---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10−Q

(Mark One)

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

For the quarterly period ended: March 31, 2011

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

For the transition period from ____________ to _____________

Commission File Number: 000-52899

NUTRASTAR INTERNATIONAL
INC.(Exact Name of Registrant as Specified in Its Charter)

|Nevada                          | 80-0264950               
|------------------------------- | -------------------------
|(State or other jurisdiction of | (I.R.S. Empl. Ident. No.)
|incorporation or organization)  |                          

7/F Jinhua Mansion 41 Hanguang Street Nangang
District, Harbin 150080 Peoples Republic of China(Address
of principal executive offices, Zip Code)

(86) 451-82287746(Registrants telephone
number, including area code)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act 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.

Yes [X]      No [_]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).

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. (Check one):

|Large 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).

Yes [_]       No [X]

The number of shares outstanding of each of the issuers
classes of common equity, as of May 11, 2011 is as follows:

|Class of Securities            | Shares Outstanding
|------------------------------ | ------------------
|Common stock, $0.001 par value | 14,625,541        

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TABLE OF CONTENTS

|         | PART I  FINANCIAL
      INFORMATION                                                        | Page
|-------- | ------------------------------------------------------------------------------------------- | ----
|         |                                                                                             |     
|Item 1.  | Financial Statements                                                                        | 1   
|Item 2.  | Managements Discussion and Analysis of
      Financial Condition and Results of Operations | 33  
|Item 3.  | Quantitative and Qualitative
      Disclosures About Market Risk                            | 40  
|Item 4.  | Controls and Procedures                                                                     | 40  
|         |                                                                                             |     
|         | PART II  OTHER INFORMATION                                                                 |     
|         |                                                                                             |     
|Item 1.  | Legal Proceedings                                                                           | 41  
|Item 1A. | Risk Factors                                                                                | 41  
|Item 2.  | Unregistered Sales of Equity Securities and Use
      of Proceeds                           | 41  
|Item 3.  | Defaults Upon Senior Securities                                                             | 41  
|Item 4.  | [Removed and Reserved]                                                                      | 41  
|Item 5.  | Other Information                                                                           | 41  
|Item 6.  | Exhibits                                                                                    | 41  

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PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

|                                                                           | Page(s)
|-------------------------------------------------------------------------- | -------
|Condensed Consolidated Balance Sheets                                      | 2      
|Condensed Consolidated Statements of Income and
      Comprehensive Income | 3      
|Condensed Consolidated Statements of
      Stockholders Equity            | 4      
|Condensed Consolidated Statements of Cash Flows                            | 5      
|Notes to Condensed Consolidated Financial
      Statements                 | 6 - 32 

1

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES
|---------------------------------------------
|CONDENSED CONSOLIDATED BALANCE SHEETS        
|(AMOUNTS EXPRESSED IN US DOLLARS)            

|                                                                                                                                                                                                                                                                                                                                                       |   | March 31,   |  |   | December 31, | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ----------- |  | - | ------------ | 
|                                                                                                                                                                                                                                                                                                                                                       |   | 2011        |  |   | 2010         | 
|                                                                                                                                                                                                                                                                                                                                                       |   | (Unaudited) |  |   |              | 
|ASSETS                                                                                                                                                                                                                                                                                                                                                 |  
|                                                                                                                                                                                                                                                                                                                                                       |   |             |  |   |              | 
|CURRENT ASSETS                                                                                                                                                                                                                                                                                                                                         |   |             |  |   |              | 
|Cash and cash equivalents                                                                                                                                                                                                                                                                                                                              | $ | 45,017,162  |  | $ | 40,758,848   | 
|Restricted cash                                                                                                                                                                                                                                                                                                                                        |   | 148,425     |  |   | 193,075      | 
|Accounts receivable                                                                                                                                                                                                                                                                                                                                    |   | 118,514     |  |   | 261,223      | 
|Inventories                                                                                                                                                                                                                                                                                                                                            |   | 917,656     |  |   | 867,761      | 
|Prepayments and other receivables                                                                                                                                                                                                                                                                                                                      |   | 58,631      |  |   | 289,502      | 
|Total current assets                                                                                                                                                                                                                                                                                                                                   |   | 46,260,388  |  |   | 42,370,409   | 
|OTHER ASSETS                                                                                                                                                                                                                                                                                                                                           |   |             |  |   |              | 
|Intangible assets, net                                                                                                                                                                                                                                                                                                                                 |   | 2,289,046   |  |   | 2,379,435    | 
|Property, plant and equipment, net                                                                                                                                                                                                                                                                                                                     |   | 10,203,336  |  |   | 10,248,989   | 
|                                                                                                                                                                                                                                                                                                                                                       |   |             |  |   |              | 
|Total assets                                                                                                                                                                                                                                                                                                                                           | $ | 58,752,770  |  | $ | 54,998,833   | 
|                                                                                                                                                                                                                                                                                                                                                       |   |             |  |   |              | 
|LIABILITIES AND STOCKHOLDERS'
      EQUITY                                                                                                                                                                                                                                                                                                             |  
|                                                                                                                                                                                                                                                                                                                                                       |   |             |  |   |              | 
|CURRENT LIABILITIES                                                                                                                                                                                                                                                                                                                                    |   |             |  |   |              | 
|Accounts payable                                                                                                                                                                                                                                                                                                                                       | $ | 151,973     |  | $ | 125,843      | 
|Other payables and accruals                                                                                                                                                                                                                                                                                                                            |   | 691,882     |  |   | 746,643      | 
|Taxes payable                                                                                                                                                                                                                                                                                                                                          |   | 1,258,226   |  |   | 696,519      | 
|Due to related parties                                                                                                                                                                                                                                                                                                                                 |   | 51,858      |  |   | 51,339       | 
|Preferred stock dividend payable                                                                                                                                                                                                                                                                                                                       |   | 269,061     |  |   | 181,181      | 
|Warrants liabilities                                                                                                                                                                                                                                                                                                                                   |   | 806,082     |  |   | 1,198,273    | 
|Total current liabilities                                                                                                                                                                                                                                                                                                                              |   | 3,229,082   |  |   | 2,999,798    | 
|                                                                                                                                                                                                                                                                                                                                                       |   |             |  |   |              | 
|Total liabilities                                                                                                                                                                                                                                                                                                                                      |   | 3,229,082   |  |   | 2,999,798    | 
|                                                                                                                                                                                                                                                                                                                                                       |   |             |  |   |              | 
|COMMITMENTS AND CONTINGENCIES (Note 18)                                                                                                                                                                                                                                                                                                                |   |             |  |   |              | 
|                                                                                                                                                                                                                                                                                                                                                       |   |             |  |   |              | 
|STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                                                                                                   |   |             |  |   |              | 
|                                                                                                                                                                                                                                                                                                                                                       |   |             |  |   |              | 
|Preferred Stock, $0.001 par value,
      (1,000,000 shares authorized, 169,523 shares and 197,706 shares issued and
      outstanding, respectively; aggregate liquidation preference amount:
      $4,746,644 and $5,535,768, plus accrued but unpaid dividend of $269,061
      and $181,181, at March 31, 2011 and December 31, 2010, respectively) |   | 3,866,168   |  |   | 4,508,914    | 
|Common stock, $0.001 par value, 190,000,000 shares
      authorized, 14,625,541 and 14,332,731 shares issued and outstanding at
      March 31, 2011 and December 31, 2010, respectively                                                                                                                                                               |   | 14,626      |  |   | 14,333       | 
|Additional paid-in capital                                                                                                                                                                                                                                                                                                                             |   | 16,307,018  |  |   | 15,541,207   | 
|Statutory reserves                                                                                                                                                                                                                                                                                                                                     |   | 1,350,029   |  |   | 1,348,071    | 
|Retained earnings                                                                                                                                                                                                                                                                                                                                      |   | 31,214,224  |  |   | 28,326,896   | 
|Accumulated other comprehensive income                                                                                                                                                                                                                                                                                                                 |   | 2,771,623   |  |   | 2,259,614    | 
|Total stockholders' equity                                                                                                                                                                                                                                                                                                                             |   | 55,523,688  |  |   | 51,999,035   | 
|                                                                                                                                                                                                                                                                                                                                                       |   |             |  |   |              | 
|Total liabilities and
      stockholders' equity                                                                                                                                                                                                                                                                                                       | $ | 58,752,770  |  | $ | 54,998,833   | 

See accompanying notes to condensed consolidated financial
statements

2

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES                             
|--------------------------------------------------------------------------
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
      COMPREHENSIVE INCOME
|(Unaudited)                                                               
|(AMOUNTS EXPRESSED IN US DOLLARS)                                         

|                                                    |   | For the Three Months
      Ended |  
|--------------------------------------------------- | - | -------------------------------- | -
|                                                    |   | March 31,                        |  
|                                                    |   | 2011                             |  
|NET REVENUE                                         | $ | 5,796,242                        |  
|Cost of goods sold                                  |   | (1,369,800                       | )
|GROSS PROFIT                                        |   | 4,426,442                        |  
|Selling expenses                                    |   | (409,873                         | )
|General and administrative expenses                 |   | (521,326                         | )
|Income from operations                              |   | 3,495,243                        |  
|Other income:                                       |   |                                  |  
|Interest income                                     |   | 39,829                           |  
|Foreign exchange differences                        |   | 22,921                           |  
|Change in fair value of warrants                    |   | 392,191                          |  
|Total other income                                  |   | 454,941                          |  
|Income before income taxes                          |   | 3,950,184                        |  
|Provision for income taxes                          |   | (942,413                         | )
|NET INCOME                                          |   | 3,007,771                        |  
|OTHER COMPREHENSIVE INCOME:                         |   |                                  |  
|Foreign currency translation adjustments            |   | 512,009                          |  
|COMPREHENSIVE INCOME                                | $ | 3,519,780                        |  
|Earnings per share                                  |   |                                  |  
|Basic                                               | $ | 0.20                             |  
|Diluted                                             | $ | 0.18                             |  
|Weighted average number of shares
      outstanding |   |                                  |  
|Basic                                               |   | 14,513,470                       |  
|Diluted                                             |   | 16,274,183                       |  

See accompanying notes to condensed consolidated financial
statements

3

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES                  
|---------------------------------------------------------------
|CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS
      EQUITY
|(Unaudited)                                                    
|(AMOUNTS EXPRESSED IN US DOLLARS)                              

AccumulatedPreferred Stock
    
    
    Common Stock
    
    
    Additional
    
    
    
    
    
    
    
    
    OtherNumber
    
    
    
    
    
    Number
    
    
    
    
    
    Paid-in
    
    
    Statutory
    
    
    Retained
    
    
    Comprehensiveof Shares
    
    
    Amount
    
    
    of Shares
    
    
    Amount
    
    
    Capital
    
    
    Reserves
    
    
    Earnings
    
    
    Income
    
    
    TotalBalance at January 1, 2011
    
    197,706
    
    $
    4,508,914
    
    
    14,332,731
    
    $
    14,333
    
    $
    15,541,207
    
    $
    1,348,071
    
    $
    28,326,896
    
    $
    2,259,614
    
    $
    51,999,035Net income
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    3,007,771
    
    
    -
    
    
    3,007,771Foreign currency translation adjustment
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    512,009
    
    
    512,009Preferred stock converted into common stock
    
    (28,183
    )
    
    (642,746
    )
    
    281,830
    
    
    282
    
    
    642,464
    
    
    -
    
    
    -
    
    
    -
    
    
    -Preferred stock dividend converted into
      common stock
    
    -
    
    
    -
    
    
    10,980
    
    
    11
    
    
    30,594
    
    
    -
    
    
    -
    
    
    -
    
    
    30,605Preferred stock dividend
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (118,485
    )
    
    -
    
    
    (118,485
    )Appropriation of statutory reserves
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    1,958
    
    
    (1,958
    )
    
    -
    
    
    -Share-based payment
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    92,753
    
    
    -
    
    
    -
    
    
    -
    
    
    92,753At March 31, 2011 (Unaudited)
    
    169,523
    
    $
    3,866,168
    
    
    14,625,541
    
    $
    14,626
    
    $
    16,307,018
    
    $
    1,350,029
    
    $
    31,214,224
    
    $
    2,771,623
    
    $
    55,523,688


See accompanying notes to condensed consolidated financial
statements.

4

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES  
|-----------------------------------------------
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|(Unaudited)                                    
|(AMOUNTS EXPRESSED IN US DOLLARS)              

|                                                                                    |   | For the Three Months |  
|----------------------------------------------------------------------------------- | - | -------------------- | -
|                                                                                    |   | Ended                |  
|                                                                                    |   | March 31,            |  
|                                                                                    |   | 2011                 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                               |   |                      |  
|Net income                                                                          | $ | 3,007,771            |  
|Adjustments to reconcile net income
      to cash provided by operating activities: |   |                      |  
|Change in fair value of warrants                                                    |   | (392,191             | )
|Depreciation and
      amortization                                                 |   | 263,838              |  
|Share-based compensation expense                                                    |   | 92,753               |  
|(Increase) decrease in assets:                                                      |   |                      |  
|Accounts receivable                                                                 |   | 144,759              |  
|Prepayments and other receivables                                                   |   | 230,979              |  
|Inventories                                                                         |   | (40,953              | )
|Increase (decrease) in
      liabilities:                                           |   |                      |  
|Accounts payable                                                                    |   | 24,756               |  
|Other
      payables and accruals                                                   |   | (61,212              | )
|Taxes payable                                                                       |   | 552,406              |  
|Net cash
      provided by operating activities                                     |   | 3,822,906            |  
|                                                                                    |   |                      |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                               |   |                      |  
|Purchase of property, plant and equipment                                           |   | (1,168               | )
|Net cash used in
      investing activities                                         |   | (1,168               | )
|                                                                                    |   |                      |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                               |   |                      |  
|Advances from restricted cash                                                       |   | 44,650               |  
|Repayment to related party                                                          |   | -                    |  
|Net cash
      provided by (used in) financing activities                           |   | 44,650               |  
|                                                                                    |   |                      |  
|Foreign currency translation adjustment                                             |   | 391,926              |  
|                                                                                    |   |                      |  
|INCREASE IN CASH AND CASH
      EQUIVALENTS                                         |   | 4,258,314            |  
|CASH AND CASH EQUIVALENTS, at the beginning of the period                           |   | 40,758,848           |  
|                                                                                    |   |                      |  
|CASH AND CASH EQUIVALENTS, at the end of the period                                 | $ | 45,017,162           |  
|                                                                                    |   |                      |  
|NON-CASH TRANSACTIONS                                                               |   |                      |  
|Preferred stock and dividend
      converted into common stock                      | $ | 673,351              |  
|Share-based payment  IR warrants                                                   |   | 22,359               |  
|Share-based payments to officers and
      directors under equity incentive plan    |   | 92,753               |  
|                                                                                    |   |                      |  
|SUPPLEMENTAL DISCLOSURE INFORMATION                                                 |   |                      |  
|Cash paid for income taxes                                                          | $ | 215,317              |  

See accompanying notes to condensed consolidated financial
statements

5

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 1 | DESCRIPTION OF BUSINESS AND ORGANIZATION
|------ | ----------------------------------------

Nutrastar International Inc. (Nutrastar or the Company) was
incorporated in the State of Nevada on December 22, 2002. On December 23, 2008,
the Company completed a reverse acquisition with New Zealand WAYNES New
Resources Development Co., Ltd. (New Resources). As a result of the reverse
acquisition with New Resources, the Company is no longer a shell company and
active business operations have been revived. Nutrastar together with its
subsidiaries and affiliates as described below are referred to as the
Company.

On May 19, 2009, the Company filed Amended and Restated
Articles of Incorporation with the State of Nevada to amend the Companys
Articles of Incorporation to, among other things, (1) change the name of the
Company from YzApp International Inc. to Shuaiyi International New Resources
Development Inc., (2) increase the total number of shares of common stock that
the Company has the authority to issue from 50,000,000 to 190,000,000 shares and
(3) effect a one for 114.59 reverse split of the Companys outstanding common
stock. The detailed description of the amendment was provided in the Companys
Form 8-K filed on May 26, 2009.

On January 11, 2010, the Company filed a Certificate of
Amendment to its Articles of Incorporation with the State of the State of
Nevada, pursuant to which the Company further changed its name from "Shuaiyi
International New Resources Development Inc." to "Nutrastar International
Inc."

On October 22, 2010, New Resources, a wholly-owned British
Virgin Islands subsidiary of the Company, entered into an equity transfer
agreement with the original founders of Heilongjiang Shuaiyi (the Shuaiyi
Founders), pursuant to which New Resources transferred all of its equity
interests in Heilongjiang Shuaiyi New Energy Development Co., Ltd.
(Heilongjiang Shuaiyi), a then wholly-owned Chinese subsidiary of New
Resources, to the Shuaiyi Founders (the Equity Transfer).

In connection with the Equity Transfer, the Shuaiyi Founders,
the Companys indirectly wholly-owned Chinese subsidiary incorporated on July
13, 2010, Harbin Baixin Biotech Development Co., Ltd. (Harbin Baixin) and
Heilongjiang Shuaiyi entered into the following commercial arrangements (the
Contractual Arrangement and together with the Equity Transfer, the
Restructuring), pursuant to which the Company has contractual rights to
control and operate the businesses of Heilongjiang Shuaiyi and Heilongjiang's
two wholly-owned Chinese subsidiaries, Daqing Shuaiyi Biotech Co., Ltd. (Daqing
Shuaiyi) and Harbin Shuaiyi Green & Specialty Food Trading LLC (Harbin
Shuaiyi) and together with Heilongjiang Shuaiyi and Daqing Shuaiyi, (the
VIEs):

Service AgreementPursuant to a technical
service agreement, entered into by and between Harbin Baixin and Heilongjiang
Shuaiyi, Harbin Baixin will provide certain exclusive technical services to
Heilongjiang Shuaiyi in exchange for the payment by Heilongjiang Shuaiyi of a
service fee that is calculated based on the market price in light of the
particulars of the service and the time of such service provided by Harbin
Baixin (the Service Agreement);

Option AgreementPursuant to an exclusive
purchase option agreement, entered into by and among Harbin Baixin, the Shuaiyi
Founders and Heilongjiang Shuaiyi, the Shuaiyi Founders granted to Harbin Baixin
an option to purchase at any time during the term of this agreement, all or part
of the equity interests in Heilongjiang Shuaiyi (the Equity Interests), at the
exercise price equal to the lowest possible price permitted by Chinese laws (the
Option Agreement);

6

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 1 | DESCRIPTION OF BUSINESS AND ORGANIZATION
      (CONTINUED)
|------ | ----------------------------------------------------------

Voting Rights AgreementPursuant to a voting
rights proxy agreement, entered into by and among Harbin Baixin, the Shuaiyi
Founders and Heilongjiang Shuaiyi, each of the Shuaiyi Founders irrevocably
entrusted Harbin Baixin and any entities or individuals designated by Harbin
Baixin to, among others, exercise its voting rights and other rights as a
shareholder of Heilongjiang Shuaiyi (the Voting Rights Agreement); and

Pledge agreementPursuant to an equity pledge
agreement, entered into by and among Harbin Baixin, the Shuaiyi Founders and
Heilongjiang Shuaiyi, the Founders pledged all of the Equity Interests to Harbin
Baixin to secure the full and complete performance of the obligations and
liabilities on the part of the Shuaiyi Founders and Heilongjiang Shuaiyi under
this and above contractual arrangements (the Pledge Agreement and together
with the Service Agreement, the Option Agreement, the Voting Rights Agreement
and the Equity Transfer Agreement, the Restructuring Documents).

As a result of the Restructuring, the Company transferred all
of its indirect equity interests in Heilongjiang Shuaiyi back to the Shuaiyi
Founders, among whom, Ms. Lianyun Han became a majority shareholder of
Heilongjiang Shuaiyi by owning a 68.3% equity interest in Heilongjiang Shuaiyi.
At the same time, through the above contractual agreement, the Company maintains
substantial control over the VIEs daily operations and financial affairs,
election of their senior executives and all matters requiring shareholder
approval. As the primary beneficiary of the VIEs, the Company is entitled to
consolidate the financial results of the VIEs in its own consolidated financial
statements under Financial Accounting Standards Board Accounting Standard
Codification (ASC) Topic 810 and related subtopics related to the consolidation
of variable interest entities (collectively, ASC Topic 810).

7

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES       
|----------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                         

|NOTE 1 | DESCRIPTION OF BUSINESS AND ORGANIZATION
      (CONTINUED)
|------ | ----------------------------------------------------------

As of March 31, 2011, details of the subsidiaries and
affiliates of the Company are as follows:

Domicile and
    
    
    
    Percentagedate of
    
    
    
    of effectiveNames
    
    incorporation
    
    Paid-up capital
    
    ownership
    
    Principal activitiesSubsidiariesNew Zealand WAYNEs New Resources
      Development Co., Ltd (New Resources)
    
    British Virgin Islands
      March 13, 2008
    
    $50,000
    
    100%
    
    Holding company of the
      other subsidiariesOriental Global Holdings Limited (Oriental
      Global)
    
    Hong Kong May 28, 2010
    
    HK$1
    
    100%
    
    Holding company of Harbin BaixinHarbin Baixin Biotech Development Co.,
      Ltd (Harbin Baixin)
    
    Peoples Republic of
      China (PRC) July 13, 2010
    
    $3,000,000
    
    100%
    
    Chinese Golden Grass
      cultivation technology research and development, services and
      Chinese Golden Grass products wholesaleVIEsHeilongjiang Shuaiyi New Energy
      Development Co., Ltd (Heilongjiang Shuaiyi)
    
    PRC July 11, 2006
    
    RMB60,000,000
    
    100%
    
    Principally engaged in
      investment holdingDaqing Shuaiyi Biotech Co. Ltd. (Daqing Shuaiyi)
    
    PRC August 8, 2005
    
    RMB10,000,000
    
    100%
    
    Growing and sales of Chinese Golden
      Grass, which is widely used for Chinese medicine, and
      functional health beveragesHarbin Shuaiyi Green and Specialty Food
      Trading LLC. (Harbin Shuaiyi)
    
    PRC May 18, 2001
    
    RMB1,500,000
    
    100%
    
    Sales of organic and
      specialty food products


8

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICES
|------ | -----------------------------------------------

Basis of presentationThese interim condensed
consolidated financial statements are unaudited. In the opinion of management,
all material adjustments and disclosures necessary for a fair presentation of
these interim condensed consolidated financial statements have been included.
The results reported in the condensed consolidated financial statements for any
interim periods are not necessarily indicative of the results that may be
reported for the entire year. The (a) condensed consolidated balance sheet as of
December 31, 2010, which was derived from audited financial statements, and (b)
the unaudited interim condensed consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and note disclosures normally included in annual
financial statements prepared in accordance with accounting principles generally
accepted in the United States have been condensed or omitted pursuant to those
rules and regulations, although the Company believes that the disclosures made
are adequate to make the information not misleading. These unaudited condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and accompanying footnotes of the Company for
the year ended December 31, 2010.

Principle of consolidationThe accompanying
condensed consolidated financial statements include the financial statements of
Nutrastar and its wholly owned subsidiaries, New Resources, Oriental Global and
Harbin Baixin, and its VIEs Heilongjiang Shuaiyi, Daqing Shuaiyi and Harbin
Shuaiyi. All significant inter-company balances or transactions have been
eliminated on consolidation.

The Company has evaluated the relationship with Heilongjiang
Shuaiyi, Daqing Shuaiyi and Harbin Shuaiyi and based on the result of the
evaluation, believes that these entities are variable interest entities and that
they are the primary beneficiary of these entities. Consequently, the Company
has included the results of operations of these variable interest entities in
the condensed consolidated financial statements. The Companys relationships
with Heilongjiang Shuaiyi, Daqing Shuaiyi and Harbin Shuaiyi are governed by a
series of contractual arrangements. Under PRC laws, Heilongjiang Shuaiyi, Daqing
Shuaiyi and Harbin Shuaiyi are independent legal persons and none of them is
exposed to liabilities incurred by the other parties.

The accounts of Heilongjiang Shuaiyi, Daqing Shuaiyi and Harbin
Shuaiyi are consolidated in the accompanying financial statements pursuant to
the Financial Accounting Standards Board Accounting Standard Codification (ASC)
Topic 810 and related subtopics related to the consolidation of variable
interest entities. The Company does not have any non-controlling interests in
net income and accordingly, did not subtract any net income in calculating the
net income attributable to the Company. Because of the contractual arrangements,
the Company had a pecuniary interest in the VIEs that require consolidation of
the Companys and the VIEs financial statements.

Use of estimatesThe preparation of these
financial statements in conformity with generally accepted accounting principles
requires the Company to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the related disclosure of contingent
assets and liabilities at the date of these financial statements and the
reported amounts of revenues and expenses during the reporting period. The
Company bases its estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances.
Accordingly, actual results may differ from these estimates under different
assumptions or conditions.

Cash and cash equivalentsCash and cash
equivalents consist of all cash balances and highly liquid investments with an
original maturity of three months or less. Because of the short maturity of
these investments, the carrying amounts approximate their fair value. Restricted
cash is excluded from cash and cash equivalents.

9

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
      (CONTINUED)
|------ | -----------------------------------------------------------

Accounts receivableAccounts receivable is
stated at cost, net of an allowance for doubtful accounts. The Company maintains
allowances for doubtful accounts for estimated losses resulting from the failure
of customers to make required payments. The Company reviews the accounts
receivable on a periodic basis and provides allowances where there is doubt as
to the collectability of individual balances. In evaluating the collectability
of individual receivable balances, the Company considers many factors, including
the age of the balance, the customers payment history, its current
credit-worthiness and current economic trends.

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

Derivative financial instrumentsThe
Company evaluates all its financial instruments to determine if such instruments
are derivatives or contain features that qualify as embedded derivatives. For
derivative instruments that are accounted for as liabilities, the derivative
instrument is initially recorded at its fair value and is then revalued at each
reporting date, with changes in the fair value reported in the consolidated
statements of income. For stock-based derivative financial instruments, the
Company uses Monte-Carlo simulation methods to value the derivative instruments
at inception and on subsequent valuation dates.

Property, plant and equipmentProperty, plant
and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses, if any. Gains or losses on disposals are reflected as gain or
loss in the year of disposal. The cost of improvements that extend the life of
property, plant and equipment are capitalized. These capitalized costs may
include structural improvements, equipment and fixtures. All ordinary repair and
maintenance costs are expensed as incurred.

Depreciation for financial reporting purposes is provided using
the straight-line method over the estimated useful lives of the assets as
follows:

|                             | Useful Life
|---------------------------- | -----------
|                             | (In years) 
|Buildings                    | 20-40      
|Machinery and motor vehicles | 5-10       
|Office equipment             | 5          

10

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
      (CONTINUED)
|------ | -----------------------------------------------------------

Intangible assets

The Companys intangible assets include a ten-year exclusive
right to use a secret process and computer software. The Companys amortization
policy on intangible assets is as follows:

|                  | Useful Life
|----------------- | -----------
|                  | (In years) 
|Exclusive right   | 10         
|Computer software | 4          

The Company accounts for its intangible assets pursuant to FASB
ASC Subtopic 350-30, General Intangibles Other Than Goodwill. Under ASC
350-30-35, intangibles with definite lives continue to be amortized on a
straight-line basis over the lesser of their estimated useful lives or
contractual terms. Intangibles with indefinite lives are evaluated at least
annually for impairment by comparing the assets estimated fair value with its
carrying value, based on cash flow methodology.

Impairment of long-lived assetsThe Company
reviews and evaluates its long-lived assets for impairment when events or
changes in circumstances indicate that the related carrying amounts may not be
recoverable. An impairment is considered to exist if the total estimated future
cash flows on an undiscounted basis are less than the carrying amount of the
assets, including goodwill, if any. An impairment loss is measured and recorded
based on discounted estimated future cash flows. In estimating future cash
flows, assets are grouped at the lowest level for which there is identifiable
cash flows that are largely independent of future cash flows from other asset
groups.

Revenue recognitionRevenue is recognized when
the following four revenue criteria are met: persuasive evidence of an
arrangement exists, delivery has occurred, the selling price is fixed or
determinable, and collectability is reasonably assured.

Sales revenue is recognized net of value added and sales
related taxes, sales discounts and returns at the time when the merchandise is
delivered to the customer. Based on historical experience, management estimates
that sales returns are immaterial and has not recorded an allowance for
estimated sales returns.

Share-based paymentsThe Company accounts for
share-based compensation awards to employees in accordance with FASB ASC Topic
718, Compensation  Stock Compensation, which requires that share-based
payment transactions with employees be measured based on the grant-date fair
value of the equity instrument issued and recognized as compensation expense
over the requisite service period.

The Company accounts for share-based compensation awards to
non-employees in accordance with FASB ASC Topic 718 and FASB ASC Subtopic
505-50, Equity-Based Payments to Non-employees. Under FASB ASC Topic 718 and
FASB ASC Subtopic 505-50, stock compensation granted to non-employees has been
determined as the fair value of the consideration received or the fair value of
equity instrument issued, whichever is more reliably measured and is recognized
as expenses as the goods or services are received.

11

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
      (CONTINUED)
|------ | -----------------------------------------------------------

Income taxesThe Company is subject to income
taxes in the United States and other foreign jurisdictions where it operates.
The Company accounts for income taxes in accordance with FASB ASC Topic 740,
Income Taxes. FASB ASC Topic 740 requires an asset and liability approach for
financial accounting and reporting for income taxes and allows recognition and
measurement of deferred tax assets based upon the likelihood of realization of
tax benefits in future years. Under the asset and liability approach, deferred
taxes are provided for the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. A valuation allowance is provided for
deferred tax assets if it is more likely than not these items will either expire
before the Company is able to realize their benefits, or that future
deductibility is uncertain.

Research and development costsResearch and
development costs are expensed as incurred, and are charged to general and
administrative expenses. Research and development costs were $27,855 and $8,789
for the three months ended March 31, 2011 and 2010, respectively.

Advertising costsThe Company expenses all
advertising costs as incurred. Advertising costs charged to selling expenses
were $22,664 and $21,692 for the three months ended March 31, 2011 and 2010,
respectively.

Shipping and handling costsSubstantially all
costs of shipping and handling of products to customers are included in selling
expense. Shipping and handling costs for the three months ended March 31, 2011
and 2010 were insignificant.

Foreign currencyThe Company uses the United
States dollars (US Dollar or US$ or $) for financial reporting purposes.
The PRC subsidiaries and VIEs within the Company maintains their books and
records in their functional currency, Chinese Renminbi (RMB), being the lawful
currency in the PRC. Assets and liabilities of the PRC subsidiaries and VIEs are
translated from RMB into US Dollars using the applicable exchange rates
prevailing at the balance sheet date. Items on the statement of operations are
translated at average exchange rates during the reporting period. Equity
accounts are translated at historical rates. Adjustments resulting from the
translation of the Companys financial statements are recorded as accumulated
other comprehensive income.

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

|                                                       | March 31, 2011               |  | December 31, 2010
|------------------------------------------------------ | ---------------------------- |  | -----------------
|Balance sheet items, except for equity
      accounts  | US$1=RMB 6.5564              |  | US$1=RMB6.6227   
|                                                       |                              |  |                  
|                                                       | Three months ended March 31,
|                                                       | 2011                         |  | 2010             
|Items in the statements of income and cash
      flows | US$1=RMB 6.5832              |  | US$1=RMB6.8269   

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

12

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
      (CONTINUED)
|------ | -----------------------------------------------------------

Recent accounting pronouncementsIn January
2011, the FASB issued ASU No. 2011-01- Receivables (Topic 310): Deferral of the
Effective Date of Disclosures about Troubled Debt Restructurings in Update No.
2010-20. The amendments in this update temporarily delay the effective date of
the disclosures about troubled debt restructurings in ASU No. 2010-20,
Receivables (Topic 310): Disclosures about the Credit Quality of Financing
Receivables and the Allowance for Credit Losses, for public entities. The delay
is intended to allow the FASB time to complete its deliberations on what
constitutes a troubled debt restructuring. The effective date of the new
disclosures about troubled debt restructurings for public entities and the
guidance for determining what constitutes a troubled debt restructuring will
then be coordinated. This deferral will have no material impact on the Companys
consolidated financial statements.

In January 2011, the FASB issued ASU No. 2011-02- Receivables
(Topic 310): A Creditors Determination of Whether a Restructuring Is a Troubled
Debt Restructuring. The amendments in this update provide additional guidance to
assist creditors in determining whether a restructuring of a receivable meets
the criteria to be considered a troubled debt restructuring For public
companies, the new guidance is effective for interim and annual periods
beginning on or after June 15, 2011, and applies retrospectively to
restructurings occurring on or after the beginning of the fiscal year of
adoption. Early application is permitted. The adoption of the provisions in ASU
2011-02 will have no material impact on the Companys consolidated financial
statements.

Other accounting standards that have been issued or proposed by
the FASB or other standards-setting bodies that do not require adoption until a
future date are not expected to have a material impact on the Companys
consolidated financial statements upon adoption.

|NOTE 3 | FAIR VALUE MEASUREMENTS AND FINANCIAL
      INSTRUMENTS
|------ | -------------------------------------------------------

The Company values its financial instruments as required by
FASB ASC 320-12-65 (formerly SFAS No. 107, Disclosures about Fair Value of
Financial Instruments). The estimated fair value amounts have been determined
by the Company, using available market information or other appropriate
valuation methodologies. However, considerable judgment is required in
interpreting market data to develop estimates of fair value. Consequently, the
estimates are not necessarily indicative of the amounts that could be realized
or would be paid in a current market exchange.

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

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

13

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 3 | FAIR VALUE MEASUREMENTS AND FINANCIAL
      INSTRUMENTS (CONTINUED)
|------ | -------------------------------------------------------------------

Determining which category an asset or liability falls within
the hierarchy requires significant judgment. The Company evaluates its hierarchy
disclosures each quarter.

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

Fair value measurement
      using inputs
    
    
    Carrying amount atFinancial instruments
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    March 31,
    
    
    December 31,2011
    
    
    2010Liabilities:Derivative instruments Warrants
    $
    
    
    $
    806,082
    
    $
    
    
    $
    806,082
    
    $
    1,198,273Total
    $
    
    
    $
    806,082
    
    $
    
    
    $
    806,082
    
    $
    1,198,273


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

There was no asset or liability measured at fair value on a
non-recurring basis as of March 31, 2011 and December 31, 2010.

|NOTE 4 | RESTRICTED CASH
|------ | ---------------

As of March 31, 2011, $148,425 in total was held in escrow
arising from agreements in conjunction with the private placements consummated
in June 2010, which are further disclosed in Note 11.

Restricted cash consisted of the following:

|                                                                 |   | March 31, |  |   | December 31, | 
|---------------------------------------------------------------- | - | --------- |  | - | ------------ | 
|                                                                 |   | 2011      |  |   | 2010         | 
|                                                                 |   |           |  |   |              | 
|Restricted cash - compensation for Chief
      Financial Officer | $ | 148,425   |  | $ | 193,075      | 

|NOTE 5 | ACCOUNTS RECEIVABLE, NET
|------ | ------------------------

Accounts receivable consisted of the following:

|                                   |   | March 31, |  |   | December 31, | 
|---------------------------------- | - | --------- |  | - | ------------ | 
|                                   |   | 2011      |  |   | 2010         | 
|                                   |   |           |  |   |              | 
|Accounts receivable                | $ | 118,514   |  | $ | 261,223      | 
|Less: Allowance for doubtful debts |   | -         |  |   | -            | 
|                                   |   |           |  |   |              | 
|Accounts receivable, net           | $ | 118,514   |  | $ | 261,223      | 

No allowance was deemed necessary as of March 31, 2011 and
December 31, 2010.

14

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 6 | INVENTORIES
|------ | -----------

Inventories by major categories are summarized as follows:

|                 |   | March 31, |  |   | December 31, | 
|---------------- | - | --------- |  | - | ------------ | 
|                 |   | 2011      |  |   | 2010         | 
|                 |   |           |  |   |              | 
|Raw materials    | $ | 269,660   |  | $ | 338,415      | 
|Work in progress |   | 439,228   |  |   | 363,240      | 
|Finished goods   |   | 208,768   |  |   | 166,106      | 
|                 |   |           |  |   |              | 
|Total            | $ | 917,656   |  | $ | 867,761      | 

|NOTE 7 | PREPAYMENTS AND OTHER RECEIVABLES
|------ | ---------------------------------

Prepayments and other receivables consist of the following:

|                                                                       |   | March 31, |  |   | December 31, | 
|---------------------------------------------------------------------- | - | --------- |  | - | ------------ | 
|                                                                       |   | 2011      |  |   | 2010         | 
|                                                                       |   |           |  |   |              | 
|Prepayments                                                            | $ | 47,573    |  | $ | 78,932       | 
|Other receivables from unrelated entities, net of $nil
      allowance |   | 11,058    |  |   | 210,570      | 
|                                                                       |   |           |  |   |              | 
|                                                                       | $ | 58,631    |  | $ | 289,502      | 

|NOTE 8 | INTANGIBLE ASSETS, NET
|------ | ----------------------

Intangible assets, net consisted of the following:

|                                              |   | March 31,  |   |   | December 31, |  
|--------------------------------------------- | - | ---------- | - | - | ------------ | -
|                                              |   | 2011       |   |   | 2010         |  
|                                              |   |            |   |   |              |  
|Computer software, cost                       | $ | 1,515      |   | $ | 1,499        |  
|Exclusive right to use a secret process, cost |   | 4,577,519  |   |   | 4,531,694    |  
|Less: Accumulated amortization                |   | (2,289,988 | ) |   | (2,153,758   | )
|                                              |   |            |   |   |              |  
|                                              | $ | 2,289,046  |   | $ | 2,379,435    |  

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

Amortization expense for the three months ended March 31, 2011
and 2010 was $113,984 and $109,915, respectively. The estimated expense of the
intangible assets over each of the next five years and thereafter will be
$457,801 per annum.

15

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 9 | PROPERTY, PLANT AND EQUIPMENT, NET
|------ | ----------------------------------

Property, plant and equipment, net consisted of the
following:

|                               |   | March 31,  |   |   | December 31, |  
|------------------------------ | - | ---------- | - | - | ------------ | -
|                               |   | 2011       |   |   | 2010         |  
|Cost:                          |   |            |   |   |              |  
|Buildings                      | $ | 12,197,777 |   | $ | 12,075,666   |  
|Office equipment               |   | 27,166     |   |   | 25,732       |  
|Machinery                      |   | 128,156    |   |   | 126,873      |  
|Motor vehicles                 |   | 57,115     |   |   | 56,543       |  
|Total cost                     |   | 12,410,214 |   |   | 12,284,814   |  
|Less: Accumulated depreciation |   | (2,206,878 | ) |   | (2,035,825   | )
|                               |   |            |   |   |              |  
|Net book value                 | $ | 10,203,336 |   | $ | 10,248,989   |  

Depreciation expense for the three months ended March 31, 2011
and 2010 was $149,854 and $142,977, respectively.

|NOTE 10 | OTHER PAYABLES, ACCRUALS AND TAXES
      PAYABLE
|------- | ------------------------------------------------

Other payables and accruals consisted of the following:

|                    |   | March 31, |  |   | December 31, | 
|------------------- | - | --------- |  | - | ------------ | 
|                    |   | 2011      |  |   | 2010         | 
|                    |   |           |  |   |              | 
|Accrued staff costs | $ | 613,249   |  | $ | 627,791      | 
|Other payables      |   | 78,633    |  |   | 118,852      | 
|                    |   |           |  |   |              | 
|                    | $ | 691,882   |  | $ | 746,643      | 

Taxes payable consisted of the following:

|                |   | March 31, |  |   | December 31, | 
|--------------- | - | --------- |  | - | ------------ | 
|                |   | 2011      |  |   | 2010         | 
|                |   |           |  |   |              | 
|Value added tax | $ | 287,535   |  | $ | 349,585      | 
|Income tax      |   | 937,992   |  |   | 214,033      | 
|Others          |   | 32,699    |  |   | 132,901      | 
|                |   |           |  |   |              | 
|                | $ | 1,258,226 |  | $ | 696,519      | 

16

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 11 | STOCKHOLDERS EQUITY
|------- | --------------------

Private Placement in 2010On May 27, 2010, the
Company entered into a securities purchase agreement (the "Securities Purchase
Agreement") with certain investors, pursuant to which, the Company agreed to
issue and sell up to an aggregate of 250,000 units at a purchase price of $28.56
per unit, for an aggregate purchase price of up to $7,140,000 (the "Aggregate
Purchase Price"). Each unit consists of (i) one share of a newly designated
series A preferred stock, ("Series A Preferred Stock"), with an initial
one-to-ten conversion ratio into shares of the Companys common stock, ("Common
Stock"), and (ii) warrants to purchase five shares of Common Stock at an
exercise price of $3.40 per share ("Warrants", together with the shares of
Series A Preferred Stock, the "Securities"). In addition, the Company and the
investors agreed, that the placement agent of this transaction, will receive
from the investors a fee equal to 2% of the Aggregate Purchase Price and
Warrants to purchase 2% of the aggregate number of shares of Common Stock that
shares of Series A Preferred Stock to be issued under the Securities Purchase
Agreement are convertible into.

Pursuant to the Securities Purchase Agreement, the Company also
granted registration rights to holders of registrable securities, which include
shares of Common Stock issued or issuable upon conversion of shares of the
Series A Preferred Stock and shares of Common Stock issuable upon exercise of
the Warrants (the "Registrable Securities"). Holders holding a majority of the
Securities then outstanding may request the Company to file a registration
statement to register the Registrable Securities within a pre-defined period
(the "Registration Statement"). The Company may be subject to liquidated damages
in the amounts prescribed by the Securities Purchase Agreement if it is unable
to file the Registration Statement timely or maintain its effectiveness as
required by the Securities Purchase Agreement.

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

On June 28, 2010, the Company effected the second closing of a
private placement transaction and issued approximately 74,303 Units at a
purchase price of $28.56 per unit for gross proceeds of $2,121,938.

Pursuant to the Securities Purchase Agreement, a written
request was received from the Preferred Stock holders on July 14, 2010 and the
Company filed the Registration Statement on August 11, 2010. The Registration
Statement was declared effective by the Securities and Exchange Commission
(SEC) on September 15, 2010.

Escrow AgreementIn connection with the Securities
Purchase Agreement, the Company entered into an escrow agreement (the "Escrow
Agreement") pursuant to which the parties agreed to deposit the investment
amount received from the investors into escrow to be released upon the
occurrence of the events set forth in the Escrow Agreement. In addition, the
Company agreed that $100,000 out of the investment amount will remain in escrow
and will be disbursed to an investor relations firm hired by the Company, all of
which has been released to investor relations firm during the third quarter of
2010. The Company also agreed that an additional $250,000 will remain in escrow
and will be used as compensation for the Chief Financial Officer of the Company,
of which $44,650 has been released in the three months ended March 31, 2011 and
the rest of $148,425 remained in escrow and will be released from escrow as the
compensation is paid (See Note 4).

17

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 11 | STOCKHOLDERS EQUITY (CONTINUED)
|------- | --------------------------------

Allocation of Proceeds in the Private PlacementThe
guidance provided in ASC 470-20-30-5 has been applied to the amount allocated to
the convertible Preferred Stock, and the effective conversion price has been
used, to measure the intrinsic value, if any, of the embedded conversion option.
The fair value of the embedded conversion features of the Series A Preferred
Stock of $ 1,143,198 and $ 644,532 were calculated using the intrinsic value
model in accordance with the guidance provided in ASC Topic 470-20-30-6
(formerly EITF 00-27, Application of Issue No. 98-5 to Certain Convertible
Instruments) and limited to the amount of the proceeds allocated to the
convertible instrument on June 7, 2010 and June 28, 2010, respectively. The
intrinsic value of the beneficial conversion feature was calculated by comparing
the effective conversion price, which was determined based on the proceeds from
the private placement allocated to the convertible Series A Preferred Stock, and
the market price of the Companys common stock of $3.2 and $3.16 on June 7, 2010
and June 28, 2010, respectively. The fair value of $1,143,198 and $644,532 of
the beneficial conversion feature has been recognized as a reduction to the
carrying amount of the convertible Series A Preferred Stock and an addition to
paid-in capital.

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

|Proceeds of the private placement on June
      7, 2010                                          | $ | 3,524,342  |  
|------------------------------------------------------------------------------------------------ | - | ---------- | -
|Allocation of proceeds to Series C Warrants to investors                                         |   | (718,698   | )
|Allocation of proceeds to beneficial
      conversion feature                                    |   | (1,143,198 | )
|Amortization of discount resulting from the accounting for
      a beneficial conversion feature |   | 1,143,198  |  
|Convertible Series A Preferred Stock (net
      of fees and expenses) at December 31, 2010       | $ | 2,805,644  |  
|Preferred stock converted into common stock                                                      |   | (25,657    | )
|Convertible Series A Preferred Stock at
      March 31, 2011                                     | $ | 2,779,987  |  
|                                                                                                 |   |            |  
|Proceeds of the private placement on June
      28, 2010                                         | $ | 2,121,938  |  
|Allocation of proceeds to Series C Warrants to investors                                         |   | (418,668   | )
|Allocation of proceeds to beneficial
      conversion feature                                    |   | (644,532   | )
|Amortization of discount resulting from the accounting for
      a beneficial conversion feature |   | 644,532    |  
|Convertible Series A Preferred Stock (net
      of fees and expenses) at December 31, 2010       | $ | 1,703,270  |  
|Preferred stock converted into common stock                                                      |   | (617,089   | )
|Convertible Series A Preferred Stock at
      March 31, 2011                                     | $ | 1,086,181  |  

In accordance with ASC Topic 470-20-30-6, the discount on the
Series A Preferred Stock resulting from the accounting for a beneficial
conversion feature was amortized and charged to retained earnings, because the
Series A Preferred Stocks are immediately convertible upon issuance and have no
stated redemption date. Amortization of the discount resulting from the
accounting for a beneficial conversion feature is considered analogous to a
return to holders of perpetual preferred stock and has been accounted for as a
reduction to net income available to common stockholders for the purpose of
calculation of earnings per share.

18

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 11 | STOCKHOLDERS EQUITY (CONTINUED)
|------- | --------------------------------

Preferred StockThe Board of the Company is
authorized, without further action by the shareholders, to issue, from time to
time, up to 1,000,000 shares of preferred stock in one or more classes or
series. Similarly, the Board is authorized to fix or alter the designations,
powers, preferences and the number of shares which constitute each such class or
series of preferred stock. Such designations, powers or preferences may include,
without limitation, dividend rights (and whether dividends are cumulative),
conversion rights, if any, voting rights (including the number of votes, if any,
per share), redemption rights (including sinking fund provisions, if any), and
liquidation preferences of any unissued shares or wholly unissued series of
preferred stock.

On May 27, 2010, the Company created, from the authorized but
unissued shares of its preferred stock, a series of preferred stock consisting
of 300,000 shares and has designated one series of preferred stock as the Series
A Preferred Stock of which the Company issued 197,706 shares upon the closing of
the private placement in 2010.

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

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

Dividend: Holders of the Series A Preferred Stock are entitled
to a cumulated dividend at an annual rate of 6% of the Series A Preferred Stock,
payable in additional shares of Series A Preferred Stock, compounded quarterly,
and payable upon the occurrence of a Liquidation Event, Conversion, Mandatory
Conversion or from time-to-time at the discretion of the Board. When dividends
on the Series A Preferred Stock are paid, each such additional share of Series A
Preferred Stock shall be valued at the Original Series A purchase price, which
may be adjusted from time to time pursuant to a split, subdivision, combination
or other similar events.

Optional Conversion: Shares of the Series A Preferred Stock are
optionally convertible into fully paid and non-assessable shares of Common Stock
at a conversion rate calculated by dividing (i) $28.00 per share plus any
declared, accrued but unpaid dividends by (ii) the conversion price (the
Conversion Price), which is initially $2.80 per share, subject to adjustment
as provided in the Certificate. Initially, each share of Series A Preferred
Stock is convertible into 10 shares of Common Stock.

Mandatory Conversion: All outstanding shares of the Series A
Preferred Stock will automatically convert to shares of Common Stock, subject to
the conversion restrictions set forth in the Certificate (the "Mandatory
Conversion"), at the earlier to occur of (i) the Companys shares of Common
Stock are listed on the New York Stock Exchange, the NYSE Amex, the NASDAQ
Global Market, the NASDAQ Global Select Market or the NASDAQ Capital Market
(each, a "National Stock Exchange") and the registration statement on Form S-1
or such other appropriate form promulgated by the SEC registering the Common
Stock underlying the Securities pursuant to the Securities Purchase Agreement is
declared effective by the Commission, and (ii) 12 months from the date that the
Company's shares of Common Stock are first listed on a National Stock Exchange.

Adjustment to Conversion Price: If the Company shall issue any
additional stock without consideration or for consideration per share less than
the Conversion Price in effect immediately prior to the issuance of such
Additional Stock, then such Conversion Price in effect immediately prior to such
issuance shall be adjusted to a price determined by multiplying such Conversion
Price by a fraction:

19

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 11 | STOCKHOLDERS EQUITY (CONTINUED)
|------- | --------------------------------

Preferred Stock (continued)

Sum of (x) the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional stock plus (y) the number
of shares of Common Stock that the aggregate consideration received by the
Company for the total number of such additional stock so issued would purchase
at Conversion Price (divided by) (x) the number of shares of Common Stock
outstanding immediately prior to the issuance of such additional stock plus (y)
the number of shares of such additional stock so issued.

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

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

Registration Rights: The holders of Series A Preferred Stock
have the right to request the Company to file a Registration Statement to
register Registrable Securities (which include the common stock into which the
Series A Preferred Stock and Warrants are convertible). Upon such request, no
later than 30 days upon receipt of such request (the Required Filing Date) the
Company should use its commercially reasonable efforts to register the Common
Stock underlying the Registrable Securities and have the Registration Statement
declared effective by the SEC which is not later than the earlier of (x) 150
calendar days after the Required Filing Date, or (y) if the Registration
Statement is not reviewed by the SEC, 5 business days after oral or written
notice to the Company or its counsel from the SEC that there will not be a
review.

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

Accounting for Series A Preferred Stock

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

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

The Series A Preferred Stock is not subject to redemption
(except on liquidation) and the holders of the Series A Preferred Stock are
entitled to vote together with common stock holders on an as-converted basis.
The Series A Preferred Stock, excluding the embedded conversion option, are
considered to be an equity instrument and accordingly, the embedded conversion
option has not been separated and accounted for as a derivative instrument
liability.

20

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 11 | STOCKHOLDERS EQUITY (CONTINUED)
|------- | --------------------------------

Preferred Stock (continued)

During the quarter ended March 31, 2011, 28,183 shares of
Series A Preferred Stock were converted into 281,830 shares of common stock at a
1 for 10 ratio. In addition, during the quarter ended March 31, 2011, 10,980
shares of common stock were issued to the investors as settlement of stock
dividend of $30,605.

Common Stock Purchase Warrants

Series C Warrants

In conjunction with the issuance of the Series A Preferred
Stock, the Company issued Series C Warrants to the investors and the placement
agent to purchase up to 617,008 and 24,681 shares, respectively, of Common Stock
on June 7, 2010 and 371,493 and 14,859 shares, respectively, on June 28, 2010,
respectively, all at an exercise price of $3.40 per share issued and
outstanding. The Series C Warrants have a term of exercise expiring 3 years from
the issuance date. The Series C Warrants at the option of the holder, may be
exercised by cash payment of the exercise price or, the holder may satisfy its
obligation to pay the exercise price through a "cashless exercise."

The Company will not receive any additional proceeds to the
extent that the Series C Warrants are exercised by cashless exercise.

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

21

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 11 | STOCKHOLDERS EQUITY (CONTINUED)
|------- | --------------------------------

Accounting for Series A, Series B and Series C
WarrantsSeries A and Series B Warrants issued to certain investors to
purchase 500,000 shares of the Companys common stock remained outstanding at
December 31, 2009 had a term of three years and exercise prices of $3.25 and
$4.00 per share, respectively. These warrants contain standard anti-dilution
provisions for stock dividends, stock splits, stock combination,
recapitalization and a change of control transaction. Because these warrants do
not contain any contingent exercise provisions and their settlement amount will
equal the difference between the fair value of a fixed number of the Companys
equity shares and a fixed strike price, these warrants, which are freestanding
instruments, qualify for the scope exception under the guidance provided in ASC
815-40-15-5 through 815-40-15-8, and are considered indexed to the Companys own
stock. Accordingly, Series A and Series B Warrants have been classified as
equity.

Since the Series C Warrants issued to the investors and the
placement agent in June 2010 contain reset exercise price provisions, the
Company had determined to classify these warrants as derivative liabilities. The
reset exercise provisions of the warrants issued to the investors and the
placement agent in June 2010 were recorded at their relative fair values at
issuance of $1,182,860 and will continue to be recorded at fair value at each
subsequent balance sheet date. Any change in value between reporting periods
will be recorded as other income (expense). These warrants will continue to be
reported as a liability until such time when they are exercised or expire. The
fair value of these warrants is estimated using Monte-Carlo simulation
methods.

As of March 31, 2011, the fair value of these outstanding
Series C Warrants was determined to be $806,082, accordingly, the Company
recorded $392,191 in other income related to the change in the fair value of the
Series C Warrants in the three months ended March 31, 2011. There is no cash
flow impact for the warrant liability until the Series C Warrants are
exercised.

The following table presents a reconciliation of the warrant
liabilities measured at fair value on a recurring basis using Level 2 from
January 1, 2010 to March 31, 2011:

|                                          |   | Warrant liabilities |  
|----------------------------------------- | - | ------------------- | -
|Balance at January 1, 2010                | $ | -                   |  
|Issuance of warrants                      |   | 1,182,860           |  
|Change in fair value included in earnings |   | 15,413              |  
|Balance at December 31, 2010              | $ | 1,198,273           |  
|Change in fair value included in earnings |   | (392,191            | )
|Balance at March 31, 2011                 | $ | 806,082             |  

IR WarrantsOn May 27, 2010, the Company
entered into an investor relations agreement with a consultant in which the
consultant would provide certain consulting services to the Company for a term
of one year. In exchange for the consulting services provided, the consultant
should receive (i) a cash fee of $100,000 and (ii) 100,000 warrants (the IR
Warrants) at an exercise price of $3.80 and a term of three years from issuance
date. The above 100,000 IR Warrants were issued on July 1, 2010. The grant date
fair value of these IR warrants was estimated at $89,435 using Black-Scholes
valuation model and $22,359 was charged as general and administrative expenses
during the three months ended March 31, 2011.

22

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 11 | STOCKHOLDERS EQUITY (CONTINUED)
|------- | --------------------------------

Warrants issued and outstanding at March 31, 2011, and changes
during the three months then ended, are as follows:

|                                 |  |            |  |   | Weighted |  |  | Average          | 
|-------------------------------- |  | ---------- |  | - | -------- |  |  | ---------------- | 
|                                 |  | Number of  |  |   | Average  |  |  | Remaining        | 
|                                 |  | underlying |  |   | Exercise |  |  | Contractual Life | 
|                                 |  | shares     |  |   | Price    |  |  | (years)          | 
|Outstanding at December 31, 2010 |  | 1,628,041  |  | $ | 3.50     |  |  | 2.29             | 
|Granted                          |  | -          |  |   | -        |  |  | -                | 
|Forfeited                        |  | -          |  |   | -        |  |  | -                | 
|Exercised                        |  | -          |  |   | -        |  |  |                  | 
|Outstanding at March 31, 2011    |  | 1,628,041  |  | $ | 3.50     |  |  | 2.04             | 
|                                 |  |            |  |   |          |  |  |                  | 
|Exercisable at March 31, 2011    |  | 1,628,041  |  | $ | 3.50     |  |  | 2.04             | 

|NOTE 12 | STATUTORY RESERVES
|------- | ------------------

In accordance with the PRC Companies Law, the Companys PRC
subsidiaries and VIEs were required to transfer 10% of their profits after tax,
as determined in accordance with accounting standards and regulations of the
PRC, to the statutory surplus reserve and a percentage of not less than 5%, as
determined by management, of the profits after tax to the public welfare fund.
However, the Companys PRC subsidiaries and VIEs were not required to transfer
any profit after tax to the statutory surplus reserve after the accumulated
statutory surplus reserves reached 50% of registered capital of the Companys
PRC subsidiaries and VIEs. With the amendment of the PRC Companies Law which was
effective from January 1, 2006, enterprises in the PRC were no longer required
to transfer any profit to the public welfare fund. Any balance of the public
welfare fund brought forward from December 31, 2005 should be transferred to the
statutory surplus reserve. The statutory surplus reserve is non-distributable.

|NOTE 13 | SHARE-BASED COMPENSATION
|------- | ------------------------

Stock options granted to CFO

On July 16, 2010, the Company entered into a stock option
agreement with Mr. Robert Tick (Mr. Tick), the Chief Financial Officer of the
Company, under the Companys 2009 Equity Incentive Plan. Pursuant to the terms
of the stock option agreement, Mr. Tick was granted options to purchase an
aggregate of 150,000 shares of common stock of the Company, consisting of, an
option to purchase 75,000 shares that will vest in 2011 with an exercise price
of $5.00 per share, and an option to purchase 75,000 shares that will vest in
2012 with an exercise price of $7.00 per share. Each of these options expires
three years after their respective vesting dates.

23

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 13 | SHARE-BASED COMPENSATION (CONTINUED)
|------- | ------------------------------------

Stock options granted to CFO (continued)

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

On January 24, 2011, the Compensation Committee of the Board
approved the repricing of the options that the Company granted to Mr. Tick on
July 16, 2010. As a result, each such option outstanding has an exercise price
of $3.50 per share which is higher than the closing price of the Companys
common stock on the OTC Bulletin Board on the date of repricing. In addition,
the vesting schedules of the outstanding options granted to Mr. Tick were
changed from vesting on an annual basis to vesting on a semi-annual basis.

Summary of options issued and outstanding at March 31, 2011 and
the movements during the three months then ended are as follows:

|                                          |  | Number of underlying shares |  |   | Weighted- Average Exercise Price Per
      Share |  |   | Aggregate Intrinsic
      Value(1) |  |  | **Weighted- Average**
      **Contractual Life** **Remaining in Years** | 
|----------------------------------------- |  | --------------------------- |  | - | ------------------------------------------------ |  | - | ---------------------------------- |  |  | ----------------------------------------------------------------------- | 
|                                          |  |                             |  |   |                                                  |  |   |                                    |  |  |                                                                         | 
|Outstanding at December 31, 2010          |  | 150,000                     |  | $ | 6.00                                             |  | $ | -                                  |  |  | 5.00                                                                    | 
|Granted                                   |  | -                           |  |   | -                                                |  |   | -                                  |  |  | -                                                                       | 
|Exercised                                 |  | -                           |  |   | -                                                |  |   | -                                  |  |  | -                                                                       | 
|Expired                                   |  | -                           |  |   | -                                                |  |   | -                                  |  |  | -                                                                       | 
|Forfeited                                 |  | -                           |  |   | -                                                |  |   | -                                  |  |  |                                                                         | 
|Outstanding at March 31, 2011 (Unaudited) |  | 150,000                     |  | $ | 3.50                                             |  | $ | -                                  |  |  | 4.75                                                                    | 
|                                          |  |                             |  |   |                                                  |  |   |                                    |  |  |                                                                         | 
|Exercisable at March 31, 2011 (Unaudited) |  | -                           |  | $ | -                                                |  | $ | -                                  |  |  | -                                                                       | 

|(1) | The market value of the Companys common stock at March
      31, 2011 was $2.99. The outstanding options to Mr. Tick had no intrinsic
      value at March 31, 2011.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

In accordance with the guidance provided in ASC Topic 718,
Stock Compensation, the compensation costs associated with these options are
recognized, based on the grant-date fair values of these options, over the
requisite service period, or vesting period. Also in accordance with ASC Topic
718, incremental compensation cost is measured as the excess, if any, of the
fair value of the modified award over the fair value of the original award
immediately before its terms are modified, Accordingly, the Company recognized
compensation expense of $16,310 in relation to the options granted to the CFO
for the three months ended March 31, 2011.

24

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 13 | SHARE-BASED COMPENSATION (CONTINUED)
|------- | ------------------------------------

Restricted shares granted to CFO

On July 26, 2010, the Company also entered into a restricted
shares grant agreement (the "Restricted Shares Grant Agreement") under the
Companys 2009 Equity Incentive Plan with Mr. Tick. Pursuant to the terms of the
Restricted Shares Grant Agreement, the Company granted to Mr. Tick 150,000
restricted shares (the Restricted Shares) of the Companys common stock
subject to the vesting schedule therein. If Mr. Ticks service with the Company
ceases for any reason other than Mr. Ticks (a) death, (b) disability, (c)
retirement, or (d) termination by the Company without cause, any unvested
restricted shares will be automatically forfeited to the Company.

The Restricted Shares vest under the following schedule:

|Number of Shares | Vesting Date     
|---------------- | -----------------
|25,000           | December 31, 2010
|25,000           | June 30, 2011    
|25,000           | December 31, 2011
|25,000           | June 30, 2012    
|25,000           | December 31, 2012
|25,000           | June 30, 2013    

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

Accordingly, the Company recognized compensation expense of
$37,500, related to the restricted shares granted to Mr. Tick for the three
months ended March 31, 2011, based on the estimated grant-date fair value of the
Companys common stock of $3.00.

Restricted shares granted to independent directors

On October 5, 2010, the Company entered into separate
restricted shares grant agreements with the Companys newly elected independent
directors Mr. Henry Ngan, Ms. Virginia Pan and Mr. Jianbing Zhong. Pursuant the
agreements, the Company granted, under the Companys 2009 Equity Incentive Plan,
to Mr. Ngan 40,000 restricted shares of the Companys common stock, Ms. Pan
30,000 restricted shares and Mr. Zhong 20,000 restricted shares, as compensation
for the services to be provided by them as independent directors.

On January 24, 2011, the Company entered into an independent
director contract and an indemnification agreement with Mr. Kurtzig, whereby the
Company agreed to grant, under the Companys 2009 Equity Incentive Plan, to Mr.
Kurtzig 20,000 restricted shares of the Companys common stock as compensation
for the services to be provided by him and indemnify Mr. Kurtzig against
expenses, judgments, fines, penalties or other amounts actually and reasonably
incurred by Mr. Kurtzig in connection with any proceeding if Mr. Kurtzig acted
in good faith and in the best interests of the Company.

The restricted shares granted to independent directors will
vest in equal installments on a semi-annual basis over a two-year period. If the
independent directors service with the Company ceases for any reason other than
the independent directors (a) death, (b) disability, (c) retirement, or (d)
termination by the Company without cause, any unvested restricted shares will be
automatically forfeited to the Company.

25

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 13 | SHARE-BASED COMPENSATION (CONTINUED)
|------- | ------------------------------------

Restricted shares granted to independent directors
(continued)

Accordingly, the Company recognized a total compensation
expense of $38,943 related to the restricted shares granted to the directors for
the three months ended March 31, 2011, based on the estimated grant-date fair
values of the Companys common stock of $2.98 on October 5, 2010 and $3.28 on
January 24, 2011.

|NOTE 14 | INCOME TAXES
|------- | ------------

The Companys VIEs and subsidiaries incorporated in the PRC are
subject to PRC enterprise income tax (EIT). Before January 1, 2008, the PRC
EIT rate was generally 33%. In March 2007, the PRC government enacted a new PRC
Enterprise Income Tax Law, or the New EIT Law, and promulgated related
regulations, Implementation Regulations for the PRC Enterprise Income Tax Law.
The New EIT Law and Implementation Regulations became effective on January 1,
2008. The New EIT Law, among other things, imposes a unified income tax rate of
25% for both domestic and foreign invested enterprises registered in the
PRC.

The New EIT Law provides a grandfathering on tax holidays which
were granted under the then effective tax laws and regulations. Therefore, one
of the Company's VIEs, Daqing Shuaiyi, being engaged in growing and sales of
organic and specialty food products, has continued to be entitled to a
preferential tax treatment: an EIT holiday for the two years ended December 31,
2006 and 2007 and a 50% reduction on the EIT rate for the three years ended
December 31, 2008, 2009 and 2010.

Harbin Shuaiyi was subject to an EIT rate of 25% for the year
ended December 31, 2010.

Both Daqing Shuaiyi and Harbin Shuayi are subject to an EIT
rate of 25% for the year ending December 31, 2011.

Harbin Baixin has been subject to an EIT rate of 25% since its
incorporation. No provision for PRC taxes was made as Harbin Baixin had no
taxable income in the PRC.

No provision for other overseas taxes is made as none of
Nutrastar, New Resources and Oriental Global has any taxable income in the U.S.,
British Virgin Islands or HK, respectively.

The Companys income tax expense consisted of:

|                         |   | For the Three Months | 
|------------------------ | - | -------------------- | 
|                         |   | Ended March 31,      | 
|                         |   | 2011                 | 
|Current income tax  PRC | $ | 942,413              | 
|Deferred                 |   | -                    | 
|                         | $ | 942,413              | 

26

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 14 | INCOME TAXES (CONTINUED)
|------- | ------------------------

A reconciliation of the provision for income taxes determined
at the U.S. federal corporate income tax rate to the Companys effective income
tax rate is as follows:

|                                                                    |   | For the Three Months |  
|------------------------------------------------------------------- | - | -------------------- | -
|                                                                    |   | Ended March 31,      |  
|                                                                    |   | 2011                 |  
|                                                                    |   |                      |  
|Pre-tax income                                                      | $ | 3,950,184            |  
|                                                                    |   |                      |  
|U.S. federal corporate income tax rate                              |   | 34%                  |  
|Income tax computed at U.S. federal corporate income tax
      rate |   | 1,343,063            |  
|Reconciling items:                                                  |   |                      |  
|Impact of tax holiday of Daqing Shuaiyi                             |   | -                    |  
|Loss not recognized as
      deferred tax assets                    |   | 57,380               |  
|Change in fair value of warrants                                    |   | (133,345             | )
|Rate differential for PRC
      earnings                            |   | (341,399             | )
|Non-deductible expenses and non-taxable income                      |   | 16,714               |  
|Effective tax expense                                               | $ | 942,413              |  

The Company had deferred tax assets as follows:

|                                     |   | March 31, |   |   | December 31, |  
|------------------------------------ | - | --------- | - | - | ------------ | -
|                                     |   | 2011      |   |   | 2010         |  
|Net operating losses carried forward | $ | 586,920   |   | $ | 529,540      |  
|Less: Valuation allowance            |   | (586,920  | ) |   | (529,540     | )
|Net deferred tax assets              | $ | -         |   | $ | -            |  

As of March 31, 2011 and December 31, 2010, the Company had
$1,726,234 and $1,557,472, net operating loss carryforwards available to reduce
future taxable income, respectively, which will expire in various years through
2030. It is more-likely-than-not that the deferred tax assets cannot be utilized
in the future because there will not be significant future earnings from the
entity which generated the net operating loss. Therefore, the Company recorded a
full valuation allowance on its deferred tax assets.

As of March 31, 2011 and December 31, 2010, the Company has no
material unrecognized tax benefits which would favorably affect the effective
income tax rate in future periods and does not believe that there will be any
significant increases or decreases of unrecognized tax benefits within the next
twelve months. No interest or penalties relating to income tax matters have been
imposed on the Company during the three months ended March 31, 2011 and 2010,
and no provision for interest and penalties is deemed necessary as of March 31,
2011 and December 31, 2010.

According to the PRC Tax Administration and Collection Law, the
statute of limitations is three years if the underpayment of taxes is due to
computational errors made by the taxpayer or its withholding agent. The statute
of limitations extends to five years under special circumstances, which are not
clearly defined. In the case of a related party transaction, the statute of
limitation is ten years. There is no statute of limitation in the case of tax
evasion.

27

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 15 | EARNINGS PER SHARE
|------- | ------------------

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

|                                                        |   | For the Three Months |  
|------------------------------------------------------- | - | -------------------- | -
|                                                        |   | Ended March 31,      |  
|                                                        |   | 2011                 |  
|                                                        |   |                      |  
|Income available to common stockholders:                |   |                      |  
|- Net income                                            | $ | 3,007,771            |  
|                                                        |   |                      |  
|Less: Preferred stock dividend                          |   | (118,485             | )
|Income available to common stockholders
      (Basic)   | $ | 2,889,286            |  
|Add: Preferred stock dividend                           |   | 118,485              |  
|Income available to common stockholders
      (Diluted) | $ | 3,007,771            |  
|                                                        |   |                      |  
|Weighted average number of shares:                      |   |                      |  
|- Basic                                                 |   | 14,513,470           |  
|- Effect of dilutive preferred stock                    |   | 1,751,728            |  
|- Effect of dilutive restricted stock units             |   | 8,985                |  
|- Effect of dilutive warrants and options               |   | -                    |  
|- Diluted                                               |   | 16,274,183           |  
|                                                        |   |                      |  
|Net income per share                                    |   |                      |  
|- Basic                                                 | $ | 0.20                 |  
|- Diluted                                               | $ | 0.18                 |  

Diluted earnings per share is calculated by adjusting the
weighted average number of common shares outstanding to assume conversion of all
dilutive potential common shares.

The diluted earnings per share calculation for the three months
ended March 31, 2011 did not include the warrants and CFO options to purchase up
to 1,628,041 and 150,000 shares of common stock, respectively, because their
effect was anti-dilutive.

28

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 16 | RELATED PARTY TRANSACTIONS
|------- | --------------------------

Other than disclosed elsewhere in these financial statements,
the Company also had the following related party balances and transactions:-

|(a) | Due to related parties
|--- | ----------------------

| |                                                                             |   | March 31, |  |   | December 31, | 
| | --------------------------------------------------------------------------- | - | --------- |  | - | ------------ | 
| |                                                                             |   | 2011      |  |   | 2010         | 
| |                                                                             |   |           |  |   |              | 
| | Due to Ms. Lianyun Han, Chairperson, CEO
      and President of the Company | $ | 51,858    |  | $ | 51,339       | 

|    | The amount due to Ms Han was non-interest bearing,
      unsecured and without a fixed repayment date.                                                            
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                   
|(b) | Lease of land                                                                                                                                                     
|    |                                                                                                                                                                   
|    | For the three months ended March 31, 2011 and 2010, the
      Company paid rental expense of $2,335 and $2,252 for land to Shuaiyi
      Technology, respectively.

|NOTE 17 | CONCENTRATION RISK
|------- | ------------------

|(a) | Concentration of credit
risk
|--- | ----------------------------

As of March 31, 2011 and December 31, 2010, almost all of the
Companys cash included cash on hand and deposits in accounts maintained within
the PRC where there is currently no rule or regulation in place for obligatory
insurance to cover bank deposits in the event of bank failure. However, the
Company has not experienced any losses in such accounts and believes it is not
exposed to any risks on its cash in bank accounts

For the three months ended March 31, 2011 and 2010, all of the
Companys sales arose in the PRC. In addition, all accounts receivable as of
March 31, 2011 and December 31, 2010 also arose in the PRC.

Details of individual customers accounting for 10% or more of
the Groups revenues for the three months ended March 31, 2011 and 2010:

|                       |  | 2011  |  |  | 2010  | 
|---------------------- |  | ----- |  |  | ----- | 
|Lai En Century Co. Ltd |  | 37.2% |  |  | 41.4% | 

29

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|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 17 | CONCENTRATION RISK (CONTINUED)
|------- | ------------------------------

|(a) | Concentration of credit risk
  (continued)
|--- | ------------------------------------------

Individual customer amounts receivable accounting for 10% or more
of total accounts receivable as of March 31, 2011 and December 31, 2010 were as
follows:

|                                                                         |  | Percentage of accounts receivable as of | 
|------------------------------------------------------------------------ |  | --------------------------------------- | 
|                                                                         |  | March 31,                               | 
|                                                                         |  | 2011                                    | 
|                                                                         |  |                                         | 
|Great Northern Wilderness Grain and Oil
      Warehouse Market Co., Ltd. |  | 36%                                     | 
|Beijing Ruichenboji Technology Development Co., Ltd                      |  | 26%                                     | 
|Zhejiang Wanfeng Enterprise Group
      Pharmaceutical Co., Ltd.         |  | 19%                                     | 
|Disha Pharmaceutical Co., Ltd                                            |  | 13%                                     | 
|Xian Yizhiliu Pharmaceutical Co., Ltd                                    |  | -                                       | 
|Zhejiang Yinlong Trading Company                                         |  | -                                       | 
|Si Chuan Ai Da Biotech Co. Ltd.                                          |  | -                                       | 

|(b) | Concentration of operating
risk
|--- | -------------------------------

Substantially all of the Companys operations are conducted in
China. The Companys operations are subject to various political, economic, and
other risks and uncertainties inherent in China. Among other risks, the
Companys operations are subject to the risks of restrictions on transfer of
funds; export duties, quotas, and embargoes; domestic and international customs
and tariffs; changing taxation policies; foreign exchange restrictions; and
political conditions and governmental regulations.

|NOTE 18 | COMMITMENTS AND CONTINGENCIES
|------- | -----------------------------

|(a) | Operating leases
|--- | ----------------

The Company has entered into tenancy agreements for the leases
of an exhibition hall and land with a third party and a related company, Shuaiyi
Technology (see Note 16(b)), respectively, for the purposes of the operation of its VIEs. The Companys commitments for minimum lease payments under these operating
leases for the next five years and thereafter as of March 31, 2011 are as
follows:

|Remainder of fiscal year ending December
      31, 2011 | $ | 56,260  | 
|------------------------------------------------------- | - | ------- | 
|Fiscal year ending December 31, 2012                    |   | 45,986  | 
|Fiscal year ending December 31, 2013                    |   | 36,834  | 
|Fiscal year ending December 31, 2014                    |   | 9,380   | 
|Fiscal year ending December 31, 2015                    |   | 9,380   | 
|Thereafter                                              |   | 112,562 | 
|Total                                                   | $ | 270,402 | 

During the three months ended March 31, 2011 and 2010, rental
expenses under operating leases amounted to $15,247 and $9,173, respectively.

30

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 18 | COMMITMENTS AND CONTINGENCIES
      (CONTINUED)
|------- | -----------------------------------------------

|(b) | PRC employee costs
|--- | ------------------

According to the prevailing laws and regulations of the PRC,
the Companys subsidiaries and VIEs in the PRC are required to cover its
employees with medical, retirement and unemployment insurance programs.
Management believes that due to the transient nature of its employees, they do
not need to provide all employees with such social insurances, and have not paid
the social insurances for all employees.

In the event that any current or former employee files a
complaint with the PRC government, the Company's subsidiaries and VIEs may be
subject to making up the social insurances as well as administrative fines. As
the Company believes that these fines would not be material, no provision has
been made in this regard.

|(c) | Indemnification agreement
|--- | -------------------------

On October 5, 2010, the Company entered into an indemnification
agreement with each of its newly elected independent directors, Mr. Henry Ngan,
Ms. Virginia Pan and Mr. Jianbing Zhong, pursuant to which the Company agreed
to indemnify the independent directors against expenses, judgments, fines,
penalties or other amounts actually and reasonably incurred by the Independent
directors in connection with any proceeding if the independent directors acted
in good faith and in the best interests of the Company.

Also on October 5, 2010, the Company entered into an
indemnification agreement with Mr. Tick pursuant to which the Company agreed to
indemnify Mr. Tick against expenses, judgments, fines, penalties or other
amounts actually and reasonably incurred by Mr. Tick in connection with any
proceeding if Mr. Tick acted in good faith and in the best interests of the
Company.

On January 24, 2011, the Company entered into an
indemnification agreement with Mr. Joshua Kurtzig, its newly elected independent
director, pursuant to which the Company agreed to indemnify Mr. Kurtzig against
expenses, judgments, fines, penalties or other amounts actually and reasonably
incurred by the independent director in connection with any proceeding if the
independent director acted in good faith and in the best interests of the
Company.

|NOTE 19 | SEGMENT INFORMATION
|------- | -------------------

The Company operates in three business segments identified by
product, Chinese Golden Grass, beverages and organic and specialty food
products. The Chinese Golden Grass segment consists of the growing and sales of
Chinese Golden Grass, which business is conducted through Daqing Shuaiyi. The
beverages segment consists of the manufacturing of functional health beverages
featuring the Chinese Golden Grass as a core ingredient, which business is also
conducted through Daqing Shuaiyi, which was launched in the fourth quarter of
2010. The organic and specialty food products segment consists of the sales of
rice, flour and silage corn etc agricultural products which business is mainly
conducted through Harbin Shuaiyi.

Throughout the three months ended March 31, 2011 and 2010, all
of the Companys operations were carried out in one geographical segment -
China.

31

---

|NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
|(Unaudited)                                               

|NOTE 19 | SEGMENT INFORMATION (CONTINUED)
|------- | -------------------------------

The Companys segment revenue and results for the three months
ended March 31, 2011 and 2010 are as follows:

Three Months Ended March 31, 2011Organic andChinese
    
    
    
    
    
    Specialty Food
    
    
    CorporateGolden Grass
    
    
    Beverages
    
    
    Products
    
    
    unallocated
    
    
    ConsolidatedSegment revenue from external customers
    $
    5,083,488
    
    $
    230,315
    
    $
    482,439
    
    $
    -
    
    $
    5,796,242Segment profit
    $
    3,581,442
    
    $
    182,338
    
    $
    27,818
    
    $
    158,586
    
    $
    3,950,184Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,950,184Segment assets
    $
    46,210,964
    
    $
    72,452
    
    $
    1,312,566
    
    $
    11,156,788
    
    $
    58,752,770Total assets
    
    
    
    
    
    
    
    
    
    
    
    
    $
    58,752,770Other segment information:Depreciation and amortization
    $
    260,161
    
    $
    1,298
    
    $
    1,300
    
    $
    1,079
    
    $
    263,838Expenditure for segment assets
    $
    1,168
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    1,168


|                                        |   | Three Months Ended March 31, 2010 | 
|--------------------------------------- | - | --------------------------------- | 
|                                        |   |                                   | 
|                                        |   | Chinese                           | 
|                                        |   | Golden Grass                      | 
|                                        |   |                                   | 
|Segment revenue from external customers | $ | 4,265,043                         | 
|                                        |   |                                   | 
|Segment profit (loss)                   | $ | 3,300,048                         | 
|Income before income taxes              |   |                                   | 
|                                        |   |                                   | 
|Segment assets                          | $ | 27,386,798                        | 
|                                        |   |                                   | 
|Total assets                            |   |                                   | 
|                                        |   |                                   | 
|Other segment information:              |   |                                   | 
|Depreciation and amortization           | $ | 250,463                           | 
|Expenditure for segment assets          | $ | 4,526                             | 

32

---

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q, including the following
Managements Discussion and Analysis of Financial Condition and Results of
Operations, contains forward-looking statements that are based on the beliefs
of our management, and involve risks and uncertainties, as well as assumptions,
that, if they ever materialize or prove incorrect, could cause actual results to
differ materially from those expressed or implied by such forward-looking
statements. The words believe, expect, anticipate, project, targets,
optimistic, intend, aim, will or similar expressions are intended to
identify forward-looking statements. All statements, other than statements of
historical fact, are statements that could be deemed forward-looking statements,
including statements regarding new and existing products, technologies and
opportunities; statements regarding market and industry segment growth and
demand and acceptance of new and existing products; any projections of sales,
earnings, revenue, margins or other financial items; any statements of the
plans, strategies and objectives of management for future operations; any
statements regarding future economic conditions or performance; uncertainties
related to conducting business in China; and any statements of belief or
intention. As such, they are subject to risks and uncertainties that could cause
our results to differ materially from those expressed or implied by such forward
looking statements. Such risks and uncertainties include any of the factors and
risks mentioned in the Risk Factors sections of the Quarterly Report and our
Annual Report on Form 10-K for the year ended December 31, 2010 and subsequent
SEC filings, and any statements of assumptions underlying any of the foregoing.
All forward-looking statements included in this report are based on information
available to us on the date of this report. We assume no obligation and do not
intend to update these forward-looking statements, except as required by
law.

Certain Terms

Except as otherwise indicated by the context, references in
this report to:

- BVI refers to the British Virgin Islands;
- China, Chinese and PRC, refer to the Peoples Republic of China;
- Exchange Act refers to the Securities Exchange Act of 1934, as amended.
- Nutrastar, we, us, our company and our refer to Nutrastar
  International Inc., a Nevada corporation, its subsidiaries, and, in the
  context of describing our operations and business and consolidated financial
  information, include our VIE Entities;
- Renminbi and RMB refer to the legal currency of China;
- SEC refers to the United States Securities and Exchange Commission;
- Securities Act refers to the Securities Act of 1933, as amended;
- U.S. dollars, dollars and $ refer to the legal currency of the
  United States; and
- VIE Entities means our consolidated variable interest entities,
  including Heilongjiang Shuaiyi New Energy Development Co., Ltd. and its
  subsidiaries as depicted in our organizational chart included in our Annual
  Report on Form 10-K for the year ended December 31, 2010.

Overview of Our Business

We are a China based leading producer and supplier of premium
branded Traditional Chinese Medicine consumer products including commercially
cultivated Chinese Golden Grass (Cordyceps Militaris), organic and specialty
food products and functional health beverages. Through our VIE Entities, we
specialize in developing, processing, marketing and distributing a variety of
consumer products as described in more detail below.

Our primary product is Chinese Golden Grass, also known as
Cordyceps Militaris. Cordyceps Militaris is a species of parasitic fungus that
is typically found in north-eastern mountainous China. It is a precious
ingredient in traditional Chinese medicine, as Cordyceps Militaris is widely
believed in China to offer high medical and health benefits by nourishing the
yin,boosting the yang,and invigorating the meridians of the
lungs and kidneys. Through several years of laboratory tests, we developed a
technology to commercially grow and produce Cordyceps Militaris in 2006. We
generated 87.7% and 89.4% of our revenues from Chinese Golden Grass for the
first quarter of 2011 and 2010, respectively. We plan to continue to focus on Chinese Golden
Grass based consumer products, which is our fastest growing product line with
the greatest market demand and a significantly high profit margin.

33

---

We also sell organic and specialty food products through our
VIE Entity, Harbin Shuaiyi Green & Specialty Food Trading LLC, or Harbin
Shuaiyi, which was formed in 2001. After years of development, we believe that
we have become the largest wholesale distributor of organic and specialty food
in Heilongjiang Province, China.

We introduced the Chinese Golden Grass based functional health
beverages in the fourth quarter of 2010. The non-carbonized beverage products
were developed internally and contain the Chinese Golden Grass as a key
ingredient. The products are currently being marketed directly to consumers in
select cities in Jiangsu Province through various distribution channels.

First Quarter Financial Performance Highlights

We continued to experience strong demand for our products and
services during the first quarter of 2011, which resulted in continued growth in
our revenues and net income.

The following are some financial highlights for the first
quarter of 2011:

- Revenues: Our revenues were approximately $5.80 million for the first
  quarter of 2011, an increase of 21.6% from the same quarter of last year.
- Gross Margin: Gross margin was 76.4% for the first quarter of 2011, as
  compared to 77.8% for the same period in 2010.
- Operating Profit: Operating profit was approximately $3.50 million for the
  first quarter of 2011, an increase of 12.4% from $3.11 million of the same
  period last year.
- Net Income: Net income was approximately $3.01 million for the first
  quarter of 2011, an increase of 10.5% from the same period of last year.
- Basic and fully diluted earnings per share was $0.20 and $0.18,
  respectively for the first quarter of 2011.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2011 Compared to Three
Months Ended March 31, 2010

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

|                                    |  | Three Months Ended March
      31, |   |  | Three Months Ended
      March **31,** | 
|----------------------------------- |  | ---------------------------------- | - |  | -------------------------------------- | 
|                                    |  | 2011                               |   |  | 2010                                   | 
|                                    |  |                                    |   |  | As a                                   | 
|                                    |  |                                    |   |  | percentage of                          | 
|                                    |  | In Thousands                       |   |  | revenues                               | 
|                                    |  |                                    |   |  |                                        | 
|Revenues                            |  | 5,796                              |   |  | 100 %                                  | 
|Cost of goods sold                  |  | (1,370                             | ) |  | (23.6) %                               | 
|                                    |  |                                    |   |  |                                        | 
|Gross Profit                        |  | 4,426                              |   |  | 76.4 %                                 | 
|                                    |  |                                    |   |  |                                        | 
|Selling expenses                    |  | (410                               | ) |  | (7.1) %                                | 
|General and administrative expenses |  | (521                               | ) |  | (9.0) %                                | 

|Income from operations           |  | 3,495 |   |  | 60.3%   |  |  | 3,110 |   |  | 65.2%  | 
|-------------------------------- |  | ----- | - |  | ------- |  |  | ----- | - |  | ------ | 
|Other income                     |  |       |   |  |         |  |  |       |   |  |        | 
|Interest income                  |  | 40    |   |  | 0.7%    |  |  | 33    |   |  | 0.7%   | 
|Exchange gain                    |  | 23    |   |  | 0.4%    |  |  | -     |   |  | -%     | 
|Change in fair value of warrants |  | 392   |   |  | 6.8%    |  |  | -     |   |  | -%     | 
|Income before income tax         |  | 3,950 |   |  | 68.2%   |  |  | 3,144 |   |  | 65.9%  | 
|Provision for income tax         |  | (942  | ) |  | (16.3)% |  |  | (423  | ) |  | (8.9)% | 
|Net income                       |  | 3,008 |   |  | 51.9%   |  |  | 2,721 |   |  | 57.1%  | 

34

---

Revenues. Our revenues are generated from sales of our
products. Revenues increased approximately $1.03 million, or 21.6%, to
approximately $5.80 million for the three months ended March 31, 2011, from
approximately $4.77 million for the same period in 2010. This increase was
mainly attributable to the increase in demand for our core products,
commercially cultivated Cordyceps Militaris and sales of our functional health
beverage products which were launched in the fourth quarter of 2010.

Our business operations can be categorized into three segments
based on the type of products we manufacture and sell, specifically (i) Chinese
Golden Grass (Cordyceps Militaris), (ii) functional health beverages and (iii)
organic and specialty food products. The following table shows the different
segments comprising our total sales revenue:

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

|                                           |   | Three Months Ended March
      31, |  |   | Percent | 
|------------------------------------------ | - | ---------------------------------- |  | - | ------- | 
|                                           |   | 2011                               |  |   | 2010    | 
|Components of Sales Revenue                |   |                                    |  |   |         | 
|Chinese Golden Grass (Cordyceps Militaris) | $ | 5,084                              |  | $ | 4,265   | 
|Functional Health Beverages                |   | 230                                |  |   | -       | 
|Organic and Specialty Food Products        |   | 482                                |  |   | 503     | 
|Total revenues                             | $ | 5,796                              |  | $ | 4,768   | 

Cost of Goods Sold.Our cost of goods sold is primarily
comprised of the costs of our raw materials, labor and overhead. Our cost of
goods sold increased by $0.31 million, or 29.7%, to approximately $1.37 million
for the three months ended March 31, 2011 from approximately $1.06 million
during the same period in 2010. This increase was mainly due to the increase in
sales for the core products and increase in production costs associated with the
functional health beverages products. As a percentage of revenues, the cost of
goods sold increased to 23.6% for the three months ended March 31, 2011 from
22.2% during the same period in 2010. Such increase of cost of goods sold as a
percentage of sales was mainly attributable to the increase in production costs
associated with the functional health beverages, which outpaced the increase of
our revenues for the three months ended March 31, 2011.

Gross Profit.Our gross profit increased by
approximately $0.71 million, or 19.3%, to approximately $4.43 million for the
three months ended March 31, 2011 from approximately $3.71 million during the
same period in 2010. Gross profit as a percentage of revenues, or gross margin,
was 76.4% for the three months ended March 31, 2011, a decrease of 1.4% from
77.8% during the same period in 2010. Such percentage decrease was mainly due to
the increase in the sales of functional health beverages in the product mix,
which have a lower gross margin as compared to our commercially cultivated
Cordyceps Militaris.

Selling Expenses. Our selling expenses include sales
commissions, cost of advertising and promotional materials, salaries and fringe
benefits of sales personnel, and other sales related costs. Selling expenses
increased approximately $0.24 million, or 138.7%, to approximately $0.41 million
for the three months ended March 31, 2011 from approximately $0.17 million
during the same period in 2010. As a percentage of revenues, selling expenses
increased to 7.1% for the three months ended March 31, 2011 from 3.6% for the
same period in 2010. The increase in the amount and percentage of selling
expenses was mainly attributable to additional selling and marketing expenses
relating to initial rollout of our functional health beverages product line.

35

---

General and Administrative Expense. General and
administrative expenses include the costs associated with staff and support
personnel who manage our business activities, depreciation charge for fixed
assets, and professional fees paid to third parties. General and administrative
expenses increased approximately $0.09 million, or 21.3%, to approximately $0.52
million for the three months ended March 31, 2011 from approximately $0.43
million for the same period in 2010. As a percentage of revenues, general and
administrative expenses were 9.0% for both the three months ended March 31, 2011
and 2010. Increase in general and administrative expenses  in dollar term was mainly
attributable to the stock-based compensation in an amount of $115,112 paid to our CFO,
independent directors and investor relations firm in the first quarter of 2011,
while we did not have such expense in the same period in 2010.

Income Before Income Tax. Income before income tax
increased approximately $0.81 million, or 25.6%, to approximately $3.95 million
during the three months ended March 31, 2011 from approximately $3.14 million
during the same period in 2010. As a percentage of revenues, income before
income tax increased to 68.2% during the three months ended March 31, 2011 from
65.9% during the same period in 2010. The increase of income before income tax
is mainly attributable to the increase of our revenue described above and the
change in fair value of warrants of $0.39 million. The warrants were issued to
the investors and the placement agent in conjunction with the issuance of the
Series A Preferred Stock in June 2010.

Income Taxes.Nutrastar International Inc. is subject to
United States federal income tax at a tax rate of 34%. No provision for income
taxes in the United States has been made as Nutrastar International Inc. had no
income taxable in the United States for the three months ended March 31, 2011.
New Resources was incorporated in the BVI and under the current laws of the BVI,
is not subject to income taxes. Oriental Global was formed in Hong Kong and
under the current laws of Hong Kong, is not subject to income taxes. Our PRC
subsidiary and the VIEs are subject to national and local income taxes within
China at the applicable tax rate on the taxable income as reported in their PRC
statutory financial statements in accordance with relevant income tax laws.
China passed a new Enterprise Income Tax Law, or the New EIT Law, and its
implementing regulations, both of which became effective on January 1, 2008.

The New EIT Law provides for a grandfathering on tax holidays
which were granted under the then effective tax laws and regulations. Therefore,
Daqing Shuaiyi had continued to be entitled to a three-year 50% income tax
reduction until December 31, 2010. Daqing Shuaiyi had been subject to a 12.5%
income tax rate in 2010 and Harbin Shuaiyi was subject to a tax rate of 25% in
2010. Both entities are subject to an income tax rate of 25% in 2011.

Income tax increased approximately $0.52 million to
approximately $0.94 million for the three months ended March 31, 2011 from
approximately $0.42 million for the same period in 2010. Income tax expense in
2011 increased because of the increase in sales, taxable income and income tax
rate as described above.

Net Income. Net income increased by approximately $0.29
million, or 10.5% to approximately $3.01 million for the three months ended
March 31, 2011 from approximately $2.72 million for the same period of 2010 as a
result of the factors described above.

Business Segment Information

Our business operations can be categorized into three segments
based on the type of products we manufacture and sell, specifically (i) Chinese
Golden Grass (Cordyceps Militaris), (ii) functional health beverages and (iii)
organic and specialty food products.

For the three months ended March 31, 2011, our sales revenue
from our Cordyceps Militaris was approximately $5.08 million, while
approximately $0.23 million from functional health beverages and approximately
$0.48 million from organic and specialty food products.

We grow and sell our Cordyceps Militaris products as well as
manufacture and distribute our functional health beverages through Daqing
Shuaiyi. Harbin Shuaiyi is mainly engaged in the business of selling our organic
and specialty food products.

We expect that majority of our revenue for 2011 will still be
generated from our Cordyceps Militaris products, with an increase in percentage
of revenue coming from the functional health beverages as we are expanding our
distribution channel of such products. We also expect that sales and
marketing related costs associated with branding and advertising of the
functional health beverages will increase as a percentage of revenue.

36

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Additional information regarding our products can be found at
Note 19 in our unaudited condensed consolidated financial statements contained
under Part I, Item I FINANCIAL STATEMENTS above.

Liquidity and Capital Resources

General

As of March 31, 2011, we had cash and cash equivalents
(excluding restricted cash) of approximately $45.02 million. The following table
provides detailed information about our net cash flow for all financial
statement periods presented in this report.

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

|                                                          |   | Three Months Ended March
      31, |  
|--------------------------------------------------------- | - | ---------------------------------- | -
|                                                          |   | 2011                               |  
|Net cash provided by operating activities                 | $ | 3,823                              |  
|Net cash used in investing activities                     |   | (1                                 | )
|Net cash provided by (used in) financing
      activities |   | 45                                 |  
|Foreign currency translation adjustment                   |   | 391                                |  
|Net cash flow                                             | $ | 4,258                              |  

Operating Activities

Net cash provided by operating activities was approximately
$3.82 million for the three-month period ended March 31, 2011, which is an
increase of approximately $0.65 million from approximately $3.17 million net
cash provided by operating activities for the same period of 2010. The increase
of the cash provided by operating activities was mainly attributable to the
increase in our sales and net income.

Investing Activities

Our primary uses of cash for investing activities are payments
for the acquisition of property, plant and equipment.

Net cash used in investing activities for the three-month
period ended March 31, 2011 was approximately $1,000, which is a decrease of
approximately $4,000 from net cash used in investing activities of approximately
$5,000 for the same period of 2010. The decrease of the cash used in investing
activities was mainly due to the decrease in purchasing equipment.

Financing Activities

Net cash provided by financing activities for the three-month
period ended March 31, 2011 was $0.04 million, compared to net cash used in
financing activities of $0.004 million for the same period in 2010. The change
was primarily due to the release of restricted cash as compensations of the CFO
of $0.04 million during the first quarter of 2011.

We believe that our cash on hand, cash flow from operations as
well as the proceeds we received from the recent private placement transactions
in June 2010 will meet our expected capital expenditure and working capital for
the next 12 months. However, we may in the future require
additional cash resources due to changed business conditions, implementation of
our strategy to expand our production capacity or other investments or
acquisitions we may decide to pursue. If our own financial resources are
insufficient to satisfy our capital requirements, we may seek to sell additional
equity or debt securities or obtain additional credit facilities. The sale of
additional equity securities could result in dilution to our stockholders. The
incurrence of indebtedness would result in increased debt service obligations
and could require us to agree to operating and financial covenants that would
restrict our operations. Financing may not be available in amounts or on terms
acceptable to us, if at all. Any failure by us to raise additional funds on
terms favorable to us, or at all, could limit our ability to expand our business
operations and could harm our overall business prospects.

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Effects of Inflation

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

Off Balance Sheet Arrangements

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

Seasonality

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

Critical Accounting Policies

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America (U.S.
GAAP) requires our management to make assumptions, estimates and judgments that
affect the amounts reported in the financial statements, including the notes
thereto, and related disclosures of commitments and contingencies, if any. We
consider our critical accounting policies to be those that require the most
significant judgments and estimates in the preparation of financial statements,
including the following:

- Accounts Receivable. The Company maintains an allowance for doubtful
  accounts for estimated losses resulting from the failure of customers to make
  required payments. The Company reviews the accounts receivable on a periodic
  basis and provides allowances where there is doubt as to the collectability of
  individual balances. In evaluating the collectability of individual receivable
  balances, the Company considers many factors, including the age of the
  balance, the customers payment history, its current credit-worthiness and
  current economic trends.
- Inventories. Inventories are stated at the lower of cost, determined on a
  weighted average basis, or market. Costs of inventories include purchase and
  related costs incurred in bringing the products to their present location and
  condition. Market value is determined by reference to selling prices after the
  balance sheet date or to managements estimates based on prevailing market
  conditions. Management will write down the inventories to market value if it
  is below cost. Management also regularly evaluates the composition of its
  inventories to identify slow-moving and obsolete inventories to determine if a
  valuation allowance is required.
- Impairment. The Company reviews and evaluates its long-lived assets for
  impairment when events or changes in circumstances indicate that the related
  carrying amounts may not be recoverable. An impairment is considered to exist
  if the total estimated future cash flows on an undiscounted basis are less
  than the carrying amount of the assets, including goodwill, if any. An
  impairment loss is measured and recorded based on discounted estimated future
  cash flows. In estimating future cash flows, assets are grouped at the lowest level for which there is identifiable cash
  flows that are largely independent of future cash flows from other asset
  groups.

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- Property, plant and equipment. Property, plant and equipment are stated at
  cost less accumulated depreciation and accumulated impairment losses, if any.
  Gains or losses on disposals are reflected as gain or loss in the year of
  disposal. The cost of improvements that extend the life of property, plant and
  equipment are capitalized. These capitalized costs may include structural
  improvements, equipment and fixtures. All ordinary repair and maintenance
  costs are expensed as incurred.
- Depreciation for financial reporting purposes is provided using the
  straight-line method over the estimated useful lives of the assets as follows:

| |                              | Useful Life
| | ---------------------------- | -----------
| |                              | (In years) 
| | Buildings                    | 20-40      
| | Machinery and motor vehicles | 5-10       
| | Office equipment             | 5          

- Intangible assets. The Companys intangible assets include a ten-year
  exclusive right to use a secret process and computer software. The Company
  accounts for its intangible assets pursuant to FASB ASC Subtopic 350-30,
  General Intangibles Other Than Goodwill. Under ASC 350-30-35, intangibles
  with definite lives continue to be amortized on a straight-line basis over the
  lesser of their estimated useful lives or contractual terms. Intangibles
  within definite lives are evaluated at least annually for impairment by
  comparing the assets estimated fair value with its carrying value, based on
  cash flow methodology.
- Revenue Recognition. Revenue is recognized when the following four revenue
  criteria are met: persuasive evidence of an arrangement exists, delivery has
  occurred, the selling price is fixed or determinable, and collectability is
  reasonably assured. Sales revenue is recognized net of value added and sales
  related taxes, sales discounts and returns at the time when the merchandise is
  delivered to the customer. Based on historical experience, management
  estimates that sales returns are immaterial and has not recorded an allowance
  for estimated sales returns.
- Foreign currency translation. The Company uses the United States dollars
  (US Dollar or US$ or $) for financial reporting purposes. The PRC
  subsidiaries within the Company maintains their books and records in their
  functional currency, Chinese Renminbi (RMB), being the lawful currency in
  the PRC. Assets and liabilities of the PRC subsidiaries are translated from
  RMB into US Dollars using the applicable exchange rates prevailing at the
  balance sheet date. Items on the statement of operations are translated at
  average exchange rates during the reporting period. Equity accounts are
  translated at historical rates. Adjustments resulting from the translation of
  the Companys financial statements are recorded as accumulated other
  comprehensive income. The exchange rates used to translate amounts in RMB into
  U.S. Dollars for the purposes of preparing the consolidated financial
  statements are based on the rates as published on the website of Peoples Bank
  of China. The value of RMB against U.S. dollars and other currencies may
  fluctuate and is affected by, among other things, changes in Chinas political
  and economic conditions. Any significant revaluation of RMB may materially
  affect the Companys results and financial position in terms of U.S. dollar
  reporting.
- Stock-based Compensation. The Company accounts for share-based
  compensation awards to employees in accordance with FASB ASC Topic 718,
  Compensation  Stock Compensation, which requires that share-based payment
  transactions with employees be measured based on the grant-date fair value of
  the equity instrument issued and recognized as compensation expense over the
  requisite service period. The Company accounts for share-based compensation
  awards to non-employees in accordance with FASB ASC Topic 718 and FASB ASC
  Subtopic 505-50, Equity-Based Payments to Non-employees. Under FASB ASC
  Topic 718 and FASB ASC Subtopic 505-50, stock compensation granted to
  non-employees has been determined as the fair value of the consideration
  received or the fair value of equity instrument issued, whichever is more
  reliably measured and is recognized as expenses as the goods or services are
  received.

39

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Recent Accounting Pronouncements

In January 2011, the FASB issued ASU No. 2011-01- Receivables
(Topic 310): Deferral of the Effective Date of Disclosures about Troubled Debt
Restructurings in Update No. 2010-20. The amendments in this update temporarily
delay the effective date of the disclosures about troubled debt restructurings
in ASU No. 2010-20, Receivables (Topic 310): Disclosures about the Credit
Quality of Financing Receivables and the Allowance for Credit Losses, for public
entities. The delay is intended to allow the FASB time to complete its
deliberations on what constitutes a troubled debt restructuring. The effective
date of the new disclosures about troubled debt restructurings for public
entities and the guidance for determining what constitutes a troubled debt
restructuring will then be coordinated. This deferral will have no material
impact on our consolidated financial statements.

In January 2011, the FASB issued ASU No. 2011-02- Receivables
(Topic 310): A Creditors Determination of Whether a Restructuring Is a Troubled
Debt Restructuring. The amendments in this update provide additional guidance to
assist creditors in determining whether a restructuring of a receivable meets
the criteria to be considered a troubled debt restructuring. For public
companies, the new guidance is effective for interim and annual periods
beginning on or after June 15, 2011, and applies retrospectively to
restructurings occurring on or after the beginning of the fiscal year of
adoption. Early application is permitted. The adoption of the provisions in ASU
2011-02 will have no material impact on our consolidated financial statements.

Other accounting standards that have been issued or proposed by
the FASB or other standards-setting bodies that do not require adoption until a
future date are not expected to have a material impact on our consolidated
financial statements upon adoption.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our chief executive
officer and chief financial officer, Ms. Lianyun Han and Mr. Robert Tick,
respectively, evaluated the effectiveness of our disclosure controls and
procedures. The term disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other
procedures of a company that are designed to ensure that information required to
be disclosed by a company in the reports, such as this report, that it files or
submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the SECs rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by a company in the
reports that it files or submits under the Exchange Act is accumulated and
communicated to the companys management, including its principal executive and
principal financial officers, as appropriate to allow timely decisions regarding
required disclosure. Management recognizes that any controls and procedures, no
matter how well designed and operated, can provide only reasonable assurance of
achieving their objectives and management necessarily applies its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.
Based on that evaluation, Ms. Lianyun Han and Mr. Robert Tick concluded that as
of March 31, 2011, and as of the date that the evaluation of the effectiveness
of our disclosure controls and procedures was completed, our disclosure controls
and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial
Reporting.

During the fiscal quarter ended March 31, 2011, there were no
changes in our internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

40

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PART IIOTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits
and legal proceedings which arise in the ordinary course of business. We are
currently not aware of any legal proceedings or claims that would require
disclosure under Item 103 of Regulation S-K. However, litigation is subject to
inherent uncertainties, and an adverse result in these or other matters may
arise from time to time that may harm our business.

ITEM 1A. RISK FACTORS.

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.

We have not sold any unregistered equity securities during the
fiscal quarter ended March 31, 2011 that were not previously disclosed in a
current report on Form 8-K that was filed during that period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. [REMOVED AND RESERVED].

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

EXHIBITS.

|31.1* | Certification of Principal Executive Officer filed
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                         
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.2* | Certification of Principal Financial Officer filed
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                         
|32.1* | Certification of Principal Executive Officer furnished
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.
|32.2* | Certification of Principal Financial Officer furnished
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

DATED: May 16, 2011

NUTRASTAR INTERNATIONAL
INC.

By: /s/
Lianyun
Han    
Lianyun Han      Chief Executive
Officer      (Principal Executive Officer)

By: /s/
Robert
Tick    
Robert Tick      Chief Financial
Officer      (Principal Financial Officer)

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EXHIBIT INDEX

|Exhibit |                                                                                                                                                                             
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                 
|31.1*   | Certification of Principal Executive Officer filed
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                         
|31.2*   | Certification of Principal Financial Officer filed
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                         
|32.1*   | Certification of Principal Executive Officer furnished
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.
|32.2*   | Certification of Principal Financial Officer furnished
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.

* Filed herewith.

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