China Forestry (OTC BB:CHFY)

On December 14, 2010, the Registrant (as Vendor) and Land Synergy Limited (as Purchaser), a company incorporated in the British Virgin Islands (“Land Synergy”), simultaneously entered into and closed the transactions contemplated by a Sale and Purchase Agreement relating to the share capital of the Jin Yuan Global Limited (“Jin Yuan”) subsidiary of the Registrant. Jin Yuan owned and operated a company known as Harbin Senrun Forestry Development Co. Ltd., which has in the past operated a timber business for the Registrant in the Heilongjiang Province of the People’s Republic of China. However, for the year ended December 31, 2007 and subsequent years, Harbin Senrun lost its wood cutting quota for log sales from the Bureau of Forestry and has had no revenues. Land Synergy paid US$2,000 for 100% of the share capital of Jin Yuan.

The Board of Directors of the Registrant determined, in the exercise of its reasonable business judgment, that the timber business of Jin Yuan no longer fit with the business plan of the Registrant as it has developed since the merger on July 15, 2010 with Hanzhong Hengtai Bio-Tech Limited, a Chinese company engaged in the business of the plantation and sale of garden plants used in landscaping. Accordingly, the Board of Directors of the Registrant determined that it was in the best interests of the company to sell its 100% equity interest in Jin Yuan to Land Synergy.