China Huaren Organic Products, Inc. (fka CHRN)

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Accounts receivable



During the first quarter of 2007, the Company, facing an imminent expiration date on organic crops that it had received from Wancheng, sold those crops at cost to Yushu Wanli Co., Ltd (“Yushu”) pursuant to a sales contract. This sale on March 15, 2007 increased the Company’s accounts receivable by approximately $5,380,185 (equivalent to RMB 40,312,786), which included the merchandise price plus VAT and other sales taxes. Yushu Wanli Co., Ltd. is a non-related third party. Based upon the sales contract, Yushu started to pay the amount due to us in May 2007. As of September 30, 2007, the outstanding balance due from Yushu was $4,445,958 (equivalent to RMB 33,312,786). It represented all of our gross accounts receivable balance as of September 30, 2007.