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: June 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 Q    
No  £



Yes £    
No £

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

Large accelerated filer

      £
      Accelerated filer £Non-accelerated filer
      £
      (Do not check if a smaller
reporting company)
      Smaller
      reporting companyQ


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

Yes £    
No Q

The number of shares outstanding of each of the issuers
classes of common equity, as of August 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

|         | PART I                                                                                      | Page
|-------- | ------------------------------------------------------------------------------------------- | ----
|         |                                                                                             |     
|Item 1.  | Financial Statements                                                                        | 1   
|Item 2.  | Managements Discussion and Analysis of
      Financial Condition and Results of Operations | 18  
|Item 3.  | Quantitative and Qualitative
      Disclosures About Market Risk                            | 28  
|Item 4.  | Controls and Procedures                                                                     | 28  
|         |                                                                                             |     
|         | PART II                                                                                     |     
|         |                                                                                             |     
|Item 1.  | Legal Proceedings                                                                           | 29  
|Item 1A. | Risk Factors                                                                                | 29  
|Item 2.  | Unregistered Sales of Equity Securities and Use
      of Proceeds                           | 29  
|Item 3.  | Defaults Upon Senior Securities                                                             | 29  
|Item 4.  | Submission of Matters to a Vote of Securities
      Holders                                 | 29  
|Item 5.  | Other Information                                                                           | 29  
|Item 6.  | Exhibits                                                                                    | 29  



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PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                                                                              | Page
|------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|Condensed Consolidated Balance Sheets as of
      June 30, 2009 (Unaudited) and December 31, 2008 (Audited)                                                   | 1   
|Condensed Consolidated Statements of Income and
      Comprehensive Income (Unaudited) for the Three Months and Six Months Ended
      June 30, 2009 and 2008 | 2   
|Condensed Consolidated Statement of
      Stockholders Equity (Unaudited) for the Six Months Ended June 30, 2009                                             | 3   
|Condensed Consolidated Statements of Cash Flows (Unaudited)
      for the Six Months Ended June 30, 2009 and 2008                                             | 4   
|Notes to Condensed Consolidated Financial
      Statements (Unaudited)                                                                                        | 5-18



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

|                                                                                                                            |   | As of      | 
|--------------------------------------------------------------------------------------------------------------------------- | - | ---------- | 
|                                                                                                                            |   | June 30,   | 
|                                                                                                                            |   | 2009       | 
|                                                                                                                            |   | Unaudited  | 
|ASSETS                                                                                                                      |  
|CURRENT ASSETS                                                                                                              |   |            | 
|Cash and
      cash equivalents                                                                                             | $ | 13,873,770 | 
|Accounts receivable, net                                                                                                    |   | 341,322    | 
|Other
      receivables                                                                                                     |   | 18,736     | 
|Inventories                                                                                                                 |   | 624,763    | 
|Total current assets                                                                                                        |   | 14,858,591 | 
|OTHER ASSETS                                                                                                                |   |            | 
|Intangible
      assets, net                                                                                                |   | 2,965,584  | 
|Property, plant and
      equipment, net                                                                                    |   | 10,622,017 | 
|Total other assets                                                                                                          |   | 13,587,601 | 
|Total assets                                                                                                                | $ | 28,446,192 | 
|                                                                                                                            |   |            | 
|LIABILITIES
      AND SHAREHOLDERS' EQUITY                                                                                  |  
|CURRENT
      LIABILITIES                                                                                                   |   |            | 
|Accounts payable                                                                                                            | $ | 19,160     | 
|Other
      payables and accruals                                                                                           |   | 412,211    | 
|Payable for intangibles 
      Current portion                                                                             |   | 878,233    | 
|Income tax
      payable                                                                                                    |   | 134,526    | 
|Due to related parties                                                                                                      |   | 75,126     | 
|Acquisition payable                                                                                                         |   | 8,732,101  | 
|Total current
      liabilities                                                                                             |   | 10,251,357 | 
|NON-CURRENT
      LIABILITIES                                                                                               |   |            | 
|Payable for intangibles,
      net of current portion                                                                       |   | 878,233    | 
|Total liabilities                                                                                                           |   | 11,129,590 | 
|                                                                                                                            |   |            | 
|COMMITMENTS AND
      CONTINGENCIES (Note 16)                                                                               |   |            | 
|                                                                                                                            |   |            | 
|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 11,746,041shares issued and outstanding |   | 13,298     | 
|Additional paid-in capital                                                                                                  |   | 2,216,891  | 
|Statutory
      reserves                                                                                                    |   | 1,326,239  | 
|Retained earnings                                                                                                           |   | 12,802,091 | 
|Accumulated other comprehensive income                                                                                      |   | 958,083    | 
|Total shareholders'
      equity                                                                                            |   | 17,316,602 | 
|Total liabilities and shareholders' equity                                                                                  | $ | 28,446,192 | 

See
      accompanying notes to condensed consolidated financial statements

- 1 -

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

|                                                     |   | For
      the Three Months |   |   | For
      the Six Months |  
|---------------------------------------------------- | - | -------------------------- | - | - | ------------------------ | -
|                                                     |   | Ended
      June 30,       |   |   | Ended
      June 30,     |  
|                                                     |   | 2009                       |   |   | 2008                     |  
|                                                     |   |                            |   |   |                          |  
|Revenue                                              | $ | 3,339,762                  |   | $ | 2,820,892                |  
|                                                     |   |                            |   |   |                          |  
|Cost of goods
      sold                             |   | (1,183,805                 | ) |   | (1,061,082               | )
|Gross profit                                         |   | 2,155,957                  |   |   | 1,759,810                |  
|                                                     |   |                            |   |   |                          |  
|Selling expenses                                     |   | (81,574                    | ) |   | (25,224                  | )
|General and
      administrative expenses            |   | (354,696                   | ) |   | (253,093                 | )
|Income from
      operations                         |   | 1,719,687                  |   |   | 1,481,493                |  
|                                                     |   |                            |   |   |                          |  
|Other income (expenses):                             |   |                            |   |   |                          |  
|Interest income                                      |   | 39,849                     |   |   | 6,720                    |  
|Exchange loss                                        |   | (5,109                     | ) |   | -                        |  
|Other                                                |   | -                          |   |   | 3,821                    |  
|Income before
      income tax                       |   | 1,754,427                  |   |   | 1,492,034                |  
|Provision for income tax                             |   | (254,620                   | ) |   | (207,812                 | )
|Net income                                           |   | 1,499,807                  |   |   | 1,284,222                |  
|                                                     |   |                            |   |   |                          |  
|Other comprehensive income:                          |   |                            |   |   |                          |  
|Foreign currency translation adjustment              |   | 13,628                     |   |   | 423,690                  |  
|Total comprehensive
      income                     | $ | 1,513,435                  |   | $ | 1,707,912                |  
|                                                     |   |                            |   |   |                          |  
|Earnings per share:                                  |   |                            |   |   |                          |  
|Basic                                                | $ | 0.12                       |   | $ | 0.11                     |  
|Diluted                                              | $ | 0.12                       |   | $ | 0.11                     |  
|                                                     |   |                            |   |   |                          |  
|Weighted average number of
      shares outstanding: |   |                            |   |   |                          |  
|Basic                                                |   | 12,874,654                 |   |   | 12,032,289               |  
|Diluted                                              |   | 12,874,654                 |   |   | 12,032,289               |  

See accompanying notes to condensed consolidated financial
statements

- 2 -

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIESCONDENSED 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                                                                                 |  | -               |   |   | -            |   |   | -              |   |   | -       |   |   | -         |   |   | -         |  |   | 3,670,347  |  |   | -                 |  |   | 3,670,347  | 
|Foreign currency
      translation adjustment                                              |  | -               |   |   | -            |   |   | -              |   |   | -       |   |   | -         |   |   | -         |  |   | -          |  |   | 9,317             |  |   | 9,317      | 
|Comprehensive income                                                                       |  | -               |   |   | -            |   |   | -              |   |   | -       |   |   | -         |   |   | -         |  |   | -          |  |   | -                 |  |   | 3,679,664  | 
|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 12) |  | -               |   |   | -            |   |   | 500,000        |   |   | 500     |   |   | 24,500    |   |   | -         |  |   | -          |  |   | -                 |  |   | 25,000     | 
|                                                                                           |  |                 |   |   |              |   |   |                |   |   |         |   |   |           |   |   |           |  |   |            |  |   |                   |  |   |            | 
|                                                                                           |  |                 |   |   |              |   |   |                |   |   |         |   |   |           |   |   |           |  |   |            |  |   |                   |  |   |            | 
|At June 30, 2009 (Unaudited)                                                               |  | -               |   |   | -            |   | $ | 13,297,731     |   | $ | 13,298  |   | $ | 2,216,891 |   | $ | 1,326,239 |  | $ | 12,802,091 |  |   | 958,083           |  | $ | 17,316,602 | 

See accompanying notes to condensed consolidated financial
statements

- 3 -

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

|                                                                                    |   | For the Six
      Months |  
|----------------------------------------------------------------------------------- | - | ------------------------ | -
|                                                                                    |   | Ended June 30,           |  
|                                                                                    |   | 2009                     |  
|CASH FLOWS FROM
      OPERATING ACTIVITIES:                                         |   |                          |  
|Net income                                                                          | $ | 3,670,347                |  
|Adjustments to reconcile net income to cash provided by
      operating activities: |   |                          |  
|Share-based
      compensation expense                                              |   | 25,000                   |  
|Depreciation and amortization                                                       |   | 504,872                  |  
|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                                                                 |   | (57,381                  | )
|Deposits and other receivables                                                      |   | (4,625                   | )
|Inventories                                                                         |   | 543,706                  |  
|Trade receivable due from related parties                                           |   | -                        |  
|Increase (decrease) in liabilities:                                                 |   |                          |  
|Accounts payable                                                                    |   | 15,950                   |  
|Other payables and accruals                                                         |   | (60,928                  | )
|Income tax payable                                                                  |   | 14,991                   |  
|Trade payable due to related parties                                                |   | 4,500                    |  
|Net cash provided by operating activities                                           |   | 4,656,432                |  
|CASH FLOWS FROM
      INVESTING ACTIVITIES:                                         |   |                          |  
|Purchase
      of property, plant and equipment                                     |   | -                        |  
|Purchase of intangible
      asset                                                  |   | -                        |  
|Payment of
      acquisition payable                                                |   | (50,269                  | )
|Net
      cash used in investing activities                                         |   | (50,269                  | )
|CASH FLOWS FROM FINANCING ACTIVITIES:                                               |   |                          |  
|                                                                                    |   |                          |  
|Advances
      from related parties                                                 |   | 61,615                   |  
|Net
      cash provided by financing activities                                     |   | 61,615                   |  
|Foreign currency translation adjustment                                             |   | 7,749                    |  
|INCREASE IN CASH
      AND CASH EQUIVALENTS                                         |   | 4,675,527                |  
|CASH AND CASH EQUIVALENTS, at the beginning of the period                           |   | 9,198,243                |  
|CASH AND CASH
      EQUIVALENTS, at the end of the period                           | $ | 13,873,770               |  
|NON-CASH INVESTING AND FINANCING ACTIVITIES:                                        |   |                          |  
|Machinery acquired in
      exchange for issuance of capital                        | $ | -                        |  
|SUPPLEMENTAL DISCLOSURE INFORMATION                                                 |   |                          |  
|Income taxes paid                                                                   | $ | 592,947                  |  

See accompanying notes to condensed consolidated
financial statements

- 4 -

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

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.

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

As of June 30, 2009, details of the subsidiaries of the Company
are as follows:

|                         |  | Domicile and   |  |                 |  | Percentage   |  |                       
|------------------------ |  | -------------- |  | --------------- |  | ------------ |  | ----------------------
|                         |  | date of        |  |                 |  | of effective |  |                       
|Subsidiaries names      |  | incorporation  |  | Paid-up capital |  | ownership    |  | Principal activities  
|                         |  |                |  |                 |  |              |  |                       
|New Zealand WAYNES      |  | British Virgin |  | $50,000         |  | 100%         |  | Holding company of    
|New Resources            |  | Islands        |  |                 |  |              |  | the other subsidiaries
|Development Co., Ltd     |  | March 13, 2008 |  |                 |  |              |  |                       
|(New Resources)        |  |                |  |                 |  |              |  |                       
|                         |  |                |  |                 |  |              |  |                       
|Heilongjiang Shuaiyi New |  | Peoples       |  | RMB60,000,00    |  | 100%         |  | Principally engaged in
|Energy Development Co.,  |  | Republic of    |  | 0               |  |              |  | investment holding    
|Ltd (Heilongjiang       |  | China (PRC)  |  |                 |  |              |  |                       
|Shuaiyi)                |  | July 11, 2006  |  |                 |  |              |  |                       
|                         |  |                |  |                 |  |              |  |                       
|Daqing Shuaiyi Biomass   |  | PRC            |  | RMB10,000,00    |  | 100%         |  | Growing and sales of  
|Technology Co., Ltd.     |  | August 8, 2005 |  | 0               |  |              |  | Chinese Caterpillar   
|(Daqing Shuaiyi)       |  |                |  |                 |  |              |  | Fungus, which is      
|                         |  |                |  |                 |  |              |  | widely used for       
|                         |  |                |  |                 |  |              |  | Chinese medicine      
|                         |  |                |  |                 |  |              |  |                       
|Harbin Shuaiyi Green and |  | PRC            |  | RMB1,500,000    |  | 100%         |  | Sales of agricultural 
|Specialty Food Trading   |  | May 18, 2001   |  |                 |  |              |  | products              
|LLP. (Harbin Shuaiyi)  |  |                |  |                 |  |              |  |                       

- 5 -

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

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.

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 June 30, 2009               | As of December 31, 2008
|------------------------------------------------------ | --------------------------------- | -----------------------
|Balance sheet items, except for equity
      accounts  | US$1=RMB6.8319                    | US$1=RMB6.8346         
|                                                       |                                   |                        
|                                                       | Three months ended
      June 30,
|                                                       | 2009                              | 2008                   
|Items in the statements of income and cash
      flows | US$1=RMB 6.8299                   | US$1=RMB 6.9645        
|                                                       |                                   |                        
|                                                       | Six months ended
      June 30,  
|                                                       | 2009                              | 2008                   
|Items in the statements of income and cash
      flows | US$1=RMB6.8328                    | US$1=RMB 7.0686        

- 6 -

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

Research and development costs

Research and development costs are expensed to operations as incurred.  Research and development costs were $18,139 and $15,696 for the six months ended June 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 $90 for the six months ended June 30, 2009 and 2008, respectively.

Shipping and handling costs

Substantially all costs of shipping and handling of products to customers are included in selling expenses. Shipping and handling costs for the six months ended June 30, 2009 and 2008 were nil and $293, respectively.

Earnings per share

All per share data including earnings per share has been retroactively restated to reflect the reverse acquisition on December 23, 2008 whereby the 689,390 shares of preferred stock issued by 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.

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.

Recent accounting pronouncement adopted

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

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

- 7 -

---

SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

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

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

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

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

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

- 8 -

---

SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

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

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

New accounting pronouncement to be adopted

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

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:

|                                   |   | June 30,  |  |   | December 31, | 
|---------------------------------- | - | --------- |  | - | ------------ | 
|                                   |   | 2009      |  |   | 2008         | 
|                                   |   | Unaudited |  |   | Audited      | 
|                                   |   |           |  |   |              | 
|Accounts receivable                | $ | 341,322   |  | $ | 283,822      | 
|Less: Allowance for doubtful debts |   | -         |  |   | -            | 
|Accounts receivable, net           | $ | 341,322   |  | $ | 283,822      | 

- 9 -

---

SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

NOTE4             INVENTORIES

|Inventories by major categories are summarized
      as follows: |   |           |  |   |              | 
|---------------------------------------------------------------- | - | --------- |  | - | ------------ | 
|                                                                 |   | June 30,  |  |   | December 31, | 
|                                                                 |   | 2009      |  |   | 2008         | 
|                                                                 |   | Unaudited |  |   | Audited      | 
|                                                                 |   |           |  |   |              | 
|Raw materials                                                    | $ | 175,054   |  | $ | 147,824      | 
|Work in progress                                                 |   | 305,650   |  |   | 832,680      | 
|Finished goods                                                   |   | 144,059   |  |   | 187,575      | 
|                                                                 | $ | 624,763   |  | $ | 1,168,079    | 

NOTE 5             INTANGIBLE ASSETS, NET

|Intangible assets, net consisted of the
      following: |   |            |   |   |              |  
|-------------------------------------------------------- | - | ---------- | - | - | ------------ | -
|                                                         |   | June 30,   |   |   | December 31, |  
|                                                         |   | 2009       |   |   | 2008         |  
|                                                         |   | Unaudited  |   |   | Audited      |  
|                                                         |   |            |   |   |              |  
|Computer software, cost                                  | $ | 1,453      |   | $ | 1,453        |  
|Exclusive right to use a secret process, cost            |   | 4,392,929  |   |   | 4,391,193    |  
|Less: Accumulated amortization                           |   | (1,428,798 | ) |   | (1,208,651   | )
|                                                         | $ | 2,965,584  |   | $ | 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 six months ended June 30, 2009
and 2008 were $219,641 and $212,589, respectively.

NOTE 6             PROPERTY, PLANT AND EQUIPMENT, NET

|Property, plant and equipment, net consisted
      of the following: |   |            |   |   |              |  
|-------------------------------------------------------------------- | - | ---------- | - | - | ------------ | -
|                                                                     |   | June 30,   |   |   | December 31, |  
|                                                                     |   | 2009       |   |   | 2008         |  
|                                                                     |   | Unaudited  |   |   | Audited      |  
|Cost:                                                                |   |            |   |   |              |  
|Buildings                                                            | $ | 11,652,144 |   | $ | 11,647,541   |  
|Office equipment                                                     |   | 9,321      |   |   | 9,317        |  
|Machinery                                                            |   | 98,942     |   |   | 98,903       |  
|Motor vehicles                                                       |   | 54,812     |   |   | 54,790       |  
|Total cost                                                           |   | 11,815,219 |   |   | 11,810,551   |  
|Less: Accumulated depreciation                                       |   | (1,193,202 | ) |   | (907,575     | )
|Net book value                                                       | $ | 10,622,017 |   | $ | 10,902,976   |  

Depreciation expenses for the six months ended June 30, 2009
and 2008 were $285,231 and $344,078, respectively.

- 10 -

---

SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

NOTE 7             OTHER PAYABLES AND ACCRUALS

Other payables and accruals consisted of the following:

|                    |   | June 30,  |  |   | December 31, | 
|------------------- | - | --------- |  | - | ------------ | 
|                    |   | 2009      |  |   | 2008         | 
|                    |   | Unaudited |  |   | Audited      | 
|                    |   |           |  |   |              | 
|Accrued staff costs | $ | 287,377   |  | $ | 235,421      | 
|Other taxes payable |   | 119,775   |  |   | 232,481      | 
|Other payables      |   | 5,059     |  |   | 5,057        | 
|                    |   |           |  |   |              | 
|                    | $ | 412,211   |  | $ | 472,959      | 

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 RMB30,000,000 payable over 5 years from the date of purchase. The
agreement provides that all payments by the Company for the secret process and
method will be refundable if the secret process and method proves ineffective.
Under 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 June
      30,                                                          |   |           |  
|2010                                                                                           | $ | 878,233   |  
|2011                                                                                           |   | 878,233   |  
|2012 and thereafter                                                                            |   | -         |  
|Total                                                                                          |   | 1,756,466 |  
|Less: Current portion                                                                          |   | (878,233  | )
|Non-current portion                                                                            | $ | 878,233   |  

NOTE 9             ACQUISITION PAYABLE

The acquisition payable represents the transfer price of
RMB60,000,000 payable by New Resources for the acquisition of 100% equity
interest in Heilongjiang Shuaiyi. As discussed in Note 16, 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.

- 11 -

---

SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

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
our charter 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 June 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 may be issued under the Plan was 1,000,000.

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

NOTE 12             STOCK-BASED COMPENSATION

Under the Plan described in Note 11 above, on June 17, 2009, the directors granted 500,000 restricted shares to employees by entering into Restricted Shares Grant Agreements (the Agreements) with the employees. Under the
Agreements, the shares were grant for no consideration and vested on the date of grant. Accordingly, these shares vested immediately and all restrictions as to transferability, sale, assignment or otherwise disposition of the shares have been
released on the date of grant.

Under FAS 123R, the Company recognized a compensation expense of $25,000 based on the fair value of $0.05 per share which is the last traded price of the shares at the grant date. This expense is accounted under General and
administrative expenses.

As the 500,000 shares do not impose any obligations that require the Company to transfer assets, these have been classified as equity in accordance with statement FAS 150.

- 12 -

---

SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

NOTE 13             INCOME TAXES

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

|The Companys income tax expense consisted of: |   |                      |  |   |                    |  |   |           |  |  |           | 
|---------------------------------------------- | - | -------------------- |  | - | ------------------ |  | - | --------- |  |  | --------- | 
|                                               |   | For the Three Months |  |   | For the Six Months | 
|                                               |   | Ended June 30,       |  |   | Ended June 30,     | 
|                                               |   | 2009                 |  |   | 2008               |  |   | 2009      |  |  | 2008      | 
|                                               |   | Unaudited            |  |   | Unaudited          |  |   | Unaudited |  |  | Unaudited | 
|                                               |   |                      |  |   |                    |  |   |           |  |  |           | 
|Current  PRC EIT                              | $ | 254,620              |  | $ | 207,812            |  | $ | 570,838 $ |  |  | 417,009   | 
|Deferred                                       |   | -                    |  |   | -                  |  |   | -         |  |  | -         | 
|                                               |   |                      |  |   |                    |  |   |           |  |  |           | 
|                                               | $ | 254,620              |  | $ | 207,812            |  | $ | 570,838 $ |  |  | 417,009   | 

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

- 13 -

---

SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

NOTE 14             RELATED PARTY TRANSACTIONS

(a)         Due to related parties

Due to related parties consisted of the following:

|                                                                                    |  |      |  |   | June 30,  |  |   | December 31, | 
|----------------------------------------------------------------------------------- |  | ---- |  | - | --------- |  | - | ------------ | 
|                                                                                    |  |      |  |   | 2009      |  |   | 2008         | 
|                                                                                    |  |      |  |   | Unaudited |  |   | Audited      | 
|Due to related company:                                                             |  |      |  |   |           |  |   |              | 
|- Heilonjiang Shuaiyi Technology Development
      Co., Ltd. (Shuaiyi Technology) |  | (i)  |  | $ | 13,503    |  | $ | 8,998        | 
|- Ms. Lianyun Han                                                                   |  | (ii) |  |   | 61,623    |  |   | -            | 
|                                                                                    |  |      |  |   |           |  |   |              | 
|                                                                                    |  |      |  | $ | 75,126    |  | $ | 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.

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

(b)         Purchase of goods

For the six months ended June 30, 2009 and 2008, the Company
purchased rice amounting to $655,032 and $754,837, respectively, from Shuaiyi
Technology.

(c)         Lease of land

For the six months ended June 30, 2009 and 2008, the Company
paid rental expense of $4,500 and $ 4,350, respectively, for land under an
operating lease to Shuaiyi Technology.

- 14 -

---

SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

NOTE 15             CONCENTRATION OF RISK

(a)         Concentration of credit risk

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

There was no single customer who accounted for more than 10% of
the Companys revenue for either the six months ended June 30, 2009 or 2008.

As of June 30, 2009, five customers on an individual basis
accounted for 21%, 15%, 13%, 13% and 11% 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 June 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 16             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 June 30, 2009 are as follows:

|                  |   | Unaudited | 
|----------------- | - | --------- | 
|Remainder of 2009 | $ | 22,834    | 
|2010              |   | 31,836    | 
|2011              |   | 9,002     | 
|2012              |   | 9,002     | 
|2013              |   | 9,002     | 
|Thereafter        |   | 126,026   | 
|Total             | $ | 207,702   | 

(b)         PRC employee costs

According to the prevailing laws and regulations of the PRC,
the Companys subsidiaries in the PRC are required 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.

- 15 -

---

SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

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

(c)         Transfer price for equity interest in Heilongjiang Shuaiyi

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

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

NOTE 17             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 six months ended June 30, 2009 and 2008, all of
the Companys operations were carried out in one geographical segment - China.

|                                                 |  |   | Chinese     |  |   | Other        |  |   |             |   |   |              | 
|------------------------------------------------ |  | - | ----------- |  | - | ------------ |  | - | ----------- | - | - | ------------ | 
|                                                 |  |   | Caterpillar |  |   | Agricultural |  |   | Corporate   |   |   |              | 
|Six months ended June 30,
      2009             |  |   | Fungus      |  |   | Products     |  |   | unallocated |   |   | Consolidated | 
|Segment revenue from external customers          |  | $ | 5,439,084   |  | $ | 2,543,955    |  | $ | -           |   | $ | 7,983,039    | 
|Segment profit
      (loss)                      |  | $ | 3,848,617   |  | $ | 558,983      |  | $ | (166,415    | ) | $ | 4,241,185    | 
|Income from
      operations before income taxes |  |   |             |  |   |              |  |   |             |   | $ | 4,241,185    | 
|Segment assets                                   |  | $ | 24,955,981  |  | $ | 1,097,455    |  | $ | 2,392,756   |   | $ | 28,446,192   | 
|Total assets                                     |  |   |             |  |   |              |  |   |             |   | $ | 28,446,192   | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Other segment
      information:                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Depreciation and
      amortization              |  | $ | 499,571     |  | $ | 3,926        |  | $ | 1,375       |   | $ | 504,872      | 
|Expenditure for segment assets                   |  | $ | -           |  | $ | -            |  | $ | -           |   | $ | -            | 

- 16 -

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SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. AND
SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
FOR THE PERIODS ENDED JUNE 30, 2009 AND 2008

|                                                 |  |   | Chinese     |  |   | Other        |  |   |             |   |   |              | 
|------------------------------------------------ |  | - | ----------- |  | - | ------------ |  | - | ----------- | - | - | ------------ | 
|                                                 |  |   | Caterpillar |  |   | Agricultural |  |   | Corporate   |   |   |              | 
|Six months ended June 30,
      2008             |  |   | Fungus      |  |   | Products     |  |   | unallocated |   |   | Consolidated | 
|Segment revenue from external customers          |  | $ | 3,434,447   |  | $ | 2,353,065    |  | $ | -           |   | $ | 5,787,512    | 
|Segment profit
      (loss)                      |  | $ | 2,497,570   |  | $ | 582,134      |  | $ | (133,931    | ) | $ | 2,945,773    | 
|Income from
      operations before income taxes |  |   |             |  |   |              |  |   |             |   | $ | 2,945,773    | 
|Segment assets                                   |  | $ | 20,719,834  |  | $ | 825,822      |  | $ | 462,392     |   | $ | 22,008,048   | 
|Total assets                                     |  |   |             |  |   |              |  |   |             |   | $ | 22,008,048   | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Other segment
      information:                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Depreciation and
      amortization              |  | $ | 553,954     |  | $ | 1,199        |  | $ | 1,514       |   | $ | 556,667      | 
|Expenditure for segment assets                   |  | $ | 25,943      |  | $ | 3,296        |  | $ | 1,567       |   | $ | 30,806       | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|                                                 |  |   | Chinese     |  |   | Other        |  |   |             |   |   |              | 
|                                                 |  |   | Caterpillar |  |   | Agricultural |  |   | Corporate   |   |   |              | 
|Three months
      ended June 30, 2009           |  |   | Fungus      |  |   | Products     |  |   | unallocated |   |   | Consolidated | 
|Segment revenue
      from external customers    |  | $ | 2,538,083   |  | $ | 801,679      |  | $ | -           |   | $ | 3,339,762    | 
|Segment profit (loss)                            |  | $ | 1,779,350   |  | $ | 62,597       |  | $ | (87,520     | ) | $ | 1,754,427    | 
|Income from operations before
      income taxes |  |   |             |  |   |              |  |   |             |   | $ | 1,754,427    | 
|Segment assets                                   |  | $ | 24,955,981  |  | $ | 1,097,455    |  | $ | 2,392,756   |   | $ | 28,446,192   | 
|Total assets                                     |  |   |             |  |   |              |  |   |             |   | $ | 28,446,192   | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Other segment information:                       |  |   |             |  |   |              |  |   |             |   |   |              | 
|Depreciation and amortization                    |  | $ | 249,694     |  | $ | 1,963        |  | $ | 688         |   | $ | 252,345      | 
|Expenditure for
      segment assets             |  | $ | -           |  | $ | -            |  | $ | -           |   | $ | -            | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|                                                 |  |   | Chinese     |  |   | Other        |  |   |             |   |   |              | 
|                                                 |  |   | Caterpillar |  |   | Agricultural |  |   | Corporate   |   |   |              | 
|Three months ended June 30,
      2008           |  |   | Fungus      |  |   | Products     |  |   | unallocated |   |   | Consolidated | 
|Segment revenue from external customers          |  | $ | 1,941,688   |  | $ | 879,204      |  | $ | -           |   | $ | 2,820,892    | 
|Segment profit (loss)                            |  | $ | 1,448,144   |  | $ | 99,316       |  | $ | (55,426     | ) | $ | 1,492,034    | 
|Income from
      operations before income taxes |  |   |             |  |   |              |  |   |             |   | $ | 1,492,034    | 
|Segment assets                                   |  | $ | 20,719,834  |  | $ | 825,822      |  | $ | 462,392     |   | $ | 22,008,048   | 
|Total assets                                     |  |   |             |  |   |              |  |   |             |   | $ | 22,008,048   | 
|                                                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Other segment
      information:                 |  |   |             |  |   |              |  |   |             |   |   |              | 
|Depreciation and
      amortization              |  | $ | 276,618     |  | $ | 424          |  | $ | 1,359       |   | $ | 278,401      | 
|Expenditure for segment assets                   |  | $ | 25,799      |  | $ | -            |  | $ | 1,591       |   | $ | 27,390       | 

- 17 -

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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; 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 and silage fodder. In addition, we plan to produce and market other products developed from Cordyceps Militaris within the
coming months and years, including Cordycepin and Corn Series Beverage as indicated in more detail below.

Our primary product is dry Chinese Caterpillar Fungus, which is developed from Cordyceps Militaris. Cordyceps Militaris is a species of parasitic fungus that is typically found in north-eastern mountainous China. It is a precious
ingredient in traditional Chinese medicine, as Cordyceps Militaris is widely believed in China to offer high medical and health benefits by nourishing the yin, boosting the yang, and invigorating the meridians of the lungs and
kidneys.

- 18 -

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According to Georges Halperns Healing Mushrooms, certain research has shown that Cordyceps Militaris may boost our immune system, and can be used as a supplement for the purposes of combating certain effects of fatigue and aging, as
well as reducing blood pressure, the occurrences of certain tumors, and combating arteriosclerosis and certain gastrointestinal disorders. In addition, Cordyceps Militaris has significantly high economic values. According to Halpern , wild
Cordyceps Militaris can cost as much as $10,000 per kilogram. Due to the extremely sensitive growing conditions of Cordyceps Militaris, it is very difficult to grow the plant in a man-made environment. Through several years of laboratory tests,
we developed the technology to commercially grow and produce Cordyceps Militaris in 2006. We generated approximately 76% of our revenues from dry Chinese Caterpillar Fungus during the second quarter of 2009. We believe that we own 19% of the world
wide market share in the cultivated Chinese Caterpillar Fungus industry. We plan to continue to focus on dry Chinese Caterpillar Fungus, which is our fastest growing product line with the greatest market demand and a significantly high profit
margin.



We also sell organic and specialty food products through our subsidiary, Harbin Shuaiyi, which was formed in 2001. After years of development, we believe that we have become the largest wholesale distributor of organic and specialty food in
Heilongjiang Province, China.

History and Corporate Structure

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

On May 19, 2009, we filed amended and restated articles of incorporation with the Nevada Secretary of State to amend our articles of incorporation to, among other things, (1) change our name from YzApp International Inc. to Shuaiyi
International New Resources Development Inc., (2) increase the total number of shares of common stock that we have the authority to issue from 50,000,000 to 190,000,000 shares and (3) effect a one for 114.59 reverse split of our outstanding
common stock. In addition, following the amendment to our articles of incorporation, our common stock has been quoted on the Over The Counter Bulletin Board under the new symbol SYID.OB since May 27, 2009.

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

- 19 -



---



Second Quarter Financial Performance Highlights

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

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

- Revenues: Our revenues were approximately $3.34 million for the second quarter of 2009, an increase of 18.4% from the same quarter of last year.
- Gross Margin: Gross margin was 64.6% for the second quarter of 2009, as compared to 62.4% for the same period in 2008.
- Operating Profit: Operating profit was approximately $1.72million for the second quarter of 2009, an increase of 16.2% from $1.48 million of the same period last year.
- Net Income: Net income was approximately $1.50 million for the second quarter of 2009, an increase of 17.2% from the same period of last year.
- Fully diluted earnings per share was $0.002 for the second quarter of 2009.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2009 Compared to Three Months Ended June 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.

- 20 -

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|                                          |  | Three Months Ended June 30,
    2009 |   |  | Three Months Ended June 30,
    2008 | 
|----------------------------------------- |  | ------------------------------------ | - |  | ------------------------------------ | 
|                                          |  |                                      |   |  | As a
    percentage of               | 
|                                          |  | In Thousands                         |   |  | revenues                             | 
|Revenues                                  |  | 3,340                                |   |  | 100 %                                | 
|Cost of goods sold                        |  | (1,184                               | ) |  | 35.4 %                               | 
|Gross Profit                              |  | 2,156                                |   |  | 64.6 %                               | 
|Selling expenses                          |  | (82                                  | ) |  | 2.5 %                                | 
|General and administrative
      expenses |  | (354                                 | ) |  | 10.6 %                               | 
|Income from operations                    |  | 1,720                                |   |  | 51.5%                                | 
|Other income and (expenses)               |  |                                      |   |  |                                      | 
|Interest income                           |  | 40                                   |   |  | 1.2%                                 | 
|Other income                              |  | -                                    |   |  | -                                    | 
|Exchange
      loss                       |  | (5                                   | ) |  | (0.1)%                               | 
|Income before income tax                  |  | 1,754                                |   |  | 52.5%                                | 
|Provision for income tax                  |  | (255                                 | ) |  | 7.6%                                 | 
|Net income                                |  | 1,500                                |   |  | 44.9%                                | 

Revenues. Revenues increased approximately $0.52
million, or 18.4%, to approximately $3.34 million for the three months ended
June 30, 2009, from approximately $2.82 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.

Cost of Goods Sold.Our cost of goods is primarily
comprised of the costs of our raw materials, labor and overhead. Our cost of
goods sold increased approximately $0.12 million, or 11.3%, to approximately
$1.18 million for the three months ended June 30, 2009, from approximately $1.06
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 35.4% during the three moths ended June 30, 2009 from 37.6% in the
same period in 2008. Such increase of gross margin was mainly attributable to
the fact that a larger portion of our total revenues was generated from our
small package 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 in the second quarter of
2009.

Gross Profit.Our gross profit increased by
approximately $0.40 million, or 22.7%, to approximately $2.16 million for the
three months ended June 30, 2009 from approximately $1.76 million during the
same period in 2008. Gross profit as a percentage of revenues, or gross margin,
was64.6% for the three months ended June 30, 2009, an increase of 2.2% from
62.4% during the same period in 2008. Such percentage increase was mainly due to
the increased sales of our higher margin small package Chinese Caterpillar
Fungus products.

Selling Expenses . Our selling expenses include sales
commissions, the cost of advertising and promotional materials, salaries and
fringe benefits of sales personnel, and other sales related costs. Selling
expenses increased approximately $0.05 million, or 166.7%, to approximately
$0.08 million for the three months ended June 30, 2009 from approximately $0.03
million during the same period in 2008. As a percentage of revenues, selling
expenses increased to 2.5% for the three months ended June 30, 2009 from 0.9%
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 $0.10 million, or 40%, to
approximately $0.35 million for the three months ended June 30, 2009 from
approximately $0.25 million for the same period in 2008. As a percentage of
revenues, general and administrative expenses increased to 10.6% for
the three months ended June 30, 2009 from 9.0% for the same period in 2008. The increase in the amount and percentage of general and administrative expenses was mainly attributable to the increase of services expenses associated with being a public
company in the second quarter of 2009.

- 21 -

---

Income Before Income Tax . Income before income tax increased approximately $0.26 million, or 17.4%, to approximately $1.75 million during the three months ended June 30, 2009 from approximately $1.49 million during the same
period in 2008. As a percentage of revenues, income before income tax decreased to 52.5% during the three months ended June 30, 2009 from 52.9% during the same period in 2008. The increase of income before income tax is mainly attributable to the
increase in our gross profit as a result of the increase in our sales.

Income Taxes. 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 ( 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.

- 22 -

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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 increased approximately $0.04 million to
approximately $0.25 million for the three months ended June 30, 2009 from
approximately $0.21 million for the same period in 2008. We paid more tax in
2009 because of the increase in sales and taxable income.

Net Income . Net income increased by approximately $0.22
million, or 17.2% to approximately $1.50 million for the three months ended June
30, 2009 from approximately $1.28 million for the same period of 2008, as a
result of the factors described above.

Six Months Ended June 30, 2009 Compared to Six Months
Ended June 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.

|                                          |  | **Six Months Ended June 30,**
      **2009** |   |  | Six Months Ended June 30, 
    2008 | 
|----------------------------------------- |  | -------------------------------------------- | - |  | ----------------------------------- | 
|                                          |  |                                              |   |  | As a                                | 
|                                          |  |                                              |   |  | percentage of                       | 
|                                          |  | In Thousands                                 |   |  | revenues                            | 
|Revenues                                  |  | 7,983                                        |   |  | 100 %                               | 
|Cost of goods sold                        |  | (2,940                                       | ) |  | 36.8 %                              | 
|Gross Profit                              |  | 5,043                                        |   |  | 63.2 %                              | 
|Selling expenses                          |  | (193                                         | ) |  | 2.4 %                               | 
|General and administrative
      expenses |  | (658                                         | ) |  | 8.2 %                               | 
|Income from operations                    |  | 4,192                                        |   |  | 52.5%                               | 
|Other income and (expenses)               |  |                                              |   |  |                                     | 
|Interest income                           |  | 53                                           |   |  | 0.7%                                | 
|Other income                              |  | -                                            |   |  | -                                   | 
|Exchange
      loss                       |  | (4                                           | ) |  | 0.1%                                | 
|Income before income tax                  |  | 4,241                                        |   |  | 53.1%                               | 
|Provision for income tax                  |  | 571                                          |   |  | 7.2%                                | 
|Net income                                |  | 3,670                                        |   |  | 46%                                 | 

Revenues. Revenues increased approximately $2.19
million, or 37.8%, to approximately $7.98 million for the six months ended June
30, 2009, from approximately $5.79 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.

Cost of Goods Sold.Our cost of goods sold increased
approximately $0.70 million, or 31.3%, to approximately $2.94 million for the
six months ended June 30, 2009, from approximately $2.24 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 36.8%
during the six moths ended June 30, 2009 from 38.7% 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 six months ended June 30, 2009.

- 23 -

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Gross Profit.Our gross profit increased by approximately $1.49 million, or 42.0%, to approximately $5.04 million for the six months ended June 30, 2009 from approximately $3.55 million during the same period in 2008. Gross profit
as a percentage of revenues, or gross margin, was 63.2% for the six months ended June 30, 2009, an increase of 1.9% from 61.3% during the same period in 2008. Such percentage increase was mainly due to the increased sales of our higher margin small
package Chinese Caterpillar Fungus products.

Selling Expenses . Our selling expenses increased approximately $0.14 million, or 280%, to approximately $0.19 million for the six months ended June 30, 2009 from approximately $0.05 million during the same period in 2008. As a
percentage of revenues, selling expenses increased to 2.4% for the six months ended June 30, 2009 from 0.9% 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 $0.09 million, or 15.8%, to approximately $0.66 million for the six months ended June 30, 2009 from approximately $0.57 million for
the same period in 2008. As a percentage of revenues, general and administrative expenses decreased to 8.2% for the six months ended June 30, 2009 from 9.8% 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 six months ended June 30, 2009.

Income Before Income Tax . Income before income tax increased approximately $1.29 million, or 43.7%, to approximately $4.24 million during the six months ended June 30, 2009 from approximately $2.95 million during the same period
in 2008. As a percentage of revenues, income before income tax increased to52.5% during the six months ended June 30, 2009 from 50.7% during the same period in 2008. The increase of income before income tax is mainly attributable to the increase in
our gross profit as a result of the increase in our sales.

Income Taxes. Income tax increased approximately $0.15 million to approximately $0.57 million for the six months ended June 30, 2009 from approximately $0.42 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 $1.14 million, or 45.1% to approximately $3.67 million for the six months ended June 30, 2009 from approximately $2.53 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 six months ended June 30, 2009, our sales revenue from our Chinese Caterpillar Fungus was approximately $5.44 million, and our sales revenue from our other agricultural products was approximately $12.54 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 17 in our unaudited consolidated financial statements contained under Part I, Item I FINANCIAL STATEMENTS above.

Liquidity and Capital Resources

General

As of June 30, 2009, we had cash and cash equivalents (excluding restricted cash) of approximately $13.87 million. The following table provides detailed information about our net cash flow for all financial statement periods presented in this
report.

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

Six Months Ended June 30,2009
      2008Net cash provided by operating
      activities
      $4,656
      $2,569Net cash (used in) investing
      activities
      (50)
      (32)Net cash provided by (used in)
      financing activities
      62
      -Net cash flow
      4,676
      2,754


Operating Activities

Net cash provided by operating activities was approximately $4.66 million for the six-month period ended June 30, 2009, which is an increase of approximately $2.09 million from approximately $2.57 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 six-month period ended June 30, 2009 was approximately $0.05 million, which is an increase of approximately $0.02 million from net cash used in investing activities of approximately $0.03
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 six-month period ended June 30, 2009 was approximately $0.06 million while we did not have net cash provided by financing activities for the same period in 2008. During the six months ended June
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.

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Effects of Inflation

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

Off Balance Sheet Arrangements

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

Seasonality

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

Critical Accounting Policies

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

Recently Issued Accounting Pronouncements

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

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

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

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

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

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

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

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

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

New accounting pronouncement to be adopted

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

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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 June 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 June 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.

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PART II 
OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS.

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

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

We have not sold any equity securities during the fiscal
quarter ended June 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.

On June 3, 2009, our Board of Directors unanimously adopted
resolutions approving Shuaiyi International New Resources Development Inc. 2009
Equity Incentive Plan, or the Plan, and recommended that our stockholders
approve the Plan within one year. In connection with the adoption of these
resolutions, our Board of Directors elected to seek the written consent of the
holders of a majority of our outstanding shares in order to reduce associated
costs and implement the proposals in a timely manner. On June 3, 2009, New
Zealand WAYNEs Investment Holdings Co., Ltd., being the shareholder of
8,949,424 shares of our common stock, constituting 69.9% of the issued and
outstanding shares of our common stock, approved in writing the Plan.

**ITEM 5.** OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

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

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SIGNATURES

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

DATED: August 13, 2009

SHUAIYI INTERNATIONAL NEW RESOURCES
DEVELOPMENT INC.

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

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





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EXHIBIT INDEX

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





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