UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[X]  ANNUAL  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT  OF  1934

     For  the  fiscal  year  ended  September 30, 2000

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d) OF THE SECURITIES
     EXCHANGE  ACT  OF  1934

     For  the  transition  period  from  _____________  to  _____________

                        Commission file number:  0-25963

                               AGROCAN CORPORATION
               ---------------------------------------------------
              (Exact name of small business issuer in its charter)

               DELAWARE
    -------------------------------                   ----------------------
    (State of other jurisdiction of                     (I.R.S.  Employer
    incorporation  or  organization)                  Identification Number)

             CLI BUILDING, SUITE 1003, 313 HENNESSY ROAD, HONG KONG
           -----------------------------------------------------------
          (Address of principal executive offices, including zip code)

Registrant's  telephone  number,  including  area  code:  852-2723-0983

Securities  registered  pursuant  to  Section  12(b)  of  the  Act:  None

Securities  registered  pursuant to Section 12(g) of the Act:  Common Stock, par
value  $0.0001  per  share

Check  whether  the issuer (1) filed all reports required to be filed by Section
13  or  15(d)  of  the  Exchange Act during the preceding 12 months (or for such
shorter  period that the registrant was required to file such report(s), and (2)
has  been subject to such filing requirements for the past 90 days.
                                Yes [X]  No [ ]

Check  if  disclosure of delinquent filers in response to Item 405 of Regulation
S-B  is  not contained in this form, and no disclosure will be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-KSB or any amendment to
this  Form  10-KSB.  [X]

The  issuer's  revenues  for  the  fiscal year ended September 30, 2000 were RMB
51,526,030.

The  aggregate  market value of the issuer's common stock held by non-affiliates
of  the  issuer  as  of  September  30,  2000  was  $2,165,282.

The  issuer  had  2,334,970  shares of common stock issued and outstanding as of
September 30, 2000.

Transitional  Small  Business  Disclosure  Format:  Yes  [ ]  No  [X]

Documents  incorporated  by  reference:  None.


                                        1

                                     PART I.


ITEM  1.  DESCRIPTION  OF  BUSINESS

GENERAL

AgroCan  Corporation,  a  Delaware  corporation (the "Company"), owns all of the
capital  stock  of  AgroCan  (China)  Inc., a British Virgin Islands corporation
("AgroCan  China").  AgroCan  China  owns  three  subsidiary  companies  (the
"Subsidiaries")  located  in  the  People's  Republic  of  China ("China" or the
"PRC"),  one  of  which  is  a  Sino-Foreign  Equity  Joint  Venture (the "Joint
Venture").  Unless  the  context  indicates  otherwise, reference to the Company
shall  include  the  Subsidiaries.

AgroCan  China  was  established in 1996 to take advantage of the growing demand
for  fertilizers  and  other  products  and  technologies  that  enhance  the
agricultural  output  of  China.  As  of  December  31,  2000,  the  Company had
established  an  annual  production  capacity  of 125,000 metric tons ("MT") for
compound  fertilizers  in  two  of  the largest agricultural provinces of China,
Guangxi  and  Jiangxi,  and  planned  to  enter markets in other provinces.  The
Company  is  expanding  its distribution channels, product lines and services in
order  to  provide  comprehensive solutions to niche markets of the agricultural
sectors  of  China.

The  following  is  a  summary  description  of  the  Subsidiaries and the Joint
Venture:


NAME  OF       YEAR  OF    OWNERSHIP             CAPACITY PER     PRODUCT
SUBSIDIARY  ESTABLISHMENT  PERCENTAGE  LOCATION    YEAR (MT)    DESCRIPTION
----------  -------------  ----------  --------  ------------   -----------

Subsidiaries:

Guangxi         1996          100%     Nanning,     50,000      Compound
Linmao                                 Guangxi,                 fertilizers for
Fertilizer                             PRC                      eucalyptus,
Company                                                         citrus,  paddy
Limited                                                         rice, sugar cane
                                                                and  flowers


Jiangxi         1997          100%     Fuzhou,      50,000      Compound
Jiali                                  Jiangxi,                 fertilizers for
Chemical                               PRC                      citrus,  fruit
Industry                                                        trees,  paddy
Company                                                         rice,  tobacco
Limited                                                         and  flowers


Joint Venture:

Jiangxi         1996           70%     Nanchang,    25,000      Compound
Fenglin                                Jiangxi,                 fertilizers for
Chemical                               PRC                      aspen,  citrus,
Industry                                                        fruit  trees,
Company                                                         paddy  rice, oil
Limited                                                         vegetable  and
                                                                flowers


                                        2

PRODUCTS

The Company produces various compound fertilizers.  Compound fertilizers are the
end  product made from the combination of the three primary nutrients:  nitrogen
(N),  phosphate  (P)  and  potassium  (K), together with other elements, such as
iron,  zinc,  copper  and  manganese.  These  elements  are blended in different
proportions  and  are  made  into  pellets  and packed into bags of 50 kilograms
("kg")  each.  Compound  fertilizers  are  also commonly called NPK fertilizers.
The  Company's compound fertilizers are designed and formulated for the specific
climate,  soil  and  crop  requirements  of  each  individual  market.

According  to  irrigated  area consumption of fertilizer figures compiled by the
State Statistical Bureau, People's Republic of China, and published in the China
Statistical  Yearbook  (1998),  compound  fertilizers  have  become increasingly
popular  in  China  over  the last 20 years.  The Company believes this trend is
because  compound  fertilizers  can  provide  crops  and  plants  with  balanced
nutrients  and  maintain  the Ph values of the soil.  The following is a list of
the  main  compound  fertilizers  developed  by  the  Company:

                  N-P-K RATIO               APPLICATIONS
                  -----------               ------------

                  15-6-9                    Paddy rice

                  8-18-10                   Wheat

                  14-6-10                   Cotton

                  12-9-9                    Corn

                  5-10-10                   Tobacco

                  12-8-10                   Sugar  cane

                  16-16-16                  General application

                  12-10-8                   Eucalyptus plantation

                  12-12-8                   Aspen plantation

                  10-7-8                    Fruit  tree


The  Company's compound fertilizers are sold under the brand name "AgroCan Three
Leaves"  (see  "Marketing  and  Distribution").

PRODUCTION

In  order  to  maintain  the  consistency  of  quality  and corporate image, the
fertilizer  plants  are  designed and built with standard production facilities.
The  Company's management and employees are trained to operate the plants in the
same manner.  Standard operation procedures have been devised.  These procedures
are based on the requirement of ISO 9000 standards.  The ISO 9000 standards were
developed  by  the  International  Organization  for  Standardization,  a
non-governmental  organization  with  membership from 120 countries.  The ISO is
not  part  of the United Nations Organization, although it has strong links with
nearly  all  bodies  and specialized agencies of the United Nations family.  The
ISO  9000  standards  represent  an  international  consensus on good management
practice.  These  standards give organizations guidelines on what constitutes an
effective  quality management system, which in turn can serve as a framework for
continuous  improvement.  The  standard  procedures  include:

     -  raw  material  storage  practices
     -  material feeding steps and speed of the production line
     -  fertilizer  blending  control
     -  production  capability  analysis  (Cpk)
     -  packing  and  weighting  of  finished  products
     -  storage  and  procurement

All  of  the  Company's products are made from urea, phosphate, potash and other
non-hazardous  chemicals.  The  production  process  does not cause any chemical
reaction.  The  Company  does not incur any additional costs for compliance with
environmental  laws  in  China.


                                        3

QUALITY  CONTROL

The  quality  and level of nutrient output can be obtained by blending different
proportions  of  NPK  input.  Water  and  other  necessary  ingredients  have  a
significant  impact  on  output  cost  and  quality.  All plants operated by the
Company  are  equipped  with  computer  systems  to  assist  in cost and quality
control.  Quality assurance (QA) and quality control (QC) are priorities for the
Company.  Continuous  improvement  in  product  quality  is  vital  to enhancing
competitiveness.  The  Company  plans to establish and implement a comprehensive
quality-upgrading program that will lead to ISO 9000 certification.  The Company
emphasizes  the  training  of  quality  control  personnel.

The  laboratories  of  each plant are continually conducting research for better
formulae  to  meet  plant/crop  requirements  and  at  the same time to optimize
material combinations.  The laboratories are also responsible for testing output
to  ensure  the  appropriate  level  of  quantity  and  quality.

SEASONS  AND  INVENTORY  CONTROL

There  are  two  planting  seasons  (spring  and  fall)  in  China.  Prices  of
fertilizers  fluctuate  between  the  two  planting  seasons.  The  prices  of
fertilizer  increase  during planting seasons and decrease during other periods.
Companies  generally  obtain  raw materials by signing purchase contracts at the
end  of  the  off-seasons  when  prices  generally  drop  to  the  lowest level.

The  Company's  product  mix  allows  sales  of  compound  fertilizers with crop
rotations  in different months.  However, the Company's sales revenues are lower
in  the  off-season  as  a  result  of  decreased sales volume and lower prices.

PRODUCT  DEVELOPMENT

The  Company places considerable emphasis on the research and development of new
products and technology.  The Company benefits from its relationships with major
national  and  local agricultural and soil research institutes in China, as well
as  the  Ministry of Agriculture, State Petroleum and Chemical Bureau, and State
Forestry  Bureau.  The  Company  regularly  engages  the  various  institutes to
conduct  discrete  research  projects  and testing on its behalf.  The Company's
management  regularly  meets  with the government ministry and bureaus to obtain
information  on  national  policies and statistics with regard to the fertilizer
and  agricultural industries and advises these governmental agencies of industry
developments.  The  Company  retains a group of leading engineers and scientists
as  consultants  to  support the research teams at each subsidiary.  The Company
has not applied for any patents, since it believes that patent protection is not
available to protect the formulations of the Company's products since the ratios
and proportion of the different materials change in accordance with soil, plant,
season  and  weather  conditions.

MARKETING  AND  DISTRIBUTION

The  State  Internal  Trade Bureau of the PRC maintains distribution systems and
channels  from provincial to local levels.  The Company's main customers are the
farming supplies bureaus and cooperatives under the State Internal Trade Bureau.
These  entities act as wholesalers to individual farmers.  State-owned farms and
plantations  are  also  major  accounts  of the Company, and are serviced by the
Company's sales representatives at each Subsidiary.  These direct sales units of
the  Company are responsible for maintaining good working relationships with the
customers.  The  Company  has  also  established its own provincial distribution
channels  in  the  target  market.  As  of  September  30, 2000, the Company had
established  a  total  of  250  retail  points  of  sales in Guangxi and Jiangxi
provinces.  During  the  fiscal  year  ended September 30, 2000, the Company had
five  customers  that  accounted  for  more  than  10%  of total sales:  Chunsun
Development  Co.  Ltd.,  Zhongce Industrial and Commercial Investment Co., Ltd.,
Zhanjiang  Jinhua  Agriculture  Co.,  Ltd., Jinhua Co., Ltd. and Gaoyao Forestry
Trading  &  Development  Co.,  Ltd.

The Company conducts soil and vegetation surveys on a regular basis and provides
technical  support  to  customers.  Prior  to  the launching of any new compound
fertilizers,  testing  fields  are established and data is collected for further
studies.  The  tests  are conducted in collaboration with customers and the test
results  are  certified  by  customers.  Management  believes  that  such  close
collaboration  with  customers  enhances  customer  satisfaction  and  promotes
customer  loyalty.


                                        4

PRICING

Market  prices  of  fertilizers  and  constituent ingredients generally follow a
seasonal  fluctuation  worldwide as well as in China.  The Company has adopted a
purchasing  policy  to  order raw materials during the low price seasons so that
product  cost  can be minimized.  The Company has recently started to source raw
material  like  urea  from  the  producers  directly.  Previously,  the  Company
purchased  all  of  its  raw  material through intermediaries.  This approach is
expected  to  reduce the Company's reliance on intermediates and thus reduce raw
material  costs.  The  Company  purchases  its  raw  materials  from over thirty
different  suppliers.  During  the  fiscal  year  ended  September 30, 2000, the
Company  had  two  suppliers  that  provided  more than 10% of the Company's raw
materials:  Hainan  Fudao  Chemical  Co.  Ltd.  and  Chungqing Jiangjan Chemical
Fertilizer  General  Factory.  The Company is not reliant on any single supplier
for  its  raw  material  supply.

Selling  prices  of  the  Company's  fertilizers  are basically in line with the
market  prices in the respective markets where the Company's plants are located.
However,  the  Company  is  generally able to charge a slight premium (2% to 4%)
over  its competitors because of the stability and high quality of its products.
The  Joint  Venture  Agreement  for  Jiangxi  Fenglin  Chemical Industry Company
Limited  provides that the product price shall be calculated, in general, as the
cost  of raw materials plus 12% gross profit.  However, as the controlling party
of  the  Joint Venture, the Company has the right to increase or decrease prices
without  the  approval  of  any  governmental  unit  or  other  party.

THE  MARKET

According to the population and its composition statistics published in the 1998
China  Statistics  Yearbook,  in  1997, 70% of the population (about 866 million
people) live in rural areas of China.  The per capita irrigated land of China is
0.04  hectare,  which  is  only  approximately 50% of that of the United States.
Total  arable  land  area was reduced between 1961 and 1978 when China initiated
the open-door economic policy.  Arable area has been further reduced since 1978.
However, during this period, grain output has increased two- to three-fold.  The
output  per  hectare also increased in a similar way.  The following comparative
table  shows  the  trend:

         ARABLE LAND             GRAIN OUTPUT            OUTPUT PER
          (MILLION              (MILLION METRIC           HECTARE
YEAR      HECTARES)    -/+           TONS)        -/+   (METRIC TONS)    -/+
----      ---------    ---      ---------------   ---   -------------    ---

1961        103.4                    109.9                   1.06

1978         97.3    - 5.9%          272.9      + 167%       2.74      + 158%

1997         94.9    - 2.4%          443.5      +  62%       4.67      +  71%


Source:  FAO  &  China  Statistical  Yearbook  (1998)


With  the  reduction  of  usable  land,  there is a significant need in China to
increase the output of crops per hectare.  China is the world's largest importer
of  fertilizers,  importing  over  25% of its fertilizer requirements.  In 1997,
China  imported 2,592,214 metric tons of NPKs, up 21.8% from the previous year's
2,128,280 metric tons.  The Chinese government imposes an import quota system to
control  the  import  of  various  types  of  fertilizers.


                                        5

THE  WORLDWIDE  MARKET

Average annual worldwide consumption of fertilizers was about 130 million metric
tons  between  1991  and  1997.  In  that  period,  developing  countries in the
aggregate consumed an average of 59 million metric tons annually, accounting for
45.7%  of the total consumption.  China was the most significant fertilizer user
in  the  world,  consuming an average of 30 million metric tons between 1991 and
1997, accounting for 23.5% of total worldwide consumption.  During 1997, China's
consumption increased to a record high of 36.5 million metric tons, representing
27%  of  total  worldwide  consumption.  India's  fertilizer  consumption ranked
second,  with annual consumption of 14.3 million metric tons in 1997, accounting
for 10.1% of the world total.  These statistics were obtained from two worldwide
Organizations,  the  Food  and  Agriculture  Organization  (FAO)  and Fertilizer
Advisory Development and Information Network for Asia and the Pacific (FADINAP),
under  a  United  Nations  commission.

MARKET  TREND  OF  CHINA

China  is  the world's largest producer of fertilizer, with total output in 1997
of  27.6  million  metric  tons,  which accounted for 18.6% of world production.
Despite  being the world's largest fertilizer producing country, China still had
a  shortage  of  8.9 million metric tons of fertilizer, equivalent to 24% of its
requirement.  Therefore,  China  had to rely on imports to make up the shortage.

Between  1980  and 1997, total consumption of fertilizer in China increased from
16.7  metric  tons  to 35.9 million metric tons, representing an average of 6.7%
per  annum.  The  annual  average growth for NPK compound fertilizers was 14.5%,
13.4%,  11.7%,  9.5%  and  8.6%  from  1993  to 1997, respectively.  The Company
believes that demand for fertilizers in the next decade will continue to grow at
the  same  pace  as  in  the  last  decade.

In  order  to  improve efficient utilization of fertilizers, the PRC Ministry of
Agriculture  opted  for  using  more  NPK compound fertilizers instead of single
nutrients,  such  as  urea.  It  is  expected  that  demand  for  NPK  compound
fertilizers  will  gradually  increase  over  the  years.  This  demand  can  be
satisfied  either  by increasing imports or local production.  In 1996, in order
to  capitalize  on  the  market  growth in NPK compound fertilizers, the Company
established  its  first  NPK compound fertilizer production plant in Guangxi and
further  expanded into Jiangxi in 1997.  As of September 30, 2000, the Company's
total  annual  production  capacity  is  approximately  125,000  metric  tons.

THE  COMPANY'S  MARKETS

In 1999, the usage of fertilizer in selected provinces and cities in the PRC was
as  follows:

                   ARABLE LAND   FERTILIZERS     FERTILIZERS        NPK
PROVINCE            (MILLION      CONSUMED        CONSUMED        CONSUMED
OR CITY             HECTARES)    (1,000 MT)   (KG PER HECTARE)   (1,000 MT)
-------             ---------    ----------   ----------------   ----------

Guangxi                7.7         4,193             545           1,259

Jiangxi                5.1         3,354             663             766

Hebei and Tianjin      8.1         3,999             493             738

Henan                  7.4         2,882             391             655

Hubei                  6.0         2,557             428             654

Hunan                  4.9         2,515             508             440

Guangdong              3.3         1,728             528             248

Shandong               9.2         2,103             229             364

Jiangsu                4.4         1,538             349             408

Anhui                  4.0         1,809             458             280

Sichuan                3.0         1,167             390             211

Beijing                0.3           190             552              59

Shanghai               0.3           204             647              23

SUB-TOTAL             63.6        28,239             444*          6,105

NATIONAL TOTAL       130.0        41,243             317*          8,800

-------------------------------------------

*Fertilizer consumed divided by Arable Land

Source:  China Statistics Yearbook (2000)


                                        6

For  China's  9th  Five-Year  Plan  (1996-2001), these provinces and cities were
allocated  more  resources  for  development  of the agricultural sectors by the
Central  Government.  The  Company  has established one plant in Guangxi and two
plants in Jiangxi.  The Company plans to establish at least one plant in each of
the  above  listed  provinces  and  cities  (the  "Target Markets").  The Target
Markets  are prime agricultural developing provinces in China.  Total cultivated
land  of these provinces constitutes 38.3% of the PRC total and their fertilizer
consumption  exceeds  55.6%  of  the national total.  Fertilizer consumption per
hectare  in  these  provinces  is  above  the  Chinese  national  average.

Fertilizer  applications  in  these  provinces and cities are mainly paddy rice,
wheat,  corn, sugar cane, tobacco, cotton, vegetables, tree plantation and fruit
trees.

COMPETITION

LOCAL  SUPPLIERS

There  are  many small fertilizer producers in China, each with annual output of
less  than  10,000  metric tons that supply low quality fertilizers and compound
fertilizers.  Because  of  their  small size, these producers are generally less
cost  effective,  have  low  quality  control  and  minimal  product development
capabilities.  Generally,  the  single  or  dual  chemical nutrients supplied by
these  producers are less effective at boosting the growth of plants as compared
to  the  Company's  custom-made  compound  fertilizers.

INTERNATIONAL  SUPPLIERS

The  second  group  of  competitors  of  the  Company  consists of international
producers  and  the  traders who import fertilizers into China, including Agrium
Inc.,  Cargill Group, Norsk Hydro Group, Kemira Agro Group, BASF Group, Marubeni
Corporation,  Mitsubishi  Corporation,  Canpotex  Ltd. and Sinochem Group (China
National  Chemicals  Import & Export Corp.).  The products that are imported and
traded  range  from single chemical elements like urea, phosphate and potash, to
standard  NPK  compound fertilizers.  The NPK ratios of imported products are in
the  range of 15-15-15.  Qualities of imported products are generally higher and
more  stable  than  existing  locally  made  fertilizers.  Due to import duties,
import  license  fees  and  shipping  and  transportation  expenses,  imported
fertilizers  are  normally  priced  10%  to 25% higher than local products.  The
total quantities imported are also limited by the import quota system imposed by
the  Chinese  government.

There  are  presently  a  small number of joint venture fertilizer plants China.
Most  of  these  plants  are Sino-Foreign Equity Joint Venture companies between
Chinese-owned  enterprises  and  foreign  companies.  They  mainly produce basic
fertilizer  ingredients  such  as  urea.  These  fertilizer  producers  do  not
constitute  direct competition for the Company because their plants are isolated
and  are  unable  to supply the whole country as China's infrastructure is still
under  development.  Moreover,  these  plants  do  not  maintain  their  own
laboratories  to  develop  new  formulations  and  therefore  do  not  have  the
capability  to manufacture custom-made compound fertilizers that suit individual
markets.  These  joint  venture fertilizer plants can provide a stable supply of
raw  materials  to  the  Company's  plants  in  different  provinces.

COMPETITIVE  EDGES

The Company specializes in producing compound fertilizers, which are custom-made
to  suit  local  conditions, such as plant, soil and climate.  There are no more
than  two  competitors  in  the  Company's selected markets capable of producing
custom  fertilizer  products.  The  Company  believes  that it has the following
competitive  advantages:

     - the Company's operations are located within a 200 kilometer radius of its
market,  resulting  in  savings  in  transportation  costs,  responsive customer
services  and  market  intelligence
     - the  Company  emphasizes quality, as its compound fertilizer is unmatched
as  compared  to  locally  supplied  compound  fertilizer
     - the  Company  has a wide variety of products for different needs by local
farmers
     - the Company conducts proactive product and market development
     - the Company is local, thus avoiding the import quota system, and combines
local  and  foreign  expertise,  and  works  closely with local farming supplies
bureaus  and  cooperatives

EXPANSION  PLANS

The  Company's strategy in establishing operations in China is to first seek out
operating  production facilities suitable for the Company's product lines.  Once
a  potential  site  is  targeted,  the  Company  will  endeavor  to  implement a
consistent  strategy.  Typically, the strategy is to form a joint venture with a
local  partner  and  provide initial capital.  On-site management and financial,
accounting  and  sales  personnel are also provided, and management personnel of
the  Company  are  expected  to  actively  participate  in  the  management  and
operations of the joint venture.  Facilities are updated as needed.  The Company
then  will  provide  technology to the joint venture with the goal of developing
fertilizers  suitable  for the local market.  Management has determined that the
capital outlay for this type of operation is lower than forming a new operation.

The  Company's  short-term objective is to build annual production capacities of
up  to 200,000 metric tons in selected provinces other than Guangxi and Jiangxi,
thus  establishing  standardized  compound  fertilizers  plants in these growing
markets.  At  the same time, quality control programs for ISO 9000 certification
will  be  implemented  in  the  Company's operations.  Advertising and marketing
programs  will  be  launched to enhance the "AgroCan Three Leaves" brand locally
and  nationally.

The Company's long-term objective is to become an influential participant in the
modernization  of the agricultural industry in China.  The Company believes that
China's  agricultural  industry  requires  high quality fertilizers, pesticides,
seedlings  and  other  necessary inputs for the next century.  In order to raise
total  land  productivity  with  limited  arable  land,  China must apply modern
technology  to  the  agricultural  industry.  The  Company  is  evaluating
opportunities  to  bring  biotech  and  genetic  technologies, which are already
available  and  used  in  developed  countries,  to  China.

JOINT  VENTURE

The Company owns a 70% interest in the Joint Venture pursuant to a Joint Venture
Contract  dated  October  18, 1996.  The validity, interpretation, execution and
settlement  of disputes is governed under PRC law and disputes are submitted for
arbitration  to  the  Foreign Economic and Trade Arbitration Commission of China
Council  for  the  Promotion  of  International Trade.  Despite some progress in
developing  a  legal system, China does not have a comprehensive system of laws.
The  interpretation  of Chinese laws may be subject to policy changes reflecting
domestic  political  factors.  Enforcement  of  existing  laws,  including  laws
pertaining  to  PRC  joint  ventures,  may  be  uncertain  and  sporadic,  and
implementation  may  be  inconsistent.

EMPLOYEES

As  of September 30, 2000, the Company had approximately 44 full-time employees.
There  are  4 employees based in the Company's corporate office in Hong Kong and
40  employees  based in China.  Of the 40 employees based in China, 18 employees
are  involved  with  sales  related  activities  and  22 employees are technical
personnel  in  the  agricultural  field.


                                        7

ITEM  2.  DESCRIPTION  OF  PROPERTIES

HONG  KONG.  The Company occupies office space in Wanchai, Hong Kong, consisting
of  810  square  feet.  The  lease  expires  May  9,  2001.

NANNING,  GUANGXI.  The  Company's subsidiary, Guangxi Linmao Fertilizer Company
Limited,  owns  a fertilizer manufacturing plant in Nanning, Guangxi, consisting
of  25,500  square feet.  The plant was newly constructed in 1997 and is in good
condition.  The  land  lease  expires  January  28,  2017.

NANCHANG,  JIANGXI.  The  Company's  joint  venture,  Jiangxi  Fenglin  Chemical
Industry  Company  Limited, leases a fertilizer manufacturing plant in Nanchang,
Jiangxi,  consisting of 21,800 square feet.  The lease expires October 17, 2001.

FUZHOU,  JIANGXI.  The  Company's  subsidiary,  Jiangxi  Jiali Chemical Industry
Company  Limited  owns  a  fertilizer  manufacturing  plant  in Fuzhou, Jiangxi,
consisting of 28,010 square feet.  The plant was newly constructed in the fourth
quarter  of  1997  and  completed  in  the  first quarter of 1998 and is in good
condition.  The  land  lease  expires  June  30,  2057.


ITEM  3.  LEGAL  PROCEEDINGS

There  are  no  pending  or  threatened  legal  proceedings against the Company,
including  its  Subsidiaries  and  the  Joint  Venture.


ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

No matters were submitted to a vote of the Company's security holders during the
fourth  quarter  of  the  fiscal  year  ended  September  30,  2000.


                                    PART II.


ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS

Since  July  14, 2000, the Company's common stock has been listed for trading on
the  OTC  Bulletin Board under the symbol "AGRN".  The trading market is limited
and  sporadic  and  should  not  be deemed to constitute an "established trading
market".

The  following  table  sets  for the range of bid prices of the Company's common
stock  as  quoted  on the OTC Bulletin Board during the periods indicated.  Such
prices  reflect  prices  between  dealers  in  securities and do not include any
retail mark-up, mark-down or commission and may not necessarily represent actual
transactions.  The  information  set  forth  the below was obtained from America
Online.

                                              HIGH          LOW
                                             ------        ------

FISCAL YEAR ENDED SEPTEMBER 30, 1999
------------------------------------

Three months ended December 31, 1998           (1)          (1)
Three months ended March 31, 1999              (1)          (1)
Three months ended June 30, 1999               (1)          (1)
Three months ended September 30, 1999          (1)          (1)


FISCAL YEAR ENDED SEPTEMBER 30, 2000
------------------------------------

Three months ended December 31, 1999           (1)          (1)
Three months ended March 31, 2000              (1)          (1)
Three months ended June 30, 2000             $3.25         $2.50
Three months ended September 30, 2000        $2.31         $1.19

--------------------------------

(1)  Not  quoted  during  the  period


As  of  September  30,  2000,  there  were 35 holders of record of the Company's
common  stock.


                                        8

DIVIDEND  POLICY

The Company has never paid dividends on its common stock and does not anticipate
paying  dividends  on  its  common  stock  in the foreseeable future.  It is the
present  policy  of the Board of Directors to retail all earnings to provide for
the future growth of the Company.  Earnings of the Company, if any, are expected
to  be retained to finance the expansion of the Company's business.  The payment
of  dividends  on  the  Company's  common stock in the future will depend on the
results  of operations, financial condition, capital expenditure plans and other
cash  obligations of the Company and will be at the sole discretion of the Board
of  Directors.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

The following is information for all securities that the Company has sold within
the  past  three  years  without registering the securities under the Securities
Act:

          1.  On December 31, 1997, the Company issued an aggregate of 1,598,646
shares  of common stock to the shareholders of AgroCan (China) Inc.  in exchange
for  all  of  the  outstanding capital stock of AgroCan (China) Inc.  The shares
were  issued  in  a  private  transaction  not involving an offering pursuant to
Section  4(2)  of  the  Securities Act.  This transaction was characterized as a
reincorporation  and  had  no  financial  impact  on  the  Company.

          2.  During  March  1998,  the  Company  issued 47,914 shares of common
stock  to  Critical  Success  Ltd.,  a  third party with a pre-existing business
relationship  with  the  Company,  for  cash  consideration of RMB 256,680.  The
shares  were  issued in a private transaction not involving an offering pursuant
to  Section  4(2)  of  the  Securities  Act.

          3.  On  August  25,  1998,  the Company issued an aggregate of 250,000
units, each unit consisting of one share of common stock and 1/10th of a warrant
to  purchase  one  share  of  common  stock at $0.10 per share, to 43 accredited
investors  for  an  aggregate  cash  purchase price of RMB 4,140,000.  Of the 43
investors,  6  investors  had  pre-existing  personal  relationships  with  the
Company's  officers  and/or  directors  and  37 investors were introduced to the
Company  by  financial  consultants  of  the  Company  who  were affiliated with
registered  broker-dealers.  The  shares  were  issued  in  a  private placement
pursuant  to  Rule  504  of  Regulation  D.

          4.  On  August  25,  1998,  the Company issued 20,000 shares of common
stock  and two-year warrants to purchase 125,000 shares of common stock at $0.10
per  share to an accredited unrelated financial consultant for services rendered
in  connection  with  the  private  placement  discussed  in Transaction 3.  The
securities  were  issued  pursuant  to  Rule  504  of  Regulation  D.

          5.  On  August  25,  1998,  the  Company  issued  two-year warrants to
purchase  150,000  shares  of  common  stock at $1.50 per share to an accredited
unrelated  financial  consultant  for  services  rendered in connection with the
private  placement  discussed  in  Transaction  3.  The  securities  were issued
pursuant  to  Rule  506  of  Regulation  D.

          6.  On  August  25,  1998,  the  Company  issued  two-year warrants to
purchase  25,000  shares  of  common  stock  at $0.10 per share to an accredited
unrelated  financial  consultant  for  services  rendered in connection with the
private  placement  discussed in Transaction 3.  The shares were issued pursuant
to  Rule  504  of  Regulation  D.

          7.  On  August  25,  1998, the Company issued 150,000 shares of common
stock  to  an accredited unrelated financial consultant for services rendered in
connection  with  the  private placement discussed in Transaction 3.  The shares
were  issued  pursuant  to  Rule  506  of  Regulation  D.

          8.  On  April  6,  1999,  the  Company issued 100,000 shares of common
stock  to  an accredited unrelated financial consultant for services rendered in
connection  with  the  private placement discussed in Transaction 3.  The shares
were  issued  pursuant  to  Rule  504  of  Regulation  D.

          9.  From October 1998 to December 1998, warrants issued in the private
placement  in  Transaction  3 were exercised for an aggregate of 2,200 shares of
common  stock.  The  shares  were  issued  pursuant to Rule 504 of Regulation D.

          10.  From  January  1999  to  February  1999,  warrants  issued in the
private  placement  in  Transaction  3  were exercised for an aggregate of 1,700
shares  of  common  stock.  The  shares  were  issued  pursuant  to  Rule 504 of
Regulation  D.

          11.  From  November  1999  to  December  1999,  warrants issued in the
private  placement  in  Transaction  3  were exercised for an aggregate of 2,000
shares  of  common  stock.  The  shares  were  issued  pursuant  to  Rule 504 of
Regulation  D.

          12.  From  January  2000 to March 2000, warrants issued in the private
placement  in  Transaction 3 were exercised for an aggregate of 25,000 shares of
common  stock.  The  shares  were  issued  pursuant to Rule 504 of Regulation D.

          13.  From  July  to  September  2000,  warrants  issued in the private
placement  in Transaction 3 were exercised for an aggregate of 137,510 shares of
common  stock.  The  shares  were  issued  pursuant to Rule 504 of Regulation D.


                                        9

ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION

Cautionary  Statement  Pursuant  to  Safe  Harbor  Provisions  of  the  Private
Securities  Litigation  Reform  Act  of  1995:

This  Annual  Report on Form 10-KSB for the fiscal year ended September 30, 2000
contains  "forward-looking"  statements  within  the  meaning  of  the  Federal
securities  laws.  These  forward-looking  statements  include,  among  others,
statements  concerning  the Company's expectations regarding sales trends, gross
and  net  operating  margin  trends,  political  and  economic  matters,  the
availability  of  equity capital to fund the Company's capital requirements, and
other  statements  of  expectations,  beliefs,  future  plans  and  strategies,
anticipated  events  or  trends, and similar expressions concerning matters that
are  not historical facts.  The forward-looking statements in this Annual Report
on Form 10-KSB for the fiscal year ended September 30, 2000 are subject to risks
and  uncertainties  that  could  cause  actual results to differ materially from
those  results  expressed  in  or  implied  by  the statements contained herein.

Overview:

AgroCan  Corporation (the "Company") was incorporated on December 8, 1997 in the
State  of  Delaware.  Effective  December 31, 1997, the Company issued 1,598,646
shares  of  common stock, which represented all of the capital stock outstanding
at  the  completion  of this transaction, to the shareholders of AgroCan (China)
Inc.,  a corporation incorporated in the British Virgin Islands, in exchange for
all  of  the  capital  stock  of  AgroCan  (China)  Inc.

Prior  to  this  transaction,  the  Company had no significant operations.  This
transaction  was accounted for as a recapitalization of AgroCan (China) Inc., as
the  shareholders  of  AgroCan (China) Inc. acquired all of the capital stock of
the  Company  in a reverse acquisition.  Accordingly, the assets and liabilities
of  AgroCan  (China)  Inc.  were  recorded at historical cost, and the shares of
common  stock issued by the Company were reflected in the consolidated financial
statements  giving  retroactive  effect  as  if  the Company had been the parent
company  from  inception.

The  Company, through AgroCan (China) Inc., currently owns 100% interests in two
wholly-owned  subsidiaries,  Guangxi Linmao Fertilizer Company Limited ("Guangxi
Linmao")  and Jiangxi Jiali Chemical Industry Company Limited ("Jiangxi Jiali").
The  Company,  through AgroCan (China) Inc., also owns a 70% interest in Jiangxi
Fenglin  Chemical  Industry Company Limited, a Sino-Foreign Equity Joint Venture
("Jiangxi  Fenglin").  All  of  the  aforementioned  entities are located in the
People's  Republic  of  China  ("China"  or  the  "PRC").

The  Company  accounts  for  its  interest  in  Jiangxi  Fenglin  similar  to  a
majority-owned  subsidiary  because of its 70% interest, its contractual ability
to  appoint  four  out  of six directors to the Board of Directors, which is the
highest  authority for the joint venture, and the Company's right to appoint the
Chairman  of  the  Board.  Due  to  the rights asserted by the PRC partner under
customary  joint  venture  agreements,  joint  venture  interests in the PRC are
generally  not consolidated in the financial statements of companies that report
under  the  periodic  reporting requirements of the United States Securities and
Exchange  Commission.  However,  as  a  result  of  the  aforementioned  factors
specific  to  Jiangxi  Fenglin,  management  believes  that it is appropriate to
consolidate  the  joint  venture's  operations  into  the Company's consolidated
financial  statements.


                                       10

AgroCan  (China)  Inc.  was  established  in  1996  to develop, produce and sell
fertilizers  and  other  products  and  technologies to enhance the agricultural
output  of  China.  The Company produces various compound fertilizers, which are
the  end product made from the combination of three primary nutrients, nitrogen,
phosphate  and potassium, mixed together with other elements such as iron, zinc,
copper  and  manganese.  These  ingredients are blended in different proportions
and  packed into 50 kilogram bags.  The Company designs its compound fertilizers
for  specific  climate, soil and crop requirements of each individual geographic
market.  As  of  December  31,  2000,  the  Company  had  established  an annual
production  capacity  of 125,000 metric tons for compound fertilizers in Guangxi
and Jiangxi, two of the largest agricultural provinces in China, and the Company
intends  to  enter  markets  in  other  provinces  in  China.

The  Company's customers are all located in the PRC, and sales to such customers
are generally on an open account basis.  During the fiscal years ended September
30, 2000 and 1999, the Company relied on a small number of customers for most of
its  sales.  During  the  fiscal  year  ended September 30, 2000, four customers
accounted for 59% of total sales (18%, 15%, 15% and 11% of total sales).  During
the  fiscal  year ended September 30, 1999, three customers accounted for 62% of
total  sales  (29%,  17%  and  16%  of  total sales).  As of September 30, 2000,
approximately  67%  of  accounts receivable were generated by trade transactions
with  five  significant  customers,  of  which  one  customer  accounted  for
approximately 51% of the accounts receivable balance.  As of September 30, 1999,
approximately  86%  of  accounts receivable were generated by trade transactions
with  five  significant  customers,  of  which  one  customer  accounted  for
approximately  57%  of  the  accounts  receivable  balance.

The  Company  has  also relied on a small number of suppliers located in the PRC
for  its  raw  material  purchases.  During the fiscal years ended September 30,
2000  and  1999, two suppliers accounted for 54% and 58%, respectively, of total
purchases.  As  of  September  30,  2000 and 1999, 75% and 78%, respectively, of
accounts  payable  were  generated  by  trade transactions with such significant
suppliers.

The consolidated financial statements of the Company include the accounts of the
Company  and  its  wholly-owned  and  majority-owned subsidiaries.  All material
intercompany  balances  and  transactions  are eliminated at consolidation.  The
consolidated  financial  statements  have  been  prepared  in  accordance  with
generally  accepted  accounting  principles  in  the United States and have been
presented in Chinese Renminbi ("RMB").  The functional currency of the Company's
PRC  operations  is the RMB.  The accounts of foreign operations are prepared in
their  local  currency  and are translated into RMB using the applicable rate of
exchange.  The  resulting  translation adjustments are included in comprehensive
income  (loss).  Transactions  denominated  in currencies other than the RMB are
translated  into  RMB  at  the  applicable  exchange  rates. Monetary assets and
liabilities  denominated  in  other  currencies  are  translated into RMB at the
applicable  rate  of exchange at the balance sheet date.  The resulting exchange
gains  or  losses  are  credited  or  charged  to the consolidated statements of
operations.


                                       11

Consolidated  Results  of  Operations:

Fiscal  Years  Ended  September  30,  2000  and  1999:

Revenues.  Revenues  for  the  fiscal  year  ended  September  30, 2000 were RMB
51,526,030,  as compared to revenues of RMB 40,733,729 for the fiscal year ended
September  30,  1999,  an  increase of RMB 10,792,301 or 26.5%.  The increase in
revenues  in 2000 as compared to 1999 was a result of several factors, including
an  increase  in selling prices and an increase in demand from both existing and
new  customers.

Gross Profit.  Gross profit for the fiscal year ended September 30, 2000 was RMB
9,581,094  or  18.6%  of  revenues,  as  compared  to  RMB 5,434,398 or 13.3% of
revenues  for  the  fiscal  year  ended  September  30, 1999, an increase of RMB
4,146,696  or  76.0%.  The  gross profit margin increased in 2000 as compared to
1999,  both on an absolute basis and as a percentage of revenues, as a result of
the  Company  raising  its  prices  to  focus  on  higher-margin  customers  and
fluctuations  in  the  cost  of  certain  raw  material  components.

Administrative  and  General  Expenses.  Administrative and general expenses for
the fiscal year ended September 30, 2000 increased by RMB 1,257,151 or 33.2%, to
RMB  5,040,379  or  9.8%  of  revenues,  as compared to RMB 3,783,228 or 9.3% of
revenues  for  the  fiscal  year  ended September 30, 1999.  For the fiscal year
ended September 30, 2000, directors' remuneration of RMB 747,000 was included in
administrative  and  general  expenses.  For the fiscal year ended September 30,
1999,  non-cash consulting fees of RMB 1,510,600 were included in administrative
and  general  expenses.  Administrative  and  general  expenses,  particularly
compensation and related costs, increased in 2000 as compared to 1999 in part as
a  result  of  an  increase  in  costs  incurred  to support and expand business
operations,  including  costs related to office operations, salaries and travel,
as  well  as  the legal and professional fees associated with the operation of a
public  company.

Selling Expenses.  Selling expenses for the fiscal year ended September 30, 2000
increased  by  RMB  505,117  or  96.3%, to RMB 1,029,642 or 2.0% of revenues, as
compared  to RMB 524,525 or 1.3% of revenues for the fiscal year ended September
30, 1999.  Selling expenses increased in 2000 as compared to 1999 as a result of
the Company's continuing efforts to broaden its customer base and thereby reduce
its  reliance  on  sales  to  a small number of customers.  The Company incurred
increased  costs  to  support  expanded marketing and selling efforts, including
office  operations,  salaries  and  travel,  as well as product promotion costs.


                                       12

Other  Income  (Expense).  The  Company  recorded  subcontracting  income of RMB
1,025,000  and  RMB  1,200,000 for the fiscal years ended September 30, 2000 and
1999,  respectively.  The  Company recorded commission income of RMB 251,100 and
RMB  857,880  for  the  fiscal  years  ended  September  30,  2000  and  1999,
respectively.  The Company recorded interest income of RMB 31,747 and RMB 56,325
for  the  fiscal  years  ended  September  30, 2000 and 1999, respectively.  The
Company  recorded  amortization of loan fees of RMB 616,283 for the fiscal years
ended  September  30,  2000  and  1999.

Income  Taxes.  The  Company  is  subject  to income taxes on an entity basis on
income  arising  in or derived from the tax jurisdiction in which each entity is
domiciled.  The  Company's  British  Virgin Islands subsidiary is not liable for
income  taxes.  The  Company's  PRC  subsidiaries  consist  of  two wholly-owned
foreign  enterprises  and  a  70%-owned  Sino-Foreign Equity Joint Venture.  PRC
companies  are  generally  subject to income taxes at an effect rate of 33% (30%
national  income tax plus 3% state income tax).  As manufacturing companies, the
Company's  subsidiaries  operate  in  special  zones,  which  entitles them to a
reduced  national  income  tax rate of 24%, and the subsidiaries are exempt from
state  income  tax.  Further,  pursuant  to the approval of the relevant PRC tax
authorities,  the  subsidiaries  have  been granted a "tax holiday", whereby the
subsidiaries  are fully exempt from PRC income taxes for two years starting from
the  year profits are first recognized, followed by a 50% exemption for the next
three  years.  In 1999, the two-year, 100% exemption expired for Jiangxi Fenglin
and Guangxi Linmao, subjecting them to an income tax at a rate of 12%. Effective
October  1,  2000,  the  two-year,  100%  exemption  expired  for Jiangxi Jiali,
subjecting  it  to  an  income  tax  at a rate of 12%.  Losses incurred by joint
ventures  may  be  carried  forward  for  five  years.

The  Company recorded income taxes of RMB 464,966 and RMB 656,998 for the fiscal
years  ended  September  30,  2000  and  1999,  respectively.

Minority  Interest.  For the fiscal years ended September 30, 2000 and 1999, the
Company recorded a minority interest of RMB 78,527 and RMB 26,120, respectively,
to  reflect  the  interest of the Company's 30% joint venture partner in Jiangxi
Fenglin.

Net  Income.  Net  income  was RMB 3,711,551 for the fiscal year ended September
30,  2000,  as compared to net income of RMB 1,889,042 for the fiscal year ended
September  30,  1999.


                                       13

Consolidated  Financial  Condition:

Liquidity  and  Capital  Resources  -  September  30,  2000:

Operating.  For  the  fiscal  year  ended  September  30,  2000,  the  Company's
operations  utilized  cash resources of RMB 3,381,008, as compared to generating
cash  resources  of  RMB 2,780,379 for the fiscal year ended September 30, 1999.
The  Company's  operations  utilized  cash  resources  in  2000,  as compared to
generating cash resources in 1999, primarily a result of an increase in accounts
receivable resulting from increased revenues, which was only partly offset by an
increase  in accounts payable.  The Company had net working capital at September
30, 2000 of RMB 17,557,262, as compared to net working capital of RMB 12,713,791
at  September  30,  1999,  reflecting a current ratio of 1.54:1 at September 30,
2000,  as  compared  to  2.15:1  at  September  30,  1999.

Accounts  receivable increased by RMB 24,133,591, to RMB 38,030,840 at September
30,  2000,  from  RMB  13,897,249  at  September  30,  1999. Accounts receivable
increased  during  the  fiscal  year  ended  September  30,  2000 as a result of
increased  revenues.

Accounts payable increased by RMB 16,159,698, to RMB 21,159,642 at September 30,
2000,  from  RMB  4,999,944  at  September 30, 1999.  Accounts payable increased
during  the  fiscal  year  ended  September  30,  2000  as a result of increased
purchases  of  raw  materials  to  support  increased  revenues.

Investing.  During the fiscal years ended September 30, 2000 and 1999, additions
to  property,  plant  and  equipment  aggregated  RMB  445,943  and RMB 752,228,
respectively.

The  Company  had  no significant capital expenditure commitments outstanding at
September  30,  2000.

Financing.  During  the  fiscal  year  ended  September  30,  1999,  the Company
incurred  a  short-term  bank  loan  of  RMB 700,000, with interest at 5.61% per
annum,  to  fund  operations.  This  bank loan was secured by the Company's cash
deposit of US$120,000 (RMB 996,000), and was repaid during the fiscal year ended
September  30,  2000.

During  the  fiscal  year  ended  September  30,  2000, the Company borrowed RMB
4,580,212  pursuant to advances and short-term loans from various third parties,
of which RMB 600,000 had been repaid at September 30, 2000.  With respect to the
remaining  balance  outstanding  of  RMB  3,980,212  at  September 30, 2000, RMB
1,510,212 consisted of unsecured notes, with interest at 5% per annum, which are
repayable  within  one year, and RMB 2,470,000 consisted of non-interest bearing
advances  which  are  repayable  on  demand.

During  the  fiscal  year  ended  September 30, 2000, the Company issued 164,510
shares  of  common  stock  upon  exercise  of common stock purchase warrants and
received  net  proceeds  of  RMB  136,541.

During the fiscal year ended September 30, 1999, the Company's minority interest
partner  contributed  capital  to  the  joint  venture  of  RMB  138,187.

The  Company  anticipates,  based  on  currently  proposed plans and assumptions
relating  to  its  existing  operations,  that  its  projected  cash  flows from
operations,  combined  with  cash  that the Company expects to generate from the
issuance  of  its  securities and from borrowings, will be sufficient to support
its  planned  operations for the next twelve months.  Depending on the Company's
rate of growth, the Company may seek additional capital in the future to support
expansion  of  operations  and  acquisitions.


                                       14

Inflation  and  Currency  Matters:

In  recent  years, the Chinese economy has experienced periods of rapid economic
growth as well as relatively high rates of inflation, which in turn has resulted
in  the  periodic  adoption  by  the  Chinese  government  of various corrective
measures  designed  to  regulate  growth and contain inflation.  Since 1993, the
Chinese  government  has  implemented  an  economic  program designed to control
inflation,  which has resulted in the tightening of working capital available to
Chinese business enterprises.  The success of the Company depends in substantial
part on the continued growth and development of the Chinese economy.  During the
fiscal  years  ended  September 30, 2000 and 1999, inflation and changing prices
have had a minor impact on the Company's operations and financial position.  The
actual  rate  of  inflation in the agricultural sector has been nominal, and the
price  level  of  fertilizer  products  has  been  stable.

Foreign  operations are subject to certain risks inherent in conducting business
abroad,  including price and currency exchange controls, and fluctuations in the
relative value of currencies.  Changes in the relative value of currencies occur
periodically  and  may,  in  certain  instances, materially affect the Company's
results of operations.  In addition, the Renminbi is not freely convertible into
foreign  currencies,  and  the ability to convert the Renminbi is subject to the
availability  of  foreign  currencies.  Effective  December 1, 1998, all foreign
exchange  transactions involving the Renminbi must take place through authorized
banks  in  China at the prevailing exchange rates quoted by the People's Bank of
China.  The  Company  expects  that  a  portion  of its revenues will need to be
converted  into  other currencies to meet foreign exchange currency obligations,
including  the  payment  of  any  dividends  declared.

Although  the  central government of China has repeatedly indicated that it does
not  intend  to devalue its currency in the near future, recent announcements by
the  central  government  of  China  indicate  that devaluation is an increasing
possibility.  Should  the  central  government  of  China  decide to devalue the
Renminbi,  the  Company  does  not  believe  that  such  an  action would have a
detrimental  effect  on  the  Company's  operations,  since the Company conducts
virtually  all of its business in China, and the sale of its products is settled
in  Renminbi.  However,  devaluation  of  the Renminbi against the United States
dollar  would adversely effect the Company's financial performance when measured
in  United  States  dollars.


                                       15

Recent  Accounting  Pronouncements:

In June 1997, the Financial Accounting Standards Board issued Statement No. 130,
"Reporting  Comprehensive  Income"  ("SFAS  No.  130"),  which  is effective for
financial  statements issued for fiscal years beginning after December 15, 1997.
SFAS  No.  130  establishes  standards  for  the  reporting  and  display  of
comprehensive  income,  its components and accumulated balances in a full set of
general purpose financial statements.  SFAS No. 130 defined comprehensive income
to  include  all  changes  in  equity except those resulting from investments by
owners  and  distributions  to  owners.  Among  other  disclosures, SFAS No. 130
requires  that  all  items  that  are  required  to  be recognized under current
accounting  standards  as  components  of  comprehensive income be reported in a
financial  statement  that  is  presented  with  the  same  prominence  as other
financial  statements.  The  Company's  only  current component of comprehensive
income is foreign currency translation adjustment.  The Company adopted SFAS No.
130 for its fiscal year beginning October 1, 1998.  Adoption of SFAS No. 130 did
not have a material effect on the Company's financial statement presentation and
disclosures.

In June 1997, the Financial Accounting Standards Board issued Statement No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS No.
131"),  which  supersedes  SFAS  No.  14, "Financial Reporting for Segments of a
Business  Enterprise" and which is effective for financial statements issued for
fiscal  years  beginning  after  December  15,  1997.  SFAS  No. 131 establishes
standards  for  the way that public companies report information about operating
segments  in  annual  financial  statements  and  requires reporting of selected
information  about operating segments in interim financial statements.  SFAS No.
131  also  establishes  standards  for disclosures by public companies regarding
information  about  their  major  customers,  operating  segments,  products and
services,  and the geographic areas in which they operate.  SFAS No. 131 defines
operating segments as components of an enterprise about which separate financial
information  is  available  that  is  evaluated regularly by the chief operating
decision  maker  in  deciding  how  to  allocate  resources  and  in  assessing
performance.  SFAS No. 131 requires comparative information for earlier years to
be restated.  The Company operates in only one segment, the manufacture and sale
of  fertilizer  products.  The  Company adopted SFAS No. 131 for its fiscal year
beginning  October  1,  1998.  Adoption  of SFAS No. 131 did not have a material
effect  on  the  Company's  financial  statement  presentation  and disclosures.

In  February 1998, the Financial Accounting Standards Board issued Statement No.
132,  "Employers' Disclosures about Pensions and Other Post Retirement Benefits"
("SFAS  No. 132"), which is effective for financial statements issued for fiscal
years  beginning  after  December  15,  1997.  SFAS  No.  132 revises employers'
disclosures about pension and other post retirement benefit plans.  SFAS No. 132
requires  comparative information for earlier years to be restated.  The Company
does  not  have any pension or other post retirement benefit plans.  The Company
adopted SFAS No. 132 for its fiscal year beginning October 1, 1998.  Adoption of
SFAS No. 132 did not have a material effect on the Company's financial statement
presentation  and  disclosures.


                                       16

In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133"),
which, as amended, is effective for financial statements for all fiscal quarters
of  all  fiscal  years beginning after June 15, 2000.  SFAS No. 133 standardizes
the  accounting  for  derivative  instruments,  including  certain  derivative
instruments  embedded  in other contracts, by requiring that an entity recognize
those  items as assets or liabilities in the statement of financial position and
measure  them  at  fair  value.  SFAS  No. 133 also addresses the accounting for
hedging  activities.  The  Company  will  adopt SFAS No. 133 for its fiscal year
beginning  October  1, 2000.  The Company currently does not have any derivative
instruments  nor  is it engaged in any hedging activities, thus the Company does
not  believe  that implementation of SFAS No. 133 will have a material effect on
its  financial  statement  presentation  and  disclosures.

In  December  1999,  the  Staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB  No.  101").  SAB No. 101, as amended by SAB No. 101A and SAB No. 101B, is
effective  no  later  than  the  fourth fiscal quarter of fiscal years beginning
after  December  15,  1999.  SAB  No. 101 provides the Staff's views in applying
generally accepted accounting principles to selected revenue recognition issues.
The  Company  believes  that  it  currently  complies  with  the  accounting and
disclosures  provisions described in SAB No. 101.  Accordingly, the Company does
not  believe  that  implementation of SAB No. 101 will have a material effect on
its  financial  statement  presentation  and  disclosures.


ITEM  7.  FINANCIAL  STATEMENTS

The  consolidated  financial statements for the fiscal years ended September 30,
2000  and  1999  are listed at the "Index to Consolidated Financial Statements".


ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
         FINANCIAL  DISCLOSURE

None.


                                       17

                                    PART III.


ITEM  9.  DIRECTORS  AND  EXECUTIVE  OFFICERS;  PROMOTERS  AND  CONTROL PERSONS;
         COMPLIANCE  WITH  SECTION  16(a)  OF  THE  EXCHANGE  ACT

DIRECTORS  AND  EXECUTIVE  OFFICERS

The  following table and text sets forth the names and ages of all directors and
executive  officers  of  the  Company  as  of  September 30, 2000.  The Board of
Directors  of  the Company is comprised of only one class.  All of the directors
will  serve  until  the  next  annual  meeting  of  stockholders and until their
successors  are elected and qualified, or until their earlier death, retirement,
resignation or removal.  Executive officers serve at the discretion of the Board
of  Directors,  and  are  appointed  to serve until the first Board of Directors
meeting  following the annual meeting of stockholders.  Also provided is a brief
description  of  the  business experience of each director and executive officer
during  the  past  five  years  and  an indication of directorships held by each
director  in  other  companies  subject  to the reporting requirements under the
Federal  securities  laws.

    NAME                 AGE                  POSITION(S)
    ----                 ---                  -----------

Lawrence Hon              52        Chairman of the Board, President and Chief
                                    Executive Officer

Donald Lau                52        Chief Financial Officer and Director

Danny Wu                  40        Secretary  and  Director

Yuanhong Chen             38        Vice  President, Marketing and Sales

Haibo Li                  49        Vice President, Operations

Changfa Li                52        Vice President, Business Development

Ngai Poon                 31        Director


                                       18

LAWRENCE  HON.  Mr.  Hon  has  been  Chairman  of the Board, President and Chief
Executive  Officer  of  the  Company  since  December 1997.  Mr. Hon started his
career  as  a  professional accountant.  In 1984, Mr. Hon joined Modern Printing
Equipment  Ltd. as the Financial Director.  Modern Printing Equipment Ltd. was a
subsidiary of KNP BT, a Dutch-based multinational group.  KNP BT was the world's
eight  largest forestry group specializing in paper, packaging and printing.  He
was promoted to KNP BT's Regional Financial Director in 1986 and Deputy Managing
Director  of Asian Options in 1990, responsible for Hong Kong, China, Taiwan and
Korea.  In  1994,  Mr.  Hon  participated  in  the  formation  of  Sino-Forest
Corporation,  a  company  listed  on  the  Toronto  Stock Exchange.  Sino-Forest
Corporation's  main  business was supplying wood fiber in the form of wood chips
to  the  pulp  and  paper  industry  in  Japan, China and other Asian countries.
Between  1994  and  1996,  Mr.  Hon  served  as  the  Senior  Vice  President of
Sino-Forest Corporation, and was responsible for tree plantation, which provided
wood  fiber  for paper, packaging and panel-board production.  Since March 1999,
Mr.  Hon  has  been  a  director  of  China  Gateway Holdings Inc.  Mr. Hon is a
professional  accountant  with  fellowship  in  the  respective  accountants
associations  in  Hong Kong and the United Kingdom.  Mr. Hon holds an MBA Degree
and  a  professional  qualification  in  Information  Technology.

DANNY  WU.  Mr.  Wu  has  been  Secretary  and  a  director of the Company since
December  1997.  Mr. Wu has over ten years of experience in international trade,
manufacturing  management  and direct investment in China.  He started as a loan
officer at Hang Lung Bank, Hong Kong.  He joined the Hong Kong Trade Development
Council  (HKTDC)  in 1985 and was in charge of promoting HKTDC's services to the
local  business community.  Subsequently, he was assigned to promote Hong Kong's
export  trade  and  investments  and  assisted  a number of foreign companies to
invest  in  Hong Kong and China during that period.  Mr. Wu was then promoted to
project  manager,  responsible  for the organization and overall management of a
number  of  international  conventions  and  exhibitions.  He  joined  Quanta
Industries Inc., a Taiwanese conglomerate, in 1989 as the general manager of its
Hong Kong office overseeing trading, direct investment activities and setting up
joint  venture enterprises in China related to catering, cable manufacturing and
metal  processing.  He  was also involved in the general financial management of
these  ventures.  Mr.  Wu  was  a  founding member of Sino-Forest Corporation, a
company  listed  on  the Toronto Stock Exchange, with investments in forestry in
China.  He  was responsible for market development of wood chips and procurement
in  China  and  Asia.  From 1994 to 1995, Mr. Wu was Senior Manager of Sino-Wood
Partners  Limited,  an  investment  company.  From  1996  to  1999,  Mr.  Wu was
Executive  Director of Gateway China Limited, an investment company.  From March
1999 to present, Mr. Wu has been Chairman, Chief Executive Officer and Secretary
of China Gateway Holdings Inc.  He is a graduate of University of Hong Kong with
a  degree  in  management  studies  and  economics.

DONALD LAU.  Mr. Lau has been a director of the Company since December 1997, and
he  has  been Chief Financial Officer since September 2000.  Mr. Lau started his
career  in  New  York.  He  joined  Bank  of  America in 1974 and specialized in
commercial  lending  for  the  agricultural  and forest products industries.  He
covered Colorado, Oregon, Utah and Washington.  In 1978, he was promoted to vice
president  and  was  in  charge of correspondent bank lending in Asia.  Based in
Hong  Kong,  he  conducted  business  in  Japan,  Taiwan, Philippines, Malaysia,
Thailand,  Singapore  and Indonesia.  He joined Sinomay Company, Inc., New York,
in 1982.  He was involved in the building of the first modern bromine extraction
plant  in China and a number of technology transfer projects.  He also developed
the  export  business  of logs from Oregon and Washington to China.  In 1986, he
joined Sinomart International Inc., New York.  Sinomart is an investment company
owned  by the Guangdong Provincial government of China.  He established a number
of joint venture projects in the United States and China.  Mr. Lau joined Wonton
Food  Inc.,  New  York,  in  1988  and  expanded Wonton's sales and distribution
network.  Wonton  is  the  world's  largest fortune cookie manufacturer.  He  is
currently a director of Wonton. Mr. Lau received his  Bachelor of Science Degree
and  MBA  Degree  from  Columbia  University,  New  York,  in  1971  and  1974,
respectively.


                                       19

NGAI  POON.  Ms.  Poon  has  been a director of the Company since December 1997.
Ms.  Poon  joined  the  New  York  office of Dupont Inc. in 1991 as a management
accountant.  In  1996, she moved to Hong Kong and joined Sino-Forest Corporation
as  an  investment  analyst.  She  was  responsible  for financial modeling, due
diligence  and  review  of  investment  proposals.  During  her  service  with
Sino-Forest  Corporation,  she  traveled  extensively  in  China.  Ms. Poon is a
graduate  of  Columbia  University,  New  York,  majoring  in  accounting.

YUANHONG  CHEN.  Mr.  Chen  has been Vice President, Marketing and Sales, of the
Company  since  December  1997.  Mr.  Chen  has over fifteen years experience in
marketing  and  distribution  of  commodities  and general goods in Southern and
Central  China.  Prior  to  joining  the  Company, he was the general manager of
Guangxi Jinhong Trading Company Limited.  He is a graduate of Nanning University
in  Guangxi.  He  oversees  the  marketing  and sales operations of the Company.

HAIBO  LI.  Mr.  Li  has  been  Vice President, Operations, of the Company since
December 1997.  Mr. Li started as a technician in the Fuzhou Chemical Factory in
the 1970's.  He was assigned to the Forestry Bureau of Fuzhou, Jiangxi, in 1982.
In  1990,  he  returned  to  Fuzhou Chemical Factory and was promoted to factory
manager.  He joined the Company in 1996 and was involved in establishing the two
joint  ventures  in  Jiangxi.  Mr.  Li  is responsible for the operations of the
Company's  production  facilities.  Mr.  Li  is a graduate of Nanchang Technical
College.

CHANGFA  LI.  Mr.  Li  has  been  Vice  President,  Business Development, of the
Company  since  December 1997, and is responsible for formulating strategies and
development  planning.  Mr.  Changfa  Li has been a manager of the Company since
its  inception.  He  has  more than twenty years experience in management within
the chemical industry.  He has been involved in the establishment of four medium
and large scale chemical fiber companies.  Since the early 1980's, he has served
as  factory  manager  of Shengma Group, a listed company in China, manufacturing
director  of  Shenzhen  Shunchang  Company,  and  President of Zhongshan Kesheng
Chemical  Limited.  In  1994,  he  was  appointed as researcher for the Economic
Adjustment  Department  of  the China National Textile Council.  He received his
chemical  engineering  degree  from Wuhan University and a law degree from Henan
Law  School  in  1986.


                                       20

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

Section  16(a)  of the Securities Exchange Act of 1934, as amended, requires the
Company's  directors and executive officers and persons who own more than 10% of
a  registered  class  of the Company's equity securities to file various reports
with  the  Securities  and Exchange Commission concerning their holdings of, and
transactions in, the securities of the Company.  Copies of these filings must be
furnished  to  the  Company.  The  Company  believes  that all individual filing
requirements  applicable  to the Company's directors and executive officers were
complied  with  under  Section  16(a) during the fiscal year ended September 30,
2000.


ITEM  10.  EXECUTIVE  COMPENSATION

The  following  table sets forth the compensation paid during fiscal years ended
September  30, 1998, 1999 and 2000 to the Company's Chief Executive Officer.  No
officer  of  the  Company received annual compensation in excess of $100,000 per
annum  during  such  years.

                           SUMMARY  COMPENSATION  TABLE


         NAME AND PRINCIPAL POSITION                 YEAR            SALARY
         ---------------------------                 ----            ------

         Lawrence Hon, President and                 2000           $45,000
         Chief Executive Officer                     1999             -0-
                                                     1998             -0-


COMPENSATION  AGREEMENTS

There are currently no long-term employment or consulting agreements between the
Company  and  the  executive  officers  or  directors  of  the  Company.

BOARD  OF  DIRECTORS

During  the  year  ended  September  30,  2000,  five  meetings  of the Board of
Directors  were  held.  Additionally,  certain  corporate  actions  were  also
conducted  by  unanimous  written  consent of the Board of Directors.  Directors
receive  no  compensation  for  serving  on  the  Board  of  Directors,  but are
reimbursed  for any out-of-pocket expenses incurred in attending board meetings.

The  Board  of  Directors  had  no  nominating  or  compensating  committees, or
committees  performing similar functions, during the fiscal year ended September
30,  2000.  The Board of Directors has established an audit committee consisting
of  Lawrence  Hon  and  Ngai  Poon.

STOCK  OPTION  PLAN

The  Company adopted the 1998 Stock Option Plan in order to compensate, motivate
and  retain key employees, directors and consultants of the Company.  During the
year  ended  September  30,  2000, no stock options were granted pursuant to the
1998  Stock  Option  Plan.


                                       21

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

The following table sets forth certain information as of September 30, 2000 with
respect  to  the beneficial ownership of the common stock of the Company by each
beneficial  owner  of  more than 5% of the outstanding shares of common stock of
the  Company,  each  director, each executive officer and all executive officers
and  directors  of  the Company as a group, the number of shares of common stock
owned  by  each  such  person  and group and the percent of the Company's common
stock  so  owned.

As  used  in  this  section,  the  term  beneficial  ownership with respect to a
security  is  defined by Rule 13d-3 under the Exchange Act as consisting of sole
or  shared  voting power (including the power to vote or direct the vote) and/or
sole or shared investment power (including the power to dispose of or direct the
disposition  of) with respect to the security through any contract, arrangement,
understanding,  relationship  or  otherwise,  subject to community property laws
where applicable.  Each person has sole voting and investment power with respect
to  the  shares  of  common  stock,  except  as otherwise indicated.  Beneficial
ownership consists of a direct interest in the shares of common stock, except as
otherwise  indicated.  The  address of those persons for which an address is not
otherwise  indicated  is CLI Building, Suite 1003, 313 Hennessy Road, Hong Kong.

The  only  class  of  equity  securities that the Company has outstanding is its
common  stock,  $0.0001  par  value,  of  which 2,334,970 shares were issued and
outstanding  as  of  September  30,  2000.


                                       22

                                                   PERCENT OF OUTSTANDING
    NAME OF                  SHARES OF COMMON      SHARES OF COMMON STOCK
BENEFICIAL OWNER          STOCK BENEFICALLY OWNED    BENEFICIALLY OWNED
----------------          -----------------------    ------------------

Lawrence Hon                        102,011                   4.4%

Danny Wu                            102,011                   4.4%

Donald Lau (1)                      420,444                  18.0%

Ngai Poon (2)                       473,200                  20.3%

Yuanhong Chen                          -                       -

Haibo Li                               -                       -

Changfa Li                             -                       -

All Directors
and Executive
Officers as a
Group (7 persons)                 1,097,666                  47.0%


Masterpiece Development Ltd. (1)    420,444                  18.0%
c/o T. C. Lau  &  Co.
501, China Insurance Group Bldg.
141, Des Voeux Road Central
Hong  Kong

Intermax Ltd. (2)                   473,200                  20.3%
811,  Wing  Shan  Tower
73  Des  Voeux  Road  Central
Hong  Kong

Shenton Development Ltd.            127,000                   5.4%
Suite 901
Kee Hung Commercial Building
80 Queen's Road East
Hong  Kong

Wan Wai Tak                         213,200                   9.1%

Poon Chung Ping                     213,200                   9.1%

----------------------------

(1)  Mr. Lau owns a majority interest in Masterpiece Development Ltd.
(2)  Ms. Poon owns all of the outstanding shares of Intermax Ltd.

CHANGES  IN  CONTROL

The  Company  is  unaware of any contract or other arrangement, the operation of
which  may  at  a  subsequent date result in a change in control of the Company.


                                       23

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

TRANSACTIONS  WITH  RELATED  PARTIES

During  1997, the Company paid various expenses totaling RMB 1,164,772 on behalf
of  an affiliated company.  The advances were reduced to RMB 740,679 at December
30,  1998,  and  increased to RMB 1,157,325 at September 30, 1999.  During 2000,
the  affiliated  company received RMB 1,577,000 on behalf of the Company.  Total
advances  amounted  to  RMB  2,734,325  at September 30, 2000.  The advances are
non-interest  bearing  and  are  payable  on  demand.

During  2000,  the  Company  paid  management  fees  of  RMB  236,124 to another
affiliated  company.

During  2000, the Company paid various expenses on behalf of the PRC shareholder
of  Jiangxi  Fenglin  amounting to RMB 56,280, resulting in an amount due to the
Company  at  September  30, 2000 of RMB 155,329.  Total advances amounted to RMB
99,050  at  September  30,  1999.

The  Company paid factory and production facilities rental of RMB 180,000 during
2000  and  1999  to  the  PRC  shareholder  of  Jiangxi  Fenglin.


TRANSACTIONS  WITH  DIRECTORS

During 1999, the Company made advances to and paid various expenses totaling RMB
634,469  on  behalf  of  officers  and  directors.  The advances to officers and
directors  increased  from  RMB  267,857 at September 30, 1999 to RMB 859,196 at
September  30,  2000.  The  advances are non-interest bearing and are payable on
demand.

During  2000,  another  director  repaid  advances  to  him of RMB 277,961 as of
September  30,  1999  and  has  paid  various expenses on behalf of the Company.
Advances  from  the  director  as of September 30, 2000 amounted to RMB 425,487,
which  are  non-interest  bearing  and  are  repayable  on  demand.

Directors'  remuneration  for the year ended September 30, 2000 was RMB 747,000.


TRANSACTIONS  WITH  SHAREHOLDERS

On  February  6,  1998,  certain  shareholders  made  a  loan of US$300,000 (RMB
2,490,614)  to the Company.  The loan is repayable at the earlier of three years
from  May  1,  1998  or  sixty  days  after  demand  by  all  and/or  individual
shareholders.  In  consideration  of  the  loan,  the  Company  granted to these
shareholders  options  to purchase 754,117 shares of common stock of the Company
at  an  exercise  price of US$1.50 (RMB12.42) per share exercisable during a two
year  period  beginning February 6, 1998.  The options were valued at US$241,317
(RMB  1,998,105)  based upon the market value of the common stock underlying the
options  resulting  in  deferred loan costs of that amount.  Of this amount, RMB
616,283  has  been  recognized  as  an  expense  during  each of the years ended
September  30, 2000 and 1999, and RMB 352,690 has been deferred at September 30,
2000.  The  deferred  amount  is being amortized to expense through May 1, 2001.


                                       24

                                    PART IV.


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K


(a)  Exhibits:

Exhibit
Number         Description
------         -----------

 3.1           Certificate of Incorporation as filed with the Delaware Secretary
               of  State,  with  amendment.  (1)

 3.2           Bylaws  (1)

10.1           Agreement  with  Nanchang  Organic  Fertilizer  Factory  for  the
               establishment  of  Jiangxi  Fenglin  Chemical  Industry  Company
               Limited  (1)

10.2           Lease  Agreement  for  Hong  Kong  office (1)

10.3           Land  Lease  Agreement  for  Guangxi  Linmao (1)

10.4           Lease  Agreement  for  Jiangxi  Fenglin (1)

10.5           Lease  Agreement  for  Jiangxi  Jiali (1)

21             Subsidiaries  of  the  Registrant (1)

27             Financial  Data  Schedule  (electronic filing only)


(1)  Included  as  an  exhibit  to  the Company's Registration Statement on Form
10-SB  filed  with  the  Securities  and Exchange Commission on May 4, 1999, and
incorporated  herein  by  reference.


(b)  Reports  on Form 8-K:  The Company did not file any Current Reports on Form
8-K  during  the  three  months  ended  September  30,  2000.


                                       25

                                   SIGNATURES


In  accordance  with Section 13 or 15(d) of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly  authorized.


                                               AGROCAN CORPORATION
                                               -------------------
                                                   (Registrant)



Date:  January 12, 2001                     By:  /s/  LAWRENCE HON
                                               -------------------
                                               Lawrence  Hon
                                               President and Chief
                                               Executive Officer



In  accordance  with  the  Exchange  Act,  this  report  has  been signed by the
following  persons  on behalf of the registrant and in the capacities and on the
dates  indicated.


Date:  January 12, 2001                     By:  /s/  LAWRENCE HON
                                               -------------------
                                               President and Chief
                                               Executive Officer


Date:  January 12, 2001                     By:  /s/  DONALD LAU
                                               -------------------
                                               Chief  Financial
                                               Officer  and
                                               Director


Date:  January 12, 2001                     By:  /s/  DANNY  WU
                                               -------------------
                                               Secretary  and
                                               Director


Date:  January 12, 2001                     By:  /s/  NGAI POON
                                               -------------------
                                               Director


                                       26

                               AGROCAN CORPORATION

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999


                                                                            Page
                                                                            ----


Independent  Auditors'  Report                                               F-1


Consolidated  Statements  of  Income                                         F-2


Consolidated  Balance  Sheets                                                F-3


Consolidated  Statements  of  Shareholders'  Equity                          F-4


Consolidated  Statements  of  Cash  Flows                                    F-5


Notes  to  Consolidated  Financial  Statements                       F-6 to F-19



                                       27

                          INDEPENDENT AUDITORS' REPORT




The Board of Directors and Shareholders of
AgroCan  Corporation


     We  have audited the consolidated balance sheets of AgroCan Corporation and
subsidiaries  as  of September 30, 2000 and 1999 and the consolidated statements
of income, shareholders' equity and cash flows for each of the years then ended.
These  financial  statements are the responsibility of the Company's management.
Our  responsibility is to express an opinion on these financial statements based
on  our  audits.

     We  conducted  our  audits  in  accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing  the  accounting  principles  used  and  significant estimates made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  that  our  audits  provide  a  reasonable  basis  for  our opinion.

     In  our  opinion,  the  consolidated financial statements referred to above
present  fairly,  in  all  material  respects, the financial position of AgroCan
Corporation  and subsidiaries as of September 30, 2000 and 1999, and the results
of  their  operations  and  their cash flows for each of the years then ended in
conformity  with  generally  accepted  accounting  principles.




HORWATH GELFOND HOCHSTADT PANGBURN, P.C.
Denver,  Colorado

December  22,  2000


                                      F-1



                                 AGROCAN  CORPORATION
                        CONSOLIDATED  STATEMENTS  OF  INCOME
               FOR  THE  YEARS  ENDED  SEPTEMBER  30,  2000  AND  1999



                                      Note       2000         2000         1999
                                             ------------  -----------  -----------
                                              US DOLLARS       RMB          RMB
                                                            

Net sales                                    $ 6,207,955   51,526,030   40,733,729

Cost of sales                                  5,053,606   41,944,936   35,299,331
                                             ------------  -----------  -----------

Gross profit                                   1,154,349    9,581,094    5,434,398

Administrative and general expenses             (607,274)  (5,040,379)  (3,783,228)

Selling expenses                                (124,054)  (1,029,642)    (524,525)
                                             ------------  -----------  -----------

Income from operations                           423,021    3,511,073    1,126,645

Other income (expense)
  Commission income                               30,253      251,100      857,880
  Subcontracting income                          123,494    1,025,000    1,200,000
  Interest income                                  3,825       31,747       56,325
  Amortization of loan fees                      (74,251)    (616,283)    (616,283)
                                             ------------  -----------  -----------

Income before income taxes                       506,342    4,202,637    2,624,567

Income taxes                              3      (56,020)    (464,966)    (656,998)
                                             ------------  -----------  -----------

Income before minority interest                  450,322    3,737,671    1,967,569
Minority interest                                 (3,147)     (26,120)     (78,527)
                                             ------------  -----------  -----------

Net income                                   $   447,175    3,711,551    1,889,042
                                             ============  ===========  ===========

Weighted average shares outstanding
  Basic                                2(o)    2,202,647    2,202,647    2,115,368
  Diluted                              2(o)    2,202,647    2,202,647    2,459,083

Basic earnings per share                     $      0.20         1.68         0.89
                                             ============  ===========  ===========

Diluted earnings per share                   $      0.20         1.68         0.77
                                             ============  ===========  ===========


                 See notes to consolidated financial statements.


                                      F-2



                                  AGROCAN CORPORATION
                              CONSOLIDATED BALANCE SHEETS


                                             Note     2000         2000        1999
                                                   -----------  ----------  ----------
                                                   US DOLLARS      RMB         RMB
                                                                
ASSETS
Current assets
  Cash and cash equivalents                        $   556,227   4,616,686   5,027,798
  Accounts receivable, less allowance for
   doubtful accounts (2000 and 1999:
   RMB280,000)                                       4,582,029  38,030,840  13,897,249
  Other receivables and prepayments                     57,914     480,688     519,776
  Inventories                                          335,831   2,787,401   1,087,978
  Deposits                                              52,353     434,521   1,454,044
  Amounts due from related parties              8      451,668   3,748,850   1,802,193
                                                   -----------  ----------  ----------

  Total current assets                               6,036,022  50,098,986  23,789,038

Property, plant and equipment - net             5      758,705   6,297,254   6,319,950
Construction in progress                        6            -           -      21,000
Deferred costs                                          43,314     359,507   1,285,984
                                                   -----------  ----------  ----------

  Total assets                                     $ 6,838,041  56,755,747  31,415,972
                                                   ===========  ==========  ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
  Advances and short-term loans-unsecured       7  $   479,543   3,980,212           -
  Short-term bank loan                                       -           -     700,000
  Accounts payable                                   2,549,354  21,159,642   4,999,944
  Other payables and accruals                          169,858   1,409,816   2,075,443
  Deposits received                                    178,510   1,481,629     153,396
  Amounts due to related parties                8      441,337   3,663,101   2,490,614
  Income tax payable                            3      102,087     847,324     655,850
                                                   -----------  ----------  ----------

  Total current liabilities                          3,920,689  32,541,724  11,075,247

Minority interest                                      136,088   1,129,531   1,103,411

Shareholders' equity
  Preferred stock, par value US$0.0001
   per share, authorized 10,000,000 shares;
   none issued
  Common stock, par value US$0.0001
   per share, authorized 25,000,000 shares;
   issued and outstanding 2,334,970 shares
   at September 30, 2000; 2,170,460 at
  September 30, 1999                                       233       1,934       1,800
  Capital in excess of par value                     1,358,385  11,274,599   8,745,884
  Stock options and warrants                   10            -           -   2,392,308
  Retained earnings
    Unappropriated                                   1,364,422  11,324,705   7,806,456
    Appropriated                                        56,049     465,204     271,902
  Other comprehensive income                             2,175      18,050      18,964
                                                   -----------  ----------  ----------

  Total shareholders' equity                         2,781,264  23,084,492  19,237,314
                                                   -----------  ----------  ----------

  Total liabilities and shareholders' equity       $ 6,838,041  56,755,747  31,415,972
                                                   ===========  ==========  ==========


                See notes to consolidated financial statements.


                                      F-3



                                                    AGROCAN CORPORATION
                                      CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                      FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999



                                                                         Stock      Unappro-      Appro-       Foreign
                                                          Capital in    options      priated      priated      currency
                                       Common stock       excess of       and       retained     retained    translation
                                    Shares      Amount    par value    warrants     earnings     earnings     adjustment
                                 ------------  ---------  ----------  -----------  -----------  -----------  -----------
                                                  RMB        RMB          RMB          RMB          RMB           RMB
                                                                                        
Balance, October 1, 1998            2,066,560      1,714   7,232,133   2,395,545    5,999,381       189,935      12,064

Issuance of common stock (net
 of offering costs) (Note 1(j))       100,000         86   1,510,514           -            -             -           -
Exercise of warrants                    3,900          -       3,237      (3,237)           -             -           -
Staff welfare reserve                                  -           -           -      (81,967)       81,967           -
Comprehensive income:
  Net income for the year ended
  September 30, 1999                                   -           -           -    1,889,042             -           -
  Other comprehensive income                           -           -           -            -             -       6,900
                                 ------------  ---------  ----------  -----------  -----------  -----------  -----------

Balance, September 30, 1999         2,170,460      1,800   8,745,884   2,392,308    7,806,456       271,902      18,964
Exercise of warrants                  164,510        134     136,407           -            -             -           -
Staff welfare reserve                                  -           -           -     (193,302)      193,302           -
Forfeiture of stock options
 and warrants                                          -   2,392,308  (2,392,308)           -             -           -
Comprehensive income:
  Net income for the year ended
  September 30, 2000                                   -           -           -    3,711,551             -           -
  Other comprehensive income                           -           -           -            -             -        (914)
                                 ------------  ---------  ----------  -----------  -----------  -----------  -----------

Balance, September 30, 2000         2,334,970      1,934  11,274,599           -   11,324,705       465,204      18,050
                                 ============  =========  ==========  ===========  ===========  ===========  ===========



                                    Total
                                shareholders'
                                   equity
                                 -----------
                                     RMB
                              
Balance, October 1, 1998         15,830,772

Issuance of common stock (net
 of offering costs) (Note 1(j))   1,510,600
Exercise of warrants                      -
Staff welfare reserve                     -
Comprehensive income:
  Net income for the year ended
  September 30, 1999              1,889,042
  Other comprehensive income          6,900
                                 -----------

Balance, September 30, 1999      19,237,314
Exercise of warrants                136,541
Staff welfare reserve                     -
Forfeiture of stock options
 and warrants                             -
Comprehensive income:
  Net income for the year ended
  September 30, 2000              3,711,551
  Other comprehensive income           (914)
                                 -----------

Balance, September 30, 2000      23,084,492
                                 ===========


                 See notes to consolidated financial statements.


                                      F-4



                                      AGROCAN CORPORATION
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                        FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999



                                                           2000          2000          1999
                                                       ------------  ------------  ------------
                                                        US DOLLARS       RMB           RMB
                                                                          
Operating activities
Net income                                             $   447,175     3,711,551     1,889,042
Adjustments to reconcile net income to net cash
 (used in) provided by operating activities:
  Amortization of deferred costs                           111,623       926,477       729,073
  Depreciation                                              58,992       489,639       436,750
  Compensation expense related to stock issuance                 -             -     1,510,600
  Minority interest in net income                            3,147        26,120        78,527
  (Increase) decrease in accounts receivable            (2,907,662)  (24,133,591)   41,095,721
  Decrease (increase) in other receivables, deposits
  and prepayments                                          127,543     1,058,611      (206,421)
  (Increase) decrease in inventories                      (204,750)   (1,699,423)       23,703
  Increase in amounts due from related parties            (234,536)   (1,946,657)   (1,061,514)
  Increase (decrease) in accounts payable                1,946,952    16,159,698   (43,146,872)
  Increase in income tax payable                            23,069       191,474       655,850
  Increase (decrease) in other payables and accruals       (80,196)     (665,627)    1,069,812
  Increase (decrease) in deposits received                 160,028     1,328,233      (180,628)
  Increase (decrease) in amounts due to related parties    141,263     1,172,487      (113,264)
                                                       ------------  ------------  ------------

  Net cash (used in) provided by operating activities     (407,352)   (3,381,008)    2,780,379
                                                       ------------  ------------  ------------


Investing activities
  Deferred costs                                                 -             -       (38,704)
  Additions to property, plant and equipment               (53,728)     (445,943)     (752,228)
                                                       ------------  ------------  ------------

  Net cash used in investing activities                    (53,728)     (445,943)     (790,932)
                                                       ------------  ------------  ------------

Financing activities
  Proceeds from advances and short-term loans-unsecured    551,833     4,580,212             -
  Repayment of advances and short-term loans-unsecured     (72,289)     (600,000)            -
  Repayment of short-term bank loan                        (84,337)     (700,000)            -
  Proceeds from short-term bank loan                             -             -       700,000
  Minority interest capital contribution                         -             -       138,187
  Proceeds from issuance of common stock                    16,452       136,541             -
                                                       ------------  ------------  ------------

  Net cash provided by financing activities                411,659     3,416,753       838,187
                                                       ------------  ------------  ------------

Net (decrease) increase in cash and cash equivalents       (49,421)     (410,198)    2,827,634
Cash and cash equivalents at beginning of year             605,759     5,027,798     2,193,264
Effect of exchange rate changes on cash                       (111)         (914)        6,900
                                                       ------------  ------------  ------------

Cash and cash equivalents at end of year               $   556,227     4,616,686     5,027,798
                                                       ============  ============  ============

Cash paid during the year for income taxes             $    32,951       273,492             -
                                                       ============  ============  ============


See  notes  to  consolidated  financial  statements.


                                      F-5

                               AGROCAN CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Organization  and  basis  of  consolidated  financial  statements

     (a)  AgroCan  Corporation  (the "Company") was  incorporated on December 8,
          1997 in the  State  of  Delaware,  and  currently  has a  wholly-owned
          subsidiary   AgroCan   (China)  Inc.,   which  has  two   wholly-owned
          subsidiaries,  Guangxi Linmao  Fertilizer  Company Limited and Jiangxi
          Jiali Chemical Industry Company Limited.

     (b)  The  Company  was  incorporated   with  authorized  share  capital  of
          25,000,000  shares of common stock with a par value of  US$0.0001  per
          share and  10,000,000  shares of  preferred  stock with a par value of
          US$0.0001  per share.  The shares of preferred  stock may be issued in
          series  having  such  designations,  powers,  preferences,  rights and
          limitations,  and  on  such  terms  and  conditions  as the  board  of
          directors may from time to time  determine  including  the rights,  if
          any,  of the  holders  thereof  with  respect  to  voting,  dividends,
          redemption,  liquidation and conversion.  As of September 30, 2000, no
          shares of preferred stock had been issued.

     (c)  On November 3, 1996, AgroCan (China) Inc. entered into a joint venture
          agreement   with  FuZhou  Grain  and  Oil  Industry   Corp.,  a  state
          majority-owned  enterprise in the People's  Republic of China ("PRC"),
          for the establishment of a Sino-Foreign Equity Joint Venture,  Jiangxi
          Jiali Compound  Fertilizer  Company  Limited,  in the PRC. The Group's
          share in the equity interest in this joint venture as of September 30,
          1997 was 55%. On April 5, 1998,  the Group  acquired the remaining 45%
          interest. On the same date, the subsidiary changed its name to Jiangxi
          Jiali Chemical  Industry Company Limited  ("Jiangxi  Jiali").  Jiangxi
          Jiali  is  engaged  in  the   manufacture   and  trading  of  compound
          fertilizers with production having commenced on May 1, 1998.

     (d)  On October 8, 1996,  AgroCan (China) Inc. entered into a joint venture
          agreement  with another  state  majority-owned  enterprise  in the PRC
          Nanchang Organic Fertilizer Factory ("Nanchang") for the establishment
          of a  Sino-Foreign  Equity Joint  Venture,  Jiangxi  Fenglin  Chemical
          Industry  Company Limited  ("Jiangxi  Fenglin"),  in the PRC.  AgroCan
          (China) Inc.'s share in the equity interest of Jiangxi Fenglin is 70%.
          The joint venture has a term of 30 years from  November 28, 1996,  the
          date of incorporation.

          Under the terms of the joint venture  agreement,  Nanchang and AgroCan
          (China)  Inc.  are  required  to  contribute   capital  of  US$101,449
          (RMB840,000) and US$236,715 (RMB1,960,000),  respectively, in the form
          of cash and business  assets relating to the manufacture and retailing
          of compound fertilizers to the joint venture. On October 28, 1998, all
          of the above required capital had been contributed by Nanchang and the
          Company.

     (e)  Guangxi  Linmao  Compound  Fertilizer  Company  Limited  was formed on
          September  19, 1996 and became a  wholly-owned  subsidiary  of AgroCan
          (China) Inc.  during the year ended September 30, 1997 and changed its
          name to Guangxi Linmao Fertilizer  Company Limited ("Guangxi  Linmao")
          on December 25, 1997. Guangxi Linmao is engaged in the manufacture and
          trading of compound fertilizers.


                                      F-6

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.   Organization  and  basis of consolidated financial statements (continued)

     (f)  Effective  December 31, 1997, the Company issued  1,598,646  shares of
          common stock at  US$0.0001  par value to the  shareholders  of AgroCan
          (China)  Inc. in exchange for their  interest in AgroCan  (China) Inc.
          and its three  subsidiaries  in the PRC.  Prior to the  exchange,  the
          Company had no substantial  operations and, under  generally  accepted
          accounting  principles,   the  transaction  was  accounted  for  as  a
          recapitalization, as the shareholders of AgroCan (China) Inc. acquired
          all of the stock of the Company. Accordingly, there was no revaluation
          of assets or liabilities for financial statement  accounting purposes.
          The transaction resulted in the following subsidiaries:




                               Country of       Percentage
                             incorporation       of equity
Name of company              and operation     interest held     Principal activity
-------------------------  ------------------  -------------  ------------------------
                                                     
AgroCan (China) Inc.       the British Virgin            100  Investment holding
                           Islands

Guangxi Linmao Fertilizer  The People's                  100  Manufacturer and trading
Company Limited            Republic of China                  of compound fertilizers

Jiangxi Jiali Chemical     The People's                  100  Manufacturer and trading
Industry Company Limited   Republic of China                  of compound fertilizers

Jiangxi Fenglin Chemical   The People's                   70  Manufacturer and trading
Industry Company Limited   Republic of China                  of compound fertilizers



     (g)  For  financial   reporting   purposes,   the  consolidated   financial
          statements  reflect the  above-mentioned  reorganization  similar to a
          pooling  of  interests,   with  assets  and  liabilities  recorded  at
          historical  cost.  Because the transaction has been accounted for as a
          reverse  acquisition,  the  shares  issued  by the  Company  have been
          reflected in the financial  statements giving retroactive effect as if
          the  Company  had  been  the  parent  company  from   inception.   The
          consolidated   financial   statements   incorporate   the  results  of
          operations  and  assets  and   liabilities  of  the  Company  and  its
          subsidiaries  (hereinafter  referred to as the "Group" or  "Company").
          All intercompany  balances and transactions  have been eliminated upon
          consolidation.

     (h)  During the period ended  September 30, 1998, the Company  authorized a
          US$750,000  (RMB6,210,000)  private  placement,  consisting of 375,000
          units at US$2.00  (RMB16.56) per unit,  with each unit  containing one
          share of common  stock and  1/10th of a two-year  warrant to  purchase
          shares of common stock at US$0.10  (RMB0.828) per share. In connection
          with the private  placement,  the Company also issued 150,000 two-year
          warrants to purchase  common stock at US$0.10  (RMB0.828) per share to
          its financial advisors.


                                      F-7

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.   Organization  and  basis of consolidated financial statements (continued)

          In August 1998,  250,000  units  comprising  250,000  shares of common
          stock and 25,000 two-year warrants expiring in August 2000 were issued
          pursuant  to  the  above  private   placement  for   consideration  of
          US$450,716  (RMB3,731,928),   net  of  offering  costs.  Each  warrant
          entitles  the holder  upon  exercise  to receive  from the Company one
          share of common stock at the purchase price of US$0.10  (RMB0.828) per
          share. These warrants were not exercised and expired in August 2000.

          Also in August 1998, the Company issued 20,000 shares of common stock,
          two-year  warrants  to  purchase  125,000  shares of  common  stock at
          US$0.10 (RMB0.828) per share and two-year warrants to purchase 150,000
          shares of common stock at US$1.50 (RMB12.42) per share to a consultant
          for services rendered in connection with the private placement.

          In  addition,   the  Company  issued  two-year   warrants  to  another
          consultant  to  purchase  25,000  shares  of common  stock at  US$0.10
          (RMB0.828)  per share for  services  rendered in  connection  with the
          private placement.

     (i)  Pursuant to a board of directors'  resolution of August 25, 1998,  the
          Company issued 150,000 shares of common stock to its financial advisor
          for services rendered in connection with the private placement.

     (j)  Pursuant to a board of  directors'  resolution  passed on December 31,
          1998,  the Company  issued  100,000  shares of common stock at US$1.82
          (RMB15.11)  per  share  to  a  consultant.   The  Company   recognized
          RMB1,510,600  of general and  administrative  expense  related to this
          transaction.

     (k)  During the years  ended  September  30, 1999 and 2000,  warrants  were
          exercised to acquire 3,900 shares and 164,510 shares, respectively.

     (l)  The  financial  statements  have  been  prepared  in  accordance  with
          accounting  principles  generally  accepted  in the  United  States of
          America ("US GAAP"),  and are presented in Chinese  Renminbi  ("RMB"),
          the national currency of the PRC (note 2(e)).


                                      F-8

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.   Principal  accounting  policies

     (a)  The  consolidated  financial  statements  include the  accounts of the
          Company  and its  subsidiaries.  Material  intercompany  balances  and
          transactions have been eliminated on consolidation.

     (b)  Cash and cash equivalents

          For financial  reporting  purposes,  the Company  considers all highly
          liquid investments  purchased with original maturities of three months
          or less to be cash equivalents.

     (c)  Property,  plant  and  equipment

          Property,  plant and  equipment  are carried at cost less  accumulated
          depreciation.  Depreciation  is provided over their  estimated  useful
          lives, using the straight line method, at the following annual rates:

               Land use rights                     2% - 5%
               Buildings                           4.5%
               Furniture and equipment             18% - 33 1/3%
               Machinery                           9% - 20%
               Motor  vehicles                     18%
               Leasehold improvements              20%

          Repairs and maintenance costs are expensed as incurred.

          Management  assesses the carrying value of its  long-lived  assets for
          impairment  when  circumstances  warrant  such  a  review.  Management
          considers  projected future operating results,  cash flows, trends and
          other circumstances in its assessment. Based on its review, management
          does not believe that any  impairment has occurred as of September 30,
          2000.

     (d)  Inventories

          Inventories  are valued at the lower of cost or net realizable  value.
          Cost includes the cost of raw materials  computed  using the first-in,
          first-out  method and, in the case of work in  progress  and  finished
          goods,  direct  labor  and an  appropriate  proportion  of  production
          overhead. Net realizable value is determined by reference to the sales
          proceeds of items sold in the  ordinary  course of business  after the
          balance sheet date or management  estimates based on prevailing market
          conditions.


                                      F-9

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.   Principal  accounting  policies  (continued)

     (d)  Inventories (continued)

          Inventories  are  comprised  of  the following as of September 30:

                                    2000              2000              1999
                                ------------      ------------      ------------
                                 US DOLLARS            RMB               RMB

          Raw materials         $    269,681         2,238,353           731,196
          Finished goods              66,150           549,048           356,782
                                ------------      ------------      ------------

                                $    335,831         2,787,401         1,087,978
                                ============      ============      ============


     (e)  Fair  Value  of  Financial  Instruments

          The fair  value  of the  Company's  related  parties  receivables  and
          payables  are not  practicable  to estimate  due to the related  party
          nature of the underlying  transactions.  Management  believes that the
          carrying   amounts  of  the  Company's  other  financial   instruments
          approximates  their fair values  primarily  because of the  short-term
          maturities of these instruments.

     (f)  Translation  of  foreign  currencies

          Transactions  and  monetary  assets  and  liabilities  denominated  in
          currencies  other than RMB are  translated  into RMB at the respective
          applicable rates of exchange quoted by the People's Bank of China (the
          "Exchange Rate"). Monetary assets and liabilities denominated in other
          currencies are translated into RMB at the applicable  Exchange Rate at
          the respective  balance sheet dates.  The resulting  exchange gains or
          losses  are  credited  or charged to the  consolidated  statements  of
          income.  Currency  translation  adjustments  arising  from  the use of
          different  exchange  rates  from  period to period are  included  as a
          separate component in shareholders' equity.

          The   translation  of  amounts  from  RMB  into  US  dollars  for  the
          convenience of the reader has been made at the rate of exchange quoted
          by the People's Bank of China on the respective balance sheet dates of
          US$1.00  equals RMB8.30 and  accordingly,  differs from the underlying
          foreign  currency  amounts.  No  representation  is made  that the RMB
          amounts  could have been,  or could be,  converted  into US dollars at
          that rate on the respective balance sheet dates or at any other date.


                                      F-10

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.   Principal  accounting  policies  (continued)

     (g)  Operating  leases

          Leases where  substantially  all the risks and rewards of ownership of
          assets remain with the lessors are accounted for as operating  leases.
          Rentals under  operating  leases are charged to expense over the lease
          term.

     (h)  Construction  in  progress

          Construction in progress represents the accumulated costs of factories
          under construction, which comprise all expenditures on land use rights
          and other direct costs  attributable  to  construction,  including the
          cost of financing.  Construction in progress also includes the cost of
          machinery under development and construction for production.

          No charge for depreciation is made until assets are placed in service.

     (i)  Deferred  costs

          Loan fees are deferred and amortized by equal  installments  over five
          years or the term of the related financial instrument.

     (j)  Revenue  recognition

          Revenue from sales of goods by the Company,  its  subsidiaries and the
          joint venture is recognized on the delivery of goods to customers.

     (k)  Income taxes

          Deferred tax assets and  liabilities are recognized for the future tax
          consequences   attributable  to  differences   between  the  financial
          statements  carrying  amounts of existing  assets and  liabilities and
          their  respective tax bases.  Deferred tax assets and  liabilities are
          measured  using enacted tax rates  expected to apply to taxable income
          in the years in which those  temporary  differences are expected to be
          recovered   or  settled.   The  effect  on  deferred  tax  assets  and
          liabilities of a change in tax rates is recognized in the consolidated
          statement of income in the period that includes the enactment date.


                                      F-11

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.   Principal  accounting  policies  (continued)

     (l)  Use of estimates in the preparation of financial statements

          The  preparation of financial  statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions  that  affect  the  reported  amounts  of assets  and
          liabilities and disclosure of contingent assets and liabilities at the
          date of the financial  statements and the reported amounts of revenues
          and expenses  during the  reporting  periods.  Management  makes these
          estimates  using  the  best  information  available  at the  time  the
          estimates are made;  however  actual  results could differ  materially
          from these estimates.

     (m)  Offering costs

          Costs incurred by the Company for its private  placement  offerings of
          shares of common stock were charged to capital in excess of par at the
          completion of the offerings.

     (n)  Staff welfare reserve

          PRC rules and  regulations  governing  joint ventures and  enterprises
          require  allocation  of a portion of annual net  income,  if any, to a
          welfare reserve fund. The amounts to be reserved are stipulated by PRC
          laws and  regulations.  The reserve  cannot be used for purposes other
          than those for which it is created  and is not  distributable  as cash
          dividends.

     (o)  Stock-based compensation

          Statement of Financial Accounting Standards (SFAS) No. 123, Accounting
          for Stock-Based  Compensation,  defines a  fair-value-based  method of
          accounting for stock-based  employee  compensation and transactions in
          which an entity  issues its  equity  instruments  to acquire  goods or
          services  from  non-employees,  and  encourages  but does not  require
          companies  to  record  compensation  cost  for  stock-based   employee
          compensation  at fair  value.  The  Company  has chosen to account for
          stock-based  employee  compensation  using the intrinsic  value method
          prescribed in Accounting  Principles Board Opinion No. 25,  Accounting
          for Stock Issued to Employees and related interpretations.

     (p)  Earning per share

          Statement of  Financial  Accounting  Standards  No.128  ("SFAS  128"),
          earnings per share,  requires dual  presentation  of basic and diluted
          earning per share ("EPS") with a  reconciliation  of the numerator and
          denominator of the EPS  computations.  Basic earning per share amounts
          are based on the weighted  average share of common stock  outstanding.
          Diluted earning per share assume the conversion,  exercise or issuance
          of all potential common stock  instruments  such as options,  warrants
          and convertible  securities,  unless the effect is to reduce a loss or
          increase earnings per share.


                                      F-12

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.   Principal  accounting  policies  (continued)

     (p)  Earning  per  share  (continued)

          Accordingly,  this  presentation  has  been  adopted  for all  periods
          presented.  The basic  and  diluted  weighted  average  common  shares
          outstanding are as follows as of September 30:

                                                            2000          1999
                                                         ---------     ---------
          Weighted average outstanding common share
           used  for  basic  EPS                         2,202,647     2,115,368

          Plus incremental common shares from assumed
           issuance of stock options and warrants                -       343,715
                                                         ---------     ---------

          Weighted average outstanding common shares
           used  for  diluted  EPS                       2,202,647     2,459,083
                                                         =========     =========

     (q)  Comprehensive income

          In  June  1997,  the  Financial   Accounting  Standards  Board  issued
          Statement No. 130, "Reporting Comprehensive Income," ("SFAS No. 130").
          SFAS No. 130  established  standards  for the reporting and display of
          comprehensive  income,  its components and  accumulated  balances in a
          full set of general purpose financial statements. SFAS No. 130 defines
          comprehensive  income to include  all changes in equity  except  those
          resulting  from  investments  by owners and  distributions  to owners.
          Among other disclosures, SFAS No. 130 requires that all items that are
          required  to be  recognized  under  current  accounting  standards  as
          components  of  comprehensive   income  be  reported  in  a  financial
          statement  that  is  presented  with  the  same  prominence  as  other
          financial  statements.  During the year ended  September 30, 1999, the
          Company adopted SFAS No. 130. The Company's only current  component of
          comprehensive income is foreign currency translation adjustment.

     (r)  Recent Accounting Pronouncements

          In  June  1997,  the  Financial   Accounting  Standards  Board  issued
          Statement No. 131,  "Disclosures  about  Segments of an Enterprise and
          Related  Information"  (SFAS No. 131"),  which supersedes SFAS No. 14,
          "Financial  Reporting for Segments of a Business Enterprise" and which
          is  effective  for  financial   statements  issued  for  fiscal  years
          beginning after December 15, 1997. SFAS No. 131 established  standards
          for the way that public companies report  information  about operating
          segments in annual  financial  statements  and  requires  reporting of
          selected  information  about operating  segments in interim  financial
          statements. SFAS No. 131 also establishes standards for disclosures by
          public companies  regarding  information  about their major customers,
          operating segments, products and services, and the geographic areas in
          which  they  operate.  SFAS No.  131  defines  operating  segments  as
          components of an enterprise about which separate financial information
          is  available  that is  evaluated  regularly  by the  chief  operating
          decision maker in deciding how to allocate  resources and in assessing
          performance.  The Company  adopted SFAS No. 131 in 1999. The Company's
          results of  operations  and  financial  position  were not affected by
          implementation  of SFAS No. 131 as it  operates  in only one  segment,
          fertilizer manufacturing.


                                      F-13

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.   Principal  accounting  policies  (continued)

     (r)  Recent Accounting Pronouncements (continued)

          In February  1998,  the Financial  Accounting  Standards  Board issued
          Statement No. 132,  "Employers'  Disclosures  about Pensions and Other
          Post  Retirement  Benefits"  ("SFAS No.  132").  SFAS No. 132  revises
          employers' disclosures about pension and other post retirement benefit
          plans. The Company adopted SFAS No. 132 in 1999. The Company's results
          of   operations   and   financial   position   were  not  affected  by
          implementation of SFAS No. 132.

          In  June  1998,  the  Financial   Accounting  Standards  Board  issued
          Statement No. 133, "Accounting for Derivative  Instruments and Hedging
          Activities"  ("SFAS No.  133"),  which,  as amended,  is effective for
          financial  statements  for all fiscal  quarters  of all  fiscal  years
          beginning  after  June  15,  2000.  SFAS  No.  133   standardizes  the
          accounting for derivative  instruments,  including certain  derivative
          instruments  embedded in other contracts,  by requiring that an entity
          recognize  those items as assets or  liabilities  in the  statement of
          financial  position and measure them at fair value.  SFAS No. 133 also
          addresses the accounting for hedging activities. The Company currently
          does not have any derivative  instruments nor is it engaged in hedging
          activities,  thus the Company does not believe  implementation of SFAS
          No.  133  will  have a  material  impact  on its  financial  statement
          presentation or disclosures.

          In December 1999, the Staff of the Securities and Exchange  Commission
          issued Staff  Accounting  Bulletin  No. 101,  Revenue  Recognition  in
          Financial  Statements  ("SAB No. 101"). SAB No. 101, as amended by SAB
          No.  101A and SAB No.  101B,  is  effective  no later  than the fourth
          fiscal quarter of fiscal years  beginning after December 15, 1999. SAB
          No. 101  provides  the Staff's  views in applying  generally  accepted
          accounting   principles  to  selected  revenue   recognition   issues.
          Currently,  the Company  believes that it complies with the accounting
          and  disclosures  described  in SAB No. 101.  Accordingly,  management
          believes  that SAB No.  101 will not impact  the  Company's  financial
          statements.

3.   Taxation

     The Company is subject to income taxes on an entity basis on income arising
     in or derived from the tax  jurisdiction in which each entity is domiciled.
     The Company's  British Virgin  Islands  subsidiary is not liable for income
     taxes. The Company's PRC subsidiaries  consist of two wholly-owned  foreign
     enterprises and a 70% held Sino-Foreign Equity Joint Venture.  Companies in
     the PRC are generally  subject to income taxes at an effective  rate of 33%
     (30%  national  income  tax plus 3% state  income  tax).  As  manufacturing
     companies,  the Company's  subsidiaries  operate in special economic zones,
     which entitles them to a reduced  national  income tax rate of 24%, and the
     subsidiaries  are exempt from state  income tax.  Further,  pursuant to the
     approval of the relevant PRC tax authorities,  the  subsidiaries  have been
     granted a "tax holiday", whereby the subsidiaries are fully exempt from PRC
     income taxes for two years  starting  from the year profits are first made,
     followed  by a 50%  exemption  for the  next  three  years.  In  1999,  the
     two-year,  100% exemption  expired for Jiangxi  Fenglin and Guangxi Linmao,
     subjecting them to income tax at a rate of 12%.  Effective October 1, 2000,
     the two-year,  100% exemption  expired for Jiangxi Jiali,  subjecting it to
     income  tax at a rate of 12%.  Losses  incurred  by joint  ventures  may be
     carried forward for five years.


                                      F-14

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.   Taxation  (Continued)

     Deferred  tax  assets  and  liabilities  are  not  considered  material  at
     September 30, 2000 and 1999.

     The reconciliation  between the effective tax rate and the statutory United
     States federal income tax rate is as follows:

                                                   Year ended      Year ended
                                                  September 30,   September 30,
                                                      2000            1999
                                                  -------------   -------------

          Statutory U.S. federal tax rate              34%             34%
          Difference in foreign statutory rates        (1)             (1)
          Income  tax  exemption                      (22)             (8)
                                                  -------------   -------------

          Effective tax rate                           11%              25%
                                                  =============   =============

     The pro forma  effect of the tax  holiday on net income  and  earnings  per
     share is as follows:

                                                          September 30,
                                                  -----------------------------
                                                       2000           1999
                                                  -------------   -------------
                                                        RMB            RMB

          Net income                                  2,787,000       1,680,000
          Basic earnings per share                         1.26            0.79
          Diluted earnings per share                       1.26            0.68

4.   Significant  concentrations

     The  Company  grants  credit to its customers, generally on an open account
     basis.  The Company's  customers are all located in the PRC.  Approximately
     59% and 62% of the Company's  sales were generated  from four customers and
     three  customers,  respectively,  during the years ended September 30, 2000
     and 1999, respectively. Sales to each of these customers were 18%, 15%, 15%
     and 11% of total sales  for the year ended September 30, 2000, and 29%, 17%
     and 16% of total sales for the year ended September 30, 1999.

     At September 30, 2000 and 1999, approximately 67% and 86%, respectively, of
     accounts  receivable were from trade  transactions with five customers,  of
     which one customer  accounted for approximately 51% and 57%,  respectively,
     of the accounts receivable balance.


                                      F-15

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5.   Property,  plant  and  equipment

                                         2000        2000       1999
                                      -----------  ---------  ---------
                                      US DOLLARS      RMB        RMB
     Cost:
     Land use rights                  $   129,009  1,070,775  1,070,775
     Buildings                            525,637  4,362,784  4,115,985
     Leasehold improvements                16,570    137,530          -
     Plant and machinery                  180,479  1,497,972  1,493,600
     Furniture and equipment               40,330    334,745    256,504
     Motor vehicles                        30,095    249,792    249,792
                                      -----------  ---------  ---------


     Total cost                           922,120  7,653,598  7,186,656
                                      -----------  ---------  ---------

     Accumulated depreciation:
     Land use rights                       12,160    100,927     66,611
     Buildings                             44,838    372,151    206,288
     Leasehold improvements                   828      6,877          -
     Plant and machinery                   66,313    550,395    361,437
     Furniture and equipment               19,522    162,037    113,376
     Motor vehicles                        19,754    163,957    118,994
                                      -----------  ---------  ---------


                                          163,415  1,356,344    866,706
                                      -----------  ---------  ---------

     Net                              $   758,705  6,297,254  6,319,950
                                      ===========  =========  =========

6.   Construction in progress
                                          2000        2000       1999
                                      -----------  ---------  ---------
                                       US DOLLARS     RMB        RMB

     Cost:
     Factories under construction     $         -          -     21,000
                                      ===========  =========  =========

7.   Advances  and  short-term  loans  -  unsecured

     The amounts  represent  money  borrowed  from third  parties.  Loans in the
     amount of RMB1,510,212 are unsecured and are repayable within one year. The
     Company is  committed  to pay  interest of  RMB75,000  (5%) on repayment of
     these  loans.  Advances  in the  amount of  RMB2,470,000  are  non-interest
     bearing and payable on demand.

     At  September  30,  1999,  the  Company  had  a  bank  loan  of  RMB700,000
     (US$84,337),  which was collateralized by a pledge of the Company's cash in
     bank to a maximum  amount of  US$120,000  (RMB996,000).  The bank loan bore
     interest at 5.61% per annum and was repaid during the year ended  September
     30, 2000.


                                      F-16

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8.   Related  party  balances  and  transactions

     (a)  Transactions  with  related  parties

          (i)  During  1997,   the  Company  paid  various   expenses   totaling
               RMB1,164,772  on behalf of an  affiliated  company.  The advances
               were reduced to RMB740,679 at December 30, 1998, and increased to
               RMB1,157,325  at September 30, 1999.  During 2000, the affiliated
               company  received  RMB1,577,000  on behalf of the Company.  Total
               advances  amounted to  RMB2,734,325  at September  30, 2000.  The
               advances are non-interest bearing and are payable on demand.

          (ii) During 2000,  the Company paid  management  fees of RMB236,124 to
               another affiliated company.

          (iii)During 2000,  the Company paid various  expenses on behalf of the
               PRC  shareholder  of  Jiangxi  Fenglin  amounting  to  RMB56,280,
               resulting in an amount due to the Company at  September  30, 2000
               of RMB155,329.  Total advances amounted to RMB99,050 at September
               30, 1999.

          (iv) The Company  paid  factory and  production  facilities  rental of
               RMB180,000 during 2000 and 1999 to the PRC shareholder of Jiangxi
               Fenglin.

     (b)  Transactions with directors

          (i)  During  1999,  the  Company  made  advances  to and paid  various
               expenses totaling RMB634,469 on behalf of officers and directors.
               The advances to officers and directors  increased from RMB267,857
               at September 30, 1999 to  RMB859,196  at September 30, 2000.  The
               advances are non-interest bearing and are payable on demand.

          (ii) During  2000,   another   director  repaid  advances  to  him  of
               RMB277,961 as of September 30, 1999 and has paid various expenses
               on  behalf  of the  Company.  Advances  from the  director  as of
               September 30, 2000 amounted to RMB425,487, which are non-interest
               bearing and are repayable on demand. In addition,  the directors'
               remuneration  for the year ended  September  30, 2000 amounted to
               RMB747,000 and was accrued at September 30, 2000.


                                      F-17

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8.   Related  party  balances  and  transactions  (continued)

     (c)  Transactions with shareholders

          On February 6, 1998,  certain  shareholders  made a loan of US$300,000
          (RMB2,490,614) to the Company. The loan is repayable at the earlier of
          three years from May 1, 1998 or sixty days after  demand by all and/or
          individual  shareholders.  In  consideration  of the loan, the Company
          granted to these  shareholders  options to purchase  754,117 shares of
          common stock of the Company at an exercise price of US$1.50 (RMB12.42)
          per share exercisable  during a two year period beginning  February 6,
          1998. The options were valued at US$241,317  (RMB1,998,105) based upon
          the market value of the common stock underlying the options  resulting
          in deferred loan costs of that amount. Of this amount,  RMB616,283 has
          been recognized as an expense during each of the years ended September
          30, 2000 and 1999,  and  RMB352,690 has been deferred at September 30,
          2000. The deferred amount is being amortized to expense through May 1,
          2001.


9.   Lease  commitments

     The Company  leases  land,  buildings  and other  equipment  under  various
     contracts.  Rental expenses for the years ended September 30, 2000 and 1999
     were  RMB180,000.  The future total minimum rental payments  required under
     operating  leases  that  have  remaining  non-cancellable  lease  terms  at
     September 30, 2000 are as follows:

                                                                      RMB

     Year  ending  September  30,  2001                           180,000
                                                                  =======


10.  Warrants  and  options

     The  Company  adopted a stock  option  plan (the  "Plan") as of February 6,
     1998. The Plan allows the Board of Directors, or a committee thereof at the
     Board's  discretion,  to grant stock  options to officers,  directors,  key
     employees, and consultants of the Company and its affiliates.  An aggregate
     of 250,000  shares of common  stock has been  reserved  for  issuance  upon
     exercise of the options  granted under the Plan.  Pursuant to the Plan, the
     exercise  price shall in no event be less than the fair market value of the
     shares of common stock at the date of grant.  As of September  30, 2000, no
     stock options have been granted under the Plan.


                                      F-18

                               AGROCAN CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10.  Warrants  and  options  (continued)

     A summary of the status of the Company's stock options and warrants for the
     years ended September 30, 2000 and 1999 is as follows:



                       Options (Note 9)              Warrants  (Note 1)
                     -------------------  ----------------------------------------
                                Exercise             Exercise             Exercise
                      Shares     Price     Shares     Price     Shares     Price
                     ---------  --------  ---------  --------  ---------  --------
                                  US$                  US$                  US$
                                                        
Outstanding at
 September 30, 1998   754,117       1.50   275,000       1.50   203,900       0.10

Granted                     -          -         -          -         -          -
Exercised                   -          -         -          -    (3,900)      0.10
Forfeited                   -          -         -          -         -          -
                     ---------  --------  ---------  --------  ---------  --------

Outstanding at
 September 30, 1999   754,117       1.50   275,000       1.50   200,000       0.10

Granted                     -          -         -          -         -          -
Exercised                   -          -         -             (164,510)      0.10
Forfeited            (754,117)         -  (275,000)         -   (35,490)         -
                     ---------  --------  ---------  --------  ---------  --------

Outstanding at
 September 30, 2000         -          -         -          -         -          -
                     =========  ========  =========  ========  =========  ========



11.  Risk  considerations

     As a majority of the  Company's  operations  are  conducted in the PRC, the
     Company  is subject to special  considerations  and  significant  risks not
     typically  associated  with  investments  in  equity  securities  of  North
     American and Western European  companies.  The Company's  operations may be
     adversely   affected  by   significant   political,   economic  and  social
     uncertainties in the PRC.

     Although the PRC government has been pursuing  economic reform policies for
     the past several  years,  no assurance can be given that the PRC government
     will  continue to pursue such  policies  or that such  policies  may not be
     significantly  altered,  especially in the event of a change in leadership,
     social or political disruption,  or unforeseen  circumstances affecting the
     PRC's political,  economic and social life. There is also no guarantee that
     the PRC  government's  pursuit of economic  reforms will be  consistent  or
     effective.

     The  Company  expects  that  substantially  all of  its  revenues  will  be
     denominated  in RMB. A portion of such  revenues  will need to be converted
     into other currencies to meet foreign currency  obligations such as payment
     of  any  dividends  declared.  Both  the  conversion  of RMB  into  foreign
     currencies and the remittance of foreign currencies abroad requires the PRC
     government's approval.


                                      F-19