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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10−Q

(Mark One)

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

For the quarterly period ended: March 31, 2015

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

For the transition period from _____________ to _____________

Commission File Number: 000-52899

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

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

4/F Yushan Plaza
51 Yushan Road
Nangang District, Harbin 150090
People’s Republic of China
(Address of principal executive offices, Zip Code)

(86) 451-8228-7746
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes [X]      No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes [X]      No [   ]

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes [   ]      No [X]

The number of shares outstanding of each of the issuer’s classes of common equity, as of May 12, 2015 is as follows:

	Class of Securities		Shares Outstanding
	Common stock, $0.001 par value		16,996,396

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TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9
Item 4.	Controls and Procedures	9
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	10
Item 1A.	Risk Factors	10
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10
Item 3.	Defaults Upon Senior Securities	10
Item 4.	Mine Safety Disclosures	10
Item 5.	Other Information	10
Item 6.	Exhibits	10

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PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Page(s)
Condensed Consolidated Balance Sheets	F-2
Condensed Consolidated Statements of Income and Comprehensive Income	F-3
Condensed Consolidated Statements of Stockholders’ Equity	F-4
Condensed Consolidated Statements of Cash Flows	F-5
Notes to Condensed Consolidated Financial Statements	F-6 – F-29

F-1

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

		March 31, 2015			December 31, 2014
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	127,914,281		$	126,542,564
Accounts receivable		49,495			93,066
Inventories		1,380,675			635,409
Prepayments and other receivables		1,141,526			1,489,800
Deferred tax asset (VAT)		247,761			-
Total current assets		130,733,738			128,760,839
OTHER ASSETS
Intangible assets, net		488,857			613,315
Property, plant and equipment, net		14,124,892			14,424,942
Total assets	$	145,347,487		$	143,799,096
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Other payables and accruals	$	955,592		$	990,290
Taxes payable		1,280,708			2,748,583
Due to a related party		515,631			511,054
Preferred stock dividend payable		700,606			690,662
Total current liabilities		3,452,537			4,940,589
Total liabilities		3,452,537			4,940,589
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred Stock, $0.001 par value, 1,000,000 shares authorized, 74,276 shares and 77,776 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively; aggregate liquidation preference amount: $2,079,728 and $ 2,177,728, plus accrued but unpaid dividend of $700,606 and $690,662, at March 31, 2015 and December 31, 2014, respectively		1,693,950			1,773,772
Common stock, $0.001 par value, 190,000,000 shares authorized, 17,039,951 shares issued and 16,996,396 shares outstanding at March 31, 2015; 16,953,541 shares issued and 16,909,986 shares outstanding at December 31, 2014		17,040			16,954
Additional paid-in capital		21,274,427			21,122,372
Statutory reserves		4,989,033			4,989,033
Treasury stock, at cost, 43,555 shares as of March 31, 2015 and December 31, 2014		(78,767	)		(78,767	)
Retained earnings		106,272,606			102,783,308
Accumulated other comprehensive income		7,726,661			8,251,835
Total stockholders' equity		141,894,950			138,858,507
Total liabilities and stockholders' equity	$	145,347,487		$	143,799,096

See accompanying notes to condensed consolidated financial statements

F-2

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

		For the Three Months Ended March 31,
		2015			2014
REVENUE	$	7,042,327		$	6,866,681
Cost of goods sold		(1,584,260	)		(1,628,254	)
GROSS PROFIT		5,458,067			5,238,427
Selling expenses		(297,625	)		(247,063	)
General and administrative expenses		(491,283	)		(673,015	)
Income from operations		4,669,159			4,318,349
Other income (expenses):
Interest income		111,407			91,858
Foreign exchange differences		(8,071	)		(18,089	)
Total other income (expenses)		103,336			73,769
Income before income taxes		4,772,495			4,392,118
Provision for income taxes		(1,241,318	)		(1,158,544	)
NET INCOME		3,531,177			3,233,574
OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustments		(525,174	)		(1,052,829	)
COMPREHENSIVE INCOME	$	3,006,003		$	2,180,745
Earnings per share
Basic	$	0.21		$	0.19
Diluted	$	0.20		$	0.18
Weighted average number of shares outstanding
Basic		16,957,832			16,657,418
Diluted		17,737,437			17,645,322

See accompanying notes to condensed consolidated financial statements

F-3

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

		Preferred Stock						Common Stock
																										Accumulated
														Additional												Other
		Number						Number of						Paid-In			Treasury			Statutory			Retained			Comprehensive
		of Shares			Amount			Shares			Amount			Capital			Stock			Reserves			Earnings			Income			Total
Balance at January 1, 2015		77,776		$	1,773,772			16,909,986		$	16,954		$	21,122,372		$	(78,767	)	$	4,989,033		$	102,783,308		$	8,251,835		$	138,858,507
Net income		-			-			-			-			-			-			-			3,531,177			-			3,531,177
Foreign currency translation adjustment		-			-			-			-			-			-			-			-			(525,174	)		(525,174	)
Preferred stock converted into common stock		(3,500	)		(79,822	)		35,000			35			79,787			-			-			-			-			-
Issuance of common stock for preferred stock dividend		-			-			11,410			11			31,924			-			-			-			-			31,935
Preferred stock dividend		-			-			-			-			-			-			-			(41,879	)		-			(41,879	)
Share-based payments to independent directors		-			-			-			-			40,384			-			-			-			-			40,384
Issuance of restricted stock to independent directors		-			-			40,000			40			(40	)		-			-			-			-			-
Balance at March 31, 2015		74,276		$	1,693,950			16,996,396		$	17,040		$	21,274,427		$	(78,767	)	$	4,989,033		$	106,272,606		$	7,726,661		$	141,894,950

See accompanying notes to condensed consolidated financial statements

F-4

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

		For the Three Months Ended March 31,
		2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,531,177		$	3,233,574
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		367,958			372,777
Share-based compensation expense		40,384			45,234
IR unregistered stock compensation expense		-			14,558
(Increase) decrease in assets:
Accounts receivable		43,249			(40,338	)
Inventories		(748,178	)		(1,046,809	)
Prepayments and other receivables		342,881			526,815
Increase (decrease) in liabilities:
Other payables and accruals		(31,145	)		(75,594	)
Advance from related party		13,864			139,989
Taxes payable		(1,706,421	)		(1,704,426	)
Net cash provided by operating activities		1,853,769			1,465,780
Foreign currency translation adjustment		(482,052	)		(930,431	)
INCREASE IN CASH AND CASH EQUIVALENTS		1,371,717			535,349
CASH AND CASH EQUIVALENTS, at the beginning of the period		126,542,564			102,599,186
CASH AND CASH EQUIVALENTS, at the end of the period	$	127,914,281		$	103,134,535
NON-CASH TRANSACTIONS
Preferred stock and dividend converted into common stock	$	111,757		$	958,897
Preferred stock dividend payable		41,879			46,676
Share-based payment to officers and directors under equity incentive plan		40,384			45,234
Share-based payment – IR unregistered stock compensation expense		-			14,558
SUPPLEMENTAL DISCLOSURE INFORMATION
Income taxes paid	$	2,247,715		$	2, 355,699

See accompanying notes to condensed consolidated financial statements

F-5

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

NOTE 1             DESCRIPTION OF BUSINESS AND ORGANIZATION

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

On May 19, 2009, the Company filed Amended and Restated Articles of Incorporation with the State of Nevada to amend the Company’s Articles of Incorporation to, among other things, (1) change the name of the Company from “YzApp International Inc.” to “Shuaiyi International New Resources Development Inc.,” (2) increase the total number of shares of common stock that the Company has the authority to issue from 50,000,000 to 190,000,000 shares and (3) effect a one for 114.59 reverse split of the Company’s outstanding common stock.

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

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

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

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

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

F-6

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

NOTE 1             DESCRIPTION OF BUSINESS AND ORGANIZATION (CONTINUED)

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

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

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

F-7

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

NOTE 1             DESCRIPTION OF BUSINESS AND ORGANIZATION (CONTINUED)

As of March 31, 2015, details of the subsidiaries and affiliates of the Company are as follows:

F-8

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

NOTE 2             SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

Basis of preparation
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

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

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

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

Use of estimates
The preparation of these consolidated financial statements in conformity with generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of these consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ from these estimates under different assumptions or conditions. Significant estimates for the periods ended March 31, 2015 and 2014 include the useful lives of property and equipment and intangible assets, assumptions used in assessing impairment for long-term assets and the fair values of share-based payments.

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

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

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

F-9

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

NOTE 2             SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (CONTINUED)

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

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

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

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

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

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

The Company accounts for its intangible assets pursuant to FASB ASC Subtopic 350-30, “General Intangibles Other Than Goodwill”. Under ASC 350-30-35, intangibles with definite lives continue to be amortized on a straight-line basis over the lesser of their estimated useful lives or contractual terms. Under FASB ASU No.2012-02 Intangible-Goodwill and Other (Topic 350), the Company assesses qualitative factors to determine whether it is necessary to perform a quantitative impairment test. The Company would not be required to calculate the fair value of an indefinite-lived intangible asset unless the Company determines, based on a qualitative assessment, that it is not more likely than not, the indefinite-lived intangible asset is impaired. If the qualitative assessment fails, intangibles with indefinite lives are further evaluated quantitatively for impairment by comparing the asset’s estimated fair value with its carrying value, based on cash flow methodology.

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

F-10

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

NOTE 2             SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (CONTINUED)

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

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

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

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

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

The Company’s income tax returns are subject to examination by the Internal Revenue Service (“IRS”) and other tax authorities in the locations where it operates. The Company assesses potentially unfavorable outcomes of such examinations based on the criteria of FASB ASC 740-10-25-5 through 740-10-25-7 and 740-10-25-13 (formerly FASB Interpretation No. 48 (“FIN 48”) “Accounting for Uncertainty in Income Taxes”). The interpretation prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This Interpretation also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures.

Research and development costs
Research and development costs are expensed as incurred, and are charged to general and administrative expenses. Research and development costs were $39,834 and $39,982 for the three months ended March 31, 2015 and 2014, respectively.

Advertising costs
The Company expenses all advertising costs as incurred. Advertising costs charged to selling expenses were nil for the three months ended March 31, 2015 and 2014.

Shipping and handling costs
Substantially all costs of shipping and handling of products to customers are included in selling expense. Shipping and handling costs were insignificant.

F-11

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

NOTE 2             SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (CONTINUED)

Comprehensive income
FASB ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and displaying comprehensive income and its components in the consolidated financial statements. Accumulated other comprehensive income includes foreign currency translation adjustments.

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

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

	March 31, 2015		December 31, 2014
Balance sheet items, except for equity accounts	US$1=RMB6.1422		US$1=RMB6.1190

	Three months ended March 31,
	2015		2014
Items in the statements of income and cash flows	US$1=RMB6.1380		US$1=RMB6.1180

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

Segment reporting
The Company follows FASB ASC Topic 280, “Segment Reporting”, which requires that companies disclose segment data based on how management makes decisions about allocating resources to segments and evaluating their performance.

The Company believes that during the three months ended March 31, 2015 and 2014, it operated in three business segments – growing and sales of Cordyceps Militaris, which is widely used for Chinese medicine, manufacturing and sale of functional health beverages featuring the Cordyceps Militaris as a core ingredient, and sales of organic and specialty products. The manufacturing and sale of Cordyceps Militaris functional health beverages was launched in the fourth quarter of 2010.

Throughout the three months ended March 31, 2015 and 2014, all of the Company’s operations were carried out in one geographical segment - China.

Earnings per share
The Company reports earnings per share in accordance with the provisions of FASB ASC Topic 260, "Earnings per Share". FASB ASC Topic 260 requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution (using the treasury stock method) that could occur if securities or other contracts to issue common stock were exercised and converted into common stock.

F-12

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

NOTE 2             SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (CONTINUED)

Commitments and contingencies
The Company follows FASB ASC Subtopic 450-20, “Loss Contingencies” in determining its accruals and disclosures with respect to loss contingencies. Accordingly, estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.

Recent accounting pronouncements
In April 2014, the FASB issued ASU 2014-08 “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) - Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”, which changes the threshold for reporting discontinued operations and adds new disclosures. The new guidance defines a discontinued operation as a disposal that “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.” The standard is required to be adopted by public business entities in annual periods beginning on or after December 15, 2014, and interim periods within those annual periods.. The adoption of the provisions in ASU 2014-08 did not have an impact on the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)" which clarifies and improves the principles for recognizing revenue and develops a common revenue standard for United States generally accepted accounting principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) that among other things, improves comparability of revenue recognition practices and provides more useful information to users of financial statements through improved disclosure requirements. The amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is currently reviewing the impact on its consolidated financial statements of adopting this guidance.

In June 2014, the FASB issued ASU 2014-12, "Compensation - Stock Compensation (Topic 718)" which provides explicit guidance on the treatment of awards with performance targets that could be achieved after the requisite service period. The amendments in ASU 2014-12 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The Company does not expect that the adoption will have a material impact on its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern. This standard requires management to evaluate for each annual and interim reporting period whether it is probable that the reporting entity will not be able to meet its obligations as they become due within one year after the date that the financial statements are issued. If the entity is in such a position, the standard provides for certain disclosures depending on whether or not the entity will be able to successfully mitigate its going concern status. This guideline is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early application is permitted. The Company does not expect that the adoption will have a material impact on its consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02 "Consolidation (Topic 810): Amendments to the Consolidation Analysis." ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. It is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company is currently in the process of evaluating the impact of the adoption of ASU 2015-02 on its consolidated financial statements.

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

F-13

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

NOTE 3             FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

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

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

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The carrying values of cash and cash equivalents, trade and other receivables and payables approximate their fair values due to the short maturities of these instruments.

For stock-based derivative financial instruments, the Company uses Monte-Carlo simulation methods to value the derivative instruments at inception and on subsequent valuation dates.

There was no asset or liability measured at fair value on a non-recurring basis as of March 31, 2015 and December 31, 2014.

NOTE 4             ACCOUNTS RECEIVABLE, NET

Accounts receivable consisted of the following:

		March 31, 2015			December 31, 2014
Accounts receivable	$	49,495		$	93,066
Less: Allowance for doubtful debts		-			-
Accounts receivable, net	$	49,495		$	93,066

No allowance was deemed necessary as of March 31, 2015 and December 31, 2014.

F-14

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

NOTE 5             INVENTORIES

Inventories by major categories are summarized as follows:

		March 31, 2015			December 31, 2014
Raw materials	$	217,086		$	169,025
Work in progress		707,449			432,322
Finished goods		456,140			34,062
Total	$	1,380,675		$	635,409

NOTE 6             PREPAYMENTS AND OTHER RECEIVABLES

Prepayments and other receivables consisted of the following:

		March 31, 2015			December 31, 2014
Prepayments for raw material purchasing	$	1,124,594		$	1,470,434
Other receivables, net of $nil allowance		16,932			19,366
	$	1,141,526		$	1,489,800

NOTE 7             INTANGIBLE ASSETS, NET

Intangible assets, net consisted of the following:

		March 31, 2015			December 31, 2014
Computer software, cost	$	1,617		$	1,623
Exclusive right to use a secret process, cost		4,886,205			4,904,731
Less: Accumulated amortization		(4,398,965	)		(4,293,039	)
	$	488,857		$	613,315

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 Cordyceps Militaris, which is widely used for traditional Chinese medicine, for a cash consideration of RMB30,000,000, payable over five years. The exclusive right is amortized over its term of ten years using the straight-line method.

Amortization expense was $122,226 and $122,625 for the three months ended March 31, 2015 and 2014, respectively. The estimated expense of the intangible assets over each of the next two years will be:

Remainder of fiscal 2015	$	366,427
Fiscal 2016		122,430
	$	488,857

F-15

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

NOTE 8             PROPERTY, PLANT AND EQUIPMENT, NET

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

		March 31, 2015			December 31, 2014
Cost:
Buildings	$	19,637,709		$	19,712,166
Office equipment		28,998			29,108
Machinery		136,799			137,317
Motor vehicles		118,366			118,815
Total cost		19,921,872			19,997,406
Less: Accumulated depreciation		(5,796,980	)		(5,572,464	)
Net book value	$	14,124,892		$	14,424,942

Depreciation expense for the three months ended March 31, 2015 and 2014 was $245,732 and $250,152, respectively.

NOTE 9             OTHER PAYABLES, ACCRUALS AND TAXES PAYABLE

Other payables and accruals consisted of the following:

		March 31, 2015			December 31, 2014
Accrued staff costs	$	880,473		$	943,700
Other payables		75,119			46,590
	$	955,592		$	990,290

Accrued staff costs mainly represent salary payables, fringe and social benefit accruals. According to the prevailing laws and regulations of the PRC, all eligible employees of the Company’s subsidiaries and VIEs are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan (“social insurance”). The Company’s subsidiaries and VIEs are required to: i) accrue the social insurance based on certain percentages of the qualified employees’ salaries; and ii) make contributions to the plans for the amounts accrued. For the past periods, the Company’s subsidiaries and VIEs recorded the accrual amount but the actual social insurance plan was not established to receive the contribution. The recorded accruals for the social insurance reflected an estimate of the probable liability incurred based on the information available at the date of each financial statement.

Taxes payable consisted of the following:

		March 31, 2015			December 31, 2014
Value added tax	$	-		$	423,818
Income tax		1,193,205			2,207,274
Others		87,503			117,491
	$	1,280,708		$	2,748,583

F-16

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

NOTE 10           STOCKHOLDERS’ EQUITY

Preferred Stock

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

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

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

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

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

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

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

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

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

F-17

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

NOTE 10           STOCKHOLDERS’ EQUITY (CONTINUED)

Preferred Stock (Continued)

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

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

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

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

Accounting for Series A Preferred Stock

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

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

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

Movements of Series A Preferred Stock for the three months ended March 31, 2015 and 2014 are as below:

						Private Placement on
			Number of Shares			June 7, 2010			June 28, 2010			Total
	Balance at January 1, 2015		77,776		$	1,521,171		$	252,601		$	1,773,772
	Preferred stock converted into common stock		(3,500	)		(79,822	)		-			(79,822	)
	Balance at March 31, 2015		74,276		$	1,441,349		$	252,601		$	1,693,950

						Private Placement on
			Number of Shares			June 7, 2010			June 28, 2010			Total
	Balance at January 1, 2014		110,066		$	2,030,706		$	479,477		$	2,510,183
	Preferred stock converted into common stock		(32,290	)		(509,535	)		(226,876	)		(736,411	)
	Balance at March 31, 2014		77,776		$	1,521,171		$	252,601		$	1,773,772

F-18

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

NOTE 10           STOCKHOLDERS’ EQUITY (CONTINUED)

Preferred Stock (Continued)

During the three months ended March 31, 2015 and 2014, 3,500 shares and 32,290 shares of Series A Preferred Stock were converted into 35,000 shares and 322,900 shares of common stock, at a 1 for 10 ratio. In addition, during the three months ended March 31, 2015 and 2014, 11,410 shares and 79,480 shares of common stock were issued to the investors as settlement of stock dividends of $31,935 and $222,486, respectively.

NOTE 11           STATUTORY RESERVES

In accordance with the PRC Companies Law, the Company’s PRC subsidiaries and VIEs are required to transfer 10% of their profits after tax, as determined in accordance with accounting standards and regulations of the PRC, to the statutory surplus reserve. However, the Company’s PRC subsidiaries and VIEs are not required to transfer any profit after tax to the statutory surplus reserve after the accumulated statutory surplus reserves reached 50% of registered capital of the Company’s PRC subsidiaries and VIEs. The statutory surplus reserve is non-distributable.

NOTE 12           SHARE-BASED COMPENSATION

The Company was authorized to issue an aggregate of 2,500,000 shares of its common stock under the 2009 Equity Incentive Plan (“Plan”) as equity awards of incentive stock options, non-statutory stock options, restricted stock, and other equity incentives to employees, officers, directors and consultants. The Plan expires in 2019 and as of March 31, 2015, there were 470,000 shares of common stock available for grant pursuant to the Plan.

Stock options granted to Management

On July 16, 2010, the Company entered into a stock option agreement with Mr. Robert Tick (“Mr. Tick”), the Chief Financial Officer of the Company, under the Company’s 2009 Equity Incentive Plan.(“the Plan”). Pursuant to the terms of the stock option agreement, Mr. Tick was granted options to purchase an aggregate of 150,000 shares of common stock of the Company, consisting of, an option to purchase 75,000 shares that would vest in 2011 with an exercise price of $5.00 per share, and an option to purchase 75,000 shares that would vest in 2012 with an exercise price of $7.00 per share. Each of these options expires three years after their respective vesting dates. The Compensation Committee of the Board approved the repricing of the options on January 24, 2011 to an exercise price of $3.50 per share which was higher than the closing price of the Company’s common stock on the OTC Bulletin Board on the date of repricing and the vesting schedules of the outstanding options granted were changed to a semi-annual basis.

According to the stock option agreement, in the event Mr. Tick’s employment with the Company is terminated for any reason except for death or disability, he may exercise these options only to the extent that these options would have been exercisable on the termination date and no later than three months after the termination date. If his employment is terminated due to his death or disability, these options may be exercised only to the extent that these options would have been exercisable by Mr. Tick on the termination date and must be exercised by Mr. Tick no later than twelve months after the termination date. If the employment is terminated for Cause as defined in the stock option Agreement, these options will terminate immediately. In no event will these options be exercised later than December 31, 2015. As of March 31, 2015, a total of 75,000 options granted on July 16, 2010, which vested on or before December 31, 2011, had expired.

On August 8, 2013, the Company entered into a stock option agreement with Mr. Tick, under the Plan. Pursuant to the terms of the stock option agreement, Mr. Tick was granted options to purchase an aggregate of 75,000 shares of common stock of the Company, consisting of, an option to purchase at an exercise price of $0.83 per share, 37,500 shares that would vest in November 15, 2013, and an option to purchase 37,500 shares that would vest in April 15, 2014. Each of these options expires three years after their respective vesting dates.

F-19

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

NOTE 12           SHARE-BASED COMPENSATION (CONTINUED)

Stock options granted to Management (continued)

In accordance with the guidance provided in ASC Topic 718, Stock Compensation, the compensation costs associated with these options are recognized, based on the grant-date fair values of these options, over the requisite service period, or vesting period. Also in accordance with ASC Topic 718, incremental compensation cost is measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms are modified. The fair value of the option award was estimated on the date of grant using the Black-Scholes option valuation model. The valuation was based on the assumptions noted in the following table.

Expected volatility	73%
Expected dividend	0%
Expected terms (in year)	1
Risk-free rate	0.12%

A summary of options issued and outstanding at March 31, 2015 and the movements since January 1, 2014 to March 31, 2015 are as follows:

					Weighted-
		Number of			Average			Aggregate			Weighted- Average
		Underlying			Exercise Price			Intrinsic			Contractual Life
		Shares			Per Share			Value (1)			Remaining in Years
Outstanding at January 1, 2014		225,000		$	2.61		$	96,750			1.86
Granted		-			-			-			-
Exercised		-			-			-			-
Expired		(75,000	)	$	3.50			-			-
Forfeited		-			-			-			-
Outstanding at December 31, 2014		150,000		$	2.17		$	57,000			1.41
Granted		-			-			-			-
Exercised		-			-			-			-
Expired		-			-			-			-
Forfeited		-			-			-			-
Outstanding at March 31, 2015		150,000		$	2.17		$	5,250			1.17
Exercisable at March 31, 2015		150,000		$	2.17		$	5,250			1.17

(1)

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been realized by the option holders had all option holders exercised their options on March 31, 2015. The intrinsic value of a stock option is the excess of the Company’s closing stock price on March 31, 2015 of $0.90 per share over the exercise price $0.83 per share, multiplied by the number of shares subject to the option.

The Company recognized compensation expense of nil and $6,318 in relation to the options granted to Mr. Tick for the three months ended March 31, 2015 and 2014, respectively.

F-20

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

NOTE 12           SHARE-BASED COMPENSATION (CONTINUED)

Restricted shares granted to Management

On August 8, 2013, the Company entered into a restricted shares grant agreement (the "Third Restricted Shares Grant Agreement") under the Company’s Plan with Mr. Tick. Pursuant to the terms of the Third Restricted Shares Grant Agreement, the Company granted to Mr. Tick 75,000 restricted shares (the “Restricted Shares”) of the Company’s common stock. If Mr. Tick’s service with the Company ceases for any reason other than Mr. Tick’s (a) death, (b) disability, (c) retirement, or (d) termination by the Company without cause, any unvested restricted shares will be automatically forfeited to the Company. The Third Restricted Shares vested under the following schedule: 37,500 shares vest on November 15, 2013 and 37,500 shares vest on April 15, 2014.

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

Accordingly, the Company recognized compensation expense of nil and $22,410, related to the restricted shares granted to Mr. Tick for the three months ended March 31, 2015 and 2014, respectively, based on the estimated grant-date fair value of the Company’s common stock of $0.83 on August 8, 2013.

Restricted shares granted to independent directors

On August 15, 2014, the Company entered into separate restricted shares grant agreements with the Company’s independent directors Mr. Henry Ngan, Ms. Virginia P’an, Mr. Jianbing Zhong and Mr. Richard E. Fearon, Jr. Pursuant to the agreements, the Company granted, under the Company’s 2009 Equity Incentive Plan, 40,000 restricted shares to each person, as compensation for the services to be provided by them as independent directors.

The restricted shares granted to independent directors will vest in equal installments on a semi-annual basis over a two-year period. If the independent director’s service with the Company ceases for any reason other than the independent director’s (a) death, (b) disability, (c) retirement, or (d) termination by the Company without cause, any unvested restricted shares will be automatically forfeited to the Company. On February 15, 2015, 10,000 restricted shares to each independent director were vested, the Company issued a total of 40,000 restricted shares to the four independent directors accordingly.

Accordingly, the Company recognized a total compensation expense of $40,384 and $16,506 related to the restricted shares granted to the directors for the three months ended March 31, 2015 and 2014, respectively, based on the estimated grant-date fair values of the Company’s common stock of $1.15 per share on November 26, 2012 and $2.05 on August 15, 2014.

Unregistered shares granted to consultant

On August 3, 2013, the Company entered into an investor relations agreement (the “Agreement”) under the Company’s Plans with a consultant. Pursuant to the terms of the Agreement, the Company would grant a total of 25,000 unregistered shares to the Company’s investor relations consultant for consulting services provided by the consultant during the period August 2013 to June 2014. The Company issued 15,000 shares on September 16, 2013 (vesting date) and issued another 10,000 unregistered shares on Jan 1, 2014. The Company recognized total compensation expense of $23,746 and $17,804 for the year ended December 31, 2014 and 2013, based on the fair values of the Company’s common stock of US$1.05 on September 16, 2013 for the 15,000 shares issued and the fair value of the Company’s common stock of $2.58 on January 1, 2014 for the 10,000 shares issued. Pursuant to the terms of the Agreement, if during any three-month period, the Average Closing Price is $2.00 per share or greater, the Company shall issue 12,500 (twelve thousand five hundred) Incentive Shares to the consultant. During the first three-month period of 2014, the Average Closing Price is $2.84 per share. The Company then issued 12,500 shares to the consultant on April 2, 2014. The Company recognized total compensation expense of nil for the three months ended March 31, 2015 and 2014, respectively, based on the fair values of the Company’s common stock of US$2.37 on April 2, 2014 for the 12,500 shares issued.

F-21

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

NOTE 12           SHARE-BASED COMPENSATION (CONTINUED)

Unregistered shares granted to consultant (continued)

On August 15, 2014, the Company and American Capital Ventures (the “Consultant”) entered into certain Investor Relations Agreement (the “2014 Agreement”). The Company retained the Consulting Services provided by the Consultant from August 15, 2014 to June 30, 2015. Pursuant to the terms of the 2014 Agreement, the Company has agreed to issue up to 60,000 shares of unregistered common stock to the consultant and its designee, among which 20,000 shares were earned and vested as of August 18, 2014. During the service period, the consultant is entitled to receive additional 15,000 unregistered shares of common stock if the average closing price of the common stock as reported on the Over-the Counter Bulletin Board or any other market on which the common stock is listed or quoted for trading on the date in question (the “Average Closing Price”) is at or above $3.00 but lower than $4.00. The consultant is entitled to receive further 25,000 unregistered shares of common stock if the Average Closing Price is $4.00 per share or greater and the company qualifies, files and is approved for a NASDAQ uplisting. The Company recognized total compensation expense of nil for the three months ended March 31, 2015 and 2014, respectively, based on the fair values of the Company’s common stock of US$1.95 on September 22, 2014 for the 20,000 shares issued.

NOTE 13           INCOME TAXES

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

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

Daqing Shuaiyi, Harbin Shuayi and Heilongjiang Shuaiyi are subject to an EIT rate of 25%. No provision for PRC taxes was made for Heilongjiang Shuaiyi which had no taxable income in the PRC.

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

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

The Company’s income tax expense consisted of:

		For the Three Months Ended March 31,
		2015			2014
Current income tax – PRC	$	1,241,318		$	1,158,544
Deferred		-			-
	$	1,241,318		$	1,158,544

F-22

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

NOTE 13           INCOME TAXES (CONTINUED)

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

		For the Three Months Ended March 31,
		2015			2014
Pre-tax income	$	4,772,495			4,392,118
U.S. federal corporate income tax rate		34%			34%
Income tax computed at U.S. federal corporate income tax rate		1,622,648			1,493,320
Reconciling items:
Change in valuation allowance		65,556			100,772
Rate differential for PRC earnings		(443,293	)		(416,045	)
Non-deductible expenses and non-reportable income		(3,593	)		(19,503	)
Effective tax expense	$	1,241,318		$	1,158,544

The Company had deferred tax assets as follows:

		March 31, 2015			December 31, 2014
Net operating losses carried forward	$	2,188,190		$	2,122,634
Less: Valuation allowance		(2,188,190	)		(2,122,634	)
Net deferred tax assets	$	-		$	-

As of March 31, 2015 and December 31, 2014, Nutrastar had $6,225,164 and $6,072,219, respectively, of net operating loss carry forwards available to reduce future taxable income which will expire in various years through 2030. The Company’s VIE entity, Heilongjiang Shuaiyi, had $286,540 net operating loss carry forwards as of March 31, 2015 available to offset future taxable income which will be expire in various years through 2020. Management believes it is more-likely-than-not that the Company will not realize these potential tax benefits as the Company’s U.S. operations will not generate any operating profits in the foreseeable future. Therefore, the Company recorded a full valuation allowance on its deferred tax assets.

As of March 31, 2015 and December 31, 2014, the Company has no material unrecognized tax benefits which would favorably affect the effective income tax rate in future periods and does not believe that there will be any significant increases or decreases of unrecognized tax benefits within the next twelve months. No interest or penalties relating to income tax matters have been imposed on the Company during the three months ended March 31, 2015 and 2014, and no provision for interest and penalties was deemed necessary as of March 31, 2015 and December 31, 2014.

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

F-23

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

NOTE 14           EARNINGS PER SHARE

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

		For the Three Months Ended March 31,
		2015			2014
Income available to common stockholders:
Net income	$	3,531,177		$	3,233,574
Less: Preferred stock dividend		(41,879	)		(46,676	)
Income available to common stockholders (Basic)	$	3,489,298		$	3,186,898
Add: Preferred stock dividend		41,879			46,676
Income available to common shareholders (Diluted)	$	3,531,177		$	3,233,574
Weighted average number of shares:
- Basic		16,957,832			16,657,418
- Effect of dilutive preferred stock		756,760			893,453
- Effect of dilutive restricted stock units		-			41,394
- Effect of dilutive options		22,845			53,057
- Diluted		17,737,437			17,645,322
Net income per share
- Basic	$	0.21		$	0.19
- Diluted	$	0.20		$	0.18

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

The diluted earnings per share calculation for the three months ended March 31, 2015 did not include management options to purchase up to 75,000 shares of common stock, respectively, because their effect was anti-dilutive.

The diluted earnings per share calculation for the three months ended March 31, 2014 did not include the management options to purchase up to 150,000 shares of common stock, because their effect was anti-dilutive.

NOTE 15           RELATED PARTY TRANSACTIONS

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

(a)	Due to related parties

			March 31, 2015			December 31, 2014
	Due to Ms. Lianyun Han, Chairperson, CEO and President	$	515,631		$	511,054

The amount due to Ms. Han was non-interest bearing, unsecured and without a fixed repayment date. The balance was mainly for the payment of US$ denominated expenses.

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

NOTE 15           RELATED PARTY TRANSACTIONS (CONTINUED)

(b)	Lease of land
	For the three months ended March 31, 2015 and 2014, the Company paid rental expense of $14,714 and $14,772, respectively, for the land leased from Heilongjiang Shuaiyi Technology Development Co., Ltd. (“Shuaiyi Technology”). Shuaiyi Technology and the Company are under common control and management.
(c)	Acquisition of corporate headquarter premises
	On April 15, 2011, Heilongjiang Shuaiyi entered into an asset transfer agreement (the “Transfer Agreement”) with Ms. Han. Pursuant to the Transfer Agreement, Heilongjiang Shuiayi acquired an office building located at 54-1 Ganshui Road, Xiangfang District, Harbin, with a construction area of 1854.1 square meters, from Ms. Han at a cash consideration of RMB12.75 million (approximately $1.95 million including other incidental costs),which was fully paid in April 2011. The purchase price was determined based on a real property valuation report issued by an independent appraisal firm, Harbin Guoxin Real Estate Appraisal and Consulting Co., Limited on November 11, 2010 and reflected approximately equal valuation which Ms. Han originally paid when she acquired such property for the Company. Management believes that based on the property valuation report issued by the independent appraisal firm, the terms of the purchase transaction and the consideration that the Company paid in connection with this transaction were comparable to the terms available and the amounts that would be paid in an arm’s-length transaction.
	It is the current intention of the Company to move the Company headquarters to this office building in the foreseeable future.

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

NOTE 16           CONCENTRATION RISK

a)           Concentration of credit risk

As of March 31, 2015 and December 31, 2014, approximately 99.7% and 99.9%, respectively, of the Company’s cash including cash on hand and deposits in accounts are maintained with one financial institution within the PRC. To protect the interest of depositors, the PRC recently introduced deposits insurance which provides maximum compensation of RMB500,000 per depositor if a bank becomes insolvent or bankrupt. However, the Company has not experienced any losses in this financial institution and monitors the soundness and the credit ratings of this financial institution on a periodic basis, thus believes it is currently not exposed to any material risks on its bank deposits in bank accounts with this financial institution. For the three months ended March 31, 2015 and 2014, all of the Company’s sales arose in the PRC. In addition, all accounts receivable as of March 31, 2015 and December 31, 2014 also arose in the PRC.

The following individual customer accounted for 10% or more of the Group’s revenues for the three months ended March 31, 2015 and 2014:

	March 31, 2015		March 31, 2014
Lai En Century Co. Ltd	41%		41%

Individual customer accounts receivable that represented 10% or more of total accounts receivable as of March 31, 2015 and December 31, 2014 were as follows:

		Percentage of accounts receivable as of
		March 31, 2015			December 31, 2014
Great Northern Wilderness Grain and Oil Warehouse Market		100%			55.4%
Shandong Province, Linyi City Hong Yun Commodity		-			17.3%
Dalian Exalts Trade Co., Ltd		-			15.5%
Shenyang Wellhope Group		-			11.8%

For the three months ended March 31, 2015 and 2014, all of the Company’s purchases arose in the PRC. In addition, all accounts payable as of March 31, 2015 and December 31, 2014 also arose in the PRC.

The following suppliers accounted for 10% or more of the Company’s procurement for the three months ended March 31, 2015 and 2014:

		March 31, 2015			March 31, 2014
Zhangjiagang Nong Nong Drinking and Food Co. Ltd		32.4%			23.3%
Harbin Zijiang Packing Co., Ltd		22.8%			27.3%
Harbin Reservation During The Oil Co. Ltd		21.1%			20.5%

No individual supplier accounted for 10% or more of total accounts payable as of March 31, 2015 and 2014.

(b)         Concentration of operating risk

Substantially all of the Company’s operations and assets are conducted in and located inside China. The Company’s operations and assets are subject to various political, economic, and other risks and uncertainties inherent in China. Among other risks, the Company’s operations and assets 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.

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

NOTE 17           COMMITMENTS AND CONTINGENCIES

(a)           Operating leases

The Company has entered into tenancy agreements for the leases of an exhibition hall and land with a third party and a related company, Shuaiyi Technology (see 15(b)), respectively, for the purposes of the operation of its VIEs. The Company’s commitments for minimum lease payments under these operating leases for the next five years and thereafter as of March 31, 2015 are as follows:

		Related Parties			Non-related Parties			Total
Remainder of fiscal year ending December 31, 2015		44,141			8,547			52,688
Fiscal year ending December 31, 2016		58,855			-			58,855
Fiscal year ending December 31, 2017		58,855			-			58,855
Fiscal year ending December 31, 2018		58,855			-			58,855
Fiscal year ending December 31, 2019		58,855			-			58,855
Thereafter		666,211			-			666,211
Total	$	945,772		$	8,547		$	954,319

During the three months ended March 31, 2015 and 2014, rental expenses under operating leases amounted to $20,412 and $24,784, respectively.

(b)           PRC employee costs

According to the prevailing laws and regulations of the PRC, the Company’s subsidiaries and VIEs in the PRC are required to contribute to medical, retirement and unemployment insurance programs for its employees. We have recorded accruals for the probable estimated liability for approximately the past two years. However, in the past we did not provide for contributions for our temporary employees. If the PRC regulatory authorities take the view that we were required to make contributions to the social insurance and housing accumulation funds for our temporary employees, our failure to make previous payments may be in violation of applicable PRC labor laws and PRC governmental authorities may impose penalties on us for failure to comply. In addition, in the event that any current or former employee files a complaint with the PRC government, we may be subject to making up the contributions to the social insurance and housing accumulation funds as well as paying administrative fines. As the Company does not currently believe that it is probable that these additional contributions and fines would be material and, furthermore, cannot be reasonably estimated, no additional provision has been made in this regard.

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

NOTE 17           COMMITMENTS AND CONTINGENCIES (CONTINUED)

(c)           Indemnification agreement

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

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

On January 24, 2011, the Company entered into an indemnification agreement with Mr. Joshua Kurtzig, its newly elected independent director, pursuant to which the Company agreed to indemnify Mr. Kurtzig against expenses, judgments, fines, penalties or other amounts actually and reasonably incurred by the independent director in connection with any proceeding if the independent director acted in good faith and in the best interests of the Company. Mr. Kurtzig resigned from the Company’s Board effective November 26, 2012.

On November 26, 2012, the Company entered into an indemnification agreement with Mr. Richard E. Fearon, Jr., its newly elected independent director, pursuant to which the Company agreed to indemnify Mr. Fearon, Jr. against expenses, judgments, fines, penalties or other amounts actually and reasonably incurred by the independent director in connection with any proceeding if the independent director acted in good faith and in the best interests of the Company.

NOTE 18           SEGMENT INFORMATION

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

During the three months ended March 31, 2015 and March 31, 2014, all of the Company’s operations were carried out in one geographical segment - China.

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

NOTE 18           SEGMENT INFORMATION (CONTINUED)

The Company’s segment revenue and results for the three months ended March 31, 2015 and 2014 are as follows:

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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,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions are intended to identify forward-looking statements. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements regarding new and existing products, technologies and opportunities; statements regarding market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business in China; and any statements of belief or intention. As such, they are subject to risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward looking statements. Such risks and uncertainties include any of the factors and risks mentioned in the “Risk Factors” sections of the Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2014 and subsequent SEC filings, and any statements of assumptions underlying any of the foregoing. All forward-looking statements included in this report are based on information available to us on the date of this report. We assume no obligation and do not intend to update these forward-looking statements, except as required by law.

Certain Terms

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

• “BVI” refers to the British Virgin Islands;
• “China,” “Chinese” and “PRC,” refer to the People’s Republic of China;
• “Exchange Act” refers to the Securities Exchange Act of 1934, as amended.
• “Nutrastar,” “we,” “us,” “our company” and “our” refer to Nutrastar International Inc., a Nevada corporation, its subsidiaries, and, in the context of describing our operations and business and consolidated financial information, include our VIE Entities;
• “Renminbi” and “RMB” refer to the legal currency of China;
• “SEC” refers to the United States Securities and Exchange Commission;
• “Securities Act” refers to the Securities Act of 1933, as amended;
• “U.S. dollars,” “dollars” and “$” refer to the legal currency of the United States; and
• “VIE Entities” means our consolidated variable interest entities, including Heilongjiang Shuaiyi New Energy Development Co., Ltd. and its subsidiaries as depicted in our organizational chart included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Overview of Our Business

We are a leading China based producer and supplier of premium branded consumer products including commercially cultivated Cordyceps Militaris, organic and specialty food products and functional health beverages.

Our primary product is Cordyceps Militaris, which is a species of parasitic fungus that is typically found in north-eastern 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. According to Georges Halpern's Healing Mushrooms, certain research has shown that Cordyceps Militaris may boost the immune system, and can be used as a supplement for combating certain effects of fatigue and aging, the occurrences of certain tumors, and combating arteriosclerosis and certain gastrointestinal disorders, as well as reducing blood pressure. In addition, Cordyceps Militaris has significantly high economic values and 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. After several years of laboratory tests, we developed a technology to commercially grow and produce Cordyceps Militaris in 2006. Through our VIE entity, Daqing Shuaiyi, we generated 87.6% and 88.3% of our revenues from Cordyceps Militaris for the first quarter of 2015 and 2014, respectively. We plan to continue to focus on Cordyceps Militaris related based consumer products, which is our fastest growing product line with the greatest market demand and a significantly higher profit margin.

We also sell organic and specialty food products through our VIE, Harbin Shuaiyi, which was formed in 2001. After years of development, we believe that we have become the largest wholesale distributor of organic and specialty food in Heilongjiang Province, China. We plan to increase our focus in organic and specialty food products business, including efforts to become a producer and increase our distribution capabilities.

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We introduced the Cordyceps Militaris based functional health beverages in the fourth quarter of 2010. The non-carbonized beverage products were developed internally and contain the Cordyceps Militaris as a key ingredient. The products are currently being marketed directly to consumers in select cities in Jiangsu and Anhui Province through various distribution channels. We produce and distribute our functional health beverages through our VIE entity, Daqing Shuaiyi.

First Quarter Financial Performance Highlights

The following are some financial highlights for the first quarter of 2015:

• Net Revenue: Our net revenue was approximately $7.04 million for the first quarter of 2015, an increase of $0.17 million or 2.5% from $6.87 million for the same period of last year.

• Gross Margin: Gross margin was 77.5% for the first quarter of 2015, as compared to 76.3% for the same period in 2014.

• Operating Profit: Operating profit was approximately $4.67 million for the first quarter of 2015, an increase of $0.35 million or 8.1% from $4.32 million for the same period of last year.

• Net Income: Net income was approximately $3.53 million for the first quarter of 2015, an increase of $0.30 million or 9.2% from $3.23 million for the same period of last year.

• Basic and fully diluted earnings per share were $0.21 and $0.20, respectively, for the first quarter of 2015.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014

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

		Three Months Ended						Three Months Ended
		March 31, 2015						March 31, 2014
					As a						As a
					percentage of						percentage of
		In Thousands			revenues			In Thousands			revenues
Net Revenue	$	7,042			100%		$	6,867			100%
Cost of goods sold		(1,584	)		(22.5)%			(1,629	)		(23.7)%
Gross Profit		5,458			77.5%			5,238			76.3%
Selling expenses		(298	)		(4.2)%			(247	)		(3.6)%
General and administrative expenses		(491	)		(7.0)%			(673	)		(9.8)%
Income from operations		4,669			66.3%			4,318			62.9%
Other income and (expenses):
Interest income		111			1.6%			92			1.4%
Foreign exchange differences		(8	)		(0.1)%			(18	)		(0.3)%
Total other income		103			1.5%			74			1.1%
Income before income tax		4,772			67.8%			4,392			64.0%
Provision for income tax		(1,241	)		(17.6)%			(1,158	)		(16.9)%
Net income	$	3,531			50.2%		$	3,234			47.1%

Net Revenue. Our revenues are generated from the sale of our Cordyceps Militaris products, functional health beverages and organic and specialty food products. Revenues increased approximately $0.17 million, or 2.5%, to approximately $7.04 million for the three months ended March 31, 2015 from approximately $6.87 million for the same period in 2014. This increase was mainly attributable to the increase in quantity sold of our core product, Cordyceps Militaris with a value of $0.11 million combined with a slight increase in sales of our beverage products by $0.05 million. The increase in quantity sold of our products was mainly driven by the continued increase in market demand for our core products.

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Business Segment Information

Our business operations can be categorized into three segments based on the type of products we produce and sell, specifically (i) Cordyceps Militaris, (ii) functional health beverages and (iii) organic and specialty food products. The following table illustrates the revenue from each of these three segments as well as the change of percentage for the periods indicated:

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

		Three Months Ended March 31,						Percent
		2015			2014			Change
Components of Sales Revenue
Cordyceps Militaris	$	6,169		$	6,062			1.7%
Functional Health Beverages		290			235			23.4%
Organic and Specialty Food Products		583			570			2.3%
Total revenues	$	7,042		$	6,867			2.5%

We expect that majority of our revenue for 2015 will continue to be generated from our Cordyceps Militaris related products. In addition, we expect to see an increase in the percentage of revenue coming from the functional health beverages in the future if we continue to be successful in expanding our distribution channel of such products. We also expect to increase our business development activities in the organic and specialty food products on a going forward basis. We anticipate that sales and marketing related costs associated with branding, marketing and advertising of the functional health beverages will increase as a percentage of revenue.

Additional information regarding our products can be found at Note 18, Segment Information in our unaudited condensed consolidated financial statements contained under Part I, Item I “FINANCIAL STATEMENTS” above.

Cost of Goods Sold. Our cost of goods sold is primarily comprised of the costs of our raw materials, labor and overhead. Our cost of goods sold decreased by $0.05 million, or 2.8%, to approximately $1.58 million for the three months ended March 31, 2015 from approximately $1.63 million during the same period in 2014. As a percentage of net revenue, the cost of goods sold decreased to 22.5% for the three months ended March 31, 2015 from 23.7% during the same period in 2014. The decrease in cost of goods sold in dollar terms and as a percentage of net revenue was mainly attributable to the economies of scale due to our full capacity utilization.

Gross Profit. Our gross profit increased by approximately $0.22 million, or 4.0%, to approximately $5.46 million for the three months ended March 31, 2015 from approximately $5.24 million during the same period in 2014. Gross profit as a percentage of net revenue, or gross margin, was 77.5% for the three months ended March 31, 2015, an increase of 1.2% from 76.3% during the same period in 2014. Such percentage increase was mainly due to the increase in the sales of core Cordyceps Militaris products in the product mix which has a higher gross margin as compared to our beverage and organic and specialty foods products and economies of scale due to our full capacity utilization.

Selling Expenses. Our selling expenses include sales commissions, cost of advertising and promotional materials, salaries and fringe benefits of sales personnel, and other sales related costs. Selling expenses increased approximately $0.05 million, or 20.5%, to approximately $0.30 million for the three months ended March 31, 2015 from approximately $0.25 million during the same period in 2014. As a percentage of net revenue, selling expenses increased to 4.2% for the three months ended March 31, 2015 from 3.6% for the same period in 2014. The increase in selling expenses in dollar terms and percentage of net revenue for the three months ended March 31, 2015 was mainly attributable to the increase in sales commission paid to our sales agents and other sales salary and benefit related costs due to the higher sales volume.

General and Administrative Expense. General and administrative expenses include the costs associated with staff and support personnel who manage our business activities, depreciation charges for fixed assets, and professional fees paid to third parties. General and administrative expenses decreased approximately $0.18 million, or 27.0%, to approximately $0.49 million for the three months ended March 31, 2015 from approximately $0.67 million for the same period in 2014. As a percentage of net revenue, general and administrative expenses were 7.0% for the three months ended March 31, 2015 as compared to 9.8% for the same period of 2014. The decrease in dollar terms and as a percentage of revenue was mainly attributable to the decrease in stock compensation expenses to our management and payments for third party professional services.

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Income Before Income Tax. Income before income tax increased approximately $0.38 million, or 8.7%, to approximately $4.77 million during the three months ended March 31, 2015 from approximately $4.39 million during the same period in 2014. As a percentage of net revenue, income before income tax increased to 67.8% during the three months ended March 31, 2015 from 64.0% during the same period in 2014. The increase of income before income tax in dollar terms and as a percentage of revenue was mainly attributable to the increase in the amount of our gross profit, combined with a decrease in operating expenses resulting in an increase in income from operations of $0.35 million.

Income Taxes. Nutrastar International Inc. is subject to United States federal income tax at a tax rate of 34%. No provision for income taxes in the United States has been made as Nutrastar International Inc. had no U.S. source income taxable in the United States for the three months ended March 31, 2015 or 2014. New Resources was incorporated in the BVI and under the current laws of the BVI, is not subject to income taxes. Oriental Global was formed in Hong Kong and under the current laws of Hong Kong, is not subject to income taxes. Our PRC subsidiary and the VIEs are subject to national and local income taxes within China at the applicable tax rate on the taxable income as reported in their PRC statutory financial statements in accordance with relevant income tax laws. China passed a new Enterprise Income Tax Law, or the New EIT Law, and its implementing regulations, both of which became effective on January 1, 2008.

Each of VIE entities, Daqing Shuaiyi and Harbin Shuaiyi has been subject to an income tax rate of 25% since 2011.

Income tax increased approximately $0.08 million to approximately $1.24 million for the three months ended March 31, 2015 from approximately $1.16 million for the same period in 2014. Income tax expense for the three months ended March 31, 2015 increased because of the increase in net revenue and taxable income described above.

Net Income. Net income increased by approximately $0.30 million, or 9.2% to approximately $3.53 million for the three months ended March 31, 2015 from approximately $3.23 million for the same period of 2014, as a result of the factors described above.

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Liquidity and Capital Resources

General

As of March 31, 2015, we had cash and cash equivalents of approximately $127.9 million. The following table provides detailed information about our net cash flow for all financial statement periods presented in this report.

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

	Three Months Ended March 31,
	2015		2014
Net cash provided by operating activities	$1,854		$1,465
Net cash used in / provided by investing activities	-		-
Net cash used in / provided by financing activities	-		-
Foreign currency translation adjustment	(482)		(930)
Net cash flow	$1,372		$535

Operating Activities

Net cash provided by operating activities was approximately $1.85 million for the three-month period ended March 31, 2015, which is an increase of approximately $0.38 million from approximately $1.47 million net cash provided by operating activities for the same period of 2014. The increase was mainly attributable to the $0.30 million increase in net income for the three-month period ended March 31, 2015 compared with the same period of 2014, combined with the following changes in working capital items:

• A decrease in purchases of inventories for the first quarter of 2015 compared to the same quarter last year increased our operating cash balances by approximately $0.29 million; reflecting on us utilizing less cash for inventory production;
• A decrease in our utilization of prepaid expenses for the first quarter of 2015 compared to the same quarter last year decreased our operating cash balances by approximately $0.19 million;
• An increase in our collection from account receivables for the first quarter of 2015 compared to the same period last year increased our operating cash balances by approximately $0.08 million; and
• A decrease in advance from related parties decreased our operating cash balances by approximately $0.13 million, reflecting repayment of advance from related parties for payments of US$ denominated expenses in the prior period.

Investing Activities

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

For the three-month period ended March 31, 2015 and the three-month period ended March 31, 2014, there were no net cash used in or provided by investing activities.

Financing Activities

For the three-month period ended March 31, 2015 and the three-month period ended March 31, 2014, there were no net cash used in or provided by financing activities.

We believe that our cash on hand and cash flow from operations will meet our expected capital expenditure and working capital requirements 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, sales, marketing and branding activities 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, Cordyceps Militaris, beverage products and organic and specialty food products, historically have not been subject to material seasonal variations. However since all of our sales are in China, the timing of the various Chinese holidays such as Lunar Chinese New Year, May and October holidays may have an impact on our operating results and operating cash flows.

Critical Accounting Policies

Management’s discussion and analysis of its financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. Our financial statements reflect the selection and application of accounting policies, which require management to make significant estimates and judgments. See Note 2 to our condensed consolidated financial statements, “Summary of Significant Accounting Policies”. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe that the following reflect the more critical accounting policies that currently affect our financial condition and results of operations.

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

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

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

Use of estimates
The preparation of these consolidated financial statements in conformity with generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of these consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various

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other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ from these estimates under different assumptions or conditions. Significant estimates for the periods ended March 31, 2015 and 2014 include the useful lives of property and equipment and intangible assets, assumptions used in assessing impairment for long-term assets and the fair values of share-based payments.

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

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

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

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

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

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

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

The Company accounts for its intangible assets pursuant to FASB ASC Subtopic 350-30, “General Intangibles Other Than Goodwill”. Under ASC 350-30-35, intangibles with definite lives continue to be amortized on a straight-line basis over the lesser of their estimated useful lives or contractual terms. Under FASB ASU No.2012-02 Intangible-Goodwill and Other (Topic 350), the Company assesses qualitative factors to determine whether it is necessary to perform a quantitative impairment test. The Company would not be required to calculate the fair value of an indefinite-lived intangible asset unless the Company determines, based on a qualitative assessment, that it is not more likely than not, the indefinite-lived intangible asset is impaired. If the qualitative assessment fails, intangibles with indefinite lives are further evaluated quantitatively for impairment by comparing the asset’s estimated fair value with its carrying value, based on cash flow methodology.

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

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

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

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

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

The Company’s income tax returns are subject to examination by the Internal Revenue Service (“IRS”) and other tax authorities in the locations where it operates. The Company assesses potentially unfavorable outcomes of such examinations based on the criteria of FASB ASC 740-10-25-5 through 740-10-25-7 and 740-10-25-13 (formerly FASB Interpretation No. 48 (“FIN 48”) “Accounting for Uncertainty in Income Taxes”). The interpretation prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This Interpretation also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures.

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

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

	March 31, 2015		December 31, 2014
Balance sheet items, except for equity accounts	US$1=RMB6.1422		US$1=RMB6.1190

	Three months ended March 31,
	2015		2014
Items in the statements of income and cash flows	US$1=RMB6.1380		US$1=RMB6.1180

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

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our chief executive officer and chief financial officer, Ms. Lianyun Han and Mr. Robert Tick, respectively, evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, Ms. Lianyun Han and Mr. Robert Tick concluded that as of March 31, 2015, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting.

During the fiscal quarter ended March 31, 2015, 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 or will have a material adverse affect on our business, financial condition or operating results. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

ITEM 1A. RISK FACTORS

Not applicable.

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

We have not sold any unregistered equity securities during the fiscal quarter ended March 31, 2015 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. MINE SAFETY DISCLOSURES.

Not applicable.

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.
101	The following financial information from The Nutrastar International Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at March 31, 2015 and December 31, 2014, (ii) Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2015 and 2014, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014, and (iv) the Notes to Condensed Consolidated Financial Statements.

* Filed herewith.

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SIGNATURES

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

DATED: May 15, 2015

NUTRASTAR INTERNATIONAL INC.

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

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

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EXHIBIT INDEX

Exhibit
Number	Description
31.1*	Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from The Nutrastar International Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at March 31, 2015 and December 31, 2014, (ii) Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2015 and 2014, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014, and (iv) the Notes to Condensed Consolidated Financial Statements.

* Filed herewith.

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