- Annual Report (10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

o 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 000-25765

CHINA FORESTRY, INC.

(Exact name of registrant as specified in its charter)

Nevada		87-0429748
(State or Other Jurisdiction of Incorporation of Organization)		(I.R.S. Employer Identification No.)


Room 517, No. 18 Building Nangangjizhong District, High-Tech Development Zone Harbin, Heilongjiang Province, The People’s Republic of China		(011) (86) 0451-87011257
(Address of principal executive offices) (ZIP Code)		(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section12 (g) of the Act: Common Stock, $0.001 par value

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant as 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes  No x

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

Large accelerated filer  Accelerated filer  Non-accelerated filer  Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes  No x

Aggregate market value of the voting and non-voting common stock of the registrant held by non-affiliates of the registrant at December 31, 2008, computed by reference to the closing price of $0.016 per share as of March 26, 2009: $599,780

Number of common shares outstanding at March 31, 2009: 56,000,000

TABLE OF CONTENTS

		Page

PART I

PART I

Item 1.	Business	3

Item 2.	Properties	9

Item 3.	Legal Proceedings	10

Item 4.	Submission of Matters to a Vote of Security Holders	10

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	10

Item 6.	Selected Financial Data	11

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	13

Item 8.	Financial Statements and Supplementary Data	14

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	23

Item 9A.	Controls and Procedures	23

Item 9A(T).	Controls and Procedures	24

Item 9B.	Other Information	24

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	25

Item 11.	Executive Compensation	27

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	28

Item 13.	Certain Relationships, Related Transactions and Director Independence	28

Item 14.	Principal Accounting Fees and Services	29

PART IV

Item 15.	Exhibits, Financial Statement Schedules	29

	Signatures	30

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PART I

Item 1. Business

Forward-looking Statements

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable laws, including the securities laws of the United States, we do not intend to update any of the forward-looking statements so as to conform these statements to actual results.

As used in this annual report, the terms "we", "us", "our", “the Company”, and "China Forestry" mean China Forestry, Inc. and all of our subsidiaries, unless otherwise indicated.

All dollar amounts refer to US dollars unless otherwise indicated.

Overview

History of Our Company

Patriot Investment Corporation, a Nevada corporation (“Patriot”), was originally incorporated on January 13, 1986. It has not had active business operations since inception and was considered a development stage company. In 1993, Patriot entered into an agreement with Bradley S. Shepherd in which Mr. Shepherd agreed to become an officer and director and use his best efforts to organize and update our books and records and to seek business opportunities for acquisition or participation.

On June 26, 2007, Patriot Investment Corporation simultaneously entered into, and closed, a Share Exchange Agreement (the “Exchange Agreement”) by and among the Company, Harbin SenRun Forestry Development Co., Ltd., a corporation organized and existing under the laws of the People’s Republic of China (“Harbin SenRun”), Bradley Shepherd, the President and majority shareholder of the Company (“Shepherd”), Everwin Development Ltd., a corporation organized under the laws of the British Virgin Islands (“Everwin”), and beneficial owner of 100% of the share capital of Jin Yuan Global Limited, Jin Yuan Global Limited, a corporation organized under the laws of the Hong Kong SAR of the People’s Republic of China (“Hong Kong Jin Yuan”), and the Jin Yuan Global Limited Trust, a Hong Kong trust created pursuant to a Declaration of Trust and a Trust and Indemnity Agreement dated March 10, 2007 (the “Jin Yuan Global Limited Trust”) (Everwin, Hong Kong Jin Yuan and the Jin Yuan Global Limited Trust being hereinafter referred to as the “SenRun Shareholders”). At the closing of the share exchange transaction contemplated under the Exchange Agreement (the “Share Exchange”), Everwin transferred all of its share capital of Hong Kong Jin Yuan together with the sum of $610,000 in cash, plus $25,000 in proceeds of a cash deposit that was retained by the Company, to the Company in exchange for an aggregate of 10,000,000 shares of Series A Convertible Preferred Stock, which preferred shares are convertible into 47,530,000 shares of common stock of the Company, thus causing Hong Kong Jin Yuan to become a wholly-owned subsidiary of the Company and Harbin SenRun to become an indirect wholly-owned subsidiary of the Company.

In addition, pursuant to the terms and conditions of the Exchange Agreement:

Ÿ	On the Closing Date, the Company declared a cash dividend to the holders of its common stock in an amount equal to $ 0.01227 per share to holders of record on July 6, 2007, representing the cash payment received from Everwin less the outstanding liabilities of the Company which were to be paid off before the cash dividend was made.
Ÿ	After the dividend payment date on July 16, 2007, Shepherd exchanged 44,751,500 of his shares of common stock of the Company for 221,500 shares of common stock of the Registrant, and Todd Gee exchanged 100,000 of his shares for 100,000 shares of common stock, with Mr. Shepherd ending up owning 507,500 shares of common stock and Mr. Gee ending up owning 100,000 shares of common stock.
Ÿ	Following Shepherd’s exchange of shares, Everwin converted its Series A Convertible Preferred Stock into 47,530,000 shares of common stock.
Ÿ	Demand and piggy-back registration rights were granted to Everwin and piggy-back registration rights were granted to Messrs. Shepherd and Gee with respect to shares of the Company’s restricted common stock acquired by them following the closing.
Ÿ	Everwin agreed for a period of one year following the closing that it will not cause or permit the Company to effect any reverse stock splits or register more than 6,000,000 shares of the Company’s common stock pursuant to a registration statement on Form S-8.
Ÿ	On the Closing Date, the current officers of the Company resigned from such positions and the persons designed by Everwin were appointed as the officers of the Company, notably Chunman Zhang as CEO, CFO and Treasurer and Degong Han as President and Secretary, and Todd Gee resigned as a director of the Company and a person designated by Everwin was appointed to fill the vacancy created by such resignation, notably Man Ha.
Ÿ	On the Closing Date, Shepherd resigned from his position as a director effective upon the expiration of the ten day notice period required by Rule 14f-1, at which time two persons designated by Everwin were appointed as directors of the Company, notably Degong Han and Kunlun Wang.
Ÿ	On the Closing Date, the Company paid and satisfied all of its “liabilities” as such term is defined by U.S. GAAP as of the closing.
Ÿ	On October 8, 2007, the Company announced the dismissal of Chunman Zhang from the offices of Chief Executive Officer, Chief Financial Officer and Treasurer, and the appointment of Yuan Tian as the Chief Executive Officer and Director and Man Ha as the Chief Financial Officer and Treasurer of the Company.

As of the date of the Exchange Agreement there were no material relationships between the Company or any of its affiliates and Everwin and the SenRun Shareholders, other than in respect of the Exchange Agreement.

The foregoing description of the Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Exchange Agreement, which is filed as Exhibit 2.1 to a Form 8-K filed with the Commission on July 2, 2007, and is incorporated herein by reference.

We are a Nevada corporation. We are a fully-reporting 1934 Act company, with our common stock quoted on the Over the Counter Bulletin Board (OTCBB).

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Everwin’s Acquisition of Hong Kong Jin Yuan; the Share Exchange

During January 2007, Mr. Degong Han, a citizen and resident of the People’s Republic of China and the majority shareholder of Harbin SenRun (“Han”), contributed 51% of the equity ownership of Harbin SenRun to Hong Kong Jin Yuan. Later, during March 2007, Han, who owned the remaining 49% equity interest in Harbin SenRun, executed the Jin Yuan Global Limited Trust, and transferred his ownership interest in trust and he became Trustee of the Trust. Simultaneously, the Trustee assigned to Hong Kong Jin Yuan the beneficial ownership interest in the Trust’s 49% ownership interest in Harbin SenRun. As a result of these transactions, Hong Kong Jin Yuan became the beneficial owner of a 100% interest in Harbin SenRun.

During May 2007, Everwin acquired 100% of the equity interest in Hong Kong Jin Yuan in exchange for shares of capital stock to be issued in the future by Everwin to the shareholders of Hong Kong Jin Yuan. As a result of these transactions, Everwin owns 100% of the equity interest in Hong Kong Jin Yuan, which, as mentioned above, owns 100% of the equity interest in Harbin SenRun. Mr. Man Ha, Chief Financial Officer of China World Trade Corporation, is the sole director, secretary and sole shareholder of Everwin.

Pursuant to the Share Exchange, 100% of the equity interest in Hong Kong Jin Yuan was contributed to the Registrant, together with $610,000 in cash, plus $25,000 in proceeds of a cash deposit that was retained by the Registrant, which made Hong Kong Jin Yuan a wholly owned subsidiary of the Registrant, and Harbin SenRun a wholly owned indirect subsidiary of the Registrant.

Organizational Charts

Set forth below is an organization chart of the entities that existed prior to the Share Exchange and contribution of 100% of the share capital of Hong Kong Jin Yuan by Everwin to Patriot, and an organizational chart showing the entities that existed after the Share Exchange and contribution of 100% of the share capital of Hong Kong Jin Yuan by Everwin to Patriot.

Before Share Exchange

After Share Exchange

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Share Exchange

The Share Exchange . On June 26, 2007, the Registrant entered into the Exchange Agreement with Harbin SenRun, Shepherd, and the SenRun Shareholders. Upon closing of the Share Exchange on June 26, 2007, Everwin delivered 100% of the share capital in Hong Kong Jin Yuan to the Registrant together with $610,000 in cash, plus $25,000 in proceeds of a cash deposit that was retained by the Registrant, in exchange for 10,000,000 shares of Series A Convertible Preferred Stock of the Registrant which are convertible into 47,530,000 shares of common stock of the Registrant, resulting in Hong Kong Jin Yuan becoming a wholly-owned subsidiary of the Registrant, and Harbin SenRun becoming an indirect wholly-owned subsidiary of the Registrant. Each share of Series A Convertible Preferred Stock is entitled to 4.753 votes and is convertible into 4.753 shares of common stock of the Registrant.

As a result, 47,000,000 shares of the Registrant’s common stock were outstanding immediately prior to the closing of the Share Exchange, and, after giving effect to the cancellation and exchange of shares, and the conversion of the Series A Convertible Preferred Stock to common stock, 50,000,000 shares of the Registrant’s common stock will be outstanding after the closing of the Share Exchange. Of these shares, 1,862,500 shares of common stock represent the Registrant’s “float” prior to and after the Share Exchange. The 10,000,000 shares of Series A Common Stock and the 47,530,000 shares of common stock into which they are convertible were issued in reliance upon an exemption from registration pursuant to Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The 1,862,500 shares of common stock in the Registrant’s float will continue to represent the shares of the Registrant’s common stock held for resale without further registration by the holders thereof.

Neither the Registrant nor Everwin had any options or warrants to purchase shares of capital stock outstanding immediately prior to or following the Share Exchange.

Prior to the announcement by the Registrant relating to the entry into the Share Exchange, there were no material relationships between the Registrant, Everwin, Hong Kong Jin Yuan or Harbin SenRun, or any of their respective affiliates, directors or officers, or any associates of their respective officers or directors.

Changes Resulting from the Share Exchange . At this time, the Company intends to carry on Harbin SenRun’s business as its sole line of business. The Registrant has relocated its executive offices to Room 517, No. 18 Building, Nangangjizhoing District, Hi-Tech Development Zone, Harbin, Heilongjiang, People’s Republic of China, and its telephone number is 86-0451-87011257.

Changes to the Officers and Board of Directors : At closing, the former officers of the Registrant resigned from such positions and the persons designated by Everwin were appointed to the following offices by Everwin, Chunman Zhang as CEO, CFO and Treasurer, and Degong Han as President and Secretary, have been designated as officers of the Registrant. In addition, at closing Todd Gee resigned as a director of the Registrant and Man Ha was appointed to fill the vacancy created by such resignation. Further, at closing Bradley Shepherd resigned from his position as a director effective upon the expiration of the ten day notice period required by Rule 14f-1 promulgated under the Securities Exchange Act of 1934, as amended, at which time the board will be increased and Kunlun Wang and Degong Han will be appointed directors. As mentioned above, on October 8, 2007, the Company announced the dismissal of Chunman Zhang from all of his offices, and the appointment of Yuan Tian to the position of Chief Executive Officer and Man Ha to the position of Chief Financial Officer and Treasurer.

Description of the Company

Overview

The Registrant was originally incorporated in Nevada on January 13, 1986. Since inception, it has not had active business operations and was considered a development stage company. In 1993, the Registrant entered into an agreement with Bradley S. Shepherd in which Mr. Shepherd agreed to become an officer and director and use his best efforts to organize and update the Company’s books and records and to seek business opportunities for acquisition or participation. The acquisition of the share capital of Hong Kong Jin Yuan was such an opportunity.

As a result of the Share Exchange, Hong Kong Jin Yuan became a wholly-owned subsidiary of the Registrant, Harbin SenRun became an indirect wholly-owned subsidiary of the Registrant, and the Registrant succeeded to the business of Harbin SenRun Forestry Development Co., Ltd., a producer of forest products with approximately 1,561 hectares of State forest assets located mainly over the Small Xing An Mountains, Jin Yin County, and the Harbin Wu Chang District of Heilongjiang Province of Northern China.

Harbin SenRun was founded in 2004. It currently has a workforce of 8 full time employees, mainly in sales, administration and in supporting services. It recruits temporary part-time workers to carry out felling, cutting and forestry plantation and protection.

Harbin SenRun engages in the business of conserving and managing forests and forest lands to provide a sustained supply of forest products, forest conditions, and other forest values desired by its position as a forest user. Its primary operations are felling trees and selling the logs.

Harbin SenRun plans to expand into paper and pulp manufacturing over the next ten years. The company also plans to develop a service industry in its forests, providing hunting, fishing, boating, riding, mountaineering, exploration, photography and the like. Finally, subject to its receipt of additional capital, Harbin SenRun plans to invest $3.0 million in forest acquisition for the year 2008, and $4.0 million in forest resource management and for a forest acquisition program for the year 2009, with an additional $1.0 million to be invested for capital construction, nursery construction, equipment and other overhead. Harbin SenRun will require substantial additional debt or equity capital in order to make such investments and fund such activities and, as of the date hereof, Harbin SenRun has not entered into any agreement or arrangement for the provision of such funding and no assurances can be given that it will be successful in obtaining such funding.

Philosophy & Values

Since its inception, Harbin SenRun’s founders and management team have been committed to the philosophy of “the forest as an independent ecosystem,” and believe this focus will continue to help Harbin SenRun grow and develop as a strong and lasting enterprise.

Holding true to its values, Harbin SenRun treats the forest as a renewable resource, a sustainable resource, a storable resource, and a beneficial resource, yielding economic benefits, ecosystem benefits and social benefits. Management notes that the China forest products market grew by 13.68% in 2008 to reach a value of RMB 1,330 billion.

Description of Our Business

All references to the “Company,” “we,” “our” and “us” for periods prior to the closing of the Share Exchange refer to Harbin SenRun, and references to the “Company,” “we,” “our” and “us” for periods subsequent to the closing of the Share Exchange and Stock Purchase refer to the Registrant and its subsidiaries.

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Company Overview

Forestry

Our forestry business manages 1,561 hectares of private commercial forestland in Heilongjiang Province, the People’s Republic of China. We have the right to use all of those hectares pursuant to a usage lease for a term of years from the provincial government. Our forest lands are as follows:

1.	Ping Yang He Forestry Center – The forest land locates near Small Xing An Mountains, Jin Yin County, Heilongjiang Province, with a total of 191 hectares. We have the woodland use right up to February 9, 2074.

2.	Jin Lien Forestry Center – The forest land locates near Harbin Wu Chang District of Heilongjiang Province, with a total of 571 hectares. We have the woodland use right up to September 8, 2056.

3.	Wei Xing Forestry Center – The forest land locates near Harbin Wu Chang District of Heilongjiang Province, with a total of 555 hectares. We have the woodland use right up to August 30, 2056.

4.	Mao Lin Forestry Center – The forest land locates near Harbin Wu Change District of Heilongjiang Province, with a total of 244 hectares. We have the woodland use right up to December 1, 2056

What we do

We grow and harvest trees, felling them and selling the logs to commercial customers. After harvest, we typically plant seedlings to reforest the harvested areas using the most effective regeneration method for the site and species. We monitor and care for the new trees as they grow to maturity. We seek to sustain and maximize the timber supply from our forestlands, while keeping the health of our environment a key priority.

The goal of our business is to maximize return by selling logs and stumpage to commercial customers. We focus on solid softwood and seek to improve forest productivity and returns, while managing the forests on a sustainable basis to meet both customer and public expectations.

How much we sell

There are no sales to customers in 2007 or 2008.

Where we are headed

Our strategies for achieving continued success include:

Ÿ	managing forests on a sustainable basis to meet customer and public expectations
Ÿ	reducing the time it takes to realize returns by practicing intensive forest management and focusing on the most advantageous markets
Ÿ	building long term relationships with our customers who rely on a consistent supply of high quality raw material
Ÿ	continuously reviewing our portfolio to create the greatest value for the company
Ÿ	we have plans to build a pulp and paper plant over the next ten years

The Future - Cellulose fiber (Pulp) and white papers

We are not currently active in the cellulose fiber (pulp) and white paper product business. However, we do have a ten year plan to compete in a wide range of fine paper products, which are sold to customers through a variety of networks and distribution chains.

Our Business Plan

Ÿ	We plan to raise adequate capital over the next ten years and build a pulp and paper plant
Ÿ	We plan to acquire sufficient forestry assets to serve as the raw material to our plant
Ÿ	We will provide cellulose fibers (pulp) for targeted specialty markets, working closely with our customers to develop unique or specialized applications for cellulose fibers.
Ÿ	We will produce uncoated freeset and coated ground wood papers used in various printing and publishing applications.
Ÿ	We will manufacture liquid packaging board used primarily for the production of containers.

Where we will do it

We plan to build a pulp and paper mill in a strategic location on our existing timber facilities.

Source of revenues

The projected revenues of our Cellulose Fiber and White Papers business will come from sales to customers who use the products for further manufacturing or distribution, or for direct use.

Factors that affect sales volumes for Cellulose Fiber products

Ÿ	World gross domestic product growth and
Ÿ	Paper production and diaper demand

Factors that affect the prices for Cellulose Fiber products

Ÿ	World economic environment
Ÿ	Industry operating rate, which is based on the supply and demand
Ÿ	Relative strength of the Chinese RMB

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Factors that affect sales volume for fine paper products include

Ÿ	Chinese economic environment
Ÿ	Displacement of paper needs due to electronic applications and
Ÿ	Competition from other paper grades

Factors that may affect the prices of our fine paper products include

Ÿ	Industry operating rate, which is based on the balance of supply and demand
Ÿ	Chinese and world economic environments

Our strategies for achieving success in cellulose fiber products and fine paper products

Ÿ	Focusing our cellulose fiber business on value-added pulp products
Ÿ	Focusing research and development resources on new ways to expand and improve the range of applications for cellulose fiber, including chemically modified fibers to enhance performance; and on new product opportunities for liquid packaging and newsprint
Ÿ	Improving cost competitiveness
Ÿ	Focusing capital investment on new and improved product capabilities and cost reduction opportunities.

Service Industry

We do not currently provide a service industry in our forests, but our business plan includes laying out the forest to provide for activities like sightseeing, hunting, fishing, boating, riding, mountaineering, exploration, photography and the like. We would make these economic activities for the company.

Sales by Product Category

The Company sells logs, which is its sole product category at present; the log sales were $0 for the fiscal year ended December 31, 2008.

The Market for Logs

The World Log Market

Many countries in the world are starting programs to protect their domestic forest industries, reduce illegal logging, protect deforestation, all of which reduces supply. The reduction of supply has lead to increasing log prices in the world market, and this trend has continued over the last several years.

The Log Market in China

According to the International Tropical Timber Organization (“ITTO”), which was established in 1986 under the auspices of the United Nations, the total log production in China was 106,754,000 m3 in 2007, up by 94,665,000 or 12.77% from 2006. Some ITTO consumer countries continued to produce significant quantities of tropical timber products in 2007. China remained the only significant tropical log producer among ITTO consumer countries (1.4 million m3), followed by Australia (41,000 m3), these products being sourced from the tropical regions of both countries.

The products of our primary forestry industry consist of logs, sawn wood, veneer and plywood. The selling prices for China’s major forestry products rose generally in 2008.

The Log Market in Heilongjiang Province, China

According to the China Statistics Yearbook issued by the National Bureau of Statistics of China, the gross output value of the forestry industry rose from RMB0.85 trillion in 2005 to RMB 1.33 trillion in 2008.

The forestry industry products are mainly composed of the felling and transport of timber and bamboo and the collection of forest products.

It appears that the continuous demand for high quality wood products is increasing the demand for logs in China. Further, we believe the rising standard of living in China will provide a higher demand for quality wood products for local consumption.

Competition

Log Sales

There are no strong competitors to the Company in the Heilongjiang Province. The Company believes that any logging operation that might compete with Harbin SenRun produces products that are lesser in quality than the Company’s products. Moreover, most of these competitors produce products that are considered lower grade than the Company’s products. The Company’s logs include alley woods (20%), the highly demanded charcoal wood material used for construction materials (35%), and thick woods (45%).

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Cellulose Fibers (Pulp) and Paper

Although the Company does not sell cellulose fibers or paper at this point in time, the Company has identified competitors.

The first one is Da Xing An Ling Sen Gong (Lin Ye) Ji Tuan Company Ltd., a company which is directly owned by the State Forestry Administration. This company manufactures and produces all forest products and some natural products, and is the manufacturing arm of the Central government. It has sales and distribution networks set up all over China. Its products cover the high-end as well as the low-end in terms of use and value. Logs, pulp and paper are primary offerings of the company.

A second competitor is Heilongjiang Yichun County Guang Ming Furniture Manufacturing Group. The group was organized in 1986 and now employs over 4,000 workers with 17 manufacturing facilities around Heilongjiang Province. Some of their wood products are exported to the overseas market.

A third competitor is BeiDaHuang ZhiYe. This company used to be a state owned enterprise which was set up in 1958, but in 2003 it was reorganized as a private company and its subsidiary was listed on the PRC stock market. Their pulp and paper manufacturing section has over 1,200 workers and annual output of over 14,000 tons of pulp and over 18,000 tons of paper.

A well known problem for a state owned or quasi-state owned enterprise in China is its inflexibility to react to market driven trends in production, manufacturing, timing of output, pricing and sales support. It is customary for employees of these companies not to embrace the risks associated with market driven changes and the globalization of the world market. In short, we believe they are not competitive with many smaller, more agile privately held companies.

Competitive Advantages and Strategy

Log sales

The Company believes that its product formulations, price points, lower costs, relationships, infrastructure, proven quality control standards, and reputation represent substantial competitive advantages. The Company is currently able to maintain a substantially lower cost structure than competitors based in the Heilongjiang Province. Furthermore, the Company believes its competitive advantage in China is protected by significant knowledge of government regulations, business practices, and strong relationships.

In comparison to Chinese competitors, the Company believes it possesses superior technological expertise, products, marketing knowledge, and global relationships.

Cellulose Fiber (Pulp) and White Papers

The Company is not currently competing in this market segment although it plans to build a pulp and paper mill over the next ten years.

Growth Strategy

The Company’s vision is to be and integrated forestry operation. Management intends to grow the Company’s business by pursuing the following strategies:

Ÿ	Grow capacity and capabilities in line with market demand increases
Ÿ	Enhance leading-edge technology through continuous innovation, research and study
Ÿ	Continue to improve operational efficiencies and use of nearly all resource by-products
Ÿ	Further expand into higher value-added segments of the forestry industry
Ÿ	Build a strong market reputation to foster and capture future growth in China

Existing Facilities in Heilongjiang Province

The Company uses tractors for collection of its logs, and trucks for delivery to customers. In the past, the Company rented trucks from the Forestry Bureau. In the future, the Company plans to purchase two tractors and three trucks. In addition, it plans to acquire ten more felling saws and other small sized equipment.

The Company anticipates that building of its planned paper plant over the next ten years will be completed with minimal disruption to current infrastructure and production schedules, subject to its receipt of the substantial additional capital required to construct the plant.

Sales and Marketing

Log sales

To date, the Company has developed relationships with current and future potential customers primarily through its small but effective sales force. The Company will continue to build on its success by expanding its sales force in China as may be appropriate. The Company’s sales strategy is designed to capitalize on its reputation, current industry trends and new market segments that have shown the most promise.

Intellectual Property

None.

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Customers

Log sales

For the twelve month period from January 1, 2008 through December 31, 2008, the Company achieved revenues of $0, so the Company did not have any customers in 2008.

Regulation

According to “The State of the World’s Forests 2009” issued by the Food and Agriculture Organization of the United Nations, forest land in Asia and Pacific area occupies 18.6% of the world total forest land. The area has 136 million hectares of manmade forest, occupying half of the global manmade forest. One third of manmade forest in Asia and Pacific area locate in China and India for environmental protection.

The Company is subject to environmental regulation by both the PRC central government and by local government agencies. Since its inception, the Company has been in compliance with applicable regulations in all material respects.

The main statutes which govern matters related to forestry in China are set forth below:

The Forest Law of the People’s Republic of China (the “Forest Law”) is the most important piece of legislation that regulates the forestry administrative management agencies at different levels and forest owners, managers and utilizers’ legal rights and responsibilities on ownership, management, protection, tree planting and forest felling.

2.	The Provisional Regulations on Forest Management provide for the major tasks of responsible forestry agencies and local forest land management and supervision agencies are implementing and executing relevant national and local laws, regulations and policies concerning forest land management.

3.	The Regulations on the Protection of Terrestrial Wildlife was enacted to provide better provisions for the protection of wild life.

Employees

Harbin SenRun has eight full time employees, mainly in sales, administration and supporting services. It recruits temporary part-time workers to carry out felling, cutting and forestry plantation and protection. Harbin SenRun believes it is in compliance with local prevailing wage, contractor licensing and insurance regulations, and has good relations with its employees.

Item 2. Properties

Harbin SenRun’s headquarters are currently located on leased office space at Room 517, No. 18 Building, Nangangjizhoing District, Hi-Tech Development Zone, Harbin, Heilongjiang Province, People’s Republic of China.

In China, the ownership of land belongs to the PRC government, and private entities and individuals can acquire land use rights for a certain period of time. The land use right can be transferred according to the relevant law. According to the Forest Law, the woodland use right is transferable.

Harbin SenRun has the following 4 major Forestry Centers:

1. Ping Yang He Forestry Center

The forest land locates near Small Xing An Mountains, Jia Yin Country, Heilongjiang Province. The site area of the forest was approximately 191 hectares as recorded under the Forest Right Certificate.

We hold the forest land use right, woodland ownership right and woodland use right for a period of up to February 9, 2074 (approximately 66 years left).

There is a timber stand forest in which the trees are mainly for timber production. The major tree species are for timber product usage.

2. Jin Lien Forestry Center

The forest land locates near Harbin Wu Chang District of Heilongjiang Province. The site are of the forest was approximately 571 hectares as recorded in the Forest right Certificate.

We hold the forest land use right, woodland ownership right and woodland use right for a period of up to September 8, 2056 (approximately 48 years left).

This is a timber stand forest in which the trees are mainly for timber production. The major tree species were for timber product usage.

3. Wei Xing Forestry Center

The forest land locates near Harbin Wu Chang District of Heilongjiang Province. The site area of the forest was approximately 55 hectares as recorded under the Forest Right Certificate.

We hold the forest land use right, woodland ownership right and woodland use right for a period up to August 30, 2056 (approximately 48 years left).

This is a timber stand forest in which the trees are mainly for timber production. The major free species were Aspens, for timber product usage.

- 9 -

4. Mao Lin Forestry Center

The forest land locates near Harbin Wu Chan District of Heilongjiang Province. The site area of the forest was approximately 244 hectares as recorded under the Forest Right Certificate.

We hold the forest land use right, woodland ownership right and woodland use right for a period up to December 1, 2056 (approximately 48 years left).

This is a timber stand forest with the trees are used mainly for timber production. The major tree species are for timber product usage.

Item 3. Legal Proceedings

We know of no material, active or pending legal proceedings against us, our subsidiaries or our property, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholders are an adverse party or have a material interest adverse to us.

Item 4. Submission of Matters to a Vote of Security Holders

None.

PART II

Item 5.

Market for Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock is currently quoted on a limited basis on the Over-the-Counter Bulletin Board (“OTCBB”) under the symbol “CHFY”. The quotation of our common stock on the OTCBB does not assure that a meaningful, consistent and liquid trading market currently exists. We cannot predict whether a more active market for our common stock will develop in the future. In the absence of an active trading market:

(1) Investors may have difficulty buying and selling or obtaining market quotations;

(2) Market visibility for our common stock may be limited; and

(3) A lack of visibility of our common stock may have a depressive effect on the market price for our common stock.

The following table sets forth the range of high and low prices of our common stock as quoted on the OTCBB during the periods indicated. The prices reported represent prices between dealers, do not include markups, markdowns or commissions and do not necessarily represent actual transactions.

		High		Low

2008	First Quarter	$	1.01	$	0.11
	Second Quarter	$	0.62	$	0.12
	Third Quarter	$	N/A	$	N/A
	Fourth Quarter	$	0.95	$	0.03

2007	First Quarter	$	0.22	$	0.07
	Second Quarter	$	0.22	$	0.20
	Third Quarter	$	0.30	$	0.06
	Fourth Quarter	$	0.30	$	0.06

The transfer agent for our common stock is Interwest Transfer Co., Inc., 1981 East 4800 South, Ste 100, Salt Lake City, UT 84111, Attn Melinda Orth; Tel: (801) 272-9294.

From January 1 to March 26, 2009, the highest and lowest prices of our common shares on the OTC Bulletin Board were $0.07 per share and $0.01 per share. On March 26, 2009, the closing price of our common stock on the OTC Bulletin Board on the last day it traded before the filing of this Annual Report was $0.016 per share.

Holders

As of December 31, 2008, there were 160 holders of record of 56,000,000 outstanding shares of common stock of the Company.

Dividends

Holders of our common stock are entitled to dividends if declared by the Board of Directors out of funds legally available therefore. As of December 31, 2008 no cash dividends have been declared.

Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our results of operation, financial condition, contractual and legal restrictions and other factors the board of directors deem relevant.

- 10 -

Equity Compensation Plans

As of December 31, 2008, we did not have any equity compensation plans.

Recent Sales of Unregistered Securities

We have not made any previously unreported sales of unregistered securities from January 1, 2008 to December 31, 2008.

Recent Purchases of Equity Securities by us and our Affiliated Purchasers

We have not repurchased any of our common stock and have no publicly announced repurchase plans or programs as of December 31, 2008.

Item 6. Selected Financial Data

Not applicable.

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This report contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including, "could" "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this Annual Report.

Results of Operations

Fiscal Year Ended December 31, 2008 Compared to the Fiscal Year Ended December 31, 2007.

	Year Ended December 31,
	2008			2007
Net Sales Revenue:	$	0		$	0
General and Administrative Expenses:	$	1,162,532		$	103,155
Income (Loss) Before Taxes:	$	(1,162,532	)	$	(103,155	)
Net Income (Loss):	$	(1,162,532	)	$	(103,155	)

Operating Revenue

There was no revenue in 2008 or 2007 as a result of failing to acquire the wood-cutting quota from the local government department of Tieli Bureau of Forestry and there was no production in 2008 and 2007. The Company is currently in the process of getting the wood-cutting quota from the government.

Loss before taxes increased by $1,059,377 for the twelve-month period ended December 31, 2008, compared to the same corresponding period in year 2007. The increase was predominantly caused by failing to acquire log-cutting quota from the local Bureau of Forestry. The local Tieli Bureau of Forestry was undertaking an organization reform and didn’t issue any wood-cutting quota to local timberlands in 2008. The increase in loss is also due to China Forestry having issued 6,000,000 common shares for services to outside consultants and recorded $1,090,500 in expenses based on the fair value of the common stock at the time the service agreement was signed during 2008.

Since the Company did not get any sales revenue from selling logs in 2008, the percentage of total operating revenues to consolidated gross profit margins cannot be measured in 2008.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by approximately $1,059,377 to $1,162,532 for the year ended December 31, 2008 from $103,155 for the same corresponding period in 2007. The increase was mainly due to the stock based compensations paid to consultants in 2008.

Net Loss

Net loss was approximately $1,162,532 for the year ended December 31, 2008, as compared to a net loss of $103,155for the same corresponding period in year 2007. The decrease in net loss was the result of failing to sell log products without the wood-cutting quota from local Bureau of Forestry.

- 11 -

Liquidity and Capital Resources

The Company’s ability to continue as a going concern is ultimately contingent upon its ability to attain profitable operations through the successful development of its business plan. As shown in the accompanying consolidated financial statements, the Company has incurred an accumulated deficit of $1,271,176 as of December 31, 2008 through its limited operations. It has working capital deficits and negative operating cash flows. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. The Company is actively pursuing additional funding and a potential merger or acquisition candidate and strategic partners, which would enhance owners’ investment.

As of December 31, 2008, cash and cash equivalents totaled $2,652. This cash position was the result of a combination of cash at beginning of period in the amount of $2,660 and net cash provided by financing activities in the amount of $49,266, offset by net cash used in operating activities in the amount of $48,883.

We believe that said level of financial resources is a significant factor for our future development and accordingly may choose at any time to raise capital through private debt or equity financing to strengthen our financial position, facilitate growth and provide us with additional flexibility to take advantage of business opportunities.

Off-Balance Sheet Arrangements

China Forestry has not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. China forestry has not entered into any derivative contracts that are indexed to China Forestry’s shares and classified as equity or that are not reflected in China Forestry’s financial statements. Furthermore, the company does not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. China Forestry does not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to the Company or engages in leasing, hedging or research and development services with the Company.

Inflation

China Forestry believes that inflation has not had a material effect on its operations to date.

Critical Accounting Policies

The discussion and analysis of China Forestry’s financial condition presented in this section are based upon the audited financial statements of the company, which have been prepared in accordance with the generally accepted accounting principles in the United States. During the preparation of the financial statements, the company was required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the company evaluates its estimates and judgments, including those related to investments, fixed assets, income taxes and other contingencies. The company bases its estimates on historical experience and on various other assumptions that it believes are reasonable under current conditions. Actual results may differ from these estimates under different assumptions or conditions.

In response to the SEC’s Release No. 33-8040, “Cautionary Advice Regarding Disclosure About Critical Accounting Policy,” China Forestry identified the most critical accounting principles upon which its financial status depends. The company determined that those critical accounting principles are related to the use of estimates, revenue recognition, and income tax and impairment of long-lived assets. The company presents these accounting policies in the relevant sections in this management’s discussion and analysis, including the Recently Issued Accounting Pronouncements discussed below.

Timberlands. We carried timberland at historical cost less accumulated amortization. Since private ownership of timberland is not allowed in the People’s Republic of China, the Company acquired the user right of timberland from the government. We capitalized the acquisition costs of the user right and allocated that cost to the timberland. The user right is good for from 50 to 70 years and with the user right, the timber on the timberland is under the Company’s ownership. Amortization of the use right on timberland is primarily determined using the straight-line method over the life of usage right.

We capitalized reforestation costs incurred in developing viable seedling plantations (up to two years from planting), such as site preparation, seedlings, planting, fertilization, insect and wildlife control, thinning and herbicide application. We expensed all other costs, such as property taxes and costs of forest management personnel, as incurred. Once the seedling plantation was viable, we expensed all costs to maintain the viable plantations, such as fertilization, herbicide application, insect and wildlife control, and thinning, as incurred. We capitalized costs incurred to initially build roads as land improvements, and we expensed as incurred costs to maintain these roads.

Income Taxes . China Forestry has adopted Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (SFAS 109). SFAS 109 requires the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consist of taxes currently due plus deferred taxes. Since China forestry had no operations within the United States there is no provision for US income taxes and there are no deferred tax amounts as of December 31, 2008. The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they related to income taxes levied by the same taxation authority and the Company intends to settle current tax assets and liabilities on a net basis.

- 12 -

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Credit Risk

Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash and cash equivalents with high-quality institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally these deposits may be redeemed upon demand and therefore bear minimal risk.

Foreign Exchange Risk

The value of the Renminbi against the U.S. dollar and other currencies is affected by, among other things, changes in China’s political and economic conditions. Since July 2005, the Renminbi has no longer been pegged to the U.S. Dollar. Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the Renminbi may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future, PRC authorities may lift restrictions on fluctuations in the Renminbi exchange rate and lessen intervention in the foreign exchange market.

Because all of our earnings and cash assets are denominated in Renminbi, but our reporting currency is the U.S. dollar, fluctuations in the exchange rate between the U.S. dollar and the Renminbi will affect our balance sheet and our earnings per share in U.S. dollars. In addition, appreciation or depreciation in the value of the Renminbi relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend we issue in the future that will be exchanged into U.S. dollars and earnings from, and the value of, any U.S. dollar-denominated investments we make in the future.

Most of the transactions of the Company are settled in Renminbi and U.S. dollars. In the opinion of the directors, the Company is not exposed to significant foreign currency risk.

Inflation

Inflationary factors, such as increases in the cost of raw materials and overhead costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of sales revenue if the selling prices of our products do not increase with these increased costs.

Company’s Operations are All in China

All of our operations are conducted in China and are subject to various political, economic, and other risks and uncertainties inherent in conducting business in China.

The Company has significant investments in the PRC. The operating results of the Company may be adversely affected by changes in the political and social conditions in the PRC and by changes in Chinese government policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. There can be no assurance; however, those changes in political and other conditions will not result in any adverse impact.

- 13 -

Item 8. Financial Statements and Supplementary Data

CHINA FORESTRY, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2008

		Page(s)

Report of Independent Registered Public Accounting Firm		15

Consolidated Balance Sheets as of December 31, 2008 and 2007		16

Consolidated Statements of Operations for the Years Ended December 31, 2008 and 2007		17

Consolidated Statements of Cash Flows for the Years Ended December 31, 2008 and 2007		18

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2008 and 2007		19

Notes to the Consolidated Financial Statements		20 - 22

- 14 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

China Forestry, Inc. and Subsidiaries

(formerly Patriot Investment Corp)

Harbin, Heilongjiang Province, People’s Republic of China

We have audited the accompanying consolidated balance sheets of China Forestry, Inc. and Subsidiaries, as of December 31, 2008 and 2007 and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2008 and 2007 and the consolidated results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters are described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

MALONE & BAILEY, PC

www.malone-bailey.com

Houston, Texas

March 30, 2009

- 15 -

CHINA FORESTRY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of December 31, 2008 and 2007

	December 31,			December 31,
	2008			2007

ASSETS
Current Assets
Cash	$	2,652		$	2,660
Prepaid expenses		2,006			6,409
Total Current Assets		4,658			9,069

Timberlands - net (Note3)		845,047			810,701

Total Assets	$	849,705		$	819,770


LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accrued expenses	$	5,463		$	4,171
Due to shareholders		64,889			15,623
Total Current Liabilities		70,352			19,794


Shareholders' Equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding		-			-
Common stock, $0.001 par value; 200,000,000shares authorized, 56,000,000 and 50,000,000 shares issued and outstanding		56,000			50,000
Additional Paid-in Capital		1,938,764			854,264
Accumulated Deficit		(1,271,176	)		(108,644	)
Accumulated other comprehensive income		55,765			4,356
Shareholders' Equity		779,353			799,976
Total Liabilities and Shareholders' Equity	$	849,705		$	819,770

See accompanying notes to the Consolidated Financial Statements.

- 16 -

CHINA FORESTRY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For the years ended December 31, 2008 and 2007

	Year Ended December 31,
	2008			2007

Revenues	$	-		$	-

Expenses
General and administrative expenses		1,162,532			103,155
Net Loss	$	(1,162,532	)	$	(103,155	)

Other comprehensive income-Foreign exchange gain		51,410			4,355

Comprehensive loss	$	(1,111,122	)	$	(98,800	)

Net Loss per share - basic and diluted	$	(0.02	)	$	(0.00	)

Weighted average shares outstanding - basic and diluted		52,219,178			50,000,000

See accompanying notes to the Consolidated Financial Statements.

- 17 -

CHINA FORESTRY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2008 and 2007

	Year Ended December 31,
	2008			2007

Operating Activities:
Net income (loss)	$	(1,162,532	)	$	(103,155	)

Adjustments to reconcile income (loss) to net cash provided by (used in) operations:
Amortization		17,454			16,780
Stock Based Compensation		1,090,500			-
Changes in operating assets and liabilities:
(Increase)/decrease in prepaid expenses		4,403			3,815
Increase/(decrease) in accounts payable and accrued expenses		1,292			(2,591	)
Net cash provided by (used in) operating activities		(48,883	)		(85,151	)

Financing Activities
Proceeds from shareholder loans		-			13,137
Capital contribution		-			(5,147	)
Payment of cash dividends		-			648,291
Advances from related parties		49,266			(519,713	)
Net cash provided by financing activities		49,266			136,568

Effect of exchange rate changes on cash		(391	)		(55,345	)

Increase(decrease) in cash		(8	)		(3,928	)
Cash at beginning of period		2,660			6,588
Cash at end of period	$	2,652		$	2,660


Supplemental Cash Flow Information:
Interest and taxes paid during the year	$	-		$	-

See accompanying notes to the Consolidated Financial Statements.

- 18 -

CHINA FORESTRY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the years ended December 31, 2008 and 2007

	Preferred Stock						Common Stock				Addition						Retained
	Shares			Par (0.001)			Shares		Par (0.001)		Paid in Capital			AOCI			Earnings			Total

Balances, December 31, 2006		-			-			-		-		(427	)		5,817			(5,489	)		(99	)

Preferred shares issued under merger		10,000,000			10,000																10,000
Common shares issued under merger								2,470,000		2,470		633,004									635,474
Conversion of preferred to common		(10,000,000	)		(10,000	)		47,530,000		47,530		(47,530	)								(10,000	)
Special distribution												(635,475	)								(635,475	)
Contribution of shareholder debt to equity												846,382									846,382
Cash Contributions												58,310									58,310
Currency translation															(1,461	)					(1,461	)
Net income																		(103,155	)		(103,155	)

Balances, December 31 , 2007		-		$	-			50,000,000	$	50,000	$	854,264		$	4,356		$	(108,644	)	$	799,976
Share Based compensation								6,000,000		6,000		1,084,500									1,090,500
Currency translation															51,409						51,409
Net income (Loss)																		(1,162,532	)		(1,162,532	)
Balances, December 31 , 2008		-		$	-			56,000,000	$	56,000	$	1,938,764		$	55,765		$	(1,271,176	)	$	779,353

See accompanying notes to the Consolidated Financial Statements.

- 19 -

CHINA FORESTRY AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND

Patriot Investment Corp., (the “Company” or “Patriot”) was incorporated under the law of the State of Nevada on January 13, 1986. The Company is principally engaged in the growing and harvesting of timber and manufacture and marketing of lumber in the People’s Republic of China (“PRC”) through its holding and subsidiaries, Everwin Development Limited (“Everwin”) and Jin Yuan Global Limited (“Jin Yuan”).

Everwin was incorporated on April 25, 2007 in British Virgin Islands (“BVI”) under the BVI Business Companies Act, 2004. Jin Yuan was incorporated as a Hong Kong limited liability company on November 22, 2006. On May 25, 2007, Jin Yuan transferred its sole share to Everwin. Both Everwin and Jin Yuan were formed to facilitate a merger between a US company and a PRC business entity.

Harbin Senrun Forestry Development Limited (“Senrun”) was incorporated as a company with a limited liability in People’s Republic of China on August 2, 2004. Senrun is located in Harbin, Heilongjiang and principally engaged in the growing and harvesting of timber and the manufacture and marketing of lumber. All Senrun’s business is currently in PRC.

On January 10, 2007, Jin Yuan acquired 51% of the equity ownership in Senrun.

On March 10, 2007, Mr. Han Degong (the “Trustee”), citizen of the PRC, who owns a 49% equity ownership interest in Senrun, executed Trust and Indemnity Agreements with Jin Yuan Global Limited, pursuant which the Trustee assigned to Jin Yuan Global Limited all of the beneficial interest in the Trustee’s equity ownership in the Company. These arrangements have been undertaken solely to satisfy the PRC regulations, which prohibits foreign companies from owning or operating the forestry business in the PRC. Through the transaction and agreement described in preceding paragraphs, Senrun is deemed a 100% subsidiary of Jin Yuan.

On June 26, 2007, under the terms of the Share Exchange Agreement, Everwin exchanged all share capital of Jin Yuan together with the sum of $635,000 for the Company’s 10,000,000 restricted shares of Series A Convertible Preferred Stock, $.001par value. The Company’s 10,000,000 shares of Preferred Stock was converted into 47,530,000 shares of the Company’s common stock.

As a result of Share Exchange Agreement, the transaction was treated for accounting purposes as a recapitalization and reverse merger by the accounting acquirer (Senrun).

The consolidated balance sheet consists of the net assets of the accounting acquirer at historical cost; and the consolidated statements of operations include the operations of the accounting acquirer for the years presented.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of China Forestry, Inc. and its wholly-owned subsidiaries, Everwin Development Limited and Jin Yuan Global Limited. All significant inter-company accounts and balances have been eliminated in consolidation.

Basis of Presentation

These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

Use of Estimates

In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the year reported. Actual results may differ from these estimates.

Foreign Currency Translation

The functional currency of the Company is the Renminbi (“RMB”). The accompanying financial statements have been expressed in United States dollars, the reporting currency of the Company. In accordance with Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation", foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates as of the balance sheet date. The statements of operations are translated using a weighted average rate for the period. Translation adjustments are reflected as accumulated comprehensive income in shareholders’ equity.

Concentrations of credit risk

Country risk

- 20 -

CHINA FORESTRY AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND (CONT.)

Basic and Diluted Net Loss per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the years ended December 31, 2008 and 2007, there were no potential dilutive securities and therefore no diluted net loss per common share was calculated.

Revenue Recognition

Revenues are recognized when products are shipped to customers, both title and the risks and rewards of ownership are transferred or services have been rendered and accepted, and collectability is reasonably assured.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less.

Timberland

Timberland is stated at acquisition cost less accumulated amortization. Since private ownership of timberland is not allowed in the People’s Republic of China, the Company acquired the user right of timberland from the government. The user right is good for 50 to 70 years and with the user right, the timber on the timberland is under the Company’s ownership. Amortization of the use right on timberland is primarily determined using the straight-line method over the life of usage right.

The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Fair value is estimated based upon either discounted cash flow analysis or estimated salvage value.

Income Tax

Income tax expense is based on reported income before income taxes. Deferred income taxes reflect the effect of temporary differences between assets and liabilities that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. In accordance with Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes," these deferred taxes are measured by applying currently enacted tax laws.

The Company did not provide any current or deferred income tax provision or benefit for any period presented to date because there is no income from operations, with only minor timing differences with regard to the depreciation of fixed assets. Management has determined that any deferred tax asset or liability is inconsequential, and not material to the financial statements.

Restricted Retained Earnings

Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC ("PRC GAAP") at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). The Company did not make any appropriations to the reserve funds mentioned above due to lack of profit after tax since commencement of operations.

New Accounting Pronouncements

There were various accounting standards and interpretations issued during 2008 and 2007, none of which are expected to have a material impact on the Company’s consolidated financial position, operations or cash flows.

NOTE 2 - GOING CONCERN

The Company’s ability to continue as a going concern is ultimately contingent upon its ability to attain profitable operations through the successful development of its business plan. As shown in the accompanying consolidated financial statements, the Company has incurred an accumulated deficit of $1,271,176 as of December 31, 2008 through its limited operations. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. The Company is actively pursuing additional funding and a potential merger or acquisition candidate and strategic partners, which would enhance owners’ investment. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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CHINA FORESTRY AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 3 - TIMBERLANDS

Timberlands consist of the following as of December 31, 2008:

As of December 31, 2008:

Location	Usage Right Effective Period	Amount
Ping Yang He Forestry Center*	02/09/2004 - 02/09/2074	$	0
Jiu Lien Forestry Center	09/08/2006 - 09/08/2056		357,665
Wei Xing Forestry Center	08/30/2006 - 08/30/2056		341,323
Mao Lin Forestry Center	12/01/2006 - 12/01/2056		184,326
Total Cost			883,314
Less: Accumulated Amortization			(38,267	)
Net Timberlands		$	845,047

*Ping Yang He Forestry Center was contributed by the shareholder valued at zero, due to there was no cost associated with this contributed asset.

The amortization expense was $16,780 and $17,667 for the years ended December 31, 2007 and 2008, respectively.

NOTE 4 - RELATED PARTY TRANSACTIONS

Mr. Degong Han and Mr. Guiying Niu are the majority shareholders of the Company since inception and is provided funds in the form of non interest-bearing shareholders’ loans to China Forestry Inc. Mr. Han and Mr. Niu forgave the debt obligation of the Company for previously paid advances in the amount of $846,382 as of December 31, 2007 and it was contributed to additional paid in capital. $64,889 remained owed to these shareholders as of December 31, 2008.

NOTE 5 - INCOME TAXES

The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. During the years ended December 31, 2008 and 2007, the Company incurred net losses and, therefore, has no tax expense. The net deferred tax asset generated by the loss carry-forward has been fully reserved.

NOTE 6 - PREFERRED AND COMMON STOCK

Preferred Stock

Prior to the reverse merger of the Company, there was no preferred stock issued and outstanding. Pursuant to the Share Exchange Agreement on June 26, 2007, 10,000,000 shares of Series A Convertible Preferred Stock were issued to Everwin Development Ltd., an incorporation under British Virgin Islands (“Everwin”) in exchange for all outstanding share capital of Jin Yuan. The Preferred Stock was subsequently converted into 47,530,000 shares of common stock on December 13, 2007, leaving none issued and outstanding as of December 31, 2007.

Common Stock

Prior to the reverse merger of the Company, there were 47,000,000 shares of common stock issued and outstanding. Following the execution of Special Cash Distribution of $635,475 provided by the Share Exchange Agreement on July 17, 2007 the share certificates of Bradley Shepherd and Todd Gee totaled 44,851,500 shares of the Company’s restricted common stock were cancelled and exchanged for 321,500 new restricted shares of the Company’s common stock, making the number of total outstanding common shares amounted 2,470,000. On December 13, 2007 Everwin converted its 10,000,000 shares of Series A Convertible Preferred Stock into 47,530,000 shares of common stock, making the total outstanding common shares 50,000,000.

On December 13, 2007, a simple majority of shareholders of the Company voted to increase the authorized number of shares of common stock, $.001 par value, of the Company from 50,000,000 shares to 200,000,000 shares.

During, 2008, China Forestry issued 6,000,000 common shares for services to outside consultants and recorded $1,090,500 in stock based compensation expense based on the fair value of the common stock at the time the service agreement was signed.

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Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

(a) On April 16, 2008, the Registrant terminated Turner Stone & Company as the independent registered public accounting firm for the Registrant because Turner, Stone failed to complete the Registrant's 2007 audit on a timely basis. The dismissal of Turner, Stone was approved unanimously by the Board of Directors. Additional disclosure with respect to this dismissal is contained in a Form 8-K filed with the Commission on April 23, 2008 and in a Form 8-K/A filed with the Commission on May 8, 2008.

(b) On April 16, 2008, the Registrant engaged Malone & Bailey, PC as its independent registered public accounting firm. The Registrant had not consulted with Malone & Bailey regarding the application of accounting principles to any contemplated or completed transactions, nor the type of audit opinion that might be rendered on the Registrant's financial statements, and neither oral nor written advice was provided that would be an important factor considered by the Registrant in reaching a decision as to an accounting, auditing or financial reporting issue.

(c) On January 23, 2008, the Registrant dismissed Kempisty & Company, Certified Public Accountants, as the independent registered public accounting firm for the Registrant. Kempisty & Company, had been the independent registered public accounting firm for and reviewed the balance sheets for the quarters ended June 30, 2007 and September 30, 2007 of the Registrant and the related consolidated statements of operations, cash flows and stockholders' equity (deficit) for the quarters then ended. All of the foregoing unaudited consolidated financial statements are hereinafter collectively referred to as the “consolidated financial statements.” The review performed by Kempisty & Company of the consolidated financial statements for the two quarters contained no adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, scope or accounting principles. The dismissal of Kempisty & Company was approved unanimously by the Board of Directors.

In connection with Kempisty & Company’s reviews of the interim periods through January 23, 2008, there have been no disagreements between the Registrant and Kempisty & Company on any matter of accounting principles or practices, financial statement disclosure, or scope or procedure, which, if not resolved to the satisfaction of Kempisty & Company would have caused it to make reference thereto in their review of the Registrant’s financial statements for these periods.

The Registrant made the contents of its Form 8-K filing, filed on January 30, 2008, available to Kempisty & Company and requested it to furnish a letter to the Securities and Exchange Commission as to whether Kempisty & Company agrees or disagrees with, or wishes to clarify Registrant’s expression of its views.

(d) On January 23, 2008, the Registrant engaged Turner, Stone & Company, Certified Public Accountants, as its independent registered public accounting firm. The Registrant had not consulted with Turner, Stone regarding the application of accounting principles to any contemplated or completed transactions nor the type of audit opinion that might be rendered on the Registrant's financial statements, and neither written nor oral advice was provided that would be an important factor considered by the Registrant in reaching a decision as to an accounting, auditing or financial reporting issue.

(e) On June 26, 2007, the Registrant dismissed Michael J. Larsen, PC as the independent registered public accounting firm for the Registrant. Michael J. Larsen, PC had been the independent registered public accounting firm for and audited the balance sheet of the Registrant as of December 31, 2006 and the related statements of operations, stockholders' equity (deficit) and cash flows for the year then ended. All of the foregoing audited financial statements are hereinafter collectively referred to as the “audited financial statements.” The report of Michael J. Larsen, PC on the audited financial statements contained no adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles, except for an explanatory paragraph relating to the Registrant's ability to continue as a "going concern." The dismissal of Michael J. Larsen, PC was approved unanimously by the Board of Directors.

In connection with the audit for the most recent fiscal year by Michael J. Larsen, PC and in connection with Michael J. Larsen, PC’s review of the subsequent interim periods through June 26, 2007, there have been no disagreements between the Registrant and Michael J. Larsen, PC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Michael J. Larsen, PC would have caused it to make reference thereto in its report on the Registrant’s financial statements for these periods.

The Registrant made the contents of its Form 8-K/A filing, filed on February 4, 2008 available to Michael J. Larsen, PC and requested it to furnish a letter to the Securities and Exchange Commission as to whether Michael J. Larsen, PC agrees or disagrees with, or wishes to clarify the Registrant’s expression of its views. In the previous Form 8-K filing made on January 30, 2008, a letter was included for Michael J. Larsen, PC which purported to express its views on the filing. Michael J. Larsen, PC did not provide nor did it author such letter and the filing of the letter was in error. However, Michael J. Larsen, PC has reviewed our Form 8-K/A filing and provided the letter.

(f) On June 26, 2007, the Registrant engaged Kempisty & Company, Certified Public Accountants, as its independent registered public accounting firm. The Registrant has not consulted with Kempisty & Company regarding the application of accounting principles to any contemplated or completed transactions nor the type of audit opinion that might be rendered on the Registrant's financial statements, and neither written nor oral advice was provided that would be an important factor considered by the Registrant in reaching a decision as to an accounting, auditing or financial reporting issue.

Item 9A. Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer, Yuan Tian (“CEO”) and Chief Financial Officer, Man Ha (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) or 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules, regulations and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

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Item 9A(T). Controls and Procedures

Management Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company in accordance with Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the (i) effectiveness and efficiency of operations, (ii) reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and (iii) compliance with applicable laws and regulations.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management has concluded that the Company’s internal control over financial reporting is not effective as of December 31, 2008.

As a result of management’s evaluation of the effectiveness of the Company’s internal control over financial reporting, referred to in the paragraph above, a material weakness was identified. A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weakness that was identified relates to the failure of management to identify and record the issuance of 6.0 million shares of S-8 common stock that were issued to consultants and the related expenses. Only when the Company’s auditors discovered the issuance by asking the transfer agent for a report on the issued and outstanding shares of common stock, were the auditors informed about the 6.0 million share issuance and were able to properly account for it in the financial statements set forth in the Company’s Form 10-Q for the period ended September 30, 2008.

While the auditors caught the failure of management to identify and record the stock issuance before the Company’s Form 10-Q for the period ended September 30, 2008 was filed, management nonetheless recognizes that this is a material weakness and must be addressed with improved bookkeeping techniques and the devotion of additional resources to the function of internal control over financial reporting. Inasmuch as management relies to a large degree on consultants in the preparation of financial statements and reports under the Securities Exchange Act of 1934, as amended, in the future, management will train its own internal staff to perform these functions.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report.

Changes in Internal Controls

During the year ended December 31, 2008 there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.Other Information

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The following table sets forth information regarding the members of our board of directors and our executive officers and other significant employees as of December 31, 2008. All directors hold office for one-year terms until the election and qualification of their successors. Officers are elected annually by the board of directors and serve at the discretion of the board.

Name	Age	Position
Tian, Yuan	35	CEO and Director
Han, Degong	53	President, Secretary and Director
Wang, Kunlun	40	Director
Ha, Man	46	CFO, Treasurer and Director

The directors will serve as directors until our next annual shareholder meeting or until a successor is elected who accepts the position. Officers hold their positions at the will of the Board of Directors, absent any employment agreement. There are no arrangements, agreements or understandings between non-management shareholders and management under which non-management shareholders may directly or indirectly participate in or influence the management of our affairs.

Backgrounds of Directors and Officers

Yuan, TIAN, Chief Executive Officer and Director - 35

Mr. Tian graduated from the Institute of National Economic Management in Renmin University of China with a Bachelors of Economics Degree in 1996, and attended senior EMBA courses in Schenzhen Academy of Tsinghua University in 2001. In July 1996, Mr. Tian started his career in the Marketing Department of Hainan Airline Co., Ltd. In 1998 he was appointed as Project & Marketing Leader to establish the Hainan Airline Hotel Group. After that, Mr. Tian was appointed as Assistant to the General Manager, Marketing Department in Hainan Airline Hotel Group, and general manager of Hainan Airline Commercial Tourism Co., Ltd. In October 1999, he joined Guangdong Huajing Industrial (Group) Co., Ltd. as Assistant to the General Manager. In April 2003, he joined Guangzhou Hengda Industrial (Group) Co., Ltd. as the Officer to the President. From August 2005 to August 2006, he joined Guangdong New Generation Commercial Management Co., Ltd. and was appointed as General Manager of the marketing center, and Officer of non-ticket section management office, and Director of Tourism Credit Center. From 2006 to January 2007, he was appointed as CEO of Suzhou Tongli International Tourism Development Co., Ltd. In February 2007, Mr. Tian worked as the General Manager in the Network Payment Department in Guangdong Tour Electric Commercial Traveling Service Co., Ltd.

Degong HAN, President, Secretary and Director - 53

Mr. Han used to work in YiChun Xinqing Forestry Bureau as a supervisor of the sales department in 1979. After 4 years, he was promoted to the position of administrator and in 1995, Han was the senior manager of the forestry bureau. In August 1990, Han achieved the Reward Degree of Forestry Studies. From 1996 to 2003, Han began to research the innovation of the forestry industry. And from 2004, he found Harbin Senrun Forestry Development Limited.

Kunlun WANG, Director - 40

Ms Wang graduated from Harbin Watercraft Engineering Institute in 1990, and majored in Electron Engineering. From 1990 to 1992, Wang worked in the customer service department in Panasonic Inc. (China), Heilongjiang Province Technique Supports. In 1999, Wang began to work in Zhuhai Northeast Jincheng Estate Limited and worked as an administrator for three years. From 1994 to 1997, she joined the Orient Group (a public company in China) for International Trading. From 1997, Ms. Wang founded the family company, Harbin Pingchuan Pharmaceutical, Inc, a North Carolina corporation, and took the charge of the capital management. On August 2, 2004, the company listed on the OTCBB in the USA. The company effected a redomicile merger with Shandong Zhouyuan Seeds and Nursery Co., a Delaware corporation, and listed on OTCBB in America again with a new ticker symbol. From 2005 to present, Ms. Wang cooperated with Mr. ZENG Zhixiong, the chairman of China World Trade Corporate and founded the World Trade Full Capital (Beijing) Investment Consultancy Limited. Ms. Wang was the Executive Director and the General Manager.

Man HA, CFO, Treasurer and Director - 46

Mr. Ha was appointed as Chief Financial Officer of China World Trade Corporation on February 28, 2006. He has over 20 years of experience in the areas of auditing, transaction advisory services and commercial fields. In the past, he was executive director, group financial controller and company secretary of several publicly traded companies that were listed on the Hong Kong Stock Exchange. Mr. Ha holds a Masters Degree in Professional Accounting from the Open University of Hong Kong. He is also a fellow member of The Association of Chartered Certified Accountants and The Hong Kong Institute of Certified Public Accountants.

Meetings of Our Board of Directors

The Registrant’s Board of Directors took all actions by unanimous written consent without a meeting during the fiscal year ended December 31, 2008.

The Registrant’s Board of Directors took all actions by unanimous written consent without a meeting during the fiscal year ended December 31, 2007.

Director Independence

Our securities are quoted on the OTC Bulletin Board which does not have any director independence requirements. Once we engage further directors and officers, we will develop a definition of independence and scrutinize our Board of Directors with regard to this definition.

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Board Committees

Audit Committee . The Company intends to establish an audit committee of the board of directors, which will consist of soon-to-be-nominated independent directors. The audit committee’s duties would be to recommend to the Company’s Board of Directors the engagement of independent auditors to audit the Company’s financial statements and to review the Company’s accounting and auditing principles. The audit committee would review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent public accountants, including their recommendations to improve the system of accounting and internal controls. The audit committee would at all times be composed exclusively of directors who are, in the opinion of the Company’s Board of Directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.

Compensation Committee . The Company intends to establish a compensation committee of the Board of Directors. The compensation committee would review and approve the Company’s salary and benefits policies, including compensation of executive officers.

Director Compensation

We have no standard arrangement pursuant to which our directors are compensated for their services in their capacity as directors. The Board of Directors may award special remuneration to any director undertaking any special services on behalf of our company other than services ordinarily required of a director. No director received and/or accrued any compensation for his services as a director, including committee participation and/or special assignments.

Significant Employees

Other than the directors and officer described above, we do not expect any other individuals to make a significant contribution to our business.

Family Relationships

There are no familial relationships between or among our officers and directors.

No Legal Proceedings

None of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past five years:

Ÿ	any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

Ÿ	any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

Ÿ	being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

Ÿ	being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Section 16(a) Beneficial Ownership Compliance Reporting

Under Section 16(a) of the Exchange Act, all executive officers, directors, and each person who is the beneficial owner of more than 10% of the common stock of a company that files reports pursuant to Section 12 of the Exchange Act, are required to report the ownership of such common stock, options, and stock appreciation rights (other than certain cash-only rights) and any changes in that ownership with the Commission. Specific due dates for these reports have been established, and the Company is required to report, in this Form 10-KSB/A, any failure to comply therewith during the fiscal year ended December 31, 2008. The Company believes that all of these filing requirements were satisfied by its executive officers, directors and by the beneficial owners of more than 10% of the Company’s common stock. In making this statement, the Company has relied solely on copies of any reporting forms received by it, and upon any written representations received from reporting persons that no Form 5 (Annual Statement of Changes in Beneficial Ownership) was required to be filed under applicable rules of the Commission.

Code of Ethics

The Company adopted a Code of Ethics that applies to the Company’s principal chief executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, as well as other employees (the "Code of Ethics"), a copy of which is attached as Exhibit 10.1 to our Form 8-K filed on December 19, 2008. The Code of Ethics is designed with the intent to deter wrongdoing, and to promote the following:

Ÿ	Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships
Ÿ	Full, fair, accurate, timely and understandable disclosure in reports and documents that a small business issuer files with, or submits to, the Commission and in other public communications made by the small business issuer
Ÿ	Compliance with applicable governmental laws, rules and regulations
Ÿ	The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code
Ÿ	Accountability for adherence to the code

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Item 11. Executive Compensation

The following Summary Compensation Table sets forth, for the years indicated, all cash compensation paid, distributed or accrued for services, including salary and bonus amounts, rendered in all capacities by the Company’s chief executive officer and all other executive officers who received or are entitled to receive remuneration in excess of $100,000 during the stated periods.

SUMMARY COMPENSATION TABLE

Name of Officer	Year	Salary	Bonus	Stock Awards	Option Awards	Non-Equity Incentive Plan Compensation	Nonqualified Deferred Compensation	All Other Compensation	Total

Tian, Yuan	2008	0	--	--	--	--	--	--	0
	2007	0	--	--	--	--	--	--	0
	2006	0	--	--	--	--	--	--	0
Han, Degong	2008	0	--	--	--	--	--	--	0
	2007	$1,000	--	--	--	--	--	--	$1,000
	2006	0	--	--	--	--	--	--	0

Option Grants in Last Fiscal Year

There were no options granted to any of the named executive officers during the year ended December 31, 2008.

During the year ended December 31, 2008, none of the named executive officers exercised any stock options.

Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.

Employment Agreements

The Company has no employment agreements with any of its employees.

Equity Compensation Plan

On June 23, 2008, we adopted a 2008 Non-Qualified Stock Compensation Plan for officers, directors, employees and consultants of the Company and we filed a Registration Statement on Form S-8 with the Commission. Subsequently, on August 5, 2008, the Board of Directors authorized by unanimous written consent the issuance of 6,000,000 shares of common stock to three consultants for bona fide services rendered to the Company. There have been no other shares issued pursuant to the 2008 Non-Qualified Stock Compensation Plan.

Directors’ and Officers’ Liability Insurance

The Company currently does not have insurance insuring directors and officers against liability; however, the Company is in the process of investigating the availability of such insurance.

Compensation Committee

We currently do not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.

Compensation of Directors

The Company paid nil to its directors for service as directors in 2008, and the Company has not paid its directors any separate compensation in respect of their services on the board. However, in the future, the Company intends to implement a market-based director compensation program.

Change of Control

As of December 31, 2008 we had no pension plans or compensatory plans or other arrangements which provide compensation on the event of termination of employment or change in control of us.

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Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth the information concerning the number of shares of our common stock owned beneficially as of December 31, 2008 by: (i) each of our directors, (ii) each of our named executive officers and (iii) owners of 5% or more of our common shares. There was no other person or group known by us to beneficially own more than 5% of our outstanding shares of common stock. Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own.

Except as otherwise specified below, the address of each beneficial owner listed below is Room 517, No. 18 Building, Nangangjizhoing District, Hi-Tech Development Zone, Harbin, Heilongjiang Province, People’s Republic of China.

Title of Class	Name	Number of Shares Owned	Percent of Voting Power

Other Principal Stockholders (5%)

Common	Everwin Development Limited(1)	9,513,743	16.9	%
Common	Tse Wan Yi	2,815,026	5.0	%

Directors and Executive Officers

Common	Tian, Yuan, CEO	0	0	%
Common	Degong Han, Director	9,000,000	16.1	%
Common	Kunlun Wang, Director	0	0	%
Common	Man Ha, CFO	9,513,743	16.9	%

Common	All Officers and Directors as a Group (4 persons)	18,513,743	33.0	%

(1) The Sole owner and director of Everwin Development Limited is Man Ha, who is also the Chief Financial Officer, Treasurer and a Director of the Company. Mr. Ha is deemed to be the beneficial owner of the shares of common stock owned by Everwin Development Ltd.

Item 13. Certain Relationships, Related Transactions, and Director Independence

The Company utilized office space at the residence of Bradley Shepherd at no charge.

For the year ended December 31, 2006, Bradley Shepherd who was then president of the Company advanced $5,100 to the Company. For the year ended December 31, 2005 and 2004, Mr. Shepherd advanced $9,600 and $6,375 to the Company, respectively. During the year ended December 31, 2004 Mr. Shepherd cancelled and returned to the Company 3,000,000 shares of common stock that had been issued to him in exchange for cash advances in the amount of $3,000 in late 2004 and such advances were reinstated. At Closing under the Exchange Agreement, the Company paid Mr. Shepherd $34,950 in full satisfaction of all advances previously made to the Company by Mr. Shepherd, including interest thereon, which had an outstanding balance of approximately $37,491 on the Closing Date.

At Closing under the Exchange Agreement, Bradley Shepherd and Todd Gee delivered stock certificates representing 44,851,000 shares of the Company’s restricted common stock to the Company’s transfer agent with irrevocable transfer instructions instructing the transfer agent to cancel such shares on the day following the payment date for the Special Cash Distribution of $.01227 per share, and to issue in exchange for such shares 321,500 restricted shares of Patriot common stock following the transactions contemplated by the Share Exchange Agreement, with 221,500 of such shares being issued to Brad Shepherd and 100,000 shares being issued to Todd Gee. The Share Exchange Agreement also provided that during the period from the Closing Date until the date the above share exchange has been completed Mr. Shepherd will vote all shares of Patriot held by him in accordance with the instructions of Everwin.

The Ping Yang He Forestry Center was owned by Mr. Degong Han, the president of the Company. In 2004, Mr. Han contributed the timberland as the registration capital to establish Harbin Senrun Forestry Development Co., Ltd. in exchange for stock in the Company.

Mr. Degong Han, the President, Secretary and a major shareholder of China Forestry Inc., has loaned a total of $527,090 to the Harbin SenRun subsidiary of China Forestry, Inc. for operating capital. The loan bears interest at 5% of the net income generated from timberland sales. The principal and interest is due May 15, 2008. In the event of a default the principal plus 12% interest is due on November 15, 2008. Mr. Man Ha is Chief Financial Officer and Director of China Forestry, Inc. and also is a major shareholder of CHFY. As of December 31, 2007, the entire amount was contributed by converting to additional paid in capital.

Except for the transactions described above, there are no proposed transactions and no transactions during the past two years to which the Company was (or is) a party, and in which any officer, director, or principal stockholder, or their affiliates or associates, was also a party.

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Item 14. Principal Accounting Fees and Services.

Audit and Non-Audit Fees

The following table represents fees for the professional audit services and fees billed for other services rendered by our auditors for the audit of our annual financial statements for the years ended December 31, 2007 and December 31, 2008 and any other fees billed for other services rendered by our auditors during these periods.

Malone & Bailey, PC
Year ended December 31, 2008
Audit fees	$	27,000
Audit-related fees	$
Tax fees	$
All other fees	$
Total	$	27,000

Malone & Bailey, PC
Year ended December 31, 2007
Audit fees	$	31,000
Audit-related fees	$
Tax fees	$
All other fees	$
Total	$	31,000

Since our inception, our Board of Directors, performing the duties of the Audit Committee, reviews all audit and non-audit related fees at least annually. The Board of Directors as the Audit Committee pre-approved all audit related services in the year ended December 31, 2008.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) (1) Financial Statements

See “Table of Contents to Consolidated Financial Statements” set forth on page 22.

(a) (2) Financial Statement Schedules

None. The financial statement schedules are omitted because they are inapplicable or the requested information is shown in our financial statements or related notes thereto.

Exhibits

Exhibit Number		Exhibit Description
3.1		Articles of Incorporation of the Company (1)
3.2		Bylaws of the Company (1)
10.1		Share Exchange Agreement by and among Patriot Investment Corporation, Bradley Shepherd, Everwin Development, Ltd., Harbin SenRun Forestry Development Co., Ltd., Jin Yuan Global Limited and Jin Yuan Global Limited Trust (2)
21.1		List of Subsidiaries
		Jin Yuan Global Limited, a corporation organized and existing under the laws of the Hong Kong SAR of the People’s Republic of China
		Harbin SenRun Forestry Development Co., Ltd., a corporation organized and existing under the laws of the People’s Republic of China
23.1		Consent of Independent Registered Public Accounting Firm (3)
23.2		Consent of Independent Registered Public Accounting Firm (3)
31.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (3)
31.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (3)
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (3)
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (3)

(1)	Incorporated by reference from Exhibit 3 to Patriot Investment Corporation’s Form 10-SB12G filed with the Commission on April 13, 1999.
(2)	Included as an exhibit to our Form 8-K filed with the Commission on July 2, 2007.
(3)	Filed herewith.

- 29 -

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Company has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	CHINA FORESTRY, INC.

Date: March 31, 2009	By:	/s/ Yuan Tian
		Yuan Tian
		Chief Executive Officer (principal executive officer)

Pursuant to the requirements of the Exchange Act this Report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

Name and Title		Date


/s/ Yuan Tian		March 31, 2009
Yuan Tian, Chief Executive Officer and Director (principal executive officer)


/s/ Degong Han		March 31, 2009
Degong Han President


/s/ Man Ha		March 31, 2009
Man Ha Chief Financial Officer and Director (principal financial officer and accounting officer)


/s/ Kunlun Wang		March 31, 2009
Kunlun Wang Director

- 30 -

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