UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

(Mark One)

QQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934For the quarterly period ended: March 31, 2009

£TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934For the transition period from ____________ to _____________

Commission File Number: 000-52899

YZAPP INTERNATIONAL INC.

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


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 Q    
No  £



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 companyQ


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

Yes £    
No Q

The number of shares outstanding of each of the issuers
classes of common equity, as of May 13, 2009 is as follows:

Class of Securities
      Shares OutstandingCommon Stock, $0.001 par
      value
      11,746,041


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TABLE OF CONTENTS

|         | PART I                                                                                      | Page
|-------- | ------------------------------------------------------------------------------------------- | ----
|         |                                                                                             |     
|Item 1.  | Financial Statements                                                                        | 1   
|Item 2.  | Managements Discussion and Analysis of
      Financial Condition and Results of Operations | 19  
|Item 3.  | Quantitative and Qualitative
      Disclosures About Market Risk                            | 27  
|Item 4.  | Controls and Procedures                                                                     | 27  
|         |                                                                                             |     
|         | PART II                                                                                     |     
|         |                                                                                             |     
|Item 1.  | Legal Proceedings                                                                           | 28  
|Item 1A. | Risk Factors                                                                                | 28  
|Item 2.  | Unregistered Sales of Equity
      Securities and Use of Proceeds                           | 28  
|Item 3.  | Defaults Upon Senior Securities                                                             | 28  
|Item 4.  | Submission of Matters to a Vote
      of Securities Holders                                 | 28  
|Item 5.  | Other Information                                                                           | 28  
|Item 6.  | Exhibits                                                                                    | 28  

i

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ITEM 1. FINANCIAL STATEMENTS.

YZAPP INTERNATIONAL INC. AND SUBSIDIARIES

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                                                                | Page
|----------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                                                                                                                                |     
|Condensed Consolidated Balance Sheets as of
      March 31, 2009 (Unaudited) and December 31, 2008 (Audited)                                    | 2   
|Condensed Consolidated Statements of Income and
      Comprehensive Income (Unaudited) for the three months ended March 31, 2009
      and 2008 | 3   
|Condensed Consolidated Statements of Cash
      Flows (Unaudited) for the three months ended March 31, 2009 and 2008                            | 4   
|Notes to Condensed Consolidated Financial Statements
      (Unaudited)                                                                          | 5-18











- 1 -

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**YZAPP INTERNATIONAL INC. AND SUBSIDIARIES** 
**CONDENSED CONSOLIDATED BALANCE SHEETS**  (AMOUNTS
EXPRESSED IN US DOLLAR)



|                                                                                                                            |   | March 31,  |  |   | December 31, | 
|--------------------------------------------------------------------------------------------------------------------------- | - | ---------- |  | - | ------------ | 
|                                                                                                                            |   | 2009       |  |   | 2008         | 
|                                                                                                                            |   | Unaudited  |  |   | Audited      | 
|ASSETS                                                                                                                      |  
|CURRENT ASSETS                                                                                                              |   |            |  |   |              | 
|Cash and cash equivalents                                                                                                   | $ | 11,980,067 |  | $ | 9,198,243    | 
|Accounts receivable, net                                                                                                    |   | 426,118    |  |   | 283,822      | 
|Other receivables                                                                                                           |   | 10,240     |  |   | 14,105       | 
|Inventories                                                                                                                 |   | 570,321    |  |   | 1,168,079    | 
|Total current assets                                                                                                        |   | 12,986,746 |  |   | 10,664,249   | 
|OTHER ASSETS                                                                                                                |   |            |  |   |              | 
|Intangible assets, net                                                                                                      |   | 3,073,619  |  |   | 3,183,995    | 
|Property, plant and equipment, net                                                                                          |   | 10,758,154 |  |   | 10,902,976   | 
|                                                                                                                            |   |            |  |   |              | 
|Total assets                                                                                                                | $ | 26,818,519 |  | $ | 24,751,220   | 
|                                                                                                                            |   |            |  |   |              | 
|LIABILITIES AND SHAREHOLDERS'
      EQUITY                                                                                  |  
|CURRENT LIABILITIES                                                                                                         |   |            |  |   |              | 
|Accounts payable                                                                                                            | $ | 12,950     |  | $ | 3,206        | 
|Other payables and accruals                                                                                                 |   | 332,287    |  |   | 472,959      | 
|Payable for intangibles  Current portion                                                                                   |   | 877,719    |  |   | 877,886      | 
|Income tax payable                                                                                                          |   | 140,124    |  |   | 119,486      | 
|Due to related parties                                                                                                      |   | 72,832     |  |   | 8,998        | 
|Acquisition payable                                                                                                         |   | 8,726,992  |  |   | 8,778,861    | 
|Total current liabilities                                                                                                   |   | 10,162,904 |  |   | 10,261,396   | 
|NON-CURRENT LIABILITIES                                                                                                     |   |            |  |   |              | 
|Payable for intangibles, net of current portion                                                                             |   | 877,719    |  |   | 877,886      | 
|Total liabilities                                                                                                           |   | 11,040,623 |  |   | 11,139,282   | 
|                                                                                                                            |   |            |  |   |              | 
|COMMITMENTS AND CONTINGENCIES (Note 15)                                                                                     |   |            |  |   |              | 
|                                                                                                                            |   |            |  |   |              | 
|SHAREHOLDERS' EQUITY                                                                                                        |   |            |  |   |              | 
|Preferred Stock, $0.001 par value, 1,000,000 shares
      authorized, 727,520 shares issued and outstanding                 |   | 727        |  |   | 727          | 
|Common stock, $0.001 par value, 50,000,000 shares
      authorized, 11,746,041 shares and
      none issued and outstanding |   | 11,746     |  |   | 11,746       | 
|Additional paid-in capital                                                                                                  |   | 2,192,716  |  |   | 2,192,716    | 
|Statutory reserves                                                                                                          |   | 1,326,239  |  |   | 1,326,239    | 
|Retained earnings                                                                                                           |   | 11,302,013 |  |   | 9,131,744    | 
|Accumulated other comprehensive
      income                                                                                |   | 944,455    |  |   | 948,766      | 
|Total shareholders' equity                                                                                                  |   | 15,777,896 |  |   | 13,611,938   | 
|                                                                                                                            |   |            |  |   |              | 
|Total liabilities and shareholders' equity                                                                                  | $ | 26,818,519 |  | $ | 24,751,220   | 
|                                                                                                                            |   |            |  |   |              | 
|See accompanying notes to condensed
      consolidated financial statements                                                 |  

- 2 -

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YZAPP INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(AMOUNTS EXPRESSED IN US DOLLAR)

|                                                    |   | Three months ended |  
|--------------------------------------------------- | - | ------------------ | -
|                                                    |   | March 31,          |  
|                                                    |   | 2009               |  
|                                                    |   |                    |  
|NET REVENUE                                         | $ | 4,642,724          |  
|                                                    |   |                    |  
|Cost of sales                                       |   | (1,755,704         | )
|                                                    |   |                    |  
|GROSS PROFIT                                        |   | 2,887,020          |  
|Selling expenses                                    |   | (111,532           | )
|General and administrative expenses                 |   | (303,525           | )
|                                                    |   |                    |  
|Income from operations                              |   | 2,471,963          |  
|Other income                                        |   |                    |  
|Interest income                                     |   | 12,746             |  
|Exchange gain                                       |   | 1,600              |  
|Other                                               |   | 152                |  
|Total other income                                  |   | 14,498             |  
|                                                    |   |                    |  
|Income before income taxes                          |   | 2,486,461          |  
|                                                    |   |                    |  
|Provision for income taxes                          |   | (316,192           | )
|NET INCOME                                          |   | 2,170,269          |  
|OTHER COMPREHENSIVE INCOME:                         |   |                    |  
|Foreign currency translation adjustments            |   | (4,311             | )
|TOTAL COMPREHENSIVE INCOME                          | $ | 2,165,958          |  
|Earnings per share                                  |   |                    |  
|Basic                                               | $ | 0.001              |  
|Diluted                                             | $ | 0.001              |  
|Weighted average number of shares
      outstanding |   |                    |  
|Basic                                               |   | 1,466,786,041      |  
|Diluted                                             |   | 1,466,786,041      |  

See accompanying notes to condensed consolidated financial
statements

- 3 -

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**YZAPP INTERNATIONAL INC. AND SUBSIDIARIES** 
**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**(UNAUDITED)(AMOUNTS EXPRESSED IN US DOLLAR)

|                                                                                    |   | Three months ended |  
|----------------------------------------------------------------------------------- | - | ------------------ | -
|                                                                                    |   | March 31,          |  
|                                                                                    |   | 2009               |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                               |   |                    |  
|Net income                                                                          | $ | 2,170,269          |  
|Adjustments to reconcile net income
      to cash provided by operating activities: |   |                    |  
|Depreciation and
      amortization                                                 |   | 252,527            |  
|Loss from disposition of property,
      plant and equipment                        |   | -                  |  
|Impairment losses on
      trade and other receivables                              |   | -                  |  
|Loss on write-down of inventories                                                   |   | -                  |  
|(Increase) decrease in assets:                                                      |   |                    |  
|Accounts receivable                                                                 |   | (142,354           | )
|Deposits
      and other receivables                                                |   | 3,862              |  
|Inventories                                                                         |   | 597,554            |  
|Trade
      receivable due from related parties                                     |   | -                  |  
|Increase (decrease) in liabilities:                                                 |   |                    |  
|Accounts
      payable                                                              |   | 9,745              |  
|Other payables and
      accruals                                                   |   | (140,586           | )
|Income
      tax payable                                                            |   | 20,662             |  
|Trade payable due to
      related parties                                          |   | 2,250              |  
|Net cash
      provided by operating activities                                     |   | 2,773,929          |  
|                                                                                    |   |                    |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                               |   |                    |  
|Purchase of property, plant and equipment                                           |   | -                  |  
|Payment of acquisition payable                                                      |   | (50,269            | )
|Net cash used in investing
      activities                                         |   | (50,269            | )
|                                                                                    |   |                    |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                               |   |                    |  
|Advances from related parties                                                       |   | 61,588             |  
|Net cash provided by financing
      activities                                     |   | 61,588             |  
|                                                                                    |   |                    |  
|Foreign currency translation adjustment                                             |   | (3,424             | )
|                                                                                    |   |                    |  
|INCREASE IN CASH AND CASH EQUIVALENTS                                               |   | 2,781,824          |  
|                                                                                    |   |                    |  
|CASH AND CASH EQUIVALENTS, at the beginning of the period                           |   | 9,198,243          |  
|                                                                                    |   |                    |  
|CASH AND CASH EQUIVALENTS, at the end of the period                                 | $ | 11,980,067         |  
|                                                                                    |   |                    |  
|NON-CASH INVESTING AND FINANCING ACTIVITIES:                                        |   |                    |  
|Machinery acquired in exchange for
      issuance of capital                        | $ | -                  |  
|                                                                                    |   |                    |  
|SUPPLEMENTAL DISCLOSURE INFORMATION                                                 |   |                    |  
|Income taxes paid                                                                   | $ | 356,091            |  
|                                                                                    |   |                    |  
|See accompanying notes to condensed
      consolidated financial statements         |  

- 4 -

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YZAPP INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS
PERIOD ENDED MARCH 31, 2009 AND 2008

NOTE 1

DESCRIPTION OF BUSINESS AND
ORGANIZATION

YzApp International Inc. (the Company or YzApp) was
incorporated in the State of Nevada on December 22, 2002. On December 23, 2008,
the Company completed a reverse acquisition of New Zealand WAYNES New Resources
Development Co., Ltd. (New Resources). As a result of the reverse acquisition
of New Resources, the Company is no longer a shell company and active business
operations have been revived.

As of March 31, 2009, details of the subsidiaries of the
Company are as follows:

|Subsidiaries names                                                                  | Domicile and date of incorporation               | Paid-up capital | Percentage of effective ownership | Principal activities                                                                                        
|------------------------------------------------------------------------------------ | ------------------------------------------------ | --------------- | --------------------------------- | ------------------------------------------------------------------------------------------------------------
|New Zealand WAYNES
      New Resources Development
      Co., Ltd (New Resources) | British Virgin Islands March 13, 2008            | $50,000         | 100%                              | Holding company of the other subsidiaries                                                                   
|                                                                                     |                                                  |                 |                                   |                                                                                                             
|Heilongjiang Shuaiyi New Energy Development Co., Ltd(Heilongjiang Shuaiyi)         | Peoples Republic of China (PRC) July 11, 2006 | RMB60,000,000   | 100%                              | Principally engaged in investment holding                                                                   
|                                                                                     |                                                  |                 |                                   |                                                                                                             
|Daqing Shuaiyi Biomass
      Technology Co., Ltd. (Daqing Shuaiyi)                 | PRC
      August 8, 2005                         | RMB10,000,000   | 100%                              | Growing and sales
      of Chinese Caterpillar Fungus,
      which is widely used for Chinese
      medicine
|                                                                                     |                                                  |                 |                                   |                                                                                                             
|Harbin Shuaiyi Green and Specialty Food Trading LLP. (Harbin
      Shuaiyi)        | PRC May
      18, 2001                           | RMB1,500,000    | 100%                              | Sales of agricultural products                                                                              

- 5 -

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YZAPP INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS
PERIOD ENDED MARCH 31, 2009 AND 2008

NOTE 2

SUMMARIES OF
SIGNIFICANT ACCOUNTING POLICIES

Principle of consolidation

These condensed consolidated financial statements include the
financial statements of YzApp and its subsidiaries. All significant
inter-company balances or transactions have been eliminated on consolidation.

Basis of preparation

These condensed consolidated financial statements for the
interim periods are unaudited. In the opinion of management, all adjustments and
disclosures necessary for a fair presentation of these interim statements have
been included. The results reported in these condensed consolidated financial
statements are not necessarily indicative of the results that may be reported
for the entire year. The accompanying condensed consolidated financial
statements have been prepared in accordance with the rules and regulations of
the Securities and Exchange Commission and do not include all information and
footnotes necessary for a complete presentation of financial statements in
conformity with accounting principles generally accepted in the United States.
These interim condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and footnotes included in
Companys annual report on Form 10-K for the year ended December 31, 2008.

Use of estimates

The preparation of these condensed consolidated 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 consolidated 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.

Foreign currency

The Company uses the United States dollars (US Dollar or
US$ or $) for financial reporting purposes. The Company maintains the books
and records in its functional currency, Chinese Renminbi (RMB), being the
primary currency of the economic environment in which its operations are
conducted. In general, the Company translates its assets and liabilities into
U.S. dollars using the applicable exchange rates prevailing at the balance sheet
date, and the statement of income is 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 were
as follows:-

|                                                 | As of March 31, 2009         | As of December 31, 2008
|------------------------------------------------ | ---------------------------- | -----------------------
|Balance sheet items, except for equity accounts  | US$1=RMB6.8359               | US$1=RMB6.8346         
|                                                 |                              |                        
|                                                 | Three months ended March 31,
|                                                 | 2009                         | 2008                   
|Items in the statements of income and cash flows | US$1=RMB6.8357               | US$1=RMB7.1692         

- 6 -

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YZAPP INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS
PERIOD ENDED MARCH 31, 2009 AND 2008

Research and development costs

Research and development costs are expensed to operations as
incurred. Research and development costs were $8,777 and $7,107 for the three
months ended March 31, 2009 and 2008, respectively.

Advertising costs

The Company expenses all advertising costs as incurred.
Advertising costs charged to selling expenses were $1,097 and $3,157 for the
three months ended March 31, 2009 and 2008, respectively.

Shipping and handling costs

Substantially all costs of shipping and handling of products to
customers are included in selling expenses. Shipping and handling costs for the
three months ended March 31, 2009 and 2008 were nil and $289, respectively.

Earnings per share

All per share data including earnings per share has been
retroactively restated to reflect the reverse acquisition on December 23, 2008
whereby the 689,390 shares of preferred stock issued by YzApp (the nominal
acquirer) to the shareholder of New Resources (the nominal acquiree) are deemed
to be the number of shares outstanding for the period prior to the reverse
acquisition. For the period after the reverse acquisition, the number of shares
considered to be outstanding is the actual number of shares outstanding during
that period. As holders of Series A Preferred Stock vote with the holders of
common stock on all matters on a an as-converted to common stock basis, basic
and diluted earnings per share have been calculated and presented on the basis
that all shares of the Companys common stock and Series A Preferred Stock are
considered a single class and on an as-converted to common stock basis.

Recent Accounting Pronouncement Adopted

Effective January 1, 2009, the first day of fiscal 2009, the
Company adopted Financial Accounting Standards Board (FASB) Staff Position
Financial Accounting Standard 142-3 (FSP FAS 142-3), Determination of the
Useful Life of Intangible Assets. FSP FAS 142-3 amends the factors that should
be considered in developing renewal or extension assumptions used to determine
the useful life of a recognized intangible asset under SFAS No. 142 ("SFAS
142"), Goodwill and Other Intangible Assets. The Company will apply FSP FAS
142-3 prospectively to intangible assets acquired subsequent to the adoption
date. The adoption of FSP FAS 142-3 had no impact on the Companys Condensed
Consolidated Financial Statements.

Effective January 1, 2009, the Company adopted, Statement of
Financial Accounting Standards No. 161 (SFAS 161), Disclosures about
Derivative Instruments and Hedging Activities, which amends and expands
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS 161 requires tabular disclosure of the
fair value of derivative instruments and their gains and losses. This Statement
also requires disclosure regarding the credit-risk related contingent features
in derivative agreements, counterparty credit risk, and strategies and
objectives for using derivative instruments. The adoption of SFAS 161 did not
have a material impact on the Companys Condensed Consolidated Financial
Statements.

During 2008, the Company adopted FASB Staff Position No. 157-2
("FSP FAS 157-2"), "Effective Date of FASB Statement 157,"which deferred the
provisions of SFAS 157 for nonfinancial assets and liabilities to the first
fiscal period beginning after November 15, 2008. Deferred nonfinancial assets
and liabilities include items such as goodwill and other nonamortizable
intangibles. Effective January 1, 2009, we adopted the provisions of SFAS 157
for nonfinancial assets and liabilities. The adoption of FSP FAS 157-2 did not
have a material impact on the Companys Condensed Consolidated Financial
Statements.

- 7 -

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YZAPP INTERNATIONAL INC. AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2009 AND 2008

Effective January 1, 2009, the Company adopted Statement of Financial Accounting Standards No. 160 ("SFAS 160"), "Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB No. 51." SFAS 160 amends Accounting Research
Bulletin No. 51, "Consolidated Financial Statements" to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a
subsidiary, which is sometimes referred to as minority interest, is an ownership interest in the consolidated entity that should be reported as equity. Among other requirements, this Statement requires that the consolidated net income attributable
to the parent and the noncontrolling interest be clearly identified and presented on the face of the consolidated income statement. SFAS 160 was effective beginning in the Companys fiscal 2009. SFAS 160 requires prospective application, except
for the presentation and disclosure requirements, which must be applied retrospectively to all periods presented. The adoption of SFAS 160 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

Effective January 1, 2009, the Company adopted Statement of Financial Accounting Standards No. 141 (revised 2007) ("SFAS 141R"), "Business Combinations." SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures
in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in an acquiree and the goodwill acquired. The Company will apply SFAS 141R to any business combinations subsequent to adoption. In
addition, this Statement requires that any additional reversal of deferred tax asset valuation allowance established in connection with our fresh start reporting on January 7, 1998 be recorded as a component of income tax expense rather than as a
reduction to the goodwill established in connection with the fresh start reporting.

In April 2009, the FASB issued FASB Staff Position Financial Accounting Standard 141R-1 ("FSP FAS 141R-1"), "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies." FSP FAS 141R-1 amends SFAS
141R to require that an acquirer recognize at fair value, at the acquisition date, an asset acquired or a liability assumed in a business combination that arises from a contingency if the acquisition-date fair value of that asset or liability can be
determined during the measurement period. If the acquisition-date fair value of such an asset acquired or liability assumed cannot be determined, the acquirer should apply the provisions of SFAS 5, " Accounting for Contingencies", to
determine whether the contingency should be recognized at the acquisition date or after such date. FSP FAS 141R-1 is effective for business combinations whose acquisition date is on or after the first reporting period beginning after December 15,
2008. Accordingly, the Company adopted this FSP during the first quarter of 2009. The adoption of FSP FAS 141R-1 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

New accounting pronouncement to be adopted

In December 2008, the FASB issued FASB Staff Position FAS 132(R)-1 (FSP FAS 132(R)-1), Employers Disclosures about Postretirement Benefit Plan Assets. The FSP expands the disclosure requirements about plan assets for
defined benefit pension plans and postretirement plans. The Company is required to adopt FSP FAS 132(R)-1 in the fourth quarter of 2009. The Company is currently in the process of assessing the impact that this FSP may have on the disclosures in the
Companys Condensed Consolidated Financial Statements.

In April 2009, the FASB issued FASB Staff Position No. FAS 107-1 and APB 28-1 ("FSP FAS 107-1 and APB 28-1"), "Interim Disclosures about Fair Value of Financial Instruments." The FSP amends SFAS 107, "Disclosure about Fair Value of Financial
Instruments," and Accounting Principles Board Opinion No. 28, "Interim Financial Reporting," to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial
statements. The Company is required to adopt FSP FAS 107-1 and APB 28-1 in the
second quarter of 2009. The Company does not currently believe that adopting
this FSP will have a material impact on the Companys Condensed Consolidated
Financial Statements.

- 8 -

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YZAPP INTERNATIONAL INC. AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2009 AND 2008

In April 2009, the FASB issued FASB Staff Position No. FSP FAS
115-2 and FAS 124-2 ("FSP FAS 115-2 and FAS 124-2"), "Recognition and
Presentation of Other-Than-Temporary Impairments." The FSP amends the
other-than-temporary impairment guidance in U.S. GAAP for debt securities to
make the guidance more operational and to improve the presentation and
disclosure of other-than-temporary impairments on debt and equity securities in
the financial statements. This FSP does not amend existing recognition and
measurement guidance related to other-than-temporary impairments of equity
securities. The Company is required to adopt FSP FAS 115-2 and FAS 124-2 in the
second quarter of 2009. The Company does not currently believe that adopting
this FSP will have a material impact on the Companys Condensed Consolidated
Financial Statements.

In April 2009, the FASB issued FASB Staff Position No. FAS
157-4 ("FSP FAS 157-4"), " Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly." The FSP provides additional guidance for
estimating fair value in accordance with FASB Statement No. 157, "Fair Value
Measurements" , when the volume and level of activity for the asset or liability
have significantly decreased. This FSP also includes guidance on identifying
circumstances that indicate a transaction is not orderly. The Company is
required to adopt FSP FAS 157-4 in the second quarter of 2009. The Company does
not currently believe that adopting this FSP will have a material impact on the
Companys Condensed 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
Condensed Consolidated Financial Statements upon adoption.

NOTE 3

ACCOUNTS
RECEIVABLE, NET

Accounts receivable consisted of the following:

|                                   |   | March 31, |  |   | December 31, | 
|---------------------------------- | - | --------- |  | - | ------------ | 
|                                   |   | 2009      |  |   | 2008         | 
|                                   |   | Unaudited |  |   | Audited      | 
|                                   |   |           |  |   |              | 
|Accounts receivable                | $ | 426,118   |  | $ | 283,822      | 
|Less: Allowance for doubtful debts |   | -         |  |   | -            | 
|Accounts receivable, net           | $ | 426,118   |  | $ | 283,822      | 

- 9 -

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YZAPP INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)FOR THE THREE MONTHS
PERIOD ENDED MARCH 31, 2009 AND 2008

|NOTE 4 **OTHER RECEIVABLES**                                     |  |   |            |   |           |            |   |              | 
|---------------------------------------------------------------- |  | - | ---------- | - | --------- | ---------- | - | ------------ | 
|                                                                 |  |   |            |   |           |            |   |              | 
|Other receivables consist of the following:                      |  |   |            |   |           |            |  
|                                                                 |  |   |            |   | March 31, |            |   | December 31, | 
|                                                                 |  |   |            |   | 2009      |            |   | 2008         | 
|                                                                 |  |   |            |   | Unaudited |            |   | Audited      | 
|                                                                 |  |   |            |   |           |            |   |              | 
|Other receivables                                                |  | $ | 10,240     |   | $         | 14,105     |  
|Less: Allowance for doubtful debts                               |  |   | -          |   |           | -          |  
|Other receivables, net                                           |  | $ | 10,240     |   | $         | 14,105     |  
|                                                                 |  |   |            |   |           |            |   |              | 
|NOTE 5 **INVENTORIES**                                           |  |   |            |   |           |            |   |              | 
|                                                                 |  |   |            |   |           |            |   |              | 
|Inventories by major categories are summarized as
      follows: |  |   |            |   |           |            |  
|                                                                 |  |   |            |   | March 31, |            |   | December 31, | 
|                                                                 |  |   |            |   | 2009      |            |   | 2008         | 
|                                                                 |  |   |            |   | Unaudited |            |   | Audited      | 
|                                                                 |  |   |            |   |           |            |   |              | 
|Raw materials                                                    |  | $ | 140,197    |   | $         | 147,824    |  
|Work in progress                                                 |  |   | 251,303    |   |           | 832,680    |  
|Finished goods                                                   |  |   | 178,821    |   |           | 187,575    |  
|                                                                 |  |   |            | $ | 570,321   |            | $ | 1,168,079    | 
|                                                                 |  |   |            |   |           |            |   |              | 
|                                                                 |  |   |            |   |           |            |   |              | 
|NOTE 6 **INTANGIBLE ASSETS, NET**                                |  |   |            |   |           |            |   |              | 
|                                                                 |  |   |            |   |           |            |   |              | 
|Intangible assets, net consisted of the
      following:         |  |   |            |   |           |            |  
|                                                                 |  |   |            |   | March 31, |            |   | December 31, | 
|                                                                 |  |   |            |   | 2009      |            |   | 2008         | 
|                                                                 |  |   |            |   | Unaudited |            |   | Audited      | 
|                                                                 |  |   |            |   |           |            |   |              | 
|Computer software, cost                                          |  | $ | 1,453      |   | $         | 1,453      |  
|Exclusive right to use a secret process, cost                    |  |   | 4,390,358  |   |           | 4,391,193  |  
|Less: Accumulated amortization                                   |  |   | (1,318,192 | ) |           | (1,208,651 | )
|                                                                 |  |   |            | $ | 3,073,619 |            | $ | 3,183,995    | 

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 Caterpillar Fungus, 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 expenses for the three months ended March 31, 2009
and 2008 were $109,774 and $104,788, respectively.

- 10 -

---

YZAPP INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS
PERIOD ENDED MARCH 31, 2009 AND 2008

NOTE 7

PROPERTY,
PLANT AND EQUIPMENT, NET

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

|                               |   | March 31,  |   |   | December 31, |  
|------------------------------ | - | ---------- | - | - | ------------ | -
|                               |   | 2009       |   |   | 2008         |  
|                               |   | Unaudited  |   |   | Audited      |  
|Cost:                          |   |            |   |   |              |  
|Buildings                      | $ | 11,645,326 |   | $ | 11,647,541   |  
|Office equipment               |   | 9,315      |   |   | 9,317        |  
|Machinery                      |   | 98,884     |   |   | 98,903       |  
|Motor vehicles                 |   | 54,780     |   |   | 54,790       |  
|Total cost                     |   | 11,808,305 |   |   | 11,810,551   |  
|Less: Accumulated depreciation |   | (1,050,151 | ) |   | (907,575     | )
|Net book value                 | $ | 10,758,154 |   | $ | 10,902,976   |  

Depreciation expenses for the three months ended March 31, 2009
and 2008 were $142,753 and $173,617, respectively.

NOTE 8

**OTHER PAYABLES AND ACCRUALS**

|Other payables and accruals consisted of the following: |   |           |  |   |              | 
|------------------------------------------------------- | - | --------- |  | - | ------------ | 
|                                                        |   | March 31, |  |   | December 31, | 
|                                                        |   | 2009      |  |   | 2008         | 
|                                                        |   | Unaudited |  |   | Audited      | 
|                                                        |   |           |  |   |              | 
|Accrued staff costs                                     | $ | 283,555   |  | $ | 235,421      | 
|Other taxes payable                                     |   | 43,676    |  |   | 232,481      | 
|Other payables                                          |   | 5,056     |  |   | 5,057        | 
|                                                        |   |           |  |   |              | 
|                                                        | $ | 332,287   |  | $ | 472,959      | 

NOTE 9

**PAYABLE FOR
      INTANGIBLES**

As described in Note 6, the Company purchased an exclusive
right from an independent party for a secret process and method for a stated
value of RMB30,000,000 payable over 5 years from the date of purchase. The
agreement provides that all payments by the Company for the secret process and
method will be refundable if the secret process and method proves ineffective.
Under APB21, Interest on Receivables and Payables, the payable for intangibles
are stated without imputed interest as the noninterest factor fairly represents
the warranty for performance.

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

|Period ending March 31, |   |           |  
|----------------------- | - | --------- | -
|2010                    | $ | 877,719   |  
|2011                    |   | 877,719   |  
|2012 and thereafter     |   | -         |  
|Total                   |   | 1,755,438 |  
|Less: Current portion   |   | (877,719  | )
|Non-current portion     | $ | 877,719   |  

- 11 -

---

YZAPP INTERNATIONAL INC. AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2009 AND 2008

NOTE 10

ACQUISITION PAYABLE

The acquisition payable represents the transfer price of RMB60,000,000 payable by New Resources for the acquisition of 100% equity interest in Heilongjiang Shuaiyi. As discussed in Note 15, the acquisition payable is due for payment in full on or
before December 1, 2009 by New Resources to Shuaiyi Founders who are also shareholders of the Company. During the period, the Company paid $50,269, as a part of the transfer price, to the Shuaiyi Founders who have agreed extend a 10-year
subordinated loan of a same amount as the transfer price of RMB60,000,000 to the Company upon receipt of the full transfer price.

NOTE 11

SHAREHOLDERS EQUITY

Series A Voting Convertible Preferred Stock

In accordance with the Companys Articles of Incorporation, the Companys Board of Directors unanimously approved the filing of a Certificate of Designation designating and authorizing the issuance of up to 800,000 shares of our Series A
Voting Preferred Stock. The Certificate of Designation was filed on December 22, 2008. The holders of the Companys Series A Preferred Stock are entitled to vote on all matters together with all other classes of stock on an as-converted to
common stock basis. Holders of Series A Preferred Stock have protective class voting veto rights on matters, such as business combination transactions, payment of dividends, the issuance of other classes of stock with senior rights, changes to our
charter documents and stock redemptions. Shares of Series A Preferred Stock have a senior liquidation payment preference in the event of a liquidation or sale of the Company.

Shares of Series A Preferred Stock will be, upon the occurrence of certain events, convertible into shares of common stock on the basis of one share of Series A Preferred Stock for 2,000 shares of common stock, which will be adjusted to a conversion
ratio of one share of Series A Preferred Stock for 17.45 shares of common stock upon the effectiveness of a planned 1-for-114.59 reverse split of the Companys outstanding common stock, as discussed in Note 17. All shares of Series A Preferred
Stock will be automatically converted into common stock upon the effectiveness of such reverse stock split. Holders of Series A Preferred Stock vote with the holders of common stock on all matters on an as-converted to common stock basis.

As of March 31, 2009 and December 31, 2008, the Company had 727,520 shares of Series A Preferred Stock issued and outstanding.

- 12 -

---

YZAPP INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS
PERIOD ENDED MARCH 31, 2009 AND 2008

NOTE 12

INCOME TAXES

The PRC subsidiaries within the Group are subject to PRC income
taxes on an entity basis on income arising in or derived from the tax
jurisdiction in which they operate, i.e. the PRC. The statutory PRC Enterprise
Income Tax (EIT) rate for the Companies PRC subsidiaries was generally 33%
for periods before January 1, 2008. However, one of the Companies subsidiaries,
Daqing Shuaiyi, being engaged in growing and sales of agricultural products is
entitled to a preferential EIT treatment whereby Daqing Shuaiyi was granted an
EIT holiday for the two years ended December 31, 2007 and 2006 and a 50%
reduction on the EIT rate for the year ended December 31, 2008 and the two years
ending 2009 and 2010.

|The Companys income tax expense consisted of: |   |                              |   |   |           |  
|---------------------------------------------- | - | ---------------------------- | - | - | --------- | -
|                                               |   | Three months ended March 31, |  
|                                               |   | 2009                         |   |   | 2008      |  
|                                               |   | Unaudited                    |   |   | Unaudited |  
|                                               |   |                              |   |   |           |  
|Current  PRC EIT                              | $ | (316,192                     | ) | $ | (209,279  | )

On March 16, 2007, the PRC government promulgated a new tax
law, Chinas Unified Enterprise Income Tax Law (New EIT Law), which took
effect from January 1, 2008. Under the New EIT Law, foreign-owned enterprises as
well as domestic companies are subject to a uniform tax rate of 25%. The New EIT
Law provides for a five-year transition period from its effective date for those
enterprises which were established before the promulgation date of the New EIT
Law and which were entitled to a preferential EIT treatment. Accordingly, Daqing
Shuaiyi has continued to be entitled to the 50% reduction on its EIT rate for
the year ended December 31, 2008 and the two years ending 2009 and 2010.

- 13 -

---

YZAPP INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE
MONTHS PERIOD ENDED MARCH 31, 2009 AND 2008

**NOTE 13**

**RELATED PARTY
TRANSACTIONS**

**(a)**

**Due to related parties**

Due to related parties consisted of the following:

|                                                                                     |      |  |   | March 31, |  |   | December 31, | 
|------------------------------------------------------------------------------------ | ---- |  | - | --------- |  | - | ------------ | 
|                                                                                     |      |  |   | 2009      |  |   | 2008         | 
|                                                                                     |      |  |   | Unaudited |  |   | Audited      | 
|Due to related company:                                                              |      |  |   |           |  |   |              | 
|- Heilonjiang Shuaiyi Technology Development Co.,
      Ltd.  (Shuaiyi Technology) | (i)  |  | $ | 11,246    |  | $ | 8,998        | 
|- Ms.Lianyun Han                                                                     | (ii) |  |   | 61,586    |  |   | -            | 
|                                                                                     |      |  |   |           |  |   |              | 
|                                                                                     |      |  | $ | 72,832    |  | $ | 8,998        | 

(i) Shuaiyi Technology and the Company are under common control
and management. The amount payable were rentals on land payable by the Company

(ii) Ms. Lianyun Han is the CEO and Chairman of the Company.

Due to Shuaiyi Technology relates to the land rental payable to
Shuaiyi Technology.

The amounts due to related parties were non-interest bearing,
unsecured and without any fixed term of repayment.

(b)

Purchase of
goods

For the three months ended March 31, 2009 and 2008, the Company
purchased rice amounting to $395,702 and $328,592, respectively, from Shuaiyi
Technology.

(c)

Lease of land

For the three months ended March 31, 2009 and 2008, the Company
paid rental expense of $2,249 and $2,145 respectively, for the use of land under
an operating lease with Shuaiyi Technology.

- 14 -

---

YZAPP INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS
PERIOD ENDED MARCH 31, 2009 AND 2008

**NOTE** **14**

**CONCENTRATION OF
RISK**

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

As of March 31, 2009 and December 31, 2008, 100% 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, 2009 and 2008, all of the
Companys sales arose in the PRC. In addition, all accounts receivable as of
March 31, 2009 and December 31, 2008 also arose in the PRC.

There was no single customer who accounted for more than 10% of
the Companys revenue for either the three months ended March 31, 2009 or 2008.

As of March 31, 2009, the largest four customers accounted for
21%, 14%, 14% and 10% of accounts receivable of the Company. As of December 31,
2008, the largest three customers accounted for 32%, 23% and 15% of accounts
receivable of the Company. Except as aforesaid, there was no other single
customer who accounted for more than 10% of the Companys accounts receivable as
of March 31, 2009 or December 31, 2008.

(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** **15**

**COMMITMENTS AND CONTINGENCIES**

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

The Company has entered into tenancy agreements for the lease
of exhibition hall and land with a third party and a related company (see Note
13(a)), respectively, for the purposes of the operation of its subsidiaries. The
Companys commitments for minimum lease payments under this operating lease for
the next five years and thereafter as of March 31, 2009 are as follows:

|Remainder of 2009 | $ | 23,863  | 
|----------------- | - | ------- | 
|2010              |   | 31,817  | 
|2011              |   | 8,997   | 
|2012              |   | 8,997   | 
|2013              |   | 8,997   | 
|Thereafter        |   | 125,953 | 
|                  |   |         | 
|Total             | $ | 208,624 | 

- 15 -

---

YZAPP INTERNATIONAL INC. AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2009 AND 2008

(b)

PRC employee costs

According to the prevailing laws and regulations of the PRC, the Companys subsidiaries 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 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)

Transfer price for equity interest in Heilongjiang Shuaiyi

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

On March 10, 2009, New Resources obtained the approval from the relevant PRC business bureau for the extension of time allowed for the payment of the transfer price to one year until December 1, 2009. The Company has engaged financial advisors with
a view to raising additional capital for the Company. The Company believes that it will be able to make the payment for the transfer price within the time allowed by the relevant PRC business bureau and therefore has not accrued any amount related
to this contingency. However, there can be no assurance that the Company will be successful in raising sufficient capital for the purpose of the payment of the transfer price to the Shuaiyi Founders.

- 16 -

---

YZAPP INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS
PERIOD ENDED MARCH 31, 2009 AND 2008

NOTE 16

SEGMENT INFORMATION

The
Company operates in two business segments identified by product, Chinese
Caterpillar Fungus and other agricultural products. The Chinese Caterpillar
Fungus segment consists of the growing and sales of Chinese Caterpillar Fungus,
which business is conducted through the Companys subsidiary, Daqing Shuaiyi.
The other agricultural products segment consists of the sales of rice, flour and
silage corn etc, agricultural products which business is mainly conducted
through the Companys subsidiary, Harbin Shuaiyi.

Throughout the three months ended March 31, 2009 and 2008, all
of the Companys operations were carried out in one geographical segment -
China.

|                                                 |  |   | Chinese     |  |   | Other        |  |   |             |   |   |              | 
|------------------------------------------------ |  | - | ----------- |  | - | ------------ |  | - | ----------- | - | - | ------------ | 
|                                                 |  |   | Caterpillar |  |   | Agricultural |  |   | Corporate   |   |   |              | 
|Three months ended March 31, 2009                |  |   | Fungus      |  |   | Products     |  |   | unallocated |   |   | Consolidated | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Segment revenue from external
      customers    |  | $ | 2,900,846   |  | $ | 1,741,878    |  | $ | -           |   | $ | 4,642,724    | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Segment profit (loss)                            |  | $ | 2,080,125   |  | $ | 485,220      |  | $ | (78,884     | ) | $ | 2,486,461    | 
|Income from operations before
      income taxes |  |   |             |  |   |              |  |   |             |   | $ | 2,486,461    | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Segment assets                                   |  | $ | 23,340,035  |  | $ | 1,032,236    |  | $ | 2,446,248   |   | $ | 26,818,519   | 
|Total assets                                     |  |   |             |  |   |              |  |   |             |   | $ | 26,818,519   | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Other segment information:                       |  |   |             |  |   |              |  |   |             |   |   |              | 
|Depreciation and
      amortization              |  | $ | 249,877     |  | $ | 1,963        |  | $ | 687         |   | $ | 252,527      | 
|Expenditure for
      segment assets             |  | $ | -           |  | $ | -            |  | $ | -           |   | $ | -            | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|                                                 |  |   | Chinese     |  |   | Other        |  |   |             |   |   |              | 
|                                                 |  |   | Caterpillar |  |   | Agricultural |  |   | Corporate   |   |   |              | 
|Three months ended March 31, 2008                |  |   | Fungus      |  |   | Products     |  |   | unallocated |   |   | Consolidated | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Segment revenue from external
      customers    |  | $ | 1,504,034   |  | $ | 1,461,925    |  | $ | -           |   | $ | 2,965,959    | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Segment profit (loss)                            |  | $ | 1,105,616   |  | $ | 477,293      |  | $ | (127,900    | ) | $ | 1,455,009    | 
|Income from operations before
      income taxes |  |   |             |  |   |              |  |   |             |   | $ | 1,455,009    | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Segment assets                                   |  | $ | 17,671,969  |  | $ | 728,805      |  | $ | 1,789,407   |   | $ | 20,190,181   | 
|Total assets                                     |  |   |             |  |   |              |  |   |             |   | $ | 20,190,181   | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Other segment information:                       |  |   |             |  |   |              |  |   |             |   |   |              | 
|Depreciation and
      amortization              |  | $ | 257,016     |  | $ | 771          |  | $ | 20,618      |   | $ | 278,405      | 
|Expenditure for
      segment assets             |  | $ | -           |  | $ | 3,847        |  | $ | -           |   | $ | 3,847        | 

- 17 -

---

YZAPP INTERNATIONAL INC. AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2009 AND 2008

NOTE 17

SUBSEQUENT EVENTS

On April 21, 2009, the Company filed with the Securities and Exchange Commission (SEC) a definitive information statement on Schedule 14C pursuant to Section 14(c) of the Securities Exchange Act of 1934 relating to a written consent of the majority
stockholders of the Company authorizing an amendment and restatement of the Companys Articles of Incorporation (the Restated Articles) to, among other things:

|1. | change the Companys name to Shuaiyi International New Resources Development Inc.;                                                                                                                                                      
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                           
|2. | increase the Companys total authorized stock from 50,000,000 to 190,000,000 shares of Common Stock;                                                                                                                                      
|   |                                                                                                                                                                                                                                           
|3. | effect and implement a 1-for-114.59 reverse split of the outstanding shares of the Companys Common Stock; and                                                                                                                            
|   |                                                                                                                                                                                                                                           
|4. | include certain provisions regarding the Companys election not to be governed by certain provisions of the Nevada Revised Statutes restricting certain business combinations with interested stockholders and control share
acquisitions.

The Company has mailed the definitive information statement on Schedule 14C to stockholders. The Company will, when permissible following the expiration of the 20-day period mandated by Rule 14c of the Exchange Act and the provisions of the Nevada
Revised Statutes, file the Restated Articles with the Nevada Secretary of States Office. The Restated Articles will become effective upon such filing and the Company anticipates that such filing will occur around May 19, 2009.

- 18 -

---

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION ANDRESULTS 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; any statements of belief or intention;
any of the factors and risks mentioned in the Risk Factors sections of the
Quarter Report and our Annual Report on Form 10-K for the year ended December
31, 2008 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

In this report, unless indicated otherwise, references
to:

- we, us, our company, our and YzApp refer to the combined
  business of YzApp International Inc. and/or its consolidated subsidiaries, as
  the case may be;
- New Resources refers to New Zealand WAYNEs New Resources Development
  Co., Ltd., our direct, wholly-owned subsidiary, a BVI corporation;
- Heilongjiang Shuaiyi refers to Heilongjiang Shuaiyi New Energy
  Development Co., Ltd. our indirect, wholly-owned subsidiary, a Chinese
  corporation;
- Daqing Shuaiyi refers to Daqing Shuaiyi Biotech Co., Ltd., our indirect,
  wholly-owned subsidiary, a Chinese corporation;
- Harbin Shuaiyi refers to Harbin Shuaiyi Green & Specialty Food
  Trading LLC, our indirect, wholly-owned subsidiary, a Chinese corporation;
- BVI refers to the British Virgin Islands;
- China, Chinese and PRC, refer to the Peoples Republic of China;
- Renminbi and RMB refer to the legal currency of China;
- U.S. dollars, dollars and $ refer to the legal currency of the
  United States;
- SEC refers to the United States Securities and Exchange Commission;
- Securities Act refers to the Securities Act of 1933, as amended; and
- Exchange Act refers to the Securities Exchange Act of 1934, as amended

Overview of Our Business

We are a holding company that operates through our indirectly
owned subsidiary Heilongjiang Shuaiyi, a leading dry Chinese Caterpillar Fungus
grower and producer in China. We specialize in developing, processing, marketing
and distributing a variety of agricultural and nutraceutical products consisting
of dry Chinese Caterpillar Fungus, organic and specialty food products and
silage fodder. In addition, we plan to produce and market other products
developed from Cordyceps Militaris within the coming months and years, including
Cordycepin and Corn Series Beverage as indicated in more detail below.

Our primary product is dry Chinese Caterpillar Fungus, which is
developed from 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.

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|According to Georges Halperns Healing Mushrooms, certain research has shown that Cordyceps Militaris may boost our immune system, and can be used as a supplement for the purposes of combating certain effects of fatigue and aging, as
well as reducing blood pressure, the occurrences of certain tumors, and combating arteriosclerosis
and certain gastrointestinal disorders. In addition, Cordyceps Militaris has significantly high economic values. According to Halpern , wild
Cordyceps Militaris can cost as much as $10,000 per kilogram. Due to the extremely sensitive growing conditions of Cordyceps Militaris, it is very difficult to grow the plant in a man-made environment. Through several years of laboratory tests,
we developed the technology to commercially grow and produce Cordyceps Militaris in 2006. We generated approximately 62.49% of our revenues from dry Chinese Caterpillar Fungus during the first quarter of 2009. We believe that we own 19% of the world
wide market share in the cultivated Chinese Caterpillar Fungus industry. We plan to continue to focus on dry Chinese Caterpillar Fungus, which is our fastest growing product line with the greatest market demand and a significantly high profit
margin.
We also sell organic and specialty food products through our subsidiary, Harbin 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.

History and Corporate Structure

We were originally incorporated in the State of Nevada on

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

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



First Quarter Financial Performance Highlights

We continued to experience strong demand for our products and services during the first fiscal quarter of 2009, which resulted in continued growth in our revenues and net income.

The following are some financial highlights for the first quarter of 2009:

- Revenues: Our revenues were approximately $4.64 million for the first quarter of 2009, an increase of 56% from the same quarter of last year.
- Gross Margin: Gross margin was 62.2% for the first quarter of 2009, as compared to 60.3% for the same period in 2008.
- Operating Profit: Operating profit was approximately $2.47 million for the first quarter of 2009, an increase of 71% from $1.45 million of the same period last year.
- Net Income: Net income was approximately $2.17 million for the first quarter of 2009, an increase of 74% from the same period of last year.
- Fully diluted earnings per share was $0.001 for the first quarter of 2009.

RESULTS OF OPERATIONS

Three Months Ended Mach 31, 2009 Compared to Three Months Ended March 31, 2008

The following table summarizes the results of our operations during the three-month periods ended March 31, 2009 and 2008, and provides information regarding the dollar and percentage increase or (decrease) from the three-month period ended March
31, 2008 to the three-month period ended March 31, 2009.

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|                                          |  | Three Months Ended
      March |   |  | Three Months Ended
      March | 
|----------------------------------------- |  | ------------------------------ | - |  | ------------------------------ | 
|                                          |  | 31, 2009                       |   |  | 31, 2008                       | 
|                                          |  |                                |   |  | As a                           | 
|                                          |  |                                |   |  | percentage of                  | 
|                                          |  | In Thousands                   |   |  | revenues                       | 
|Revenues                                  |  | 4,643                          |   |  | 100 %                          | 
|Cost of goods sold                        |  | (1,756                         | ) |  | 37.8 %                         | 
|Gross Profit                              |  | 2,887                          |   |  | 62.2 %                         | 
|Selling expenses                          |  | (112                           | ) |  | 2.4 %                          | 
|General and administrative
      expenses |  | (303                           | ) |  | 6.5 %                          | 
|Income from operations                    |  | 2,472                          |   |  | 53.2%                          | 
|Other income and (expenses)               |  |                                |   |  |                                | 
|Interest income                           |  | 12                             |   |  | 0.3%                           | 
|Other income                              |  | 0.15                           |   |  | 0.003%                         | 
|Exchange gain                             |  | 1                              |   |  | 0.02%                          | 
|Income before income tax                  |  | 2,486                          |   |  | 53.5%                          | 
|Provision for income tax                  |  | (316                           | ) |  | 6.8%                           | 
|Net income                                |  | 2,170                          |   |  | 46.7%                          | 

Revenues. Revenues increased approximately $1.67
million, or 56.2%, to approximately $4.64 million for the three months ended
March 31, 2009, from approximately $2.97 million for the same period in 2008.
This increase was mainly attributable to the increase of our sales and output
volume of our product, dry Chinese Caterpillar Fungus, driven by the continued
increase in market demand for our products. At the same time, the Company
introduced its small package Chinese Caterpillar Fungus which has higher unit
selling price in the second half of 2008..

Cost of Goods Sold.Our cost of goods is primarily
comprised of the costs of our raw materials, labor and overhead. Our cost of
goods sold increased approximately $0.58 million, or 49.2%, to approximately
$1.76 million for the three months ended March 31, 2009, from approximately
$1.18 million during the same period in 2008. This increase was mainly due to
the increase in our raw materials and labor costs, which were generally in line
with the increase in our sales. As a percentage of revenues, the cost of goods
sold decreased to 37.8% during the three moths ended March 31, 2009 from 39.6%
in the same period in 2008. Such increase of gross margin was mainly
attributable to the fact that a larger portion of our total revenues was
generated from our small package products with higher unit selling price as
compared to the same period of 2008. Because the gross margin of small package
products is higher than that of larger package products, the percentage of cost
of sales to total sales revenue decreased in the first quarter of 2009.

Gross Profit.Our gross profit increased by
approximately $1.1 million, or 61.5%, to approximately $2.89 million for the
three months ended March 31, 2009 from approximately $1.79 million during the
same period in 2008. Gross profit as a percentage of revenues was 62.2% for the
three months ended March 31, 2009, an increase of 1.9% from 60.3% during the
same period in 2008. Such percentage increase was mainly due to the increased
sales of our higher margin small package Chinese Caterpillar Fungus
products.

Selling Expenses . Our selling expenses include sales
commissions, the cost of advertising and promotional materials, salaries and
fringe benefits of sales personnel, and other sales related costs. Selling
expenses increased approximately $ 0.08 million, or 266.7%, to approximately
$0.11 million for the three months ended March 31, 2009 from approximately $0.03
million during the same period in 2008. As a percentage of revenues, selling
expenses increased to 2.32% for the three months ended March 31, 2009 from 0.8%
for the same period in 2008. The increase in the
amount and percentage of selling expenses was mainly attributable to the increase of salaries and travelling expenses of our sales representatives and more marketing activities to promote our products..

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General and Administrative Expenses . General and administrative expenses decreased approximately $0.01 million, or 3.2%, to approximately $0.30million for the three months ended March 31, 2009 from approximately $0.31 million for
the same period in 2008. As a percentage of revenues, general and administrative expenses decreased to 4.1% for the three months ended March 31, 2009 from 10.6% for the same period in 2008. Due to our effective internal control over overhead costs,
we slightly decreased our general and administrative expenses despite the fact that our cost of sales increased in line with increase in our sales during the first quarter of 2009.

Income Before Income Tax . Income before income tax increased approximately $1.03 million, or 70.5%, to approximately $2.49 million during the three months ended March 31, 2009 from approximately $1.46 million during the same
period in 2008. As a percentage of revenues, income before income tax increased to 53.5% during the three months ended March 31, 2009 from 49.1% during the same period in 2008. The increase of income before income tax is mainly attributable to the
increase in our gross profit as a result of the increase in our sales.

Income Taxes. YzApp International Inc. is subject to United States tax at a tax rate of 34%. No provision for income taxes in the United States has been made as YzApp International Inc. had no income taxable in the United States. New
Resources was incorporated in the BVI and under the current laws of the BVI, is not subject to income taxes. Our PRC subsidiaries 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.  Under the Provisional Taxation Regulation of the Peoples Republic of China effective before January 1, 2008, income tax was generally payable by
enterprises at a rate of 33% of their taxable income.  Newly established high-technology enterprises, such as our subsidiary Daqing Shuaiyi, are entitled to a two-year 50% tax reduction. Daqing Shuaiyi has been subject to a 12.5% income tax rate in
2008 and 2009 and Harbin Shuaiyi was subject to a tax rate of 25% in 2008 and is subject to a tax rate of 25% in 2009.

Income tax increased approximately $0.11 million to approximately $52.4 million for the three months ended March 31, 2009 from approximately $0.21 million for the same period in 2008. We paid more tax in 2009 because of the increase in
sales and taxable income.

Net Income . Net income increased by approximately $0.92 million, or 73.6% to approximately $2.17 million for the three months ended March 31, 2009 from approximately $1.25 million for the same period of 2008, as a result of the
factors described above.

Liquidity and Capital Resources

General

As of March 31, 2009, we had cash and cash equivalents (excluding restricted cash) of approximately $11.98 million. The following table provides detailed information about our net cash flow for all financial statement periods presented in this
report.

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Cash Flow

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

Three Months Ended March 31,2009
    
    
    2008Net cash provided by (used in)
      operating activities
    $
    2,774
    
    $
    1,156Net cash
      provided by (used in) investing activities
    
    (50
    )
    
    (3
    )Net cash provided by (used in)
      financing activities
    
    61
    
    
    -Net cash flow
    
    2,782
    
    
    1,287


Operating Activities

Net cash provided by operating activities was approximately
$2.78 million for the three-month period ended March 31, 2009, which is an
increase of approximately $1.62 million from approximately $1.16 million net
cash provided by operating activities for the same period of 2008. The increase
of the cash provided by operating activities was mainly attributable to the
increases in our net profit and the decrease in our inventory as a result of the
increase in our sales.

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, 2009 was approximately $0.05million, which is an increase
of approximately $0.047 million from net cash used in investing activities of
approximately $0.003 million for the same period of 2008. The increase of the
cash used in investing activities was mainly due to the payment to the original
shareholders of Heilongjiang Shuaiyi for the transfer of their equity interests
in Heilongjiang Shuaiyi to New Resources in connection with the Companys
restructuring.

Financing Activities

Net cash provided by financing activities for the three-month
period ended March 31, 2009 was approximately $0.061 million while we did not
have net cash provided by financing activities for the same period in 2008.
During the first quarter of 2009, we borrowed approximately $0.0061 million from
our Chairman, Lianyun Han as working capital of the Company.

We believe that our cash on hand and cash flow from operations
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.

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.

- 24 -

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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

The production and sale of our primary product, dry Chinese Caterpillar Fungus, historically have not been subject to seasonal variations. The peak sales season of our silage fodder is between January and March.

Critical Accounting Policies

Critical accounting policies are those we believe are most important to portraying our financial conditions and results of operations and also require the greatest amount of subjective or complex judgments by management. Judgments and uncertainties
regarding the application of these policies may result in materially different amounts being reported under various conditions or using different assumptions.  There have been no material changes to the critical accounting policies previously
disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

Recently Issued Accounting Pronouncements

Effective January 1, 2009, the first day of fiscal 2009, the Company adopted Financial Accounting Standards Board (FASB) Staff Position Financial Accounting Standard 142-3 (FSP FAS 142-3), Determination of the Useful
Life of Intangible Assets. FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142 ("SFAS 142"),
Goodwill and Other Intangible Assets. The Company will apply FSP FAS 142-3 prospectively to intangible assets acquired subsequent to the adoption date. The adoption of FSP FAS 142-3 had no impact on the Companys Condensed
Consolidated Financial Statements.

Effective January 1, 2009, the Company adopted, Statement of Financial Accounting Standards No. 161 (SFAS 161), Disclosures about Derivative Instruments and Hedging Activities, which amends and expands Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 161 requires tabular disclosure of the fair value of derivative instruments and their gains and losses. This Statement also requires disclosure
regarding the credit-risk related contingent features in derivative agreements, counterparty credit risk, and strategies and objectives for using derivative instruments. The adoption of SFAS 161 did not have a material impact on the Companys
Condensed Consolidated Financial Statements.

During 2008, the Company adopted FASB Staff Position No. 157-2 ("FSP FAS 157-2"), "Effective Date of FASB Statement 157,"which deferred the provisions of SFAS 157 for nonfinancial assets and liabilities to the first fiscal period beginning after
November 15, 2008. Deferred nonfinancial assets and liabilities include items such as goodwill and other nonamortizable intangibles. Effective January 1, 2009, we adopted the provisions of SFAS 157 for nonfinancial assets and liabilities. The
adoption of FSP FAS 157-2 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

Effective January 1, 2009, the Company adopted Statement of Financial Accounting Standards No. 160 ("SFAS 160"), "Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB No. 51." SFAS 160 amends Accounting Research
Bulletin No. 51, "Consolidated Financial Statements" to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a
subsidiary, which is sometimes referred to as minority interest, is an ownership interest in the consolidated entity that should be reported as equity. Among other requirements, this Statement requires that the consolidated net income attributable
to the parent and the noncontrolling interest be clearly identified and presented on the face of the consolidated income statement. SFAS 160 was effective beginning in the Companys fiscal 2009. SFAS 160 requires prospective application, except
for the presentation and disclosure requirements, which must be applied retrospectively to all periods presented. The adoption of SFAS 160 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

- 25 -

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Effective January 1, 2009, the Company adopted Statement of Financial Accounting Standards No. 141 (revised 2007) ("SFAS 141R"), "Business Combinations." SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures
in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in an acquiree and the goodwill acquired. The Company will apply SFAS 141R to any business combinations subsequent to adoption. In
addition, this Statement requires that any additional reversal of deferred tax asset valuation allowance established in connection with our fresh start reporting on January 7, 1998 be recorded as a component of income tax expense rather than as a
reduction to the goodwill established in connection with the fresh start reporting.

In April 2009, the FASB issued FASB Staff Position Financial Accounting Standard 141R-1 ("FSP FAS 141R-1"), "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies." FSP FAS 141R-1 amends SFAS
141R to require that an acquirer recognize at fair value, at the acquisition date, an asset acquired or a liability assumed in a business combination that arises from a contingency if the acquisition-date fair value of that asset or liability can be
determined during the measurement period. If the acquisition-date fair value of such an asset acquired or liability assumed cannot be determined, the acquirer should apply the provisions of SFAS 5, " Accounting for Contingencies", to
determine whether the contingency should be recognized at the acquisition date or after such date. FSP FAS 141R-1 is effective for business combinations whose acquisition date is on or after the first reporting period beginning after December 15,
2008. Accordingly, the Company adopted this FSP during the first quarter of 2009. The adoption of FSP FAS 141R-1 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

New accounting pronouncement to be adopted

In December 2008, the FASB issued FASB Staff Position FAS 132(R)-1 (FSP FAS 132(R)-1), Employers Disclosures about Postretirement Benefit Plan Assets. The FSP expands the disclosure requirements about plan assets for
defined benefit pension plans and postretirement plans. The Company is required to adopt FSP FAS 132(R)-1 in the fourth quarter of 2009. The Company is currently in the process of assessing the impact that this FSP may have on the disclosures in the
Companys Condensed Consolidated Financial Statements.

In April 2009, the FASB issued FASB Staff Position No. FAS 107-1 and APB 28-1 ("FSP FAS 107-1 and APB 28-1"), "Interim Disclosures about Fair Value of Financial Instruments." The FSP amends SFAS 107, "Disclosure about Fair Value of Financial
Instruments," and Accounting Principles Board Opinion No. 28, "Interim Financial Reporting," to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial
statements. The Company is required to adopt FSP FAS 107-1 and APB 28-1 in the second quarter of 2009. The Company does not currently believe that adopting this FSP will have a material impact on the Companys Condensed Consolidated Financial
Statements.

In April 2009, the FASB issued FASB Staff Position No. FSP FAS 115-2 and FAS 124-2 ("FSP FAS 115-2 and FAS 124-2"), "Recognition and Presentation of Other-Than-Temporary Impairments." The FSP amends the other-than-temporary impairment guidance in
U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. This FSP does not amend existing
recognition and measurement guidance related to other-than-temporary impairments of equity securities. The Company is required to adopt FSP FAS 115-2 and FAS 124-2 in the second quarter of 2009. The Company does not currently believe that adopting
this FSP will have a material impact on the Companys Condensed Consolidated Financial Statements.

In April 2009, the FASB issued FASB Staff Position No. FAS 157-4 ("FSP FAS 157-4"), " Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not
Orderly." The FSP provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, "Fair Value Measurements" , when the volume and level of activity for the asset or liability have significantly decreased. This FSP
also includes guidance on identifying circumstances that indicate a transaction is not orderly. The Company is required to adopt FSP FAS 157-4 in the second quarter of 2009. The Company does not currently believe that adopting this FSP will have a
material impact on the Companys Condensed Consolidated Financial Statements.

- 26 -

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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
Condensed 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. Xianfeng Han,
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. Xianfeng Han concluded that as
of March 31, 2009, 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 to satisfy the objectives for which they are
intended.

Changes in Internal Control Over Financial
Reporting.

During the fiscal quarter ended March 31, 2009, 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.

- 27 -

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

We have not sold any equity securities during the fiscal
quarter ended March 31, 2009 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. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

On February 4, 2009, our board of directors and New Zealand
WAYNEs Investment Holdings Co., Ltd., the holder of approximately 69.9% of our
issued and outstanding capital stock at such time, approved by a written consent
in lieu of a meeting an amendment and restatement of our Articles of
Incorporation to, among other things, (i) change our name to Shuaiyi
International New Resources Development Inc., (ii) increase our total
authorized stock from 50,000,000 to 190,000,000 shares of common stock, (iii)
effect a 1-for-114.59 reverse split of our issued and outstanding common stock,
and (iv) include certain provisions regarding our election not to be governed by
certain provisions of the Nevada Revised Statutes restricting certain business
combinations with interested stockholders and control share acquisitions.

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 13, 2009

YZAPP INTERNATIONAL INC.

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

By: /s/ Xianfeng Han-------------------------------------Xianfeng Han Chief
Financial Officer (Principal Financial Officer)



---

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.  







---