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Prospectus SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT - 9-13-2010

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Prospectus SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT  - 9-13-2010 Powered By Docstoc
					                                                                                                            Filed Pursuant to Rule 424(b)(3 )
                                                                                                                Registration No. 333-164564
PROSPECTUS

                                                              1,500,000 Shares




                                          NUTRASTAR INTERNATIONAL INC.
                                                 Common Stock, par value $0.001 per share
                                                    ____________________________

       This prospectus relates to 1,500,000 shares of common stock of Nutrastar International Inc. that may be sold fro m time to time by the
selling stockholders named in this prospectus, which includes:

•            1,000,000 shares of common stock;

•            250,000 shares of common stock issuable to the selling stockholders upon the exercise of Series A Warrants; and

•            250,000 shares of common stock issuable to the selling stockholders upon the exercise of Series B Warrants.

      We will not receive any proceeds fro m the sales of outstanding shares of common stock by the selling stockholders, but we wil l receive
funds from the exercise of warrants held by the selling stockholders, if exercised for cash.

      Our co mmon stock is quoted on the OTCQB market under the symbol ―NUIN.‖ The closing price for our co mmon stock on August 25,
2010 was $3.00 per share, as reported on the OTCQB market. You are urged to obtain current market quotations of our co mmon st ock before
purchasing any of the shares being offered for sale pursuant to this prospectus.

        The shares of our common stock offered under this prospectus are being registered to permit the selling stockholders to sell the shares
fro m t ime to time in the public market. The selling stockholders may sell the shares through ordinary brokerage transactions or through any
other means described in the section titled ―Plan of Distribution.‖ We do not know when or in what amount the selling stockholders may offer
the shares for sale. The selling stockholders may sell any, all or none of the shares offered by this prospectus.

       Investing in the shares being offered pursuant to this prospectus invol ves a high degree of risk. You shoul d carefully read a nd
consider the informati on set forth in the section of this pros pectus ti tled “Risk Factors,” beginning on page 7, wh en determining
whether to purchase any of these shares.

       Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any representati on to the contrary is a cri minal offense .

                                              The date of this prospectus is September 10, 2010.
                                                         TABLE OF CONTENTS

                                                                                                                                       Page
PROSPECTUS S UMMARY                                                                                                                       1
RIS K FACTORS                                                                                                                             7
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS                                                                                        19
US E OF PROCEEDS                                                                                                                         19
B USINESS                                                                                                                                19
MANAGEMENT’S DISCUSS ION AND ANALYS IS OF FINANCIAL CONDITION AND RES ULTS OF OPERATIONS                                                 26
HIS TORY AND CORPORATE S TRUCTURE                                                                                                        36
MANAGEMENT                                                                                                                               39
EXEC UTIVE COMPENS ATION                                                                                                                 42
TRANSACTIONS WITH RELATED PERS ONS, PROMOTERS AND CERTAIN CONTROL PERSONS; CORPORATE                                                     45
GOVERNANCE
CHANGE IN ACCOUNTANTS                                                                                                                     46
SELLING STOCKHOLDERS                                                                                                                      47
SECURITY OWNERS HIP OF CERTAIN B EN EFICIAL OWNERS AND MANAGEMENT                                                                         49
DES CRIPTION OF S ECURITIES                                                                                                               51
MARKET FOR OUR COMMON S TOCK AND RELAT ED S TOCKHOLDER MATTERS                                                                            54
SHARES ELIGIB LE FOR FUTUR E SALE                                                                                                         55
PLAN OF DIS TRIB UTION                                                                                                                    56
LEGAL MATTERS                                                                                                                             58
EXPERTS                                                                                                                                   58
WHERE YOU CAN FIND MORE INFORMATION                                                                                                       58
INDEX TO CONSOLIDATED FINANCIAL S TATEMENTS                                                                                              F-1

You shoul d rel y only on the i nformation provi ded i n this pros pectus. Neither we nor the selling stockhol ders have authorized anyone to
provi de you wi th addi tional or di fferent i nformation. The selling stockhol ders are not making an offer of these securities in any
jurisdicti on where the offer is not permitted. You shoul d assume that the informati on in this pros pectus is accurate only as of the date
on the front of the document.

                                                                      i
                                                       PROSPECTUS S UMMARY

The items in the following summary are described in more detail later in this prospectus. You should read the following summa ry
together with the more detailed information regarding our company and the common stock being sold in this offering, including ―Risk
Factors‖ and our consolidated financial statements and related notes, included elsewhere in, or incorporated by reference into, this
prospectus.

In this prospectus, unless indicated otherwise,

           ―we,‖ ―us,‖ ―our co mpany,‖ ―our‖ and ―Nutrastar‖ refer to the co mbined business of Nutrastar International Inc. and/or its
            consolidated subsidiaries, as the case may be;

           ―New Resources‖ refers to New Zealand WAYNE‘s New Resources Development Co., Ltd., our d irect, wholly -owned
            subsidiary, a BVI co mpany;

           ―Heilongjiang Shuaiy i‖ refers to Heilongjiang Shuaiy i New Energy Develop ment Co., Ltd. our indirect, wholly -owned
            subsidiary, a Chinese company;

           ―Daqing Shuaiyi‖ refers to Daqing Shuaiyi Biotech Co., Ltd., our indirect, wholly -owned subsidiary, a Ch inese company;

           ―Harbin Shuaiyi‖ refers to Harb in Shuaiyi Green & Specialty Food Trad ing LLC, our indirect, wholly -owned subsidiary, a
            Chinese company;

           ―BVI‖ refers to the Brit ish Virgin Islands;

           ―China,‖ ―Chinese‖ and ―PRC,‖ refer to the People‘s Republic of China and for the purpose of this prospectus, do not include
            Taiwan and the special ad ministrative regions of Hong Kong and Macau;

           ―Ren minb i‖ and ―RM B‖ refer to the legal currency of China;

           ―U.S. dollars,‖ ―dollars‖ and ―$‖ refer to the legal currency of the United States;

           ―SEC‖ refers to the United States Securities and Exchange Co mmission;

           ―Securities Act‖ refers to the Securities Act of 1933, as amended; and

           ―Exchange Act‖ refers to the Securities Exchange Act of 1934, as amended.

Effective May 19, 2009, we implemented a 1-for-114.59 reverse stock split of issued and outstanding shares of our common stock.
Except where specifically indicated, all co mmon share informat ion (including informat ion related to warrants to purchase common stock)
has been restated to reflect the 1-for-114.59 reverse split.

                                                               The Company

Overview of Our B usiness

We are a ho lding co mpany that operates through our indirectly owned subsidiary Heilongjiang Shuaiy i, a leading grower and p roducer of
Cordyceps Militaris, or ―Ch inese Golden Grass‖ in China. We specialize in developing, processing, marketing and distributing a variety
of agricultural and nutraceutical products consisting of Chinese Go lden Grass, organic and specialty food products. In addition, we plan
to produce and market other products developed from Cordyceps Militaris within the co ming months and years, includin g special ty
beverage products as indicated in more detail below.

Our primary product is Chinese Go lden Grass, which is developed fro m Co rdyceps Militaris. Cordyceps Militaris is a species of parasitic
fungus that is typically found in north-eastern mountainous China. It is a precious ingredient in tradit ional Chinese medicine, as
Cordyceps Militaris is widely believed in Ch ina to offer h igh medical and health benefits by nourishing the yin, boosting the yang, and
invigorating the meridians of the lungs and kidneys.

We generated 91.0% and 78.7% of our revenues from Chinese Golden Grass for the six months ended June 30, 2010 and the fiscal year of
2009, respectively. We believe that we own 19% o f the world wide market share in the cultivated Ch inese Go lden Grass industry . We
plan to continue to focus on Chinese Go lden Grass, which is our fastest growing product line with the greatest market demand and a
significantly high profit margin. We also sell organic and specialty food products through our subsidiary, Harbin Shuaiy i, wh ich was
formed in 2001. After years of development, we believe th at we have become the largest wholesale distributor of organic and specialty
food in Heilongjiang Province, Ch ina.
1
Our Competiti ve Strengths

  We believe that our success to date and potential for future g rowth can be attributed to a combination of our strengths, including the
  following:

            High-end niche products. We sell organic and specialty food products and Chinese Golden Grass products that the followers of
             traditional Ch inese med icine believe have high nutrient concentration, potential health benefits and high value. Our p roducts are
             positioned in the high-end market as premiu m healthy food and are distinguished from the co mmon nutraceutical products in the
             market.

            Leading market position and significantly high margin. We believe we have established ourselves as a dominant player in
             China‘s Ch inese Golden Grass industry. By successfully co mmercializing our Cordyceps Militaris planting technology, we
             believe that we have achieved economies of scale and accordingly significantly high margin that no other major co mpetitor can
             match in the near future.

            Leading-edge R&D team. Our research and develop ment team has a strong and extensive technology background and has been
             an early participant in the Chinese Golden Grass market. Currently we have 21 technicians in our R&D depart ment, led by Mr.
             Lichen Wang who is a lead expert in the field of edib le fungus in Ch ina.

            Experienced management team with a strong track record. Our management team has extensive operating experience an d
             industry knowledge. We believe that our management team‘s experience and capabilities have contributed greatly to our
             significant growth in the past three years.

  Our Growth Strategy

  As a leading nutraceutical producer in Ch ina, we believe we are well positioned to capitalize on future industry growth in Ch ina. We are
  dedicated to providing healthy and high nutritional products to our consumers. We will imp lement the following strategic plans to take
  advantage of industry opportunities and our competitive strengths:

            Focus on brand development . With intense price co mpetition among many similar or identical products in the industry, we
             believe that building brand awareness is the primary means to generate and sustain profitable growth in the future. We believ e
             that developing close cooperative relationships with research centers of well -known universities in Ch ina and globally is key to
             building brand equity. We also market our products through an integrated market ing program that includes advertising in
             relevant media outlets, attending trade shows and offering seminars and lectures to local co mmun ities reg arding the products and
             their heath benefits.

            Introducing new products . We constantly evaluate our products and seek to adapt to changing market conditions by updating
             our products to reflect new trends in consumer p references. We endeavor to expand our market presence by introducing
             additional co mpetitive nutraceutical products to our product offerings. Our new p roducts under development include specialt y
             beverage products.

            Increase production capacity. Our existing production lines of Ch inese Golden Grass have been running at close to full capacit y
             while the market demand for our existing products continues to increase. In order to meet the raw material needs of our produ cts
             and to expand sales of small packages of our Golden Grass products, we plan t o add 10 plants to our production line, of wh ich
             three plants are expected to begin operating during the second half of 2010. We anticipate that the entire project will be
             completed in 2012. Annual production capacity of Golden Grass is expected to increas e to 72 tons in 2010, up fro m 55 tons in
             2009. We will convert mo re buildings into b iotechnologically controlled cult ivation plants to grow and process Cordyceps
             Militaris in the future.

            Further expand our distribution network to increase the prevalence of our products nationwide. We plan to expand our
             distribution network by selling our small-pack p roducts through drug stores, supermarkets and franchise stores. We have
             one-year contracts with our major d istributors which normally extend for one more year by the end of the contracts. We
             maintain constant communications with these distributors to keep us in formed regarding consumer preferences and market
             trends in order to develop new p roducts. We also organize monthly product promot ion meetings with the distributors to increase
             the sales of small package products.

                                                                      2
-675 Technology innovation. We believe that the development of new technology is critical to our success. We will continuously improve
the quality of our existing and future products through new technologies. We intend to maintain our long -term partnership with Ch inese
universities and research institutes in order to develop new technologies.

  Our Background and History

  We were orig inally incorporated in the State of Nevada on December 22, 2002. Fo llo wing incorporation, we engaged in the busin ess of
  developing software which allowed us to act as an application service provider acting as a conduit between retailers and fin ancial
  institutions. Because this business was not successful, we were focused on the identification of suitable businesses with wh i ch to enter
  into a business opportunity or business comb ination until December 23, 2008, when we co mpleted our reverse acquisition of New
  Resources. As a result of our reverse acquisition of New Resources, we are no longer a shell co mpany and active business oper ations
  were revived.

  On May 19, 2009, we filed amended and restated articles of incorporation with the Nevada Secreta ry o f State to amend our articles of
  incorporation to, among other things, (1) change our name fro m ―YzApp International Inc.‖ to ―Shuaiyi International New Resources
  Develop ment Inc.,‖ (2) increase the total number of shares of common stock that we have t he authority to issue from 50,000,000 to
  190,000,000 shares and (3) effect a 1-for-114.59 reverse split of our outstanding common stock.

  On January 11, 2010, we changed our name to Nutrastar International Inc. to mo re accurately reflect our marketing and b randing strategy
  and products.

  On May 27, 2010, we entered into a securities purchase agreement, or the 2010 Securities Purchase Agreement with certain inve stors,
  pursuant to which, we agreed to issue and sell up to an aggregate of 250,000 Units at a purch ase price of $28.56 per Unit, for an aggregate
  purchase price of up to $7,140,000, or the Aggregate Purchase Price. Each Un it consists of (i) one share of a newly designate d series A
  preferred stock, par value $0.001 per share, or the Series A Preferred St ock, with an init ial one-to-ten conversion ratio into shares of the
  Co mpany‘s common stock, par value $0.001 per share, and (ii) warrants to purchase five shares of common stock at an exercise price of
  $3.40 per share, or the Series C Warrants. In addition, Gilford Securities Incorporated, as the placement agent of this transaction, received
  fro m the investors a fee equal to 2% of the Aggregate Purchase Price and Series C Warrants to purchase 2% of the aggregate nu mber of
  shares of common stock that shares of Series A Preferred Stock to be issued under the 2010 Securit ies Purchase Agreement are
  convertible into.

  In connection with the 2010 Securit ies Purchase Agreement, we filed a Certificate of Designation of Series A Preferred Stock with the
  Secretary of State of the State of Nevada, or the 2010 Certificate, on May 27, 2010, wh ich became effective upon filing. Pursuant to the
  2010 Cert ificate, there are 300,000 shares of Series A Preferred Stock authorized.

  On June 7, 2010 and June 28, 2010, we consummated the first and the second closing of the private placement transaction contemplated
  by the 2010 Securit ies Purchase Agreement, respectively, in wh ich we issued in aggregate 197,706 Un its to certain investors a t a purchase
  price of $28.56 per unit for gross proceeds of approximately $5.65 million.

  Corporate Information

  The following chart reflects our organizational structure as of the date of this prospectus.

                                                                        3
Our corporate headquarters are located at 7/F Jinhua Mansion, 41 Hanguang Street, Nangang District, Harb in 150080, China. Our
telephone number is (86) 451-82287746. We maintain a website at http://www.nutrastarintl.co m that contains informat ion about us, but
that information is not a part of this prospectus.

                                                                   4
                                                              The Offering

 Co mmon stock offered by selling stockholders                                1,500,000 shares, consisting of 1,000,000 outstanding
                                                                              shares of common stock owned by selling stockholders
                                                                              and 500,000 shares issuable upon the exercise of warrants
                                                                              held by the selling stockholders. This number represents
                                                                              10.11% of our current outstanding common stock, on a
                                                                              fully diluted basis (1) .

 Co mmon stock outstanding before the offering                                14,332,731 shares

 Co mmon stock outstanding after the offering, assuming                       14,832,731 shares
 all warrants are exercised for cash.

 Proceeds to us                                                               We will not receive any proceeds fro m the sale of
                                                                              common stock covered by this prospectus. We will,
                                                                              however, receive appro ximately $1.81 million fro m the
                                                                              exercise of the warrant held by the selling stockholder, if
                                                                              exercised for cash.

 Trading Sy mbol                                                              NUIN

(1) Based on 14,332,731 shares of our common stock issued and outstanding as of August 25, 2010.

Risk Factors

In operating our business, we have faced and will continue to face significant challenges. Our ability to successfully operat e our business
is subject to numerous risks as discussed more fully in the section titled ―Risk Factors.‖ For examp le:

           Our current business is significantly based on a single product, Chinese Go lden Grass;

           Our inability to grow and harvest sufficient Cordyceps Militaris to satisfy our production requirements could reduce our sale s
            and negatively affect our results of operations;

           Evaluating our business and prospects based only on our past results may be difficult; and

           We are subject to risks of conducting business in China.

Any of the above risks could materially and adversely affect our business, financial position a nd results of operations. An investment in
our common stock involves risks. You should carefully read and consider the info rmation set forth in ―Risk Factors‖ and all other
informat ion set forth in this prospectus before investing in our common stock.

                                                                       5
                                            Summary Consoli dated Financi al Informati on

The following summary consolidated statement of income data for the years ended December 31, 2009 and 2008 and the consolidat ed
balance sheet data as of December 31, 2009 and 2008 are derived fro m our audited consolidated financial statements inclu ded i n this
prospectus. The summary consolidated statement of income data for the periods ended June 30, 2010 and 2009 and the consolidated
balance sheet data as of June 30, 2010 are derived fro m our unaudited consolidated financial statements included in this pros pectus. Such
unaudited financial informat ion includes all adjustments, consisting of only normal recurring accruals, wh ich ou r management considers
necessary for the fair presentation of our financial position and results of operations for such interim periods. The data se t forth below
should be read in conjunction with ―Management‘s Discussion and Analysis of Financial Condition and Results of Operations ‖ and our
consolidated financial statements and related notes appearing elsewhere in this prospectus. Our historical results are not ne cessarily
indicative of our results for any future periods.

STATEMENT OF                                            Six Months Ended                                     Years Ended
INCOME                                                       June 30,                                        December 31,
                                                    2010                 2009
                                                 (Unaudited)          (Unaudited)                     2009                   2008


Revenues                                         $10,226,547               $7,983,039            $15,332,445            $12,989,760

Operating expenses                                 1,382,145                851,330                1,864,086              1,643,671

Operating inco me                                  6,899,472               4,191,958               8,904,394              6,741,141

Income taxes                                        945,384                 570,838                1,235,210                974,653

Net inco me                                       $6,136,703               $3,670,347            $7,741,716              $3,719,049

Earnings Per Share
Basic                                                $0.31                   $0.29                  $0.59                   $0.31
Diluted                                              $0.30                   $0.29                  $0.58                   $0.31

BALANCE S HEET DATA                                       As of June 30,                           As of December 31,
                                                               2010                         2009                         2008
                                                           (Unaudited)
Working capital                                            $22,946,843                  $10,758,895                    $402,853

Current assets                                                33,857,042                 21,198,471                   10,664,249

Total assets                                                  46,572,751                 34,342,380                   24,751,220

Current liab ilit ies                                         10,910,199                 10,439,576                   10,261,396

Total liabilities                                             11,916,478                 10,439,576                   11,139,282

Stockholders‘ equity                                         $34,656,273                $23,902,804                   $13,611,938

                                                                     6
                                                                RIS K FACTORS

The shares of our common stock being offered for resale by the selling stockholders are highly speculative in nature, involve a high degree of
risk and should be purchased only by persons who can afford to lose the entire amount invested in the common stock. Before purchasing any of
the shares of co mmon stock, you should carefully consider the following factors relating to our business and prospects. You s hould pay
particular attention to the fact that we conduct all of our operations in China and are gover ned by a legal and regulatory environment that in
some respects differs significantly from the environment that may prevail in the U.S. and other countries. If any of the foll owing risks actually
occurs, our business, financial condition or operating results will suffer, the trading price of our common stock could decline, and you may
lose all or part of your investment.

RIS KS RELATED TO OUR B US INESS

The global economic crisis could further impair our business, limit demand for our products and affect the o verall availability and cost of
external financing for our operations.

The continuation or intensification of the global economic crisis and turmoil in the global financial markets may adversely i mp act our business
and our potential sources of capital financing. Our ab ility to access the capital markets may be restricted at a t ime when we wo uld like, or need,
to raise capital, which could have an impact on our flexib ility to react to changing economic and business conditions. In add ition, these
economic conditions also impact levels of consumer spending, which have recently deteriorated significantly and may remain depressed for the
foreseeable future. Consumer purchases of discretionary items, including our Ch inese Go lden Grass, generally decline during r ecessionary
periods and other periods where disposable income is adversely affected. If demand for our products fluctuates as a result of economic
conditions or otherwise, our revenue and gross margin could be harmed. Presently, it is unclear whether and to what extent the economic
stimulus measures and other actions taken or contemplated by the Ch inese government and other governments throughout the worl d will
mitigate the effects of the crisis on the agricultural and nutraceutical industries and other indus tries that affect our business. Although these
conditions have not presently impaired our ab ility to access credit markets and finance our operations, the impact of the cur rent crisis on our
ability to obtain capital financing in the future, and the cost and terms of same, is unclear.

Our current busi ness is significantly based on a single product, Chinese Golden Grass, w hich currently accounts for approxima tely 90
percent of our revenues, and we may not be able to general significant revenue if this produc t fails.

Approximately 91.0% of our sales for the six months ended June 30, 2010 co mes fro m a single product, Chinese Golden Grass, an d our
business may suffer a material adverse impact if this product fails. If we experience d ifficu lties or obstacles in t he manufacture and sale of
Chinese Golden Grass, we may not be able to generate significant revenues, our business may fail and you would lose all or pa rt of your
investment in our co mpany.

We may not be able to grow and harvest sufficient Cordyceps Milita ris to satisfy our production requirements a nd any decline in the
amount or quality of Cordyceps Militaris could reduce our sales and negatively affect our results of operations, financia l co ndition and
business prospects.

Our Chinese Go lden Grass business and financial results significantly depend on maintain ing a consistent and cost -effective supply of
Cordyceps Militaris. The availab ility, size and quality of Co rdyceps Militaris fo r the production of our products are subject to risks inherent to
growing, such as size, quality, and yield fluctuation caused by technical problems of growing, pest and disease problems, and other factors
beyond our control. Because all Cordyceps Militaris used to produce our Chinese Golden Gras s products are gro wn by us, we may not be able
to locate in a timely manner any third party suppliers who could provide us with sufficient materials to meet our production needs when our
self-supply faces significant fluctuations in the availability of Cordyceps Militaris. Therefore, any interruptions to or decline in the amount or
quality of our Cordyceps Militaris supply could materially disrupt our production and adversely affect our business and finan cial condition and
financial prospects.

Our sales and reputation may be affected by product liability claims, litigation, product recalls, or adverse publicity in relation to our
products.

The sale of products for human consumption involves an inherent risk of in jury to consumers. We face risks associated with product liability
claims, lit igation, or product recalls, if our products cause injury, or become adulterated or misbranded. Our products are s ubject to product
tampering, and to contamination risks, such as mo ld, bacteria, insects, and other pests, and off-flavor contamination during the various stages of
the procurement, production, transportation and storage processes. If any of our products were to be tampered with, or beco me tainted in any of
these respects and we were unable to detect this, our products could be subject to product liability claims or product recalls. W e cannot predict
what impact such product liability claims or resulting negative publicity would have on our business or on our brand image. T he successful
assertion of product liability claims against us could result in potentially significant monetary damages, diversion of management resources and
require us to make significant payments and incur substantial legal expenses. We do not have product liability insurance and have not made
provisions for potential product liability claims. Therefore, we may not have adequate resources to satisfy a judgment if a s uccessful claim is
brought against us. Even if a product liability claim is not successfully pursued to judgment by a claimant, we may still incur substantial legal
expenses defending against such a claim. Finally, serious product quality concerns could result in governmental action agains t us, which,
among other things, could result in the suspension of production or distribution of our products, loss of certain licenses, or other govern mental
penalties. A widespread product recall could result in significant loss due to the cost of conducting a product recall includ ing destruction of
inventory and the loss of sales resulting fro m the unavailability of the product for a period of t ime. In addition. product liability claims and
product recalls could have a material adverse effect on the demand for our products and on our business goodwill and reputation. Adverse
publicity could result in a loss of consumer confidence in our products.

                                                                        7
We compete in an industry t hat is brand-conscious, and unless we are able to establish and maintain brand name recognition our sales may
be negatively impacted.

Our business is substantially dependent upon awareness and market acceptance of our products and brand by our targeted consumers. In
addition, our business depends on acceptance by our suppliers and consumers of our brand. Although we believe th at we have made progress
towards establishing market recognition for our brand ― 帅亿东方神 ‖ in the Chinese Golden Grass products industry, it is too early in the
product life cycle of the brand to determine whether our products and brand will achieve and main tain satisfactory levels of acceptance by our
customers.

We compete in an industry characterized by rapid changes in consumer preferences, so our inability to continue developing new products to
satisfy our consumers' cha nging preferences would have a material adverse effect on our sales volumes.

Our success depends on our ability to anticipate, gauge and react in a timely and effective manner to changes in consumer spe nding patterns
and product preferences. We must continually work to develop, produce and market new products, maintain and enhance the recognition of our
brands, achieve a favorable mix o f products, and refine our approach as to how and where we market and sell our products. While we plan to
devote considerable effort and resources to shape, analyze and respond to consumer preferences , consumer spending patterns and preferences
cannot be predicted with certainty and can change rapidly. Our failure to adapt our product offering to respond to such chang es may result in
reduced demand and lower p rices for our products, resulting in a material adverse effect on our sales volumes, sales and profits.

Our current market d istribution and penetration is limited as co mpared with the potential market and so our in itial v iews as to customer
acceptance of a particular product can be erroneous, and there can be no assurance that true market acceptance will ult imately be achieved. In
addition, customer preferences are also affected by factors other than taste. If we do not adjust to respond to these and oth er changes in
customer preferences, our sales may be adversely affected.

Expansion of our business may put added pressure on our management and operational infrastructure impeding our ability to mee t any
potential increased demand for the products that we sell and possibly hurting our future operating results.

Our business plan is to significantly grow our operations to meet anticipated growth in demand for the products that we sell, and by the
introduction of new product offerings. Gro wth in our business may place a significant strain on our personnel, management, financial systems
and other resources. The evolution of our business also presents numerous risks and challenges, including:

          our ability to successfully and rapidly expand sales to potential new distributors in response to potentially incre asing demand;

          the costs associated with such growth, which are difficult to quantify, but could be significant; and

          rapid technological change.

                                                                       8
To accommodate any such growth and compete effectively, we may need to obtain additional funding to imp rove informat ion syste ms,
procedures and controls and expand, train, motivate and manage our emp loyees, and such funding may not be available in suffic ient quantities,
if at all. If we are not able to manage these activities and imp lement these strategies successfully to expand to meet any in creased demand, our
operating results could suffer.

Due to our rapid growth in recent years, o ur past results may no t be indicative of our future performance and evaluating our business and
prospects may be difficult.

Our business has grown and evolved rapidly in recent years as demonstrated by our growth in net income for the fiscal year en ded December
31, 2009 to $7.7 million, fro m $3.7 million for the fiscal year ended December 31, 2008. We may not be able to achieve similar growth in
future periods, and our historical operating results may not provide a meaningful basis for evaluating our business, financia l performance and
prospects. Moreover, our ability to achieve satisfactory production results at higher volumes is unproven. Therefore, you sho uld not rely on our
past results or our historical rate of gro wth as an indication of our future performance.

We depend heavily on key personnel, and turnover of key employees and senior management could harm our business.

Our future business and results of operations depend in significant part upon the continued contributions of our key tech nica l and senior
management personnel, including Lianyun Han, our chief executive officer and chairperson, and Robert Tick, our chief financial o fficer. The
expertise of management and technical innovation of the company give it a strong competitive advantage. We do not maintain ke y person
insurance on these individuals. The loss of any of these key employees ‘ services or any of our other management poses a risk to our business.
We may not be able to attract or retain qualified management on acceptable terms in the future due to the intense competition for qualified
personnel in our industry and as a result, our business could be adversely affected.

We may have to pay liquidated damages to our investors in the recent private placement if the registration statement to regis ter the shares
issued in connection with this financing is not effective within the time periods specified.

In connection with the recent private placement described above, on May 27, 2010, we entered into the 2010 Securities Purchas e Agreement
with certain investors, pursuant to which, we granted registration rights to holders of registrable securities, wh ich include shares of common
stock issuable upon conversion of shares of the Series A Preferred Stock and shares of common stock issuable upon exercise of the Series C
Warrants. Under the terms of the 2010 Securit ies Purchase Agreement, if the registration statement that was filed on August 11, 20 10 is not
declared effective by the SEC within the t ime period specified in the 2010 Securit ies Purchase Agreement, then we are req uired to pay the
investors, as liquidated damages, 1.0% of the amount invested for each 30-day period during which such failure continues, for up to a
maximu m of 8% of each investor‘s investment pursuant to the 2010 Securities Pu rchase Agreement, except th at we will not be obligated to pay
any such fee if we are unable to fulfill our registration obligations as a result of rules, regulations, positions or release s issued or actions taken
by the SEC with respect to Rule 415 of the Securit ies Act, so long as we register at such time the maximu m nu mber of securit ies permissible by
the SEC. There can be no assurance that the registration statement filed on August 11, 2010 will be declared effect ive by the SEC for the time
period necessary to avoid payment of liquidated damages.

Our inability to protect our trademarks, patent and trade secrets may prevent us from successfully marketing our products and competing
effectively.

Failure to protect our intellectual property could harm our brands and our reputation, and adversely affect our ability to compete effectively.
Further, enforcing or defending our intellectual property rights, including our trademarks, patents, copyrights, know how and trade secrets,
could result in the expenditure of significant financial and managerial resources. We produce, market and sell our products using the brand ― 帅
亿东方神 ‖. We regard our intellectual property, part icularly our trademark, know how and trade secrets to be of considerable value and
importance to our business and our success . We rely on a combination of patent, trademark, trade secrecy laws, and contractual provisions to
protect our intellectual property rights. There can be no assurance that the steps taken by us to protect these proprietary r ights will be adequate
or that third parties will not infringe or misappropriate our patent, trademark, trade secrets or similar proprietary rights. In addit ion, there can be
no assurance that other parties will not assert infringement claims against us, and we may have to pursue litigat ion against other parties to assert
our rights. Any such claim o r litigation could be costly and we may lack the resources required to defend against such claims . In addition, any
event that would jeopardize our proprietary rights or any claims of infringe ment by third parties could have a material adverse affect on our
ability to market or sell our brands, and profitably exp loit our products.

                                                                           9
We may be exposed to potential risks relating to our internal controls over financial reporting.

As directed by Section 404 of the Sarbanes -Oxley Act of 2002, the SEC adopted rules requiring public co mpanies to include a report of
management on the company‘s internal controls over financial reporting in their annual reports, including Form 10-K. Under current law, we
are subject to this requirement beginning with our annual report for the fiscal year ended December 31, 2007. A report of our management is
included under Item 9A(T) of our Annual Report on Form 10 -K for the fiscal year ended December 31, 2009, or the Annual Report, in wh ich
our management concluded that our internal controls over our financial reporting were effective for the period covered by the Annual Report.
However, in the future, our management may conclude that our internal controls over our financial reporting are not effective due to the
identification of one or more material weaknesses. In the event we identify significant deficiencies or material weaknesses in our internal
controls that we cannot remediate in a t imely manner, investors and others may lose confidence in the reliability of our financial statements.

We do not carry any business interruption insura nce, third -party liability insurance for our production facilities or insurance tha t covers
the risk of loss of o ur products in shipment.

Operation of our facilities involves many risks, including equip ment failures, natural disasters, industrial accidents, power outages, labor
disturbances and other business interruptions. Furthermore, if any of our products are faulty, then we may beco me s ubject to product liability
claims o r we may have to engage in a product recall. We do not carry any business interruption insurance, product recall or t hird-party liability
insurance for our production facilit ies or with respect to our products to cover claims pertaining to personal injury or property or environ mental
damage arising fro m defects in our products, product recalls, accidents on our property or damage relating to our operations. As a result, we
may be required to pay for financial and other losses, damages and liabilit ies, including those caused by natural disasters and other events
beyond our control, out of our own funds, which could have a material adverse effect on our business, financial condition and results of
operations.

We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt
Practices Act could have a material adverse effect on our business.

We are subject to the Foreign Corrupt Practice Act, or the FCPA, and o ther laws that prohibit improper pay ments or offers of payments to
foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the p urpose of obtaining or
retaining business. We have operations, agreements with third part ies and make sales in China, which may experience corruptio n. Our act ivit ies
in China create the risk of unauthorized payments or offers of pay ments by one of the employees, consultants, sales agents or distributors of our
company, because these parties are not always subject to our control. It is our policy to implement safeguards to discourage these pra ctices by
our employees. Also, our existing safeguards and any future imp rovements may prove to be less than effective, and the emp loyees, consultants,
sales agents or distributors of our Co mpany may engage in conduct for wh ich we might be held responsible. Vio lations of the F CPA may result
in severe criminal or civil sanctions, and we may be subject to other liabilit ies, wh ich could negatively affect our business, operating results and
financial condition. In addition, the govern ment may seek to hold our Co mpany liab le for successor liability FCPA v iolatio ns committed by
companies in which we invest or that we acquire.

We have not voluntarily implemented various corporate governance measures, in the absence of w hich, shareholders may have limited
protections against related party transactions, conflicts of interest and similar matters.

Since our co mmon stock is not listed for trad ing on a national securities exchange, we are not subject to certain of the corporate governance
requirements established by the national securities exchanges pursuant to the Sarbanes -Oxley Act of 2002. These include rules relat ing to
independent directors, and independent director nominating, audit and compensation committees. While we are currently seeking independent
directors for our board of directors, we do not presently have such directors. As a result, we have not established independe nt audit,
compensation, or nominating committees of our board of directors. In the absence of a majority of independent directors, our officers and
directors could establish policies and enter into transactions without independent review and approval. In certain circu mstan ces, management
may not have the same interests as the shareholders and conflicts of interest may arise. Notwithstanding the exercise of thei r fiduciary duties as
directors and executive officers and any other duties that they may have to us or our shareholders in general, these persons may have interests
different than yours which could adversely affect your investment.

                                                                         10
There are limitations on the liability of our directors, and we may have to indem nify our officers and directors in certain instances.

Our bylaws provide that we will indemn ify our officers and directors and may indemn ify our employees and other agents. The Co mpany may
also have contractual indemnification obligations under its agreements with its executive o fficers and directors. The foregoing indemn ification
obligations could result in the Co mpany incurring substantial expenditures to cover the cost of settlement or damage awards a gainst directors
and officers, which the Co mpany may be unable to recoup. These provisions and resultant costs may also discourage the Co mpany fro m
bringing a lawsuit against directors and officers for breaches of their fiduciary duties and may similarly discourage the fil ing of derivative
lit igation by the Co mpany‘s stockholders against the Company‘s directors and officers even though such actions, if successful, might otherwise
benefit the Co mpany and its stockholders.

RIS KS RELATED TO DOING B US INESS IN CHINA

Adverse changes in political and economic policies of the PRC government could impede the overall economic growth of China, which
could reduce the demand for our products and damage our business.

We conduct substantially all of our operations and generate all of our revenue in China. Accordingly, our bus iness, financial condition, results
of operations and prospects are affected significantly by economic, polit ical and legal develop ments in China. The PRC economy differs fro m
the economies of most developed countries in many respects, including:

           a higher level of govern ment involvement;

           a early stage of development of the market-oriented sector of the economy;

           a rapid growth rate;

           a higher level of control over foreign exchange; and

           the allocation of resources.

As the PRC economy has been transitioning fro m a planned economy to a more market -oriented economy, the PRC government has
implemented various measures to encourage economic g rowth and guide the allocation of resources. While these measures may ben efit the
overall PRC economy, they may also have a negative effect on us.

Although the PRC government has in recent years implemented measures emphasizing the utilization of market forces for economi c reform,
the PRC government continues to exercise significant co ntrol over economic g rowth in China through the allocation of resources, controlling
the payment of foreign currency-denominated obligations, setting monetary policy and imposing policies that impact part icular industries or
companies in different ways.

Any adverse change in economic conditions or govern ment policies in China could have a material adverse effect on the overall e conomic
growth in China, wh ich in turn could lead to a reduction in demand for our services and consequently have a material advers e effect on our
business and prospects.

Uncertainties with respect to the PRC legal system could limit the legal protections available to you and us.

We conduct substantially all of our business through our operating subsidiaries in the PRC. Our operating subsidiaries are generally subject to
laws and regulations applicable to foreign investments in China and, in part icular, laws applicable to foreign -invested enterprises. The PRC
legal system is based on written statutes, and prior court decisions may be cited fo r reference but have limited precedential value. Since 1979, a
series of new PRC laws and regulat ions have significantly enhanced the protections afforded to various forms of foreign inves tments in Ch ina.
However, since the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always
uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections availab le to you and us.
In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention. In
addition, all of our executive officers and all o f our directors are residents of Ch ina and not of the United States, and substantially all the assets
of these persons are located outside the United States. As a result, it could be difficult for investors to affect service of process in the United
States or to enforce a judgment obtained in the United States against our Chinese operations and subsidiaries.

                                                                          11
If we are found to have failed to comply with applicable laws, we may incur additional expenditures or be subject to signific ant fines and
penalties.

Our operations are subject to PRC laws and regulations applicable to us. However, many PRC laws and regulations are uncertain in their scope,
and the implementation of such laws and regulations in different localit ies could have significant differences. In certain in stances, local
implementation rules and/or the actual imp lementation are not necessarily consistent with the regulations at the national level . Although we
strive to comp ly with all the applicab le PRC laws and regulations, we cannot assure you that the relevant PRC govern ment authorities will not
later determine that we have not been in co mpliance with certain laws or regulations. Ou r failure to co mply with applicable P RC laws and
regulations could subject us to admin istrative penalties and injunctive relief, as well as civ il remed ies, includ ing fines, injunctions and recalls of
our products. It is possible that changes to such laws or more rigorous enforcement of such laws or with respect to our curre nt or past practices
could have a material adverse effect on our business, operating results and financial condition.

The PRC government exerts substantial influence over the manner in w hich we must conduct our business activities.

The PRC govern ment has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through
regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating
to taxation, import and export tariffs, environmental regulations, land use rights, property and other matters. We believe that our operations in
China are in material co mpliance with all applicable legal and regulatory requirements. However, the central or local governments of the
jurisdictions in which we operate may impose new, stricter regulat ions or interpretations of existing regulations that would require additional
expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.

Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a
more centrally planned economy or regional or local variations in the imp lementation of economic policies, could have a signi ficant effect on
economic conditions in China o r part icular reg ions thereof and could require us to divest ourselves of any interest we then hold in Ch inese
properties or joint ventures.

Restrictions on currency exchange may limit our ability to receive and use our sales revenue effectively.

All our sales revenue and expenses are denominated in RM B. Under PRC law, the RM B is currently convertible under the ―current account,‖
which includes dividends and trade and service-related foreign exchange transactions, but not under the ―capital account,‖ which includes
foreign d irect investment and loans. Cu rrently, our PRC operating subsidiaries may purchase foreign currencies for settlement of current
account transactions, including payments of dividends to us, without the approval of the State Admin istration of Foreign Exchange, or SAFE,
by comply ing with certain procedural requirements. However, the relevant PRC government authorities may limit or elimin ate ou r ability to
purchase foreign currencies in the future. Since a significant amount of our future rev enue will be denominated in RMB, any existing and
future restrictions on currency exchange may limit our ability to utilize revenue generated in RM B to fund our business activ ities outside China
that are denominated in foreign currencies.

Foreign exchange transactions by our PRC operating subsidiaries under the capital account continue to be subject to significa nt foreign
exchange controls and require the approval of or need to register with PRC government authorities, including SAFE. In pa rticular, if our PRC
operating subsidiaries borrow foreign currency through loans from us or other foreign lenders, these loans must be registered with SAFE, and if
we finance the subsidiaries by means of additional capital contributions, these capital con tributions must be approved by certain government
authorities, including the Ministry of Co mmerce, o r MOFCOM , or their respective local counterparts. These limitations could a ffect their
ability to obtain foreign exchange through debt or equity financing.

                                                                           12
Fluctuations in exchange rates could adversely affect our business a nd the value of our securities.

The value of our co mmon stock will be indirectly affected by the fo reign exchange rate between U.S . dollars and RMB an d between those
currencies and other currencies in which our sales may be denominated. Appreciation or depreciation in the value of the RM B r elative to the
U.S. dollar would affect our financial results reported in U.S. dollar terms wit hout giving effect to any underlying change in our business or
results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend we issue in the future as well as
earnings from, and the value of, any U.S. dollar-denominated investments we make in the future.

Since July 2005, the RM B has no longer been pegged to the U.S. dollar. Although the People's Bank of China regularly interven es in the
foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RM B may appreciate or depreciate significantly
in value against the U.S. dollar in the med iu m to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on
fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

Very limited hedging transactions are available in Ch ina to reduce our exposure to exchange rate fluctuations. To date, we ha ve not entered into
any hedging transactions. While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions
may be limited, and we may not be able to successfully hedge our exposure at all. In addit ion, our foreign currency exchange losses may be
magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.

Restrictions under PRC law on our PRC subsidiaries' ability to make dividends and other distributions could materially and ad versely affect
our ability to grow, make investments or acquisitions that could benefit our business, pay dividends to you, a nd otherwise fund and conduct
our businesses.

Substantially all of our revenues are earned by our PRC subsidiaries. However, PRC regulations restrict the ability of our PR C subsidiaries to
make dividends and other payments to its offshore parent company. PRC legal restrictions permit pay ments of dividend by our P RC
subsidiaries only out of their accu mulated after-tax profits, if any, determined in accordance with PRC accounting standa rds and regulations.
Our PRC subsidiaries are also required under PRC laws and regulations to allocate at least 10% of our annual after -tax profits determined in
accordance with PRC GAAP to a statutory general reserve fund until the amounts in said fund re aches 50% of our registered capital.
Allocations to these statutory reserve funds can only be used for specific purposes and are not transferable to us in the for m o f loans, advances
or cash dividends. Any limitations on the ability of our PRC subsidiaries to transfer funds to us could materially and adversely limit our ability
to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and cond uct our business.

Under the New EIT Law, we may be classified as a “resident enterprise” of China. Such classification will likely result in unfavorable tax
consequences to us and our non-PRC stockholders.

China passed a new Enterprise Income Tax Law, or the New EIT Law, and its imp lementation regulat ions, both of wh ich became effective on
January 1, 2008. Under the New EIT Law, an enterprise established outside of China with ―de facto management bodies ‖ within China is
considered a ―resident enterprise,‖ meaning that it can be treated in a manner similar to a Chinese domestic enterprise for enterprise inco me tax
purposes. The implementing rules of the New EIT Law define de facto management as ―substantial and overall management and control over
the production and operations, personnel, accounting, and properties ‖ of the enterprise. On April 22, 2009, the State Administration of Taxat ion
issued the Notice Concerning Relevant Issues Regarding Cognizance of Ch inese Investment Controlled Enterprises Incorporated O ffshore as
Resident Enterprises pursuant to Criteria of de facto Management Bodies, o r the Not ice, further interpreting the applicat ion of the New EIT
Law and its implementation with respect to non-Chinese enterprises or group controlled offshore entities. Pu rsuant to the Notice, an enterprise
incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a ―non-domestically incorporated
resident enterprise‖ if (i) its senior management in charge of daily operations reside or perform their duties main ly in China; (ii) its financial o r
personnel decisions are made or approved by bodies or persons in China; (iii) substantial assets and properties, accounting b ooks, corporate
chops, board and shareholder minutes are kept in China; and (iv) at least half of its directo rs with voting rights or senior management often
resident in China. A resident enterprise would be generally subject to the uniform 25% enterprise inco me tax rate as to its w orldwide inco me.
Substantially all o f our management is currently based in China. Therefore, we may be treated as a Chinese resident enterprise for enterprise
income tax purposes. The tax consequences of such treatment are currently unclear, as they will depend on how local tax autho rities apply or
enforce the New EIT Law or the imp lementation regulations.

                                                                          13
In addition, under the New EIT Law and imp lementation regulations, PRC inco me tax at the rate of 10% is applicable to dividen ds payable to
investors that are ―non-resident enterprises‖ (and that do not have an establishment or place of business in the PRC, or that have such
establishment or p lace of business but the relevant income is not effectively connected with the establishment or place of bu siness) to the extent
that such dividends have their source within the PRC unless there is an applicable tax treaty between the PRC and the jurisdiction in wh ich an
overseas holder resides which reduces or exempts the relevant tax. Similarly, any gain realized on the transfer of shares by such investors is
also subject to the 10% PRC income tax if such gain is regarded as income derived fro m sources within the PRC. If we are cons idered a PRC
―resident enterprise‖, it is unclear whether the div idends we pay with respect to our shares, or th e gain you may realize fro m the transfer of our
shares, would be treated as inco me derived fro m sources within the PRC and be subject to PRC tax. If we are required under th e New EIT Law
to withhold PRC inco me tax on our div idends payable to our foreign sh areholders, or if you are required to pay PRC inco me tax on the transfer
of your shares, the value of your investment in our shares may be materially and adversely affected.

We face uncertainty from China ’s Circular on Strengthening the Administration of Enterprise Income Tax on Non-Resident Enterprises'
Share Transfer, or Circular 698, that was released in December 2009 with retroactive effect from January 1, 2008.

The Chinese State Administration of Taxation (SAT) released a circular (Guoshuihan No. 698 – Circular 698) on Decemb er 15, 2009 that
addresses the transfer of shares by nonresident companies. Circular 698, which is effective retroactively to January 1, 2008, may have a
significant impact on many co mpanies that use offshore holding companies to in vest in China. Circu lar 698, which provides parties with a short
period of time to co mp ly with its requirements, indirectly taxes foreign co mpanies on gains derived fro m the indirect sale of a Chinese
company. Where a foreign investor indirectly transfers equity interests in a Chinese resident enterprise by selling the shares in an offshore
holding company, and the latter is located in a country or jurisdiction where the effective tax burden is less than 12.5% or where the offshore
income of his, her, or its residents is not taxable, the foreign investor is required to provide the tax authority in charge of that Chinese resident
enterprise with the relevant information with in 30 days of the transfers. Moreover, where a foreign investor indirectly trans fers equity interests
in a Chinese resident enterprise through an abuse of form of organization and there are no reasonable commercial purposes suc h that the
corporate income tax liability is avoided, the PRC tax authority will have the power to re -assess the nature of the equity transfer in accordance
with PRC‘s ―substance-over-form‖ princip le and deny the existence of the offshore holding co mpany that is used for tax p lanning purposes.
There is uncertainty as to the applicat ion of Circular 698. For examp le, whi le the term "indirectly transfer" is not defined, it is understood that
the relevant PRC tax authorit ies have jurisdiction regarding requests for information over a wide range of foreign entities h aving no direct
contact with China. Moreover, the relevant authority has not yet promulgated any formal provisions or formally declared or stated how to
calculate the effect ive tax in the country or jurisdiction and to what extent and the process of the disclosure to the tax au thority in charge of that
Chinese resident enterprise. In addit ion, there are not any formal declarations with regard to how to decide ―abuse of form o f o rganizat ion‖ and
―reasonable co mmercial purpose,‖ wh ich can be ut ilized by us to balance if our Co mpany comp lies with the Circular 698. As a result, we may
become at risk o f being taxed under Circular 698 and we may be required to expend valuable resources to comply with Circular 698 or to
establish that we should not be taxed under Circular 698, which could have a material adverse effect on our financial condition and results of
operations.

If the China Securities Regulatory Commission, or CSRC, or another PRC regulatory agency determines that CSRC approval is req uired in
connection with the reverse acquisition of New Resources, t he reverse a cquisition may be unwound, or we may become subj ect to penalties.

On August 8, 2006, six PRC regulatory agencies, including the CSRC, pro mulgated the Provisions Regard ing Mergers and Acquisit ions of
Do mestic Enterprises by Foreign Investors, or the M&A Ru le, which became effective on September 8, 2006. The M&A Ru le, among other
things, requires that an offshore company controlled by PRC co mpanies or indiv iduals that have acquired a PRC domestic compan y for the
purpose of listing the PRC do mestic co mpany's equity interest on an overseas stock exchange must obtain the approval of the CSRC p rior to
the listing and trading of such offshore company's securities on an overseas stock exchange. On September 21, 2006, the CSRC, pursuant to the
M&A Rule, published on its official web site procedures specifying documents and materials required to be submitted to it by offshore
companies seeking CSRC approval of their overseas listings.

We do not believe that the M&A Rule concerning the CSRC approval for acquisition of a PRC domestic co mpany by an offshore company
controlled by PRC co mpanies or individuals applies to our reverse acquisition of New Resources because neither Nutrastar Inte rnational Inc.
nor New Resources was a ―Special Purpose Vehicle‖ or an ―offshore company controlled by PRC co mpanies or individuals ‖ as defined in the
M&A Rule. If the CSRC or another PRC governmental agency subsequently determines that we must obtain CSRC approval prior to t he
complet ion of the reverse acquisition, the reverse acquisition may be unwound and we may face regulatory act ions or other sanctions from the
CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China an d limit our
operating privileges in China, or take other actions that could have a material adverse effect on our business, financial condition, results of
operations, reputation and prospects, as well as the trading price of our shares.

                                                                          14
If we do not fulfill our obligation to pay the transfer price for the equity interest of Heilongjiang Shuaiyi, then we may be subject to fines
and prohibitions imposed by relevant PRC authorities that could have a material adverse effect on our business.

On July 28, 2008, our subsidiary, New Resources entered into an equity transfer agreement with the founders of Heilongjiang Sh uaiy i to
acquire all of their equity interests in Heilongjiang Shuaiyi for RM B 60 million (approximately $8.8 million). On November 24, 2008,
Heilongjiang Shuaiyi obtained the Certificate of Approval for Establishment of Enterprises of Foreign Investment issued by He ilongjiang
Provincial Govern ment and a new business license was issued to Heilongjiang Shuaiyi on December 1, 2008. Acco rding to the M&A Rule, the
equity interest transfer price should be paid in full within three months commencing fro m the issuance of the new business license to
Heilongjiang Shuaiyi. If the transfer price is not paid by this date, we may apply to the relev ant PRC regulatory agency for an extension of up
to one year fro m the date of the issuance of the license; provided, however, that 60% of the transfer price will be required to b e paid with in six
months from such date. On March 10, 2009, we obtained the ap proval from the relevant PRC regulatory agency allowing us to make the
payment by December 1, 2009. On January 4, 2010, the relevant PRC regulatory agency extended the payment due date to June 30, 2010. On
July 12, 2010, the relevant PRC regulatory agency further extended the payment due date to December 31, 2010. However, if we are unable to
make the transfer pay ment in fu ll by the December 31, 2010 deadline we may subject to fines or penalt ies imposed by the PRC r egulatory
agency. In addition, we may not be permitted to exercise any decision-making rights as a shareholder in Heilongjiang Shuaiyi or to consolidate
Heilongjiang Shuaiyi‘s financial results into our financial statements, both of which result would have a material adverse effect on our
business.

The M&A Rule establishes more complex procedures for some acquisitions of Chi nese companies by foreign investors, w hich could make it
more difficult for us to pursue growth through acquisitions in China.

The M&A Rule establishes additional procedures and requirements that could make some acquisitions of Chinese co mp anies by for eign
investors more time -consuming and complex, including requirements in some instances that the PRC Min istry of Co mmerce be notif ied in
advance of any change-of-control transaction and in some situations, require approval of the PRC Min istry of Co mmerce when a foreign
investor takes control of a Chinese domestic enterprise. In the future, we may grow our business in part by acquirin g comp lementary
businesses, although we do not have any plans to do so at this time. The M&A Ru le also requires PRC M inistry of Co mmerce anti-trust review
of any change-of-control transactions involving certain types of foreign acquirers. Co mply ing with th e requirements of the M&A Ru le to
complete such transactions could be time -consuming, and any required approval processes, including obtaining approval fro m the PRC
Ministry of Co mmerce, may delay or inhibit our ability to co mplete such transactions, which could affect our ability to expand our business or
maintain our market share.

The implementation of the new PRC employment contract law and i ncreases in the labor costs in C hina may hurt o ur business and
profitability.

A new employ ment contract law became effective on January 1, 2008 in China. It imposes more stringent requirements on employers in
relation to entry into fixed -term employ ment contracts, recruit ment of temporary emp loyees and dismissal of employees. In ad dition, under the
newly pro mulgated Regulations on Paid Annual Leave for Emp loyees, which also became effect ive on January 1, 2008, emp loyees who have
worked continuously for more than one year are entit led to paid vacation ranging fro m 5 to 15 days, depending on the length o f the employee‘s
service. Employees who waive such vacation entitlements at the request of the employer will be co mpensated for three t imes th eir normal daily
salaries for each vacation day so waived. As a result of the new law and regulations, our labor costs may increase . There is no assurance that
disputes, work stoppages or strikes will not arise in the future. Increases in the labor costs or future disputes with our emp loyees could damage
our business, financial condition or operating results.

                                                                         15
Any outbreak of the Swine Flu (H1N1), severe acute respiratory syndrome, or SARS, the Avian Flu, or another widespread public health
problem in the PRC could adversely affect our operations.

There have been recent outbreaks of the highly pathogenic Swine Flu, caused by the H1N1 virus, in certain regions of the world, including
parts of China, where all of our manufacturing facilit ies are located and where all of our sales occur. Our business is dependent upon our ability
to continue to manufacture and distribute our products, and an outbreak of the Swine Flu, or a renewed outbreak of SA RS, the Avi an Flu, or
another widespread public health problem in China, could have a negative effect on our operations. Any such outbreak cou ld have an impact on
our operations as a result of:

           quarantines or closures of our manufacturing or distribution facilities or the retail outlets, which would severely disrupt o ur
            operations,

           the sickness or death of our key officers and emp loyees, and

           a general slowdown in the Ch inese economy.

Any of the foregoing events or other unforeseen consequences of public health problems could adversely affect our operations.

You may have difficulty enforcing judgments against us.

We are a Nevada holding co mpany and most of our assets are located outside of the United States. Most of our current operatio ns are
conducted in the PRC. In addition, most of our directors and officers are nationals and residents of countries other than th e United States. A
substantial portion of the assets of these persons is located outside the United States. As a result, it may be difficult for you to effect service of
process within the United States upon these persons. It may also be difficult for you to enforce in U.S. courts judgments on the civil liability
provisions of the U.S. federal securities laws against us and our officers and directors, most of whom are not residents in t he United States and
the substantial majority o f whose assets are located outside of the United States. In addition, there is uncertainty as to whether the courts of the
PRC would recognize or enforce judg ments of U.S. courts. Courts in China may recognize and enforce foreign judg ments in accor dance with
the requirements of the PRC Civ il Procedures Law based on treaties between Ch ina and the country where the judgmen t is made or on
reciprocity between jurisdictions. China does not have any treaties or other arrangements that provide fo r the recip rocal rec ognition and
enforcement of foreign judgments with the United States. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not
enforce a foreign judg ment against us or our directors and officers if they decide that the judgment vio lates basic princip le s of PRC law or
national sovereignty, security or the public interest. So it is uncertain whether a PRC court would enfo rce a judgment render ed by a court in the
United States.

RIS KS RELATED TO THE MARKET FOR OUR STOCK GEN ERALLY

Our common stock is quoted on the OTC QB which may have an unfavorable impact on our stock price and liquidity.

Our co mmon stock is quoted on the OTCQB. The OTCQB is a significantly more limited market than the New York Sto ck Exchange or
Nasdaq system. The quotation of our shares on the OTCQB may result in a less liquid market available fo r existing and potential stockholders
to trade shares of our common stock, could depress the trading price of our common stock and could have a long -term adverse impact on our
ability to raise capital in the future.

The market price of our common stock is volatile, leading to the possibility of its value being depressed at a time when you may want to sell
your holdings.

The market price of our co mmon stock is volatile, and this volatility may continue. Nu merous factors, many of which are beyond our control,
may cause the market price of our co mmon stock to fluctuate significantly. In addition to market and industry factors, the pr ice and trading
volume for our co mmon stock may be h ighly volatile for specific business reasons. Factors such as variations in our revenues, earnings and
cash flow, announcements of new investments, cooperation arrangements or acquisitions, and fluctuations in market prices for our products
could cause the market price for our shares to change substantially.

                                                                         16
Securities class action litigation is often instituted against companies following periods of volatility in their stock price . This type of litigation
could result in substantial costs to us and divert our management‘s attention and resources.

Moreover, the trading market for our co mmon stock will be influenced by research or reports that industry or securities analy sts publish about
us or our business. If one or mo re analysts who cover us downgrade our common stock, the market price for our co mmon stock would likely
decline. If one or mo re o f these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibilit y in the financial
markets, which, in turn, could cause the market price fo r our co mmon stock or trading volu me to decline.

Furthermore, securities markets may fro m time to time experience significant price and volume fluctuations for reasons unrela ted to operating
performance of part icular co mpanies. These market fluctuations may adversely affect the p rice of our co mmon stock and other interests in our
company at a time when you want to sell your interest in us.

We may be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common sto ck.

The SEC has adopted regulations which generally define so -called ―penny stocks‖ to be an equity security that has a market price less than
$5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. If our co mmon stock beco mes a ―penny stock‖,
we may beco me subject to Rule 15g-9 under the Exchange Act, or the Penny Stock Ru le. Th is rule imposes additional sales practice
requirements on broker-dealers that sell such securities to persons other than established customers and ―accredited investors‖ (generally,
individuals with a net worth in excess of $1,000,000 or annual inco mes exceeding $200,000, or $300,000 together with their sp ouses). Fo r
transactions covered by Rule 15g-9, a b roker-dealer must make a special suitability determination for the purchaser and have received the
purchaser's written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell o ur securities and
may affect the ability of purchasers to sell any of our securities in the secondary market.

For any transaction involving a penny stock, unless exempt, the rules require delivery, prio r to any transaction in penny sto ck, of a disclosure
schedule prepared by the SEC relat ing to the penny stock market. Disclosure is also required to be made about sales commissions payable to
both the broker-dealer and the reg istered representative and current quotations for the securit ies. Finally, monthly stateme nts are required to be
sent disclosing recent price informat ion for the penny stock held in the account and information on the limited market in pen ny stock.

There can be no assurance that our common stock will qualify for exempt ion fro m the Penny Stock Ru le. In any event, even if our co mmon
stock were exempt fro m the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the
authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public
interest.

Certain provisions of our Articles of Incorporation may make it more difficult for a third party to effect a change -of-control.

Our Articles of Incorporation authorizes our board of directors to issue up to 1,000,000 shares of preferred stock. The preferred stock may be
issued in one or more series, the terms of which may be determined at the time of issuance by the board of directors without further action by
the stockholders. These terms may include preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund
provisions. The issuance of any preferred stock could d iminish the rights of holders of our co mmon stock, and therefore could reduce the value
of such common stock. In addition, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge
with, o r sell assets to, a third party. The ability of our board of directors to issue preferred stock could make it more difficult, delay, discourage,
prevent or make it mo re costly to acquire or effect a change-in-control, which in turn could prevent our stockholders from reco gnizing a gain in
the event that a favorable offer is extended and could materially and negatively affect the market price of our co mmon stock.

The conversion of preferred stock or exercise of warrants we issued in our previous private placements may result in dilution to the holders
of our common stock and cause the price of o ur common stock to decline.

Dilution of the per share value of our co mmon stock could result fro m the conversion of our outstanding Series A Preferred St ock issued to the
investors in the recent private placement and the exercise of outstanding warrants that we issued in connection with our previous private
placement transactions. As of August 25, 2010, there were 197,706 shares of our Series A Preferred Stock outstanding, which may be
converted into our common stock at the option of the holders of the Series A Preferred Stock in whole or in part at any time at an init ial
conversion ratio of 1-for-10. In addition, as of August 25, 2010, there were outstanding warrants to purchase 1,588,501 shares of our co mmon
stock. When the conversion price of the Series A Preferred Stock or the exercise price of the warrants is less than the trading price of our
common stock, the conversion of Series A Preferred Stock o r the exercise of the warrants would have a dilut ive effect on our s hareholders. The
possibility of the issuance of s hares of our common stock upon the conversion of Series A Preferred Stock or exercise of the warrants could
cause the trading price of our co mmon stock to decline as well.

                                                                           17
We may use these proceeds in ways with which you may not agree.

While we currently intend to use the proceeds fro m this offering for working capital and general corporate purposes, we h ave considerable
discretion in the application of the proceeds. You will not have the opportunity, as part of your investment decision, to assess whether the
proceeds are being used in a manner agreeable to you. You must rely on our judg ment regarding the application of the net proc eeds of this
offering. The net proceeds may be used for corporate purposes that do not immediately imp rove our profitability or increase the price of our
shares.

We do not intend to pay dividends for the foreseeable future.

For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate
paying any cash dividends on our common stock. Accordingly, investors must be prepared to rely on sales of their shares of co mmon stock
after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our
common stock. Any determination to pay dividends in the future will be made at the discretion of our board of directors and w ill depend on our
results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors
deems relevant.

                                                                         18
                                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have made statements under the captions ―Prospectus Summary,‖ ―Risk Factors,‖ ―Management‘s Discussion and Analysis of Financial
Condition and Results of Operat ions,‖ and ―Business‖ and in other sections of this prospectus that are fo rward-looking statements. In some
cases, you can identify these statements by forward-looking words such as ―may,‖ ―might,‖ ―will,‖ ―should,‖ ―expect,‖ ―plan,‖ ―anticipate,‖
―believe,‖ ―estimate,‖ ―predict,‖ ―potential,‖ or ―continue,‖ the negative of these terms, and other co mparab le termino logy, although not all
forward-looking statements contain these identifying words. These forward -looking statements, which are subject to risks, u ncertainties, and
assumptions, may include project ions of our future financial perfo rmance based on our growth strategies and anticipated trends in our business.
These statements are only predictions based on our current expectations and projections about future events. There are impo rt ant factors that
could cause our actual results, level of activity, performance, or achievements to differ materially fro m the results, level of activity,
performance, or achievements expressed or imp lied by the forward -looking statements. Those factors include, but are not limit ed to, the highly
competitive nature of the markets in which we sell our products, changes in demand for our products and services, our ability to develop new
products and services, competitive pressures, changes in laws and regulat ions govern ing our business and the other factors discussed under the
caption ―Risk Factors.‖

Although we believe the expectations reflected in the forward -looking statements are reasonable, we cannot guarantee future results, level of
activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of
any of these forward-looking statements. You should not rely upon forward -looking statements as predictions of future events. We are under no
duty to update any of these forward-looking statements after the date of th is prospectus to conform our prior statements to actual results or
revised expectations.

                                                             US E OF PROCEEDS

We will not receive proceeds fro m the sales by the selling stockholders. If the warrants are exercised for cash, then we will receive the proceeds
of payable by the selling stockholders upon exercise of the warrants. We will use these proceeds, if received, for general wo rking capital
purposes.

                                                                   B USINESS

Business Overview

We are a holding co mpany that operates through our indirect ly owned subsidiary Heilongjiang Shuaiyi, a leading Chinese Gold en Grass grower
and producer in Ch ina. We specialize in developing, processing, marketing an d distributing a variety of agricu ltural and nutraceutical products
consisting of Ch inese Golden Grass, organic and specialty food products. In addition, we p lan to produce and market other pro ducts developed
fro m Cordyceps Militaris within the co ming months and years, including specialty beverage products as indicated in more detail belo w.

Our primary product is Ch inese Go lden Grass, which is developed fro m Cordyceps Militaris. Cordyceps Militaris is a species of parasitic
fungus that is typically found in north-eastern mountainous China. It is a p recious ingredient in trad itional Chinese medicin e, as Cordyceps
Militaris is widely believed in Ch ina to offer h igh medical and health benefits by nourishing the yin, boosting the yang, and invigorating the
merid ians of the lungs and kidneys. According to Geo rges Halpern 's Healing Mushrooms, certain research has shown that Cordyceps Militaris
may boost our immune system, and can be used as a supplement for the purposes of combating certain effects of fatigue and a ging, as well as
reducing blood pressure, the occurrences of certain tumo rs, and combating arteriosclerosis and certain gastrointestinal disor ders. In addition,
Cordyceps Militaris has significantly high economic values. According to Halpern , wild Cordyceps Militaris can cost as much as $10,000 per
kilogram. Due to the extremely sensitive growing conditions of Cordyceps Militaris, it is very difficult to gro w the plant in a man-made
environment. Through several years of laboratory tests, we developed the t echnology to commercially grow and produce Cordy ceps Militaris in
2006. We generated 91.0% and 78.7% of our revenues fro m Chinese Go lden Grass for the six months ended June 30, 2010 and the f iscal year
of 2009, respectively. We believe that we own 19% of the world wide market share in the cultivated Chinese Golden Grass industry. We plan
to continue to focus on Chinese Golden Grass, which is our fastest growing product line with the greatest market demand and a significantly
high profit margin.

                                                                        19
We also sell organic and specialty food products through our subsidiary, Harbin Shuaiy i, wh ich was formed in 2001. After year s of
development, we believe that we have become the largest wholesale d istributor of organic and specialty food in Heilongjiang Province, China.

Our Industry

The nutraceutical industry is currently made up of many small - and mediu m-sized companies that manufacture and distribute products
generally intended to, or marketed for the purpose of maintain ing, and sometimes improving, health and general well being. According to
China Enterprises Association, there are currently over 3,000 manufacturers of nutraceutical products in China, with an annua l production
value of over $6.25 billion. Of these manufacturers, large enterprises with registered capital of over $12.5 million only account for 1.45%;
med iu m-sized enterprises with reg istered capital under $12.5 million, but over $6.25 million, make up 38%; and workshop -style enterprises
with reg istered capital below $12,500 make up 12.5% of the total number of manufacturers.

Widespread economic develop ment in Ch ina has not only increased the disposable inco me of Ch inese consumers, it has also lead to an increase
in consumer awareness of the risks of d ietary imbalances and the importance of maintaining appropriate levels of v itamins and minerals in the
human body. Along with a growing middle class, all of these facts have rapidly increased China ‘s 480 million urban consumers ‘ demand for
nutraceutical products. According to China Personal Health & Supplemental Industry Survey 2005 , the sales of nutraceutical p roducts in
China are expected to reach RM B 70 b illion (appro ximately $8.75 billion) in 2009, with a co mpounded annual growth rate o f 15.24% . We
believe that the next era of nutrition will focus on naturally occurring properties provided fro m p lants, fruits, and vegetab les, which support
good health.

Because of the rarity and high prices of the wild collected variety, attempts have lo ng been made to cultivate Cordyceps Militaris. By the
mid-1980s, the majo rity of Cordyceps Militaris available in the worldwide marketplace were artificially cu ltivated. Because of th e development
of modern biotechnology-based cultivation methods, the availability of this previously rare health supplement has greatly increased in the last
20 years. The demand for Cordyceps Militaris has also compounded exponentially, in this same t ime frame, partly because of th e opening of
China to trade with the West in the 1970s, exposing many more people around the world to the concepts and practices of traditional Chinese
med icine. As Cordyceps Militaris has always been highly revered in traditional Chinese med icine, we believe that with increas ed exposure to
traditional Ch inese med icine, the demand for this plant has also increased. Such an increase has lead to overharvesting of the wild sto cks and a
subsequent shortage of wild collected varieties of Cordyceps Militaris. International markets for Cordyceps Militaris are main ly in the United
States, Canada, Japan, Korea, Hong Kong and Southeast Asia. The European and Australian markets are also emerging. According to Market
Survey of Cordyceps Militaris 2008, published by China Market Monitoring Center in 2008, the curren t international market demand fo r
Cordyceps Militaris is about 1,000 tons a year, while the Chinese domestic market demand is about 500 tons a year with an ann ual growth rate
of over 13%. With about 50 Cordyceps Militaris manufacturers in Ch ina having an a ggregate production capacity of only 250 t ons a year, there
is a big gap between supply and demand and therefore a great potential for our Chinese Golden Grass market.

                                                                        20
Our Competiti ve Strengths

We believe that our success to date and potential for future growth can be attributed to a combination of our strengths, includin g the following:

           High-end niche products. We sell o rganic and specialty food products and Chinese Golden Grass products that the followers of
            traditional Ch inese med icine believe have h igh nutrient concentration, potential health benefits and high value. Our products are
            positioned in the high-end market as premiu m healthy food and are distinguished from the co mmon nutraceutical products in the
            market.

           Leading market position and significantly high margin. We believe we have established ourselves as a dominant player in
            China‘s Chinese Go lden Grass industry. We believe that we currently o wn appro ximately 19% of world market of Ch inese Golden
            Grass. By successfully co mmercializing our Cordyceps Militaris planting technology, we believe that we have achieved economie s
            of scale and accordingly significantly h igh marg in that no other material co mpetitor can match in the near future.

           Leading-edge R&D team. Our research and develop ment team has a strong and extensive technology background and has been an
            early participant in the Chinese Golden Grass market. Cu rrently we have 21 technicians in our R&D depart ment. The head of our
            research and development team, Mr. Lichen Wang, is a lead expert in the field o f edib le fungus in Ch ina. M r. Wang graduated w ith
            a Bachelor‘s degree in edible fungus and has served as the deputy director of several research institutes of edible fungus in
            Northeast China.

           Experienced management team with a strong track record. Our management team has extensive operating experience and
            industry knowledge. Lianyun Han, our founder and chief executive officer, has more than 10 years experience in operational
            management and business development. Robert Tick, our ch ief financial off icer, has over 16 years experience in accounting and
            finance. We believe that our management team‘s experience and capabilit ies have contributed greatly to our significant growth in
            the past three years.

Our Growth Strategy

As a leading nutraceutical producer in China, we believe we are well positioned to capitalize on future industry growth in China. We are
dedicated to providing healthy and high nutritional products to our consumers. We will implement the follo wing strategic plan s to take
advantage of industry opportunities and our competitive strengths:

           Focus on brand development . With intense price co mpetition among many similar or identical products in the industry, we
            believe that building brand awareness is the primary means to generate and sustain profitable gro wth in the future. We believe that
            developing close cooperative relationships with research centers of well-known universities in Ch ina and globally is key to building
            brand equity. We also market our products through an integrated marketing program that includes advertising in relevant media
            outlets, attending trade shows such as Harbin International Fair for Trade and Economic Corporation and Beijing Agricu lture
            Exposition and offering seminars and lectures to local co mmun ities regarding th e products and their heath benefits.

           Introducing new products . We constantly evaluate our products and seek to adapt to changing market conditions by updating our
            products to reflect new trends in consumer preferences. We endeavor to expand our market p resence by introducing additional
            competitive nutraceutical products to our product offerings. Our new products under development include specialty beverage
            products.

           Increase production capacity. Our existing production lines of Chinese Golden Grass hav e been running at close to full capacity
            while the market demand for our existing products continues to increase. In order to meet the raw material needs of our produ cts
            and to expand sales of small packages of our Go lden Grass products, we plan to add 10 p lants to our production line, of wh ich three
            plants are expected to begin operating during the second half of 2010. We anticipate that the entire project will be co mplete d in
            2012. Annual production capacity of Go lden Grass is expected to increase to 72 t ons in 2010, up fro m 55 tons in 2009. We will
            convert more buildings into biotechnologically controlled cult ivation plants to grow and process Cordyceps Militaris in the f uture.

                                                                        21
           Further expand our distribution network to increase the prevalence of our products nationwide. Our current sales depend
            heavily on the sales of our large-pack products to pharmaceutical co mpanies. To support our rapid growth in sales, we plan to
            further expand our distribution network by selling our s mall-pack p roducts through drug stores, supermarkets and franchise stores.
            We have one-year contracts with our major d istributors which normally extend for one more year by the end of the contracts. We
            maintain constant communications with these distributors to keep us informed regard ing consumer preferences and market trends
            in order to develop new products. We also organize monthly product promotion meetings with the distributors to increase the s ales
            of small package products.

           Technology innovation. We believe that the development of new technology is critical to our success. We will continuously
            improve the quality of our existing and future products through new technologies. We expect to maintain our long -term partnership
            with Chinese universities and research institutes in order to develop new technologies.

Our Products and Producti on Process

Chinese Golden Grass

Our primary product is Ch inese Go lden Grass, which is developed fro m Cordyceps Militaris. Cordyceps Militaris is a species of parasitic
fungus that is typically found in the north-eastern mountainous regions of China. As a precious ingredient in traditiona l Chinese medicine,
Cordyceps Militaris is widely believed in China to o ffer high medical and health benefits by nourishing the yin, boosting the yang, and
invigorating the meridians of the lungs and kidneys. Due to the extremely sensitive growing conditio ns of Co rdyceps Militaris, it is very
difficult to grow the plants in man-made environments. Through several years laboratory tests, we developed the technology to commercially
grow and produce Cordyceps Militaris in 2006. Our p roduction process primarily includes planting, purifying and packaging.

Our present production capacity of Chinese Golden Grass is approximately 55 tons annually. We generated 91.0% and 78.7% of ou r revenues
fro m Chinese Golden Grass for the six months ended June 30, 2010 and the fis cal year of 2009, respectively. We believe that we o wn
approximately 19% worldwide market share in the entire cultivated Ch inese Golden Grass industry. We plan to continue to focus on Chinese
Go lden Grass, which is our fastest growing product with the greatest market demand and a significantly h igh profit margin. To achieve this
end, we plan to increase our annual production capacity of 72 tons by the end of 2010.

Organic and Specialty Food

Growth in do mestic demand for organic products has been driven by rising inco mes in China. Through our indirect subsidiary, Harbin Shuaiyi,
we act as either a sales agent or a distributor to market and sell organic and specialty food products supplied by third -party producers. These
products main ly include Northeast Peculiar Rice. Northeast Peculiar Rice is grown in accordance with organic product standards established by
the Chinese Ministry of Agriculture. To qualify as ―organic,‖ food must be produced in an environment which relies upon natural resources,
without the use of conventional pesticides, artificial fert ilizers, in an appropriate ecological environ ment, and must undergo a series of scientific
and technological quality control processes. Our Northeast Peculiar Rice is rich in protein, fiber fats, amino acids and calciu m, iron, zinc,
selenium and other elements and vitamins. After years of development, we believe we have beco me the largest wholesale distrib utor of organic
and specialty food in Heilongjiang Province, China.

New products under development

We plan to further d iversify our Cordyceps Militaris based product mix to cater to d ifferent customer tastes and preferences. Currently, we
have the following products under development. In 2010, we will be targeting mass consumer markets by introducing sp ecialty beverage
products with the health benefits of enhancing immunity, reducing fat igue, enhancing circulations, among other benefits deriv ed fro m our
Cordyceps Militaris.

                                                                          22
-600 Specialty Beverage Products . This convenient and delicious Chinese traditional healthcare cereal beverage has various nutritional
ingredients of Cordyceps Militaris, including Cordycepin and polysaccharides. We expect to begin manufacturing and selling th is product by
the second half of 2010.

Marketing and Sales

Currently, we have 132 experienced marketing personnel who are responsible for market research, promotion and advertisement. We
strengthen our market presence by employing various types of marketing strategies. We participate in trade shows such as Harbin International
Fair for Trade and Economic Cooperation and Beijing Agriculture Exposition and offer seminars and lectures to local communiti es regarding
the health benefits of our products. These activities help to promote our reputation and name recognition in the industry.

Our sales depend heavily on the sales of our large-pack p roducts to pharmaceutical co mpanies. To support our rapid growth in sales, we plan to
further expand our distribution network by selling our s mall-pack products through drug stores, supermarkets and franchise stores.

Raw Materials and Suppliers

While all Cordyceps Militaris used to produce our Chinese Go lden Grass products are grown by us, the raw materials of our org anic and
specialty food products primarily consist of carbamide, wheat, glucose, citric acid, b itter salt, peptone, and pupa powder. The price for su ch
material fluctuates depending upon market conditions. Ho wever, since we have long -term suppliers and clients, the influence of material p rice
fluctuation is not currently material to the Co mpany.

We have established long-term relationships with our key suppliers. However, we do not have long term supply contracts and we do not
exclusively rely on our key suppliers. We have adopted a dual supplier system for raw materials. Therefore, if our p rimary suppliers cannot
supply us with our raw material for any reason, we are able to acquire raw material fro m another supplier. All of our supplie rs must meet our
quality standards and delivery requirements consistently in order to remain on our approved supplier list. If deliveries are delayed repeatedly,
we terminate the partnership with such supplier.

The flexib le sourcing arrangements are designed to ensure the stable supply of raw materials and promote healthy competition among our
suppliers. We believe our supplier arrangements encourage our suppliers to provide high quality raw materials timely and efficiently.

Our Major Suppliers in 2009

The following table lists top suppliers of our raw materials in 2009:

                                                                                 Purchasing Value
    Rank      Company Name                                       Unit (Kg)          in 2009 ($)            Location              Material

      1       Heilongjiang Xianfeng A gricultural Goods            77,500             428,409               Harbin              Plastic film
              Trading M arket Co., Ltd.                             9,010                                                      Disinfectant
                                                                   46,000                                                       Plastic bag
                                                                    4,100                                                          Carton
                                                                  117,819                                                   Small packing boxes
                                                                  117,819                                                    Small package bag
      2       Harbin Zhenfengyuan Bio-technology Co.,              32,472             369,218               Harbin                Peptone
              Ltd.                                                191,270                                                       Vitamin-C
      3       Nehe Laocai Grain Depot                             452,320             165,539                Nehe                  Wheat
      4       Daqing Qingzhong Seed Co., Ltd.                      79,500              19,785               Daqing                 Potato
      5       Harbin Jiancheng Fine Chemical Plant                 14,900              13,670               Harbin                Glucose
                                                                    1,420                                                       Citric Acid
                                                                    2,150                                                       Bitter Salt

                                                                        23
Our Major Customers

The following table provides information on our major clients in fiscal year 2009.

                                                                                                              S ales
                                                                                                         (in Thousands           Percentage
                                                                                                                of                    of
Rank Name                                             Description of Client                                US Dollars)           Total S ales
  1 Lai En Century Co. Ltd.                           Trading company in China                                2,249                14.7%
  2 Zhejiang Wanfeng Group Pharmaceutical Co., Ltd.   Pharmaceutical Products Producer in China               1,430                 9.3%
  3 Disha Pharmaceutical Co., Ltd.                    Pharmaceutical Products Producer in China               1,347                 8.8%
  4 Zhejiang Yinlong Trading Company                  Trading company in China                                1,192                 7.8%
  5 Hangzhou KangYuanTang Ganoderma Lucidum           Health Products Producer in China                       1,190                 7.8%
     Co., Ltd.
  6 Si Chuan Ai Da Biotech Co. Ltd.                   Health Products Producer in China                       1,153                 7.5%
  7 Xi‘an Yizhiliu Pharmaceutical Co., Ltd            Pharmaceutical Products Producer in China               1,146                 7.5%
  8 Beijing Ruichenboji Technology Development Co.,   Trading company in China                                 794                  5.2%
     Ltd.
  9 Shenzhan Beilixin Biotech Co., Ltd                Health Products Producer in China                        240                  1.6%
 10 General Hospital of Shandong CAPF                 Pharmaceutical Products Producer in China                 96                  0.6%

Our Competiti on

Most of our competitors for sales of Chinese Go lden Grass products are small -sized local producers and generally have a much lower
production capacity. Compared to these competitors, we believe we have a much higher production capacity and more advanced gr owing and
production technology. Our major co mpetitors in China include Heilongjiang Xinyisheng Pharmaceutical Co., Ltd., Liangshan Cou nty
Ganoderma and Cordyceps Sci-Tech Develop ment Co., Ltd., Jiangsu Xuzhou Kangyuan Cordyceps Biology Co., Ltd., Xuzhou Baofu
Cordyceps Co., Ltd. and Jinzhou Co rdyceps Militaris Co., Ltd.

Research and Development

Our research and development activities focus on developing new products and new technologies. We currently have 21 employees dedicated
to research and development. Since 2003, we have also maintained a close cooperation relat ionship with Ch ina Institute of Science, one of the
most prestigious academic institutions of scientific and technological research in Ch ina, to imp rove commercially gro wing Cor dyceps Militaris.

As described below, on April 10, 2006, we spent RMB 30 million (appro ximately $4.4 million) in acquiring the technologies of Cordyceps
Militaris cultivation fro m Mr. Runjiao Wang. In 2009 and 2008, our research and development expenses were insignificant.

Intellectual Property

We currently have the following patents pending approval:

                                                                        24
                                                                                   Patent No. /          Expiration
Patent Name                                                   Patent type        Application No.           Date                  Status
Technology of Using Plastic Ware to Cu ltivate            Invention              200810064305.3             N/A                 Pending
Cordyceps Militaris
Planting Cordyceps militaris by the method of making      Invention              200810064705.4              N/A                Pending
liquid spawn.
Formulat ion of Cordyceps Militaris and Green Bean        Invention              200810064387.1              N/A                Pending
Paste Beverage
Formulat ion of Cordyceps Militaris and Corn Beverage     Invention              200810064389.0              N/A                Pending
Formulat ion of Cordyceps Militaris and Millet Beverage   Invention              200810064390.3              N/A                Pending
Formulat ion of Cordyceps Militaris and Red Bean Paste    Invention              200810064388.6              N/A                Pending
Beverage

On April 10, 2006, Daqing Shuaiy i entered into an exclusive licensing agreement with M r. Runjiao Wang, pursuant to which Mr. Wang agreed
to grant Daqing Shuaiyi an exclusive right to use the cultivation technology of Cordyceps Militaries that Mr. Wang deve loped. According to
this licensing agreement, Daqing Shuaiyi is allowed to use this technology exclusively in China for ten years beginning on Ap ril 10, 2006. In
consideration of the rights granted to Daqing Shuaiyi under this licensing agreement, Daqing Shuaiy i agreed to pay Mr. Wang a licensing fee in
an amount of RMB 30 million (appro ximately $4.4 million). In addition, Daqing Shuaiy i has the right of first refusal with res pect to the
cultivation technology when the licensing agreement expires.

We have applied for the trademark of ― 帅亿东方神 ‖ with the Trademark Office of the State Admin istration for Industry and Commerce of
China. Under Ch inese laws, we are allowed to use ― 帅亿东方神 ‖ for the sales and marketing of our products even if our trademark
application is still pending. Once our application is approved, the trademark will have a term o f ten years and may be continually rene wed
thereafter.

We rely on trade secret protection and confidentiality agreements to protect our proprietary informat ion and knowho w. Ou r management and
each of our research and development personnel have entered into a standard confidentiality agreement, which includes a claus e
acknowledging that all inventions, designs, trade secrets, works of authorship, develop ments and other proc esses generated by them on our
behalf are our property, and assigning to us any ownership rights that they may claim in those works. Despite our precautions , it may be
possible for third parties to obtain and use, without our consent, intellectual property that we own or are licensed to use. Unauthorized use of
our intellectual property by third parties, and the expenses incurred in protecting our intellectual p roperty rights, may adv ersely affect our
business. See ―Risk factors—Risks Related to Our Business—Failure to adequately protect our intellectual property rights may undermine our
competitive position, and litigation to protect our intellectual property rights may be costly.‖

Regulati on

Because our operating subsidiaries are located in the PRC, we are regulated by the national and local laws of the PRC. Currently only the
general rules of co mmerce in China are applicab le to us.

We are also subject to the PRC‘s foreign currency regulat ions. The PRC government has controlled Ren minbi reserves primarily t hrough direct
regulation of the conversion of Renminbi into other foreign currencies. Although foreign currencies, which are required for ―current account‖
transactions, can be bought freely at authorized PRC banks, the proper procedural requirements presc ribed by PRC law must be met. At the
same time, PRC co mpanies are also required to sell their fo reign exchange earnings to authorized PRC banks and the purchase o f foreign
currencies for capital account transactions still requires prior approval of the PRC govern ment.

Our Empl oyees

As of June 30, 2010, we emp loyed a total of 302 full-t ime employees. The following table sets forth the number of our emp loyees by function
as of June 30, 2010.

                                                                      25
              FUNCTION                                                                         NUMB ER OF EMPLOYEES

              Capital Depart ment                                                                              5
              Sales Depart ment                                                                               132
              Production Depart ment                                                                          121
              R&D Depart ment                                                                                 21
              Financial Depart ment                                                                           13
              Admin istrative Office                                                                          10
              TOTAL                                                                                           302

Our emp loyees are not represented by a labor organization or covered by a collective bargaining agreement. We have not experienced any work
stoppages.

We are required under PRC law to make contributions to the employee benefit p lans at specified percentages of the after -tax profit. In addition,
we are required by the PRC law to cover employees in Ch ina with various types of social insurance. We believe t hat we are in material
compliance with the relevant PRC laws.

Seasonality

The production and sale of our primary product, Ch inese Go lden Grass, historically have not been subject to seasonal variat io ns.

Insurance

We do not have any business liability, interruption or litigation insurance coverage for our operations in China. Insurance companies in China
offer limited business insurance products. While business interruption insurance is available to a limited extent in Ch ina, w e have determined
that the risks of interruption, cost of such insurance and the difficulties associated with acquiring such insurance on commercially reaso nable
terms make it imp ractical fo r us to have such insurance. Therefore, we are subject to business and product liability exposure . See ―Risk Factors
– We do not carry any business interruption insurance, third -party liability insurance for our production facilities or insurance that covers the
risk of loss of our products in shipment.‖

Litigation

Fro m time to time, we may beco me involved in various lawsuits and legal proceedings, wh ich arise, in the ordinary course of business.
However, lit igation is subject to inherent uncertainties, and an adverse result in these or other matters may arise fro m time t o time that may
harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affect on
our business, financial condition or operating results.

       MANAGEMENT’S DISCUSS ION AND ANALYS IS OF FINANCIAL CONDITION AND RES ULTS OF OPERATIONS

We are a holding co mpany that operates through our indirect ly owned subsidiary Heilongjiang Shuaiyi, a leading Chinese Gold en Grass grower
and producer in Ch ina. We specialize in developing, processing, marketing and distributing a variety of agricu ltural and nutraceutical products
consisting of Ch inese Golden Grass, organic and specialty food products. In addition, we p lan to produce and market other pro ducts developed
fro m Cordyceps Militaris within the co ming months and years, including specialty beverage products.

                                                                        26
Our primary product is Chinese Golden Grass, wh ich is developed fro m Cordyceps Militaris. We sell our products through an extensive
nationwide sales and distribution network covering four provinces and eight cities in Ch ina. Our Ch inese Go lden Grass product s are grown and
processed by our indirect, wholly -owned subsidiary, Daqing Shuaiy i, and are mainly sold to pharmaceutical co mpanies for fu rther processing
into drugs and nutraceutical products. We generated approximately 91.0% of our revenues from sales of Chinese Golden Grass du ring the six
months ended June 30, 2010. We believe that we own appro ximately 19% worldwide marke t share in the entire cult ivated Chinese Go lden
Grass industry.

We also sell organic and specialty food products through our subsidiary, Harbin Shuaiy i, wh ich was formed in 2001. After year s of
development, we believe that we have become the largest wholes ale distributor of organic and specialty food in Heilongjiang Province, China.

Our revenues increased approximately $2.24 million, or 28.1%, to appro ximately $10.23 million for the six months ended June 3 0, 2010, fro m
approximately $7.98 million for the sa me period in 2009. In the fiscal year ended December 31, 2009, our revenues were approximately $15.3
million, which represents an increase of 18.0% fro m appro ximately $13.0 million for 2008. Our gross marg in was 81.0% and 70.2% for the six
months ended June 30, 2010 and the fiscal year ended December 31, 2009, respectively.

Industry Wi de Factors that are Relevant to Our B usiness

We expect several key demographic, healthcare, and lifestyle trends to drive the growth of our business in the coming future:

           Increased Focus o n Healthy Living : Ou r management believes that as China beco mes more affluent, its cit izens are becoming
            more health conscious. They are leading mo re active lifestyles and becoming increasingly focused on healthy liv ing, nutrit ion , and
            supplementation. According to the Nutrition Business Journal , a higher percentage of today‘s global population is involved to
            some degree in health and wellness than a few years ago. We believe that growth in the health supplements industry will continue
            to be driven by consumers who increasingly embrace health and wellness as a critical part o f their lifestyles.

           Aging Population : The average age of the Chinese population is increasing. According to World Population Prospects: The 2004
            Revision (2005), the percentage of elderly persons in China is pro jected to triple between 2006 and 2050, fro m 8 percent t o 24
            percent, a total of 322 million people. We believe that these consumers are significantly more likely to use health supplemen ts than
            younger persons and have higher levels of disposable inco me to pursue healthy lifestyles.

           Rising Healthcare Costs and Use of Preventive Measures : Healthcare related costs have increased substantially in Ch ina. A
            research released by Ch inese Academy of Social Sciences in 2007 indicated that the out-of-pocket health expenditures in China
            increased by 1,900% fro m 1990 to 2004. To reduce med ical costs and avoid the complexities of dealing with the healthcare syst em,
            and given increasing incidence of medical problems and concern over the use and effects of prescription drugs, many consumers
            take preventive measures, including alternative med icines and nutritional supplements.

Taxati on

United States

Nutrastar International Inc. is subject to United States tax at a tax rate of 34%. No provision for inco me taxes in the United States has been
made as Nutrastar International Inc. had no income taxable in the United States.

British Virgin Islands

New Resources was incorporated in the BVI. Under the current law o f the BVI, New Resources is not subject to income or cap ital gains tax. In
addition, dividend payments are not subject to withholding tax in the BVI.

                                                                       27
PRC

In 2007, the PRC govern ment pro mulgated the New EIT Law, and the relevant imp lementation rules, which became effect ive on January 1,
2008. Under the New EIT Law and its implementation rules, all domestic and foreign investment companies will be subject to a uniform
enterprise income tax at the rate of 25%. As a result, our PRC subsidiaries are subject to enterprise income tax at the rates of 25% in 2008,
2009 and 2010.

Under the New EIT Law, d ividends fro m PRC subsidiaries to their non -PRC shareholders will be subject to a withholding tax at a rate of 20%,
which is further reduced to 10% by the implementation rules, if the non -PRC shareholder is considered to be a non-PRC tax resident enterprise
without any establishment or place within China or if the dividends payable has no connection with the non -PRC shareholder‘s establishment
or place within China, unless any such non-PRC shareholder‘s jurisdiction of incorporation has a tax treaty with Ch ina that provides for a
different withholding arrangement.

In addition, pursuant to the New EIT Law, enterprises estab lished under the laws of non-PRC jurisdictions, but whose ―de facto management
body‖ is located in the PRC, should be treated as resident enterprises for PRC tax purposes. However, it is currently uncertain whe ther we may
be deemed a resident enterprise, o r how to interpret whether any inco me or gain is derived fro m sources within China. See Item 1A, ―Risk
Factors - Under the New EIT Law, we may be classified as a ‗resident enterprise‘ of Ch ina. Such classification will likely result in unfavorable
tax consequences to us and our non-PRC stockholders.‖ If we, as a Nevada company with substantially all of our management located in
China, were t reated as a resident enterprise fo r PRC tax purposes, we will be subject to PRC tax on our worldwide income at t he 25% uniform
tax rate, which would have an impact on our effective tax rate.

Business Segment Informati on

Our business operations can be categorized into two segments based on the type of products we manufacture and sell, specifica lly (i) Ch inese
Go lden Grass, and (ii) other agricu ltural p roducts.

For the six months ended June 30, 2010, our sales revenue fro m our Chinese Golden Grass was appro ximately $9.31 millio n, and our sales
revenue fro m our other agricultural products was approximately $0.92 million. In 2009, our sales revenue fro m our Chinese Golden Grass was
approximately $12.07 million, and our sales revenue from our other agricultural products was approximately $ 3.26 million.

We grow and sell our Ch inese Golden Grass through our subsidiary, Daqing Shuaiyi. Our subsidiary, Harbin Shuaiyi is mainly en gaged in the
business of selling our other agricu ltural products.

Additional information regarding our products can be found in the notes of our consolidated financial statements contained el sewhere in th is
prospectus.

Results of Operations

Six Months Ended June 30, 2010 Co mpared to Six Months Ended June 30, 2009

The following table sets forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of our
revenue.

                                                                       28
                                                              Six Months Ended June 30,                   Six Months Ended June 30,
                                                               2010                                        2009
                                                                                  As a                                        As a
                                                                               percentage                                  percentage
                                                                                   of                                          of
                                                                In              revenues                    In              revenues
                                                             Thousands                                   Thousands

Revenues                                                $           10,227                 100 %     $            7,983                100%
Cost of goods sold                                                  (1,945 )             (19.0)%                 (2,940 )            (36.8)%

Gross Profit                                                         8,282                81.0 %                 5,043                 63.2%

Selling expenses                                                       (405 )             (4.0)%                   (193 )             (2.4)%
General and administrative expenses                                    (978 )             (9.6)%                   (658 )             (8.2)%

Income fro m operations                                              6,899                 67.5%                 4,192                 52.5%

Other inco me and (expenses)
   Interest inco me                                                     67                  0.7%                     53                 0.7%
         Exchange gain (loss)                                          (15 )              (0.1)%                     (4 )             (0.1)%
         Change in fair value of warrants                              131                  1.3%                      -                   -%
   Other inco me                                                         -                    -%                      -                   -%
       Total other inco me (expenses)                                  183                  1.8%                     49                 0.6%

Income before inco me tax                                            7,082                 69.2%                 4,241                 53.1%

Provision for inco me tax                                              (945 )             (9.2)%                   (571 )             (7.2)%

Net inco me                                             $            6,137                 60.0%     $           3,670                 46.0%

Revenues . Revenues increased approximately $2.24 million, or 28.1%, to approximately $10.23 million for the six months ended June 30,
2010, fro m appro ximately $7.98 million for the same period in 2009. This increase was mainly attributable to the increase of our sales of our
core product, Chinese Golden Grass, driven by the continued increase in market demand for our products as well as the sales o f our small
package Chinese Golden Grass products. In addition, we increased our selling prices for our packaged Chine se Golden Grass products by 21%.

Our business operations can be categorized into two segments based on the type of products we manufacture and sell, specifica lly (i) Ch inese
Go lden Grass, and (ii) other agricu ltural p roducts. The following table shows the different segments comprising our total sales revenue:

                                                     Sales Revenue by Product Segments
                                       (all amounts, other than percentages, in thousands of U.S. dollars)

                                                                                    Six Months Ended June 30,                   Percent
                                                                                     2010               2009                    Change
Components of Sales Revenue
Chinese Golden Grass                                                            $          9,309     $           5,439                 71.2%
Other agricu ltural products                                                                 918                 2,544               (63.9)%
Total revenues                                                                  $         10,227     $           7,983                 28.1%


Cost of Goods Sold. Our cost of goods sold decreased by $1.00 million, or 33.8%, to appro ximately $1.94 million for the six months ended
June 30, 2010 fro m appro ximately $2.94 million during the same period in 2009. This decrease was mainly due to improved production process
and economy of scale. As a percentage of revenues, the cost of goods sold decreased to 19.0% for the six months ended June 30 , 2010 fro m
36.8% in 2009. Such decrease of cost of goods sold as a percentage of sales was main ly attributable to the increase of sales volume of small
package products with higher unit selling price. Because the gross margin of small package products is higher than big packag e products, the
percentage of cost of sales to total sales revenue decreased as our small package products had a higher percentage in the product mix du ring the
six months ended June 30, 2010.

                                                                       29
Gross Profit. Our gross profit increased by approximately $3.24 million, or 64.2%, to appro ximately $8.28 million for the six months ended
June 30, 2010 fro m appro ximately $5.04 million during the same period in 2009. Gross profit as a percentage of revenues, or g ross marg in, was
81.0% for the six months ended June 30, 2010, an increase of 17.8% fro m 63.2% during the same period in 2009. Such percentage increa se was
mainly due to continued product mix shift towards Chinese Golden Grass and the increased sales of our higher marg in small pa ckage Chinese
Go lden Grass products.

Selling Expenses . Our selling expenses increased approximately $0.21 million, or 109.7%, to approximately $0.41 million fo r the six months
ended June 30, 2010 fro m appro ximately $0.19 million during the same period in 2009. As a percentage of revenues, selling expenses
increased to 4.0% for the six months ended June 30, 2010 fro m 2.4% fo r the same period in 2009. The increase in the amount an d percentage of
selling expenses was mainly attributable to the increase of salaries and travelling expenses of our sales representatives and more marketing
activities to promote our products.

General and Administrative Expenses . General and ad min istrative expenses increased approximately $0.32 million, or 48.5%, to
approximately $0.98 million for the six months ended June 30, 2010 fro m appro ximately $0.66 million for the same period in 2009. As a
percentage of revenues, general and ad ministrative expenses increased to 9.6% for the six months ended June 30, 2010 fro m 8.2% for the same
period in 2009. The increase in the amount and percentage of general and administrative expenses was main ly attributable t o t he increase of
services expenses associated with legal and audit services.

Income Before Income Tax . Inco me before inco me tax increased approximately $2.84 million, or 67.0%, to appro ximately $7.08 million
during the six months ended June 30, 2010 fro m appro ximately $4.24 million during the same period in 2009. As a percentage of revenues,
income before inco me tax increased to 69.2% during the six months ended June 30, 2010 fro m 53.1% during the same period in 2009. The
increase of inco me before inco me tax is mainly attributable to the increase in our gross profit as a result of the increase in our sales.

Income Taxes . Income tax increased appro ximately $0.37 million to appro ximately $0.95 million for the six months ended June 30, 2010 fro m
approximately $0.57 million for the same period in 2009. We paid more tax in 2010 because of the increase in sales and taxable inco me.

Net Income . Net income increased by approximately $2.47 million, or 67.2% to appro ximately $6.14 million for the six months ended June 30,
2010 fro m appro ximately $3.67 million for the same period of 2009, as a result of the factors described above.

Year Ended December 31, 2009 Co mpared to Year Ended December 31, 2008

The following table sets forth key components of our results of operations for the periods indicated, in dollars and as a per centage of revenue.

                                                                        30
                                        (All amounts, other than percentage, in thousands of US dollars)

                                                         Year Ended December 31, 2009                     Year Ended December 31, 2008
                                                                               As a                                             As a
                                                            In             Percentage                        In             Percentage
                                                         Thousands         of Revenue                     Thousands         of Revenue
Sales Revenue                                       $          15,332                100% $                     12,990                100%
Cost of goods sold                                              (4,564 )           (29.8% )                      (4,605 )           (35.5% )
Gross Profit                                                   10,768               70.2%                         8,385              64.5%
Selling expenses                                                  (508 )            (3.3% )                        (196 )            (1.5% )
General and administrative expenses                             (1,356 )            (8.8% )                      (1,416 )           (10.9% )
Loss on disposal of fixed assets                                                                                    (31 )            (0.2% )
Income fro m operations                                           8,904                  58.1%                    6,741              51.9%
Other inco me and (expenses)
         Interest income                                              82                  0.5%                       30                   0.2%
         Other inco me                                                 6                    -%                       12                   0.1%
         Interest expenses
         Exchange loss                                               (15 )                (0.1% )                   (20 )                (0.2% )
         Merger costs                                                                                            (2,068 )               (15.9% )
Income before inco me tax                                          8,977                 58.6%                    4,694                  36.1%
Provision for inco me tax                                         (1,235 )               (8.1% )                   (975 )                (7.5% )
Net inco me                                         $              7,742                 50.5% $                  3,719                  28.6%

Sales Revenue . Revenues increased approximately $2.3 million, or 18.0%, to approximately $15.3 million in fiscal year 2009 fro m
approximately $13.0 million for 2008. Th is increase was mainly attributable to the increase of our sales of our core product, Chinese Golden
Grass, driven by the continued increase in market demand for our products as well as the sales of our s mall package Chinese Go lden Grass
products, which consisted a larger portion of our total revenues in 2009 as co mpared to last year.

The following table shows the different segments comprising our total sales revenue:

                                                      Sales Revenue by Product Segments
                                       ( all amounts, other than percentages, in thousands of U.S. dollars)

                                                                                      Year Ended December 31,                     Percent
                                                                                       2009             2008                      Change
Components of Sales Revenue
Chinese Golden Grass                                                           $           12,074     $            8,893               35.77%
Other agricu ltural products                                                                3,258                  4,097              (20.46% )
Total revenues                                                                 $           15,332     $           12,990               18.04%

Cost of Goods Sold . Our cost of goods sold decreased by $40,983, or 0.9%, to appro ximately $4.56 million in 2009 fro m approximately $4.60
million in 2008. Th is decrease was main ly due to improved production process and economy of scale. As a percentage of revenues, the cost of
goods sold decreased to 29.8% in 2009 fro m 35.5% in 2008. Such increase of gross margin was mainly attributable to the fact t hat a larger
portion of our total revenues was generated fro m our s mall package Ch inese Golden Grass products with higher unit selling price as co mpared
to 2008. Because the gross marg in of small package products is higher than that of larger package products, the percentage of cost of sales to
total sales revenue decreased during 2009.

Gross Profit . Our gross profit increased appro ximately $2.4 million, or 28%, to appro ximately $10.8 million in 2009 fro m ap proximately $8 .4
million in 2008. Gross profit as a percentage of revenues was 70.2% in 2009, an increase of 570 basis points from 64.5% in 2008. Such
percentage increase was mainly due to continued product mix shift towards Chinese Golden Grass and the increased sales of our higher margin
small package Ch inese Go lden Grass products.

Selling Expenses . S elling expenses increased approximately $0.31 million, or 159%, to $0.51 million in 2009 fro m $0.20 million in 2008. As
a percentage of revenues, selling expenses increased to 3.3% in 2009 fro m 1.5% in 2008. The increase in the amount and percen tage of selling
expenses was mainly attributable to the increase of salaries and travelling expenses of our sales representatives and more ma rketing activities to
promote our products.

                                                                        31
General and Administrative Expenses . General and administrative expenses decreased by $60,000, o r 4%, to appro ximately $1.36 million in
2009 fro m appro ximately $1.42 million in 2008. As a percentage of revenues, general and admin istrative expenses decreased to 8.8% in 2009
fro m 10.9% in 2008. The decrease in the amount of general and ad min istrative expenses was main ly attributable to tight cost c ontrol during
2009.

Merger Cost. We incurred expenses related to our merger during 2008 of appro ximately $2.07 million. In accordance with the requirements of
and guidance in Staff Accounting Bulletin No. 107 and SFAS 123(R), we charged $1,693,326 to merger costs based on the grant -date fair value
of the 91,088 shares of Series A Preferred Stock transferred by our majority shareholder to our consultants in the merger. On December 23,
2008, the Co mpany also entered into a subscription agreement with Tan Zhen Investment Limited, pursuant to which the Co mpany issued and
sold to such investor 20,168 shares of our Series A Preferred Stock for $375,000, or $18.59 per share, which was expended on payment of
merger costs.

Income Before Income Tax . Income before inco me tax increased approximately $4.3 million, or 91%, to appro ximately $9.0 million in 2009
fro m appro ximately $4.7 million in 2008. As a percentage of revenues, income before inco me tax increased to 58.6% in 2009 fro m 36.1% in
2008. The increase in inco me before inco me tax is mainly attributable to the increase in our gross profit as a result of the increase in our sales.

Income Tax . Inco me tax increased approximately $0.3 million to appro ximately $1.2 million in 2009 fro m appro ximately $1.0 million in 2008.
We paid more tax in 2009 because of the increase in sales and taxable inco me.

Net Income . Net income increased approximately $4.0 million, or 108%, to $7.7 million in 2009 fro m appro ximately $3.7 million in 2008, as a
result of the factors described above.

Li qui di ty and Capital Resources

As of June 30, 2010, we had cash and cash equivalents (excluding restricted cash) of appro ximately $32.26 million. The follow ing table
provides detailed information about our net cash flow for all financial statement periods presented in this prospectus.

                                                                     Cash Fl ow
                                                      (All amounts in thousands of U.S. dollars)

                                                                 Six Months Ended June 30,                    Year Ended December 31,
                                                                  2010               2009                      2009             2008
Net cash provided by operating activities                        $6,411             $4,657                    $9,324           $6,466
Net cash provided by (used in) investing activities                (8)                  -                       (49)             744
Net cash provided by (used in) financing activities               5,570               11                       1,621            (438)
Foreign currency translation adjustment                            174                 8                         21              277
Net cash flow                                                    12,147              4,676                    10,917            7,050

Operating Activities

Net cash provided by operating activ ities was appro ximately $6.41 million for the six-month period ended June 30, 2010, which is an increase
of approximately $1.75 million fro m appro ximately $4.66 million net cash provided b y operating activities for the same period of 2009. The
cash provided by operating activities during the period was mainly attributable to the increases in our net income.

Net cash provided by operating activities was appro ximately $9.3 million in fiscal y ear ended December 31, 2009, an increase of
approximately $2.9 million fro m appro ximately $6.5 million net cash provided by operating activ ities in fiscal year ended Dec ember 31, 2008.
The increase of the cash provided by operating activities was mainly at tributable to increased sales.

                                                                         32
Investing Activities

Our primary uses of cash for investing activities were payments for the acquisition of property, plant and equipment, and pay ments of
acquisition payable.

Net cash used in investing activities for the six-month period ended June 30, 2010 was approximately $0.01 million, which is an increase of
approximately $0.01 million fro m net cash used in investing activities of approximately nil million for the same per iod of 2009.

Net cash used by investing activities was approximately $0.05 million in fiscal year 2009, a decrease of appro ximately $0.8 m illion fro m
approximately $0.74 million provided by investing activities in fiscal year 2008. The decrease in net cash provided by investing activities was
mainly attributable to the increase in our purchase of property, plan and equip ment, or PPE, in 2009 while at the same time t here was no sale of
PPE by us.

Financing Activities

Net cash provided by financing activ ities for the six-month period ended June 30, 2010 was appro ximately $5.57 million, which is an increase
of approximately $5.56 million fro m appro ximately $0.01 million net cash provided by financing activities for the same period of 2009. The
cash provided by financing activit ies during the period was main ly due to the $5.48 million net proceeds fro m the private placement
consummated in June 2010.

Net cash provided by financing activities for the fiscal year ended December 31, 2009 was approximately $1.6 millio n as compared to
approximately $0.44 million used in financing activities in fiscal year 2008. The increase of the net cash provided by financ ing activities was
mainly attributable to the $2.5 million capital raising in December 2009.

On December 17, 2009, we co mpleted a private placement transaction and sold 1,000,000 shares of our co mmon stock to certain accredited
investors at $2.50 per share for a total of $2.5 million pursuant to a securities purchase agreement, or the Securities Purch ase Agreement. In
addition, we issued to each of the investors two warrants to purchase in aggregate 500,000 shares of our common stock, includ ing a Series A
warrant having a term of three years with an exercise price of $3.25 per share and a Series B warrant having a term o f three years with an
exercise price of $4.00 per share, both of wh ich are subject to the usual adjustments for certain corporate events.

On June 7 and June 28, 2010, the Co mpany consummated two closings of a private placement transaction and issued in a ggregate
approximately 197,706 Units to certain investors at a purchase price of $28.56 per unit for gross proceeds of approximately $5.65 million. Each
unit consists of one share of Series A Preferred Stock with an in itial one-to-ten conversion ratio into shares of the Co mpany's common stock
and a warrant to purchase five shares of common stock at an exercise price of $3.40 per share.

We believe that our cash on hand, cash flow fro m operations as well as the proceeds we received fro m the recent private pla cement transactions
will meet our expected capital expenditure and working capital fo r the next 12 months. Ho wever, we may in the future require additional cash
resources due to changed business conditions, implementation of our strategy to expand our prod uction capacity or other investments or
acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell
additional equity or debt securities or obtain additional credit facilities. The sale of addit ional equity securities could result in dilution to our
stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and
financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any
failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business o perations and could
harm our overall business prospects.

Effects of Inflation

Inflat ion and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will
materially affect our business in the foreseeable future. However, our management will closely monitor the price change and continually
maintain effective cost control in operations.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or f uture effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity or cap ital expenditures or capit al resources that
is material to an investor in our securities.

                                                                         33
Seasonality

Our operating results and operating cash flows historically have not been subject to seasonal variat ions. This pattern may ch ange, however, as a
result of new market opportunities or new product introductions.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of A merica (―U.S.
GAAP‖) requires our management to make assumptions, estimates and judgments that affect the amou nts reported in the financial statements,
including the notes thereto, and related disclosures of commit ments and contingencies, if any. We consider our critical accou nting policies to
be those that require the most significant judg ments and estimates in the preparation of financial statements, including the following:

             Accounts Receivable. The Company maintains allo wances for doubtful accounts for estimated losses resulting fro m the failu re of
              customers to make required pay ments. The Co mpany rev iews the accounts receivable on a periodic basis and makes allo wances
              where there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivab le balances,
              the Co mpany considers many factors, including the age of t he balance, the customer‘s payment history, its current
              credit-wo rthiness and current economic trends.

             Inventories . Inventories are stated at the lower o f cost, determined on a weighted average basis, or market. Costs of inventories
              include purchase and related costs incurred in bringing the products to their present location and condition. Market value is
              determined by reference to selling prices after the balance sheet date or to management ‘s estimates based on prevailing market
              conditions. The management will write down the inventories to market value if it is below cost. The management also regularly
              evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine if valuation allowan ce is
              required.

             Impairment . The Co mpany reviews and evaluates its long-lived assets for impairment when events or changes in circu mstances
              indicate that the related carrying amounts may not be recoverable. An impairment is considered to exist if th e total estimated future
              cash flows on an undiscounted basis are less than the carrying amount of the assets, including goodwill, if any. An impairmen t loss
              is measured and recorded based on discounted estimated future cash flows. In estimat ing future cash flows, assets are grouped at
              the lowest level fo r which there is identifiable cash flo ws that are largely independent of future cash flows fro m other asse t groups.

             Property, plant and equipment. The carrying value of property, plant and equipment is ass essed annually and when factors
              indicating impairment is present, the carrying value o f the property, plant and equip ment is reduced by the amount of the
              impairment. The Co mpany determines the existence of such impairment by measuring the expected future c ash flows
              (undiscounted and without interest charges) and comparing such amount to the net asset carrying value. An impairment loss, if
              exists, is measured as the amount by which the carry ing amount of the asset exceeds the fair value of the asset.

             Intangible assets. The Co mpany‘s intangible assets include a ten-year exclusive right to use a secret process and computer
              software. The Co mpany accounts for its intangible assets pursuant to FASB ASC Subtopic 350 -30, ―General Intangibles Other
              Than Goodwill‖. Under ASC 350-30-35, intangibles with definite lives continue to be amortized on a straight -line basis over the
              lesser of their estimated useful lives or contractual terms. Intangibles with indefinite lives are evaluated at least annually for
              impairment by comparing the asset‘s estimated fair value with its carrying value, based on cash flow methodology.

             Revenue Recognition . Revenue is recognized when the follo wing four revenue criteria are met: persuasive evidence of an
              arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectability is reasonably assured. Sales
              revenue is recognized net of value added and sales related taxes, sales discounts and returns at the time when the merchandis e is
              delivered to the customer. Based on historical experience, management estimates that sales returns are immaterial and has not made
              allo wance for estimated sales returns.

                                                                           34
-600 Foreign currency translation . The Company uses the United States dollars (―US Do llar‖ or ―US$‖ or ―$‖) for fin ancial reporting
purposes. The PRC subsidiaries within the Co mpany maintains the books and records in their functional currency, Ch inese Ren mi nbi
(―RM B‖), being the lawful currency in the PRC. Assets and liabilities of the PRC subsidiaries are translated fro m RM B into US Do llars using
the applicable exchange rates prevailing at the balance sheet date. Items on the statement of operations are t ranslated at av erage exchange rates
during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting fro m the translation o f the Company‘s
financial statements are recorded as accu mulated other co mprehensive income. The exchange rates used to translat e amounts in RM B into U.S.
Dollars for the purposes of preparing the consolidated financial statements are based on the rates as published on the websit e of People‘s Bank
of China. The value of RM B against U.S. dollars and other currencies may fluctuate an d is affected by, among other things, changes in China‘s
political and economic conditions. Any significant revaluation of RM B may materially affect the Co mpany ‘s results and financial position in
terms of U.S. do llar reporting.

           Stock-based Compensation. The Co mpany accounts for share-based compensation awards to employees in accordance with FASB
            ASC Topic 718, ―Co mpensation – Stock Co mpensation‖, which requires that share-based payment transactions with emp loyees be
            measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the
            requisite service period. The Co mpany accounts for share-based compensation awards to non-employees in accordance with FASB
            ASC Topic 718 and FA SB ASC Subtopic 505-50, ―Equity-Based Pay ments to Non-emp loyees‖. Under FASB ASC Topic 718 and
            FASB ASC Subtopic 505-50, stock compensation granted to non-employees has been determined as the fair value of the
            consideration received or the fair value of equity instrument issued, wh ichever is more reliably measured and is recognized as
            expenses as the goods or services are received.

New accounting pronouncement to be adopted

Effective January 1, 2010, the Co mpany adopted the provisions in ASU 2010-06, ―Fair Value Measurements and Dis closures (ASC Topic
820): Improving Disclosures about Fair Value Measurements, which requires new disclosures related to transfers in and out of levels 1 and 2
and activity in level 3 fair value measurements, as well as amends existing disclosure requireme nts on level of disaggregation and inputs and
valuation techniques. The adoption of the provisions in ASU 2010-06 d id not have an impact on the Company‘s consolidated financial
statements.

In February 2010, the Financial Accounting Standards Board (―FASB‖) issued authoritative guidance that amends the disclosure requirements
related to subsequent events. This guidance includes the definit ion of a Securities and Exchange Co mmission filer, removes th e defin ition of a
public entity, redefines the reissuance disclosure requirements and allo ws public co mpanies to omit the disclosure of the date through which
subsequent events have been evaluated. This guidance is effective for financial statements issued for interim and annual peri ods ending after
February 2010. This guidance did not materially impact the Co mpany ‘s results of operations or financial position, but did require changes to
the Co mpany‘s disclosures in its financial statements.

In April 2010, the FASB issued ASU No. 2010-13—Co mpensation—Stock Co mpensation (Topic 718), wh ich addresses the classification of
an emp loyee share-based payment award with an exercise price denominated in the currency of a market in which the underlying equity
security trades. This Update provides amend ments to Topic 718 to clar ify that an employee share-based payment award with an exercise price
denominated in the currency of a market in which a substantial portion of the entity ‘s equity securities trades should not be considered to
contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liab ility if
it otherwise qualifies as equity. The amendments in this Update are effective for fiscal years, and interim periods within th ose fiscal years,
beginning on or after December 15, 2010. The Co mpany expects that the adoption of the amend ments in this Update will not have any
significant impact on its financial position and results of operations.

Other accounting standards that have been issued or proposed by the FASB or other standards -setting bodies that do not require adoption until a
future date are not expected to have a material impact on the Co mpany ‘s Consolidated Financial Statements upon adoption.

                                                                         35
                                               HIS TORY AND CORPORATE S TRUCTURE

General

We were orig inally incorporated in the State of Nevada on December 22, 2002. On October 15, 2003, we acquired all the outstan ding common
stock of YzApp Solutions Inc., a co mpany under co mmon contro l. We sold our o wnership in YzApp Solutions Inc. on December 3, 2008.
Following incorporation, we engaged in the business of developing software which allowed us to act as an application service provider acting
as a conduit between retailers and financial institutions. Because this business was not successful, we were focused on the identification of
suitable businesses with which to enter into a business opportunity or business combination until December 23, 2008, when we co mpleted our
reverse acquisition of New Resources. As a result of our reverse acquisition of New Resources, we are no longer a shell co mpany and active
business operations were revived.

On May 19, 2009, we filed amended and restated articles of incorporation with the Nevada Secretary of S tate to amen d our art icles of
incorporation to, among other things, (1) change our name fro m ―YzApp International Inc.‖ to ―Shuaiyi International New Resources
Develop ment Inc.,‖ (2) increase the total nu mber o f shares of co mmon stock that we have the auth ority to issue from 50,000,000 to
190,000,000 shares and (3) effect a 1-for-114.59 reverse split of our outstanding common stock.

On January 11, 2010, we changed our name to Nutrastar International Inc. to more accurately reflect our marketing and brandin g strategy and
products. Our co mmon stock has been quoted on the OTC Bulletin Board under the new symbol NUIN.OB since January 20, 2010.

Background and History of New Resources and Heilongjiang Shuai yi

New Resources is a holding co mpany, wh ich was incorporated in the BVI under the BVI Business Company Act on March 13, 2008. New
Resources was wholly-owned by New Zealand WA YNE's Investment Holdings Co., Ltd., or the Shareholder, a BVI co mpany, before the
Co mpany acquired New Resources on December 23, 2008.

Heilongjiang Shuaiy i was established on July 11, 2006 under the laws of the PRC. Heilongjiang Shuaiyi has two wholly -o wned subsidiaries,
Daqing Shuaiyi and Harbin Shuaiyi. On Ju ly 28, 2008, pursuant to a restructuring plan intended to ensure compliance with r egulatory
requirements of the PPRC, the nine orig inal shareholders of Heilongjiang Shuaiyi, or the Founders, including the Company ‘s chairperson and
chief executive officer, Lianyun Han, entered into an equity transfer agreement, or the Equity Transfer Agr eement with New Resources,
pursuant to which the Founders transferred all of their equity interests in Heilongjiang Shuaiyi to New Resources for a purch ase price of RM B
60 million (appro ximately $8.8 million). As a result, New Resources became the 100% o wn er of Heilongjiang Shuaiy i and, indirectly, Daqing
Shuaiyi and Harbin Shuaiyi. On November 24, 2008, Heilongjiang Shuaiyi obtained the Certificate of Approval for Establishment of
Enterprises of Foreign Investment issued by Heilongjiang Provincial Govern me nt and a new business license was issued to Heilongjiang
Shuaiyi on December 1, 2008.

On September 12, 2008, the Shareholder entered into separate Earn -In Agreements with the Founders of Heilongjiang Shuaiyi, which entitle
the Founders to acquire a majority interest in the Shareholder upon the satisfaction of the conditions set forth in the Earn -In Agreements.
Pursuant to the Earn-In Agreements, each Founder has an option to purchase shares of the Shareholder‘s ordinary shares at a purchase price of
$0.01 per share (the par value of the Shareholder‘s ordinary shares), provided that the aggregate price with respect to the shares eligible to be
purchased relating to the satisfaction of condition (4) below is the sum of $0.01 per share, mult iplied the number of such shares, plus $1,000,
upon the satisfaction of each of the following conditions: (1) six months have expired since the date of the Share Exchange A greement,
provided that on or before that date, the Founder and Heilongjiang Shuaiy i have entered into a b inding employ ment agreement and the Founder
is employed by Heilongjiang Shuaiy i pursuant to that agreement on such date; (2) the SEC has declared a reg istration statemen t filed by the
Co mpany under the Securities Act effective, or investors who purchased common stock fro m the Co mpany pursuant to a securities purchase
agreement being able to sell their co mmon stock under Rule 144; (3) Heilongjiang Shuaiy i and its subsidiaries have achieved n ot less than
$1,560,000 in after-tax net inco me, as determined under United States generally accepted accounting principals, or US GAAP, for the six
months ended June 30, 2009; and (4) Heilongjiang Shuaiyi has achieved not less than $3,900,000 in pre -tax p rofits, as determined under US
GAAP for the fiscal year ended December 31, 2009. Notwithstanding the foregoing, for purposes of determining whether or not the financial
thresholds described above have been achieved, the purchase of the shares by the Founder or any other person designated by th e Founder shall
not be deemed to be an expense, charge, or other deduction from revenues of the Company even though US GAAP may require contrary
treatment. On February 12, 2009, each Founder and the Shareholder entered into an amend ment to the Earn -In Agreements, or the First
Amend ment, to amend the definition of the first condition. As a result, pursuant to the First Amendment, in order to satisfy the fir st condition
for each Founder, only Ms. Lianyun Han needs to enter into a binding employ ment agreement with Heilongjiang Shuaiyi wi thin six months
after the share exchange transaction dated December 23, 2008.

                                                                       36
Each Founder may purchase 25% of the total nu mber of shares that he or she is eligib le to purchase under his or her Earn -In Agreement, as
amended, upon the satisfaction of each condition described above. The aggregate number o f shares eligible for purchase by all of the Founders
under the Earn-In Agreements is 100,000. Therefo re, upon purchase of the above shares by the Founders, the total number of outstanding
shares of the Shareholder will be 100,001 and the Founders will be the controlling shareholders of the Shareholder.

Pursuant to the Earn-in Agreement, as amended, the Shareholder further agrees, among others, that throughout the exercise period of the
Earn-in Agreement, without the prior written approval of the Founders:

           it will not increase the number of authorized shares of the Shareholder ‘s co mmon stock, or any increased authorized shares will be
            deemed as part of the option shares that the Founders are entitled to acquire under the Earn -In Agreements;

           (ii) keeps availab le the services of current officers and emp loyees of the Shareholder and Heilongjiang Shuaiy i; and

           (iii) New Resources and Heilongjiang Shuaiy i will not declare or pay any d ividend or make any other distribution, nor do they
            repurchase, redeem or otherwise reacquire any equity of shares of capital stock or other securities.

The sole purpose of the Earn-In Agreements is to enable Founders to reacquire ultimate controlling legal ownership of Heilon gjiang Shuaiy i in
compliance with regulatory requirements of Ch ina.

On December 8, 2008, Heilongjiang Shuaiy i entered into separate loan agreement and promissory notes, or the Notes, wit h the Founders,
pursuant to which Heilongjiang Shuaiyi borro wed an aggregate of RM B 60 million (appro ximately $8.8 million) fro m the Founders , which
amount is exactly equal to the proceeds that they are entitled to receive for the transfer of their o wnership of Heilongjiang Shuaiyi under the
Equity Transfer Agreement. The Notes bear no interest and are payable in successive equal yearly pay ments beginning on the te nth anniversary
of the Notes, December 8, 2018, and within the first month of each year thereafter. The final payment is due on January 1, 2028. On February
12, 2009, Heilongjiang Shuaiyi and the Founders amended the Notes, pursuant to which the Founders subordinate any right to re ceive any
payment with respect to this loan to the payment or provision for pay ment in full of all claims of all present and future creditors of
Heilongjiang Shuaiyi. During and after this restructuring plan, there has been no change to the composition of the board of d irectors of
Heilongjiang Shuaiy i. Heilongjiang Shuaiyi‘s board of directors, chaired by Ms. Han, has continued to comprise representatives of the
Founders. Therefore, Heilongjiang Shuaiyi is still under the same operating and management control of the Founders. Through t his
subordinated loan, the Founders will not receive any cash amount, nor will there be any cash flo w out of the co mbined entity during the whole
period fro m the date of the Equity Transfer Agreement though the expiry of the Earn -in Agreements, at which time it is expected that the
Founders will have reacquired the ult imate legal controlling ownership of Heilongjiang Shuaiyi.

The loan to Heilongjiang Shuaiyi by the Founders is an integral and inseparable part of the restructuring plan and has the so le purpose of
achieving the restructuring in compliance with PRC regulat ions. Furthermore, by providing the subordinated loan to Heilongjiang Shuai yi and
obtaining the Shareholder‘s agreement on not declaring any d ividend throughout the exercise period of the Earn -in Agreements without the
prior written approval of the Founders, the Founders continue to bear the residual risks and rewards relating to Heilongjiang Shuaiyi. As a
result, this restructuring plan will be accounted for as a recapitalization of Heilongjiang Shuaiy i wit h no adjustment to the historical basis of the
assets and liabilities of Heilongjiang Shuaiyi. New Resources ‘ financial statements for the subsequent period in which t he restructuring
occurred will report Heilongjiang Shuaiyi‘s results of operation will be consolidated fro m the beginning of the first period p resented in New
Resources‘ financial statements as if the restructuring had occurred as of the beginning of that period.

The following charts demonstrate the ownership information of the relevant entit ies before and after the consummation of t he restructuring
plan:

                                                                          37
Before the Equity Transfer Agreement:




After the consummation of the restructuring plan




Acquisition of New Resources

On December 23, 2008, pursuant to a share exchange agreement, or Share Exchange Agreement, we co mpleted a rev erse acquisition
transaction of New Resources whereby we issued to the Shareholder 689,390 shares of our Series A Preferred Sto ck, constitutin g
approximately 94% o f our issued and outstanding capital stock on a fully-diluted basis, in exchange for all of the issued and outstanding capital
stock of New Resources. New Resources thereby became our wholly o wned subsidiary and the Shareholder became our controlling
stockholder.

Immediately following closing of the reverse acquisition of New Resources, the Shareholder transferred 176,529 of the 689,390 shares issued
to it under the share exchange to 14 individuals and entities, pursuant to a securities allocation agreement that th e Shareholder entered into with
these people on December 23, 2008. A mong them, ten indiv iduals and entities received 91,088 shares fro m the Shareholder for p rovid ing
consulting services to New Resources and its subsidiaries in assisting them to consummate the share exchange transaction contemp lated by the
Share Exchange Agreement prior to December 23, 2008. The remaining 85,441 shares were g ifted fro m the Shareholder to four ind iv iduals and
entities who did not provide services to New Resources or its subsidiaries.

Upon the closing of the reverse acquisition, Eugene M. Weiss, our then sole director and officer, submitted a resignation let ter pursuant to
which he resigned fro m all offices that he held effective immediately and fro m his position as our directo r that became effective on January 12,
2009. Lianyun Han was appointed to our board of directors effective as of the closing of the reverse acquisition on December 23, 2008. In
addition, our board of directors on December 23, 2008 increased the size of our board of directors to five (5) and appointed Nana Jiang,

                                                                        38
Chunming Zhang, John Jing Zhang and Xi Zhu to fill the vacancies created by such increase, which appointments became effectiv e upon the
effectiveness of the resignation of Mr. Weiss on January 12, 2009. In addition, our executive officers were replaced by the New Resources
executive officers upon the closing of the reverse acquisition as indicated in more detail belo w.

For accounting purposes, the share exchange transaction was treated as a reverse acquisition with New Resources as the acquiror and the
Co mpany as the acquired party. Unless the context suggests otherwise, when we refer in this prospectus to business and financ ial informat ion
for periods prior to the consummation of the reverse acquisition, we are referring to the business and financial info rmation o f o ur subsidiary
Heilongjiang Shuaiy i because Heilongjiang Shuaiyi currently conducts all our business operations.

The following chart reflects our organizational structure as of the date of this prospectus:




                                                                MANAGEMENT

Directors and Executive Officers

The following sets forth informat ion about our directors and executive officers as of the date of this pros pectus:

Name                                      Age       Position
Lianyun Han                                52       Chairperson, CEO and President
Robert Tick                                41       Chief Financial Officer and Treasurer
Hongbing Hua                               42       Chief Marketing Officer
Nana Jiang                                 31       Director
Chunming Zhang                             39       Director
John Jing Zhang                            37       Director
Xi Zhu                                     26       Director

                                                                         39
Lianyun Han. Ms. Han has extensive experience in operational management and business development. Ms. Han is the founder of our
company and has been our Chief Executive Officer, President and the chairperson of our board of directors since the comp letio n of the reverse
acquisition of New Resources on December 23, 2008. Ms. Han has been the chairman and ch ief executive officer of our subsidiar y
Heilongjiang Shuaiyi since its formation in 2006. Fro m 1998 to 2006, Ms. Han was the president of Heilongjiang Shuaiyi Techno logy
Develop ment Co., Ltd., a company that is engaged in the business of developing, manufacturing, marketing and selling high -tech agricultural
products. Ms. Han holds a Bachelor‘s degree in Chinese Language and Literature fro m Harbin Normal Un iversity.

Robert Tick. Mr. Tick has over 16 years experience in accounting and finance. Mr. Tick was the Chief Financial Officer of A NDA Netwo rks,
Inc., a teleco m equip ment provider, fro m Ju ly 2007 to August 2010, Vice President of Finance fro m October 2005 to July 200 7 and Corporate
Controller fro m April 2003 to November 2004. Fro m November 2004 to October 2005, M r. Tick served as the Controller for T -RAM
Semiconductors Inc., a fabless semiconductor company. Mr. Tick is a Certified Public Accountant and holds a B.S. in Accounting and Finance
fro m San Francisco State University and an M.B.A. fro m Washington State University.

Hong bi ng Hua. Mr. Hua has over 15 years experience in sales and marketing management. Prior to joining the Co mpany, fro m 2003 to 2004,
Mr. Hua was the Project General Planning Principle of Wanglaoji Herbal Tea, JDB Group, one of the largest herbal tea manufacturers in Ch in a.
Fro m 1998 to 2001, he was the VP Sales & Marketing of Beijing Hu iyuan Beverage and Food Group Co., Ltd., a leading co mpany en gaged in
the manufacture and sales of juice and other beverage products in China. Mr. Hua holds a Bachelor‘s degree in international finance fro m
Tianjin Un iversity.

Chunming Zhang. M r. Zhang has decades of working experience in production management. Mr. Zha ng became our directo r on January 12,
2009. Mr. Zhang jo ined Heilongjiang Shuaiyi in 2006 as the production manager. Fro m 1998 to 2006, Mr. Zhang was the vice pres ident of
Heilongjiang Shuangyasha Boiler Factory. Mr. Zhang holds a Bachelor‘s degree in econo mics fro m Northeast Agricultural Un iversity.

Nana Jiang. Ms. Jiang became our director on January 12, 2009. Ms. Jiang joined Heilongjiang Shuaiyi in 2006 as the managing accountant.
Fro m 1998 to 2006, Ms. Jiang was the managing accountant of Heilongjiang Shuaiyi Technology Development Co., Ltd., a company that is
engaged in the business of developing, manufacturing, marketing and selling high -tech agricultural products. Ms. Jiang holds a Bachelor‘s
degree in English fro m Harbin Normal University.

John Jing Zhang. M r. Zhang became our director on January 12, 2009. Mr. Zhang currently serves as the chief executive officer of JC Global
Capital Partners, LLC, a financial consulting firm located in Shanghai, China that specializes in cross -border capital market transactions. Prior
to funding JC Global Cap ital Partners, LLC in September 2006, fro m September 2003 to August 2006, Mr. Zhang was the M anaging Director
of FirsTrust Group, a US merchant bank headquartered in Atlanta, GA, where he was responsible for its entire China operat ion. Prior to jo ining
FirsTrust Group, Mr. Zhang held senior positions in two U.S. corporations, ASI Co mputer Technology, Inc. and CTX Internationa l, Inc., a
company that engages in the business of manufacturing and selling LCD Flat Pane l Displays. Mr. Zhang holds an MBA fro m Emo ry
University.

Xi Zhu. M r. Zhu became our director on January 12, 2009. Mr. Zhu has years of experience in audit ing and financial consulting. Curren tly he
is a Sen ior Financial Advisor for JINDU Investment, a financial consulting firm that specializes in PIPE deals. Prior to JINDU Investment, Mr.
Zhu was an auditor of in the International Business Department at BDO Qingdao Branch. BDO is a world wide network of public a ccounting
firms, serving international clients . Mr. Zhu was an Auditor Assistant of Foreign Investment Serv ice in Shan Dong De Sheng Accounting Firm
fro m 2005 to 2006. M r. Zhu holds a Bachelor‘s degree in Administrative Management fro m Qingdao University. There are n o agreements or
understandings for any of our executive officers or director to resign at the request of another person and no officer or d irector is acting on
behalf of nor will any of them act at the direction of any other person.

Directors are elected until their successors are duly elected and qualified.

Director Qualifications

Below is a summary of the qualifications, attributes, skills and experience of each of our directors that led us to the conclusion that such
director should serve as a director of our Co mpany, in light of our business and structure.

                                                                         40
Ms. Lianyun Han

            Leadership and Management experience – founder of Heilongjiang Shuaiyi and has been Heilongjiang Shuaiyi‘s Chairwo man and
             Chief Executive Officer since 2006 and the Co mpany‘s Chairwo man and Chief Officer since 2008

            Industry background – president of Heilongjiang Shuaiyi Technology Development Co., Ltd., a co mpany that is engaged in the
             business of developing, manufacturing, marketing and selling high-tech agricultural products, from 1998 to 2006

Mr. Chunming Zhang

            Leadership and Management experience –became our d irector on January 12, 2009 and joined Heilongjiang Shuaiyi in 2006 as the
             production manager

            Education background – holds a Bachelor‘s degree in economics fro m Northeast Agricultural University

Ms. Nana Jiang

            Leadership and Management experience – became our d irector on January 12, 2009 and joined Heilongjiang Shuaiyi in 2006 as the
             managing accountant

            Education background – holds a Bachelor‘s degree in English fro m Harb in Normal Un iversity

Mr. John Jing Zhang

            Leadership and Management experience – became our director on January 12, 2009 and fro m September 2003 to August 2006, the
             Managing Director of FirsTrust Group, a US merchant bank headquartered in Atlanta, GA

            Education background – MBA fro m Emory University

Mr. Xi Zhu

            Leadership and Management experience – became our director on January 12, 2009 and is a Senior Financial Advisor fo r JINDU
             Investment, a financial consulting firm that specializes in PIPE deals

            Education background - Bachelor‘s degree in Ad ministrative Management fro m Qingdao University

Board Composition and Committees

The board of directors is currently co mposed of five members, Ms. Lianyun Han, Ms. Nana Jiang, M r. Chun ming Zhang, Mr. John Jing Zhang
and Mr. Xi Zhu. All Board action requires the approval of a majority of the directors in attendance at a meeting at which a q uorum is present.
We may increase the size of our board of directors in the future but have not determined the approximate t ime to take such action.

We currently do not have standing audit, no minating or compensation committees. Our board of directors handles the functions that would
otherwise be handled by each of the committees. We intend, however, to establish an audit committee, a nominating committee and a
compensation committee of the board of directors as soon as practicable. We envision that the audit committee will be primari ly responsible for
reviewing the services performed by our independent auditors, evaluating our accounting policies and our system of intern al c ontrols. The
nominating co mmittee would be primarily responsible for nominating directors and setting policies and procedures fo r th e nomination of
directors. The nominating co mmittee would also be responsible for overseeing the creation and implementation of our corporate governance
policies and procedures. The co mpensation committee will be primarily responsible fo r reviewing and approving our co mpensation and benefit
policies, including co mpensation of executive officers.

Our board of directors has not made a determination as to whether any member of our board is an audit committee financial exp ert. Upon the
establishment of an audit co mmittee, the board will determine whether any of the directors qualify as an audit co mmittee financial expert.

                                                                      41
Family Relationships

There is no family relationship among any of our officers or d irectors.

Code of Ethics

Our board of directors has adopted a code of ethics that applies to Ch ief Executive Officer, President, Ch ief Financial Offic er, Principal
Executive Officer, Principal Financial Officer, Principal Accounting Of ficer, Controller and persons performing similar functions. The code of
ethics addresses, among other things, ethical conduct, conflicts of interest, comp liance with laws, regulat ions and policies, including disclosure
requirements under the federal securities laws, confidentiality, trading on inside info rmation, and reporting of violat ions of the code. A copy of
the code of ethics has been filed as Exh ib it 14.1 to our Annual Report on Form 10-KSB filed on November 20, 2007. We are in the process of
building up the Co mpany website. Once our website is availab le, we will make the code of ethics available on the website. Thereafter , any
amend ments or waivers to the code of ethics will be posted on our website within four business days of such amend ment or waiv er. Until such
time, however, any amend ments or waivers to our code of ethics will be filed with the SEC in a Current Report on Form 8 -K.

Involvement in Certain Legal Proceedings

None of our directors or executive officers has, during the past ten years:

           been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic vio lations and ot her
            minor offences);

           had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business
            association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two y ears
            prior to that time;

           been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent
            jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspendin g or otherwise limiting, his
            involvement in any type of business, securities, futures, commodit ies, investment, banking, savings and loan, or insurance
            activities, or to be associated with persons engaged in any such activity;

           been found by a court of co mpetent jurisdiction in a civ il action or by the Securit ies and Exchange Co mmission or the Co mmodity
            Futures Trading Co mmission to have violated a federal or state securities or commodities law, and the judgment has not been
            reversed, suspended, or vacated;

           been the subject of, or a party to, any federal or state judicial or ad min istrative order, judgment, decree, or finding, not subsequently
            reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relat ing to an alleged
            violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial ins titutions
            or insurance companies including, but not limited to, a temporary or permanent injunction, order of dis gorgement or restitution,
            civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibit ion order, o r any law or regulation
            prohibiting mail or wire fraud or fraud in connection with any business entity; or

           been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self -regulatory
            organization (as defined in Sect ion 3(a)(26) of the Exchange Act, any registered entity (as defined in Section 1(a)(29) of th e
            Co mmodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its
            members or persons associated with a member.

                                                        EXEC UTIVE COMPENS ATION

Summary Compensation Table – 2009 and 2008

The following table sets forth informat ion concerning all cash and non -cash compensation awarded to, earned by or paid to th e named persons
for services rendered in all capacit ies during the noted periods. No executive o fficer receive d total annual salary and bonus compensation in
excess of $100,000 during the fiscal years 2009 and 2008.

                                                                           42
                                                                              Salary                  Bonus                    Total
Name and Princi pal Position                               Year                 ($)                    ($)                      ($)

Lianyun Han,                                               2009                        12,000                   3,000                  15,000
CEO and President (1)                                      2008                        12,000                   3,000                  15,000
Eugene M. Weiss,                                           2009                             -                       -                       -
former President and Director (2)                          2008                             -                       -                       -
Joseph Meuse,                                              2009                             -                       -                       -
former President and Director (3)                          2008                             -                       -                       -
Brian Jaggard,                                             2009                             -                       -                       -
former CEO, President, CFO                                 2008                             -                       -                       -
and Director (4)

(1)    On December 23, 2008, we acquired New Resources in a reverse acquisition transaction that was structured as a share exchange and in
       connection with that transaction, Ms. Lianyun Han became our Ch ief Executive Officer, President and director. Prior to the e ffective
       date of the reverse acquisition, Ms. Han served at New Resources ‘ wholly o wned subsidiary Heilongjiang Shuaiyi as its chairperson
       and chief executive o fficer. The annual, long term and other co mpensation shown in this table include the amount Ms. Han received
       fro m Heilongjiang Shuaiyi prior to the consummation of the reverse acquisition.

(2)    Eugene M. Weiss resigned fro m all offices he held with us upon the closing of the reverse acquisition of New Resources on Dec ember
       23, 2008. M r. Weiss was our director until January 12, 2009.

(3)    Joseph Meuse resigned fro m his position as our President on August 8, 2008 and appointed Eugene Weiss as our sole officer and
       director.

(4)    Brian Jaggard resigned fro m h is position as our President on August 1, 2008 and appointed Joseph Meuse as our sole officer an d
       director.

Empl oyment Agreements

Our indirect subsidiary Heilongjiang Shuaiyi entered into an emp loy ment agreement with our CEO and President, Ms. Lianyun Han . Ms. Han‘s
emp loyment agreement has a five-year term beginning on December 7, 2008 and ending on December 7, 2013. Ms. Han ‘s emp loyment
agreement provides for a monthly salary of approximately $1,000 and an annual bonus of approximately $3,000. Ms. Han is subje ct to
customary non-competit ion and confidentiality covenants under the agreement. The employ ment agreement does not entitle Ms. Han to
severance payments or payments following a change in control.

On August 18, 2009, Heilongjiang Shuaiyi and Mr. Hongbin Hua entered into an employ ment agreement. The term of the employ ment
agreement is for five years co mmencing on August 18, 2009. The emp loy ment agreement provides, among other things, that Mr. Hua‘s annual
base salary will be RM B 1,000,000 (appro ximately $147,000), or Annual Salary. During the term of the employ ment agreement, if either party
terminates the emp loyment for any reas on, the other party will be entit led to the compensation equal to 30% of the Annual Salary fro m the
terminating party. The Emp loy ment Agreement also contains covenants prohibiting Mr. Hua fro m disclosing any confidential info rmat ion of
the Co mpany.

On July 16, 2010, we and Mr. Tick entered into an employ ment agreement. The term o f the emp loyment agreement is for three years
commencing on July 16, 2010. The emp loyment agreement provides, among other things, that Mr. Tick‘s monthly base salary will be $12,650.

During the term of the employ ment agreement, if either party terminates the employment for any reason, a minimu m of sixty (60 ) days notice
must be given in writ ing to the other party. The emp loyment ag reement also contains covenants prohibiting Mr. Tick fro m competing with the
Co mpany during his emp loyment with the Co mpany or disclosing any confidential info rmation of the Co mpany both during his empl oy ment
and after the termination of emp loy ment.

                                                                     43
On July 16, 2010, we and Mr. Tick entered into a stock option agreement under the Company ‘s 2009 Equity Incentive Plan, or the Plan.
Pursuant to the terms of the stock option agreement, Mr. Tick was granted options to purchase an aggregate 150,000 shares of common stock of
the Co mpany, among wh ich, an option to purchase 75,000 shares will be vested on December 31, 2011 with an exercise price of $ 5.00 per
share, an option to purchase 100,000 shares will be vested on December 31, 2012 with an exercise price of $7.00 per share. Each of the options
expires three years after its respective vesting date.

According to the stock option agreement, in the event Mr. Tick ‘s employ ment with us is terminated for any reason except for death or
disability, he may exercise the options only to the extent that the options would have been exercisable on the termination da te and no later than
three months after the termination date. If Mr. Tick‘s employ ment is terminated because of his death or disability, the options may be exercised
only to the extent that such options would have been exercisable by Mr. Tick on the termination date and must be exercised by Mr. Tick no
later than twelve months after the termination date. If the emp loyment is terminated for Cause as defined in the stock option agreement, t he
options will terminate immediately. In no event will the options be exercised later than December 31, 2015.

On the same date, we also entered into a restricted shares grant agreement under the Plan with M r. Tick. Pursuant to the terms of the restricted
shares grant agreement, we granted to Mr. Tick 150,000 restricted shares of the Company ‘s common stock subject to the vesting schedule
therein. If M r. Tick‘s service with the Co mpany ceases for any reason other than Mr. Tick ‘s (a) death, (b) Disability, (c) Retirement, or (d )
termination by the Co mpany without cause, any nonvested restricted shares will be auto matically forfeited to t he Co mpany.

Both the options and the restricted shares are also subject to certain acceleration provision provided in the stock option ag reement and the
restricted shares grant agreement, respectively.

We have not provided retirement benefits (other than a state pension scheme in which all of our employees in China participate) or severance
or change of control benefits to our named executive officer.

Outstandi ng Equity Awards at Fiscal Year End

None of our executive officers received any equity awards, including, options, restricted stock or other equity incentives du ring the fiscal year
ended December 31, 2009.

Compensati on of Directors

The table below sets forth the compensation of our directors for the fiscal year ended December 31, 2009:

                                                                                                      Non-Equity
                                                                                                     Incentive Plan         All Other
                                         Fees Earned or       Stock Awards       Option Awards       Compensation         Compensation
Name                                     Paid in Cash ($)          ($)                ($)                 ($)                   ($)          Total ($)
Lianyun Han (1)                                      15,000                  -                   -                    -                  -          15,000
Nana Jiang                                            3,470                  -                   -                    -                  -           3,470
Chunming Zhang                                            -                  -                   -                    -                  -               -
John Jing Zhang                                           -                  -                   -                    -                  -               -
Xi Zhu                                                    -                  -                   -                    -                  -               -

(1)
  Ms. Han does not receive additional co mpensation for her service as our d irector. The co mpensation disclosed herein is her co mpensation for
serving as our CEO and President as disclosed in the Summary Co mpensation Table above.

                                                                        44
      TRANSACTIONS WITH RELATED PERS ONS, PROMOTERS AND CERTAIN CONTROL PERSONS; CORPORATE
                                            GOVERNANCE

Transactions with Related Persons

The following includes a summary of transactions since the beginning of the 2009 fiscal year, or any currently proposed trans action, in which
we were or are to be a part icipant and the amount involved exceeded or exceeds the lesser of $1 20,000 or one percent of the average of our
total assets at year-end for the last two comp leted fiscal years, and in which any related person had or will have a d irect or indirect material
interest (other than compensation described in the section of ―Executive Co mpensation‖ above). We believe the terms obtained or
consideration that we paid or received, as applicable, in connection with the transactions described below were co mparable to terms available
or the amounts that would be paid or received, as applicable, in arm‘s-length transactions.

           On January 10, 2008, Daq ing Shuaiyi entered into a land lease agreement with Heilongjiang Shuaiy i Technology Development Co.,
            Ltd., pursuant to which Daqing Shuaiyi leased a land use right for 20 years over a 410,00 0 square meter t ract on which it has nine
            factory buildings to grow and cultivate Ch inese Go lden Grass.

           On October 15, 2007, Heilongjiang Shuaiyi entered into a loan agreement with its wholly -owned subsidiary, Daqing Shuaiyi,
            pursuant to which Heilongjiang Shuaiyi agreed to loan RMB 35 million (appro ximately $5.1 million) to Daqing Shuiayi. The loan
            is non-interest bearing and unsecured. Daqing Shuaiyi is obligated under the loan agreement to pay off RM B 7 million
            (approximately $1 million) by October 30 each year starting fro m 2008. The loan matures on October 15, 2012.

           On September 12, 2008, the Shareholder entered into separate Earn -In Agreements with the Funders of Heilongjiang Shuaiyi,
            including our chairperson and chief executive officer, Lianyun Han. Pursuant to the Earn -In Agreements, each Founder has an
            option to purchase shares of the Shareholder‘s ordinary shares at a purchase price of $0.01 per share (the par value of the
            Shareholder‘s ordinary shares), provided that the aggregate price with respect to the shares eligible to be purchased relating to the
            satisfaction of condition (4) below is the sum of $0.01 per share, mu ltiplied the number of such shares, plus $1,000, upon the
            satisfaction of each of the following conditions: (1) six months have expired since the date of the Share Exchange Agreement,
            provided that on or before that date, the Founder and Heilongjiang Shuaiyi have entered into a b inding employ ment agreement and
            the Founder is employed by Heilongjiang Shuaiyi pursuant to that agreement on such date; (2) the SEC has declared a registrat ion
            statement filed by the Company under the Securities Act effective, or investors who purchased common stock fro m the Co mpany
            pursuant to a securities purchase agreement being ab le to sell their co mmon stock under Rule 144; (3) Heilongjiang Shuaiyi an d its
            subsidiaries have achieved not less than $1,560,000 in after -tax net inco me, as determined under US GAAP fo r the six mo nths
            ended June 2009; and (4) Heilongjiang Shuaiyi has achieved not less than $3,900,000 in pre -tax pro fits, as determined under US
            GAAP fo r the fiscal year ending 2009. Notwithstanding the foregoing, fo r purposes of determining whether or not the financial
            thresholds described above have been achieved, the purchase of the shares by the Founder or any other person designated by th e
            Founder shall not be deemed to be an expense, charge, o r other deduction fro m revenues of the Co mpany even though GAAP may
            require contrary treat ment. Each Founder may purchase 25% of the total nu mber of shares that he or she is eligible to purchas e
            under his or her Earn -In Agreement upon the satisfaction of each condition described above and the aggregate number of shares
            elig ible for purchase by all o f the Founders under the Earn -In Agreements is 100,000. On February 12, 2009, each Founder and the
            Shareholder entered into the First A mendment to amend the definition of the first condition. As a result, pursuant to the First
            Amend ment, in order to satisfy the first condition for each Founder, only Ms. Lianyun Han needs to enter into a bin ding
            emp loyment agreement with Heilongjiang Shuaiy i within six months after the date of the Share Exchange Agreement.

           On December 8, 2008, Heilongjiang Shuaiyi entered into separate loan agreement and promissory notes, or the Notes, with the
            Founders, pursuant to which Heilongjiang Shuaiyi bo rrowed an aggregate of RMB 60 million (appro ximately $8.8 million) from
            the Founders, including fro m our chairperson and chief executive officer. The Notes bear no interest and are payable in succe ssive
            equal yearly payments beginning on the tenth annivers ary of the Notes, December 8, 2018, and within the first month of each year
            thereafter. The final pay ment is due on January 1, 2028. On February 12, 2009, Heilongjiang Shuaiyi and the Founders amended
            the Notes, pursuant to which the Shuaiyi Founders subordinate any right to receive any payment with respect to this loan to the
            payment or provision for pay ment in full of all claims of all present and future creditors of Heilongjiang Shuaiyi.

                                                                       45
Except as set forth in our discussion above, none of our directors, director nominees or executive officers has been involved in any tr ansactions
with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursua nt to the rules and
regulations of the SEC.

Promoters and Certain Control Persons

We did not have any promoters at any time during the past five fiscal years.

Parents of the Company

New Zealand WA YNE‘s Investment Holdings Co., Ltd. currently owns 54.87% o f Nutrastar International Inc.

Director Independence

We currently do not have any independent directors, as the term ―independent‖ is defined by the rules of the Nasdaq Stock Market.

                                                       CHANGE IN ACCOUNTANTS

       (a)     Dis missal of Prev ious Independent Registered Public Accounting Firm.

              i.      Effective July 12, 2010, our Board of Directors approved the dismissal of AGCA, Inc., or A GCA, as the Company's
                      independent registered public accounting firm.

              ii.     AGCA‘s reports on the Co mpany‘s financial statements as of and for the fiscal years ended December 31, 2009 and 2008
                      did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit
                      scope, or accounting principles.

              iii.    During the Co mpany‘s two most recent fiscal years (ended December 31, 2009 and 2008) and during the subsequent
                      interim period through July 12, 2010, there were (1) no disagreements with A GCA on any matter of accounting
                      principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not
                      resolved to the satisfaction of A GCA, would have caused AGCA to make reference to the subject matter of the
                      disagreements in connection with its reports, and (2) no events of the type listed in paragraphs (A) t hrough (D) of Item
                      304(a)(1)(v) of Regulation S-K.

       (b)     Engagement of New Independent Registered Public Accounting Firm

              i.      Concurrent with the decision to dismiss AGCA as the Company ‘s independent auditor, the Board approved the
                      engagement of Crowe Horwath (HK) CPA Limited, or Crowe Horwath, as the Co mpany ‘s new independent registered
                      public accounting firm.

              ii.     During the Co mpany‘s two most recent fiscal years (ended December 31, 2009 and 2008) and through the subsequent
                      interim period to July 12, 2010, the Co mpany did not consult Crowe Horwath with respect to (a) the application of
                      accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be
                      rendered on the Co mpany‘s consolidated financial statements, and neither a written report was provided to the Co mpany
                      or oral advice was provided that Crowe Horwath concluded was an important factor considered by the Company in
                      reaching a decision as to the accounting, auditing or financial reporting issue; or (b) any matter that was the subject of
                      either a d isagreement as defined in Item 304(a)(1)(iv) of Regulat ion S-K or a reportable event as described in Item
                      304(a)(1)(v) of Regulation S-K.

We provided AGCA with a copy of this disclosure on July 15, 2010, providing A GCA with the opportunity to furnish us with a le tter addressed
to the SEC containing any new informat ion, clarification of the Co mpany's expression of its views, or the respect in which AGCA does not
agree with the statements contained herein. A letter fro m A GCA dated July 16, 2010 was attached as Exh ibit 16.1 to the Curren t Report on
Form 8-K filed on July 16, 2010.

                                                                       46
                                                         SELLING STOCKHOLDERS

This prospectus relates to the resale by the selling stockholders named belo w fro m t ime to time of up to a total of 1,500,000 shares of our
common stock that were issued or are issuable to selling stockholders pursuant to transactions exempt fro m reg istration under the Securities
Act. All o f the co mmon stock offered by this prospectus is being offered by the selling stockholders for their own accounts. The selling
stockholders are div ided into two categories: (1) investors from the private placement transaction; and (ii) certain shareholder who received
shares of our common stock before the private placement transaction.

Private Placement Transaction

On December 17, 2009, we co mpleted a private placement transaction and sold 1,000,000 shares of our co mmon stock to certain accredited
investors at $2.50 per share for a total of $2.5 million pursuant to a securities purchase agreement, or the 2009 Securities Purchase Agreement.
In addition, we issued to each of the investors two warrants to purchase in aggregate 500,000 shares of our common stock, including a Series A
warrant having a term of three years with an exercise price of $3.25 per share and a Series B warrant having a term o f three years with an
exercise price o f $4.00 per share, both of which are subject to the usual adjustments for certain corporate events. The shares underlying the
warrants are being included in this registration statement, but none of the warrants has been exercised.

Pursuant to the 2009 Securities Purchase Agreement, we agreed to reg ister the shares and the warrants within a pre -defined period. We are
subject to registration delay payments in cash in the amounts prescribed by the Securit ies Purchase Agreement if it is unabl e to file the
registration statement, cause it to become effective or maintain its effect iveness as required by the Securities Purchase Agreement.

In addition, pursuant to the 2009 Securities Purchase Agreement, our majority stockholder, the Shareholder ag reed to place a t otal of 1,000,000
shares of our common stock held by it into escrow to secure the make good obligations described below on behalf of the invest ors. Under the
2009 Securit ies Purchase Agreement, the Shareholder agreed that: (i) in the event that our consolidated financial statements reflect less than
$9,000,000 of after-tax inco me fo r the fiscal year ending December 31, 2010, it will transfer to the investors, on a pro rata basis, for no
additional consideration, 500,000 shares of our common stock owned by it; and (ii) in the event that our consolidated financial statements
reflect less than $11,000,000 of after-tax net inco me for the fiscal year ending December 31, 2011, it will transfer to the investors, on a pro rata
basis, for no additional consideration, 500,000 shares of our common stock owned by it.

The issuance of these shares of common stock and the warrants was made in reliance upon exemptions provided by Section 4(2) o f the
Securities Act for the offer and sale of securit ies not involving a public offering and Regulation D pro mulgated thereunder.

Selling Stockholders

The follo wing table sets forth certain informat ion regarding the selling stockholders and the shares offered by it in this pr ospectus. Beneficial
ownership is determined in accordance with the rules of the SEC. In co mputing the number of shares beneficially owned by a selling
stockholder and the percentage of ownership of that selling stockholder, shares of common stock and underlying shares of convertible p referred
stock, options or warrants held by that selling stockholder that are convertible or exercisable, as the case may be, within 60 day s of August 25,
2010 are included. Those shares, however, are not deemed outstanding for the purpose of co mputing the percentage ow nership of any other
selling stockholder. Each selling stockholder‘s percentage of ownership in the following table is based upon 14,332,731 shares of common
stock outstanding as of August 25, 2010.

None of the selling stockholders has held a position as our officer or director, nor has any material relationship of any kind with us or any of
our affiliates. All information with respect to share ownership has been furnished by the selling stockholders. The shares be ing offered are
being registered to permit public secondary trading of the shares and the selling stockholders may offer all or part of the s hares owned for
resale fro m time to time. In addition, none of the selling stockholders has any family relationships with our officers, direc tors or controlling
stockholders. Furthermore, no selling stockholder is a registered broker-dealer or an affiliate of a registered broker-dealer.

                                                                         47
The term ―selling stockholders‖ also includes any transferees, pledges, donees, or other successors in interest to the selling stockholders named
in the table below. To our knowledge, subject to applicable community property laws, each person named in the table has sole voting and
investment power with respect to the shares of co mmon stock set forth opposite such person ‘s name. We will file a supplement to this
prospectus (or a post-effective amend ment hereto, if necessary) to name successors to any named selling stockholder who is able to use this
prospectus to resell the securities registered hereby.

                                                            Shares             Shares of              Beneficial             Percentage of
                                                         Beneficially        Common S tock            Ownership              Common S tock
                                                        Owned Before          Included in              After the              Owned After
 Name and Address                                        the Offering         Prospectus              Offering (1)             Offering (2)

 Lead Success Investment Limited (3)                       673,953             450,000 (3)              223,953                  1.55%

 #1706 Hongyuan Tiancheng, Section
 B, Hulin Rd, Guli District, Fuzhou,
 China 350003

 Chunlei Tang                                              132,859             132,353 (4)                506                      *

 9F Silver Tower, 218 Xizangnan Rd,
 Shanghai, China 200021

 Dong Lin                                                  264,706             264,706 (5)                 0                       *

 Secondly Industrial Zone, Baishi,
 Sanxiang, Zhongshan City,
 Guangdong, China 528463

 Hui Jiang                                                 176,472             176,472 (6)                 0                       *

 #18-8 Yaoditoudao Street, Daoli
 District, Harbin, China 150000

 Youliang Wang                                             264,706             264,706 (7)                 0                       *

 Five Group, Tuanjie Street,
 Dongchang District, Tonghua, Jilin
 Province, China 134000

 Yuehong Luan                                              211,763             211,763 (8)                 0                       *

 No.1610, 59-1, Xidawang Road,
 Chaoyang District, Beijing, China
 100022

 TOTAL:                                                   1,724,459            1,500,000

* Less than 1%.
(1)
        Assumes that all securities offered are sold.
(2)
        As of August 25, 2010, a total of 14,332,731 shares of our common stock are considered to be outstanding pursuant to SEC Rule
        13d-3(d)(1). For each beneficial o wner above, any options exercisable within 60 days have been included in the denominator.
(3)
        Includes 300,000 shares of our co mmon stock and 150,000 shares underlying the warrants to purchase shares of our common stock. Mr.
        Li Yi is the sole shareholder and director of Lead Success Investment Limited and has sole voting and investment control over the
        securities held by Lead Success Investment Limited.

                                                                        48
(4)
         Includes 88,235 shares of our common stock and 44,118 shares underlying the warrants to purchase shares of our common stock.
(5)
         Includes 176,470 shares of our common stock and 88,236 shares underlying the warrants to purchase shares of our common stock.
(6)
         Includes 117,648 shares of our common stock and 58,824 shares underlying the warrants to purchase shares of our common stock.
(7)
         Includes 176,470 shares of our common stock and 88,236 shares underlying the warrants to purchase shares of our common stock.
(8)
         Includes 141,177 shares of our common stock and 70,586 shares underlying the warrant to purchase shares of our common stock.

We will not receive any proceeds from the sale of any shares by the selling stockholders but we will receive funds fro m th e exercise of the
warrants held by the selling stockholders if and when those warrants are exercised for cash. We have agreed to bear expenses incurred by the
selling stockholders that relate to the registration of the shares being offered and sold by the selling stockholders, includin g the SEC reg istration
fee and legal, accounting, printing and other expenses of this offering.

                          SECURITY OWNERS HIP OF CERTAIN B EN EFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding beneficial ownership of our common stock as of August 25, 2010 (i) by ea ch person who
is known by us to beneficially o wn more than 5% of our voting securities; (ii) by each of our officers and directors; and (iii) by all of our
officers and directors as a group. Unless otherwise specified, the address of each of the persons set forth below is in care of Nutrastar
International Inc., 7/F Jinhua Mansion, 41 Hanguang Street, Nangang District, Harbin 150080, People ‘s Republic of Ch ina.



 Name and Address of
 Beneficial
 Owner                             Office, If Any                                            Shares Beneficially Owned (1)
                                                                                                                                        % Total
                                                                                                                                         Voting
                                                                      Common Stock (2)                  Series A Preferred Stock (3)    Power (4)

                                                                                    % of                                      % of
                                                                 Shares             Class               Shares                Class
                                                                    Directors and Officers
 Lianyun Han                       Chairperson, President     8,949,424 (5)        62.44%                 0                     *        54.87%
                                   and CEO
 Robert Tick                       Chief Financial Officer        0                      *                0                     *           *
                                   and Treasurer
 Hongbin Hua                       Chief M arketing Officer       0                     *                 0                     *            *
 Chunming Zhang                    Director                       0                     *                 0                     *            *
 Nana Jiang                        Director                       0                     *                 0                     *            *
 John Jing Zhang                   Director                   543,899 (6)            3.79%                0                     *         3.33%
 Xi Zhu                            Director                       0                     *                 0                     *            *
 All officers and directors as a                              9,493,323             66.24%                0                     *        58.20%
 group (7 persons named
 above)
                                                                     5% S ecurity Holders
 New Zealand WAYNE‘s                                          8,949,424 (5)        62.44%                 0                     *        54.87%
 Investment Holdings Co.,
 Ltd. 4/F, Yushan Plaza
 No.51 Yushan Road

                                                                               49
Harbin, China 150090 (5)
ARC China Investment                                  462,187 (7)          3.12%             96,289             48.70%             8.50%
Funds (7)
Banque Privée Edmond de
Rothschild Europe 20,
Boulevard Emmanuel
Servais L-2535 Luxembourg
Gal Shmuel Dymant                                      63,866 (8)            *               13,306             6.73%              1.20%
Suite 1806, Building A
Oriental M edia Centre 4
Guanghua Road Chaoyang
District, Beijing 100026
People's Republic of China
Sequoia Aggressive                                     84,034 (9)            *               17,508             8.86%              1.58%
Growth Fund (9)
c/o Nemo Asset
M anagement PO Box
60374 Abu Dhabi, U.A.E.
Adam Roseman (10)                                     487,397 (10)         3.29%             101,542            51.36%             8.95%
c/o ARC China
Investment Funds
Banque Privée Edmond
de Rothschild Europe
20, Boulevard Emmanuel
Servais L-2535 Luxembourg
Lianyun Han                Chairperson, President     8,949,424 (5)        62.44%               0                  *              54.87%
                           and CEO

* Less than 1%

(1)    Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with
       respect to securities. For each beneficial o wner above, any options exercisable with in 60 days have been included in the deno minator.

(2)    Based on 14,332,731 shares of common stock issued and outstanding as of August 25, 2010.

(3)    Based on 197,706 shares of Series A Preferred Stock issued and outstanding as of August 25, 2010. Each share of Series A Pref erred
       Stock is convertible init ially into ten (10) shares of common stock (subject to customary adjustments for stock splits, combinations, or
       equity dividends on common stock). Ho lders of Series A Preferred Stock vote with the holders of common stock on all matters o n an
       ―as converted‖ basis. See ―Description o f Securit ies – Preference Shares‖ below for mo re information regarding our Series A Preferred
       Stock.

(4)    Percentage of Total Capital Stock represents total ownership with respect to all shares of our co mmon stock and Series A Pref erred
       Stock, as a single class and on an ―as-converted‖ to common stock basis.

(5)    Includes 8,949,424 shares of co mmon stock o wned by New Zealand WA YNE‘s Investment Hold ings Co., Ltd. Pursuant to the Earn-In
       Agreement, dated September 12, 2008, as amended, the Founders, including Ms. Han, have the options to acquire a majority inte rest in
       New Zealand WAYNE‘s Investment Holdings Co., Ltd. upon the satisfaction of certain conditions set forth in the Earn -In Agreement.
       Upon the passage of six months after the date of Share Exchange Agreement, which was entered into among the Co mpany, New
       Resources, along with the subsidiaries of New Resources, including Heilongjiang Shuaiyi, Daqing Shuaiyi and Harb in Shuaiyi, and
       New Zealand WA YNE‘s Investment Holdings Co., Ltd., dated December 23, 2008, Ms. Han will own at least a majority o wnership of
       Investment Holdings if she exercises her option pursuant to the Earn -In Agreement. Ms. Han may be deemed to be a beneficial owner
       of the shares held by Investment Hold ings. In addition, pursuant to the Securities Purchase Agreement, dated December 17, 2009, New
       Zealand WAYNE‘s Investment Ho ldings Co., Ltd., agreed by the Founders, placed a total of 1,000,000 shares held by it into escrow
       that may be released to the investors in the event we do not meet the performance thresholds for 2010 and 2011. The remaining
       7,949,424 shares of common stock owned by New Zealand WAYNE‘s Investment Holdings Co., Ltd. are subject to a lock up
       agreement with ARC China, Inc., dated May 27, 2010 for a 12-month lock up period.

                                                                      50
(6)    Including 127,978 shares of common stock held by his spouse.

(7)    Includes 462,187 shares underlying a warrant to purchase our common stock. Mr. Adam Roseman is the director of ARC China
       Investment Funds and has sole voting and investment control over the securities held by ARC Ch ina Investment Funds.

(8)    Includes 63,866 shares underlying a warrant to purchase our common stock.

(9)    Includes 84,034 shares underlying a warrant to purchase our co mmon stock. M r. Christian Nav ille is the Director of Sequoia
       Aggressive Gro wth Fund and has shared voting and investment control over the securities held by Sequoia Aggressive Growth Fund.

(10)   Includes (i) 462,187 shares underlying a warrant to purchase our co mmon stock and 96,289 shares of Series A Preferred Stock d irectly
       owned by ARC Ch ina Investment Funds, and (ii) 25,210 shares underlying a warrant to purchase our common stock and 5,253 shares of
       Series A Preferred Stock. Mr. Adam Roseman is the Director of both ARC China Investment Funds and ARC China Investment Fund,
       L.P. and has sole voting and investment control over the securities held by both firms.

                                                        DES CRIPTION OF S ECURITIES

Common Stock

We are authorized to issue up to 190,000,000 shares of co mmon stock. On May 19, 2009, we amended our articles of incorporatio n to effect a
1-for-114.59 reverse split of our outstanding common stock.

Each outstanding share of common stock entitles the holder thereof to one vote per share on all matters. Stockholders do not have preemptive
rights to purchase shares in any future issuance of our co mmon stock. The holders of shares of our co mmon stock are entitled to dividends out
of funds legally available when and as declared by our board of directors. We have never declared or paid cash dividends. Our board of
directors does not anticipate declaring a dividend in the foreseeable future. Should we decide in the future to pay dividends , as a holding
company, our ability to do so and meet other obligations depends upon the receipt of dividends or other payments from our operating
subsidiaries and other holdings and investments. In addition, our PRC operating subsidiaries, fro m time to time, may be subject to restrictions
on its ability to make distributions to us, including as a result of restrict ive covenants in loan agreements, restrictions o n the conversion of local
currency into U.S. dollars or other hard currency and other regulatory restrictions.

All of the issued and outstanding shares of our common stock are duly authorized, validly issued, fully paid and non -assessable. To the extent
that additional shares of our common stock are issued, the relative interests of existing stockholders will be diluted.

Preferred Stock

We may issue up to 1,000,000 shares of preferred stock, par value $0.001 per share, in one or more classes or series within a class as may be
determined by our board of directors, who may establish, fro m time to time, the nu mber of shares to be included in each class or series, may fix
the designation, powers, preferences and rights of the shares of each such class or series and any qualifications, limitation s or restrictions
thereof. Any preferred stock so issued by our board of directors may ran k senior to the co mmon stock with respect to the payment of dividends
or amounts upon liquidation, dissolution or winding up of us, or both.

                                                                          51
On December 22, 2008, we filed a Certificate of Designation of Series A Preferred Stock, or the 2008 Certificate with the State of Nevada
designating and authorizing the issuance of up to 800,000 shares of our series A voting preferred stock, par value $0.001 per share, or the 2008
Series A Preferred Stock. On December 23, 2008, we issued 689,390 shares of our 2008 Series A Preferred Stock to the Shareholder of New
Resources. The total consideration for the 689,390 shares of our 2008 Series A Preferred Stock is 50,000 shares of New Resour ces, which is all
the issued and outstanding capital stock of New Resources. We did not receive any cash consideration in connection with the share exchange.
On December 23, 2008, we also issued and sold to Allied Ch ina Investments, LLC 17,962 shares of our 2008 Series A Preferr ed Stock for
$52,530.50, o r $2.92 per share. In addition, on December 23, 2008, we issued and sold to Tan Zhen Investment Limited 20,168 s hares of our
2008 Series A Preferred Stock for $375,000, or $18.59 per share.

Following effect iveness of the 1-for-114.59 reverse split o f our outstanding common stock and in accordance with Section 6(a) of the 2008
Cert ificate, all issued and outstanding shares of the 2008 Series A Preferred Stock were automat ically converted into shares of co mmon stock,
on the basis of 17.45 shares of common stock for each one share of 2008 Series A Preferred Stock, effective on May 29, 2009. After the
complet ion of the conversion, we withdrew the 2008 Cert ificate.

In connection with the private p lacement transaction as contemplated by t he 2010 Securit ies Purchase Agreement, dated May 27, 2010, we
filed a Cert ificate of Designation of Series A Preferred Stock, o r the 2010 Certificate, with the Secretary of State of the State of Nevada on May
27, 2010, wh ich became effective upon filing. Pursuant to the 2010 Cert ificate, there were 300,000 shares of Series A Preferred Stock
authorized.

On June 28, 2010, we co mpleted the private placement transaction and issued to certain investors approximately 197,700 Units at a purchase
price of $28.56 per Unit for gross proceeds of $5,646,270. Each Unit consists of (i) one share of Series A Preferred Stock, with an initial
one-to-ten conversion ratio into shares of the Company‘s common stock, and (ii) Series C Warrants to purchase five shares of common st ock at
an exercise price of $3.40 per share with a term of three years. As a result, we issued in aggregate 197,706 shares of our Se ries A Preferred
Stock, initially convertible into 1,977,060 shares of our common stock, and Series C Warrants to purchase a n aggregate of 988,501 shares of
our common stock.

As of the date of this Prospectus, we have 197,706 shares of our Series A Preferred Stock outstanding.

Warrant

In connection with our private placement which was closed on December 17, 2009, we issued to e ach of the investors two warrants to purchase
in aggregate 500,000 shares of our common stock, including a Series A Warrant having a term o f three years with an exercise p rice of $3.25
per share and a Series B Warrant having a term of three years with an exercise price of $4.00 per share, both of which are subject to the usual
adjustments for certain corporate events. The shares underlying the warrants are being included in this registration statemen t, but none of the
Series A or Series B Warrants has been exercised.

On June 28, 2010, we closed the private placement transaction as contemplated by the 2010 Securit ies Purchase Agreement, date d May 27,
2010 and issued to the investors Series C Warrants to purchase an aggregate of 988,501 shares of our co mmon st ock. A Series C Warrant has a
term of three years with an exercise price of $3.40 per share. None of the Series C Warrants has been exercised.

On Ju ly 1, 2010, as partial co mpensation for its services, we issued to our IR firm, A merican Capital Adventures, Inc. and its designees, a
Series D Warrant to purchase 100,000 shares of our common stock, which has a term of three years with an exercise price of $3 .80 per share.
None of the Series D Warrant has been exercised.

Anti -takeover Effects of Our Articles of Incorporati on and B y-l aws

Our Articles of Incorporation and Bylaws contain certain provisions that may have anti -takeover effects, making it mo re difficult for or
preventing a third party fro m acquiring control of the Co mpany or changing our board of dire ctors and management. Our Art icles of
Incorporation provide that our board of directors may issue, without further stockholder approval, up to 1,000,000 shares of preferred stock, par
value $0.001 per share, in one or more classes or series within a class. The issuance of preferred stock, while providing desirable flexib ility in
connection with possible acquisitions and other corporate purposes, could have the effect of making it more d ifficu lt for a t hird party to acquire,
or of discouraging a third party fro m acquiring, a majority of our outstanding voting stock. According to our Bylaws and Articles of
Incorporation, neither the holders of our common stock nor the holders of our preferred stock have cumulative voting rights in the election of
our directors. The co mbination of the present ownership by a few stockholders of a significant portion of our issued and outstanding capit al
stock and lack of cu mulat ive voting makes it more difficult for other stockholders to replace our board of directors or for a th ird party to obtain
control of the Co mpany by replacing our board of d irectors.

                                                                         52
Anti -takeover Effects of Nevada Law

Business Combinations

The ―business combination‖ provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes, or NRS, prohibit a Nevada
corporation with at least 200 stockholders fro m engaging in various ―combination‖ transactions with any interested stockholder:

           for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the
            transaction is approved by the board of directors prior to the date the interested stockholder obtained such status; or

           after the expiration of the three-year period, unless:

           the transaction is approved by the board of directors or a majority of the voting power held by disinterested stockholders, o r

           if the consideration to be paid by the interested stockholder is at least equal to the highest of: (a) the highest price per share paid by
            the interested stockholder within the three years immed iately preceding the date of the announcement of the combination or in the
            transaction in which it became an interested stockholder, whichever is higher, (b) the market value per share of common stock on
            the date of announcement of the comb ination and the date the interested stockholder acquired the shares, whichever is higher, o r (c)
            for holders of preferred stock, the highest liquidation value of the preferred stock, if it is higher.

A ―combination‖ is defined to include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer or other dispo sition, in
one transaction or a series of transactions, with an ―interested stockholder‖ having: (a) an aggregate market value equal to 5% or more of the
aggregate market value o f the assets of the corporation, (b) an aggregate market value equal to 5% or more o f the aggregate market value of all
outstanding shares of the corporation, or (c) 10% or mo re of the earning power or net inco me of the corporation.

In general, an ―interested stockholder‖ is a person who, together with affiliates and associates, own s (or within three years, did own) 10% or
more of a corporation's voting stock. The statute could prohibit or delay mergers or other takeover or change in control atte mpts and,
accordingly, may discourage attempts to acquire our company even though such a transaction may offer our stockholders the opportunity to sell
their stock at a price above the prevailing market price.

Although we do not believe that we are currently subject to these ―business comb ination‖ provisions since we only have approximately 68
stockholders of record, there can be no assurance that in the future such provisions will not apply to us.

Control Share Acquisitions

The ―control share‖ provisions of Sections 78.378 to 78.3793, inclusive, of the NRS, which apply only to Nevada corporations with at least 200
stockholders, including at least 100 stockholders of record who are Nevada residents, and which conduct business directly or indirectly in
Nevada, prohibit an acquiro r, under certain circu mstances, fro m voting its shares of a target c orporation's stock after crossing certain ownership
threshold percentages, unless the acquiror obtains approval of the target corporation's disinterested stockholders. The statute specifies three
thresholds: one-fifth or more but less than one-third, one-third but less than a majority, and a majority or more, of the outstanding voting
power. Once an acquiror crosses one of the above thresholds, those shares in an offer or acquisition and acquired within 90 d ays thereof
become ―control shares‖ and such control shares are deprived of the right to vote until disinterested stockholders restore the right. These
provisions also provide that if control shares are accorded full voting rights and the acquiring person has acquired a majori t y or more of all
voting power, all other stockholders who do not vote in favor of authorizing voting rights to the control shares are entitled to demand pay ment
for the fair value of their shares in accordance with statutory procedures established for dissenters' rights.

                                                                         53
Although we are not currently subject to these ―control share‖ provisions since we only have appro ximately 68 stockholders of record, there
can be no assurance that in the future such provisions will not apply to us.

Transfer Agent and Registrar

Our independent stock transfer agent is Interwest Transfer Co mpany, Inc, located in 1981 E. Murray Ho lladay Road, Su ite 100, Salt Lake City,
Utah 84117. Their phone number is (801) 272-9294 and facsimile nu mber is (801) 277-3147.

                       MARKET FOR OUR COMMON S TOCK AND RELAT ED S TOCKHOLDER MATTERS

Our co mmon stock is quoted under the symbol ―NUIN‖ on the OTCQB market but had not been traded in the OTCQB market except on a
limited and sporadic basis. The CUSIP nu mber is 67060M 107.

The following table sets forth, for the periods indicated, the h igh and lo w closing prices of our common stock. These prices reflect inter -dealer
prices, without retail mark-up, mark-down or co mmission, and may not represent actual transactions. These prices have been ad justed to give
retroactive effect to the 1-for-114.59 reverse split of our co mmon stock that occurred on May 19, 2009. The last reported sale price of our
common stock on January 25, 2010 was $3.76 per share.

                                                                                                              (1)
                                                                                         Closing Bid Prices
                                                                              High                                    Low
       Year E nded December 31, 2010
       1 st Quarter                                                          $5.00                                   $3.16
       2 nd Quarter                                                          $3.95                                   $1.01
       3 rd Quarter (through August 25, 2010)                                $3.06                                   $2.25
       Year E nded December 31, 2009
       1 st Quarter                                                          $28.65                                  $5.73
       2 nd Quarter                                                           $6.25                                  $5.73
       3 rd Quarter                                                           $6.25                                  $6.25
       4 th Quarter                                                           $6.25                                  $6.25

       Year E nded December 31, 2008
       1 st Quarter                                                          $13.75                                 $13.75
       2 nd Quarter                                                          $13.75                                 $13.75
       3 rd Quarter                                                          $13.75                                 $13.75
       4 th Quarter                                                          $28.65                                 $13.75

_______________

(1)    The above table sets forth the range of high and low closing bid prices per share of our common stock as reported by
       www.quotemed ia.co m for the periods indicated.

Holders

On August 25, 2010, there were appro ximately 336 stockholders of record of our co mmon stock. The number o f record holders does not
include persons who held our common stock in nominee or ―street name‖ accounts through brokers.

Dividends

We have never declared or paid a cash dividend. Any future decisions regarding dividends will be made by our board of directors. We currently
intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying a ny cash dividends
in the foreseeable future. Our board of d irectors has complete d iscretion on whether to pay dividends, subject to the approva l of our
stockholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depen d upon our future operations
and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of d irectors
may deem relevant.

                                                                        54
Securities Authorized for Issuance Under Equity Compensation Plans

On June 3, 2009, our Board of Directors authorized the establishment of the Shuaiyi International New Resources Development I nc. 2009
Equity Incentive Plan, or the Plan, whereby we are authorized to issue shares of our common stock to certain employees, consultants and
directors. The maximu m aggregate number o f shares of our common stock that may be issued under the Plan is 1,000,000 shares. The Plan,
was approved by our shareholders on June 3, 2009.

On June 17, 2009, the Co mpany granted to certain employees an aggregate of 500,000 restricted shares pursuant to the Plan.

On January 1, 2010, as disclosed above, pursuant to the Plan, the Co mpany granted options to our former CFO, M r. Dan iel Lee t o purchase an
aggregate 250,000 shares of common stock of the Co mpany, among which, an option to purchase 100,000 shares will be vested in 2011 with an
exercise price of $7.00 per share, an option to purchase 100,000 shares will be vested in 2012 with an e xercise price of $10.00 per share and an
option to purchase 50,000 shares will be vested in 2013 with an exercise price of $10.00 per share. Each of the Options expir es three years after
its respective vesting date.

On January 1, 2010, pursuant to the Plan, the Co mpany also granted to Mr. Lee 140,000 restricted shares of the Co mpany ‘s common stock
subject to the vesting schedule therein.

As a result of the resignation of Mr. Lee, effective May 5, 2010, h is employ ment agreement with the Co mpany, dated Novemb er 16, 2009, the
stock option agreement with the Company, dated January 1, 2010, and the restricted shares grant agreement with the Company, d ated January
1, 2010 were terminated, effective on May 5, 2010. In addition, upon his resignation, the unvested 105,000 restricted shares and the unvested
options to purchase 250,000 shares of the Company's common stock granted to Mr. Lee were cancelled.

On Ju ly 16, 2010, we and Mr. Tick entered into a stock option agreement under the Plan. Pursuant to the terms of th e stock option agreement,
Mr. Tick was granted options to purchase an aggregate 150,000 shares of co mmon stock of the Co mpany, among which, an op tion t o purchase
75,000 shares will be vested on December 31, 2011 with an exercise price o f $5.00 per share, a n option to purchase 100,000 shares will be
vested on December 31, 2012 with an exercise price of $7.00 per share. Each of the options expires three years after its resp ective vesting date.

On the same date, we also entered into a restricted shares grant agreement under the Plan with M r. Tick. Pursuant to the terms of the restricted
shares grant agreement, we granted to Mr. Tick 150,000 restricted shares of the Company ‘s common stock subject to the vesting schedule
therein. If M r. Tick‘s service with the Co mpany ceases for any reason other than Mr. Tick‘s (a) death, (b) Disability, (c) Retirement, or (d )
termination by the Co mpany without cause, any nonvested restricted shares will be auto matically forfeited to the Co mpany.

                                                   SHARES ELIGIB LE FOR FUTUR E SALE

As of August 25, 2010, 14,332,731 shares of our common stock were issued and outstanding.

Shares Covered by this Prospectus

All of the 1,500,000 shares being registered in this offering may be sold without restriction under the Securities Act, so lo ng as the registration
statement of which this prospectus is a part is, and remains, effect ive.

Rule 144

The SEC has recently adopted amendments to Rule 144 which became effective on February 15, 2008 and apply to securities acquired both
before and after that date. Under these amendments, a person who has beneficially o wned restricted shares of our common stock or warrants for
at least six months is entitled to sell its securities provided that (1) such person is not deemed to have been one of our affiliat es at the time of, or
at any time during the three months preceding, a sale, (2) we are subject to the Exchange Act reporting requi rements for at least 90 days before
the sale and (3) if the sale occurs prior to satisfaction of a one-year holding period, we provide current informat ion at the time o f sale.

                                                                           55
Persons who have beneficially owned restricted shares of our co mmon stock or warrants for at least six months but who are ou r affiliates at the
time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be
entitled to sell within any three-month period only a nu mber of securities that does not exceed the greater of:

           1% of the total number of securities of the same class then outstanding, which will equal appro ximately 143,327shares immedia tely
            after this offering; or

           the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144
            with respect to such sale.

provided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sa le.

However, since our shares are quoted on the OTCQB, which is not an ―automated quotation system,‖ our stockholders will n ot be able to rely
on the market-based volume limitat ion described in the second bullet above. If, in the future, our securities are listed on an exchange or quoted
on NASDA Q, then our stockholders would be ab le to rely on the market -based volume limitation. Unless and until our stock is so listed or
quoted, our stockholders can only rely on the percentage based volume limitation described in the first bullet above.

Such sales by affiliates must also comply with the manner of sale, current public informat ion and notice provisions of Rule 144. The selling
stockholders will not be governed by the foregoing restrictions when selling their shares pursuant to this prospectus.

Historically, the SEC staff has taken the position that Rule 144 is not available for the resa le of securit ies init ially issued by companies that are,
or previously were, blan k check co mpanies, like us. The SEC has codified and expanded this position in the amendments discuss ed above by
prohibiting the use of Ru le 144 for resale of securities issued by any shell companies (other than business combination related shell co mpanies)
or any issuer that has been at any time previously a shell co mpany. The SEC has provided an important exception to this prohi bition, however,
if the following conditions are met :

           the issuer of the securities that was formerly a shell co mpany has ceased to be a shell co mpany;

           the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d ) of the Exchange Act;

           the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding
            12 months (or such shorter period that the issuer was required to file such reports and materials), other than Cu rrent Re ports on
            Form 8-K; and

           the least one year has elapsed from the time that the issuer filed current co mprehensive disclosure with the SEC reflecting its status
            as an entity that is not a shell co mpany.

As a result, it is likely that pursuant to Rule 144 our stockholders, who were stockholders of ours prior to the reverse acquisition of New
Resources that concluded on December 23, 2008, were ab le to sell the their shares of our common stock fro m and after December 31, 2009 (the
one year anniversary of our filing of the Current Report on Form 8-K report ing the reverse acquisition of New Resources) without registration.

                                                            PLAN OF DIS TRIB UTION

The selling stockholders may, fro m time to t ime, sell, t ransfer or otherwise dis pose of any or all of their shares of common stock or interests in
shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These
dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at vary ing
prices determined at the time of sale, or at negotiated prices.

                                                                           56
The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein:

           ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

           block trades in wh ich the broker-dealer will attempt to sell the shares as agent, but may position and resell a port ion of the blo ck as
            principal to facilitate the transaction;

           purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

           an exchange distribution in accordance with the rules of the applicable exchange;

           privately negotiated transactions;

           short sales effected after the date the registration statement of which this Prospectus is a part is declared effective by th e SEC;

           through the writ ing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

           broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share ; and

           a comb ination of any such methods of sale.

The selling stockholders may, fro m t ime to t ime, pledge or grant a security interest in some or all of the shares of common s tock owned by
them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of
common stock, fro m time to time, under this Prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or othe r applicable
provision of the Securit ies Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as
selling stockholders under this prospectus. The selling stockholders also may transfer the shares of common stock in other circu mstances, in
which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of our common stock or interests therein, the selling stockholders may enter into hedging transac tions with
broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the
positions they assume. The selling stockholders may also sell shares of our common stock short and deliver these s ecurities to close out their
short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also
enter into option or other transactions with bro ker-dealers or other financial institutions or the creat ion of one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The aggregate proceeds to the selling stockholders from the sale of the co mmon stock offered by them will be the purchase pri ce of the
common stock less discounts or commis sions, if any. Each of the selling stockholders reserves the right to accept and, together with their
agents fro m time to t ime, to reject, in whole or in part, any proposed purchase of common stock to be made direct ly or throug h agents. We will
not receive any of the proceeds fro m this offering.

Bro ker-dealers engaged by the selling stockholders may arrange for other broker -dealers to participate in sales. Bro ker-dealers may receive
commissions or discounts fro m the selling stockholders (or, if any broker-dealer acts as agent for the purchase of shares, fro m t he purchaser) in
amounts to be negotiated. The selling stockholders do not expect these commissions and discounts to exceed what is customary in the types of
transactions involved.

The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securit ies
Act, provided that they meet the criteria and conform to the requirements of that rule.

The broker-dealers or agents that participate in the sale of the co mmon stock or interests therein and the selling stockholders who are affiliates
of broker-dealers may be ―underwriters‖ within the meaning of Sect ion 2(11) of the Securities Act. Any discounts, commissions, con cessions
or profit they earn on any resale of the shares may be underwrit ing discounts and commissions under the Securities Act. Selling stockholders
who are ―underwriters‖ within the meaning of Sect ion 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the
Securities Act. We know of no existing arrangements between any of the selling stockholders and any other stockholder, broker , dealer,
underwriter, or agent relating to the sale or distribution of the shares, nor can we presently estimate the amount, if any, of such compensation.
See ―Selling Stockholders‖ for description of any material relat ionship that a stockholder has with us and the description of such relationship.

                                                                         57
To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purc hase prices and
public offering prices, the names of any agents, dealer or underwriter, any applicable co mmissions or dis counts with respect to a part icular
offer will be set forth in an acco mpanying prospectus supplement or, if appropriate, a post -effective amendment to the registration statement
that includes this Prospectus.

In order to co mply with the securities laws of some states, if applicable, the co mmon stock may be sold in these jurisdictio ns only through
registered or licensed brokers or dealers. In addition, in so me states, the common stock may not be sold unless it has been r egistered or
qualified for sale or an exemption fro m reg istration or qualificat ion requirements is availab le and is co mplied with.

We have advised the selling stockholders that the anti-manipulat ion rules of Regulation M under the Exchange Act may apply to sales of shares
in the market and to the act ivities of the selling stockholders and their affiliates. In addition, we will make copies of this Prospectus (as it m ay
be supplemented or amended fro m t ime to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery
requirements of the Securit ies Act. The selling stockholders may indemnify any bro ker-dealer that participates in transactions involving the
sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

We have agreed to pay certain fees and expenses incurred by us incident to the registration of the shares. We have agreed to i ndemnify the
selling stockholders against liabilit ies, including liab ilities under the Securities Act and state securities laws, re lat ing to the registration of the
shares offered by this Prospectus.

                                                                 LEGAL MATTERS

The validity of the common stock offered by this prospectus will be passed upon for us by Holland & Hart LLP, Reno, Nevada.

                                                                       EXPERTS

The audited consolidated financial statements of Nutrastar International Inc. for the fiscal years ended December 31, 2009 an d 2008 included in
this prospectus and in the registration statement have been audited by AGCA, Inc., independe nt registered public accounting firm, to the extent
and for the periods sent forth in their respective reports appearing elsewhere herein and in the registration statement, and are included in
reliance on such reports, given the authority of said firms as experts in auditing and accounting.

                                               WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a reg istration statement on Form S -1 under the Securities Act with respect to the common stock offered in this
offering. This prospectus does not contain all of the information set forth in the registration statement. For further informatio n with respect to
us and the common stock offered in this offering, we refer you to the registration statement and to the attached exhib its. With respect to each
such document filed as an exh ibit to the registration statement, we refer you to such exhibit for a more co mplete descriptio n of the matters
involved.

You may inspect our registration statement and the attached exhibits and sch edules without charge at the public reference facilit ies maintained
by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may obtain copies of all or any part of our registration statement fro m the SEC
upon payment of prescribed fees. You may obtain informat ion on the operation of the public reference roo m by calling the SEC at
1-800-SEC-0330.

Our SEC filings, including the registration statement and the exhibits filed with the registration statement, are also availa ble fro m the SEC‘s
website at www.sec.gov, which contains reports, proxy and informat ion statements and other informat ion regarding issuers that file
electronically with the SEC.

                                                                            58
                                    INDEX TO CONSOLIDATED FINANCIAL S TATEMENTS

                                                                                                                  Page

NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES FINANCIAL STATEMENTS FOR THE
SIX-MONTH PERIOD ENDED J UNE 30, 2010 (UNAUDITED)

Condensed Consolidated Balance Sheets as of June 30, 2010 (Unaudited) and December 31, 2009                       F-2
Condensed Consolidated Statements of Income and Co mp rehensive Income (Unaudited) for the Three and Six Months   F-3
Ended June 30, 2010 and 2009
Condensed Consolidated Statements of Stockholders ‘ Equity (Unaudited) for the Six Months Ended June 30, 2010     F-4
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2010 and 2009       F-5
Notes to Condensed Consolidated Financial Statements                                                              F-6

NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMB ER 31, 2009 AND 2008

Reports of Independent Registered Public Accounting Firm                                                          F-27
Consolidated Balance Sheets                                                                                       F-28
Consolidated Statements of Income and Co mprehensive Income                                                       F-29
Consolidated Statements of Stockholders ‘ Equity                                                                  F-30
Consolidated Statements of Cash Flows                                                                             F-31
Notes to Consolidated Financial Statements                                                                        F-32

                                                                 F-1
                                        NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                          CONDENS ED CONSOLIDATED BALANCE S HEETS
                                              (AMOUNTS EXPRESSED IN US DOLLA RS)

                                                                                                         June 30              December 31
                                                                                                          2010                   2009
                                                                                                       (Unaudited)
                                              ASSETS
CURRENT ASSETS
Cash and cash equivalents                                                                          $      32,262,243      $      20,115,677
Restricted cash                                                                                              350,000                      -
Accounts receivable                                                                                          279,564                215,486
Inventories                                                                                                  704,502                616,073
Due fro m related party                                                                                       51,000                      -
Prepay ments and other receivables                                                                           209,733                251,235
  Total current assets                                                                                    33,857,042             21,198,471
OTHER ASSETS
Intangible assets, net                                                                                     2,541,496              2,747,402
Property, plant and equip ment, net                                                                       10,174,213             10,396,507

   Total assets                                                                                    $      46,572,751      $      34,342,380


                         LIAB ILITIES AND S HAREHOLDERS' EQUIT Y
CURRENT LIA BILITIES
Accounts payable                                                                                   $          55,214      $             863
Other payables and accruals                                                                                  380,184                453,504
Payable for intangible assets                                                                                883,535                878,709
Income tax payable                                                                                           241,032                319,873
Due to related parties                                                                                       551,665                 49,794
Preferred stock div idend payable                                                                             13,748                      -
Acquisition payable                                                                                        8,784,821              8,736,833
  Total current liabilities                                                                               10,910,199             10,439,576
Warrants liabilities                                                                                       1,006,279                      -

  Total liabilities                                                                                       11,916,478             10,439,576

COMMITM ENTS A ND CONTINGENCIES

  SHA REHOLDERS' EQUITY
Preferred Stock, $0.001 par value, 1,000,000 shares authorized, 197,706 shares
  and none shares issued and outstanding, respectively; aggregate liquidation
  preference amount: $5,535,768 and $n il, plus accrued but unpaid dividend of
  $13,748 and $nil, at June 30, 2010 and December 31, 2009, respectively                                      4,554,406                     -
Co mmon stock, $0.001 par value, 190,000,000 shares authorized,
  14,332,731 and 14,297,731 shares issued and outstanding                                                     14,333                 14,298
Additional paid-in capital                                                                                 6,356,116              4,715,891
Statutory reserves                                                                                         1,345,894              1,341,687
Retained earn ings                                                                                        21,234,521             16,858,012
Accumulated other comp rehensive income                                                                    1,151,003                972,916
  Total shareholders' equity                                                                              34,656,273             23,902,804

   Total liabilities and sharehol ders' equity                                                     $      46,572,751      $      34,342,380


                                      See accompanying notes to condensed consolidated financial statements

                                                                      F-2
                               NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                 CONDENS ED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENS IVE INCOME
                                                (UNAUDIT ED)
                                     (AMOUNTS EXPRESSED IN US DOLLA RS)

                                                                 For the Three Months                       For the Six Months
                                                                    Ended June 30,                            Ended June 30,
                                                                2010               2009                   2010               2009

Revenue                                                  $       5,458,152     $      3,339,762      $    10,226,547       $    7,983,039

Cost of goods sold                                                (888,415 )         (1,183,805 )         (1,944,930 )         (2,939,751 )

Gross profit                                                     4,569,737            2,155,957               8,281,617         5,043,288

Selling expenses                                                  (233,310 )            (81,574 )             (405,028 )         (193,119 )
General and administrative expenses                               (547,331 )           (354,696 )             (977,117 )         (658,211 )

Income fro m operations                                          3,789,096            1,719,687               6,899,472         4,191,958

Other inco me (expenses):
  Interest inco me                                                  33,719               39,849                 66,796             52,584
  Exchange loss                                                    (15,698 )              (5,109 )             (15,269 )           (3,509 )
  Change in fair value of warrants                                 131,088                     -               131,088                  -
  Other                                                                  -                     -                     -                152
  Total other inco me (expenses)                                   149,109               34,740                182,615             49,227

Income before inco me tax                                        3,938,205            1,754,427               7,082,087         4,241,185

Provision for inco me tax                                         (522,564 )           (254,620 )             (945,384 )         (570,838 )

Net inco me                                                      3,415,641            1,499,807               6,136,703         3,670,347

Other co mprehensive income:
  Fo reign currency translation adjustment                         169,229               13,628                178,087              9,317

Total comp rehensive income                              $       3,584,870     $      1,513,435      $    6,314,790        $    3,679,664


Earnings per share:
  Basic                                                  $            0.12     $           0.12      $            0.31     $         0.29
  Diluted                                                $            0.12     $           0.12      $            0.30     $         0.29


Weighted average number of shares outstanding:
 Basic                                                          14,332,731           12,874,654           14,322,786           12,836,405
  Diluted                                                       14,342,168           12,874,654           14,445,374           12,836,405


                                     See accompanying notes to condensed consolidated financial statements.

                                                                      F-3
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                               CONDENS ED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY
                                           FOR THE S IX MONTHS ENDED J UNE 30, 2010
                                             (AMOUNTS EXPRESSED IN US DOLLA RS)

                                                                                                                                  Accumulated
                           Pre ferred Stock             Common Stock          Additional                                             Other
                      Numbe r                       Number                     Paid-in           Statutory       Retained        Comprehensive
                      of Shares        Amount       of Shares    Amount        Capital           Reserves        Earnings           Income            Total

Balance at January
1, 2010                       - $               -   14,297,731 $   14,298 $     4,715,891 $       1,341,687 $    16,858,012 $           972,916 $    23,902,804

Net income                    -                 -           -          -                   -                 -    6,136,703                      -    6,136,703

Foreign currency
translation
adjustment                    -                 -           -          -                   -                 -              -           178,087        178,087

Issue preferred
stock and warrants      197,706       4,554,406             -          -                   -                 -              -                    -    4,554,406
Beneficial
conversion feature
of convertible
preferred stock               -                 -           -          -        1,742,239                    -              -                    -    1,742,239
Amortization of
preferred stock
discount resulting
from accounting for
a beneficial
conversion feature,
deemed analogous
to a dividend                 -                 -           -          -                   -                 -    (1,742,239 )                   -   (1,742,239 )
Fair value of
placement agent
warrant liabilities           -                 -           -          -             (45,493 )               -              -                    -      (45,493 )
Issuance fees and
 costs                        -                 -           -          -            (162,361 )               -              -                    -     (162,361 )
Preferred stock
dividend                      -                 -           -          -                   -                 -       (13,748 )                   -      (13,748 )
Appropriation of
statutory reserves            -                 -           -          -                   -          4,207           (4,207 )                   -            -
Share-based
payment                       -                 -      35,000         35            105,840                  -              -                    -     105,875

At June 30, 2010
(Unaudited)             197,706 $     4,554,406     14,332,731 $   14,333 $     6,356,116 $       1,345,894 $    21,234,521 $          1,151,003 $   34,656,273


                                         See accompanying notes to condensed consolidated financial statements.

                                                                              F-4
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                         CONDENS ED CONSOLIDATED STATEMENTS OF CAS H FLOWS (UNAUDIT ED)
                                        (AMOUNTS EXPRESSED IN US DOLLA RS)

                                                                                                          For the Six Months
                                                                                                            Ended June 30,
                                                                                                        2010               2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                                       $          6,136,703     $    3,670,347
Adjustments to reconcile net inco me to cash provided by operating activities:
    Change in fair value of warrants                                                                         (131,088 )               -
   Share-based compensation expense                                                                           105,875            25,000
   Depreciation and amortizat ion                                                                             506,125           504,872
 (Increase) decrease in assets:
     Accounts receivable                                                                                      (62,578 )         (57,381 )
     Prepay ments and other receivables                                                                        41,662            (4,625 )
     Inventories                                                                                              (84,617 )         543,706
   Increase (decrease) in liabilit ies:
     Accounts payable                                                                                          54,073             15,950
     Other payables and accruals                                                                              (75,431 )          (60,928 )
     Income tax payable                                                                                       (80,193 )           14,991
     Trade payable due to related parties                                                                           -              4,500
     Net cash provided by operating activities                                                              6,410,531          4,656,432

CASH FLOWS FROM INVESTING A CTIVITIES:
Purchase of property, plant and equipment                                                                      (8,246 )                 -
    Net cash used in investing activities                                                                      (8,246 )                 -

CASH FLOWS FROM FINANCING A CTIVITIES:
Proceeds fro m Private Placement                                                                            5,483,919                  -
Increase in restricted cash                                                                                  (350,000 )                -
Repay ment of acquisition payable                                                                                   -            (50,269 )
Advances from related parties                                                                                 436,047             61,615
     Net cash provided by financing activities                                                              5,569,966             11,346

Foreign currency translation adjustment                                                                      174,315               7,749

INCREASE IN CASH AND CASH EQUIVA LENTS                                                                  12,146,566             4,675,527

CASH AND CASH EQUIVA LENTS, at the beginning of the period                                              20,115,677             9,198,243

CASH AND CASH EQUIVA LENTS, at the end of the period                                             $      32,262,243        $   13,873,770


NON-CASH INVESTING AND FINA NCING ACTIVITIES:
Share-based payments to officer under equity incentive plan                                      $           105,875      $      25,000


SUPPLEM ENTA L DISCLOSURE INFORMATION
Income taxes paid                                                                                $           980,764      $     592,947


                                   See accompanying notes to condensed consolidated financial statements.

                                                                      F-5
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                       NOTES TO UNAUDIT ED CONDENS ED CONSOLIDATED FINANCIAL S TATEMENTS

NOTE 1        DESCRIPTION OF B US INESS AND ORGANIZATION

Nutrastar International Inc. (― Nutrastar ‖ or the ― Company ‖) was incorporated in the State of Nevada on December 22, 2002. On December
23, 2008, the Co mpany comp leted a reverse acquisition with New Zealand WAYNE‘S New Resources Development Co., Ltd. (― New
Resources ‖). As a result of the reverse acquisition with New Resources, the Company is no longer a shell co mpany and active business
operations have been revived. Nutrastar together with its subsidiaries are referred to as the ― Co mpany ‖.

On May 19, 2009, the Co mpany filed A mended and Restated Articles of Incorporation with the Nevada Secretary of State to amend the
Co mpany‘s current Articles of Incorporation to, among other things, (1) change the name of the Company fro m ―YzApp International Inc.‖ to
―Shuaiyi International New Resources Development Inc.,‖ (2) increase the total number of shares of common stock that the Co mpany has the
authority to issue from 50,000,000 to 190,000,000 shares and (3) effect a one for 114.59 reverse split of t he Co mpany‘s outstanding common
stock (the ― Reverse Split ‖). The detailed description of the A mend ments is stated in the Company ‘s Form 8-K dated May 26, 2009.

On January 11, 2010, the Co mpany, filed a Cert ificate of A mendment to its Articles of Incorporation with the Secretary o f State of the State of
Nevada, pursuant to which the Co mpany further changed its name fro m "Shuaiyi International New Resources Development Inc." to "Nutrastar
International Inc.".

As of June 30, 2010, details of the subsidiaries of the Co mpany are as follows:

                                Domicile and                                               Percentage
                                date of                                                    of effective
Subsidiaries’ names             incorporation                Paid-up capital               ownership                    Principal activities

New Zealand WAYNE‘S New         British Virgin Islands       $50,000                       100%                         Holding company of the
Resources Development Co.,      M arch 13, 2008                                                                         other subsidiaries
Ltd (―New Resources‖)

Heilongjiang Shuaiyi New        People‘s Republic of China   RM B60,000,000                100%                         Principally engaged in
Energy Development Co., Ltd     (―PRC‖) July 11, 2006                                                                   investment holding
(―Heilongjiang Shuaiyi‖)

Daqing Shuaiyi Biomass          PRC August 8, 2005           RM B10,000,000                100%                         Growing and sales of
Technology Co., Ltd. (―Daqing                                                                                           Chinese Golden Grass,
Shuaiyi‖)                                                                                                               which is widely used for
                                                                                                                        Chinese medicine

Harbin Shuaiyi Green and        PRC M ay 18, 2001            RM B1,500,000                 100%                         Sales of agricultural
Specialty Food Trading LLP.                                                                                             products
(―Harbin Shuaiyi‖)

                                                                       F-6
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                       NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2        BAS IS OF PRES ENTATION

These interim condensed consolidated financial statements are unaudited. In the opinion of management, all adjustments and di sclosures
necessary for a fair presentation of these interim condensed consolidated financial statements have been included. The re sults reported in the
condensed consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the
entire year. The fo llo wing (a) condensed consolidated balance sheet as of December 31, 2009, which was derived fro m audited financial
statements, and (b) the unaudited interim condensed consolidated financial statements have been prepared pursuant to the rule s and regulations
of the Securities and Exchange Co mmission. Certain informat ion and not e disclosures normally included in annual financial statements
prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted purs uant to those
rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These
unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statement s and
accompanying footnotes of the Company for the year ended December 31, 2009.

These condensed consolidated financial statements include the financial statements of Nutrastar and its subsidiaries. All sig nificant
inter-co mpany balances or transactions have been eliminated on consolidation.

Research and development costs

Research and development costs are expensed as incurred. For the six months ended June 30, 2010 and 2009, research and develo pment costs
were $29,977 and $18,139, respectively.

Advertising costs

The Co mpany expenses all advertising costs as incurred. The total amount of advertising costs charged to selling, general and administrative
expense were $23,061 and $1,098 for the six months ended June 30, 2010 and 2009, respectively.

Shipping and handling costs

Costs of shipping and handling of p roducts to customers are included in selling, general and ad ministrative expense. Sh ipping and handling
costs for the six months ended June 30, 2010 and 2009 were insignificant.

Foreign currency

The Co mpany uses the United States dollars (―U.S. Dollar‖ or ―US$‖ or ―$‖) for financial reporting purposes. The PRC subsidiaries within the
Co mpany maintain their books and records in their functional cu rrency, Chinese Ren minbi (―RM B‖), being the lawfu l currency in the PRC.
Assets and liabilities of the PRC subsidiaries are translated fro m RM B into US Dollars using the applicable exchange rates prevailing at the
balance sheet date. Items on the statement of operations are translated at average exchange rates during the reporting period . Equity accounts
are translated at historical rates. Adjustments resulting fro m the translation of the Co mpany ‘s financial statements are recorded as accumu lated
other comprehensive income.

The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are
based on the rates as published on the website of People‘s Bank of Ch ina and are as follows:-

                                                                                             June 30, 2010             December 31, 2009
Balance sheet items, except for equity accounts                                            US$1=RM B 6.7909            US$1=RM B6.8282
                                                                                                    Three months ended June 30,
                                                                                                 2010                          2009
Items in the statements of income and cash flows                                           US$1=RM B 6.8235            US$1=RM B 6.8299
                                                                                                      Six months ended June 30,
                                                                                                 2010                          2009
Items in the statements of income and cash flows                                           US$1=RM B 6.8252            US$1=RM B6.8328

                                                                        F-7
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                       NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2        BAS IS OF PRES ENTATION (CONTINUED)

No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the above rates. The value of
RM B against U.S. dollars and other currencies may fluctuate and is affected by, among other things, changes in China‘s polit ical and economic
conditions. Any significant revaluation of RM B may materially affect the Co mpany ‘s financial condition in terms of U.S. dollar reporting.

NOTE 3        REC ENT ACCOUNTING PRONOUNCEMENTS

Recent accounting pronouncement

Effective January 1, 2010, the Co mpany adopted the provisions in ASU 2010-06, ―Fair Value Measurements and Disclosures (ASC Topic
820): Improving Disclosures about Fair Value Measurements, which requires new disclosures related to transfers in and out of levels 1 and 2
and activity in level 3 fair value measurements, as well as amends existing disclosure requirements on level of disaggregatio n and inputs and
valuation techniques. The adoption of the provisions in ASU 2010-06 d id not have an impact on the Company‘s consolidated financial
statements.

In February 2010, the Financial Accounting Standards Board (―FASB‖) issued authoritative guidance that amends the disclosure requirements
related to subsequent events. This guidance includes the definit ion of a Securities and Exchange Co mmission filer, removes th e defin ition of a
public entity, redefines the reissuance disclosure requirements and allo ws public co mpanies to omit the disclosure of the date through which
subsequent events have been evaluated. This guidance is effective for financial statements issued for interim and annual peri ods ending after
February 2010. This guidance did not materially impact the Co mpany ‘s results of operations or financial position, but did require changes to
the Co mpany‘s disclosures in its financial statements.

In April 2010, the FASB issued ASU No. 2010-13—Co mpensation—Stock Co mpensation (Topic 718), wh ich addresses the classification of
an emp loyee share-based payment award with an exercise price denominated in the currency of a market in which the underlying equity
security trades. This Update provides amend ments to Topic 718 to clarify that an employee share-based payment award with an exercise price
denominated in the currency of a market in which a substantial portion of the entity ‘s equity securities trades should not be considered to
contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liab ility if
it otherwise qualifies as equity. The amendments in this Update are effective for fiscal years, and interim periods within th ose fiscal years,
beginning on or after December 15, 2010. The Co mpany expects that the adoption of the amend ments in this Update will not have any
significant impact on its financial position and results of operations.

Other accounting standards that have been issued or proposed by the FASB or other standards -setting bodies that do not require adoption until a
future date are not expected to have a material impact on the Co mpany ‘s Consolidated Financial Statements upon adoption.

                                                                        F-8
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                       NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4        FAIR VALUE MEAS UR EMENTS AND FINANCIAL INS TRUMENTS

ASC Topic 820, Fair Value Measurement and Disclosures , defines fair value as the exchange price that would be received for an asset or paid
to transfer a liab ility (an exit price) in the principal or most advantageous market fo r the asset or liability in an orderly tran saction between
market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on
observable and unobservable inputs when measuring fair value. The fair value hierarchy distinguishes between assumptions based on market
data (observable inputs) and an entity‘s own assumptions (unobservable inputs). The hierarchy consists of three levels:

       Level one —           Quoted market prices in active markets for identical assets or liabilities;
       Level two —           Inputs other than level one inputs that are either directly or indirectly observable; and
       Level three —         Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and
                             reflect those assumptions that a market part icipant would use.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Co mpany evalua tes its hierarchy
disclosures each quarter.

Assets and liabilities measured at fair value on a recurring basis are summarized as follows:

                                              Fair value measurement using inputs                               Carrying amount at
Financi al instruments                    Level 1            Level 2            Level 3                      June 30,        December
                                                                                                              2010            31, 2009

Liabilities:
Derivative instruments – Warrants $                 —     $        1,006,279    $                —     $       1,006,279     $               —
Total                             $                 —     $        1,006,279    $                —     $       1,006,279     $               —

The carrying values of cash and cash equivalents, trade and other receivables and payables approximate their fair values due to the short
maturities of these instruments.

There was no asset or liab ility measured at fair value on a non-recurring basis as of June 30, 2010 and December 31, 2009.

                                                                        F-9
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIA RIES
                       NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5        RES TRICTED CAS H

As of June 30, 2010, $350,000 in total was held in escrow arising fro m agreements in conjunction with the Private Placement, which are further
disclosed in Note 14.

Restricted cash consisted of the following:

                                                                                                         June 30             December 31
                                                                                                          2010                  2009
                                                                                                       (Unaudited)


Special fund for d istribution to Investor Relat ions Firms                                        $         100,000     $                 -
Co mpensation for a yet-to-be-determined Ch ief Financial Officer                                            250,000                       -
Total                                                                                              $         350,000     $                 -


NOTE 6        ACCOUNTS RECEIVAB LE, NET

Accounts receivable consisted of the follo wing:

                                                                                                         June 30             December 31
                                                                                                          2010                  2009
                                                                                                       (Unaudited)

Accounts receivable                                                                                $         279,564     $         215,486
Less: Allowance for doubtful debts                                                                                 -                     -
Accounts recei vable                                                                               $         279,564     $         215,486


No allowance has been established as management has determined that all accounts receivable are deemed co llect ible.

NOTE 7        INVENTORIES

Inventories by major categories are su mmarized as follows:

                                                                                                         June 30             December 31
                                                                                                          2010                  2009
                                                                                                       (Unaudited)


Raw materials                                                                                      $         192,287     $         183,934
Work in p rogress                                                                                            298,057               294,983
Fin ished goods                                                                                              214,158               137,156
Total                                                                                              $         704,502     $         616,073


                                                                     F-10
                                  NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                        NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8         PREPAYMENTS AND OTHER REC EIVAB LES

Prepayments and other receivables consist of the following:

                                                                                                       June 30             December 31
                                                                                                        2010                  2009
                                                                                                     (Unaudited)


Prepayments                                                                                      $              750    $          12,812
Other receivables                                                                                           208,983              238,423
                                                                                                 $          209,733    $         251,235


NOTE 9         INTANGIB LE ASS ETS, NET

Intangible assets, net consisted of the follo wing:

                                                                                                       June 30             December 31
                                                                                                        2010                  2009
                                                                                                     (Unaudited)


Co mputer software, cost                                                                         $            1,462 $               1,454
Exclusive right to use a secret process, cost                                                             4,419,451             4,395,309
Less: Accumulated amort ization                                                                          (1,879,417 )          (1,649,361 )
                                                                                                 $        2,541,496 $           2,747,402


In April 2006, the Co mpany purchased from a third party a ten-year exclusive right to use a secret process and method in the cultivation and
growing of Ch inese Golden Grass, which is widely used for Chinese medicine, for a cash consideration of RMB30,000,000, payable over five
years. The exclusive right is amortized over its term of ten years using the straight -line method.

Amort izat ion expenses for the six months ended June 30, 2010 and 2009 were $219,885 and $219,641, respectively.

NOTE 10       PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the follo wing:

                                                                                                       June 30             December 31
                                                                                                        2010                  2009
                                                                                                     (Unaudited)
Cost:
Bu ild ings                                                                                      $       11,736,579 $         11,672,404
Office equip ment                                                                                            23,573               15,264
Machinery                                                                                                   128,990              128,286
Motor vehicles                                                                                               55,143               54,842
Total cost                                                                                               11,944,285           11,870,796
Less: Accumulated depreciat ion                                                                          (1,770,072 )         (1,474,289 )
Net book value                                                                                   $       10,174,213 $         10,396,507


Depreciat ion expenses for the six months ended June 30, 2010 and 2009 were $286,240 and $285,231, respectively.

                                                                    F-11
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                       NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11       OTHER PAYAB LES AND ACCRUALS

Other payables and accruals consisted of the following:

                                                                                                          June 30             December 31
                                                                                                           2010                  2009
                                                                                                        (Unaudited)

Accrued staff costs                                                                                 $          372,407    $          370,395
Other taxes payable                                                                                              2,302                25,030
Other payables                                                                                                   5,475                58,079
                                                                                                    $          380,184    $          453,504


NOTE 12       PAYAB LE FOR INTANGIB LE ASSETS

As described in Note 9, the Co mpany purchased an exclusive right fro m an independent party for a secret process and method fo r a stated value
of RM B30,000,000 payable over 5 years fro m the date of purchase. The agreement provides that all payments by the Company for the secret
process and method will be refundable if the secret process and method prove ineffective. Under ASC Subtopic 835 -30, ―Imputation of
Interest‖ (formerly APB 21, ―Interest on Receivables and Payables ‖), the payable for intangibles are s tated without imputed interest as the
noninterest factor fairly represents the warranty for perfo rmance.

The following table presents the amounts payable for the next five years and thereafter:

                                                                                                                                (Unaudited)
Remainder of year ending December 31, 2010                                                                                $         883,535
2011 and thereafter                                                                                                                       -
Total                                                                                                                               883,535
Current porti on                                                                                                                    883,535
Non-current portion                                                                                                       $               -


NOTE 13       ACQUIS ITION PAYAB LE

The acquisition payable represents the transfer price of RM B60,000,000, equivalent to USD 8,736,833, payable by New Resources for the
acquisition of 100% equity interest in Heilongjiang Shuaiyi, as further discussed in Note 21, the acquisition payable is d ue for payment in full
on or before December 31, 2010 by New Resources to the Shuaiyi Founders who are also shareholders of the Company. See Note 19(b ).

                                                                      F-12
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                       NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14       S HAREHOLDERS’ EQUITY

Private Placement

On May 27, 2010, the Co mpany entered into a securit ies purchase agreement (the "Securit ies Purchase Agreement") with certain investors,
pursuant to which, the Co mpany agreed to issue and sell up to an aggregate of 250,000 Units at a purchase price of $28.5 6 per Un it, fo r an
aggregate purchase price of up to $7,140,000 (the "Aggregate Purchase Price"). Each Un it consists of (i) one share of a newly designated series
A preferred stock, par value $0.001 per share ("Series A Preferred Stock"), with an in itial o ne-to-ten conversion ratio into shares of the
Co mpany‘s common stock, par value $0.001 per share ("Co mmon Stock"), and (ii) warrants to purchase five shares of Co mmon Stock at an
exercise price of $3.40 per share ("Warrants", together with the shares of Series A Preferred Stock, the "Securities"). In additio n, the Co mpany
and the investors agreed, that the placement agent of this transaction, will receive fro m the investors a fee equal to 2% o f the Aggregate
Purchase Price and Warrants to purchase 2% of the aggregate number of shares of Co mmon Stock that shares of Series A Preferred Stock to be
issued under the Securities Purchase Agreement are convertible into.

Pursuant to the Securities Purchase Agreement, the Co mpany also granted registration rights to ho lders of registrable securities, which include
shares of Co mmon Stock issued or issuable upon conversion of shares of the Series A Preferred Stock and shares of Commo n Stoc k issuable
upon exercise of the Warrants (the "Registrable Securities"). Holders hold ing a majority of the Securities then outstanding may request the
Co mpany to file a reg istration statement to register the Registrable Securities within a pre -defined period (the "Reg istration Statement"). The
Co mpany may be subject to liquidated damages in the amounts prescribed by the Securities Purchase Agreement if it is unable to file the
Registration Statement timely or maintain its effectiveness as required by the Securities Purchase Agreement.

On June 7, 2010, the Co mpany effected the first closing of a private placement transaction and issued approximately 123,403 Un its at a
purchase price of $28.56 per unit for gross proceeds of $3,524,342.

On June 28, 2010, the Co mpany effected the second closing of a p rivate p lacement transaction and issued appr oximately 74,303 Un its at a
purchase price of $28.56 per unit for gross proceeds of $2,121,938.

Pursuant to the Securities Purchase Agreement, a written request was received fro m the majo rity holders of Series A Preferred Stock on July
14, 2010 and the Co mpany filed the Reg istration Statement on Form S -1 on August 11, 2010. The Registration Statement needs to be declared
effective by the Securities and Exchange Commission ("SEC") within appro ximately 150 days after the filing to avoid the liq uidated damages
under the Securities Purchase Agreement.

Escrow Agreement

In connection with the Securities Purchase Agreement, the Company entered into an escrow agreement (the "Escrow Agreement") p ursuant to
which the parties agreed to deposit the investment amount received fro m the investors into escrow to be released upon the occurrence of the
events set forth in the Escrow Agreement. In addition, the Co mpany agreed that $100,000 out of the investment amount will remain in escrow
and will be disbursed to an investor relat ions firm h ired by the Co mpany. The Co mpany also agreed that an additional $250,000 will remain in
escrow and will be used as compensation for a yet-to-be-determined Ch ief Financial Officer of the Co mpany.

                                                                      F-13
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                       NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14       S HAREHOLDERS’ EQUITY (CONTINUED)

Allocation of Proceeds in the Pri vate Pl acement (continued)

The guidance provided in ASC 470-20-30-5 has been applied to the amount allocated to the convertible Preferred Stock, and the effective
conversion price has been used, to measure the intrinsic value, if any, of the embedded conversion option. The fair value of the embedded
conversion feature of the Preferred Shares of $1,114,444 and $627,795 were calculated using the intrinsic value model in accordance with the
guidance provided in ASC Topic 470-20-30-6 (formerly EITF 00-27, ―Applicat ion of Issue No. 98-5 to Certain Convertible Instruments‖),
limited to the amount of the proceeds allocated to the convertible instrument on June 7, 2010 and June 28, 2010, respectively . The intrinsic
value of the beneficial conversion feature was calculated by comparing the effective conversion price, wh ich was determin ed based on the
proceeds fro m the Private Placement allocated to the convertible Preferred Shares, and the market p rice of the Co mpany ‘s common stock of
$3.2 and $3.16 on June 7, 2010 and June 28, 2010, respectively. The fair value of $1,11 4,444 and $627,795 of the beneficial co nversion feature
has been recognized as a reduction to the carrying amount of the convertible Preferred Shares and an addition to paid -in capital.

The following table sets out the allocation of the proceeds fro m the Private Placement:

Proceeds of the Private Placement on June 7, 2010                                                                        $        3,524,342
Allocation of proceeds to Warrants                                                                                                 (689,944 )
Allocation of proceeds to beneficial conversion feature                                                                          (1,114,444 )
Amort izat ion of discount resulting from the accounting for a beneficial conversion feature                                      1,114,444
Convertible Preferred Stock at June 30, 2010                                                                             $        2,834,398
Expenses related to private placement                                                                                              (114,567 )
Convertible Preferred Stock (net of fees and expenses) at June 30, 2010                                                  $        2,719,831


Proceeds of the Private Placement on June 28, 2010                                                                       $        2,121,938
Allocation of proceeds to Warrants                                                                                                 (401,930 )
Allocation of proceeds to beneficial conversion feature                                                                            (627,795 )
Amort izat ion of discount resulting from the accounting for a beneficial conversion feature                                        627,795
Convertible Preferred Stock at June 30, 2010                                                                             $        1,720,008
Expenses related to private placement                                                                                               (47,794 )
Convertible Preferred Stock (net of fees and expenses) at June 30, 2010                                                  $        1,672,214


In accordance with ASC Topic 470-20-30-6, the d iscount on the Preferred Shares resulting fro m the accounting for a beneficial conversion
feature was amort ized and charged to retained earnings, because the Preferred Shares are immediately convertible upon issuanc e and have no
stated redemption date. Amortizat ion of the discount resulting fro m the accounting for a beneficial conversion feature is considered analogous
to a return to holders of perpetual preferred stock and has been accounted for as a reduction to net income availab le to common stockholders
for the purpose of calculation of earnings per share.

                                                                       F-14
                                  NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                        NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14       S HAREHOLDERS’ EQUITY (CONTINUED)

Preferred Stock

The following are the principal terms of the Series A Preferred Stock:

Rank: The Series A Preferred Stock ran ks senior to the Company‘s common stock, but junior to all indebtedness of the Company.

Dividend: Holders of the Series A Preferred Stock are entit led to a cu mu lated dividend at an annual rate of 6% of the Series A Preferre d Stock,
payable in additional shares of Series A Preferred Stock, shall co mpound quarterly, and shall be payable upon the occurre nce of a Liquidation
Event, Conversion, Mandatory Conversion or fro m time -to-time at the discretion of the Board. When dividends on the Series A Preferred Stock
are paid, each such additional share of Series A Preferred Stock shall be valued at the Origina l Series A purchase price, which may be adjusted
fro m t ime to time pursuant to a split, subdivision, combination or other similar events.

Optional Conversion: Shares of the Series A Preferred Stock are optionally convertible into fully paid and non -assessable shares of Co mmon
Stock at a conversion rate calculated by divid ing (i) $28.00 per share plus any declared, accrued but unpaid dividends by (ii ) the conversion
price, wh ich is in itially $2.80 per share, subject to adjustment as provided in the Cert ifica te. Init ially, each share of Series A Preferred Stock is
convertible into 10 shares of Co mmon Stock.

Mandatory Conversion: All outstanding shares of the Series A Preferred Stock will auto matically convert to shares of Co mmo n Stock, subject
to the conversion restrictions set forth in the Certificate (the "Mandatory Conversion"), at the earlier to occur of (i) the Co mpany ‘s shares of
Co mmon Stock being listed on the New York Stock Exchange, the NYSE A mex, the NA SDAQ Global Market, the NASDA Q Global Select
Market or the NASDAQ Capital Market (each, a "Nat ional Stock Exchange") and the registration statement on Form S -1 o r such other
appropriate form pro mulgated by the Securities and Exchange Co mmission (the "Commission") registering the Common Stock underl ying the
Securities pursuant to the Securities Purchase Agreement being declared effective by the Co mmission, and (ii) 12 months fro m the date that the
Co mpany's shares of Co mmon Stock are first listed on a National Stock Exchange.

Adjustment to Conversion Price: If the Co mpany shall issue any additional stock without consideration or for consideration per share less than
the Conversion Price in effect immed iately prior to the issuance of such Additional Stock, then such Conversion Price in effe ct immed iately
prior to such issuance shall be adjusted to a price determined by mult iplying such Conversion Price by a fract ion:-

Sum of (x) the number of shares of Co mmon Stock outstanding immediately p rior to the issuance of such Additional Stock plu s ( y) the number
of shares of Co mmon Stock that the aggregate consideration received by the Co mpany for the total nu mber of such Additional Stock so issued
would purchase at Conversion Price (div ided by) (x) the number of shares of Co mmon Stock outstanding immediately prior t o the issuance of
such Additional Stock plus (y) the nu mber of shares of such Additional Stock so issued

Voting: The holders of the Series A Preferred Stock will vote on an "as converted" basis, together with the Co mmon Stock, as a single class, in
connection with any proposal submitted to the Co mpany‘s stockholders, except as required by Nevada law.

Liquidation Preference: The Series A Preferred Stock has a preference over the Company ‘s common stock on the Company‘s liquidation,
dissolution or winding up equal to $28 per share of the Series A Preferred Stock plus any accrued but unpaid d ividends thereon, as of the date
of liquidation.

                                                                          F-15
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                       NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14       S HAREHOLDERS’ EQUITY (CONTINUED)

Registration Rights: The holders of Series A Preferred Stock have the right to request the Co mpany to file a Registration Stat ement to register
―Registrable Securities‖ (wh ich include the common stock into which the Series A Preferred Stock and Warrants are convertible). Upon such
request, no later than 30 days upon receipt of such request (the ―Required Filing Date‖) the Co mpany should use its commercially reasonable
efforts to register the Common Stock underlying the Registrable Securities and have the Registration Statement declared effec tive by the SEC
which is not later than the earlier o f (x) 150 calendar days after the Required Filing Date, or (y) if the Registration Statement is not reviewed by
the SEC, 5 business days after oral or written notice to the Co mpany or its counsel fro m the SEC that there will not be a rev iew.

Effect of failure to file and obtain and maintain effectiveness of Registration Statement – the Company shall pay to each holder of Registrable
Securities an amount in cash equal to 1% of the aggregate purchase price of the Securities o wned by such holder as liquidated damages, but in
no event shall liquidated damages exceed 8% of the Purchase Price

Accounting for Series A Preferred Stock

The Co mpany has evaluated the terms of the Preferred Stock and determined that the Series A Preferred Stock, without embodyin g an
obligation for the Co mpany to repurchase or to settle by transferring assets, is not a liability in accordance with the guidance provided in ASC
Topic 480, Distinguishing Liabilities fro m Equity.

Also, the Preferred Stock has no redemption clause at all, it is not a mezzanine equity (out of permanent equity) in acco rdan ce with the
requirement of ASC 480-10-S99.

The Preferred Shares are not subject to redemption (except on liquidation) and the holders of the Preferred Shares are entitled to vote together
with co mmon stock holders on an as -converted basis. The Preferred Shares, excluding the embedded conversion option, are considered to be an
equity instrument and accordingly, the embedded conversion option has not been separated and accounted for as a deriv ative in strument
liab ility.

Common Stock Purchase Warrants

Series C Warrants

In conjunction with the issuance of the Preferred Shares, the Co mpany issued Series C Warrants to the investors and the placement a gent in
aggregate to purchase up to 617,008 shares and 371,493 shares of Co mmon Stock on June 7, 2010 and June 28, 2010, respective ly, at an
exercise price of $3.40 per share issued and outstanding. The Series C Warrants have a term of exercise exp iring 3 years fro m issuance date.
The Series C Warrants at the option of the holder, may be exercised by cash payment of the exercise price or, the holder may satisfy its
obligation to pay the exercise price through a "cashless exercise."

The Co mpany will not receive any additional proceeds to the extent that the Series C Warrants are exercised by cashless exerc ise.

                                                                       F-16
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                       NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14       S HAREHOLDERS’ EQUITY (CONTINUED)

Common Stock Purchase Warrants (continued)

Series C Warrants (continued)

The exercise price and number of shares of Common Stock issuable upon exercise of the Series C Warrants may be adjusted for: 1) upon
issuance of additional stock lo wer than the exercise price. 2) upon subdivision or co mbination of co mmon stocks 3) rights upon distribution of
assets and other dilutive events

Accounting for Warrants

Series A and Series B Warrants issued to certain investors to purchase 500,000 shares of the Company ‘s common stock remained outstanding
at December 31, 2009 had a term of three years and exercise prices of $3.25 and $4.00 per share, respectively. These warrants contain standard
anti-dilution provisions for stock div idends, stock splits, stock co mbination, recapitalization and a change of control transactio n. Because these
warrants do not contain any contingent exercise provisions and their settlement amount will equal the d ifference between the fair value of a
fixed nu mber of the Co mpany‘s equity shares and a fixed strike p rice, these warrants, wh ich are freestanding instruments, qualify for the scope
exception under the guidance provided in ASC 815 -40-15-5 through 815-40-15-8, and are considered indexed to the Co mpany‘s own stock.
Accordingly, Series A and Series B Warrants have been classified as equity.

Since the Series C Warrants issued to the investors and the placement agent in June 2010 contain reset exercise price provisio ns, the Co mpany
had determined to classify these warrants as derivative liabilities. The reset exercise provisions of the warrants issued to the investors and the
placement agent in June 2010 were recorded at their relative fair values at issuance of $1,137,367 and will continue to be re corded at fair value
at each subsequent balance sheet date. Any change in value between reporting periods will be recorded as other income (expense). These
warrants will continue to be reported as a liability until such time when they are exercised or expire. The fair value of t he se warrants is
estimated using Monte-Carlo simu lation methods.

As of June 30, 2010, the fair value of these outstanding Series C Warrants was determined to be $1,006,279, accordingly, the Co mpany
recorded $131,088 in other income related to the change in the fair value of the Series C Warrants. There is no cash flow imp act for the warrant
liab ility until the Series C Warrants are exercised.

The following table presents a reconciliat ion of the warrant liab ilit ies measured at fair value on a recurring basis using significant unobservable
input (Level 3) fro m January 1, 2010 to June 30, 2010:

                                                                                                                            Warrant liab ilit ies
Balance at January 1, 2010 and at March 31, 2010                                                                       $                         -
Issuance of warrants                                                                                                                     1,137,367
Change in fair value included in earn ings                                                                                                (131,088 )
Balance at June 30, 2010                                                                                               $                 1,006,279


                                                                        F-17
                                NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                      NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

Warrants issued and outstanding at June 30, 2010, and changes during the six months then ended, are as follows:

                                                                                                  Weighted                  Average
                                                                       Number of                  Average                  Remaini ng
                                                                       underlyi ng                Exercise               Contractual Life
                                                                         shares                    Price                     (years)
Outstanding at December 31, 2009                                               500,000     $                 3.63                     2.96
Granted                                                                        988,501                       3.40                     3.00
Forfeited                                                                            -                          -                         -
Exercised                                                                            -                          -
Outstandi ng at June 30, 2010 (Unaudi ted)                                   1,488,501     $                 3.48                       2.78


Exercisable at June 30, 2010 (Unaudi ted)                                     1,488,501    $                 3.48                       2.78


NOTE 15      S TATUTORY RES ERVES

In accordance with the PRC Co mpanies Law, the Co mpany ‘s PRC subsidiaries were required to transfer 10% of their pro fits after tax, as
determined in accordance with accounting standards and regulations of the PRC, t o the statutory surplus reserve and a percentage of not less
than 5%, as determined by management, of the profits after tax to the public welfare fund. However, the Co mpany ‘s PRC subsidiaries were not
required to transfer any profit after tax to the statutory surplus reserve only after the accu mulated statutory surplus reserves reached 50% of
registered capital of the Co mpany‘s PRC subsidiaries. The statutory surplus reserve is non-distributable.

                                                                     F-18
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                       NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16      S HARE-BAS ED COMPENS ATION

On January 1, 2010, the Co mpany entered into a stock option agreement with Mr. Dan iel K. Lee (―Mr. Lee‖), the Ch ief Financial Officer of the
Co mpany, under the Co mpany‘s 2009 Equ ity Incentive Plan. Pursuant to the terms of the Stock Option Agreement, M r. Lee was granted
options (the ―Options‖) to purchase an aggregate 250,000 shares of common stock of the Co mpany , among which, an option to purchase
100,000 shares will be vested in 2011 with an exercise price of $7.00 per share, an option to purchase 100,000 shares will b e vested in 2012
with an exercise price of $10.00 per share and an option to purchase 50,000 sh ares will be vested in 2013 with an exercise price of $10.00 per
share. Each of the Options expires three years after its respective vesting date.

According to the Stock Option Agreement, in the event Mr. Lee ‘s employ ment with the Co mpany is terminated for any reason except for death
or disability, he may exercise the Options only to the extent that the Opt ions would have been exercisable on the termination date and no later
than three months after the termination date. If Mr. Lee ‘s employ ment is terminated because of his death or d isability, the Options may be
exercised only to the extent that such Options would have been exercisable by Mr. Lee on the termination date and must be exe rcised by Mr.
Lee no later than twelve months after the termination date. If Mr. Lee is terminated for cause, the Options will terminate immed iately. In no
event will the Options be exercised later than December 31, 2015.

On May 5, 2010, Mr. Lee resigned as the Chief Financial Officer and Treasurer of the Co mpany, effect ively immed iately.

No expense has been recognized related to the Options which were forfeited because the requisite service for the Optio ns has not been
rendered.

On January 1, 2010, the Co mpany also entered into a restricted shares grant agreement (the ―Restricted Shares Grant Agreement‖) under the
Co mpany‘s 2009 Equity Incentive Plan with Mr. Lee. Pursuant to the terms of the Restricted Shares Grant Agreement, the Co mpany grante d to
Mr. Lee 140,000 restricted shares of the Co mpany‘s common stock subject to the vesting schedule therein. If Mr. Lee‘s service with the
Co mpany ceases for any reason other than Mr. Lee‘s (a) death, (b) Disability, (c) Ret irement, o r (d ) termination by the Co mpany without cause,
any nonvested restricted shares will be automatically forfeited to the Co mpany.

The Restricted Shares vest under the following schedule:

                          Number of Shares                                                                                          Vesting Date
                              15,000                                                                                              January 1, 2010
                              20,000                                                                                                April 1, 2010
                              35,000                                                                                                 July 1, 2010
                              35,000                                                                                              January 1, 2011
                              35,000                                                                                                 July 1, 2011

As a result of the resignation of Mr. Lee, h is employ ment agreement with the Co mpany, dated November 16, 2009, the stock option agreement
with the Co mpany, dated January 1, 2010, and the restricted shares grant agreement with the Co mpany, da ted January 1, 2010 were terminated,
effective on May 5, 2010. In addition, upon his resignation, the unvested 105,000 restricted shares and the unvested options to purchase
250,000 shares of the Company‘s common stock granted to Mr. Lee were cancelled.

The Co mpany recognizes co mpensation cost for an award with only service conditions that has a graded vesting schedule on a stra ight-line
basis over the requisite service period for the entire award, p rovided that the compensation cost recognized at any date must at least equal the
portion of the grant-date value of the award that is vested at that date. No compensation cost is recognized for instruments that employees
forfeit because a service condition or a performance condition is not satisfied.

                                                                      F-19
                                  NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                        NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16        S HARE-B AS ED COMPENSATION (CONTINUED)

Accordingly, the Co mpany recognized co mpensation expense of $105,875, related to the restricted shares granted to Mr. Lee, wh ich vested
before his resignation, for the six months ended June 30, 2010, based on the estimated grant -date fair value of $3.025 of the Co mpany‘s
common stock.

Before January 1, 2010, the Co mpany‘s common stock had scarcely been traded. The Co mpany has determined the fair value of its common
stock as of January 1, 2010 based on the volume weighted average of the fair value of the Co mpany ‘s co mmon stock issued in the p rivate
placement of shares and warrants to unaffiliated investors on December 17, 2009 and the closing prices of Co mpany ‘s common stock traded
during January 2010.

NOTE 17        EARNINGS PER SHARE

The following table is a reconciliation of the net inco me and the weighted average shares used in the computation of basic and diluted earning s
per share for the periods presented:

                                                               For the three months                           For the six months
                                                                  Ended June 30,                               Ended June 30,
                                                            2010                 2009                    2010                    2009
                                                         (Unaudited)          (Unaudited)             (Unaudited)           (Unaudited)
Income availab le to common shareholders:
- Net inco me                                        $       3,415,641 $            1,499,807     $         6,136,703 $            3,670,347
Less: Preferred stock dividend                                 (13,748 )                    -                 (13,748 )                    -
Less: Beneficial conversion feature of convertible
preferred stock                                             (1,742,239 )                      -            (1,742,239 )                      -
Income availab le to common shareholders (Basic
and diluted)                                         $       1,659,654       $      1,499,807     $         4,380,716     $        3,670,347


Weighted average number of shares:
- Basic                                                     14,332,731             12,874,654              14,322,786             12,836,405
- Effect of d ilutive warrants and options                       9,437                      -                 122,588                      -
- Diluted                                                   14,342,168             12,874,654              14,445,374             12,836,405


Net inco me per share
- Basic                                              $            0.12       $            0.12    $              0.31     $              0.29
- Diluted                                            $            0.12       $            0.12    $              0.30     $              0.29


As discussed in note 1, the Co mpany effected a 1-for-114.59 Reverse Split of its common stock. The weighted average number of shares for
the purposes of calculating the earnings per share has been retroactively adjusted as if the Reverse Split took effect as of the beginning of the
earliest period presented.

Diluted earnings per share is calculated by adjusting the weighted average number of co mmon shares outstanding to assume conv ersion of all
dilutive potential co mmon shares. The Co mpany has one category of dilutive potential co mmon shares: the Ser ies C Warrants issued in
connection with the Preferred Shares financing described in Note 14. The Warrants are assumed to have been converted into com mon shares
and the calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual
market share price of the Company‘s common stock) based on the monetary value of the subscription rights attached to outstanding Warrants.
The Preferred Shares as converted to common stock have been excluded fro m the diluted earnings per share because to do so would be
anti-dilutive. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the
exercise of the Warrants.

                                                                      F-20
                                    NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                          NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18       INCOME TAXES

The Co mpany‘s PRC subsidiaries are subject to PRC enterprise income tax (―EIT‖). Before January 1, 2008, the PRC EIT rate was generally
33%. In March 2007, the PRC government enacted a new PRC Enterprise Inco me Tax Law, or the New EIT Law, and promulgated,
Implementation Regulations for the PRC Enterprise Inco me Tax Law. The New EIT Law a nd Imp lementation Regulat ions became effective
January 1, 2008. The NEW EIT Law, among other things, imposes a unified income tax rate of 25% for both domestic and foreign invested
enterprises registered in the PRC.

The New EIT Law provides a grandfathering on tax holidays which were granted under the then effective tax laws and regulations. Therefore,
one of the Co mpany's subsidiaries, Daq ing Shuaiyi, being engaged in growing and sales of agricu ltural products, has continued to be entitled to
a preferentia l tax treat ment: an EIT holiday for each of the two years ended December 31, 2006 and 2007 and a 50% reductio n on the EIT rat e
for each of the three years ended December 31, 2008, 2009 and 2010.

Harbin Shuaiyi has been subject to an EIT rate of 25% for the years ended December 31, 2010 and 2009.

No provision for other overseas taxes is made as neither Nutrastar or New Resources has any taxable inco me in the U.S. or British Virgin
Islands, respectively.

The Co mpany‘s income tax expense consisted of:

                                                                  For the Three Months                          For the Six Months
                                                                     Ended June 30,                               Ended June 30,
                                                                 2010               2009                      2010               2009
                                                              (Unaudited)        (Unaudited)               (Unaudited)       (Unaudited)

Current income tax – PRC                                  $          522,564     $         254,620     $          945,384     $          570,838
Deferred                                                                   -                     -                      -                      -

Income tax expenses                                       $          522,564     $         254,620     $          945,384     $          570,838


The Co mpany had deferred tax assets as follows:

                                                                                                             June 30              December 31
                                                                                                              2010                   2009
                                                                                                           (Unaudited)

Net operating losses carried forward                                                                   $          350,039 $              355,212
Less: Valuation allowance                                                                                        (350,039 )             (355,212 )

Net deferred tax assets                                                                                $                 -    $                 -


As of June 30, 2010 and December 31, 2009, the Co mpany has $1,029,527 and $1,044,740, net operating loss carryforwards availa ble to
reduce future taxab le inco me which will exp ire in various years through 2029. It is more -likely -than-not that the deferred tax assets can not be
utilized in the future because there will not be significant future earnings fro m the entity which generated the net operatin g loss. Therefore, the
Co mpany recorded a full valuation allowance on its deferred tax assets.

As of June 30, 2010 and December 31, 2009, the Co mpany did not have any other significant temporary differences and carry for wards that
may result in deferred tax .

                                                                       F-21
                                NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                      NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 19       RELAT ED PARTY TRANSACTIONS

(a)   Due from (to) related parties

                                                                                                    June 30                    December 31
                                                                                                     2010                         2009
                                                                                                  (Unaudited)
Due from related parties:
Due fro m Ms. Yuehong Luan, shareholder of the Co mpany                                    a$               51,000     $                      -


Due to related parties:
Due to Ms. Lianyun Han, Chairperson, CEO and President of the Co mpany                     b$              551,665     $              49,794


a.     The amount due from Ms. Yuehong Luan was non-interest bearing and unsecured. The amount was subsequently repaid by Ms.
       Yuehong Luan in July 2010. As of June 30, 2010, the acquisition payable due to Mr Yuehong Luan is $411,727 (see note19(b)).

b.     The amount due to Ms. Lianyun Han was non-interest bearing, unsecured and without fixed repayment date.

(b)   Acquisition payable

The acquisition payable arose from the Equ ity Transfer Agreement which formed part of the restructuring of Heilongjiang Shuai yi in July
2008, pursuant to which New Resources acquired 100% equity interest in Heilongjiang Shuaiyi fro m Ms. Lianyun Han, Chairp erson, CEO and
President of the Co mpany, and other individual shareholders (collectively the ―Shuaiyi Founders‖).

As part of the restructuring plan, Heilongjiang Shuaiyi entered into separate loan agreements dated December 8, 2008, as amen ded on February
12, 2009, and pro missory notes with the Shuaiyi Founders, pursuant to which, the Shuaiyi Founders have agreed to lend to Heilo ngjiang
Shuaiyi a loan in the aggregate amount of RMB60,000,000 (appro ximately $8.8 million, ―Subordinated Loan‖). The amount of the
Subordinated Loan exactly equals to the transfer price payable to the Shuaiyi Founders by New Resources for the acquisition o f Heilongjiang
Shuaiyi in co mpliance with regulatory requirements of the PRC. The Subordinated Loan ranks behind all other debts of Heilongjiang Shuaiyi,
bears no interest and is only repayable after 10 years, in successive equal yearly payments beginning on the tenth anniversar y of the Notes,
December 8, 2018, and within the first month of each year thereafter. The final payment wi ll be due on January 1, 2028.

According to the PRC ru les and regulations, New Resources is required to settle the transfer price for acquisition of Heilong jiang Shuaiyi by
way of remittance of the RM B60,000,000 to Shuaiyi Founders within three months fro m the issue of the new business license. However, New
Resources has obtained the approval of the relevant business bureau for the extension of the time to one year until December 1, 2009. On
January 4, 2010, the relevant PRC regulatory agency further extended the payment due date to June 30, 2010. On July 12, 2010, the relevant
PRC regulatory agency further extended the payment due date to December 31, 2010. As of June 30, 2010, New Resources had only paid
$50,269 of the transfer price and, accordingly, the corresponding Subordinated Loan has not been drawn yet.

The acquisition payable due to the Shuaiyi Founders comprised:

                                                                                                         June 30                December 31
                                                                                                          2010                     2009
                                                                                                       (Unaudited)
Ms. Lianyun Han, Chairperson, CEO and President of the Co mpany                                    $       5,984,014       $        5,951,326
Ms. Nana Jiang, director of the Co mpany                                                                     280,081                  278,551
Mr. Chunming Zhang , director of the Co mpany                                                                353,414                  351,484
Mr. Weihan Zhang, director of a subsidiary of the Co mpany and the son of Ms. Lianyun Han                    441,768                  439,354
Family members of Ms. Lianyun Han                                                                            883,535                  878,708
Ms. Yuehong Luan                                                                                             411,727                  409,478
Other Shuaiyi Founders                                                                                       430,282                  427,932
Total                                                                                              $       8,784,821       $        8,736,833


                                                                     F-22
                                NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                      NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 19      RELATED PARTY TRANSACTIONS (CONTINUED)

(c)   Purchase of g oods

For the six months ended June 30, 2010 and 2009, the Co mpany purchased rice amounting to $Nil and $655,032, respectively, fro m
Heilonjiang Shuaiyi Technology Development Co., Ltd. (―Shuaiyi Technology‖). Shuaiy i Technology and the Co mpany are under co mmon
control and management.

(d)   Lease of land

For the six months ended June 30, 2010 and 2009, the Co mpany paid rental expense of $4,505 and $4,500 for land to Shuaiyi Tec hnology.

NOTE 20      CONCENTRATION OF CREDIT RIS K

As of June 30, 2010 and December 31, 2009, 100% of the Co mpany ‘s cash included cash on hand and deposits in accounts maintained within
the PRC where there is currently no rule or regulation in p lace fo r obligatory insurance to cover bank deposits in the event of bank failure.
However, the Co mpany has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts

For the six months ended June 30, 2010 and 2009, all of the Co mpany‘s sales arose in the PRC. In addition, all accounts receivable as of June
30, 2010 and December 31, 2009 also arose in the PRC.

Except for one customer who accounted for 40% of the Co mpany ‘s revenue for the six months ended June 30, 2010, there was no other single
customer who accounted for more than 10% of the Co mpany ‘s revenue for either the six months ended June 30, 2010 or 2009.

As of June 30, 2010, five customers accounted for 29%, 19%, 14%, 13% and 12% of total accounts receivable of t he Co mpany. As of
December 31, 2009, five customers accounted for 18%, 13%, 12%, 12% and 12% of accounts receivable of the Co mpany. Except as d isclosed,
no other customer accounted for 10% or mo re of the Co mpany ‘s accounts receivable as of June 30, 2010 or December 31, 2009.

                                                                     F-23
                                 NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                       NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 21       COMMIT MENTS AND CONTINGENCIES

(a)    Operating leases

The Co mpany has entered into tenancy agreements for the leases of an exh ibition hall and land with a third party and a relate d company,
Shuaiyi Technology (see 19(d)), respectively, for the purposes of th e operation of its subsidiaries. The Co mpany‘s co mmit ments for minimu m
lease payments under these operating leases for the next five years and thereafter as of June 30, 2010 are as follows:

                                                                                                                                 (Unaudited)
Remainder of fiscal year ending December 31, 2010                                                                          $          16,014
Fiscal year ending December 31, 2011                                                                                                   9,056
Fiscal year ending December 31, 2012                                                                                                   9,056
Fiscal year ending December 31, 2013                                                                                                   9,056
Fiscal year ending December 31, 2014                                                                                                   9,056
Thereafter                                                                                                                           117,731
Total                                                                                                                      $         169,969


(b)    PRC employee costs

According to the prevailing laws and regulations of the PRC, the Co mpany ‘s subsidiaries in the PRC are required to cover its emp loyees with
med ical, retirement and unemploy ment insurance programs. Management believes that due to the transient nature of its emp loyee s, they do not
need to provide all emp loyees with such social insurances, and have not paid the social insurances for all employees.

In the event that any current or former employee files a co mplaint with the PRC govern ment, the Co mpany's subsidiaries may be subject to
making up the social insurances as well as admin is trative fines. As the Company believes that these fines would not be material, no provision
has been made in this regard.

(c)   Transfer price for equity interest in Heilongjiang Shuai yi

On July 28, 2008, the Co mpany‘s subsidiary, New Resources entered into an equity transfer agreement with the Shuaiyi Founders to acquire all
of their equity interests in Heilongjiang Shuaiyi for RMB60,000,000 (appro ximately $8.8 million). A new business license was issued to
Heilongjiang Shuaiyi on December 1, 2008. According to PRC merger and acquisition ru les, the equity interest transfer price should be paid in
full with in three months commencing fro m the issuance of the new business license to Heilongjiang Shuaiyi. If the transfer pr ice is not paid by
this date, the Company may apply to the relevant PRC business bureau for an extension of up to one year from the date of the issuance of the
license; provided, however, that 60% of the transfer price will be required to be paid within six months fro m such date. Howe ver, if the
Co mpany is unable to make the pay ment for the transfer price by the March 1, 2009 or extended deadline and the relevant PRC b usiness bureau
does not grant the Company additional time to make the payment, the Company may be subject to fines or penalties imposed by the PRC
business bureau. In addition, the Co mpany may not be permitted to exercise any decision -making rights as a shareholder in Heilongjiang
Shuaiyi or to consolidate Heilongjiang Shuaiyi's financial results into the Co mpany ‘s financial statements.

On March 10, 2009, New Resources obtained the approval fro m the relevant PRC business bureau for the extension of time allowe d for the
payment of the transfer price to one year until December 1, 2009. On January 4, 2010, the relevant PRC regulatory agency further extended the
payment due date to June 30, 2010. On July 12, 2010, the relevant PRC regulatory agency further extended the payment due date to December
31, 2010. The Co mpany has engaged financial advisors with a view to raising additional c apital for the Co mpany. The Co mpan y believes that it
will be able to make the payment for the transfer price within the time allo wed by the relevant PRC business bureau and there fore has not
accrued any amount related to this contingency. However, there can be no assurance that the Company will be successful in raising sufficient
capital for the purpose of the payment of the transfer price to the Shuaiy i Founders.

                                                                      F-24
                                  NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                        NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 22        S EGMENT INFORMATION

The Co mpany operates in two business segments identified by product, ―Chinese Golden Grass‖ and ―other agricultural products‖. The Chinese
Go lden Grass segment consists of the growing and sales of Chinese Golden Grass, wh ich business is conducted through the Co mpa ny‘s
subsidiary, Daq ing Shuaiyi. The other agricultural products segment consists of the sales of rice, flour and silage corn etc, agricultural products
which business is mainly conducted through the Co mpany ‘s subsidiary, Harbin Shuaiyi.

Throughout the six months ended June 30, 2010 and 2009, all o f the Co mpany ‘s operations were carried out in one geographical segment -
China.

The Co mpany‘s segment revenue and results for the six months ended June 30, 2010 and 2009 are as fo llo ws:

                                                                                            Other
                                                                     Chinese             Agricultural          Corporate
Six months ended June 30, 2010                                     Gol den Grass           Products           unallocated         Consolidated
                                                                   (Unaudited)           (Unaudited)          (Unaudited)         (Unaudited)

Segment revenue fro m external customers                       $         9,308,592 $            917,955 $                   - $       10,226,547

Segment profit (loss)                                          $         7,394,331 $              73,025 $         (385,269 ) $        7,082,087
Income fro m operations before income taxes                                                                                   $        7,082,087


Segment assets                                                 $        34,130,009 $          1,173,790 $        11,268,952 $         46,572,751
Total assets                                                                                                                $         46,572,751
Other segment information:
  Depreciat ion and amort ization                              $           501,293 $               2,890 $             1,942 $           506,125
  Expenditure for seg ment assets                              $             7,956 $                   - $               290 $             8,246



                                                                                            Other
                                                                     Chinese             Agricultural          Corporate
Six months ended June 30, 2009                                     Gol den Grass          Products            unallocated         Consolidated

Segment revenue fro m external customers                       $         5,439,084 $          2,543,955 $                   - $        7,983,039


Segment profit (loss)                                          $         3,848,617 $            558,983 $          (166,415 ) $        4,241,185
Income fro m operations before income taxes                                                                                   $        4,241,185


Segment assets                                                 $        24,955,981 $          1,097,455 $         2,392,756 $         28,446,192
Total assets                                                                                                                  $       28,446,192


Other segment information:
  Depreciat ion and amort ization                              $           499,571 $               3,926 $             1,375 $           504,872
  Expenditure for seg ment assets                              $                 - $                   - $                 - $                 -

                                                                       F-25
                                  NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                        NOTES TO UNAUDITED CONDENS ED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 22        S EGMENT INFORMATION (CONTINUED)

                                                                           Other
                                                       Chinese          Agricultural       Corporate
Three months ended J une 30, 2010                    Gol den Grass        Products        unallocated         Consolidated
                                                     (Unaudited)        (Unaudited)       (Unaudited)         (Unaudited)

Segment revenue fro m external customers         $        5,043,549 $         414,603 $                 - $       5,458,152


Segment profit (loss)                            $        4,094,283 $          24,772 $       (180,850 ) $        3,938,205
Income fro m operations before income taxes                                                               $       3,938,205


Segment assets                                   $       34,130,009 $       1,173,790 $     11,268,952 $         46,572,751
Total assets                                                                                              $      46,572,751


Other segment information:
  Depreciat ion and amort ization                $          250,830 $           1,430 $            973 $            253,233
  Expenditure for seg ment assets                $            3,430 $               - $              - $              3,430




                                                                           Other
                                                       Chinese          Agricultural       Corporate
Three months ended J une 30, 2009                    Gol den Grass       Products         unallocated         Consolidated

Segment revenue fro m external customers         $        2,538,083 $         801,679 $                 - $       3,339,762


Segment profit (loss)                            $        1,779,350 $          62,597 $        (87,520 ) $        1,754,427
Income fro m operations before income taxes                                                               $       1,754,427


Segment assets                                   $       24,955,981 $       1,097,455 $      2,392,756 $         28,446,192
Total assets                                                                                              $      28,446,192


Other segment information:
  Depreciat ion and amort ization                $          249,694 $           1,963 $            688 $            252,345
  Expenditure for seg ment assets                $                - $               - $              - $                  -

                                                        F-26
                              REPORT OF INDEPENDENT REGIS TERED PUB LIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Nutrastar International Inc.:

We have audited the accompanying consolidated balance sh eets of Nutrastar International Inc. (formerly known as Shuaiyi International New
Resources D evelopment Inc., the ―Co mpany‖) as of December 31, 2009 and 2008 and the related consolidated statements of income and
comprehensive inco me, stockholders‘ equity, and cash flows for the years then ended. These consolidated financial statements are the
responsibility of the Co mpany‘s management. Our responsibility is to express an opinion on these consolidated financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Co mpany Accounting Oversight Board (Un ited States). Th ose
standards require that we p lan and perform the audit to obtain reasonable assurance about whether the consolida ted financial statements are free
of material misstatement. The Co mpany is not required to have, nor were we engaged to perform, an audit of its internal contr ol over financial
reporting. Our audit included consideration of internal control over financial report ing as a basis for designing audit pro cedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company ‘s internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the consolidated 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 consolidated financial position
of Nutrastar International Inc. (formerly known as Shuaiyi International New Resources Development Inc., the ―Co mpany‖) as of December
31, 2009 and 2008, the consolidated results of their operations and their cash flo ws for the years then ended in conformity with accounting
principles generally accepted in the United States of A merica.

As discussed in Notes 1 and 18 (c), the consolidated financial statements were prepared on the assumption that New Zealand WA YNE‘S New
Resources Development Co., Ltd. will be able to pay up the investment money related to Heilongjiang Shuaiyi New Energy Develop ment Co.,
Ltd. on or before June 30, 2010. In case New Zealand WAYNE‘S New Resources Development Co., Ltd. fails to pay the amount in full on
time, the basis of consolidation may not be appropriate.

/s/AGCA, Inc.

Arcadia, California
March 25, 2010

                                                                        F-27
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                              CONSOLIDATED BALANCE S HEETS
                                             (AMOUNTS EXPRESSED IN US DOLLA R)

                                                                                                             December 31,
                                                                                                      2009                  2008
                                                              ASSETS
CURRENT ASSETS
Cash and cash equivalents                                                                        $    20,115,677    $        9,198,243
Accounts receivable, net                                                                                 215,486               283,822
Inventories                                                                                              616,073             1,168,079
Prepay ments and other receivables                                                                       251,235                14,105
  Total current assets                                                                                21,198,471            10,664,249
OTHER ASSETS
Intangible assets, net                                                                                 2,747,402             3,183,995
Property, plant and equip ment, net                                                                   10,396,507            10,902,976
   Total assets                                                                                  $    34,342,380    $       24,751,220
                                           LIAB ILITIES AND S HAREHOLDERS' EQUIT Y
CURRENT LIA BILITIES
Accounts payable                                                                                 $           863    $            3,206
Other payables and accruals                                                                              453,504               472,959
Payable for intangible asset – Current portion                                                           878,709               877,886
Income tax payable                                                                                       319,873               119,486
Due to related parties                                                                                    49,794                 8,998
Acquisition payable                                                                                    8,736,833             8,778,861
  Total current liabilities                                                                           10,439,576            10,261,396
NON-CURRENT LIABILITIES
Payable for intangible asset, net of current portion                                                           -               877,886
  Total liabilities                                                                                   10,439,576            11,139,282
COMMITM ENTS A ND CONTINGENCIES (Note 18)
SHA REHOLDERS' EQUITY
Preferred Stock, $0.001 par value, 1,000,000 shares authorized, none and 727,520 shares issued
   and outstanding                                                                                              -                  727
Co mmon stock, $0.001 par value, 190,000,000 shares authorized, 14,297,731 and 11,746,041
   shares issued and outstanding                                                                          14,298                11,746
Additional paid-in capital                                                                             4,715,891             2,192,716
Statutory reserves                                                                                     1,341,687             1,326,239
Retained earn ings                                                                                    16,858,012             9,131,744
Accumulated other comp rehensive income                                                                  972,916               948,766
  Total shareholders' equity                                                                          23,902,804            13,611,938
   Total liabilities and sharehol ders' equity                                                   $    34,342,380    $       24,751,220


                                        See accompanying notes to consolidated financial statements

                                                                   F-28
                                NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                        CONSOLIDATED S TATEMENTS OF INCOME AND COMPREHENS IVE INCOME
                                        (AMOUNTS EXPRESSED IN US DOLLA R)

                                                                                                         Year Ended December 31,
                                                                                                          2009             2008
NET REV ENUE                                                                                       $     15,332,445 $      12,989,760
Cost of sales                                                                                             (4,563,965 )     (4,604,948 )
GROSS PROFIT                                                                                             10,768,480         8,384,812
Selling expenses                                                                                            (507,587 )       (196,313 )
General and administrative expenses                                                                       (1,356,499 )     (1,416,111 )
Loss on disposal of fixed assets                                                                                   -          (31,247 )
Income fro m operations                                                                                    8,904,394        6,741,141
Other inco me (expenses):
  Interest inco me                                                                                           81,542             29,741
  Exchange loss                                                                                             (15,398 )          (20,376 )
  Merger costs                                                                                                    -         (2,068,326 )
  Other, net                                                                                                  6,388             11,522
  Total other inco me (expenses), net                                                                        72,532         (2,047,439 )
Income before inco me taxes                                                                               8,976,926          4,693,702
Provision for inco me taxes                                                                              (1,235,210 )         (974,653 )
NET INCOME                                                                                                7,741,716          3,719,049
OTHER COM PREHENSIVE INCOM E:
Foreign currency translation adjustments                                                                     24,150             23,741
COMPREHENS IVE INCOME                                                                              $      7,765,866     $    3,742,790
Earnings per share
  Basic                                                                                            $          0.590     $        0.305
  Diluted                                                                                          $          0.580     $        0.305
Weighted average number of shares outstanding
 Basic                                                                                                   13,131,521         12,198,913
 Diluted                                                                                                 13,341,521         12,198,913


                                           See accompanying notes to consolidated financial statements

                                                                      F-29
                                            NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                            CONSOLIDATED S TATEMENTS OF S TOCKHOLDERS ’ EQUITY
                                                     (AMOUNTS EXPRESSED IN US DOLLAR)

                                                                                                                                 Accumulated
                       Preferred S tock           Common S tock                Additional                                           other
                      Number                   Number                           paid-in         S tatutory       Retained       comprehensive
                      of shares Amount         of shares    Amount              capital         reserves         earnings          income            Total

Balance at

 January 1, 2008       689,390 $    689                  - $     -         $        86,174 $       693,028 $      6,045,906 $          925,025 $     7,750,822

 Effect of reverse
 acquisition                   -        -       11,746,041     11,746              (14,195 )                 -              -                   -       (2,449)

Issue of shares          38,130       38                 -             -           427,411                   -              -                   -     427,449

 Share-based
 payment by
 shareholders                 -         -                -             -         1,693,326                   -              -                   -    1,693,326


   Net income                  -        -                -       -                          -                -    3,719,049                     -   3,719,049

 Foreign currency
 translation
 adjustment                    -        -                -       -                          -                -              -           23,741         23,741

 Comprehensive
 income                                                                                                                                              3,742,790

 Appropriation of
 statutory reserves            -        -                -       -                          -      633,211         (633,211 )                   -            -

Balance at
December 31, 2008      727,520      727         11,746,041     11,746            2,192,716       1,326,239        9,131,744            948,766      13,611,938


   Issue of shares             -        -        1,000,000       1,000           2,499,000                   -              -                   -    2,500,000


 Net income                    -        -                -             -                    -                -    7,741,716                     -   7,741,716

 Foreign currency
 translation
 adjustment                    -        -                -             -                    -                -              -           24,150         24,150

 Comprehensive
 income                                                                                                                                              7,765,866

 Appropriation of
 statutory reserves            -        -                -             -                    -       15,448          (15,448 )                   -            -

 Conversion of
 preferred stock
 into common
 stock                 (727,520 )   (727 )      12,695,223     12,695              (11,968 )                 -              -                   -            -

 1-for-114.59
 reverse split                 -        -      (11,643,533)    (11,643 )            11,643                   -              -                   -            -

 Share-based
 payment                       -        -         500,000            500            24,500                   -              -                   -      25,000

  Balance at
  December 31,                 -$       -       14,297,731 $   14,298 $          4,715,891 $     1,341,687 $     16,858,012 $          972,916 $    23,902,804
2009


       See accompanying notes to consolidated financial statements.

                                  F-30
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                         CONSOLIDATED S TATEMENTS OF CAS H FLOWS
                                             (AMOUNTS EXPRESSED IN US DOLLA R)

                                                                                                       Years Ended December 31,
                                                                                                        2009             2008
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                                                      $      7,741,716      $   3,719,049
Adjustments to reconcile net inco me to cash provided by operating activities:
    Depreciation and amortizat ion                                                                       1,004,386         1,123,447
    Loss from disposition of property, plant and equipment                                                       -            31,247
    Merger costs                                                                                                 -         2,068,326
    Share-based compensation expense                                                                        25,000                 -
  (Increase) decrease in assets:
       Accounts receivable                                                                                 68,574           (134,017 )
       Prepayments and other receivables                                                                 (237,020 )          141,563
       Inventories                                                                                        552,874           (466,314 )
  Increase (decrease) in liabilities:
       Accounts payable                                                                                     (2,345 )         (28,151 )
       Other payables and accruals                                                                         (19,890 )         (35,852 )
       Income tax payable                                                                                  200,193            38,245
       Due to related parties                                                                               (8,998 )           8,795
      Net cash provided by operating activities                                                          9,324,490         6,466,338
CASH FLOWS FROM INVESTING A CTIVITIES:
 Pay ment of merger costs related to reverse acquisition                                                         -          (375,000 )
 Purchase of property, plant and equipment                                                                 (49,155 )         (32,501 )
 Proceeds fro m sale of property, plant and equipment                                                            -         1,151,411
      Net cash (used in) provided by investing activities                                                  (49,155 )         743,910
CASH FLOWS FROM FINANCING A CTIVITIES:
 Proceeds fro m issue of shares                                                                         2,500,000            427,449
 Advances from shareholders                                                                                49,773                  -
 Repay ment of acquisition payable                                                                        (50,269 )                -
 Repay ment of payables for intangible asset                                                             (878,349 )         (865,292 )
      Net cash provided by (used in) financing activit ies                                              1,621,155           (437,843 )
Foreign currency translation adjustment                                                                    20,944            277,490
INCREAS E IN CASH AND CAS H EQUIVALENTS                                                                10,917,434          7,049,895
CASH AND CASH EQUIVA LENTS, at the beginning of the year                                                9,198,243          2,148,348
CAS H AND CAS H EQUIVALENTS, at the end of the year                                              $     20,115,677 $        9,198,243
NON-CASH TRA NSA CTIONS
Share-based payment awarded by shareholders to consultants for services related to the reverse
   acquisition                                                                                   $               -     $   1,693,326
Share-based payment to emp loyees under equity incentive plan                                    $          25,000     $           -
SUPPLEM ENTA L DISCLOSURE INFORMATION
Cash paid for interest                                                                           $                -    $            -
Cash paid for inco me taxes                                                                      $        907,835      $    892,547


                                         See accompanying notes to consolidated financial statements

                                                                      F-31
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008


NOTE 1        DES CRIPTION OF B US INESS AND ORGANIZATION

Nutrastar International Inc. (― Nutrastar ‖) w as incorporated in the State of Nevada on December 22, 2002. On December 23, 2008, the
Co mpany co mpleted a reverse acquisition of New Zealand WA YNE‘S New Resources Develop ment Co., Ltd. (―New Resources‖). As a result
of the reverse acquisition of New Resources, the Co mpany is no longer a shell co mpany and active business operations have bee n revived.
Nutrastar together with its subsidiaries are referred to as the ―Company‖.

On May 19, 2009, the Co mpany filed A mended and Restated Articles of Incorporation with the Nevada Secretary of State to amend the
Co mpany‘s current Articles of Incorporation to, among other things, (1) change the n ame of the Company fro m ―YzApp International Inc.‖ to
―Shuaiyi International New Resources Development Inc.,‖ (2) increase the total number of shares of common stock that the Co mpany has the
authority to issue from 50,000,000 to 190,000,000 shares and (3) effect a one for 114.59 reverse split of the Co mpany‘s outstanding common
stock (the ―Reverse Sp lit‖). The detailed description of the Amend ments is stated in the Co mpany ‘s Form 8-K dated May 26, 2009.

On January 11, 2010, the Co mpany filed a Cert ificate of A mendment to its Articles of Incorporation with the Secretary of State of the State of
Nevada, pursuant to which the Co mpany further changed its name fro m "Shuaiyi International New Resources Development Inc." to "Nutrastar
International Inc.".

As of December 31, 2009, details of the subsidiaries of the Co mpany are as follows:

                              Do micile and                                             Percentage
                              date of                                                   of effect ive
Subsidiaries‘ names           incorporation                Paid-up capital              ownership                    Principal act ivit ies
New Zealand WA YNE‘S          British Virg in            $ 50,000                       100%                         Holding co mpany of
New Resources                 Islands                                                                                the other subsidiaries
Develop ment Co., Ltd         March 13, 2008
(―New Resources‖)
Heilongjiang Shuaiy i New     People‘s                     RM B60,000,000               100%                         Principally engaged in
Energy Development Co.,       Republic o f                                                                           investment holding
Ltd (―Heilongjiang            China (―PRC‖)
Shuaiyi‖)                     July 11, 2006
Daqing Shuaiyi Bio mass       PRC                          RM B10,000,000               100%                         Growing and sales of
Technology Co., Ltd.          August 8, 2005                                                                         Chinese Golden Grass,
(―Daqing Shuaiy i‖)                                                                                                  which is widely used
                                                                                                                     for Chinese medicine
Harbin Shuaiyi Green and      PRC                          RM B1,500,000                100%                         Sales of agricultural
Specialty Food Trad ing       May 18, 2001                                                                           products
LLP. (―Harbin Shuaiyi‖)

Reverse Acquisition

On December 23, 2008, the Co mpany entered into a share exchange agreement ("Share Exchange Agreement ‖) under which the Company
issued 689,390 shares of the Company‘s series A preferred stock, par value $0.001, to the sole shareholder of New Zealand WAYNE‘S New
Resources Development Co., Ltd (―New Resources‖) in exchange for all the issued and outstanding shares of New Resources (the ―Share
Exchange‖). Immediately fo llo wing the Share Exchange, the shareholder of New Resources owned approximately 94% of the Co mpany ‘s total
issued and outstanding share capital.

                                                                     F-32
                                       NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                        NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                        FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 1         DES CRIPTION OF B US INESS AND ORGANIZATION (CONTINUED)

Reverse Acquisition (continued)

As a result, the Share Exchange has been accounted for as a reverse acquisition using the purchase method of accounting, whereby New
Resources is deemed to be the accounting acquirer and Nutrastar (formerly YzA PP) to be the accounting acquiree. The financial statements
before the date of Share Exchange are those of New Resources with the results of Nutrastar being consolidated fro m the date of Share
Exchange. No goodwill has been recorded.

New Resources was incorporated in the British Virgin Islands, which owns 100% of the outstanding cap ital stock of Heilongjiang Shuaiy i.
Heilongjiang Shuaiy i owns 100% equity interests in Daqing Shuaiy i and Harbin Shuaiy i.

Recapi talization of Daqing Shuai yi and Harbin Shuai yi

In September 2007, Heilongjiang Shuaiyi, Daq ing Shuaiyi and Harbin Shuaiy i underwent a restructuring exercise whereby Heilong jiang
Shuaiyi acquired 100% equity interests in Daq ing Shuaiy i and Harbin Shuaiy i, and former u ltimate controlling shareholders of Daq ing Shuaiyi
and Harbin Shuaiy i have become the controlling shareholders of New Energy.

Before and after the restructuring, all of the three entities, Heilongjiang Shuaiyi, Daqing Shuaiyi and Harb in Shuaiy i are un der the common
control.

This restructuring exercise has been accounted for as combinations of entities under common control using the ―as if‖ pooling method of
accounting, with no adjustment to the historical basis of the assets and liabilit ies of Daqing Shuaiyi and Harb in Shuaiy i and the operations were
consolidated as though the restructuring occurred as of the beginning of the first accounting period presented in these finan cial statements.

The shareholding percentages before and after this restructuring exercise were as follows:

                                                           Heilongjiang Shuaiyi             Daqi ng Shuaiyi               Harbi n Shuaiyi
                                                           Before        After            Before        After           Before        After
Sharehol der                                                 %            %                 %            %                %            %
Heilongjiang Shuaiy i                                             -             -                -          100                -          100
Daqing                                                         47.1             -                             -                -            -
Lianyun Han, CEO of the Co mpany                                  -         80.4                              -              20             -
Weihan Zhang*                                                     -          5.9               20             -              51             -
Heilongjiang Shuaiy i Science Development Co. Ltd.**           52.9             -              60             -                -            -
Lianju Han                                                        -          5.9               10             -                -            -
Xin jun Li                                                        -             -                5            -              29             -
Nana Jiang                                                        -             -                5            -                -            -
Lian xue Han                                                      -          5.9                              -                -            -
Fengxi Lang                                                       -          1.9                              -                -            -
                                                                100          100              100           100             100           100


*      Mr. Weihan Zhang is the son of Ms. Lianyun Han. Mr. Weihan Zhang and Ms. Lianyun Han are acting in concert and considered
       parties to the same control group.
**     Equity interests in Heilongjiang Shuaiyi Science Develop ment Co. Ltd. are held as follows:
       (i)     44.47% by Ms. Lianyun Han;
       (ii)    40.86% by Mr. Weihan Zhang; and
       (iii)   14.67% by 9 other minority shareholders.

                                                                       F-33
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 1        DES CRIPTION OF B US INESS AND ORGANIZATION (CONTINUED)

Recapi talization of Daqing Shuai yi and Harbin Shuai yi (continued)

Before the restructuring exercise, Ms. Lianyun Han together with her son, Mr. Weihan Zhang had an effective interest of 78.7% in
Heilongjiang Shuaiyi, 71.2% in Daqing Shuaiyi, and 71% in Harb in Shuaiy i, respectively. Immed iately after the restructuring e xercise, Ms.
Lianyun Han together with her son, Mr. Weihan Zhang, had an aggregate interest of 86.3% in Heilongjiang Shuaiyi, wh ich holds a 100%
interest in each of Daqing Shuaiyi and Harbin Shuaiyi. In addition, Ms. Lianyun Han has been the managing directo r of all the entities before
and after, and throughout, this restructuring exercise. As a result, there was no change in control of the entities due to th is restructuring
exercise.

The considerations for the equity transfers in this restructuring exercise were based on the face value of the paid-up capital of Daqing Shuaiyi
and Harbin Shuaiyi and satisfied in cash in compliance with the regulatory requirements in the PRC. The acquisitions of Daqin g Shuaiyi and
Harbin Shuaiyi were funded by the capital of He ilongjiang Shuaiyi, in which the former controlling shareholders of Daqing Sh uaiyi and Harbin
Shuaiyi had already established a majority ownership by way of cash contributions to Heilongjiang Shuaiyi ‘s paid-up capital.

Restructuring of Heilongjiang Shuai yi

Pursuant to a restructuring plan intended to ensure comp liance with regulatory requirements of the PRC, in July 2008, New Res ources entered
into a equity transfer agreement (― Equity Transfer Agreement ‖) to acquire 100% equity interest in Heilongjiang Shuaiy i from Ms. Lianyun
Han, the then controlling shareholder and chairman of board o f d irectors of Heilongjiang Shuaiyi, and Heilongjiang Shuaiy i‘s other individual
shareholders (collectively ― Shuaiyi Founders ‖). The Equity Transfer Agreement was approved by the relevant PRC govern ment authority on
October 23, 2008. On November 24, 2008, Heilongjiang Shuaiyi obtained the Cert ificate of Approval for Establishment of Enterp rises of
Foreign Investment issued by Heilongjiang Provincial Govern ment and a new bu siness license was issued to Heilongjiang Shuaiyi on
December 1, 2008.

As part of the restructuring plan, each of Shuaiyi Founders respectively entered into an earn -in agreement (― Earn-in Agreement ‖), dated
September 12, 2008 (as amended on February 12, 2009) with New Zealand WA YNE‘s Investment Ho ldings Co., Ltd., Heilongjiang Shuaiyi‘s
sole shareholder (― New Zealand ‖). Pursuant to the Earn-in Agreements, Shuaiyi Founders obtained the right and option to acquire controlling
shares (― Option Shares ‖) in Shareholder at the par value of the Option Shares plus a nominal amount of $1,000, upon the satisfaction of each
of the following conditions: (1) six months have exp ired since the date of the Share Exchange Agreement with Nutrastar (fo rme rly YzAPP),
provided that on or before that date, Ms. Lianyun Han and Heilongjiang Shuaiy i have entered into a binding employ ment agreement an d Ms.
Lianyun Han is employed by Heilongjiang Shuaiyi pursuant to that agreement on such date; (2) the U.S. Securities and Exchange Co mmission
has declared a registration statement filed by the Co mpany under the Securit ies Act effect ive, o r investors who purchased com mon stock fro m
the Co mpany pursuant to a securities purchase agreement being able to sell their common stock under Rule 144; (3) Heilongjiang Shuaiyi and
its subsidiaries have achieved not less than $1,560,000 in after-tax net income, as determined under US GAAP for the six mo nths ended June
30, 2009; and (4) Heilongjiang Shuaiyi and its subsidiaries have achieved not less than $3,900,000 in pre-tax profits, as determined under US
GAAP for the fiscal year 2009.

On January 28, 2010, the Co mpany filed a registration statement on Form S-1, wh ich was declared effect ive by SEC on February 4, 2010. As a
result, all of the conditions to the Earn-in Agreement have been met such that Shuaiyi Founders are entit led to reacquire t he ultimate legal
ownership of Heilongjiang Shuaiyi.

                                                                     F-34
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 1        DES CRIPTION OF B US INESS AND ORGANIZATION (CONTINUED)

Restructuring of Heilongjiang Shuai yi (continued)

Pursuant to the Earn-in Agreement, the New Zealand further ag rees, among others, that throughout the exercise period of the Earn -in
Agreement, without the prior written approval of Shuaiyi Founders:

(i)     it will not increase the number of authorized shares of the New Zealand ‘s common stock, or any increased authorized shares will be
        deemed as part of the Option Shares;
(ii)    keeps available the services of current officers and employees of New Resources and Heilongjiang Shuaiyi;
(iii)   New Resources and Heilongjiang Shuaiyi do not declare or pay any dividend or make any other distribution, nor do they repurch ase,
        redeem or otherwise reacquire any equity of shares of capital stock or other securities.

Also as part of the restructuring plan, Heilongjiang Shuaiyi entered into separate loan agreements dated December 8, 2008, as amended on
February 12, 2009, and p ro missory notes with Shuaiy i Founders, pursuant to which, Shuaiy i Founders have agreed to lend to Heilongjiang
Shuaiyi a loan in the aggregate amount of RM B60,000,000 (appro ximately $8.8 million, ― Subordinated Loan ‖). The amount of the
Subordinated Loan exactly equals to the transfer price payable to the Shuaiyi Founders by New Resources for the a cquisition of Heilongjiang
Shuaiyi in co mpliance with regulatory requirements of the PRC. The Subordinated Loan ranks behind all other debts of Heilongj iang Shuaiyi,
bears no interest and is only repayable after 10 years, in successive equal yearly payment s beginning on the tenth anniversary of the Notes,
December 8, 2018, and within the first month of each year thereafter. The final payment will be due on January 1, 2028.

According to the PRC ru les and regulations, New Resources is required to settle the t ransfer price for acquisition of Heilongjiang Shuaiyi by
way of remittance of the RM B60,000,000 to Shuaiyi Founders within three months fro m the issue of the new business license. Ho wever, New
Resources has obtained the approval of the relevant business bu reau for the extension of the time to one year until December 1, 2009. On
January 4, 2010, the relevant PRC regulatory agency fu rther extended the pay ment due date to June 30, 2010. As of December 31 , 2009, New
Resources has only paid $50,269 of the transfer price and, accord ingly, the corresponding Subordinated Loan has not been drawn yet.

During and after this restructuring plan, there has been no change to the composition of the board of d irectors of Heilongjia ng Shuaiyi. The
board of directors of Heilongjiang Shuaiyi, chaired by Ms. Lianyun Han, has continued to comprise representatives of Shuaiyi Founders.
Therefore, Heilongjiang Shuaiyi is still under the same operating and management control of Shuaiyi Founders. In addition, du e to the
Subordinated Loan, Shuaiyi Founders will not receive any cash amount, nor will there be any cash flow out of the combined entity during the
whole period fro m the date of the Equity Transfer Agreement though the exp iry of the Earn -in Agreement, at wh ich time it is expected Shuaiy i
Founders will have reacquired the ultimate legal controlling ownership of Heilongjiang Shuaiyi. Furthermore, by providing the Subordinated
Loan to Heilongjiang Shuaiy i and obtaining the agreement of the New Zealand on not declaring any dividend t hroughout the exercise period of
the Earn -in Agreement without the prior written approval o f Shuaiyi Founders, Shuaiyi Founders continue to bear the residual risks and
rewards relating to Heilongjiang Shuaiyi. As a result, this restructuring has been accou nted for as a recap italizat ion of Heilongjiang Shuaiyi
with no adjustment to the historical basis of the assets and liabilities of Heilongjiang Shuaiyi. Results of Heilongjiang Sh u aiyi have been
consolidated as though the restructuring occurred as of the b eginning of the first accounting period presented in these financial statements.

                                                                     F-35
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 2        SUMMARIES OF S IGNIFICANT ACCOUNTING POLICIES

Principle of consolidation

These consolidated financial statements include the financial statements of Nutrastar and its subsidiaries. A ll significant inter-co mpany
balances or transactions have been eliminated on consolidation.

Basis of preparation

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of
America.

Use of estimates

The preparation of these consolidated financial statements in conformity with generally accepted accounting principles r equires the Company
to make estimates and assumptions that affect the reported amounts of assets and liabilit ies and the related disclosure of co ntingent assets and
liab ilit ies at the date of these consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.
The Co mpany bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the
circu mstances. Accordingly, actual results may d iffer fro m these estimates under different assumptions or conditions.

Reclassification

Certain prior year balances have been reclassified to conform to the current year‘s financial statement presentation. These reclassifications had
no impact on previously reported financial position, results of operations, or cash flows.

Cash and cash equivalents

Cash and cash equivalents consist of all cash balances and highly liquid investments with an orig inal maturity of three month s or less. Because
of the short maturity of these inves tments, the carrying amounts approximate their fair value. Restricted cash is excluded fro m cash and cash
equivalents.

Accounts receivable

Accounts receivable is stated at cost, net of allowance for doubtful accounts. The Co mpany maintains allowances for d oubtful accounts for
estimated losses resulting fro m the failure of customers to make required payments. The Co mpany reviews the accounts receivab le on a
periodic basis and makes allo wances where there is doubt as to the collectability of individual balanc es. In evaluating the collectability of
individual receivable balances, the Co mpany considers many factors, including the age of the balance, the customer ‘s payment history, its
current credit-worthiness and current economic trends.

Inventories

Inventories are stated at the lower of cost, determined on a weighted average basis, or market. Costs of inventories include purchase and related
costs incurred in bringing the products to their present location and condition. Market value is determined by reference to selling prices after
the balance sheet date or to management‘s estimates based on prevailing market conditions. The management will write down the inventories
to market value if it is belo w cost. The management also regularly evaluates the composition o f its inventories to identify slow-mov ing and
obsolete inventories to determine if valuation allowance is required.

                                                                      F-36
                                       NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                        NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                        FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 2          SUMMARIES OF S IGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Financial instruments

The Co mpany values its financial instruments as required by FASB ASC 320-12-65 (formerly SFAS No. 107, ―Disclosures about Fair Value of
Financial Instruments‖). The estimated fair value amounts have been determined by the Co mpany, using available market info rmation or other
appropriate valuation methodologies. However, considerable judg ment is required in interpreting market data to develop estimates of fair value.
Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a curren t market exchange.

The Co mpany‘s financial instruments primarily consist of cash and cash equivalents, trade accounts receivable, other current assets; trade
accounts payable, accrued expenses, other current liabilities, and due to related parties.

As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different fro m their carrying values as
presented due to the short maturities of these instruments and that the interest rates on the borrowings approximate those th at would have been
available for loans of similar remaining maturity and risk profile at respective year ends.

Fair value measurements

ASC Topic 820, Fair Value Measurement and Disclosures , defines fair value as the exchange price that would be received for an asset or paid
to transfer a liab ility (an exit price) in the principal or most advantageous market fo r the asset or liability in an orderly tran saction betw een
market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on
observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fa ir value:

Level 1     -      Quoted prices in active markets for identical assets or liabilit ies.
Level 2     -      Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilit ies; quoted prices in markets
                   that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the
                   full term of the assets or liabilities.
Level 3     -      Unobservable inputs that are supported by little or no market activ ity and that are significant to the fair value o f the assets or
                   liab ilit ies.

The carrying values of cash and cash equivalents, trade receivables and payables, and short -term debts approximate their fair values due to their
short maturities.

There were no assets and liabilities measured at fair value on a nonrecurring basis as of December 31, 2009 and 2008.

                                                                        F-37
                                       NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                        NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                        FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 2         SUMMARIES OF S IGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated dep reciation and accumulated impairment losses, if any. Gains or losses on
disposals are reflected as gain or loss in the year of disposal. The cost of improvements that extend the life of property, p lant and equipment are
capitalized. These capitalized costs may include structural imp rovements, equipment and fixtures. All ordinary repair and maintenance costs
are expensed as incurred.

Depreciat ion for financial reporting purposes is provided using the straight -line method over the estimated useful lives of the assets as follo ws:

                                                                                                                                    Useful Life
                                                                                                                                     (In years)
Buildings                                                                                                                              20-40
Machinery and motor vehicles                                                                                                            5-10
Office equip ment                                                                                                                         5

The carrying value of property, plant and equip ment is assessed annually and when factors indicating impairment is present, t he carry ing value
of the property, plant and equipment is reduced by the amount of the impairment. The Co mpany determines the exist ence of such impairment
by measuring the expected future cash flo ws (undiscounted and without interest charges) and co mparing such amount to the n et asset carrying
value. An impairment loss, if exists, is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Intangible assets

The Co mpany‘s intangible assets include a ten-year exclusive right to use a secret process and computer software. The Co mpany ‘s amortizat ion
policy on intangible assets is as follows:

                                                                                                                                    Useful Life
                                                                                                                                     (In years)
Exclusive right                                                                                                                          10
Co mputer software                                                                                                                        4

The Co mpany accounts for its intangible assets pursuant to FASB ASC Subtopic 350 -30, ―General Intangibles Other Than Goodwill‖. Under
ASC 350-30-35, intangibles with definite lives continue to be amortized on a straight -line basis over the lesser of their estimated useful lives or
contractual terms. Intangibles with indefin ite lives are evaluated at least annually for impairment by co mparing the asset‘s estimated fair value
with its carrying value, based on cash flow methodology.

Impairment of goodwill is tested at least annually at the reporting unit. The test consists of two steps. Firstly, the Co mpan y id entifies potential
impairment by co mparing the fair value of the reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit is
greater than its carrying amount, goodwill is not considered impaired. Secondly, if there is impairment identifie d in t he first step, an
impairment loss is recognized for any excess of the carrying amount of the reporting unit ‘s goodwill over the imp lied fair value of goodwill.
The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price
allocation, in accordance with FASB ASC 805-10, ―Business Combinations‖. If the carrying value o f a reporting unit exceeds its estimated fair
value, the Co mpany compares the imp lied fair value of the report ing unit ‘s goodwill to its carrying amount, and any excess of the carrying
value over the fair value is charged to earnings. The Co mpany ‘s fair value estimates are based on numerous assumptions and it is possible that
actual fair value will be significantly d ifferent than the estimates.

                                                                        F-38
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 2        SUMMARIES OF S IGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Impairment of long-lived assets

The Co mpany reviews and evaluates its long-lived assets for impairment when events or changes in circu mstances indicate that the related
carrying amounts may not be recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted
basis are less than the carrying amount of the assets, including goodwill, if any. An impairment loss is measured and recorde d based on
discounted estimated future cash flo ws. In estimating future cash flows, assets are grouped at the lowest level for which there is ident ifiable
cash flows that are largely independent of future cash flows fro m other asset groups.

Revenue recognition

Revenue is recognized when the following four revenue criteria are met: persuasive evidence of an arrangement exists, delivery has occurred,
the selling price is fixed or determinable, and collectability is reasonably assured.

Sales revenue is recognized net of value added and sales related taxes, sales discounts and returns at the time when the merchan dise is delivered
to the customer. Based on historical experience, management estimates that sales returns are immaterial and has not mad e allo wance for
estimated sales returns.

Research and development costs

Research and development costs are expensed to operations as incurred. Research and development costs were $36,728 and $32,81 5 for the
years ended December 31, 2009 and 2008, respectively.

Advertising costs

The Co mpany expenses all advertising costs as incurred. Advertising costs charged to selling expenses were $1,915 and $3,258 for the years
ended December 31, 2009 and 2008, respectively.

Shipping and handling costs

Substantially all costs of shipping and handling of products to customers are included in selling expense. Shipping and handling costs for the
years ended December 31, 2009 and 2008 were nil and $298, respectively.

Share-Based Payments

The Co mpany accounts for share-based compensation awards to e mployees in accordance with FASB ASC Topic 718, ―Co mp ensation – Stock
Co mpensation‖, which requires that share-based payment transactions with emp loyees be measured based on the grant -date fair value of the
equity instrument issued and recognized as compensation expense over the requisite service period.

The Co mpany accounts for share-based compensation awards to non-employees in accordance with FASB A SC Topic 718 and FASB ASC
Subtopic 505-50, ―Equity-Based Payments to Non-emp loyees‖. Under FASB ASC Topic 718 and FASB ASC Subtopic 505-50, stock
compensation granted to non-employees has been determined as the fair value of the consideration received or the fair value of equity
instrument issued, whichever is more reliably measured and is recognized as expenses as the goods or services are received.

                                                                      F-39
                                        NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                         NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                         FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 2         SUMMARIES OF S IGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income taxes

The Co mpany is subject to income taxes in the United States and other foreign jurisdictions where it operates. The Company ac counts for
income taxes in accordance with FASB ASC Topic 740, ―Inco me Taxes‖. FASB ASC Topic 740 requires an asset and liability approach for
financial accounting and reporting for inco me taxes and allows recognition and measurement of deferred tax assets based upon the likelihood
of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of
temporary differences between the carrying amounts of assets and liabilit ies for financial reporting purposes and the amounts used for income
tax purposes. A valuation allowance is provided fo r deferred tax assets if it is mo re likely than not these items will either exp ire before the
Co mpany is able to realize their benefits, or that future deductibility is uncertain.

The Co mpany‘s income tax returns are subject to examination by the Internal Revenue Service (―IRS‖) and other tax authorities in the
locations where it operates. The Co mpany assesses potentially unfavorable outcomes of such examinations based on the criteria of FASB ASC
740-10-25-5 through 740-10-25-7 and 740-10-25-13 (formerly FASB Interpretation No. 48 (―FIN 48‖) ―Accounting for Uncertainty in Inco me
Taxes‖) wh ich the Co mpany adopted on January 1, 2007. The interpretation prescribes a more -likely-than-not threshold for fin ancial statement
recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This Interpretation also provi des guidance on
derecognition of income tax assets and liabilities, classification of current and deferred inco me tax assets and liab ilit ies, accounting for interest
and penalties associated with tax positions, accounting for income taxes in interim periods and income tax d isclosures.

Comprehensive income

FASB ASC Topic 220, ―Co mprehensive Income‖, establishes standards for reporting and displaying co mprehensive income and its
components in the consolidated financial statements. Accumulated other co mprehensive inco me includes foreign currency transla tion
adjustments.

Foreign currency

The Co mpany uses the United States dollars (―US Dollar‖ or ―US$‖ or ―$‖) for financial reporting purposes. The PRC subsidiaries within the
Co mpany maintains the books and records in their functional currency, Ch inese Ren minbi (―RMB‖), being the lawful currency in the PRC.
Assets and liabilities of the PRC subsidiaries are translated fro m RM B into US Dollars using the applicable exchange rates prevailing at the
balance sheet date. Items on the statement of operations are translated at average exchange rates during the reporting period . Equity accounts
are translated at historical rates. Adjustments resulting fro m the translation of the Co mpany ‘s financial statements are recorded as accumu lated
other comprehensive income.

The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are
based on the rates as published on the website of People‘s Bank of Ch ina and are as follows:-

                                                                                                           December 31, 2009 December 31, 2008
Balance sheet items, except for equity accounts                                                            US$1=RM B6.8282 US$1=RM B6.8346
Items in the statements of income and cash flows                                                           US$1=RM B6.8310 US$1=RM B6.9480

No representation is made that the RM B amounts could have been, or could be, converted into U.S. dollars at the above rates.

The value of RM B against U.S. dollars and other currencies may fluctuate and is affected by, among other things, changes in China‘s political
and economic condit ions. Any significant revaluation o f RM B may materially affect the Co mpany ‘s financial condition in terms of U.S. do llar
reporting.

                                                                         F-40
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 2        SUMMARIES OF S IGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Earnings per share

The Co mpany reports earnings per share in accordance with the provisions of FASB ASC Topic 260, " Earn ings per Share." FASB AS C Top ic
260 requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such
earnings per share. Basic earnings per share excludes dilution and is co mputed by dividing income availab le to co mmon stockho lders by the
weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution (using the
treasury stock method) that could occur if securities or other contracts to issue common stock were exercised and converted into common
stock.

All per share data including earn ings per share has been retroactively restated to reflect the reverse acquisition on December 23, 2008 whereby
the 689,390 shares of preferred stock issued by Nutrastar (the nominal acquirer) to the shareholder of New Resources (the nominal acquiree)
are deemed to be the number of shares outstanding for the period prior to the reverse acquisition. For the period after the r everse acquisition,
the number of shares considered to be outstanding is the actual number of shares outsta nding during that period.

As discussed in note 1, the Co mpany effected a 1-fo r-114.59 Reverse Split of its common stock and all outstanding shares of Series A
Preferred Stock were automatically converted to common stock. The weighted average number of shares for the purposes of calculating the
earnings per share has been retroactively adjusted as if the Reverse Split took effect as of the beginning of the earliest pe riod presented. As
holders of Series A Preferred Stock were entit led to vote with the holders of co mmon stock on all matters on a an as -converted to common
stock basis, basic and diluted earnings per share have been calculated and presented on the basis that all shares of the Co mp any‘s common
stock and Series A Preferred Stock are considered a single class and on an as-converted to common stock basis before the Reverse Split.

The following table is a reconciliation of the net inco me and the weighted average shares used in the computation of basic an d diluted earnings
per share for the periods presented:

                                                                                                           Year ended December 31,
                                                                                                           2009              2008
Income for the purposes of basic and diluted EPS:                                                   $       7,741,716  $      3,719,049
Weighted average number of shares:
  - Basic                                                                                                   13,131,521            12,198,913
  - Effect of d ilutive warrants                                                                               210,000                     –
  - Diluted                                                                                                 13,341,521            12,198,913

Segment reporting

The Co mpany follows FASB ASC Topic 280, ―Seg ment Reporting‖, wh ich requires that companies disclose segment data based on how
management makes decision about allocating resources to segments and evaluating their performance.

The Co mpany believes that during the years ended December 31, 2009 and 2008, it operated in t wo business segments – growing and sales of
Chinese Golden Grass, which is widely used for Ch inese medicine, and sales of agricultural products, respectively. Throughout the years ended
December 31, 2009 and 2008, all of the Co mpany‘s operations were carried out in one geographical segment - China.

                                                                      F-41
                                       NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                        NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                        FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 2         SUMMARIES OF S IGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Commitments and contingencies

The Co mpany follo ws FASB A SC Subtopic 450-20, ―Loss Contingencies‖ in determin ing its accruals and disclosures with respect to loss
contingencies. Accordingly, estimated losses from loss contingencies are accrued by a charge to inco me when info rmation available prio r to
issuance of the financial statements indicates that it is probable that a liab ility could be been incurred and the amount of the loss can be
reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or
reasonably estimable, d isclosure of the loss contingency is made in the financial statements when it is at least reasonably p ossible that a
material loss could be incurred.

Recent accounting pronouncements

In June 2009, the FASB established the FASB Accounting Standards Codification TM (ASC) as the single source of authoritative U.S generally
accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities. Rules and interpretiv e releases of
the Securities and Exchange Co mmission (―SEC‖) under authority of federal securities laws are also sources of authoritative GAAP for SEC
registrants. The ASC superseded all previously existing non -SEC accounting and reporting standards, and any prior sources of U.S. GAAP not
included in the ASC or grandfathered are not authoritative. New accounting standards issued subsequent to June 30, 2009 are communicated by
the FASB through Accounting Standards Updates (ASUs). The ASC d id not change current U.S. GAAP but changes the approach by
referencing authoritative literature by topic (each a ―Topic‖) rather than by type of standard. The ASC has been effective for the Co mpany
effective July 1, 2009. Adoption of the ASC did not have a material impact on the Company ‘s Consolidated Financial Statements, but
references in the Co mpany‘s Notes to Consolidated Financial Statements to former FASB positions, statements, interpretations, opinions,
bulletins or other pronouncements are now presented as references to the corresponding Topic in the ASC.

Effective January 1, 2009, the Co mpany adopted FASB ASC 350-30 and ASC 275-10-50 (formerly FSP FAS 142-3, Determination of the
Useful Life o f Intangible Assets ), wh ich amends the factors that should be considered in developing renewal or extension assumptions used to
determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets . The Co mpany will
apply ASC 350-30 and ASC 275-10-50 prospectively to intangible assets acquired subsequent to the adoption date. The adoption of these
revised provisions had no impact on the Co mpany‘s Consolidated Financial Statements.

Effective January 1, 2009, the Co mpany adopted FASB ASC 815 -10-65 (formerly SFAS 161, Disclosures about Derivative Instruments and
Hedging Activities ), which amends and expands previously existing guidance on derivative instruments to require tabular disclosure of the fair
value of derivative instruments and their gains and losses., This ASC also requires disclosure regarding the credit -risk related contingent
features in derivative agreements, counterparty credit risk, and strategies and objectives for using derivative instruments. The adoption of th is
ASC d id not have a material impact on the Co mpany‘s Consolidated Financial Statements.

During 2008, the Co mpany adopted FASB ASC 820-10 (formerly FSP FAS 157-2, Effective Date of FASB Statement 157 ), which deferred the
provisions of previously issued fair value gu idance for nonfinancial assets and liabilit ies to the first fiscal period beginn ing aft er November 15,
2008. Deferred nonfinancial assets and liabilit ies include items such as goodwill and other nonamort izable intangibles. Effective January 1,
2009, the Co mpany adopted the fair value guidance for nonfinancial assets and liabilities. The adoption of FASB ASC 820 -10 did not have a
material impact on the Co mpany‘s Consolidated Financial Statements.

                                                                        F-42
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 2        SUMMARIES OF S IGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent accounting pronouncements (continued)

Effective January 1, 2009, the Co mpany adopted FASB ASC 810 -10-65 (formerly SFAS 160,

Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51 ), which amends previously issued guidance to
establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidatio n of a subsidiary. It
clarifies that a noncontrolling interest in a subsidiary, which is sometimes referred to as minority interest, is an ownershi p interest in the
consolidated entity that should be reported as equity. Among other requirements, this State ment requires that the consolidated net income
attributable to the parent and the noncontrolling interest be clearly identified and presented on the face of the consolidate d income statement.
The adoption of the provisions in this ASC did not have a material impact on the Co mpany‘s Consolidated Financial Statements.

Effective January 1, 2009, the Co mpany adopted FASB ASC 805-10, (formerly SFAS 141R, Business Combinations ), which establishes
principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the
liab ilit ies assumed, any noncontrolling interest in an acquiree and the goodwill acquired. In addition, the provisions in thi s ASC require that
any additional reversal of deferred tax asset valuation allowance established in connection with fresh start reporting on January 7, 1998 be
recorded as a component of income tax expense rather than as a reduction to the goodwill established in connection wit h the f resh start
reporting. The Co mpany will apply ASC 805-10 to any business combinations subsequent to adoption.

Effective January 1, 2009, the Co mpany adopted FASB ASC 805 -20 (formerly FSP FAS 141R-1,

Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Ar ise from Contingencies ), wh ich amends ASC
805-10 to require that an acquirer recognize at fair value, at the acquisition date, an asset acquired or a liability assumed in a business
combination that arises fro m a contingency if the acquisition -date fair value of that asset or liability can be determined during the measurement
period. If the acquisition-date fair value of such an asset acquired or liability assumed cannot be determined, the acquirer should apply the
provisions of ASC Topic 450, Contingences , to determine whether the contingency should be recognized at the acquisition date or after such
date. The adoption of ASC 805-20 did not have a material impact on the Co mpany‘s Consolidated Financial Statements.

Effective Ju ly 1, 2009, the Co mpany adopted FASB ASC 825-10-65 (fo rmerly FASB Staff Position (―FSP‖) No. FAS 107-1 and Accounting
Principles Board 28-1, Interim Disclosures about Fair Value of Financial Instruments ), which amends previous guidance to require
disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial
statements. The adoption of FASB ASC 825-10-65 d id not have a material impact on the Co mpany‘s Consolidated Financial St atements.

Effective July 1, 2009, the Co mpany adopted FASB ASC 320-10-65 (formerly FSP FAS 115-2 and FAS 124-2, Recognition and Presentation
of Other-Than-Temporary Impairments ). Under ASC 320-10-65, an other-than-temporary impairment must be recognized if t he Co mpany has
the intent to sell the debt security or the Co mpany is more likely than not will be required to sell the debt security before its anticipated
recovery. In addit ion, ASC 320-10-65 requires impairments related to cred it loss, which is the difference between the present value of the cash
flows expected to be collected and the amo rtized cost basis for each security, to be recognized in earnings while impairments related to all other
factors to be recognized in other co mprehensive inco me. The adoption of ASC 320-10-65 did not have a material impact on the Co mpany‘s
Consolidated Financial Statements.

                                                                      F-43
                                        NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                         NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                         FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 2         SUMMARIES OF S IGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent accounting pronouncements (continued)

Effective Ju ly 1, 2009, the Co mpany adopted FASB ASC 820-10-65 (formerly FSP FAS 157-4,

Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Iden tifying
Transactions That Are Not Orderly ), wh ich provides guidance on how to determine the fair value of assets and liabilities when the volume and
level of activ ity for the asset or liability has significantly decreased when co mpared with normal market activity for the as set or liability as well
as guidance on identifying circu mstances that indicate a transaction is not orderly. Th e adoption of ASC 820-10-65 did not have a material
impact on the Co mpany‘s Consolidated Financial Statements.

Effective Ju ly 1, 2009, the Co mpany adopted FASB ASC 855-10 (fo rmerly SFAS 165, Subsequent Events ), wh ich establishes general
standards of accounting for and disclosure of events that occur after the balance sheet date, but before financial statements are issued or are
available to be issued. Adoption of ASC 855-10 did not have a material impact on the Co mpany‘s Consolidated Financial Statements.

In the fourth quarter of fiscal 2009, the Co mpany adopted ASC 715, Compensation – Retirement Benefits

(formerly FASB FSP FAS 132(R)-1, Employers’ Disclosures about Postretirement Benefit Plan Assets ), which expands the disclosure
requirements about plan assets for defined benefit pension plans and postretirement plans. The adoption of these disclosure requirements has
had no material effect on the Co mpany‘s Consolidated Financial Statements.

In the quarter ended December 31, 2009, the Co mpany adopted ASC Update No. 2009-05, wh ich provides guidance on measuring the fair
value of liabilities under FASB ASC 820 (formerly SFAS 157, Fair Value Measurements ). . The adoption of this Update has had no material
effect on the Co mpany‘s Consolidated Financial Statements.

In January 2010, the FA SB issued ASU No. 2010-05— Compensation—Stock Compensation (Topic 718): Escrowed Share Arrangements and
the Presumption of Co mpensation . Th is Update simp ly codifies EITF Topic No. D-110, ―Escrowed Share Arrangements and the Presumption
of Co mpensation‖ dated June 18, 2009. ASU No. 2010-05 includes the SEC staff announcement at the EITF meeting that clarified SEC staff
views on overcoming the presumption that for certain shareholders escrowed share arrangements represent compensa tion. Historically, the SEC
staff has expressed the view that an escrowed share arrangement involv ing the release of shares to certain shareholders based on
performance-related criteria is presumed to be compensatory. The SEC staff clarified that entities should consider the substance of the
transaction in evaluating whether the presu mption of co mpensation may be overco me, including whether the transaction was ente red into for a
reason unrelated to employ ment, such as to facilitate a financing transaction. In that situation, the staff generally believes that the escrowed
shares should be reflected as a discount in the allocation of proceeds. The Company has applied the SEC staff announcement to any escrowed
share arrangement effect ive fro m June 18, 2009.

                                                                         F-44
                                       NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                        NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                        FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 2         SUMMARIES OF S IGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New accounting pronouncement to be adopted

In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers o f Financial Assets – an amendment of FASB Statement No. 140 ,
(codified by ASU No. 2009-16 issued in December 2009). SFAS No. 166 limits the circu mstances in wh ich a financial asset should be
derecognized when the t ransferor has not transferred the entire financial asset by taking into consideration the transferor ‘s continuing
involvement. The standard requires that a transferor recognize and init ially measure at fair value all assets obtained (including a transf eror‘s
beneficial interest) and liabilit ies incurred as a result of a transfer of financial assets accounted for as a sale. The co ncept of a qualifying
special-purpose entity is removed fro m SFAS No. 140, ―Accounting for Transfers and Servicing of Financial Assets and Ext inguishments of
Liabilities,‖ along with the exception fro m applying FIN 46(R), Consolidation of Variable Interest Entities . The standard is effective for the
first annual reporting period that begins after November 15, 2009 (i.e. the Co mpany ‘s fiscal 2010). Earlier application is prohibited. It is
expected the adoption of this Statement will have no material effect on the Co mpany‘s Consolidated Financial Statements.

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R) , (codified by ASU No. 2009-17 issued in
December 2009). The standard amends FIN No. 46(R) to require a co mpany to a nalyze whether its interest in a variable interest entity (―VIE‖)
gives it a controlling financial interest. A co mpany must assess whether it has an implicit financial responsibility to ensur e that the VIE
operates as designed when determining whether it has the power to direct the activit ies of the VIE that significantly imp act its economic
performance. Ongoing reassessments of whether a company is the primary beneficiary are also required by the standard. SFAS No . 167 amends
the criteria to qualify as a primary beneficiary as well as how to determine the existence of a VIE. The standard also eliminates certain
exceptions that were available under FIN No. 46(R). This Statement will be effect ive as of the beginning o f each reporting en tity‘s first annual
reporting period that begins after November 15, 2009 (i.e. the Co mpany ‘s fiscal 2010). Earlier application is prohibited. Co mparative
disclosures will be required fo r periods after the effective date. It is expected the adoption of this Statement will have no material effect on the
Co mpany‘s Consolidated Financial Statements.

In October 2009, the FASB concurrently issued the following ASC Updates (ASU):

• ASU No. 2009-13— Revenue Recognition (ASC Topic 605): Multiple-Deliverable Revenue Arrangements (formerly EITF Issue No. 08-1).
ASU No. 2009-13 modifies the revenue recognition guidance for arrangements that involve the delivery of mu ltiple elements, such as product ,
software, services or support, to a customer at different times as part of a single revenu e generating transaction. This standard provides
principles and application guidance to determine whether mult iple deliverables exist, how the individual deliverables should be separated and
how to allocate the revenue in the arrangement among those separate deliverables. The standard also expands the disclosure requirements for
mu ltip le deliverable revenue arrangements.

• ASU No. 2009-14— Software (ASC Topic 985): Certain Revenue Arrangements That Include Software Elements (formerly EITF Issue No.
09-3) . A SU No. 2009-14 removes tangible products from the scope of software revenue recognition guidance and also provides guidance on
determining whether software deliverables in an arrangement that includes a tangible product, such as embedded software, are within the scope
of the software revenue guidance.



                                                                       F-45
                                        NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                         NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                         FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 2         SUMMARIES OF S IGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New accounting pronouncement to be adopted (continued)

• ASU No. 2009-13 and ASU No. 2009-14 should be applied on a prospective basis for revenue arrangements entered into or materially
modified in fiscal years beginning on or after June 15, 2010, with earlier application permitted. Alternatively, an entity ca n elect to adopt these
standards on a retrospective basis, but both these standards must be adopted in the same perio d using the same transition method. The Co mpany
expects to apply these ASU Updates on a prospective basis for revenue arrangements entered into or materially mod ified beginn ing April 1,
2011. The Co mpany is currently evaluating the potential impact these A SC Updates may have on its financial position and results of
operations.

In October 2009, the FASB also issued ASU No. 2009-15— Accounting for Own-Share Lending Arrangements in Contemplation of
Convertible Debt Issuance or Other Financing. ASU 2009-15 amends ASC 470-20, Debt with Conversion and Other Options , to provide
accounting and reporting guidance for own-share lending arrangements issued in contemplation of convertible debt issuance. ASU 2009 -15 is
effective for fiscal years beginning on or after December 15, 2009 (i.e. the Co mpany‘s fiscal 2010) with retrospective application required. The
Co mpany is currently evaluating the potential impact this ASC Updates may have on its financial position and results of opera tions.

In January 2010, the FASB issued the following ASC Updates:

• ASU No. 2010-01— Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash . This Update
clarifies that the stock portion of a distribution to shareholders that allows them to ele ct to receive cash or stock with a potential limitation on
the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is r eflected in EPS
prospectively and is not a stock dividend for purposes o f applying Topics 505 and 260 (Equity and Earnings Per Share). The amendments in
this Update are effective for interim and annual periods ending on or after December 15, 2009 with retrospective application.

• ASU No. 2010-02— Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary . This Update
amends Subtopic 810-10 and related guidance to clarify that the scope of the decrease in ownership provisions of the Subtopic and related
guidance applies to (i) a subsidiary or group of assets that is a business or nonprofit activity; (ii) a subsidiary that is a business or nonprofit
activity that is transferred to an equity method investee or joint venture; and (iii) an exchange of a group of assets that c onstitutes a business or
nonprofit activity for a noncontrolling interest in an entity, but does not apply to: (i) sales of in substance real estate; and (ii) co nveyances of oil
and gas mineral rights. The amendments in this Update are effect ive beginning in the period that an entity adopts FAS 160 (now included in
Subtopic 810-10).

• ASU No. 2010-06— Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements .
This Update amends Subtopic 820-10 that require new disclosures about transfers in and out of Levels 1 and 2 and activity in Level 3 fair value
measurements. This Update also amends Subtopic 820-10 to clarify certain existing disclosures. The new disclosures and clarifications of
existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about
purchases, sales, issuances, and settlements in the roll forward of activ ity in Level 3 fair value measurements, which are ef fective for fiscal
years beginning after December 15, 2010.

The Co mpany expects that the adoption of the above Updates issued in January 2010 will not have any significant impact on its financial
position and results of operations.

Other accounting standards that have been issued or proposed by the FASB or other standards -setting bodies that do not require adoption until a
future date are not expected to have a material impact on the Co mpany ‘s Consolidated Financial Statements upon adoption.


                                                                         F-46
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008


NOTE 3        ACCOUNTS RECEIVAB LE, NET

Accounts receivable consisted of the follo wing:

                                                                                            As of December 31,
                                                                                          2009              2008
Accounts receivable                                                                $        215,486 $          283,822
Less: Allowance for doubtful debts                                                                 -                 -
Accounts recei vable, net                                                          $        215,486 $          283,822


NOTE 4        INVENTORIES

Inventories by major categories are su mmarized as follows:

                                                                                                  As of December 31,
                                                                                              2009          2008
Raw materials                                                                      $        183,934 $          147,824
Work in p rogress                                                                             294,9            832,680
                                                                                                 83
Fin ished goods                                                                               137,1            187,575
                                                                                                 56
Total                                                                              $        616,073 $        1,168,079


NOTE 5        PREPAYMENTS AND OTHER REC EIVAB LES

Prepayments and other receivables consist of the following:

                                                                                            As of December 31,
                                                                                          2009              2008
Prepayments                                                                        $         12,812 $               -
Other receivables, net of $nil allowance                                                    238,423            14,105
                                                                                   $        251,235 $          14,105


                                                              F-47
                                        NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                         NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                         FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 6         INTANGIB LE ASS ETS, NET

Intangible assets, net consisted of the follo wing:

                                                                                                                   As of December 31,
                                                                                                          2009               2008
Co mputer software, cost                                                                          $            1,454 $            1,453
Exclusive right to use a secret process, cost                                                              4,395,309          4,391,193
Less: Accumulated amort ization                                                                           (1,649,361 )       (1,208,651 )
                                                                                                  $        2,747,402 $        3,183,995


In April 2006, the Co mpany purchased from a third party a ten -year exclusive right to use a secret process and method in the cultivation and
growing of Ch inese Golden Grass, which is widely used for Chinese medicine, for a cash consideration of RMB30,000,0 00, payable over five
years. The exclusive right is amortized over its term of ten years using the straight -line method.

Amort izat ion expenses for the years ended December 31, 2009 and 2008 were $439,398 and $432,597, respectively.

NOTE 7         PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the follo wing:

                                                                                                            As of December 31,
                                                                                                          2009              2008
Cost:
Bu ild ings                                                                                       $       11,672,404 $         11,647,541
Office equip ment                                                                                             15,264                9,317
Machinery                                                                                                    128,286               98,903
Motor vehicles                                                                                                54,842               54,790
Total cost                                                                                                11,870,796           11,810,551
Less: Accumulated depreciat ion                                                                           (1,474,289 )           (907,575 )
Net book value                                                                                    $       10,396,507 $         10,902,976


Depreciat ion expenses for the years ended December 31, 2009 and 2008 were $564,988 and $690,850, respectively.

NOTE 8         OTHER PAYAB LES AND ACCRUALS

Other payables and accruals consisted of the following:

                                                                                                            As of December 31,
                                                                                                          2009              2008
Accrued staff costs                                                                               $         370,395 $          235,421
Other taxes payable                                                                                          25,030            232,481
Other payables                                                                                               58,079              5,057
                                                                                                  $         453,504 $          472,959



                                                                    F-48
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 9        PAYAB LE FOR INTANGIB LES

As described in Note 6, the Co mpany purchased an exclusive right fro m an independent party for a secret process and method fo r a stated value
of RM B30,000,000 payable over 5 years fro m the date of purchase. The agreement provides that all payments by the Company for the secret
process and method will be refundable if the secret process and method proves ineffective. Under ASC Subtopic 835 -30, ―Imputation of
Interest‖ (formerly APB 21, ―Interest on Receivables and Payables ‖), the payable for intangibles are stated without imputed interest as the
noninterest factor fairly represents the warranty for perfo rmance.

The following table presents the amounts payable for the next five years and thereafter:

 Year ending December 31, 2010                                                                                             $          878,709
2011 and thereafter                                                                                                                         -
Total                                                                                                                                 878,709
Current porti on                                                                                                                      878,709
Non-current portion                                                                                                        $                -




NOTE 10       ACQUIS ITION PAYAB LE

The acquisition payable represents the transfer price of RMB60,000,000 payable by New Resources for the acquisition of 100% equity interest
in Heilongjiang Shuaiyi, as further d iscussed in Note 18, the acquisition payable is due for pay ment in full on or befo re Jun e 30, 2010 by New
Resources to Shuaiyi Founders who are also shareholders of the Company.

NOTE 11       SHAREHOLDERS ’ EQUIT Y

Series A Voting Convertible Preferred Stock

In accordance with the Co mpany‘s Articles of Incorporation, the Co mpany‘s Board of Directors unanimously approved the filing of a
Cert ificate of Designation designating and authorizing the issuance of up to 800,000 shares of our Series A Voting Preferred Stock. The
Cert ificate of Designation was filed on December 22, 2008. The holders of the Company‘s Series A Preferred Stock are entitled to vote on all
matters together with all other classes of stock on an as -converted to common stock basis. Holders of Series A Preferred Stock have protective
class voting veto rights on matters, such as business combination transactions, payment of dividends, the issuance of other classes of stock with
senior rights, changes to our charter documents and stock redemptions. Shares of Series A Preferred Stock have a senior liquidation payment
preference in the event of a liquidation or sale of the Co mpany.

On December 23, 2008, which was the date of the Share Exchange as set out in Note 1, the Company entered into an amendment, ( the ―
Amend ment ‖), of a stock purchase agreement, (the ―SPA)‖, dated August 6, 2008, by and among ACI (formerly BMC Acquisitions Corp.,
LLC), Belmont Partners LLC, or Belmont, and the Co mpany. ACI was the Co mpany ‘s majority shareholder prior to the Company‘s reverse
acquisition of New Resources. Pursuant to the SPA, the Co mpany was required to issue to Belmont a nu mber of shares of it s common stock
sufficient for Belmont to retain 1.1% ownership interest in the Co mpany. Pursuant to the Amendment, ACI assumed the foregoing obligation
of the Co mpany and agreed to transfer its shares of the Co mpany‘s co mmon stock in order to satisfy such obligation. On th e same day, the
Co mpany entered into a subscription agreement with ACI, pursuant to which the Company issued and sold to ACI 17,962 shares of Series A
Preferred Stock for $52,530.50, or $2.92 per share.

On December 23, 2008, the Co mpany also entered into a subscription agreement with Tan Zhen Investment Limited, (the ― Investor ‖),
pursuant to which the Co mpany issued and sold to the Investor 20,168 shares of the Co mpany ‘s Series A Preferred Stock for $375,000, o r
$18.59 per share.

On May 29, 2009, all issued and outstanding shares of the Series A Preferred Stock were automatically converted into 12,695,2 23 shares of
common stock on the basis of one share of Series A Preferred Sto ck for 2,000 shares of common stock, which was adjusted to a conversion
ratio of one share of Series A Preferred Stock for 17.45 shares of co mmon stock upon the effectiveness of the 1 -for-114.59 reverse split of the
Co mpany‘s outstanding common stock.

As of December 31, 2009 and 2008, the Co mpany had none and 727,520 shares of Series A Preferred Stock issued and outstanding,
respectively.

                                                                      F-49
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 11       SHAREHOLDERS ’ EQUIT Y (CONTINUED)

Private Placement Transaction

On December 17, 2009, the Co mpany completed a private placement transaction and sold 1,000,000 shares of its common stock to certain
accredited investors at $2.50 per share for a total o f $2.5 million pursuant to a securities purchase agreement, or the Sec urities Purchase
Agreement. In addition, the Co mpany issued to each of the investors two warrants to purchase in aggregate 500,000 shares of its common
stock, including a Series A warrant having a term of three years with an exercise price of $3.25 per sha re and a Series B warrant having a term
of three years with an exercise price of $4.00 per share. These warrants contain standard anti-dilut ion provisions for stock dividends, stock
splits, stock combination, recapitalization and a change of control transa ction. Because these warrants do not contain any contingent exercise
provisions and their settlement amount will equal the difference between the fair value of a fixed nu mber of the Co mpany ‘s equity shares and a
fixed strike price, these warrants, which are freestanding instruments, qualify for the scope exception under the guidance provided in ASC
815-40-15-5 through 815-40-15-8, and are considered indexed to the Company‘s own stock. Accordingly, these warrants have been classified
as equity.

Pursuant to the Securities Purchase Agreement, the Co mpany agreed to register the shares and the warrants within a pre -defined period. The
Co mpany is subject to registration delay payments in cash in the amounts prescribed by the Securities Purchase Agreement if it is unable to file
the registration statement, cause it to become effect ive or maintain its effectiveness as required by the Securities Purchase Agreement. As
discussed in Note 20, on February 4, 2010, the SEC declared effective the reg istration statement on Form S-1 filed by the Co mpany on January
28, 2010. As a result, no provision for any reg istration delay payment is required.

Warrants outstanding as of December 31, 2009 consist of the following:

                                                                                           Warrants Outstanding and Exercisable
                                                                                                        Weighted          Average
                                                                                        Number of        Average        Remaini ng
                                                                                        underlyi ng      Exercise       Contractual
                                                                                                                             Life
                                                                                          shares          Price            (years)
Balance, December 31, 2008                                                                          –
Issued                                                                                      500,000 $         3.625               3.00
Balance, December 31, 2009                                                                  500,000 $         3.625               2.96


                                                                      F-50
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 11       SHAREHOLDERS ’ EQUIT Y (CONTINUED)

Securities Escrow Arrangement

In addition, pursuant to the Securit ies Purchase Agreement, the major stockholder o f the Co mpany, New Zealand has agreed to p lace a total of
1,000,000 shares of the Co mpany‘s common stock held by it into escrow to secure the make good obligations described below on behalf o f the
investors. Under the Securities Purchase Agreement, New Zealand has agreed that: (i) in the event that the Company ‘s consolidated financial
statements reflect less than $9,000,000 of after-tax inco me for the fiscal year ending December 31, 2010, it will transfer to the investors, on a
pro rata basis, for no additional consideration, 500,000 shares of the Co mpany common stock owned by it; and (ii) in th e event that the
Co mpany‘s consolidated financial statements reflect less than $11,000,000 of after-tax net income for the fiscal year ending December 31,
2011, it will transfer to the investors, on a pro rata basis, for no additional consideration, 500,000 shares of the Co mpany‘s common stock
owned by it.

Historically, SEC staff expressed the view that an escrow share arrangement involving the release of shares to certain shareh olders based on
performance-related criteria is presumed to be compensatory, equivalent to a reverse stock split followed by the grant of a restricted stock
award under a performance-based plan.

However, in EITF No. D-110 (codified by FASB ASU No. 2010-05) dated June 18, 2009, the SEC staff has announced that when evaluating
whether the presumption of co mpensation has been overcome, the substance of the arrangement, including whether the arrangement was
entered into for purposes unrelated to, and not contingent upon, continued employ ment, should be considered.

The Co mpany has evaluated the terms of the Securities Purchase Agreement based on the SEC staff‘s clarification in EITF No. D-110 (codified
by FASB ASU No. 2010-05) and concluded that because the escrow shares would be released or distributed to the investor without regard to
the continued employ ment of any officer of the Co mpany, the arrangement is in substance an inducement to facilitate the Private P lacement,
rather than as compensatory. Therefore, the Co mpany will account for the securities escrow arrangement under the Securit ies Purchase
Agreement according to its nature and reflected as a reduction of the proceeds allocated to the newly issued securities in th e Private Placement,
following the guidance provided in FASB A SU No. 2010 -05.

NOTE 12       STATUTORY RES ERVES

In accordance with the PRC Co mpanies Law, the Co mpany‘s PRC subsidiaries were required to transfer 10% of their pro fits after tax, as
determined in accordance with accounting standards and regulations of the PRC, to the statutory surplus reserve and a percent age of not less
than 5%, as determined by management, of the profits after tax to the public welfare fund. However, the Co mpany ‘s PRC subsidiaries were not
required to transfer any profit after tax to the statutory surplus reserve only after the accu mulated statutory surplus reserves reached 50% of
registered capital of the Co mpany‘s PRC subsidiaries. With the amend ment of the PRC Co mpanies Law wh ich was effective fro m January 1,
2006, enterprises in the PRC were no longer required to transfer any p rofit to the pub lic welfare fund. Any balance of public welfare fund
brought forward fro m December 31, 2005 should be transferred to the statutory surplus reserve. The statutory surplus reserve is
non-distributable.

                                                                      F-51
                                       NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                        NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                        FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 13        SHARE-B AS ED PAYMENT

Immediately fo llo wing closing of the Share Exchange as set out in Note 1, the New Zealand transferred 91,088 shares out of the 689,390 shares
of Series A Preferred Stock issued to it under the Share Exchange Agreement to ten individuals and entities for consulting se rvices provided by
them to New Resources and its subsidiaries in assisting them to consummate the share exchange transaction contemplated by the Share
Exchange Agreement prior to December 23, 2008.

In accordance with the requirements of and guidance in Staff Accounting Bullet in No . 107 and ASC Topic 718, ―Co mpensation – Stock
Co mpensation‖), the Co mpany charged $1,693,326 to merger costs based on the grant -date fair value of the 91,088 shares of Series A Preferred
Stock transferred by New Zealand to the Co mpany‘s consultants. As the Co mpany‘s shares had scarcely been traded, the Co mpany determined
that the price of $18.59 at which 20,168 shares of the Co mpany ‘s Series A Preferred Stock were issued to the Investor, as discussed in Note 11,
appropriately represented a fair value of the Company‘s Series A Preferred Stock, because the Investor was an independent third party before
the transaction and the terms for the issuance of those shares to the Investor were based on arm‘s length negotiation. Accordingly, this being a
current cash transaction between unrelated willing parties provides the best evidence for the fair value of the Company ‘s shares in accordance
with AICPA Pract ice Aid, ―Valuation of Privately-Held-Co mpany Equity Securities Issued as Co mpensation‖.

On June 3, 2009, the Co mpany established the ―Shuaiyi International New Resources Development Inc. 2009 Equity Incentive Plan ‖ (the ―
Plan ‖). The purposes of the Plan are to attract and retain the best available personnel for positions of substantial responsibilit y, to provide
additional incentive to employees, directors and consultants, and to promote the long -term growth and profitability of the Company. The Plan
permits the granting of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Restricted Stock Un its, Stock Appreciation
Rights, Performance Un its and Performance Shares as the Company ‘s board of director may determine. The maximu m numb er of shares that
may be issued under the Plan was 1,000,000. On June 17, 2009, 500,000 restricted shares were issued under the Plan and accordingly,
remain ing shares that can be issued under the Plan was 500,000 shares as of December 31, 2009.

Under the Plan, on June 17, 2009, the directors granted 500,000 restricted shares to employees by entering into ―Restricted Shares Grant
Agreements‖ (the ― Agreements ‖) with the employees. Under the Agreements, the shares were grant for no consideration and vested on the
date of grant. Accordingly, these shares vested immediately and all restrictions as to transferability, sale, a ssignment or otherwise disposition of
the shares have been released on the date of grant.

Under ASC 718-10-30-2 (formerly SFAS 123R), the Co mpany recognized a co mpensation expense of $25,000 based on the fair value of $0.05
per share which is the last traded price of the shares at the grant date. This expense is accounted under ―General and ad ministrative expenses ‖.

As the 500,000 shares do not impose any obligations that require the Co mpany to transfer assets, these have been classified a s equity.

                                                                       F-52
                                        NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                         NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                         FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 14        OTHER INCOME (EXPENS ES), NET




                                                                                                                Year ended December 31,
                                                                                                                2009              2008
Service inco me                                                                                          $           7,078 $          11,623

Other expenses                                                                                                          (690 )           (101 )
                                                                                                         $           6,388 $ $         11,522




NOTE 15        INCOME TAXES

The entities within the Co mpany file separate tax returns in the respective tax ju risdictions that they operate.

New Resources being incorporated in the British Virg in Islands (―BVI‖) is not subject to any income tax in the BVI.

The Co mpany‘s PRC subsidiaries are subject to PRC enterprise income tax (―EIT‖). Before January 1, 2008, the PRC EIT rate was generally
33%. In March 2007, the PRC govern ment enacted a new PRC Enterprise Income Tax Law, o r the New EIT Law, and pro mu lgated relat ed
regulation, Implementation Regulat ions for the PRC Enterprise Income Tax Law. The New EIT Law and Imp lementation Reg ulations became
effective fro m January 1, 2008. The NEW EIT Law, among other things, imposes a unified income tax rate of 25% for both domest ic and
foreign invested enterprises registered in the PRC.

The New EIT Law provides a grandfathering on tax holidays which were granted under the then effective tax laws and regulation s. Therefore,
one of the Co mpany's subsidiaries, Daq ing Shuaiyi, being engaged in growing and sales of agricu ltural products, has continued to be entitled to
a preferential tax treat ment: an EIT holiday for the t wo years ended December 31, 2006 and 2007 and a 50% reduction on the EI T rate for the
three years ended December 31, 2008, 2009 and 2010.

The Co mpany‘s income tax expense consisted of:

                                                                                                                Year ended December 31,
                                                                                                                2009              2008
Current income tax – PRC                                                                                 $       1,235,210 $         974,653
Deferred                                                                                                                 -                 -
                                                                                                         $       1,235,210 $         974,653


As of December 31, 2009 and 2008, the Co mpany did not have any significant temporary d ifferences and carryforwards that may r esult in
deferred tax.

                                                                         F-53
                                       NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                        NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                        FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 15        INCOME TAXES (CONTINUED)

A reconciliation of the provision for inco me taxes determined at the local income tax to the Co mpany‘s effective inco me tax rat e is as follo ws:

                                                                                                                  Year ended December 31,
                                                                                                                     2009              2008
Pre-tax income                                                                                          $        8,976,926 $       4,693,702
U.S. federal corporate income tax rate                                                                                34%                    34%
Income tax co mputed at U.S. federal corporate income tax rate                                                  (3,052,155 )           (1,595,859 )
Reconciling items:
  Impact of tax ho liday of Daqing Shuaiy i                                                                      1,149,845                868,500
  Rate differential for PRC earnings                                                                               816,304                610,355
  Non-deductible expenses                                                                                         (149,204 )             (857,649 )
Effective tax expense                                                                                   $       (1,235,210 ) $           (974,653 )


The Co mpany has analyzed the tax positions taken or expected to be taken in its tax filings and has conclude d it has no material liability related
to uncertain tax positions or unrecognized tax benefits as of December 31, 2009 and 2008. The Co mpany classifies interest and /or penalties
related to inco me tax matters in inco me tax expense. As of December 31, 2009 a nd 2008, there was no interest and penalties related to
uncertain tax positions. The Co mpany does not anticipate any significant increases or decreases to its liability for unrecogn ized tax benefits
within the next 12 months.

The New EIT Law also imposes a withholding tax of 10% unless reduced by a tax treaty, for div idends distributed by a PRC-resident enterprise
to its immediate holding co mpany outside the PRC for earnings accumulated beginning on January 1, 2008 and undistributed earn ings
generated prior to January 1, 2008 are exempt fro m such withholding tax. The Co mpany has not provided for inco me taxes on accumulated
earnings of its PRC subsidiaries as of December 31, 2009 or 2008 since these earnings are intended to be reinvested indefinit ely in the overseas
jurisdictions. It is not practicable to estimate the amount of additional taxes that might be payable on such undistributed e arnings.

According to the PRC Tax Admin istration and Collection Law, the statute of limitations is three years if the under payment of taxes is due to
computational or other errors made by the taxpayer or the withholding agent. The statute of limitat ions extends to five years under special
circu mstances. In the case of transfer pricing issues, the statute of limitations is ten years. There is no statute of limitations in the case of tax
evasion. Accordingly, the income tax returns of the Co mpany ‘s PRC operating subsidiaries fo r the years ended December 31, 2007 through
2009 are open to examination by the PRC state and local tax authorities.

                                                                        F-54
                                       NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                        NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                        FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 16        RELATED PARTY TRANSACTIONS

(a)    Due to related parties

                                                                                                                     As of December 31,
                                                                                                                    2009            2008
Due to:
- Heilonjiang Shuaiyi Technology Develop ment Co., Ltd. (―Shuaiyi Technology‖)                             (i) $            -     $         8,998
 -Ms. Lianyun Han, CEO and Chairman of the Co mpany                                                                    49,794                   -
                                                                                                              $        49,794     $         8,998


Note (i) Shuaiyi Technology and the Company are under co mmon control and management. Due to Shuaiyi Technology arose from the land
rent payable to Shuaiyi Technology.

The amounts due to related parties were non-interest bearing, unsecured and had no fixed repayment date.

(b)    Purchase of g oods

For the years ended December 31, 2009 and 2008, the Co mpany purchased rice amounting to $790,133 and $1,579,315, respectively , fro m
Shuaiyi Technology.

(c)    Lease of l and

For the years ended December 31, 2009 and 2008, the Co mpany paid rental expense of $9,003 and $8,851 for land to Shuaiyi Technology.

NOTE 17      CONCENTRATION RIS K

(a)      Concentrati on of credit risk

As of December 31, 2009 and 2008, 100% of the Co mpany ‘s cash included cash on hand and deposits in accounts maintained within the PRC
where there is currently no rule or regulat ion in p lace fo r obligatory insurance to cover bank deposits in the event of bank failu re. However, the
Co mpany has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.

For the years ended December 31, 2009 and 2008, all of the Co mpany ‘s sales arose in the PRC. In addition, all accounts receivable as of
December 31, 2009 and 2008 also arose in the PRC.

Except for one customer who accounted for 14.7% of the Co mpany ‘s revenue for the year ended December 31, 2009, there was no other single
customer who accounted for more than 10% of the Co mpany ‘s revenue for either the year ended December 31, 2009 or 2008.

As of December 31, 2009, five customers accounted for 18%, 13%, 12%, 12% and 12% of total accounts receivable of the Co mpany. As of
December 31, 2008, three customers accounted for 32%, 23% and 15% of accounts receivable of the Company. Except as disclosed, no o ther
customer accounted for 10% or more of the Co mpany‘s accounts receivable as of December 31, 2009 and 2008.

(b)      Concentrati on of operating risk

Substantially all of the Co mpany‘s operations are conducted in China. The Co mpany ‘s operations are subject to various political, economic,
and other risks and uncertainties inherent in China. A mong other risks, the Co mpany ‘s operations are subject to the risks o f restrictions on
transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation po licies; foreign
exchange restrictions; and political conditions and governmental regulat ions.

                                                                        F-55
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 18     COMMIT MENTS AND CONTINGENCIES

(a)     Operating leases

The Co mpany has entered into tenancy agreements for the lease of exhib ition hall and land with a third party and a related company ( see Note
16), respectively, for the purposes of the operation of its subsidiaries. The Co mpany ‘s commit ments for min imu m lease payments under these
operating leases for the next five years and thereafter as of December 31, 2009 are as follows:

Year ending December 31,
 2010                                                                                                                      $           35,881
2011                                                                                                                                    9,007
2012                                                                                                                                    9,007
2013                                                                                                                                    9,007
2014                                                                                                                                    9,007
Thereafter                                                                                                                            117,091
Total                                                                                                                      $          189,000


(b)    PRC empl oyee costs

According to the prevailing laws and regulations of the PRC, the Co mpany ‘s subsidiaries in the PRC are required to cover its emp loyees with
med ical, retirement and unemploy ment insurance programs. Management believes that due to the transient nature of its emp loyee s, they do not
need to provide all emp loyees with such social insurances, and have not paid the social insurances for all employees.

In the event that any current or former employee files a co mplaint with the PRC govern ment, the Co mpany's subsidiaries may be subject to
making up the social insurances as well as admin is trative fines. As the Company believes that these fines would not be material, no provision
has been made in this regard.

(c)    Transfer price for equity interest in Heilongjiang Shuaiyi

On July 28, 2008, the Co mpany‘s subsidiary, New Resources entered into an equity transfer agreement with the Shuaiyi Founders to acquire all
of their equity interests in Heilongjiang Shuaiyi for RMB60,000,000 (appro ximately $8.8 million). A new business license was issued to
Heilongjiang Shuaiyi on December 1, 2008. According to PRC merger and acquisition ru les, the equity interest transfer price should be paid in
full with in three months commencing fro m the issuance of the new business license to Heilongjiang Shuaiyi. If the transfer pr ice is not paid by
this date, the Company may apply to the relevant PRC business bureau for an extension of up to one year from the date of the issuance of the
license; provided, however, that 60% of the transfer price will be required to be paid within six months fro m such date. Howe ver, if the
Co mpany is unable to make the pay ment for the transfer price by the March 1, 2009 or extended deadline and the relevant PRC b usiness bureau
does not grant the Company additional time to make the payment, the Company may be subject to fines or penalties imposed by the PRC
business bureau. In addition, the Co mpany may not be permitted to exercise any decision -making rights as a shareholder in Heilongjiang
Shuaiyi or to consolidate Heilongjiang Shuaiyi's financial results into the Co mpany ‘s financial statements.

On March 10, 2009, New Resources obtained the approval fro m the relevant PRC business bureau for the extension of time allowe d for the
payment of the transfer price to one year until December 1, 2009. On January 4, 2010, the relevant PRC regulatory a gency further extended the
payment due date to June 30, 2010. The Co mpany has engaged financial advisors with a view to raising additional capital for t he Co mpany.
The Co mpany believes that it will be able to make the payment for the transfer p rice within the t ime allowed by the relevant PRC business
bureau and therefore has not accrued any amount related to this contingency. However, there can be no assurance that the Co mp any will be
successful in raising sufficient capital for the purpose of the payment o f the transfer price to the Shuaiyi Founders.

                                                                      F-56
                                    NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                     NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                     FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 19        SEGMENT INFORMATION

During the years ended December 31, 2009 and 2008, the Co mpany operated in two business segments identified by product, ―Chinese Go lden
Grass‖ and ―other agricultural products ‖. The Chinese Go lden Grass segment consists of the growing and sales of Chinese Golden Grass
(formally referred to as ―Ch inese Caterpillar Fungus ‖), which was conducted through the Company‘s subsidiary, Daqing Sh uaiyi. The other
agricultural products segment consists of the sales of rice, flour and silage corn etc , which were mainly conducted through the Company‘s
subsidiary, Harbin Shuaiy i.

Throughout the years ended December 31, 2009 and 2008, all of the Co mpany ‘s operations were carried out in one geographical seg ment –
China.

                                                                                        Year Ended December 31, 2009
                                                             Chinese             Other
                                                             Gol den          Agricultural       Corporate
                                                              Grass            Products         unallocated       Consolidated
Segment revenue fro m external customers                $    12,073,855     $     3,258,590 $               - $      15,332,445
Segment profit                                          $      8,804,435    $         609,084    $       (436,593 ) $        8,976,926
Income fro m operations before income taxes                                                                         $        8,976,926
Segment assets                                          $     27,528,235    $       1,171,648    $      5,642,497   $      34,342,380
Total assets                                                                                                        $      34,342,380
Other segment information:
  Depreciat ion and amort ization                       $        994,056    $           7,443    $          2,887   $        1,004,386
  Expenditure for seg ment assets                       $          1,440    $          43,219    $          4,496   $           49,155

                                                                                        Year ended December 31, 2008
                                                             Chinese             Other
                                                             Gol den          Agricultural        Corporate
                                                              Grass            Products          unallocated      Consolidated
Segment revenue fro m external customers                $     8,892,894     $     4,096,866 $                - $     12,989,760
Segment profit                                          $      6,547,634    $         759,133    $     (2,613,065 ) $        4,693,702
Income fro m operations before income taxes                                                                         $        4,693,702
Segment assets                                          $     21,282,501    $         956,782    $      2,511,937   $      24,751,220
Total assets                                                                                                        $      24,751,220
Other segment information:
  Depreciat ion and amort ization                       $      1,114,118    $           6,089    $          3,240   $        1,123,447
  Expenditure for seg ment assets                       $         27,005    $           3,353    $          2,143   $           32,501

                                                                  F-57
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 20       SUBS EQUENT EVENTS

On January 28, 2010, the Co mpany filed with the Securities and Exchange Co mmission (SEC) a registration statement on Form S -1 (―Form
S-1‖) to register 1,500,000 shares of the Co mpany‘s common stock that may be sold fro m time to time by the selling stockholders named in the
Form S-1, which includes:

           1,000,000 shares of common stock;
           250,000 shares of common stock issuable upon the exercise of the Series A Warrants; and
           250,000 shares of common stock issuable upon the exercise of the Series B warrants.

On February 4, 2010, the Form S-1 was declared effective by the SEC.

NOTE 21       RES TRICTED NET ASS ETS

The Co mpany‘s operations are primarily conducted through its PRC subsidiaries Daqing Shuaiy i and Harb in Shuaiyi. Daq ing Shuaiyi and
Harbin Shuaiyi may only pay dividend out of its retained earnings determined in accordance with the accounting standards and regulations in
the PRC and after it has met the PRC requirements for appropriation to statutory reserves (see Note 12).

In addition, Daqing Shuaiyi and Harb in Shuaiy i‘s businesses and assets are primarily deno minated in RM B, which is not freely convertible into
foreign currencies. All foreign exchange transactions take place either through the People ‘s Bank of Ch ina or other banks authorized to buy and
sell foreign currencies at the exchange rates quoted by the People‘s Bank of Ch ina. Approval of foreign currency pay ments by the People‘s
Bank of Ch ina or other regulatory institutions requires submitt ing a pay ment application form together with suppliers ‘ invoices, shipping
documents and signed contracts. These currency exchange control procedures imposed by the PRC go vernment authorities may restrict the
ability of Daq ing Shuaiy i and Harb in Shuaiyi to transfer their net assets to the Co mpany through loans, advances or cash divi dends, which
consisted of paid-up capital, retained earnings and statutory reserves and which aggregate amount of approximately RM B206 million (or $30
million) exceeded 25% o f the Co mpany‘s consolidated net assets. Accordingly, condensed parent company financial statements have been
prepared in accordance with Rule 5-04 and Rule 12-04 of SEC Regulation S-X as set out in Note 22.

NOTE 22       SUPPLEMENTAL PARENT COMPANY FINANCIAL INFORMATION

The Co mpany records its investment in subsidiaries under the equity method of accounting as prescribed in ASC Topic 323, ―Investments –
Equity Method and Joint Ventures‖. Such investment and long-term loans to subsidiaries are presented on the balance sheet as ―Investments in
subsidiaries‖ and the income of the subsidiaries is presented as ―Equity in income of subsidiaries ‖ on the statement of inco me.

These supplemental condensed parent company financial statements should be read in conjunction with the notes to the Co mpany ‘s
Consolidated Financial Statements. Certain information and footnote disclosures normally included in financial statements pre pared in
accordance with U.S. GAAP have been condensed or omitted.

As of December 31, 2008 and 2009, there were no material contingencies, significant provisions for long -term obligations, or guarantees of the
Co mpany, except as separately disclosed in the Consolidated Financial Statements, if any.

                                                                      F-58
                                      NUTRAS TAR INTERNATIONAL INC. AND S UBS IDIARIES
                                       NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS
                                       FOR THE YEARS ENDED DEC EMB ER 31, 2009 AND 2008

NOTE 22       SUPPLEMENTAL PARENT COMPANY FINANCIAL INFORMATION

                                                      Nutrastar International Inc.
                                                      Condensed B alance Sheets
                                                                                                              As of December 31,
                                                                                                     2009                 2008
ASSETS
Investments in subsidiaries                                                                      $   23,912,342     $     13,611,938
Total assets                                                                                     $   23,912,342     $     13,611,938
LIAB ILITIES
Current liab ilit ies:
    Due to a subsidiary                                                                          $          9,538   $                –
           Total liab ilities                                                                               9,538                    –
Shareholders‘ equity
Preferred Stock, $0.001 par value, 1,000,000 shares authorized, none and 727,520 shares issued
  and outstanding                                                                                              –                   727
Co mmon stock, $0.001 par value, 190,000,000 shares authorized, 14,297,731 and 11,746,041
  shares issued and outstanding                                                                          14,298               11,746
Additional paid-in capital                                                                            4,715,891            2,192,716
Retained earnings                                                                                    18,199,699           10,457,983
Accumulated other comprehensive inco me                                                                 972,916              948,766
           Total shareholders‘ equity                                                                23,902,804           13,611,938
Total liabilities and sharehol ders ’ equity                                                     $   23,912,342     $     13,611,938


                                                   Condensed Statement of Income
                                                                                                     Year ended December 31,
                                                                                                     2009              2008
NET REVENUE                                                                                      $            – $               –
Admin istrative expenses                                                                                (34,538 )               –
Merger expenses                                                                                               –        (2,068,326 )
Income tax                                                                                                    –                 –
Equity in inco me of subsidiaries                                                                     7,776,254         5,787,375
Net income                                                                                       $    7,741,716 $       3,719,049


                                                Condensed Statement of Cash Fl ows
                                                                                                     Year ended December 31,
                                                                                                         2009          2008
Net cash used in operating activities                                                            $      (34,538 ) $             –
Net cash used in investing activities                                                                (2,465,462 )        (427,449 )
Net cash provided by financing activities                                                             2,500,000           427,449
Cash, beginning of year                                                                                       –                 –
Cash, end of year                                                                                $            – $               –


                                                                    F-59
            1,500,000 Shares




 NUTRASTAR INTERNATIONAL INC.
Common Stock, $0.001 Par Value Per Share
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                PROSPECTUS
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               September 10, 2010