PRC. The leading five provinces by revenue for the fiscal year ended June 30, 2007 include Heilongjiang (9.99%), Guangdong (7.81%), Xinjiang (6.59%), Shandong (5.81%), and Henan (5.80%).
Source: Discovery Technologies, Inc.
CONTACT:
Mr. Paul Hickey
of Hickey Freifoner Capital,
a division of Brill Securities, Inc.,
+1-1-646-415-9055
