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: September 30, 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

Shuaiyi International
New Resources Development 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


x      
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 company


      x


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

Yes £    
No


x

The number of shares outstanding of each of the issuers
classes of common equity, as of November 11, 2009 is as follows:

Class of Securities
      Shares OutstandingCommon Stock, $0.001 par
      value
      13,297,731


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|TABLE OF CONTENTS
|-----------------
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|                 
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|Item 1.          
|Item 2.          
|Item 3.          
|Item 4.          
|                 
|                 
|                 
|Item 1.          
|Item 1A.         
|Item 2.          
|Item 3.          
|Item 4.          
|Item 5.          
|Item 6.          

i

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PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                                                                                    | Page
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                                                                                                                                                    |     
|                                                                                                                                                                    |     
|                                                                                                                                                                    |     
|Condensed Consolidated Balance Sheets as of
      September 30, 2009 (Unaudited) and December 31, 2008 (Audited)                                                    | 2   
|                                                                                                                                                                    |     
|Condensed Consolidated Statements of Income and
      Comprehensive Income (Unaudited) for the Three Months and Nine Months
      Ended September 30, 2009 and 2008 | 3   
|                                                                                                                                                                    |     
|Condensed Consolidated Statement of
      Stockholders Equity (Unaudited) for the Nine Months Ended September 30,
      2009                                       | 4   
|                                                                                                                                                                    |     
|Condensed Consolidated Statements of Cash Flows (Unaudited)
      for the Nine Months Ended September 30, 2009 and 2008                                             | 6   
|                                                                                                                                                                    |     
|Notes to Condensed Consolidated Financial
      Statements                                                                                                          | 6-18

1

---

SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS(AMOUNTS
EXPRESSED IN US DOLLAR)

|                                                                                                                                   |   | As of         | 
|---------------------------------------------------------------------------------------------------------------------------------- | - | ------------- | 
|                                                                                                                                   |   | September 30, | 
|                                                                                                                                   |   | 2009          | 
|                                                                                                                                   |   | Unaudited     | 
|ASSETS                                                                                                                             |  
|CURRENT ASSETS                                                                                                                     |   |               | 
|Cash and cash equivalents                                                                                                          | $ | 15,434,465    | 
|Accounts receivable, net                                                                                                           |   | 362,880       | 
|Other receivables                                                                                                                  |   | 11,422        | 
|Inventories                                                                                                                        |   | 631,310       | 
|Total current assets                                                                                                               |   | 16,440,077    | 
|OTHER ASSETS                                                                                                                       |   |               | 
|Intangible assets, net                                                                                                             |   | 2,856,961     | 
|Property, plant and equipment, net                                                                                                 |   | 10,484,822    | 
|Total other assets                                                                                                                 |   | 13,341,783    | 
|                                                                                                                                   |   |               | 
|Total assets                                                                                                                       | $ | 29,781,860    | 
|                                                                                                                                   |   |               | 
|LIABILITIES AND SHAREHOLDERS'
      EQUITY                                                                                         |  
|CURRENT LIABILITIES                                                                                                                |   |               | 
|Accounts payable                                                                                                                   | $ | 120,972       | 
|Other payables and accruals                                                                                                        |   | 484,851       | 
|Payable for intangibles  Current portion                                                                                          |   | 878,606       | 
|Income tax payable                                                                                                                 |   | 83,167        | 
|Due to related parties                                                                                                             |   | 77,409        | 
|Acquisition payable                                                                                                                |   | 8,735,810     | 
|Total current liabilities                                                                                                          |   | 10,380,815    | 
|NON-CURRENT LIABILITIES                                                                                                            |   |               | 
|Payable for intangibles, net of current portion                                                                                    |   | -             | 
|Total liabilities                                                                                                                  |   | 10,380,815    | 
|                                                                                                                                   |   |               | 
|COMMITMENTS AND CONTINGENCIES (Note 15)                                                                                            |   |               | 
|                                                                                                                                   |   |               | 
|SHAREHOLDERS' EQUITY                                                                                                               |   |               | 
|Preferred Stock, $0.001 par value, 1,000,000 shares
      authorized, none and 727,520 shares issued and outstanding               |   | -             | 
|Common stock, $0.001 par value,
      190,000,000 shares authorized, 13,297,731 and 11,746,041 shares issued and
      outstanding |   | 13,298        | 
|Additional paid-in capital                                                                                                         |   | 2,216,891     | 
|Statutory reserves                                                                                                                 |   | 1,923,755     | 
|Retained earnings                                                                                                                  |   | 14,277,395    | 
|Accumulated other comprehensive
      income                                                                                       |   | 969,706       | 
|Total shareholders' equity                                                                                                         |   | 19,401,045    | 
|                                                                                                                                   |   |               | 
|Total liabilities and shareholders' equity                                                                                         | $ | 29,781,860    | 
|                                                                                                                                   |   |               | 
|See accompanying notes to
      condensed consolidated financial statements                                                        |  

2

---

SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME
ANDCOMPREHENSIVE INCOME (UNAUDITED)(AMOUNTS EXPRESSED IN US
DOLLAR)

|                                                                            |   | For the Three Months |   |   | For the Nine Months |  
|--------------------------------------------------------------------------- | - | -------------------- | - | - | ------------------- | -
|                                                                            |   | Ended September 30,  |   |   | Ended September 30, |  
|                                                                            |   | 2009                 |   |   | 2008                |  
|Revenue                                                                     | $ | 3,565,961            |   | $ | 4,413,082           |  
|Cost of goods sold                                                          |   | (793,101             | ) |   | (1,346,285          | )
|Gross profit                                                                |   | 2,772,860            |   |   | 3,066,797           |  
|Selling expenses                                                            |   | (87,901              | ) |   | (88,985             | )
|General and administrative
      expenses                                   |   | (330,660             | ) |   | (258,361            | )
|Income from operations                                                      |   | 2,354,299            |   |   | 2,719,451           |  
|Other income (expenses):                                                    |   |                      |   |   |                     |  
|Interest income                                                             |   | 18,507               |   |   | 8,369               |  
|Exchange loss                                                               |   | (3,709               | ) |   | -                   |  
|Other                                                                       |   | 13                   |   |   | -                   |  
|Income before income tax                                                    |   | 2,369,110            |   |   | 2,727,820           |  
|Provision for income tax                                                    |   | (340,056             | ) |   | (361,336            | )
|Net income                                                                  |   | 2,029,054            |   |   | 2,366,484           |  
|Other comprehensive income:                                                 |   |                      |   |   |                     |  
|Foreign currency
      translation adjustment                               |   | 25,251               |   |   | 144,928             |  
|Total comprehensive income                                                  | $ | 2,054,305            |   | $ | 2,511,412           |  
|Earnings per share:                                                         |   |                      |   |   |                     |  
|Basic                                                                       | $ | 0.15                 |   | $ | 0.20                |  
|Diluted                                                                     | $ | 0.15                 |   | $ | 0.20                |  
|Weighted average number of shares outstanding:                              |   |                      |   |   |                     |  
|Basic                                                                       |   | 13,297,731           |   |   | 12,032,289          |  
|Diluted                                                                     |   | 13,297,731           |   |   | 12,032,289          |  
|                                                                            |   |                      |   |   |                     |  
|See accompanying
      notes to condensed consolidated financial statements |  

3

---

SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS
EQUITYAND COMPREHENSIVE INCOME(AMOUNTS EXPRESSED IN US
DOLLAR)

|                                                                                                 |  |                 |   |   |              |   |  |             |   |   |         |   |   |           |   |   |             |  |   |            |   |   | Accumulated   |  |   |            | 
|------------------------------------------------------------------------------------------------ |  | --------------- | - | - | ------------ | - |  | ----------- | - | - | ------- | - | - | --------- | - | - | ----------- |  | - | ---------- | - | - | ------------- |  | - | ---------- | 
|                                                                                                 |  | Preferred Stock |   |   | Common Stock |   |  | Additional  |   |   |         |   |   |           |   |   | Other       |  |   |            |  
|                                                                                                 |  | Number          |   |   |              |   |  | Number      |   |   |         |   |   | Paid-in   |   |   | Statutory   |  |   | Retained   |   |   | Comprehensive |  |   |            | 
|                                                                                                 |  | of Shares       |   |   | Amount       |   |  | of Shares   |   |   | Amount  |   |   | Capital   |   |   | Reserves    |  |   | Earnings   |   |   | Income        |  |   | Total      | 
|                                                                                                 |  |                 |   |   |              |   |  |             |   |   |         |   |   |           |   |   |             |  |   |            |   |   |               |  |   |            | 
|At December 31, 2008 (Audited)                                                                   |  | 727,520         |   | $ | 727          |   |  | 11,746,041  |   | $ | 11,746  |   | $ | 2,192,716 |   | $ | 1,326,239 $ |  |   | 9,131,744  |   | $ | 948,766       |  | $ | 13,611,938 | 
|                                                                                                 |  |                 |   |   |              |   |  |             |   |   |         |   |   |           |   |   |             |  |   |            |   |   |               |  |   |            | 
|Net income                                                                                       |  | -               |   |   | -            |   |  | -           |   |   | -       |   |   | -         |   |   | -           |  |   | 5,743,167  |   |   | -             |  |   | 5,743,167  | 
|                                                                                                 |  |                 |   |   |              |   |  |             |   |   |         |   |   |           |   |   |             |  |   |            |   |   |               |  |   |            | 
|Foreign currency translation adjustment                                                          |  | -               |   |   | -            |   |  | -           |   |   | -       |   |   | -         |   |   | -           |  |   | -          |   |   | 20,940        |  |   | 20,940     | 
|                                                                                                 |  |                 |   |   |              |   |  |             |   |   |         |   |   |           |   |   |             |  |   |            |   |   |               |  |   |            | 
|Comprehensive income                                                                             |  | -               |   |   | -            |   |  | -           |   |   | -       |   |   | -         |   |   | -           |  |   | -          |   |   | -             |  |   | 5,764,107  | 
|                                                                                                 |  |                 |   |   |              |   |  |             |   |   |         |   |   |           |   |   |             |  |   |            |   |   |               |  |   |            | 
|Appropriation of statutory reserves                                                              |  | -               |   |   | -            |   |  | -           |   |   | -       |   |   | -         |   |   | 597,516     |  |   | (597,516   | ) |   | -             |  |   | -          | 
|                                                                                                 |  |                 |   |   |              |   |  |             |   |   |         |   |   |           |   |   |             |  |   |            |   |   |               |  |   |            | 
|Conversion of preferred stock into common
      stock                                            |  | (727,520        | ) |   | (727         | ) |  | 12,695,223  |   |   | 12,695  |   |   | (11,968   | ) |   | -           |  |   | -          |   |   | -             |  |   | -          | 
|                                                                                                 |  |                 |   |   |              |   |  |             |   |   |         |   |   |           |   |   |             |  |   |            |   |   |               |  |   |            | 
|1-for-114.59 Reverse Split                                                                       |  | -               |   |   | -            |   |  | (11,643,533 | ) |   | (11,643 | ) |   | 11,643    |   |   | -           |  |   | -          |   |   | -             |  |   | -          | 
|                                                                                                 |  |                 |   |   |              |   |  |             |   |   |         |   |   |           |   |   |             |  |   |            |   |   |               |  |   |            | 
|Issuance of shares to employees and
      consultants under 2009 Equity Incentive Plan (Note 11) |  | -               |   |   | -            |   |  | 500,000     |   |   | 500     |   |   | 24,500    |   |   | -           |  |   | -          |   |   | -             |  |   | 25,000     | 
|                                                                                                 |  |                 |   |   |              |   |  |             |   |   |         |   |   |           |   |   |             |  |   |            |   |   |               |  |   |            | 
|At September 30, 2009 (Unaudited)                                                                |  | -               |   |   | -            |   |  | 13,297,731  |   | $ | 13,298  |   | $ | 2,216,891 |   | $ | 1,923,755   |  | $ | 14,277,395 |   | $ | 969,706       |  | $ | 19,401,045 | 

See accompanying notes to condensed consolidated financial
statements

4

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(AMOUNTS EXPRESSED IN US DOLLAR)

|                                                                                                                 |   | For the Nine Months |  
|---------------------------------------------------------------------------------------------------------------- | - | ------------------- | -
|                                                                                                                 |   | Ended September 30, |  
|                                                                                                                 |   | 2009                |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                            |   |                     |  
|Net income                                                                                                       | $ | 5,743,167           |  
|Adjustments to reconcile net income
      to cash provided by operating activities:                              |   |                     |  
|Share-based compensation expense                                                                                 |   | 25,000              |  
|Depreciation and
      amortization                                                                              |   | 756,396             |  
|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                                                                                              |   | (78,790             | )
|Deposits
      and other receivables                                                                             |   | 2,693               |  
|Inventories                                                                                                      |   | 537,483             |  
|Trade
      receivable due from related parties                                                                  |   | -                   |  
|Increase (decrease) in liabilities:                                                                              |   |                     |  
|Accounts
      payable                                                                                           |   | 117,710             |  
|Other payables and
      accruals                                                                                |   | 11,498              |  
|Income
      tax payable                                                                                         |   | (36,400             | )
|Trade payable due to
      related parties                                                                       |   | 6,751               |  
|Net cash
      provided by operating activities                                                                  |   | 7,085,508           |  
|                                                                                                                 |   |                     |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                                            |   |                     |  
|Purchase of property, plant and equipment                                                                        |   | -                   |  
|Purchase of intangible asset                                                                                     |   | -                   |  
|Settlement of payable for intangibles                                                                            |   | (878,207            | )
|Payment of acquisition payable                                                                                   |   | (50,269             | )
|Net cash used in investing
      activities                                                                      |   | (928,476            | )
|                                                                                                                 |   |                     |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                            |   |                     |  
|Advances from related parties                                                                                    |   | 61,621              |  
|Net cash provided by financing
      activities                                                                  |   | 61,621              |  
|                                                                                                                 |   |                     |  
|Foreign currency translation
      adjustment                                                                    |   | 17,569              |  
|                                                                                                                 |   |                     |  
|INCREASE IN CASH AND CASH
      EQUIVALENTS                                                                      |   | 6,236,222           |  
|                                                                                                                 |   |                     |  
|CASH AND CASH EQUIVALENTS, at
      the beginning of the period                                                  |   | 9,198,243           |  
|                                                                                                                 |   |                     |  
|CASH AND CASH EQUIVALENTS, at
      the end of the period                                                        | $ | 15,434,465          |  
|                                                                                                                 |   |                     |  
|NON-CASH INVESTING AND
      FINANCING ACTIVITIES:  Machinery acquired in exchange for
      issuance of capital | $ | -                   |  
|                                                                                                                 |   |                     |  
|SUPPLEMENTAL DISCLOSURE
      INFORMATION  Income taxes paid                                                     | $ | 593,008             |  
|                                                                                                                 |   |                     |  
|See accompanying
      notes to condensed consolidated financial statements                                      |  

5

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1

DESCRIPTION OF BUSINESS AND
ORGANIZATION

Shuaiyi International New Resources Development Inc. (the
Company or Shuaiyi International) was formerly known as YzApp International
Inc. and 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 September 30, 2009, details of the subsidiaries of the
Company are as follows:

|                                                                                     |  | Domicile and date                                |  |                 |  | Percentage of       |  | Principal                                                                                 
|------------------------------------------------------------------------------------ |  | ------------------------------------------------ |  | --------------- |  | ------------------- |  | ------------------------------------------------------------------------------------------
|Subsidiaries names                                                                  |  | of incorporation                                 |  | Paid-up capital |  | effective ownership |  | 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                           |  | RMB1,500,00 0   |  | 100%                |  | Sales of agricultural products                                                            

**NOTE 2**

**SUMMARIES OF SIGNIFICANT
ACCOUNTING POLICIES**

Principle of consolidation

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

Basis of preparation

These interim condensed consolidated financial statements are
unaudited. In the opinion of management, all adjustments and disclosures
necessary for a fair presentation of these interim condensed consolidated
financial statements have been included. The results reported in the condensed
consolidated financial statements for any interim periods are not necessarily
indicative of the results that may be reported for the entire year. The
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 unaudited condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and accompanying footnotes included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2008.

6

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 condensed 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 United States dollars (US Dollar or US$ or
$) for financial reporting purposes. However, 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 September 30, 2009               | As of December 31, 2008
|------------------------------------------------ | -------------------------------------- | -----------------------
|Balance sheet items, except for equity accounts  | US$1=RMB6.8290                         | US$1=RMB6.8346         
|                                                 |                                        |                        
|                                                 | Three months ended September
      30,
|                                                 | 2009                                   | 2008                   
|Items in the statements of income and cash flows | US$1=RMB 6.8310                        | US$1=RMB 6.8390        
|                                                 |                                        |                        
|                                                 | Nine months ended September
      30, 
|                                                 | 2009                                   | 2008                   
|Items in the statements of income and cash flows | US$1=RMB6.8321                         | US$1=RMB6.9921         

Research and development costs

Research and development costs are expensed to operations as
incurred. Research and development costs were $26,923 and $21,590 for the nine
months ended September 30, 2009 and 2008, respectively. Research and development
costs were $8,783 and $7,896 for the three months ended September 30, 2009 and
2008, respectively.

Advertising costs

The Company expenses all advertising costs as incurred.
Advertising costs charged to selling expenses were $1,098 and $83 for the nine
months ended September 30, 2009 and 2008, respectively. There were no any
advertising costs incurred for the three months ended September 30, 2009 and
2008

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
nine months ended September 30, 2009 and 2008 were nil and $271, respectively.
There were no any shipping and handling costs incurred for the three months
ended September 30, 2009 and 2008

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 the Company (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.

7

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As discussed in note 10, the Company effected a 1-for-114.59
Reverse Split of its common stock and all outstanding shares of Series A
Preferred Stock were automatically converted to common stock. The weighted
average number of shares for the purposes of calculating the earnings per share
has been retroactively adjusted as if the Reverse Split took effect as of the
beginning of the earliest period presented. As holders of Series A Preferred
Stock were entitled to 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 before the Reverse Split.

Fair value measurements

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

|Level 1- | Quoted prices in active markets for identical
      assets or liabilities.                                                                                                                                                                                                                                                   
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                                                                                                                                                                              
|Level 2- | Observable inputs other than Level 1 prices
      such as quoted prices for similar assets or liabilities; quoted prices in
      markets that are not active; or other inputs that are observable or can be
      corroborated by observable market data for substantially the full term of
      the assets or liabilities.
|         |                                                                                                                                                                                                                                                                                                                              
|Level 3- | Unobservable inputs that are supported by
      little or no market activity and that are significant to the fair value of
      the assets or liabilities.                                                                                                                                                                  

The carrying values of cash and cash equivalents, trade
receivables and payables, and short-term debts approximate their fair values due
to their short maturities.

There were no assets and liabilities measured at fair value on
a nonrecurring basis as of September 30, 2009.

Recent accounting pronouncement adopted

In June 2009, the FASB established the FASB Accounting
Standards CodificationTM (ASC) as the single source of authoritative
U.S generally accepted accounting principles (GAAP) recognized by the FASB to be
applied to nongovernmental entities. Rules and interpretive releases of the
Securities and Exchange Commission (SEC) under authority of federal securities
laws are also sources of authoritative GAAP for SEC registrants. The ASC
superseded all previously existing non-SEC accounting and reporting standards,
and any prior sources of U.S. GAAP not included in the ASC or grandfathered are
not authoritative. New accounting standards issued subsequent to June 30, 2009
are communicated by the FASB through Accounting Standards Updates (ASUs). The
ASC did not change current U.S. GAAP but changes the approach by referencing
authoritative literature by topic (each a Topic) rather than by type of
standard. The ASC has been effective for the Company effective July 1, 2009.
Adoption of the ASC did not have a material impact on the Companys Condensed
Consolidated Financial Statements, but references in the Companys Notes to
Consolidated Financial Statements to former FASB positions, statements,
interpretations, opinions, bulletins or other pronouncements are now presented
as references to the corresponding Topic in the ASC.

Effective January 1, 2009, the first day of fiscal 2009, the
Company adopted FASB ASC 350-30 and ASC 275-10-50 (formerly FSP FAS 142-3,
Determination of the Useful Life of Intangible Assets), which 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 ASC 350-30 and ASC 275-10-50 prospectively to intangible assets acquired
subsequent to the adoption date. The adoption of these revised provisions had no
impact on the Companys Condensed Consolidated Financial Statements.

Effective January 1, 2009, the Company adopted FASB ASC
815-10-65 (formerly SFAS 161, Disclosures about Derivative Instruments and
Hedging Activities), which amends and expands previously existing guidance on
derivative instruments to require tabular disclosure of the fair value of
derivative instruments
and their gains and losses., This ASC also requires disclosure regarding the credit-risk related contingent features in derivative agreements, counterparty credit risk, and strategies and objectives for using derivative instruments. The adoption of
this ASC did not have a material impact on the Companys Condensed Consolidated Financial Statements.

8

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During 2008, the Company adopted FASB ASC 820-10 (formerly FSP FAS 157-2, "Effective Date of FASB Statement 157"), which deferred the provisions of previously issued fair value guidance 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, the Company adopted the fair value guidance for nonfinancial
assets and liabilities. The adoption of FASB ASC 820-10 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

Effective January 1, 2009, the Company adopted FASB ASC 810-10-65 (formerly SFAS 160, "Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB No. 51"), which amends previously issued guidance to establish accounting
and reporting standards for the noncontrolling interest in a subsidiary and for the 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. The adoption of the provisions in this ASC did not have a material impact on the Companys Condensed Consolidated Financial Statements.

Effective January 1, 2009, the Company adopted FASB ASC 805-10, (formerly SFAS 141R, "Business Combinations"), which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, any noncontrolling interest in an acquiree and the goodwill acquired. In addition, the provisions in this ASC require that any additional reversal of deferred tax asset valuation allowance established in
connection with fresh start reporting on January 7, 1998 be recorded as a component of income tax expense rather than as a reduction to the goodwill established in connection with the fresh start reporting. The Company will apply ASC 805-10 to any
business combinations subsequent to adoption.

Effective January 1, 2009, the Company adopted FASB ASC 805-20 (formerly FSP FAS 141R-1, "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies"), which amends ASC 805-10 to require that an
acquirer recognize at fair value, at the acquisition date, an asset acquired or a liability assumed in a business combination that arises 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 ASC Topic 450, Contingences, to determine whether the contingency should
be recognized at the acquisition date or after such date. The adoption of ASC 805-20 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

Effective July 1, 2009, the Company adopted FASB ASC 825-10-65 (formerly FASB Staff Position (FSP) No. FAS 107-1 and Accounting Principles Board 28-1, "Interim Disclosures about Fair Value of Financial Instruments"), which amends
previous guidance to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. The adoption of FASB ASC 825-10-65 did not have a material
impact on the Companys Condensed Consolidated Financial Statements.

Effective July 1, 2009, the Company adopted FASB ASC 320-10-65 (formerly FSP FAS 115-2 and FAS 124-2, "Recognition and Presentation of Other-Than-Temporary Impairments"). Under ASC 320-10-65, an other-than-temporary impairment must be recognized if
the Company has the intent to sell the debt security or the Company is more likely than not will be required to sell the debt security before its anticipated recovery. In addition, ASC 320-10-65 requires impairments related to credit loss, which is
the difference between the present value of the cash flows expected to be collected and the amortized cost basis for each security, to be recognized in earnings while impairments related to all other factors to be recognized in other
comprehensive income. The adoption of ASC 320-10-65 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

9

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Effective July 1, 2009, the Company adopted FASB ASC 820-10-65 (formerly FSP FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not
Orderly"), which provides guidance on how to determine the fair value of assets and liabilities when the volume and level of activity for the asset or liability has significantly decreased when compared with normal market activity for the asset or
liability as well as guidance on identifying circumstances that indicate a transaction is not orderly. The adoption of ASC 820-10-65 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

Effective July 1, 2009, the Company adopted FASB ASC 855-10 (formerly SFAS 165, Subsequent Events), which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date, but before
financial statements are issued or are available to be issued. Adoption of ASC 855-10 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

New accounting pronouncement to be adopted

In December 2008, the FASB issued ASC 715, Compensation  Retirement Benefits(formerly FASB FSP FAS 132(R)-1, Employers Disclosures about Postretirement Benefit Plan Assets), which expands the disclosure requirements
about plan assets for defined benefit pension plans and postretirement plans. The Company is required to adopt these disclosure requirements in the fourth quarter of 2009. It is expected the adoption of these disclosure requirements will have no
material effect on the Companys Consolidated Financial Statements.

In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets  an amendment of FASB Statement No. 140, (not yet reflected in FASB ASC). SFAS No. 166 limits the circumstances in which a financial asset
should be derecognized when the transferor has not transferred the entire financial asset by taking into consideration the transferors continuing involvement. The standard requires that a transferor recognize and initially measure at fair
value all assets obtained (including a transferors beneficial interest) and liabilities incurred as a result of a transfer of financial assets accounted for as a sale. The concept of a qualifying special-purpose entity is removed from SFAS No.
140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, along with the exception from applying FIN 46(R), Consolidation of Variable Interest Entities. The standard is effective for
the first annual reporting period that begins after November 15, 2009 (i.e. the Companys fiscal year beginning January 1, 2010), for interim periods within the first annual reporting period, and for interim and annual reporting periods
thereafter. Earlier application is prohibited. It is expected the adoption of this Statement will have no material effect on the Companys Consolidated Financial Statements.

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R), (not yet reflected in FASB ASC). The standard amends FIN No. 46(R) to require a company to analyze whether its interest in a variable interest
entity (VIE) gives it a controlling financial interest. A company must assess whether it has an implicit financial responsibility to ensure that the VIE operates as designed when determining whether it has the power to direct the
activities of the VIE that significantly impact its economic performance. Ongoing reassessments of whether a company is the primary beneficiary are also required by the standard. SFAS No. 167 amends the criteria to qualify as a primary beneficiary
as well as how to determine the existence of a VIE. The standard also eliminates certain exceptions that were available under FIN No. 46(R). This Statement will be effective as of the beginning of each reporting entitys first annual reporting
period that begins after November 15, 2009 (i.e. the Companys fiscal year beginning January 1, 2010), for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application
is prohibited. Comparative disclosures will be required for periods after the effective date. As such, the Company will adopt this Statement for interim and annual periods ending after January 1, 2010. It is expected the adoption of this Statement
will have no material effect on the Companys Consolidated Financial Statements.

In August, 2009, the FASB issued ASC Update No. 2009-05 (Update 2009-05) to provide guidance on measuring the fair value of liabilities under FASB ASC 820 (formerly SFAS 157, "Fair Value Measurements"). The Company is required to adopt Update 2009-05
in the fourth quarter of 2009. It is expected the adoption of this Update will
have no material effect on the Companys Consolidated Financial Statements.

10

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In October 2009, the FASB concurrently issued the following ASC
Updates:

- ASU No. 2009-14 - Software (Topic 985): Certain Revenue
Arrangements That Include Software Elements(formerly EITF Issue No. 09-3)
.This standard removes tangible products from the scope of software
revenue recognition guidance and also provides guidance on determining whether
software deliverables in an arrangement that includes a tangible product, such
as embedded software, are within the scope of the software revenue guidance.
- ASU No. 2009-13 - Revenue Recognition (Topic 605):
Multiple-Deliverable Revenue Arrangements(formerly EITF Issue No. 08-1).
This standard modifies the revenue recognition guidance for arrangements that
involve the delivery of multiple elements, such as product, software, services
or support, to a customer at different times as part of a single revenue
generating transaction. This standard provides principles and application
guidance to determine whether multiple deliverables exist, how the individual
deliverables should be separated and how to allocate the revenue in the
arrangement among those separate deliverables. The standard also expands the
disclosure requirements for multiple deliverable revenue arrangements.

These Accounting Standards Updates should be applied on a
prospective basis for revenue arrangements entered into or materially modified
in fiscal years beginning on or after June 15, 2010, with earlier application
permitted. Alternatively, an entity can elect to adopt these standards on a
retrospective basis, but both these standards must be adopted in the same period
using the same transition method. The Company expects to apply this standard on
a prospective basis for revenue arrangements entered into or materially modified
beginning January 1, 2011. The Company is currently evaluating the potential
impact these standards may have on its financial position and results of
operations.

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

**NOTE 3**

**ACCOUNTS RECEIVABLE,
NET**

|Accounts receivable consisted of the following: |   |               |  |   |              | 
|----------------------------------------------- | - | ------------- |  | - | ------------ | 
|                                                |   | September 30, |  |   | December 31, | 
|                                                |   | 2009          |  |   | 2008         | 
|                                                |   | Unaudited     |  |   | Audited      | 
|                                                |   |               |  |   |              | 
|Accounts receivable                             | $ | 362,880       |  | $ | 283,822      | 
|Less: Allowance for doubtful debts              |   | -             |  |   | -            | 
|Accounts receivable, net                        | $ | 362,880       |  | $ | 283,822      | 
|                                                |   |               |  |   |              | 

NOTE 4

**INVENTORIES**

|Inventories by major categories are summarized as follows: |   |               |  |   |              | 
|---------------------------------------------------------- | - | ------------- |  | - | ------------ | 
|                                                           |   | September 30, |  |   | December 31, | 
|                                                           |   | 2009          |  |   | 2008         | 
|                                                           |   | Unaudited     |  |   | Audited      | 
|                                                           |   |               |  |   |              | 
|                                                           |   |               |  |   |              | 
|Raw materials                                              | $ | 232,086       |  | $ | 147,824      | 
|Work in progress                                           |   | 224,550       |  |   | 832,680      | 
|Finished goods                                             |   | 174,674       |  |   | 187,575      | 
|                                                           | $ | 631,310       |  | $ | 1,168,079    | 

11

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**NOTE 5**

**INTANGIBLE ASSETS, NET**

|Intangible assets, net consisted of the following: |   |               |   |   |              |  
|-------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                   |   | September 30, |   |   | December 31, |  
|                                                   |   | 2009          |   |   | 2008         |  
|                                                   |   | Unaudited     |   |   | Audited      |  
|                                                   |   |               |   |   |              |  
|Computer software, cost                            | $ | 1,454         |   | $ | 1,453        |  
|Exclusive right to use a secret process, cost      |   | 4,394,794     |   |   | 4,391,193    |  
|Less: Accumulated amortization                     |   | (1,539,287    | ) |   | (1,208,651   | )
|                                                   | $ | 2,856,961     |   | $ | 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 nine months ended September 30,
2009 and 2008 were $329,495 and $322,388, respectively. Amortization expenses
for the three months ended September 30, 2009 and 2008 were $109,849 and
$109,879, respectively.

**NOTE 6**

**PROPERTY, PLANT AND EQUIPMENT,
NET**

|Property, plant and equipment, net consisted of the
      following: |   |               |   |   |              |  
|-------------------------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                                     |   | September 30, |   |   | December 31, |  
|                                                                     |   | 2009          |   |   | 2008         |  
|                                                                     |   | Unaudited     |   |   | Audited      |  
|                                                                     |   |               |   |   |              |  
|Cost:                                                                |   |               |   |   |              |  
|Buildings                                                            | $ | 11,657,092    |   | $ | 11,647,541   |  
|Office equipment                                                     |   | 9,325         |   |   | 9,317        |  
|Machinery                                                            |   | 98,984        |   |   | 98,903       |  
|Motor vehicles                                                       |   | 54,835        |   |   | 54,790       |  
|Total cost                                                           |   | 11,820,236    |   |   | 11,810,551   |  
|Less: Accumulated depreciation                                       |   | (1,335,414    | ) |   | (907,575     | )
|Net book value                                                       | $ | 10,484,822    |   | $ | 10,902,976   |  

Depreciation expenses for the nine months ended September 30,
2009 and 2008 were $426,901 and $517,949, respectively. Depreciation expenses
for the three months ended September 30, 2009 and 2008 were $141,664 and
$173,914, respectively.

**NOTE 7**

**OTHER PAYABLES AND
ACCRUALS**

|Other payables and accruals consisted of the following: |   |               |  |   |              | 
|------------------------------------------------------- | - | ------------- |  | - | ------------ | 
|                                                        |   | September 30, |  |   | December 31, | 
|                                                        |   | 2009          |  |   | 2008         | 
|                                                        |   | Unaudited     |  |   | Audited      | 
|                                                        |   |               |  |   |              | 
|Accrued staff costs                                     | $ | 337,407       |  | $ | 235,421      | 
|Other taxes payable                                     |   | 142,030       |  |   | 232,481      | 
|Other payables                                          |   | 5,414         |  |   | 5,057        | 
|                                                        |   |               |  |   |              | 
|                                                        | $ | 484,851       |  | $ | 472,959      | 

12

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8

PAYABLE FOR INTANGIBLES

As described in Note 5, the Company purchased an exclusive
right from an independent party for a secret process and method for a stated
value of RMB 30,000,000 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 APB 21, Interest on Receivables and Payables, the payable for
intangibles are stated without imputed interest as the noninterest factor fairly
represents the warranty for performance.

|The following table presents the amounts payable for the
      next five years and thereafter: |   |          |  
|---------------------------------------------------------------------------------------------- | - | -------- | -
|                                                                                               |   |          |  
|12-month period ending September 30, 2011                                                      | $ | 878,606  |  
|2012 and thereafter                                                                            |   | -        |  
|Total                                                                                          |   | 878,606  |  
|Less: Current portion                                                                          |   | (878,606 | )
|Non-current portion                                                                            | $ | -        |  

**NOTE 9**

**ACQUISITION PAYABLE**

The acquisition payable represents the transfer price of RMB
60,000,000 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 to the Shuaiyi Founders.

NOTE 10

SHAREHOLDERS EQUITY

Reverse Split of Common Stock

On May 19, 2009, the Company effected a one for 114.59 reverse
split of its outstanding common stock (Reverse Split).

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
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 were
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 had
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 oucharter documents and stock redemptions. Shares of
Series A Preferred Stock had a senior liquidation payment preference in the
event of a liquidation or sale of the Company.

Following effectiveness of the Reverse Split and in accordance
with the Certificate of Designation of the Series A Voting Convertible Preferred
Stock, all issued and outstanding shares of the Series A Preferred Stock were
automatically converted into 12,695,223 shares of common stock, on the basis of
17.45 shares of common stock for each one share of Series A Preferred Stock, on
or about May 29, 2009.

As of September 30, 2009 and December 31, 2008, the Company had
none and 727,520 shares of Series A Preferred Stock issued and outstanding,
respectively.

NOTE 11

EQUITY INCENTIVE PLAN

On June 3, 2009, the Company established the Shuaiyi
International New Resources Development Inc. 2009 Equity Incentive Plan(the
Plan). The purposes of the Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentive to employees, directors and consultants, and to promote the long-term
growth and profitability of the Company. The Plan permits the granting of Incentive Stock Options, Nonstatutory Stock
Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights,
Performance Units and Performance Shares as the Companys board of director may
determine. The maximum number of shares that may be issued under the Plan was
1,000,000.

13

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On June 17, 2009, 500,000 restricted shares were issued under
the Plan and accordingly, remaining shares that can be issued under the Plan was
500,000 shares as of September 30, 2009.

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 December 31, 2009 and 2010.

|The Companys income tax expense consisted of: |   |                      |  |   |                     |  |   |           |  |  |           | 
|---------------------------------------------- | - | -------------------- |  | - | ------------------- |  | - | --------- |  |  | --------- | 
|                                               |   | For the Three Months |  |   | For the Nine Months | 
|                                               |   | Ended September 30,  |  |   | Ended September 30, | 
|                                               |   | 2009                 |  |   | 2008                |  |   | 2009      |  |  | 2008      | 
|                                               |   | Unaudited            |  |   | Unaudited           |  |   | Unaudited |  |  | Unaudited | 
|                                               |   |                      |  |   |                     |  |   |           |  |  |           | 
|Current  PRC EIT                              | $ | 340,056              |  | $ | 361,336             |  | $ | 891,220 $ |  |  | 774,996   | 
|Deferred                                       |   | -                    |  |   | -                   |  |   | -         |  |  | -         | 
|                                               |   |                      |  |   |                     |  |   |           |  |  |           | 
|                                               | $ | 340,056              |  | $ | 361,336             |  | $ | 891,220 $ |  |  | 774,996   | 

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 December 31, 2009 and
2010.

**NOTE 13**

**RELATED PARTY
TRANSACTIONS**



(a)

Due to related
parties

|Due to related parties consisted of the
      following:                            |  |      |  |   |               |  |   |              | 
|----------------------------------------------------------------------------------- |  | ---- |  | - | ------------- |  | - | ------------ | 
|                                                                                    |  |      |  |   | September 30, |  |   | December 31, | 
|                                                                                    |  |      |  |   | 2009          |  |   | 2008         | 
|                                                                                    |  |      |  |   | Unaudited     |  |   | Audited      | 
|Due to related company:                                                             |  |      |  |   |               |  |   |              | 
|- Heilonjiang Shuaiyi Technology Development
      Co., Ltd. (Shuaiyi Technology) |  | (i)  |  | $ | 15,760        |  | $ | 8,998        | 
|- Ms. Lianyun Han                                                                   |  | (ii) |  |   | 61,649        |  |   | -            | 
|                                                                                    |  |      |  |   |               |  |   |              | 
|                                                                                    |  |      |  | $ | 77,409        |  | $ | 8,998        | 

|(i)  | Shuaiyi Technology and the Company are under common
      control and management.
|---- | ---------------------------------------------------------------------------------
|(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.

14

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

The amounts due to related parties were non-interest bearing,
unsecured and had no fixed repayment date.

(b)

Purchase of
goods

For the nine months ended September 30, 2009 and 2008, the
Company purchased rice amounting to $655,099 and $1,156,868, respectively, from
Shuaiyi Technology.

(c)

Lease of land

For the nine months ended September 30, 2009 and 2008, the
Company paid rental expense of $6,751 and $ 6,597, respectively, for land under
an operating lease to Shuaiyi Technology.

**NOTE 14**

**CONCENTRATION OF RISK**

**(a)**

**Concentration of
credit risk**



As of September 30, 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 nine months ended September 30, 2009 and 2008, all of
the Companys sales arose in the PRC. In addition, all accounts receivable as of
September 30, 2009 and December 31, 2008 also arose in the PRC.

There was one customer accounted for 10.20% of the Companys
revenue for the nine months ended September 30, 2009. There was no single
customer who accounted for more than 10% of the Companys revenue for the nine
months ended September 30, 2008.

As of September 30, 2009, five customers on an individual basis
accounted for 20%, 14%, 13%, 13% and 10% of accounts receivable of the Company.
As of December 31, 2008, three customers on an individual basis 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 September 30, 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 September 30, 2009 are as follows:

15

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

|                  |   | Unaudited | 
|----------------- | - | --------- | 
|Remainder of 2009 | $ | 7,962     | 
|2010              |   | 31,849    | 
|2011              |   | 9,006     | 
|2012              |   | 9,006     | 
|2013              |   | 9,006     | 
|Thereafter        |   | 126,080   | 
|                  |   |           | 
|Total             | $ | 192,909   | 

**(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 RMB 60,000,000
(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

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

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 nine months ended September 30, 2009 and 2008,
all of the Companys operations were carried out in one geographical segment -
China.

|                                           |  |   | Chinese     |  |   | Other        |  |   |             |   |   |                  | 
|------------------------------------------ |  | - | ----------- |  | - | ------------ |  | - | ----------- | - | - | ---------------- | 
|                                           |  |   | Caterpillar |  |   | Agricultural |  |   | Corporate   |   |   |                  | 
|Nine months ended September 30, 2009       |  |   | Fungus      |  |   | Products     |  |   | unallocated |   |   | **Consolidated** | 
|Segment revenue from external customers    |  | $ | 8,696,141   |  | $ | 2,853,103    |  | $ | -           |   | $ | 11,549,244       | 
|Segment profit (loss)                      |  | $ | 6,287,874   |  | $ | 578,505      |  | $ | (231,992    | ) | $ | 6,634,387        | 
|Income from operations before income taxes |  |   |             |  |   |              |  |   |             |   | $ | 6,634,387        | 
|Segment assets                             |  | $ | 25,239,717  |  | $ | 1,182,395    |  | $ | 3,359,748   |   | $ | 29,781,860       | 
|Total assets                               |  |   |             |  |   |              |  |   |             |   | $ | 29,781,860       | 
|Other segment information:                 |  |   |             |  |   |              |  |   |             |   |   |                  | 
|Depreciation and
      amortization        |  | $ | 748,444     |  | $ | 5,889        |  | $ | 2,063       |   | $ | 756,396          | 
|Expenditure for segment
      assets       |  | $ | 878,207     |  | $ | -            |  | $ | -           |   | $ | 878,207          | 
|                                           |  |   |             |  |   |              |  |   |             |   |   |                  | 
|                                           |  |   |             |  |   |              |  |   |             |   |   |                  | 
|                                           |  |   | Chinese     |  |   | Other        |  |   |             |   |   |                  | 
|                                           |  |   | Caterpillar |  |   | Agricultural |  |   | Corporate   |   |   |                  | 
|Nine months ended September 30, 2008       |  |   | Fungus      |  |   | Products     |  |   | unallocated |   |   | Consolidated     | 
|Segment revenue from external customers    |  | $ | 6,985,060   |  | $ | 3,182,225    |  | $ | -           |   | $ | 10,167,285       | 
|Segment profit (loss)                      |  | $ | 5,145,129   |  | $ | 658,780      |  | $ | (157,814    | ) | $ | 5,646,095        | 
|Income from operations before income taxes |  |   |             |  |   |              |  |   |             |   | $ | 5,646,095        | 
|Segment assets                             |  | $ | 21,467,946  |  | $ | 881,929      |  | $ | 1,438,153   |   | $ | 23,788,028       | 
|Total assets                               |  |   |             |  |   |              |  |   |             |   | $ | 23,788,028       | 
|Other segment information:                 |  |   |             |  |   |              |  |   |             |   |   |                  | 
|Depreciation and
      amortization        |  | $ | 832,258     |  | $ | 5,708        |  | $ | 2,371       |   | $ | 840,337          | 
|Expenditure for segment
      assets       |  | $ | 884,338     |  | $ | 4,598        |  | $ | 2,130       |   | $ | 891,066          | 

17

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

|                                           |  |   | Chinese     |  |   | Other        |  |   |             |   |   |                  | 
|------------------------------------------ |  | - | ----------- |  | - | ------------ |  | - | ----------- | - | - | ---------------- | 
|                                           |  |   | Caterpillar |  |   | Agricultural |  |   | Corporate   |   |   |                  | 
|Three months ended September 30, 2009      |  |   | Fungus      |  |   | Products     |  |   | unallocated |   |   | **Consolidated** | 
|Segment revenue from external customers    |  | $ | 3,257,025   |  | $ | 308,936      |  | $ | -           |   | $ | 3,565,961        | 
|Segment profit (loss)                      |  | $ | 2,415,268   |  | $ | 19,468       |  | $ | (65,626     | ) | $ | 2,369,110        | 
|Income from operations before income taxes |  |   |             |  |   |              |  |   |             |   | $ | 2,369,110        | 
|Segment assets                             |  | $ | 25,239,716  |  | $ | 1,182,396    |  | $ | 3,359,748   |   | $ | 29,781,860       | 
|Total assets                               |  |   |             |  |   |              |  |   |             |   | $ | 29,781,860       | 
|Other segment information:                 |  |   |             |  |   |              |  |   |             |   |   |                  | 
|Depreciation and
      amortization        |  | $ | 248,862     |  | $ | 1,962        |  | $ | 688         |   | $ | 251,512          | 
|Expenditure for segment
      assets       |  | $ | 878,349     |  | $ | -            |  | $ | -           |   | $ | 878,349          | 
|                                           |  |   |             |  |   |              |  |   |             |   |   |                  | 
|                                           |  |   | Chinese     |  |   | Other        |  |   |             |   |   |                  | 
|                                           |  |   | Caterpillar |  |   | Agricultural |  |   | Corporate   |   |   |                  | 
|Three months ended September 30, 2008      |  |   | Fungus      |  |   | Products     |  |   | unallocated |   |   | Consolidated     | 
|Segment revenue from external customers    |  | $ | 3,591,681   |  | $ | 821,401      |  | $ | -           |   | $ | 4,413,082        | 
|Segment profit (loss)                      |  |   | 2,708,344   |  | $ | 73,652       |  | $ | (54,176     | ) | $ | 2,727,820        | 
|Income from operations before income taxes |  |   |             |  |   |              |  |   |             |   | $ | 2,727,820        | 
|Segment assets                             |  | $ | 21,467,946  |  | $ | 881,929      |  | $ | 1,438,153   |   | $ | 23,788,028       | 
|Total assets                               |  |   |             |  |   |              |  |   |             |   | $ | 23,788,028       | 
|Other segment information:                 |  |   |             |  |   |              |  |   |             |   |   |                  | 
|Depreciation and
      amortization        |  | $ | 278,338     |  | $ | 4,597        |  | $ | 860         |   | $ | 283,795          | 
|Expenditure for segment
      assets       |  | $ | 877,321     |  | $ | 1,294        |  | $ | 557         |   | $ | 879,172          | 

NOTE 17

SUBSEQUENT
EVENTS

The Company has evaluated events subsequent to the balance
sheet date through November 12, 2009, which represents the issue date of this
Form 10-Q. There were no events or transactions occurring during this subsequent
event report period which requires recognition or disclosure in the financial
statements.

18

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

Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q, including the following Managements Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements that are based on the beliefs of our management,
and involve risks and uncertainties, as well as assumptions, that, if they ever materialize or prove incorrect, could cause actual results to differ materially from those expressed or implied by such forward-looking statements. The words
believe, expect, anticipate, project, targets, optimistic, intend, aim, will or similar expressions are intended to identify forward-looking
statements. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements regarding new and existing products, technologies and opportunities; statements regarding
market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future
operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business in China; and any statements of belief or intention. As such, they are subject to risks and uncertainties that could cause
our results to differ materially from those expressed or implied by such forward looking statements. Such risks and uncertainties include any of the factors and risks mentioned in the Risk Factors sections of the 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 Shuaiyi International refer to the combined business of Shuaiyi International New Resources Development 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.

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. We
generated approximately 91.34% of our revenues from dry Chinese Caterpillar
Fungus during the third 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.

19

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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.

Third Quarter Financial Performance Highlights

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

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

- Revenues: Our revenues were approximately $3.57 million for the third
  quarter of 2009, a decrease of 19.2% from the same quarter of last year.
- Gross Margin: Gross margin was 77.8% for the third quarter of 2009, as
  compared to 69.5% for the same period in 2008.
- Operating Profit: Operating profit was approximately $2.35 million for the
  third quarter of 2009, a decrease of 13.2% from $2.72 million of the same
  period last year.
- Net Income: Net income was approximately $2.03 million for the third
  quarter of 2009, a decrease of 14.4% from the same period of last year.
- Fully diluted earnings per share was $0.15 for the third quarter of 2009.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2009 Compared to Three
Months Ended September 30, 2008

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

|                                          |  | Three Months
      Ended |   |  | Three Months
      Ended |   
|----------------------------------------- |  | ------------------------ | - |  | ------------------------ | --
|                                          |  | September 30, 2009       |   |  | September 30, 2008       |   
|                                          |  |                          |   |  | As a                     |   
|                                          |  |                          |   |  | percentage of            |   
|                                          |  | In Thousands             |   |  | revenues                 |   
|Revenues                                  |  | 3,566                    |   |  | 100                      | % 
|Cost of goods sold                        |  | (793                     | ) |  | (22.2                    | )%
|Gross Profit                              |  | 2,773                    |   |  | 77.8                     | % 
|Selling expenses                          |  | (88                      | ) |  | (2.4                     | )%
|General and
      administrative expenses |  | (331                     | ) |  | (9.3                     | )%
|Income from operations                    |  | 2,354                    |   |  | 66.0                     | % 
|Other income and
      (expenses)         |  |                          |   |  |                          |   
|Interest
      income                     |  | 19                       |   |  | 0.5                      | % 
|Other income                              |  | -                        |   |  | -                        |   
|Exchange loss                             |  | (4                       | ) |  | (0.08                    | )%
|Income before income
      tax            |  | 2,369                    |   |  | 66.4                     | % 
|Provision for income tax                  |  | (340                     | ) |  | (9.5                     | )%
|Net income                                |  | 2,029                    |   |  | 56.9                     | % 

20

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Revenues. Revenues decreased approximately $0.84
million, or 19.0%, to approximately $3.57 million for the three months ended
September 30, 2009, from approximately $4.41 million for the same period in
2008. This decrease was mainly attributable to the fact that during the third
quarter of 2009, we conducted maintenance and sanitization of our production
facilities of dry Chinese Caterpillar Fungus, which reduced the production and
sales of our products.

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 decreased approximately $0.56 million, or 41.5%, to approximately
$0.79 million for the three months ended September 30, 2009, from approximately
$1.35 million during the same period in 2008. This decrease was mainly due to
the decrease in our sales. As a percentage of revenues, the cost of goods sold
decreased to 22.2% during the three moths ended September 30, 2009 from 30.5% 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 dry Chinese Caterpillar Fungus 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 during the three months ended
September 30, 2009.

Gross Profit.Our gross profit decreased by
approximately $0.30 million, or 9.8%, to approximately $2.77 million for the
three months ended September 30, 2009 from approximately $3.07 million during
the same period in 2008. Gross profit as a percentage of revenues, or gross
margin, was 77.8% for the three months ended September 30, 2009, an increase of
8.3% from 69.5% 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 decreased approximately $0.001 million, or 1.1%, to approximately
$0.088 million for the three months ended September 30, 2009 from approximately
$0.089 million during the same period in 2008. As a percentage of revenues,
selling expenses increased to 2.4% for the three months ended September 30, 2009
from 2.0% for the same period in 2008. The decrease in the amount of selling
expenses was mainly attributable to the decrease in our sales.

General and Administrative Expenses . General and
administrative expenses increased approximately $0.07 million, or 26.9%, to
approximately $0.33 million for the three months ended September 30, 2009 from
approximately $0.26 million for the same period in 2008. As a percentage of
revenues, general and administrative expenses increased to 9.3% for the three
months ended September 30, 2009 from 5.9% for the same period in 2008. The
increase in the amount of general and administrative expenses was mainly
attributable to the payment of Daqing Shuaiyi real property tax of Daqing
Shuaiyi due for the three months ended September 30, 2009 and the overdue real
property tax for the last fiscal year.

Income Before Income Tax . Income before income tax
decreased approximately $0.36 million, or 13.2%, to approximately $2.37 million
during the three months ended September 30, 2009 from approximately $2.73
million during the same period in 2008. As a percentage of revenues, income
before income tax increased to 66.4% during the three months ended September 30,
2009 from 61.8% during the same period in 2008. The decrease of income before
income tax is mainly attributable to the decrease in our gross profit as a
result of the decrease in our sales.

21

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Income Taxes. Shuaiyi International 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 Shuaiyi International 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. China passed a new
Enterprise Income Tax Law, or the New EIT Law, and its implementing rules, both of which became effective on January 1, 2008. Under the New EIT Law, an enterprise established outside of China with de facto management bodies within China
is considered a resident enterprise, meaning that it can be treated in a manner similar to a Chinese domestic enterprise for enterprise income tax purposes. The implementing rules of the New EIT Law define de facto management as
substantial and overall management and control over the production and operations, personnel, accounting, and properties of the enterprise.

On April 22, 2009, the State Administration of Taxation issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto
Management Bodies ( the Notice), further interpreting the application of the New EIT Law and its implementation with respect to non-Chinese enterprises or group controlled offshore entities. Pursuant to the Notice, an enterprise
incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a non-domestically incorporated resident enterprise if (i) its senior management in charge of daily operations reside or
perform their duties mainly in China; (ii) its financial or personnel decisions are made or approved by bodies or persons in China; (iii) substantial assets and properties, accounting books, corporate chops, board and shareholder minutes are kept in
China; and (iv) at least half of its directors with voting rights or senior management often resident in China. A resident enterprise would be subject to an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at
a rate of 10% when paying dividends to its non-PRC shareholders.  However, it remains unclear as to whether the Notice is applicable to an offshore enterprise incorporated by a Chinese natural person. Nor are detailed measures on imposition of tax
from non-domestically incorporated resident enterprises are available.  Therefore, it is unclear how tax authorities will determine tax residency based on the facts of each case.

We may be deemed to be a resident enterprise by Chinese tax authorities. If the PRC tax authorities determine that the Company is a resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences
could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as interest on financing
proceeds and non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Second, although under the New EIT Law and its implementing rules, dividends paid to us from our VIE Entities would qualify as tax-exempt
income, we cannot guarantee that such dividends will not be subject to withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound
remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that future guidance issued with respect to the new resident enterprise classification could result in a
situation in which a withholding tax is imposed on dividends we pay to our non-PRC shareholders and with respect to gains derived by our non-PRC shareholders from transferring our shares. We are actively monitoring the possibility of resident
enterprise treatment for the 2008 tax year and are evaluating appropriate organizational changes to avoid this treatment, to the extent possible.

If we were treated as a resident enterprise by PRC tax authorities, we would be subject to taxation in both the U.S. and China, and our PRC tax may not be credited against our U.S. tax.

Under the EIT, 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 decreased approximately $0.02 million to approximately $.0.34 million for the three months ended September 30, 2009 from approximately $0.36 million for the same period in 2008. We paid less tax in 2009 because of the decrease
in sales and taxable income.

Net Income . Net income decreased by approximately $0.34 million, or 14.4% to approximately $ 2.03 million for the three months ended September 30, 2009 from approximately $2.37 million for the same period of 2008, as a result of
the factors described above.

22

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Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008

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

|                                          |  | Nine Months
    Ended |   |  | Nine Months
    Ended |   
|----------------------------------------- |  | --------------------- | - |  | --------------------- | --
|                                          |  | September 30, 2009    |   |  | September 30, 008     |   
|                                          |  |                       |   |  | As a                  |   
|                                          |  |                       |   |  | percentage of         |   
|                                          |  | In Thousands          |   |  | revenues              |   
|Revenues                                  |  | 11,549                |   |  | 100                   | % 
|Cost of goods sold                        |  | (3,733                | ) |  | (32.3                 | )%
|Gross Profit                              |  | 7,816                 |   |  | 67.7                  | % 
|Selling expenses                          |  | (281                  | ) |  | (2.4                  | )%
|General and
      administrative expenses |  | (944                  | ) |  | (8.2                  | )%
|Income from operations                    |  | 6,591                 |   |  | 57.1                  | % 
|Other income and
      (expenses)         |  |                       |   |  |                       |   
|Interest
      income                     |  | 50                    |   |  | 0.4                   | % 
|Other income                              |  | -                     |   |  | -                     |   
|Exchange loss                             |  | (7                    | ) |  | (0.06                 | )%
|Income before income
      tax            |  | 6,634                 |   |  | 57.4                  | % 
|Provision for income tax                  |  | (891                  | ) |  | (7.7                  | )%
|Net income                                |  | 5,743                 |   |  | 49.7                  | % 

Revenues. Revenues increased approximately $1.3 million,
or 12.8%, to approximately $11.5 million for the nine months ended September 30,
2009, from approximately $10.2 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 as well as the sales of our small package dry
Chinese Caterpillar Fungus products, which consisted a larger portion of our
total revenues during the nine months ended September 30, 2009 as compared to
the same period last year.

Cost of Goods Sold.Our cost of goods sold increased
approximately $0.15 million, or 4.2%, to approximately $3.73 million for the
nine months ended September 30, 2009, from approximately $3.58 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 32.3%
during the nine moths ended September 30, 2009 from 35.2% 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 dry
Chinese Caterpillar Fungus 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 during the nine months ended September 30,
2009.

Gross Profit.Our gross profit increased by
approximately $1.2 million, or 18.2%, to approximately $7.8 million for the nine
months ended September 30, 2009 from approximately $6.6 million during the same
period in 2008. Gross profit as a percentage of revenues, or gross margin, was
67.7% for the nine month ended September 30, 2009, an increase of 2.9% from
64.8% 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.

23

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Selling Expenses . Our selling expenses increased
approximately $0.14 million, or 100%, to approximately $0.28 million for the
nine months ended September 30, 2009 from approximately $0.14 million during the
same period in
2008. As a percentage of revenues, selling expenses increased to 2.4% for the nine months ended September 30, 2009 from 1.4% 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.

General and Administrative Expenses . General and administrative expenses increased approximately $0.11 million, or 13.3%, to approximately $0.94 million for the nine months ended September 30, 2009 from approximately $0.83
million for the same period in 2008. As a percentage of revenues, general and administrative expenses increased to 8.2% for the nine months ended September 30, 2009 from 8.1% for the same period in 2008. The increase in the amount of general and
administrative expenses was mainly attributable to the increase of services expenses associated with being a public company during the nine months ended September 30, 2009.

Income Before Income Tax . Income before income tax increased approximately $0.98 million, or 17.3%, to approximately $6.63 million during the nine months ended September 30, 2009 from approximately $5.65 million during the same
period in 2008. As a percentage of revenues, income before income tax increased to 57.4% during the nine months ended September 30, 2009 from 55.5% during the same period in 2008. The increase in 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. Income tax increased approximately $0.11 million to approximately $0.89 million for the nine months ended September 30, 2009 from approximately $0.78 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 $0.87 million, or 17.9% to approximately $5.74 million for the nine months ended September 30, 2009 from approximately $4.87 million for the same period of 2008, as a result of
the factors described above.

Business Segment Information

Our business operations can be categorized into two segments based on the type of products we manufacture and sell, specifically (i) Chinese Caterpillar Fungus, and (ii) other agricultural products.

For the nine months ended September 30, 2009, our sales revenue from our Chinese Caterpillar Fungus was approximately $8.70 million, and our sales revenue from our other agricultural products was approximately $2.85 million.

We grow and sell our Chinese Caterpillar Fungus through our subsidiary, Daqing Shuaiyi. Our subsidiary, Harbin Shuaiyi is mainly engaged in the business of selling our other agricultural products.

Additional information regarding our products can be found at Note 16 in our unaudited consolidated financial statements contained under Part I, Item I FINANCIAL STATEMENTS above.

Liquidity and Capital Resources

General

As of September 30, 2009, we had cash and cash equivalents (excluding restricted cash) of approximately $15.4 million. The following table provides detailed information about our net cash flow for all financial statement periods presented in
this report.

24

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

Nine Months Ended September 30,2009
    2008Net cash provided by operating activities
    $7,086
    $4,592Net cash (used in) investing activities
    (928)
    (891)Net cash provided by financing activities
    62
    6.5Net cash flow
    6,236
    3,955


Operating Activities

Net cash provided by operating activities was approximately
$7.09 million for the nine-month period ended September 30, 2009, which is an
increase of approximately $2.50 million from approximately $4.59 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 account receivables.

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 nine-month period
ended September 30, 2009 was approximately $0.93 million, which is an increase
of approximately $0.04 million from net cash used in investing activities of
approximately $0.89 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 nine-month
period ended September 30, 2009 was approximately $0.06 million, which is an
increase of approximately $0.05 million from approximately $0.01 million net
cash provided by financing activities for the same period of 2008. During the
nine months ended September 30, 2009, we borrowed approximately $0.06 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.

25

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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.

New accounting pronouncement to be adopted

In June 2009, the FASB established the FASB Accounting Standards CodificationTM (ASC) as the single source of authoritative U.S generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental
entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The ASC superseded all previously existing
non-SEC accounting and reporting standards, and any prior sources of U.S. GAAP not included in the ASC or grandfathered are not authoritative. New accounting standards issued subsequent to June 30, 2009 are communicated by the FASB through
Accounting Standards Updates (ASUs). The ASC did not change current U.S. GAAP but changes the approach by referencing authoritative literature by topic (each a Topic) rather than by type of standard. The ASC has been effective for the
Company effective July 1, 2009. Adoption of the ASC did not have a material impact on the Companys Condensed Consolidated Financial Statements, but references in the Companys Notes to Consolidated Financial Statements to former FASB
positions, statements, interpretations, opinions, bulletins or other pronouncements are now presented as references to the corresponding Topic in the ASC.

Effective January 1, 2009, the first day of fiscal 2009, the Company adopted FASB ASC 350-30 and ASC 275-10-50 (formerly FSP FAS 142-3, Determination of the Useful Life of Intangible Assets), which 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 ASC 350-30 and ASC
275-10-50 prospectively to intangible assets acquired subsequent to the adoption date. The adoption of these revised provisions had no impact on the Companys Condensed Consolidated Financial Statements.

Effective January 1, 2009, the Company adopted FASB ASC 815-10-65 (formerly SFAS 161, Disclosures about Derivative Instruments and Hedging Activities), which amends and expands previously existing guidance on derivative instruments to
require tabular disclosure of the fair value of derivative instruments and their gains and losses., This ASC also requires disclosure regarding the credit-risk related contingent features in derivative agreements, counterparty credit risk, and
strategies and objectives for using derivative instruments. The adoption of this ASC did not have a material impact on the Companys Condensed Consolidated Financial Statements.

During 2008, the Company adopted FASB ASC 820-10 (formerly FSP FAS 157-2, "Effective Date of FASB Statement 157"), which deferred the provisions of previously issued fair value guidance 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, the Company adopted the fair value guidance for nonfinancial
assets and liabilities. The adoption of FASB ASC 820-10 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

26

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Effective January 1, 2009, the Company adopted FASB ASC 810-10-65 (formerly SFAS 160, "Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB No. 51"), which amends previously issued guidance to establish accounting
and reporting standards for the noncontrolling interest in a subsidiary and for the 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. The adoption of the provisions in this ASC did not have a material impact on the Companys Condensed Consolidated Financial Statements.

Effective January 1, 2009, the Company adopted FASB ASC 805-10, (formerly SFAS 141R, "Business Combinations"), which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, any noncontrolling interest in an acquiree and the goodwill acquired. In addition, the provisions in this ASC require that any additional reversal of deferred tax asset valuation allowance established in
connection with fresh start reporting on January 7, 1998 be recorded as a component of income tax expense rather than as a reduction to the goodwill established in connection with the fresh start reporting. The Company will apply ASC 805-10 to any
business combinations subsequent to adoption.

Effective January 1, 2009, the Company adopted FASB ASC 805-20 (formerly FSP FAS 141R-1, "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies"), which amends ASC 805-10 to require that an
acquirer recognize at fair value, at the acquisition date, an asset acquired or a liability assumed in a business combination that arises 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 ASC Topic 450, Contingences, to determine whether the contingency should
be recognized at the acquisition date or after such date. The adoption of ASC 805-20 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

Effective July 1, 2009, the Company adopted FASB ASC 825-10-65 (formerly FASB Staff Position (FSP) No. FAS 107-1 and Accounting Principles Board 28-1, "Interim Disclosures about Fair Value of Financial Instruments"), which amends
previous guidance to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. The adoption of FASB ASC 825-10-65 did not have a material
impact on the Companys Condensed Consolidated Financial Statements.

Effective July 1, 2009, the Company adopted FASB ASC 320-10-65 (formerly FSP FAS 115-2 and FAS 124-2, "Recognition and Presentation of Other-Than-Temporary Impairments"). Under  ASC 320-10-65, an other-than-temporary impairment must be recognized if
the Company has the intent to sell the debt security or the Company is more likely than not will be required to sell the debt security before its anticipated recovery. In addition, ASC 320-10-65 requires impairments related to credit loss, which is
the difference between the present value of the cash flows expected to be collected and the amortized cost basis for each security, to be recognized in earnings while impairments related to all other factors to be recognized in other comprehensive
income. The adoption of ASC 320-10-65 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

Effective July 1, 2009, the Company adopted FASB ASC 820-10-65 (formerly FSP FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not
Orderly"), which provides guidance on how to determine the fair value of assets and liabilities when the volume and level of activity for the asset or liability has significantly decreased when compared with normal market activity for the asset or
liability as well as guidance on identifying circumstances that indicate a transaction is not orderly. The adoption of ASC 820-10-65 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

Effective July 1, 2009, the Company adopted FASB ASC 855-10 (formerly SFAS 165, Subsequent Events), which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date, but before
financial statements are issued or are available to be issued. Adoption of ASC 855-10 did not have a material impact on the Companys Condensed Consolidated Financial Statements.

27

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New accounting pronouncement to be adopted

In December 2008, the FASB issued ASC 715, Compensation  Retirement Benefits(formerly FASB FSP FAS 132(R)-1, Employers Disclosures about Postretirement Benefit Plan Assets), which expands the disclosure requirements
about plan assets for defined benefit pension plans and postretirement plans. The Company is required to adopt these disclosure requirements in the fourth quarter of 2009. It is expected the adoption of these disclosure requirements will have no
material effect on the Companys Consolidated Financial Statements.

In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets  an amendment of FASB Statement No. 140, (not yet reflected in FASB ASC). SFAS No. 166 limits the circumstances in which a financial asset
should be derecognized when the transferor has not transferred the entire financial asset by taking into consideration the transferors continuing involvement. The standard requires that a transferor recognize and initially measure at fair
value all assets obtained (including a transferors beneficial interest) and liabilities incurred as a result of a transfer of financial assets accounted for as a sale. The concept of a qualifying special-purpose entity is removed from SFAS No.
140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, along with the exception from applying FIN 46(R), Consolidation of Variable Interest Entities. The standard is effective for
the first annual reporting period that begins after November 15, 2009 (i.e. the Companys fiscal year beginning January 1, 2010), for interim periods within the first annual reporting period, and for interim and annual reporting periods
thereafter. Earlier application is prohibited. It is expected the adoption of this Statement will have no material effect on the Companys Consolidated Financial Statements.

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R), (not yet reflected in FASB ASC). The standard amends FIN No. 46(R) to require a company to analyze whether its interest in a variable interest
entity (VIE) gives it a controlling financial interest. A company must assess whether it has an implicit financial responsibility to ensure that the VIE operates as designed when determining whether it has the power to direct the
activities of the VIE that significantly impact its economic performance. Ongoing reassessments of whether a company is the primary beneficiary are also required by the standard. SFAS No. 167 amends the criteria to qualify as a primary beneficiary
as well as how to determine the existence of a VIE. The standard also eliminates certain exceptions that were available under FIN No. 46(R). This Statement will be effective as of the beginning of each reporting entitys first annual reporting
period that begins after November 15, 2009 (i.e. the Companys fiscal year beginning January 1, 2010), for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application
is prohibited. Comparative disclosures will be required for periods after the effective date. As such, the Company will adopt this Statement for interim and annual periods ending after January 1, 2010.  It is expected the adoption of this Statement
will have no material effect on the Companys Consolidated Financial Statements.

In August, 2009, the FASB issued ASC Update No. 2009-05 (Update 2009-05) to provide guidance on measuring the fair value of liabilities under FASB ASC 820 (formerly SFAS 157, "Fair Value Measurements"). The Company is required to adopt
Update 2009-05 in the fourth quarter of 2009. It is expected the adoption of this Update will have no material effect on the Companys Consolidated Financial Statements.

In October 2009, the FASB concurrently issued the following ASC Updates:

- ASU No. 2009-14 - Software (Topic 985): Certain Revenue Arrangements That Include Software Elements(formerly EITF Issue No. 09-3) .This standard removes tangible products from the scope of software revenue recognition guidance and also provides guidance on determining whether software deliverables in an arrangement that includes a
tangible product, such as embedded software, are within the scope of the software revenue guidance.
- ASU No. 2009-13 - Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements(formerly EITF Issue No. 08-1). This standard modifies the revenue recognition guidance for arrangements that involve the delivery of multiple elements, such as product, software, services or support, to a customer at different times as part of a
single revenue generating transaction. This standard provides principles and application guidance to determine whether multiple deliverables exist, how the individual deliverables should be separated and how to allocate the revenue in the
arrangement among those separate deliverables. The standard also expands the disclosure requirements for multiple deliverable revenue arrangements.

These Accounting Standards Updates should be applied on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with earlier application permitted. Alternatively, an
entity can elect to adopt these standards on a retrospective basis, but both these standards must be adopted in the same period using the same transition method. The Company expects to apply this standard on a prospective basis for revenue
arrangements entered into or materially modified beginning January 1, 2011. The
Company is currently evaluating the potential impact these standards may have on its financial position and results of operations.

28

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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 September 30, 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 September 30, 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.

29

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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 unregistered equity securities during the
fiscal quarter ended September 30, 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.

None.

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.

30

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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: November 12, 2009

| | SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT 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.





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