China Forestry (OTC BB:CHFY)

On May 20, 2011, the Board of Directors of the Registrant authorized the termination of the several variable interest entity contracts (the “VIE Contracts”) that had been entered into between the Registrant’s direct wholly owned subsidiary Financial International (Hong Kong) Holdings Company Limited (“FIHK”), Hanzhong Hengtai Biotech Limited (“Hengtai”), and SHAO, Zhenheng, YANG, Yongli and SHAO, Zhenzhong.

The new strucute is now a foreign invested enterprise (FIE)

diagram depicting the organizational structure of the Registrant after the termination of the VIE Contracts and the exercise of the Exclusive Option Agreement follows: