---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

(Mark One)

[ X ] QUARTERLY REPORT UNDER SECTION 13 0R 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30,
2008

[ ] TRANSITION REPORT UNDER SECTION 13 0R 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________
to________________

Commission file number 000-53008

KUSHI RESOURCES INC.(Exact
name of registrant as specified in its charter)

|Nevada                                                               | 00-0000000                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|                                                                     |                                     
|#402  220 Summit Boulevard, Broomfield, Colorado                    | 80021                               
|(Address of principal executive offices)                             | (Zip Code)                          

**303-250-8869** (Registrants telephone
number, including area code)

Indicate by check mark whether the registrant (1) filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

[ X ] Yes [ ] No

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange
Act.

|Larger accelerated filer | [ ] |                                                         | Accelerated filer         | []   
|------------------------ | --- | ------------------------------------------------------- | ------------------------- | -----
|Non-accelerated filer    | [ ] | **(Do not check if a smaller
      reporting company)** | Smaller reporting company | [ X ]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).

[ X ] Yes [ ] No

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date.

|Class                           | Outstanding at December 31, 2008
|------------------------------- | --------------------------------
|common stock - $0.001 par value | 5,230,000                       

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|Form 10-Q  Q3 | Kushi Resources Inc. | 2
|-------------- | -------------------- | -

PART I  FINANCIAL INFORMATION

Item 1. Financial Statements.

|KUSHI RESOURCES INC.          
|------------------------------
|(An Exploration Stage Company)
|                              
|INTERIM FINANCIAL STATEMENTS  
|                              
|November 30, 2008             
|(Unaudited)                   

|                                        | Index
|--------------------------------------- | -----
|                                        |      
|Balance Sheets                          | F-1  
|                                        |      
|Statements of Operations                | F-2  
|                                        |      
|Statements of Cash Flows                | F-3  
|                                        |      
|Notes to the Financial
      Statements | F-4  

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|Form 10-Q  Q3 | Kushi Resources Inc. | 3
|-------------- | -------------------- | -

|KUSHI RESOURCES INC.          
|------------------------------
|(AN EXPLORATION STAGE COMPANY)
|BALANCE SHEETS                

|                                                                        |   | November 30, |   |   | February 29, |  
|----------------------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                                        |   | 2008         |   |   | 2008         |  
|                                                                        |   | (Unaudited)  |   |   |              |  
|ASSETS                                                                  |   |              |   |   |              |  
|Current assets:                                                         |   |              |   |   |              |  
|Cash                                                                    | $ | -            |   | $ | 1,916        |  
|                                                                        |   |              |   |   |              |  
|Total assets                                                            | $ | -            |   | $ | 1,916        |  
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                   |   |              |   |   |              |  
|Current liabilities:                                                    |   |              |   |   |              |  
|Accounts payable                                                        | $ | 27,204       |   | $ | 3,575        |  
|Accrued administrative
      fees                                       |   | 8,430        |   |   | 3,180        |  
|Accrued professional fees                                               |   | -            |   |   | 7,159        |  
|Due to related party                                                    |   | 27,418       |   |   | 6,051        |  
|                                                                        |   |              |   |   |              |  
|Total liabilities                                                       |   | 63,052       |   |   | 19,965       |  
|Commitments and contingencies                                           |   |              |   |   |              |  
|Stockholders' deficit:                                                  |   |              |   |   |              |  
|Common stock; authorized 75,000,000;
      $0.001 par value; 5,230,000  |   |              |   |   |              |  
|issued and outstanding
      at November 30, 2008 and February 29, 2008 |   | 5,230        |   |   | 5,230        |  
|Additional paid in capital                                              |   | 51,270       |   |   | 51,270       |  
|Deficit accumulated during the
      exploration stage                  |   | (119,552     | ) |   | (74,549      | )
|                                                                        |   |              |   |   |              |  
|Total stockholders' deficit                                             |   | (63,052      | ) |   | (18,049      | )
|                                                                        |   |              |   |   |              |  
|Total liabilities and stockholders'
      deficit                       | $ | -            |   | $ | 1,916        |  

The accompanying notes are an integral part of these interim
financial statements

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|Form 10-Q  Q3 | Kushi Resources Inc. | 4
|-------------- | -------------------- | -

|KUSHI RESOURCES INC.          
|------------------------------
|(AN EXPLORATION STAGE COMPANY)
|STATEMENTS OF OPERATIONS      
|(UNAUDITED)                   

|                                               |   |                    |   |   |                   |   |   |                 |   |   |           |   |   | From              |  
|---------------------------------------------- | - | ------------------ | - | - | ----------------- | - | - | --------------- | - | - | --------- | - | - | ----------------- | -
|                                               |   | Three Months Ended |   |   | Nine Months Ended |   |   | October 3, 2005 |  
|                                               |   | November 30,       |   |   | November 30,      |   |   | (Inception) to  |  
|                                               |   | 2008               |   |   | 2007              |   |   | 2008            |   |   | 2007      |   |   | November 30, 2008 |  
|                                               |   |                    |   |   |                   |   |   |                 |   |   |           |   |   |                   |  
|Operating Expenses:                            |   |                    |   |   |                   |   |   |                 |   |   |           |   |   |                   |  
|                                               |   |                    |   |   |                   |   |   |                 |   |   |           |   |   |                   |  
|Administrative fees                            | $ | 3,130              |   | $ | 1,242             |   | $ | 5,250           |   | $ | 5,270     |   | $ | 12,700            |  
|Bank charges and interest                      |   | 256                |   |   | 30                |   |   | 262             |   |   | 65        |   |   | 873               |  
|Donated rent                                   |   | -                  |   |   | -                 |   |   | -               |   |   | -         |   |   | 4,000             |  
|Donated services                               |   | -                  |   |   | -                 |   |   | -               |   |   | -         |   |   | 8,000             |  
|Exploration and
      development costs        |   | -                  |   |   | -                 |   |   | 12,452          |   |   | -         |   |   | 22,044            |  
|Professional fees                              |   | 6,411              |   |   | 9,998             |   |   | 24,930          |   |   | 32,297    |   |   | 68,001            |  
|Regulatory                                     |   | 496                |   |   | -                 |   |   | 2,109           |   |   | -         |   |   | 3,934             |  
|                                               |   |                    |   |   |                   |   |   |                 |   |   |           |   |   |                   |  
|                                               |   |                    |   |   |                   |   |   |                 |   |   |           |   |   |                   |  
|Net loss                                       | $ | (10,293            | ) | $ | (11,270           | ) | $ | (45,003         | ) | $ | (37,632   | ) | $ | (119,552          | )
|                                               |   |                    |   |   |                   |   |   |                 |   |   |           |   |   |                   |  
|                                               |   |                    |   |   |                   |   |   |                 |   |   |           |   |   |                   |  
|Net loss per share:                            |   |                    |   |   |                   |   |   |                 |   |   |           |   |   |                   |  
|Basic and diluted                              | $ | (0.00              | ) | $ | (0.00             | ) | $ | (0.01           | ) | $ | (0.01     | ) |   |                   |  
|                                               |   |                    |   |   |                   |   |   |                 |   |   |           |   |   |                   |  
|                                               |   |                    |   |   |                   |   |   |                 |   |   |           |   |   |                   |  
|                                               |   |                    |   |   |                   |   |   |                 |   |   |           |   |   |                   |  
|Weighted average number of shares outstanding: |   |                    |   |   |                   |   |   |                 |   |   |           |   |  
|Basic and diluted                              |   | 5,230,000          |   |   | 5,230,000         |   |   | 5,230,000       |   |   | 5,230,000 |   |   |                   |  

The accompanying notes are an integral part of these interim
financial statements

F-2

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|Form 10-Q  Q3 | Kushi Resources Inc. | 5
|-------------- | -------------------- | -

|KUSHI RESOURCES INC.          
|------------------------------
|(AN EXPLORATION STAGE COMPANY)
|STATEMENTS OF CASH FLOWS      
|(UNAUDITED)                   

|                                                        |   | Nine Months        |   |   | From October 3,          |  
|------------------------------------------------------- | - | ------------------ | - | - | ------------------------ | -
|                                                        |   | Ended November 30, |   |   | **2005 (Inception)****** |  
|                                                        |   | 2008               |   |   | 2007                     |  
|                                                        |   |                    |   |   |                          |  
|Cash flow from operating activities:                    |   |                    |   |   |                          |  
|Net loss                                                | $ | (45,003            | ) | $ | (37,632                  | )
|Adjustments
      to reconcile net loss to net cash     |   |                    |   |   |                          |  
|used in operating activities:                           |   |                    |   |   |                          |  
|Donated rent and services                               |   | -                  |   |   | -                        |  
|Changes in operating assets and liabilities:            |   |                    |   |   |                          |  
|Accounts payable                                        |   | 23,629             |   |   | 4,705                    |  
|Accrued administrative
      fees                       |   | 5,250              |   |   | 1,000                    |  
|Accrued exploration fees                                |   | -                  |   |   | (2,500                   | )
|Accrued professional fees                               |   | (7,159             | ) |   | 5,401                    |  
|Due to related party                                    |   | 21,367             |   |   | -                        |  
|                                                        |   |                    |   |   |                          |  
|Net cash used in operating activities                   |   | (1,916             | ) |   | (29,026                  | )
|                                                        |   |                    |   |   |                          |  
|Cash flows from financing activities                    |   |                    |   |   |                          |  
|Cash from issuance of
      common stock                |   | -                  |   |   | -                        |  
|Cash paid on cancellation of common stock               |   | -                  |   |   | -                        |  
|                                                        |   |                    |   |   |                          |  
|Net cash provided by financing activities               |   | -                  |   |   | -                        |  
|                                                        |   |                    |   |   |                          |  
|Decrease in cash during the period                      |   | (1,916             | ) |   | (29,026                  | )
|                                                        |   |                    |   |   |                          |  
|Cash, beginning of
      period                         |   | 1,916              |   |   | 38,657                   |  
|                                                        |   |                    |   |   |                          |  
|                                                        |   |                    |   |   |                          |  
|Cash, end of period                                     | $ | -                  |   | $ | 9,631                    |  
|                                                        |   |                    |   |   |                          |  
|Supplemental disclosure of cash flow
      information: |   |                    |   |   |                          |  
|Cash paid during the period                             |   |                    |   |   |                          |  
|Taxes                                                   | $ | -                  |   | $ | -                        |  
|Interest                                                | $ | -                  |   | $ | -                        |  

(The accompanying notes are an integral part of these interim
financial statements)

F-3

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|Form 10-Q  Q3 | Kushi Resources Inc. | 6
|-------------- | -------------------- | -

|KUSHI RESOURCES INC.             
|---------------------------------
|(AN EXPLORATION STAGE COMPANY)   
|NOTES TO THE FINANCIAL STATEMENTS
|NOVEMBER 30, 2008                
|(UNAUDITED)                      

NOTE 1  ORGANIZATION AND BASIS OF PRESENTATION

Nature of Operations

Kushi Resources Inc. (Kushi) was incorporated on October 3,
2005, under the laws of the State of Nevada. Kushis principal business is the
acquisition and exploration of mineral resources in northern British Columbia,
Canada. Kushi has not presently determined whether its properties contain
mineral reserves that are economically recoverable. Kushi has not commenced
significant operations and is considered an Exploration Stage Company, as
defined by SEC Industry Guide 7, and follows Statement of Financial Accounting
Standard (SFAS) No.7 Accounting and Reporting by Development Stage
Enterprises, where applicable. In these notes, the terms Company, we, us
or ourmean Kushi.

Basis of Presentation

The unaudited financial statements included herein have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Article 8 of Regulation S-X. They do not include all information
and notes required by generally accepted accounting principles for complete
financial statements. However, except as disclosed herein, there has been no
material changes in the information disclosed in the notes to the financial
statements included in the Annual report on Form 10-KSB of Kushi Resources Inc.
for the year ended February 29, 2008. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included, and
are of a normal recurring nature. Operating results for the three and nine
months ended November 30, 2008 are not necessarily indicative of the results
that may be expected for any other interim period or the entire year. For
further information, these unaudited financial statements and the related notes
should be read in conjunction with the Companys audited financial statements
for the year ended February 29, 2008 included in the Companys report on Form
10-KSB.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recent Accounting Pronouncements

On March 1, 2008, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 157 (SFAS 157), Fair Value Measurements.
SFAS 157 relates to financial assets and financial liabilities. In February
2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position
(FSP) No. FAS 157-2, Effective Date of FASB Statement No. 157,which
delayed the effective date of SFAS 157 for all nonfinancial assets and
nonfinancial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on at least an annual basis, until January 1,
2009 for calendar year-end entities. Also in February 2008, the FASB issued FSP
No. FAS 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13
and Other Accounting Pronouncements That Address Fair Value Measurements for
Purposes of Lease Classification or Measurement under Statement 13,which
states that SFAS No. 13, Accounting for Leases,(SFAS 13) and other
accounting pronouncements that address fair value measurements for purposes of
lease classification or measurement under SFAS 13 are excluded from the
provisions of SFAS 157, except for assets and liabilities related to leases
assumed in a business combination that are required to be measured at fair value
under SFAS No. 141, Business Combinations,(SFAS 141) or SFAS No. 141
(revised 2007), Business Combinations,(SFAS 141(R)).

SFAS 157 defines fair value, establishes a framework for
measuring fair value in accounting principles generally accepted in the United
States of America (GAAP), and expands disclosures about fair value measurements.
The provisions of this standard apply to other accounting pronouncements that
require or permit fair value measurements and are to be applied prospectively
with limited exceptions. The adoption of SFAS 157, as it relates to financial
assets and financial liabilities, had no impact on the Companys financial
statements.

F-4

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|Form 10-Q  Q3 | Kushi Resources Inc. | 7
|-------------- | -------------------- | -

|KUSHI RESOURCES INC.             
|---------------------------------
|(AN EXPLORATION STAGE COMPANY)   
|NOTES TO THE FINANCIAL STATEMENTS
|NOVEMBER 30, 2008                
|(UNAUDITED)                      

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued

Recent Accounting Pronouncements, continued

SFAS 157 defines fair value as the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. This standard is now the
single source in GAAP for the definition of fair value, except for the fair
value of leased property as defined in SFAS 13. SFAS 157 establishes a fair
value hierarchy that distinguishes between (1) market participant assumptions
developed based on market data obtained from independent sources (observable
inputs) and (2) an entitys own assumptions about market participant assumptions
developed based on the best information available in the circumstances
(unobservable inputs). The fair value hierarchy consists of three broad levels,
which gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (Level 1) and the lowest priority to
unobservable inputs (Level 3). The three levels of the fair value hierarchy
under SFAS 157 are described below:

-Level- 1 - Unadjusted quoted prices in
active markets that are accessible at the measurement date for identical,
unrestricted assets or liabilities.

-Level 2 - Inputs other than quoted
prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly, including quoted prices for similar assets or
liabilities in active markets; quoted prices for identical or similar assets or
liabilities in markets that are not active; inputs other than quoted prices that
are observable for the asset or liability (e.g., interest rates); and inputs
that are derived principally from or corroborated by observable market data by
correlation or other means.

-Level 3 - Inputs that are both
significant to the fair value measurement and unobservable.

In February 2007, the FASB issued SFAS No. 159 (SFAS 159),
The Fair Value Option for Financial Assets and Financial
LiabilitiesIncluding an amendment of FASB Statement No. 115. SFAS 159
permits measurement of certain financial assets and financial liabilities at
fair value. If the fair value option is elected, the unrealized gains and losses
are reported in earnings at each reporting date. Generally, the fair value
option may be elected on an instrument-by-instrument basis, as long as it is
applied to the instrument in its entirety. The fair value option election is
irrevocable, unless a new election date occurs. SFAS 159 was effective for the
Company on March 1, 2008. The adoption of SFAS 159 did not have a material
impact on the Companys financial statements as the Company did not elect the
fair value option for any of its financial assets or liabilities.

In June 2007, the Emerging Issues Task Force (EITF) of the FASB
reached a consensus on Issue No. 07-3, Accounting for Nonrefundable Advance
Payments for Goods or Services Received for Use in Future Research and
Development Activities (EITF 07-3). EITF 07-3 requires that non-refundable advance
payments for goods or services that will be used or rendered for future research
and development activities must be deferred and capitalized. As the related
goods are delivered or the services are performed, or when the goods or services
are no longer expected to be provided, the deferred amounts must be recognized
as an expense. This issue is effective for financial statements issued for
fiscal years beginning after December 15, 2007 and earlier application is not
permitted. This consensus is to be applied prospectively for new contracts
entered into on or after the effective date. The Company adopted EITF 07-03 on
March 1, 2008. The adoption of EITF 07-03 did not have a material effect on our
financial statements.

F-5

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|Form 10-Q  Q3 | Kushi Resources Inc. | 8
|-------------- | -------------------- | -

|KUSHI RESOURCES INC.             
|---------------------------------
|(AN EXPLORATION STAGE COMPANY)   
|NOTES TO THE FINANCIAL STATEMENTS
|NOVEMBER 30, 2008                
|(UNAUDITED)                      

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued

Recent Accounting Pronouncements, continued

In March 2008, the FASB, affirmed the consensus of FASB Staff
Position (FSP) Accounting Principles Board Opinion No. 14-1 (APB 14-1),
Accounting for Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement), which applies to all
convertible debt instruments that have a net settlement feature; which
means that such convertible debt instruments, by their terms, may be settled
either wholly or partially in cash upon conversion. FSP APB 14-1 requires
issuers of convertible debt instruments that may be settled wholly or partially
in cash upon conversion to separately account for the liability and equity
components in a manner reflective of the issuers nonconvertible debt borrowing
rate. Previous guidance provided for accounting for this type of convertible
debt instrument entirely as debt. FSP APB 14-1 is effective for financial
statements issued for fiscal years beginning after December 15, 2008 and interim
periods within those fiscal years. We do not expect the adoption of FSP APB 14-1
to have a material impact on our financial statements.

In May, 2008, FASB issued SFAS No. 162, The Hierarchy of
Generally Accepted Accounting Principles(SFAS 162). SFAS 162 identifies the sources of accounting principles
and the framework for selecting the principles used in the preparation of
financial statements of nongovernmental entities that are presented in
conformity with generally accepted accounting principles (GAAP) in the United
States (the GAAP hierarchy). SFAS 162 is effective 60 days following the U.S.
Securities and Exchange Commissions (SECs) approval of the Public Company
Accounting Oversight Board amendments to AU Section 411, The Meaning of
Present Fairly in Conformity With Generally Accepted Accounting Principles.
The Company is currently reviewing the effect, if any, the proposed guidance
will have on its financial statement disclosures.

In May, 2008, FASB issued SFAS No. 163, Accounting for
Financial Guarantee Insurance Contractsan interpretation of FASB Statement No.
60. Diversity exists in practice in accounting for financial guarantee
insurance contracts by insurance enterprises under FASB Statement No. 60,
Accounting and Reporting by Insurance Enterprises.That diversity results
in inconsistencies in the recognition and measurement of claim liabilities
because of differing views about when a loss has been incurred under FASB
Statement No. 5, Accounting for Contingencies.This Statement requires
that an insurance enterprise recognize a claim liability prior to an event of
default (insured event) when there is evidence that credit deterioration has
occurred in an insured financial obligation. This Statement also clarifies how
Statement 60 applies to financial guarantee insurance contracts, including the
recognition and measurement to be used to account for premium revenue and claim
liabilities. Those clarifications will increase comparability in financial
reporting of financial guarantee insurance contracts by insurance enterprises.
This Statement requires expanded disclosures about financial guarantee insurance
contracts. The accounting and disclosure requirements of the Statement will
improve the quality of information provided to users of financial statements.
SFAS 163 will be effective for financial statements issued for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal
years; disclosure requirements in paragraphs 30(g) and 31 are effective for the
first period (including interim periods) beginning after May 23, 2008. We do not
expect the adoption of SFAS 163 to have a significant impact on our financial
statements.

On June 16, 2008, the FASB issued FASB Staff Position No. EITF
03-6-1 (FSP No. EITF 03-6-1), Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities,to address
the question of whether instruments granted in share-based payment transactions
are participating securities prior to vesting. FSP EITF 03-6-1 indicates that
unvested share-based payment awards that contain rights to dividend payments
should be included in earnings per share calculations. The guidance will be
effective for fiscal years beginning after December 15, 2008. The Company is
currently evaluating the requirements of FSP No. EITF 03-6-1 and the impact that
its adoption will have on its results of operations and financial position.

F-6

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|Form 10-Q  Q3 | Kushi Resources Inc. | 9
|-------------- | -------------------- | -

|KUSHI RESOURCES INC.             
|---------------------------------
|(AN EXPLORATION STAGE COMPANY)   
|NOTES TO THE FINANCIAL STATEMENTS
|NOVEMBER 30, 2008                
|(UNAUDITED)                      

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued

Recent Accounting Pronouncements, continued

In June 2008, the FASB issued EITF Issue 07-5 (EITF 07-5),
Determining whether an Instrument (or Embedded Feature) is indexed to an
Entitys Own Stock. EITF No. 07-5 is effective for financial statements
issued for fiscal years beginning after December 15, 2008, and interim periods
within those fiscal years. Early application is not permitted. Paragraph 11(a)
of SFAS No. 133 Accounting for Derivatives and Hedging Activities,specifies that a contract that would otherwise meet the definition of a
derivative but is both (a) indexed to the Companys own stock and (b) classified
in stockholders equity in the statement of financial position would not be
considered a derivative financial instrument. EITF 07-5 provides a new two-step
model to be applied in determining whether a financial instrument or an embedded
feature is indexed to an issuers own stock and thus able to qualify for the
SFAS No. 133 paragraph 11(a) scope exception. The Company is currently
evaluating the impact that adoption of EITF 07-5 will have on its financial
statements.

In June 2008, FASB released a proposed SFAS, Disclosure of
Certain Loss Contingencies, an amendment of FASB Statements No. 5 and 141)
(the proposed Statement), for a comment period that ended during August
2008. The proposed Statement would (a) expand the population of loss
contingencies that are required to be disclosed, (b) require disclosure of
specific quantitative and qualitative information about those loss
contingencies, (c) require a tabular reconciliation of recognized loss
contingencies and (d) provide an exemption from disclosing certain required
information if disclosing that information would be prejudicial to an entity's
position in a dispute. The proposed Statement would be effective for financial
statements issued for fiscal years ending after December 15, 2008, and for
interim and annual periods in subsequent fiscal years. When and if the proposed
Statement is approved in final form by FASB, the Company will evaluate whether
the adoption of the proposed Statement will have any material impact on its
financial position and results of operations.

NOTE 3  GOING CONCERN

These unaudited financial statements have been prepared on a
going concern basis, which implies the Company will continue to realize its
assets and discharge its liabilities in the normal course of business. The
Company has not generated any revenues since inception and has never paid any
dividends and is unlikely to pay dividends or generate earnings in the immediate
or foreseeable future. The continuation of the Company as a going concern is
dependent upon the continued financial support from its shareholders, the
ability of the Company to obtain necessary equity financing to continue
operations, and the attainment of profitable operations. The Companys ability
to achieve and maintain profitability and positive cash flows is dependent upon
its ability to locate profitable mineral properties, generate revenues from its
mineral production and control production costs. Based upon current plans, the
Company expects to incur operating losses in future periods. At November 30,
2008, the Company had a working capital deficit of $63,052 and accumulated
losses of $119,552 since inception. These factors raise substantial doubt
regarding the Companys ability to continue as a going concern. There is no
assurance that the Company will be able to generate revenues in the future.
These financial statements do not give any effect to any adjustments that would
be necessary should the Company be unable to continue as a going concern and
therefore be required to realize its assets and discharge its liabilities in
other than the normal course of business and at amounts different from those
reflected in the accompanying financial statements.

F-7

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|Form 10-Q  Q3 | Kushi Resources Inc. | 10
|-------------- | -------------------- | --

|KUSHI RESOURCES INC.             
|---------------------------------
|(AN EXPLORATION STAGE COMPANY)   
|NOTES TO THE FINANCIAL STATEMENTS
|NOVEMBER 30, 2008                
|(UNAUDITED)                      

NOTE 4 - RELATED PARTY TRANSACTIONS

All of the Companys mineral claims are registered in the name
of a former president of the Company and pursuant to a trust agreement are held
in trust on behalf of the Company (see Note 5).

At November 30, 2008 and February 29, 2008 the Company was
indebted to a former president in the amounts of $27,418 and $6,051
respectively.

NOTE 5 - UNPROVED MINERAL PROPERTIES

On January 30, 2006, the Company staked a mineral claim near
Atlin, British Columbia, Canada, comprising an area of 410.65 hectares. The
Company is required to incur approximately $1,300 (CDN$1,643) on or before
January 30, 2009 and approximately $2,700 (CDN$3,285) on or before January 30,
2010 and each year thereafter in exploration expenditures or pay the equivalent
sum in cash in lieu of work, in order to retain title to the claims. In January
2008, the Company paid $1,635 (CDN$1,643) in cash to the Province of British
Columbia, in lieu of work, to retain title to the claims until January 30, 2009
(see Note 4).

During the nine months ended November 30, 2008, the Company
spent $12,452 on exploration expenditures which have not been submitted to the
Government of British Columbia for approval. The exploration expenditures have
to be submitted to the Government of British Columbia by April 21, 2009, and, if
approved will be applied against future minimum payments (see Note 7).

NOTE 6 - COMMON STOCK

On November 28, 2005, the Company issued 3,000,000 common
shares at $0.001 per share for cash of $3,000 to a former president.

On January 30, 2006, the Company issued 1,900,000 common shares
at $0.01 per share for cash of $19,000.

On February 28, 2006, the Company issued 450,000 common shares
at $0.05 per share for cash of $22,500. 25,000 of these common shares were
issued to relatives of a former president of the Company.

On November 10, 2006, the Company purchased and removed from
the issued and outstanding 75,000 and 30,000 common shares at their original
sale price of $0.05 and $0.01 respectively, per share. No gain or loss was
recognized on this transaction.

On November 10, 2006, the Company purchased and cancelled
120,000 common shares at their original sale price of $0.01 per share. No gain
or loss was recognized on this transaction.

On November 10, 2006, the Company issued 105,000 common shares
at $0.05 per share for proceeds of $5,250.

NOTE 7  SUBSEQUENT EVENT

On January 5, 2009, the Company registered exploration work
performed on its unproved mineral properties with the Government of British
Columbia, which would allow the Company to retain title to the claims until
January 30, 2012. The approval for this exploration work is pending a review by
the Government of British Columbia on a final geological report to be provided
by the Company (see Note 5).

F-8

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|Form 10-Q  Q3 | Kushi Resources Inc. | 11
|-------------- | -------------------- | --

Item 2. Managements Discussion and Analysis or Plan of
Operation

The following discussion and analysis should be read in
conjunction with the financial statements and notes thereto as filed in our
Annual Report on Form 10-KSB for the year ended February 29, 2008, as well as
the financial statements and notes contained herein.

Forward-Looking Statements

Some of the information in this quarterly report on Form 10-Q
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, Section 21E of the Private Securities Litigation Reform
Act of 1995. All statements other than statements of historical facts included
in this report, including, without limitation, statements regarding our future
financial position, business strategy, budgets, projected costs and plans and
objectives for future operations, are forward-looking statements. These
statements express, or are based on, our expectations about future events.
Forward-looking statements give our current expectations or forecasts of future
events. Forward-looking statements generally can be identified by the use of
forward looking terminology such as may, will, expect, intend,
project, estimate, anticipate, believe or continue or the negative
thereof or similar terminology.

Although any forward-looking statements contained in this Form
10-Q or otherwise expressed by or on behalf of us are, to our knowledge and
judgment, believed to be reasonable, there can be no assurances that any of
these expectations will prove correct or that any of the actions that are
planned will be taken. Forward-looking statements involve and can be affected by
inaccurate assumptions or by known and unknown risks and uncertainties which may
cause our actual performance and financial results in future periods to differ
materially from any projection, estimate or forecasted result. Important factors
that could cause actual results to differ materially from expected results
include those discussed under the caption Risk Factors in our annual report on
Form 10 K-SB for the year ended February 29, 2008. Any of these factors could
cause our actual results to differ materially from the results implied by these
or any other forward-looking statements made by us or on our behalf. We cannot
assure you that our future results will meet our expectations. When you consider
these forward-looking statements, you should keep in mind these factors. All
subsequent written and oral forward-looking statements attributable to us, or
persons acting on our behalf, are expressly qualified in their entirety by these
factors. Our forward-looking statements speak only as of the date made. We
assume no duty to update or revise its forward-looking statements based on
changes in internal estimates or expectations or otherwise.

General

Our principal business is the acquisition and exploration of
mineral resources in northern British Columbia, Canada. We have not presently
determined whether our properties contain mineral reserves that are economically
recoverable. We have not commenced significant operations and are considered an
Exploration Stage Company, as defined by SEC Industry Guide 7, and follows
Statement of Financial Accounting Standard (SFAS) No.7

Accounting and Reporting by Development Stage Enterprises,where applicable. We have no operations and if our mineral claims are not
successfully developed we will not earn any revenues.

Kushi Resources Inc. means we, us or our and will be
referred to as such throughout the balance of this document.

The inclusion of supplementary analytical and related
information herein may require us to make appropriate estimates and assumptions
to enable us to fairly present, in all material respects, our analysis of trends
and expectations with respect to our results of operations and financial
position taken as a whole.

Critical Accounting Policies and Estimates

An appreciation of our critical accounting policies is
necessary to understand our financial results. These policies may require that
we make difficult and subjective judgments regarding uncertainties, and as a
result, such estimates may significantly impact our financial results. The
precision of these estimates and the likelihood of future changes depend on a
number of underlying variables and a range of possible outcomes. Other than
our

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|Form 10-Q  Q3 | Kushi Resources Inc. | 12
|-------------- | -------------------- | --

accounting for mineral property costs, our critical accounting
policies do not involve the choice between alternative methods of accounting. We
have applied our critical accounting policies and estimation methods
consistently.

A summary of our significant accounting policies is included in
our Annual Report on Form 10-KSB for the fiscal year ended February 29, 2008.
Significant accounting policies which either affect us or have been developed
since February 29, 2008, are summarized below.

Recently Adopted and Recently Issued Accounting
Standards

Refer to Note 2 of the Notes to our Financial Statements which
is included in our Form 10-KSB for the fiscal year ended February 29, 2008 for a
discussion of recent accounting standards and pronouncements. Accounting
pronouncements that have been issued or adopted subsequent to February 29, 2008
are described below:

On March 1, 2008, we adopted Statement of Financial Accounting
Standards (SFAS) No. 157 (SFAS 157), Fair Value Measurements. SFAS 157
relates to financial assets and financial liabilities. In February 2008, the
Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) No.
FAS 157-2, Effective Date of FASB Statement No. 157,which delayed the
effective date of SFAS 157 for all nonfinancial assets and nonfinancial
liabilities, except those that are recognized or disclosed at fair value in the
financial statements on at least an annual basis, until January 1, 2009 for
calendar year-end entities. Also in February 2008, the FASB issued FSP No. FAS
157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and
Other Accounting Pronouncements That Address Fair Value Measurements for
Purposes of Lease Classification or Measurement under Statement 13,which
states that SFAS No. 13, Accounting for Leases,(SFAS 13) and other
accounting pronouncements that address fair value measurements for purposes of
lease classification or measurement under SFAS 13 are excluded from the
provisions of SFAS 157, except for assets and liabilities related to leases
assumed in a business combination that are required to be measured at fair value
under SFAS No. 141, Business Combinations,(SFAS 141) or SFAS No. 141
(revised 2007), Business Combinations,(SFAS 141(R)).

SFAS 157 defines fair value, establishes a framework for
measuring fair value in accounting principles generally accepted in the United
States of America (GAAP), and expands disclosures about fair value measurements.
The provisions of this standard apply to other accounting pronouncements that
require or permit fair value measurements and are to be applied prospectively
with limited exceptions. The adoption of SFAS 157, as it relates to financial
assets and financial liabilities had no impact on our financial statements.

SFAS 157 defines fair value as the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. This standard is now the
single source in GAAP for the definition of fair value, except for the fair
value of leased property as defined in SFAS 13. SFAS 157 establishes a fair
value hierarchy that distinguishes between (1) market participant assumptions
developed based on market data obtained from independent sources (observable
inputs) and (2) an entitys own assumptions about market participant assumptions
developed based on the best information available in the circumstances
(unobservable inputs). The fair value hierarchy consists of three broad levels,
which gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (Level 1) and the lowest priority to
unobservable inputs (Level 3). The three levels of the fair value hierarchy
under SFAS 157 are described below:

|(a) | Level 1 - Unadjusted quoted prices in active markets that
      are accessible at the measurement date for identical, unrestricted assets
      or liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(b) | Level 2 - Inputs other than quoted prices included within
      Level 1 that are observable for the asset or liability, either directly or
      indirectly, including quoted prices for similar assets or liabilities in
      active markets; quoted prices for identical or similar assets or
      liabilities in markets that are not active; inputs other than quoted
      prices that are observable for the asset or liability (e.g., interest
      rates); and inputs that are derived principally from or corroborated by
      observable market data by correlation or other means.

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|Form 10-Q  Q3 | Kushi Resources Inc. | 13
|-------------- | -------------------- | --

|(c) | Level 3 - Inputs that are both significant to the fair
      value measurement and unobservable.
|--- | ------------------------------------------------------------------------------------------------

In February 2007, the FASB issued SFAS No. 159 (SFAS 159),
The Fair Value Option for Financial Assets and Financial
LiabilitiesIncluding an amendment of FASB Statement No. 115.SFAS 159
permits measurement of certain financial assets and financial liabilities at
fair value. If the fair value option is elected, the unrealized gains and losses
are reported in earnings at each reporting date. Generally, the fair value
option may be elected on an instrument-by-instrument basis, as long as it is
applied to the instrument in its entirety. The fair value option election is
irrevocable, unless a new election date occurs. SFAS 159 was effective for us on
March 1, 2008. The adoption of SFAS 159 did not have a material impact on our
financial statements as we did not elect the fair value option for any of our
financial assets or liabilities.

In June 2007, the Emerging Issues Task Force (EITF) of the FASB
reached a consensus on Issue No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or
Services Received for Use in Future Research and Development Activities(EITF 07-3). EITF 07-3 requires that non-refundable advance payments for
goods or services that will be used or rendered for future research and
development activities must be deferred and capitalized. As the related goods
are delivered or the services are performed, or when the goods or services are
no longer expected to be provided, the deferred amounts must be recognized as an
expense. This issue is effective for financial statements issued for fiscal
years beginning after December 15, 2007 and earlier application is not
permitted. This consensus is to be applied prospectively for new contracts
entered into on or after the effective date. We adopted EITF 07-03 on March 1,
2008. The adoption of EITF 07-03 did not have a material effect on our financial
statements.

In March 2008, the FASB, affirmed the consensus of FASB Staff
Position (FSP) Accounting Principles Board Opinion No. 14-1 (APB 14-1),
Accounting for Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement), which applies to all
convertible debt instruments that have a net settlement feature; which
means that such convertible debt instruments, by their terms, may be settled
either wholly or partially in cash upon conversion. FSP APB 14-1 requires
issuers of convertible debt instruments that may be settled wholly or partially
in cash upon conversion to separately account for the liability and equity
components in a manner reflective of the issuers nonconvertible debt borrowing
rate. Previous guidance provided for accounting for this type of convertible
debt instrument entirely as debt. FSP APB 14-1 is effective for financial
statements issued for fiscal years beginning after December 15, 2008 and interim
periods within those fiscal years. We do not expect the adoption of FSP APB 14-1
to have a material impact on our financial statements.

In May, 2008, FASB issued SFAS No. 162, The Hierarchy of
Generally Accepted Accounting Principles(SFAS 162). SFAS 162 identifies the
sources of accounting principles and the framework for selecting the principles
used in the preparation of financial statements of nongovernmental entities that
are presented in conformity with generally accepted accounting principles (GAAP)
in the United States (the GAAP hierarchy). SFAS 162 is effective 60 days
following the U.S. Securities and Exchange Commissions (SECs) approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles. We are currently reviewing the effect, if any, the proposed
guidance will have on our financial statement disclosures.

In May, 2008, FASB issued SFAS No. 163, Accounting for
Financial Guarantee Insurance Contractsan interpretation of FASB Statement No.
60. Diversity exists in practice in accounting for financial guarantee
insurance contracts by insurance enterprises under FASB Statement No. 60,
Accounting and Reporting by Insurance Enterprises.That diversity results
in inconsistencies in the recognition and measurement of claim liabilities
because of differing views about when a loss has been incurred under FASB
Statement No. 5, Accounting for Contingencies.This Statement requires
that an insurance enterprise recognize a claim liability prior to an event of
default (insured event) when there is evidence that credit deterioration has
occurred in an insured financial obligation. This Statement also clarifies how
Statement 60 applies to financial guarantee insurance contracts, including the
recognition and measurement to be used to account for premium revenue and claim
liabilities. Those clarifications will increase comparability in financial
reporting of financial guarantee insurance contracts by insurance enterprises.
This Statement requires expanded disclosures about financial guarantee insurance
contracts. The accounting and disclosure requirements of the Statement will
improve the

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|Form 10-Q  Q3 | Kushi Resources Inc. | 14
|-------------- | -------------------- | --

quality of information provided to users of financial
statements. SFAS 163 will be effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within those
fiscal years; disclosure requirements in paragraphs 30(g) and 31 are effective
for the first period (including interim periods) beginning after May 23, 2008.
We do not expect the adoption of SFAS 163 to have a significant impact on our
financial statements.

On June 16, 2008, the FASB issued FASB Staff Position No. EITF
03-6-1 (FSP No. EITF 03-6-1), Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities,to address
the question of whether instruments granted in share-based payment transactions
are participating securities prior to vesting. FSP EITF 03-6-1 indicates that
unvested share-based payment awards that contain rights to dividend payments
should be included in earnings per share calculations. The guidance will be
effective for fiscal years beginning after December 15, 2008. We are currently
evaluating the requirements of FSP No. EITF 03-6-1 and the impact that its
adoption will have on our results of operations and financial position.

In June 2008, the FASB issued EITF Issue 07-5 (EITF 07-5),
Determining whether an Instrument (or Embedded Feature) is indexed to an
Entitys Own Stock. EITF No. 07-5 is effective for financial statements
issued for fiscal years beginning after December 15, 2008, and interim periods
within those fiscal years. Early application is not permitted. Paragraph 11(a)
of SFAS No. 133 Accounting for Derivatives and Hedging Activities,specifies that a contract that would otherwise meet the definition of a
derivative but is both (a) indexed to the Companys own stock and (b) classified
in stockholders equity in the statement of financial position would not be
considered a derivative financial instrument. EITF 07-5 provides a new two-step
model to be applied in determining whether a financial instrument or an embedded
feature is indexed to an issuers own stock and thus able to qualify for the
SFAS No. 133 paragraph 11(a) scope exception. We are currently evaluating the
impact that adoption of EITF 07-5 will have on our financial statements.

In June 2008, FASB released a proposed SFAS, Disclosure of
Certain Loss Contingencies, an amendment of FASB Statements No. 5 and 141)
(the proposed Statement), for a comment period that ended during August
2008. The proposed Statement would (a) expand the population of loss
contingencies that are required to be disclosed, (b) require disclosure of
specific quantitative and qualitative information about those loss
contingencies, (c) require a tabular reconciliation of recognized loss
contingencies and (d) provide an exemption from disclosing certain required
information if disclosing that information would be prejudicial to an entity's
position in a dispute. The proposed Statement would be effective for financial
statements issued for fiscal years ending after December 15, 2008, and for
interim and annual periods in subsequent fiscal years. When and if the proposed
Statement is approved in final form by FASB, we will evaluate whether the
adoption of the proposed Statement will have any material impact on our
financial position and results of operations.

Overview

Our mineral claim is in the Atlin mining district of northwest
British Columbia, Canada. We staked the Bee Peak Claim (the Claim) ourselves
on January 30, 2006. The mineral tenure number is 526773 and the total area of
the Claim is 410.65 hectares. The Claim is registered in the name of a former
president of the Company and pursuant to a trust agreement is held in trust on
our behalf.

During the nine months ended November 30, 2008 we spent
approximately $12,500 on a helicopter-supported magnetic survey on the Bee Peak
Claim. On January 5, 2009, the Company registered exploration work performed on
its unproved mineral properties with the Government of British Columbia, which
would allow the Company to retain title to the claims until January 30, 2012.
The approval for this exploration work is pending a review by the Government of
British Columbia on a final geological report to be provided by the Company.

Exploration Plan

On June 18, 2008, we received a report about the
helicopter-supported magnetic survey on the Bee Peak Claim from our consulting
geologist. The report recommends prospecting and sampling the surveyed area and
following up with IP/resistivity surveying in order to verify the magnetic
anomalies and help determine the depth of the causative source. Management will
review the report in 2009 and have discussions with our consulting

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|Form 10-Q  Q3 | Kushi Resources Inc. | 15
|-------------- | -------------------- | --

geologist in order to determine the economic viability of the
mineral claim based on the data that was obtained in the helicopter-supported
magnetic survey.

The following is a brief summary of our three phase mineral
exploration program:

1. The first phase of our three phase exploration program is
expected to cost approximately $21,000 (CDN$26,000). Phase One of our
exploration program cannot start until June 2009 because the area is
inaccessible due to snow. As of date of this filing we had conducted a review of
the available geochemical data for the region, including data from the area
close to the Claim and completed a helicopter-supported magnetic survey on the
Claim. We received the geophysical report on the helicopter-supported magnetic
survey on June 18, 2008 and we are currently evaluating the results of this
report to determine if we will proceed with Phase One of our mineral exploration
program. If we decide to proceed we will send a team to the claim for a period
of 14 days. During this period the crew will generally survey the Claim seeking
any outcroppings and locating streams. An outcropping is a part of a rock
formation that appears above the surface of the surrounding land. The crew will
use global positioning equipment and take a total of 80 samples, including rock,
stream sediment, and stream sediment panned concentrate samples. All samples
will be bagged and tagged for location, date and time for later analysis.

2. The samples obtained during Phase One of the mineral
exploration program will be analyzed and considered with reference to the
regional database. We will engage a consulting geologist to interpret the
results of Phase One. If we are able to identify favorable rock formations and
structures with elevated metal values we will plan and conduct Phase Two of the
mineral exploration program.

3. If Phase Two of the mineral exploration program were to
proceed, our consulting geological technician has indicated that we should
budget between $52,500 (CDN$65,000) and $121,000 (CDN$150,000) for this phase.
If we proceed with Phase Two a prospector and geologist will helicopter onto the
Bee Peak Claim and will stay for a period of 10 days. During this period the
crew will use global positioning equipment and will obtain 50 samples from
locations that are to be determined during the Phase One review. All samples
will be bagged and tagged for location, date and time for later analysis. Also,
the program will include further rock and soil geochemistry sampling, a limited
amount of trenching using hand tools and dynamite, additional geochemical
sampling, and simple geophysical survey methods. After this period is over the
crew will return to Atlin by helicopter.

4. Once we have completed Phase Two of our mineral exploration
program, we will review the results with a consulting geologist to interpret our
Phase Two results. If we are able to continue to confirm elevated metal values
at specific hand drilled targets we will consider Phase Two a success and would
plan for Phase Three of the mineral exploration program.

5. Phase Three is expected to cost between $162,000
(CDN$200,000) and $202,000 (CDN$250,000) and will be speculative, depending on
the location and configuration of the mineral zones. It is likely that further
geophysical surveys with different techniques or more densely spaced
observations will be required to assist in designing a program of diamond drill
holes to test the deeper potential of the best parts of the Bee Peak Claim.
Costs, including the cost of a limited drilling campaign, are difficult to
estimate but in a somewhat remote area like the Bee Peak Claim are likely to be
fairly high. At this stage, we would seek to link with a major resource company
in a joint venture relationship in recognition of financing requirements.

At November 30, 2008, we had a cash balance of $0. We will have
to raise additional funds to cover our operating costs and commence Phase One of
our mineral exploration program.

During the next 12 months, we do not anticipate generating any
revenue. We anticipate funding our operations and Phase One of our mineral
exploration program with the equity financing from the sale of our common stock,
private loans or advances or the sale of part of our interest in the Bee Peak
Claim. If we are successful in completing an equity financing, existing
shareholders will experience dilution of their interest. We do not have any
financing arranged and cannot provide investors with any assurance that we will
be able to raise sufficient funding from the sale of our common stock or obtain
private loans or advances to cover our operating costs or

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|Form 10-Q  Q3 | Kushi Resources Inc. | 16
|-------------- | -------------------- | --

fund our mineral exploration program. In the absence of such
financing, our business will fail.

We may consider entering into a joint venture partnership by
linking with a major resource company to provide the required funding to
complete Phase Three of the mineral exploration program. We have not undertaken
any efforts to locate a joint venture partner for Phase Three. If we enter into
a joint venture arrangement, we will assign a percentage of our interest in the
Claim to the joint venture partner.

Based on the nature of our business, management anticipates
incurring operating losses in the foreseeable future. We base this expectation,
in part, on the fact that very few mineral claims in the exploration stage
ultimately develop into producing, profitable mines. Our future financial
results are also uncertain due to a number of factors, some of which are outside
our control. These factors include, but are not limited to:

|a) | our ability to raise additional funding;                                                          
|-- | --------------------------------------------------------------------------------------------------
|b) | the market price for minerals;                                                                    
|c) | the results of our proposed exploration programs on the
      Claim; and                          
|d) | our ability to find joint venture partners for the
      development of our interest in the Claim.

Accounting and Audit Plan

We intend to continue to have our outside consultant assist in
the preparation of our quarterly and annual financial statements and have these
financial statements reviewed or audited by our independent auditor. Our outside
consultant is expected to charge us approximately $1,100 to prepare each of our
quarterly and annual financial statements. Our independent auditor is expected
to charge approximately $1,500 to review our quarterly financial statements,
approximately $7,500 to audit our annual financial statements, and approximately
$1,000 to prepare our corporate tax returns. During the next 12 months, we
anticipate spending approximately $17,400 to pay for our accounting and audit
requirements.

Functional Currency

Our functional currency is the United States dollar. We have
determined that our functional currency is the United States dollar for the
following reasons:

- our current and future financings are and will be in United States
  dollars;
- we maintain the majority of our cash holdings in United States dollars;
- any potential sales of ore recovered from the Bee Peak Claim will be
  undertaken in United States dollars;
- the majority of our administrative expenses are undertaken in United
  States dollars;
- all cash flows are generated in United States dollars; and
- the Bee Peak Claim is located in Canada, and even though the exploration
  expenses are estimated in Canadian dollars, these expenses can usually be
  requested to be billed in United States dollars.

Results of Operations  Three and Nine Months Ended November
30, 2008 and 2007

Revenues

We did not have any operating revenues from inception (October
3, 2005) to the date of this filing. To date our activities have been financed
through the proceeds of share subscriptions and funds advanced by a former
president of the Company. Due to the nature of our business we do not expect to
have operating revenues within the next year.

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|Form 10-Q  Q3 | Kushi Resources Inc. | 17
|-------------- | -------------------- | --

Operating Expenses

Our operating results for the three and nine months ended
November 30, 2008 and 2007 and the changes between those periods for the
expenses are summarized as follows:

|                          |   |                    |  |   |          |          |   | Increase          |   |   |          |  |          |        |  |   | Increase    |  
|------------------------- | - | ------------------ |  | - | -------- | -------- | - | ----------------- | - | - | -------- |  | -------- | ------ |  | - | ----------- | -
|                          |   |                    |  |   |          |          |   | (Decrease)        |   |   |          |  |          |        |  |   | (Decrease)  |  
|                          |   |                    |  |   |          |          |   | Between the       |   |   |          |  |          |        |  |   | Between the |  
|                          |   |                    |  |   |          |          |   | Three             |   |   |          |  |          |        |  |   | Nine        |  
|                          |   |                    |  |   |          |          |   | Months            |   |   |          |  |          |        |  |   | Months      |  
|                          |   | Three Months Ended |  |   | Ended    |          |   | Nine Months Ended |   |   | Ended    | 
|                          |   | November 30,       |  |   | November |          |   | November 30,      |   |   | November | 
|                          |   | 2008               |  |   | 2007     |          |   | 30, 2008          |   |   | 2008     |  |          | 2007   |  |   | 30, 2008    |  
|                          |   |                    |  |   |          | and 2007 |   |                   |   |   |          |  | and 2007 |       
|                          |   |                    |  |   |          |          |   |                   |   |   |          |  |          |        |  |   |             |  
|Operating Expenses:       |   |                    |  |   |          |          |   |                   |   |   |          |  |          |        |  |   |             |  
|                          |   |                    |  |   |          |          |   |                   |   |   |          |  |          |        |  |   |             |  
|Administrative            | $ | 3,130              |  | $ | 1,242    |          | $ | 1,888             |   | $ | 5,250    |  | $        | 5,270  |  | $ | (20         | )
|                          |   |                    |  |   |          |          |   |                   |   |   |          |  |          |        |  |   |             |  
|Bank charges and interest |   | 256                |  |   | 30       |          |   | 226               |   |   | 262      |  |          | 65     |  |   | 197         |  
|Exploration and           |   | -                  |  |   | -        |          |   |                   |   |   |          |  |          | -      |  |   |             |  
|development costs         |   |                    |  |   |          |          |   | -                 |   |   | 12,452   |  |          |        |  |   | 12,452      |  
|Professional fees         |   | 6,411              |  |   | 9,998    |          |   | (3,587            | ) |   | 24,930   |  |          | 32,297 |  |   | (7,367      | )
|Regulatory                |   | 496                |  |   | -        |          |   | 496               |   |   | 2,109    |  |          | -      |  |   | 2,109       |  
|                          |   |                    |  |   |          |          |   |                   |   |   |          |  |          |        |  |   |             |  
|                          |   |                    |  |   |          |          |   |                   |   |   |          |  |          |        |  |   |             |  
|                          |   |                    |  |   |          |          |   |                   |   |   |          |  |          |        |  |   |             |  
|Total operating expenses  | $ | 10,293             |  | $ | 11,270   |          | $ | (977              | ) | $ | 45,003   |  | $        | 37,632 |  | $ | 7,371       |  
|and net loss              |   |                    |  |   |          |          |   |                   |   |   |          |  |          |        |  |   |             |  

During the three months ended November 30, 2008 our net loss
decreased by $977 or 9% from $11,270 for the three months ended November 30,
2007 to $10,293 for the three months ended November 30, 2008. This decrease in
net loss was primarily due to a decrease in professional fees. Professional fees
were higher during the three months ended November 30, 2007 due to preparation
of our SB-2. This decrease was partially offset by increases in our
administrative and regulatory fees.

During the nine months ended November 30, 2008 our net loss
increased by $7,371 or 20% from $37,632 for the nine months ended November 30,
2007 to $45,003 for the nine months ended November 30, 2007. This increase in
net loss was primarily due to obtaining our helicopter-supported magnetic survey
which increased our exploration and development costs and an increase in
regulatory reporting costs associated with becoming a reporting issuer. These
increases were partially offset by a decrease in professional fees due to the
additional costs associated with the preparation of our SB-2 during the nine
months ended November 30, 2007.

Over the next 12 months, we do not anticipate generating any
revenue and we expect our operating losses to be approximately $67,600,
primarily due to increases in costs associated with the outsourcing of our
administration and accounting services and starting of Phase One of our mineral
exploration program. We plan to continue to fund Phase One of our mineral
exploration program and our operations through equity financing from the sale of
our shares of common stock, private advances or through the sale of a part
interest in the Bee Peak Claim. We do not have any financing arranged and cannot
provide any assurance that we will be able to raise sufficient funding from the
sale of our shares of common stock, that we will receive private advances or
that we will be able to sell a part interest in the Bee Peak Claim. Although we
have not attempted to locate a joint venture partner, if we enter into a joint
venture arrangement, we would assign a percentage of our interest in the Bee
Peak Claim to our joint venture partner.

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|Form 10-Q  Q3 | Kushi Resources Inc. | 18
|-------------- | -------------------- | --

Liquidity and Capital Resources

At November 30, 2008, we had a cash balance of $0 and negative
cash flow from operations of $1,916. To date we have funded our operations with
cash that we received from the sale of our common stock and advances from a
former president of the Company.

Going Concern

Due to lack of operating history and our present inability to
generate revenues, there currently exists substantial doubt about our ability to
continue as a going concern. Even if we complete our current exploration program
and we are successful in identifying a mineral deposit, we will have to spend
substantial funds on further drilling and engineering studies before we will
know if we have a commercially viable mineral deposit or reserve.

The notes to the accompanying financial statements have been
prepared on a going concern basis, which implies that we will continue to
realize our assets and discharge our liabilities in the normal course of
business. We have not generated any revenues since inception and have never paid
any dividends and are unlikely to pay dividends or generate earnings in the
immediate or foreseeable future. Our continuation as a going concern is
dependent upon the continued financial support from our shareholders, our
ability to obtain necessary equity financing to continue operations, and the
attainment of profitable operations. Our ability to achieve and maintain
profitability and positive cash flows is dependent upon our ability to locate
profitable mineral properties, generate revenues from our mineral production and
control production costs. Based upon current plans, we expect to incur operating
losses in future periods. At November 30, 2008, we had a working capital deficit
of $63,052 and accumulated losses of $119,552 since inception. These factors
raise substantial doubt regarding our ability to continue as a going concern.
There is no assurance that we will be able to generate revenues in the future.
These financial statements do not give any effect to any adjustments that would
be necessary should we be unable to continue as a going concern and therefore be
required to realize our assets and discharge our liabilities in other than the
normal course of business and at amounts different from those reflected in the
accompanying financial statements.

|                                          |   | For the Nine Months Ended |  
|----------------------------------------- | - | ------------------------- | -
|                                          |   | November 30,              |  
|                                          |   | 2008                      |  
|                                          |   |                           |  
|Net cash used in operating activities     | $ | (1,916                    | )
|Net cash provided by investing activities |   | -                         |  
|Net cash provided by financing activities |   | -                         |  
|Net decrease in
      cash                | $ | (1,916                    | )

Net Cash Used in Operating Activities

Net cash used in operating activities during the nine months
ended November 30, 2008 was $1,916. We used cash of $7,159 to pay accrued
professional fees and to cover our net operating loss of $45,003. These uses of
cash were offset by net increases in accounts payable of $23,629 mainly due to
an increase in legal expenses, accrued administrative fees of $5,250 and in the
amount due to a former president of the Company of $21,367, in respect of funds
he loaned to us.

Net cash used in operating activities during the nine months
ended November 30, 2007 was $29,026. We used cash of $2,500 to pay accrued
exploration fees and to cover our net operating loss of $37,632. These uses of
cash were offset by net increases in accounts payable of $4,705, accrued
administrative fees of $1,000 and accrued professional fees of $5,401.

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|Form 10-Q  Q3 | Kushi Resources Inc. | 19
|-------------- | -------------------- | --

Net Cash Used in Investing Activities

We did not have any investing activities during the nine months
ended November 30, 2008 and 2007.

Net Cash Provided By Financing Activities

We did not have any financing activities during the nine months
ended November 30, 2008 and 2007.

Unproved Mineral Property Costs

We have been in the exploration stage since inception on
October 3, 2005 and have not yet realized any revenues from our planned
operations. We are primarily engaged in the acquisition and exploration of
mining properties. We expense mineral property exploration costs as they are
incurred. Mineral property acquisition costs are initially capitalized, when
incurred, using the guidance in the Emerging Issues Task Force (EITF) 04-02, Whether Mineral Rights are Tangible or Intangible
Assets. We assess the carrying costs for impairment under SFAS No. 144,
Accounting for Impairment or Disposal of Long Lived Assetsat each fiscal
quarter end. An impairment is recognized when the sum of the expected
undiscounted future cash flows is less than the carrying amount of the mineral
property. Impairment losses, if any, are measured as the excess of the carrying
amount of the mineral property over its estimated fair value. During the nine
months ended November 30, 2008 and 2007, we expensed $12,452 and $0
respectively, in exploration and development costs.

Once we have determined that a mineral property can be
economically developed, as a result of establishing proven and probable
reserves, the costs then incurred to develop such property, will be capitalized.
Such costs will be amortized using the units-of-production method over the
estimated life of the probable reserves. If mineral properties are subsequently
abandoned or impaired, any capitalized costs will be charged to operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenue or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to our
investors. We do not have any non-consolidated, special-purpose entities.

Contingencies and Commitments

We had no commitments or contingencies at November 30,
2008.

Asset Retirement Obligations

SFAS No. 143 (SFAS 143), Accounting for Asset Retirement
Obligationsaddresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. Specifically, SFAS 143 requires that the fair value of a
liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value can be made. In
addition, the asset retirement cost is capitalized as part of the assets
carrying value and subsequently allocated to expense over the assets useful
life. At November 30, 2008, we did not have any asset retirement
obligations.

Internal and External Sources of Liquidity

To date, we have funded our operations from the sale of its
common stock and advances from our director.

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|Form 10-Q  Q3 | Kushi Resources Inc. | 20
|-------------- | -------------------- | --

Financial Instruments

Foreign Exchange Risk

We are subject to foreign exchange risk for transactions
denominated in foreign currencies. Foreign currency risk arises from the
fluctuation of foreign exchange rates and the degree of volatility of these
rates relative to the United States dollar. We do not believe that we have any
material risk due to foreign currency exchange.

Concentration of Credit Risk

Financial instruments that potentially subject us to
significant concentrations of credit risk consist principally of cash deposits.
At November 30, 2008 and February 29, 2008, we had approximately $0 and $1,900,
respectively in cash that was not insured. This cash is on deposit with a major
chartered Canadian bank. As part of our cash management process, we perform
periodic evaluations of the relative credit standing of this financial
institution. We have not experienced any losses in cash balances and we do not
believe we are exposed to any significant credit risk on our cash.

Inflation

We do not believe that inflation will have a material impact on
our future operations.

Other Trends, Events or Uncertainties that may Impact
Results of Operations or Liquidity Trends, Events, and Uncertainties

The economic crisis in the United States and the resulting
economic uncertainty and market instability may make it harder for us to raise
capital as and when we need it and have made it difficult for us to assess the
impact of the crisis on our operations or liquidity and if the prices we will
receive on the sale of minerals will exceed the cost of mineral exploitation. If
we are unable to raise cash, we may be required to cease our operations. Other
than as discussed in this quarterly report, we know of no other trends, events
or uncertainties that have or are reasonably likely to have a material impact on
our short-term or long-term liquidity.

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|Form 10-Q  Q3 | Kushi Resources Inc. | 21
|-------------- | -------------------- | --

Item 3. Quantitative and Qualitative Disclosures About
Market Risk.

Kushi is a smaller reporting company as defined by Rule 12b-2
of the Exchange Act and is not required to provide the information required
under this item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Greg Corcoran, our chief executive officer and chief financial
officer, has evaluated the effectiveness of our disclosure controls and
procedures (as the term is defined in Rules 13a-15 and 15d-15 under the
Securities Exchange Act of 1934) as of the end of the period covered by this
quarterly report (the evaluation date). Based on his evaluation, Mr. Corcoran
has concluded that, as of the evaluation date, our disclosure controls and
procedures are effective to ensure that information required to be disclosed by
us in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commissions rules and forms.

Item 4 (T). Controls and Procedures

Changes in Internal Controls

During the quarter of the fiscal year covered by this report,
there were no changes to our internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

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|Form 10-Q  Q3 | Kushi Resources Inc. | 22
|-------------- | -------------------- | --

PART II  OTHER INFORMATION

Item 1. Legal Proceedings.

Kushi is not a party to any pending legal proceedings and, to
the best of Kushis knowledge, none of Kushis property or assets are the
subject of any pending legal proceedings.

Item 1A. Risk Factors.

Kushi is a smaller reporting company as defined by Rule 12b-2
of the Exchange Act and is not required to provide the information required
under this item.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds.

During the quarter of the fiscal year covered by this report,
(i) Kushi did not modify the instruments defining the rights of its
shareholders, (ii) no rights of any shareholders were limited or qualified by
any other class of securities, and (iii) Kushi did not sell any unregistered
equity securities.

Item 3. Defaults Upon Senior Securities.

During the quarter of the fiscal year covered by this report,
no material default has occurred with respect to any indebtedness of Kushi.
Also, during this quarter, no material arrearage in the payment of dividends has
occurred.

Item 4. Submission of Matters to a Vote of Security
Holders.

No matter was submitted to a vote of security holders through
the solicitation of proxies or otherwise, during the quarter of the fiscal year
covered by this report.

Item 5. Other Information.

5.01 Changes in Control of Registrant

On December 17, 2008, Matthew Diehl, our former sole executive
officer and former director, entered into a share transfer agreement (the Share
Transfer Agreement) with Greg Corcoran, our sole executive officer and
director. On January 13, 2009, pursuant to the terms of the Share Transfer
Agreement, Mr. Diehl sold 3,000,000 shares of our common stock to Mr. Corcoran
in consideration of the payment of $3,000.

As a result of the closing of the share transfer, Mr. Corcoran
now owns approximately 57.4% of our common stock. As a result, there has been a
change in control of the Company.

In accordance with Item 5.01(a)(8) of Form 8-K, as a shell
company (as defined in Rule 12b-2 promulgated under the Exchange Act), we are
providing the information that would be required if we were filing a
registration statement on Form 10 under the Exchange Act.

Form 10 Information

The following information required on Form 10 has been
previously reported by us and may be found in the following filings:

|Form 10 Item | Description           | Company Filing                   
|------------ | --------------------- | ---------------------------------
|Item 1       | Business              | Form 10-KSB filed on May 29, 2008
|Item 2       | Financial Information | Form 10-KSB filed on May 29, 2008
|Item 3       | Properties            | Form 10-KSB filed on May 29, 2008
|Item 8       | Legal Proceedings     | Form 10-KSB filed on May 29, 2008

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|Form 10-Q  Q3 | Kushi Resources Inc. | 23
|-------------- | -------------------- | --

|Item 9  | Market Price of and Dividends on the Registrants Common
      Equity and Related Stockholder Matters | Form 10-KSB filed on May 29, 2008     
|------- | ----------------------------------------------------------------------------------------------------- | --------------------------------------
|Item 10 | Recent Sales of Unregistered Securities                                                               | Form 10-KSB filed on May 29, 2008     
|Item 11 | Description of Registrants Securities to be Registered                                               | Form SB-2/A filed on December 18, 2007
|Item 12 | Indemnification of Directors and Officers                                                             | Form SB-2/A filed on December 18, 2007
|Item 13 | Financial Statements and Supplementary Data                                                           | Form 10-KSB filed on May 29, 2008     
|Item 14 | Changes in and Disagreements with Accountants on Accounting
      and Financial Disclosure            | Form 10-KSB filed on May 29, 2008     
|Item 15 | Financial Statements and Exhibits                                                                     | Form 10-KSB filed on May 29, 2008     

Security Ownership of Certain Beneficial Owners and
Management

The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of January 13,
2009 by: (i) each person (including any group) known to us to own more than five
percent (5%) of any class of our voting securities, (ii) each of our directors
and each of our named executive officers, and (iii) officers and directors as a
group. Unless otherwise indicated, the shareholders listed possess sole voting
and investment power with respect to the shares shown.

|Title of Class                                        | Name and Address of
      Beneficial Owner                                                                                                              | Amount and Nature
      of Beneficial Ownership | Percentage of
      Common Stock(1)
|----------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | -----------------------------------
|Security Ownership of Management                      |                                                                                                                                                         |                                                
|Common Stock                                          | Greg Corcoran Chief Executive Officer,
      Chief Financial Officer, President, Secretary and Treasurer                                                | 3,000,000 (direct)                              | 57.4%                              
|Common Stock                                          | All Officers and Directors as a Group (1
      person)                                                                                                  | 3,000,000                                       | 57.4%                              
|Security Ownership of Certain Beneficial
      Owners |                                                                                                                                                         |                                                
|Common Stock                                          | Greg Corcoran Chief Executive Officer,
      Chief Financial Officer, President, Secretary and Treasurer
      Apartados 0823-01488 Panama City, Panama | 3,000,000 (direct)                              | 57.4%                              

|(1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights. As a result, the percentage of outstanding shares of any person as
      shown in this table does not necessarily reflect the persons
  actual
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|Form 10-Q  Q3 | Kushi Resources Inc. | 24
|-------------- | -------------------- | --

ownership or voting power with respect
to the number of shares of common stock actually outstanding on January 13,
2009. As of January 13, 2009, there were 5,230,000 shares of our common stock
issued and outstanding.

Directors and Executive Officers

The following table sets forth the name and positions of our
sole executive officer and director as of January 13, 2009:

|Name          | Age | Position                                                                                            
|------------- | --- | ----------------------------------------------------------------------------------------------------
|Greg Corcoran | 44  | Chief Executive Officer, Chief
      Financial Officer, President, Secretary, Treasurer and Director

Set forth below is a brief description of the background and
business experience of our sole executive officer and director:

Greg Corcoranhas been our Chief Executive Officer,
Chief Financial Officer, President, Secretary, Treasurer and a Director since
January 13, 2009. Mr. Corcoran founded Dragon Gold Resources, Inc. in December
2000. From 1998 to 2003, Gregory Corcoran has been self-employed as a technology
consultant through Spidex Technologies ("Spidex"), which he founded in 1996.
Spidex sold web server technology for the Microsoft Windows CE operating system
to Intrinsyc Software ("Intrinsyc"). This web server technology allowed
Intrinsyc to become a leader within the Windows CE industry and establish
Intrinsyc as a leader in the Windows CE market space. The web server product won
industry recognition. From December 1999 to September 2001 Mr. Corcoran also
served as director and CEO of AudioMonster Online, Inc., a company working in
the MP3 music market area. Mr. Corcoran has been published in trade journals
including the CE Tech Journal, a Microsoft sponsored trade journal. Mr. Corcoran
received a B.Sc. Degree majoring in Physics from the University of British
Columbia in 1986 and a Diploma of Technology in Robotics from the British
Columbia Institute of Technology in 1989.

Term of Office

Our directors are appointed for a one year term to hold office
until the next annual general meeting of our stockholders or until removed in
accordance with our bylaws and the provisions of the Nevada Revised Statutes.
Our officers are appointed by our board of directors and hold office until
removed by the board.

Significant Employees

We have no significant employees other than our sole officer
and director.

Executive Compensation

Summary Compensation Table

We have not paid any compensation to and have not entered into
any compensation arrangements with Mr. Greg Corcoran, our Chief Executive
Officer, Chief Financial Officer, President, Secretary and Director. During the
fiscal year ended February 29, 2008, we did not pay any compensation to our
former executive officer and director, Mr. Matthew Diehl.

Outstanding Equity Awards at Fiscal Year End

We have not granted any equity awards since inception.

---

|Form 10-Q  Q3 | Kushi Resources Inc. | 25
|-------------- | -------------------- | --

Employment Contracts

We have no employment contracts, termination of employment or
change-in-control arrangements with any of our executive officers and
directors.

Certain Relationships And Related Transactions

Other than the change of control disclosed above, none of the
following parties has, since the beginning of our last fiscal year, had any
material interest, direct or indirect, in any transaction with us or in any
presently proposed transaction that has or will materially affect us:

- Any of our directors or officers;
- Any person proposed as a nominee for election as a director;
- Any person who beneficially owns, directly or indirectly, shares carrying
  more than 5% of the voting rights attached to our outstanding shares of common
  stock;
- Any of our promoters; and
- Any member of the immediate family (including spouse, parents, children,
  siblings and in-laws) of any of the foregoing persons.

Director Independence

Our common stock is quoted on the OTC Bulletin Board
interdealer quotation system, which does not have director independence
requirements. Under FINRA Rule 4200(a)(15), a director is not considered to be
independent if he or she is also an executive officer or employee of the
corporation. As such, our sole director, Greg Corcoran, cannot be classified as
an independent director under this definition.

Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers

On January 13, 2009, Greg Corcoran was appointed as our Chief
Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and
as a member of our Board of Directors. Upon Mr. Corcorans appointment, Matthew
Diehl resigned as our Chief Executive Officer, Chief Financial Officer,
President, Secretary, Treasurer and as a member of our Board of Directors. An
information statement pursuant to Section 14(f) of the Securities Exchange Act
of 1934 and Rule 14f-1 promulgated thereunder was filed by us with the SEC, and
mailed to our stockholders of record, on January 2, 2009. There was no
disagreement between Mr. Diehl and us regarding any matter relating to our
operations, policies or practices.

The information required under Items 401(b), (d), (e) and Item
404(a) of Regulation S-K is set out under the headings Directors and Executive
Officers and Certain Relationships and Related Transactions.

---

|Form 10-Q  Q3 | Kushi Resources Inc. | 26
|-------------- | -------------------- | --

Item 6. Exhibits

(a) Index to and Description of Exhibits

All Exhibits required to be filed with the Form 10-Q are
incorporated by reference to Kushis documents previously filed with the
SEC.

|Exhibit | Description                                                                                                                                                                                                  | Status  
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------
|        |                                                                                                                                                                                                              |         
|3.1     | Articles of Incorporation
        of Kushi Resources Inc., filed as an Exhibit to Kushis Form SB-2
        (Registration Statement) filed on October 12, 2007 and incorporated herein
        by reference. | Filed   
|        |                                                                                                                                                                                                              |         
|3.2     | By-Laws of Kushi
        Resources Inc., filed as an Exhibit to Kushis Form SB-2 (Registration
        Statement) filed on October 12, 2007 and incorporated herein by reference.                           | Filed   
|        |                                                                                                                                                                                                              |         
|10.1    | Declaration of
        Trust, filed as an Exhibit to Kushis Form SB-2 (Registration Statement)
        filed on October 12, 2007 and incorporated herein by reference.                                      | Filed   
|        |                                                                                                                                                                                                              |         
|14      | Code of Ethics,
        filed as an Exhibit to Kushis Form SB-2 (Registration Statement)
        filed on October 12, 2007 and incorporated herein by reference.                                            | Filed   
|        |                                                                                                                                                                                                              |         
|31      | Certification
        pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                             | Included
|        |                                                                                                                                                                                                              |         
|32      | Certification
        pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
        of the Sarbanes-Oxley Act of 2002.                                                                      | Included

SIGNATURES

In accordance with the requirements of the Securities Exchange
Act of 1934, Kushi Resources Inc. has caused this report to be signed on its
behalf by the undersigned duly authorized person.

|                        | KUSHI RESOURCES INC.
|----------------------- | --------------------
|                        |                     
|                        |                     
|                        |                     
|Dated: January 14, 2009 | By:                 
|                        | Name:               
|                        | Title:              
|                        |                     
|                        |                     
|                        |                     

---