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UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D. C. 20549

FORM 10-K

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

For the fiscal year ended April 30, 2011

Commission file number 000-52747

CHINA FOREST ENERGY
CORP.(Exact name of registrant as specified in its
charter)

Nevada(State or other jurisdiction of
incorporation or organization)

#41 Huancheng Road Xinjian Township Jinyun County
Zhejiang, P.R. China(Address of principal executive
offices, including zip code.)

011 86 578 388 1262(Registrant's telephone
number, including area code)

CHINA FOREST ENERGYCORP(Former name, former
address and former fiscal year, if changed since last report)

Indicate by check mark if 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 15(d) of the Act:  [ ] Yes No
[X]

Indicate by check mark whether the registrant(1) has filed all
reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 day. [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-K (§229.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).Yes [   ]No [ X ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulations S-K 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. [ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 if the
Exchange Act.

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

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

The aggregate market value of Common Stock held by
non-affiliates of the Registrant on October 29, 2010 was $Nil based on a $Nil
average bid and asked price of such common equity, as of the last business day
of the registrants most recently completed second fiscal quarter.

Indicate the number of shares outstanding of each of the
Companys classes of common stock, as of the latest practicable date.
18,081,000 shares as of August 2, 2011

2

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TABLE OF CONTENTS

|PART
      I |                | Page                                                                                                                       
|------------ | -------------- | ---------------------------------------------------------------------------------------------------------------------------
|             |                |                                                                                                                            
|             | Item
      1.  | Business.                                                                                                                  
|             | Item
      1A. | Risk
      Factors.                                                                                                        
|             | Item
      1B. | Unresolved
      Staff Comments.                                                                                           
|             | Item
      2.  | Properties.                                                                                                                
|             | Item
      3.  | Legal
      Proceedings.                                                                                                   
|             | Item
      4.  | Removed
      and Reserved.                                                                                                
|             |                |                                                                                                                            
|PART II      |                |                                                                                                                            
|             |                |                                                                                                                            
|             | Item
      5.  | Market
      For Common Stock and Related Stockholder Matters.                                                             
|             | Item
      6.  | Selected
      Financial Data                                                                                              
|             | Item
      7.  | Managements
      Discussion and Analysis of Financial Condition or Plan of Operation.                                    
|             | Item
      7A. | Quantitative
      and Qualitative Disclosures about Market Risk.                                                          
|             | Item
      8.  | Financial
      Statements and Supplementary Data.                                                                         
|             | Item
      9.  | Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure                           
|             | Item
      9A. | Controls
      and Procedures                                                                                              
|             | Item
      9B. | Other
      Information                                                                                                    
|             |                |                                                                                                                            
|PART III     |                |                                                                                                                            
|             |                |                                                                                                                            
|             | Item
      10. | Directors,
      Executive Officers, Promoters and Control Persons; Compliance with Section
      16(a) of the Exchange Act
|             | Item
      11. | Executive
      Compensation                                                                                               
|             | Item
      12. | Security
      Ownership of Certain Beneficial Owners and Management                                                       
|             | Item
      13. | Certain
      Relationships and Related Transactions, and Director Independence                                            
|             | Item
      14. | Principal
      Accountant Fees and Services.                                                                              
|             |                |                                                                                                                            
|PART IV      |                |                                                                                                                            
|             |                |                                                                                                                            
|             | Item
      15. | Exhibits,
      Financial Statement Schedules.                                                                             

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PART I

|ITEM 1. | BUSINESS
|------- | --------

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,
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, including the risks in the
section entitled Risk 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 law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common
shares refer to the common shares in our capital stock.

As used in this current report and unless otherwise indicated,
the terms "we", "us", "our" and "our company" mean China Forest Energy Corp.,
unless otherwise stated.

General Overview

We were incorporated in Nevada on January 26, 2006 under the
name Henix Resources, Inc. On December 16, 2010, we changed our name to China
Forest Energy Corp. by way of a merger with our wholly-owned subsidiary China
Forest Energy Corp. which was formed for the sole purpose of the change of name.
In addition to our change of name, we effected a nine (9) for one (1) forward
split of our authorized and issued and outstanding common shares. Our preferred
shares were not affected by the stock split.

Our principal business address is #41 Huancheng Road, Xinjian
Township, Jinyun County, Zhejian, P.R. China. Our telephone number is 011 86 578
388 1262.

Current Business

We are an exploration stage company in the business of the
acquisition and exploration of mineral properties. As at the date of this annual
report, we do not own or have any rights to any mineral property.

On December 16, 2010, we filed articles of merger with our
wholly-owned subsidiary to change our name to China Forest Energy Corp. and
filed a certificate of change with the Nevada Secretary of State to give effect
to a forward split of our authorized and issued and outstanding shares of common
stock on a nine (9) new for one (1) old basis. Upon effect of the
forward stock split, our authorized capital increased from 100,000,000 to
900,000,000 shares of common stock and, correspondingly, our issued and
outstanding increased from 2,009,000 to 18,081,000 shares of common stock, with
a par value of $0.00001. Our preferred stock was unaffected as a result of the
forward split.

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On January 12, 2011, we entered into share exchange agreement
with Zhejiang Forest Bamboo Tec Co., Ltd. a Peoples Republic of China
corporation and Forest Energy Co., Ltd., a British Virgin Islands corporation.
Forest Energy Co., Ltd. is the registered and beneficial owner of all of the
issued and outstanding common shares in the capital of Sinoport Enterprises
Limited, a British Virgin Islands corporation. Sinoport is the sole owner of all
share capital of USCNHK Group Limited, a Hong Kong corporation and USCNHK is the
owner of 95%, or 76,000,000 shares, of the share capital of Zhejiang Forest
Bamboo Tec Co., Ltd. Our company has agreed to issue 15,919,000 common shares to
the Forest Energy Co., Ltd.s shareholder as consideration for the purchase of
50,000 common shares of Zhejiang Forest Bamboo Tec Co., Ltd. Upon closing of the
share exchange, Yongfu Zhu, one of our current officers and directors, will
cancel 9,000,000 shares of our common stock held in his name and we will have no
more than 25,000,000 shares of common stock issued and outstanding. As of the
date of this annual report, the share exchange agreement has not been
closed.

If we are not able to close the share exchange agreement, we
will continue with our original plan of acquisition and exploration of mineral
properties. This business is further described below.

Our proposed exploration program

We intend to acquire a property
and prospect for gold in China. Our target is mineralized material. Our success
depends upon finding mineralized material. Mineralized material is a mineralized
body which has been delineated by appropriate spaced drilling or underground
sampling to support sufficient tonnage and average grade of metals to justify
removal. If we do not find mineralized material or we cannot remove mineralized
material, either because we do not have the money to do it or because it is not
economically feasible to do it, we will cease operations.

In addition, we do not have
enough money to complete the exploration of any property. We will try to raise
additional funds from a public offering, a private placement or loans. At the
present time, we have not made any plans to raise additional money and there is
no assurance that we would be able to raise additional money in the future. If
we need additional money and cannot raise it, we will have to suspend or cease
operations.

After we acquire a property, we
must conduct exploration to determine what amount of minerals, if any, exist on
the properties and if any minerals which are found can be economically extracted
and profitably processed. There is no assurance that we will ever acquire an
option on a property or any property underlying an option.

We intend to seek out raw
undeveloped property by retaining the services of a professional mining
geologist to be selected. As of the date of this report, we have not selected a
geologist. Our properties will in all likelihood be undeveloped raw land. That
is because raw undeveloped land is much cheaper than to purchase an existing
developed property. A developed property is one with a defined ore body.

Thereafter, exploration will be
initiated.

We do not know if we will find
mineralized material.

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Our exploration program is
designed to economically explore any property we may obtain. Again, at the
present time we do not own any interest in any properties.

We do not claim to have any minerals
or reserves whatsoever.

We intend to implement an
exploration program which consists of rock sampling. Rock sampling is the
collection of a series of small chips over a measured distance, which is then
submitted for a chemical analysis, usually to determine the metallic content
over the sampled interval, a predetermined grid laid out on the property. If the
rock sampling is successful, then further work by way of a Controlled Source
Magnetotelluric survey may be in order. This is an electromagnetic method used
to map the variation of the Earth's resistivity (the resistance of the earth to
conduct electricity) by measuring naturally occurring electric and magnetic
fields at the Earth's surface. This process gives an indication of where
drilling locations may be warranted. If drilling were to be indicated, then our
first choice would be Reverse Circulation Drilling. This is a less expensive
form of drilling that does not allow for the recovery of a tube or core of rock.
The material is brought up from depth as a series of small chips of rock that
are then bagged and sent in for analysis. This is a quicker and cheaper method
of drilling, but does not necessarily give one as much information about the
underlying rocks. If warranted, core sampling would follow this stage. Core
sampling is the process of drilling holes to a depth of up to 1,400 feet in
order to extract samples of earth. Our mining engineer will determine where
drilling will occur on the property. As of the date of this registration
statement, we have not retained the services of any mining engineers, and would
not entertain doing so until an appropriate property has been secured. The drill
samples will be tested to determine if mineralized material is located on the
property. Based upon the tests of the drill samples, we will determine if we
will terminate operations; proceed with additional exploration of the property;
or develop the property. Our current financial condition is designed to only
fund the costs of rock sampling and testing.

Our plan of operation, time frames
involved and costs are as follows:

|Item or Activity                        |   | Cost   | 
|--------------------------------------- | - | ------ | 
|Property Acquisition                    | $ | 10,000 | 
|Consulting Service                      | $ | 5,000  | 
|Surface Sampling & Geochemical Analysis | $ | 15,000 | 
|Mobilization/Demobilization Contractor  | $ | 12,000 | 
|Dozer, Grader, Backhoe, ATV             | $ | 12,000 | 
|Reclamation/Bond                        | $ | 3,000  | 
|Field Supplies                          | $ | 300    | 
|Travel Expenses                         | $ | 3,000  | 

We will allocate $10,000 for the
securing of one property in China. We have not selected a property at this time.
We intend to secure a property within the next twelve months, the costs of which
should not exceed $10,000.

Exploration expenditures consist
of fees to be paid for consulting services connected with exploration, the cost
of rock sampling (the collection of a series of small chips over a measured
distance, which is then submitted for a chemical analysis, usually to determine
the metallic content over the sampled interval, at pre-determined location(s) on
the property), and cost of analyzing these samples. Since we do not own an interest in any properties, we
have not begun exploration. Consulting fees will not be paid except on an as
needed basis and should not exceed $5,000 for the next 12 months.

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We will allocate a range of money
for exploration. That is because we do not know how much will ultimately be
needed for exploration. If our initial exploration proves positive results, we
will expand the exploration activities to include reverse circulation drilling.
This is a less expensive form of drilling that does not allow for the recovery
of a tube or core of rock. The material is brought up from depth as a series of
small chips of rock that are then bagged and sent in for analysis. This is a
quicker and cheaper method of drilling, but does not necessarily give one as
much information about the underlying rocks. If warranted, core drilling would
follow this stage.

If we discover significant
quantities of mineralized material, we will begin technical and economic
feasibility studies to determine if we have reserves. Only if we have reserves
will we consider developing the property.

Once we have secured a property,
and if through early stage exploration we find mineralized material and it is
feasible to expand the exploration program, we will attempt to raise additional
money through a subsequent private placement, public offering or through loans.
If we do not raise all of the money we need, we will have to find alternative
sources of funding, like a public offering, a private placement of securities,
or loans from our officers or others.

We have discussed this matter
with our officer and director, however, our officer and director is unwilling to
make any commitment to loan us any significant amounts of money at this time. At
the present time, we have not made any arrangements to raise additional cash. If
we need additional cash and can't raise it, we will either have to suspend
operations until we do raise the cash, or cease operations entirely.

We will be conducting research in
the form of exploration of the property we intend to secure. We are not going to
buy or sell any plant or significant equipment during the next twelve months. We
will not buy any equipment until we have located a body of minerals and we have
determined they are economical to extract from the land.

The breakdown of estimated times
and dollars was made in consultation with mining engineers in China.

We do not intend to interest
other companies in the property if we find mineralized materials. We intend to
try to develop the reserves ourselves.

If we are unable to complete
exploration because we do not have enough money, we will cease operations until
we raise more money. If we cannot or do not raise more money, we will cease
operations. If we cease operations, we don't know what we will do and we don't
have any plans to do anything else.

We cannot provide you with a more
detailed discussion of how our exploration program will work and what we expect
will be our likelihood of success. That is because we do not own an interest in
a property. We may or may not find any mineralized material. We hope we do, but
it is impossible to predict the likelihood of such an event.

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We do not have a plan to take our
company to revenue generation. That is because we have not located an ore body
yet and it is impossible to project revenue generation from nothing.

If we do not find mineralized
material, we will allow any option acquired to expire.

Gold Mining in China

Gold mining in China dates back
to the Song Dynasty. The Chinese government began reforms in the mid-1990s
encouraging small operators to consolidate and allow foreign companies to form
joint ventures. The intent was for Chinese companies to learn modern management
practices; financial controls; and industrial, environmental and safety
standards.

Chinese Mining Law

The Mineral Resources Law of the
PRC is the principal mining law of the State. Together with the PRC
Constitution, it stipulates that rights to the mineral resources within the
territories of China vest in the State.

Constitution

Under the Chinese Constitution,
all mineral resources occurring within China's territorial boundaries belong to
the State, and there is a tri-level structure of legislative power whereby the
lower level is subject to, and must not contravene, the more upper level. The
three levels of legislative power consist of national legislation (the National
People's Congress), followed by the state administrative rules and regulations
(State administration), and finally, by the local regulations (provincial
congresses). Administrative departments functioning directly under the State
Council may formulate implementation rules, which will have effect within their
respective departments.

Laws

The Mineral Resources Law of the
PRC, adopted March 19, 1986, amended on August 29, 1996 ("Amendments") and
effective as amended as of January 1, 1997 (after passage of the 21st Session of
the Standing Committee of the 8th National People's Congress on August 29,
1996), is the principal mining law. The Amendments were adopted to achieve the
policy goals set forth above. Same treatment is now to be accorded foreign
investment enterprises as to domestic enterprises, regarding exploration rights,
mining rights and the transfer of those rights.

China has adopted a
licensing-type of system for the exploration and exploitation of the mineral
resources. Exploration permits (or licenses) are registered and issued to
"licensees" in the form of 3-year leases (7 years for oil and gas) from the
Central or the Provincial Bureau of Land and Resources. The exploration permit
area is described by a "basic block" of 1' of longitude x 1' of latitude
(approximately 848 acres); an exploration permit for metallic and non-metallic
minerals has a maximum of 40 basic blocks and for coal, has a maximum of 200
basic blocks.

When an economic deposit is
discovered, the licensee may apply for a 2-year renewal or retention of the
exploration right (permit) within thirty (30) days prior to expiration of the
permit term, for a maximum period of four (4) years or two extensions, covering
the area of the economic deposit. Among the obligations under the permit are
scheduled minimum exploration expenditures (the portion of which actual
expenditures are greater than the year's scheduled expenditures is creditable
against the next year's scheduled expenditures), reporting requirements
with the local county and licensing authority and scheduled payments per
kilometer for exploration rights (i.e., rentals). The permittee, with approval
and compliance with exploration expenditures, may transfer its explorations
right.

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The mining license holders of a
mining right are termed "concessionaires," and their license terms are
determined by the magnitude of a mining project. If the size of a mining project
is large, the maximum term of the mining license is thirty (30) years, and
scaled down from there to as low as ten (10) years for one small in size. The
mining licensee may extend the term of a mining license with an application
thirty (30) days prior to expiration of the term. The "rentals" for exercise of
the mining right are a fee of 1,000 RMB (USD 165) per square kilometer per year.
The Ministry of Land and Resources is metals, most non-metallics, rare earths
and other minerals as listed in the appendix to the Regulations on Registration
for Exploration of Mineral Resources, for large scale reserves. The
concessionaire, or mining licensee, may transfer with governmental approval all
or a portion of its mining right.

There are numerous taxes, charges
and fees that apply to the mineral industries, including the value added tax,
resources tax, mineral resources compensation (royalties), corporate income tax,
city construction tax, land use tax, business tax and other taxes or
assessments. As for environmental regulations, the basic laws in China governing
environmental protection in the mineral industry sector of the economy are the
Environmental Protection Law and the Mineral Resources Law.

Administrative regulations

The legal rights and interests of
the holder of mineral titles are under the protection of the Chinese Government,
pursuant to the Rules for Implementation of the Mineral Resources Law of the
PRC, promulgated March 20, 1994 ("Mineral Resources Rule").As discussed
above, China has adopted a licensing-type system for exploration and
exploitation of its mineral resources; the exploration permittee, or holder of
the exploration permit has the following rights: to undertake without
interference exploration within the area under permit during the permit term, to
have a priority to obtain a mining license upon discovery of a mineral deposit
of commercial value, to construct necessary exploration facilities and to pass
through other exploration areas and adjacent ground to access the permitted
area, among other rights.

While exploration permits are
registered and issued to licensees in the form of 3-year term leases, initially,
from the Central or Provincial Bureau of Land and Resources, as discussed above,
at least one longer term joint venture lease (20 years) has been reported. The
obligations of the permittees include the following: to start exploration within
the prescribed term, to report to the appropriate exploration management
government agency, to conduct its exploration activities in accordance with the
permit, to conduct a comprehensive exploration program for all key and
associated minerals, to submit mineral exploration reports for review and
approval and to comply with other applicable laws and regulations.

The amended law stipulates that
an exploration licensee has a priority, an exclusive right to obtain the "mining
right" within the area under the exploration right, when there has been a
discovery, to conduct mining operations, pursuant to applicable regulations (for
example: mining plans, financial and technical qualifications and environmental
impact statements).

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Once mining licenses are
obtained, the rights of the concessionaires include the following: to conduct
mining operations within the term and mining area prescribed by the license, to
sell the mineral products by themselves, except for those mineral
products which the State Council had prescribed for unified purchase, to
construct production facilities within the mining area, to acquire land use and
other rights. As well, the concessionaires have obligations including reporting
requirements and submission to inspections. Additionally, the miner - applicant
for a mining right (concession) must present, with its plan for development and
utilization of the mineral resources under lease, an environmental impact
statement.

On February 12, 1998, the State
Council issued three sets of regulations (the three "items of regulations") to
implement the Amendments, as follows: (1) the Regulations on Registration for
Mineral Exploration; (2) the Regulations on Registration for Exploration of
Mineral Resources; and (3) the Regulations on Transfer of Exploration Rights and
Mining Rights.

Local law considerations

The congress of a province or
autonomous region may adopt local mining regulations. The departments under
provincial governments, autonomous regions and municipalities directly under the
Central Government are responsible for exploration applications for mineral
resources not reviewed by the Ministry of Land and Resources, such as oil
shales, manganese, chromium, iron or sulphur and those whose reserves are
"medium" in scale. Prefecture and county level departments are responsible for
"small-scale" mineral resources.

Laws and regulations relating to foreign
investment

China first allowed foreign
investment in prospecting and mining in 1993 with prospecting for, and
exploitation of, the Tarim Basin's natural gas reserves in western China. The
Ministry approves exploration applications for mineral resources to be explored
by foreign investment entities. The mineral resources available to foreign
investments (generally not as wholly-owned foreign investments) are divided into
three categories: (1) Group A ("encouraged" projects) -- coal and associated
minerals mining and separation, iron ore mining and beneficiation, base metal
(copper, lead, zinc and aluminum) and nonmetallic minerals; (2) Group B
("restricted" projects) -- coke/coal mining, copper processing, precious metal
mining and processing (gold, silver, and platinum group metals), other base
metals (tin, tungsten and antimony), rare earth minerals and gemstones; and (3)
Group D -- minerals not included in Group A, B or C. A "Group C" project for
prohibited minerals includes radioactive minerals, boromagnesites and
celestites.

The Ministry approves exploration
applications for mineral resources to be exploited (mined) by foreign
investment. The transfers of foreign investment mining rights, as well as
similar (mined) exploration rights, are subject to approval by the Ministry
pursuant to any other transfer conditions as discussed above.

The general procedure for
implementing foreign investment in exploration of Chinese mineral resources (at
the Central Government level) is described as a seven step process: Step 1 -
inquire with the Ministry about available land areas; Step 2 - reserve the name
of the proposed entity; Step 3 - apply to the Ministry for designation of an
exploration (or mining) area; Step 4 - apply to the Ministry of Foreign Trade
and Economic Cooperation (or local agency) for authority of the proposed
business entity; Step 5 - obtain a business license; Step 6 - apply to the
Ministry for a grant of the exploration right (or the mining right); and Step 7
- apply to the Ministry for a land use right. The Ministry of Foreign Trade and
Economic Cooperation and the State Environmental Protection Agency issued
provisions in 1993 on environmental protection management with regard to foreign
investment.

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Of particular interest for
foreign investment, gold and silver (pursuant to an official "Gold Policy") have
been subject to regulatory changes of their restricted or protected status in
the 1990s. Under the Gold Policy, gold had to be sold by the miner exclusively
to the Bank of China at the current international market price discounted,
initially, at 10% and, subsequently, at 3%. Pursuant to State Council direction,
the Bank of China has authority to adjust the purchase price with respect to the
gold market prices under certain criteria. The price of gold has been raised to
more closely track the international market prices, e.g., the "London Fix."
Subject to the same policy are the low grade (less than 0.03 ounces per ton) and
refractory-processed (sulphide ore) gold deposits, that have been the sole
deposits open to foreign investors; however, such foreign investors may retain
their investment if, as development proceeds, they discover a high grade or
nonrefractory gold deposit.

Revised regulations for the
settlement, selling and payment of foreign exchange came into effect in 1996.
The foreign exchange regulations apply to domestic, as well as foreign,
investment enterprises.

Chinese General Business Laws

In China, we are required to
register as a private enterprise. A private enterprise is one which is privately
funded, that is not state funded. The registration fee is 0.1% of our capital or
$0.01, however, there is a minimum fee of 50 RMB. In addition, we will pay a
business tax of 3% of our net revenues. Business tax rates in China are at a
flat rate, but vary based upon the business. While we pay 3%, entertainment
companies pay 15%.

It is very important to remember
in China that rules and regulations are conditioned upon satisfaction of Chinese
social interests. This allows for a subjective determination by the government
when issuing licenses. If we are unable to raise enough money, we will not seek
the license.

The majority of our revenues will
be settled in RMB and, any future restrictions on currency exchanges may limit
our ability to use revenue generated in RMB to fund any future business
activities outside China or to make dividend or other payments in U.S. dollars.
Although the Chinese government introduced regulations in 1996 to allow greater
convertibility of the RMB for current account transactions, significant
restrictions still remain, including primarily the restriction that
foreign-invested enterprises may only buy, sell or remit foreign currencies
after providing valid commercial documents, at those banks in China authorized
to conduct foreign exchange business. In addition, conversion of RMB for capital
account items, including direct investment and loans, is subject to governmental
approval in China, and companies are required to open and maintain separate
foreign exchange accounts for capital account items. We cannot be certain that
the Chinese regulatory authorities will not impose more stringent restrictions
on the convertibility of the RMB.

The Chinese legal system is a
civil law system based on written statutes. Unlike common law systems, it is a
system in which precedents set in earlier legal cases are not generally used.
The Chinese laws, regulations and legal requirements are relatively recent and
are evolving rapidly, and their interpretation and enforcement involve
uncertainties Because of the legal uncertainties and because the majority of our
assets may be located in the Peoples Republic of China (the PRC), it may be
extremely difficult to access those assets to satisfy an award entered against
us in United States court. Moreover, PRC does not have treaties with the United
States providing for the reciprocal recognition and enforcement of judgments of
courts. Further, in considering whether to enforce a foreign judgment in China,
the court considers whether the judgment violates basic principles of the law of the PRC; its social interests; and ascertains that
foreign judgment has validity. If the court is not satisfied with the foregoing,
the matter is referred back to the jurisdiction that rendered the judgment. The
cost and likelihood of successfully enforcing a U.S. judgment in China is, in
our opinion, remote at best.

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Employees and Employment Agreements

At present, we have no full-time
employees. Our officers and directors are part-time employees and each will
devote about 10 hours or 25% of their time per week to our operation. Our
officers and directors do not have employment agreements with us. We presently
do not have pension, health, annuity, insurance, stock options, profit sharing
or similar benefit plans; however, we may adopt plans in the future. There are
presently no personal benefits available to our officers and directors. Our
officers and directors will handle our administrative duties. As of April 30,
2011, we have not looked for or talked to any geologists or engineers who will
perform work for us in the future.

|ITEM 1A. | RISK FACTORS
|-------- | ------------

We are a smaller reporting
company as defined by Rule 12b-2 of the Exchange Act and are not required to
provide the information under this item.

|ITEM 1B. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

We are a smaller reporting
company as defined by Rule 12b-2 of the Exchange Act and are not required to
provide the information under this item.

|ITEM 2. | PROPERTIES
|------- | ----------

Our office space is currently provided to us by a former
president of our company. The rent is donated and is recognized at $3,000 per
year. Our office is located at #41 Huancheng Road, Xinjian Township, Jinyun
County, Zhejiang, P.R. China. Our telephone number is 011 86 578 388 1262.

|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------

We are not presently a party to any
litigation.

|ITEM 4. | REMOVED AND RESERVED
|------- | --------------------

PART II

|ITEM 5. | MARKET FOR COMMON STOCK AND RELATED
      STOCKHOLDER MATTERS
|------- | -------------------------------------------------------------

Our Common stock is quoted on the OTC Bulletin Board under the
Symbol "CFEC". We originally received approval on March 13, 2007 for trading
under the symbol HENX. On December 28, 2010, our symbol was changed to our current symbol CFEC in
connection with our merger and change of name.

12

---

The following table reflects the high and low bid information
for our common stock obtained from Stockwatch and reflects inter-dealer prices,
without retail mark-up, markdown or commission, and may not necessarily
represent actual transactions.

The high and low bid prices of our common stock for the periods
indicated below are as follows:

OTC Bulletin BoardQuarter Ended(1)
    High
    LowJanuary 31, 2011
    $1.165
    $1.00


(1)
    The first trade in our common stock occurred on January
      7, 2011.


At July 29, 2011, there were 56
shareholders of record.

Dividend Policy

We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.

Recent Sales of Unregistered Securities; Use of Proceeds
from Registered Securities

Other than as disclosed herein, we did not sell any equity
securities which were not registered under the Securities Act during the year
ended April 30, 2011 that were not otherwise disclosed on our quarterly reports
on Form 10-Q or our current reports on Form 8-K filed during the year ended
April 30, 2011.

Equity Compensation Plan Information

We currently do not have any equity compensation plans.

Convertible Securities

We do not have any outstanding convertible securities.

Purchase of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during our fourth quarter of our fiscal year ended April 30,
2011.

|ITEM 6. | SELECTED FINANCIAL DATA
|------- | -----------------------

We are a smaller reporting
company as defined by Rule 12b-2 of the Exchange Act and are not required to
provide the information under this item.

13

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|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF
      FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|------- | --------------------------------------------------------------------------------------------

This section of the report
includes a number of forward-looking statements that reflect our current views
with respect to future events and financial performance. Forward-looking
statements are often identified by words like: believe, expect, estimate,
anticipate, intend, project and similar expressions, or words which, by their
nature, refer to future events. You should not place undue certainty on these
forward-looking statements, which apply only as of the date of this report.
These forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from historical results or
our predictions.

Plan of Operation

We are a start-up,
exploration-stage mining corporation and have not yet generated or realized any
revenues from our business operations. We raised $100,900 from our public
offering and issued 9,080,100 common shares at $0.01 per share on November 16,
2006. We believe that further financing (either debt or equity financing) is
required for us to acquire mineral properties.

We intend to acquire mineral
properties; however, no acquisition has been materialized as of this report. We
are not going to buy or sell any plant or significant equipment during the next
twelve months.

Our exploration target is to find
properties containing gold. Our success depends upon finding mineralized
material from such acquired properties. This includes a determination by our
consultant if the property contains reserves. Although we successfully raised
capital in 2006, we must find and acquire mineral properties for further
exploration.

We currently do not own or have a
right to explore any property. We have not identified any properties for
exploration. Our plan is to acquire an option on a property and prospect for
gold in China. Our target is mineralized material. Our success depends upon
finding mineralized material. Mineralized material is a mineralized body which
has been delineated by appropriate spaced drilling or underground sampling to
support sufficient tonnage and average grade of metals to justify removal. If we
do not find mineralized material or we cannot remove mineralized material,
either because we do not have the money to do it or because it is not
economically feasible to do it, we will cease operations.

In addition, we do not have
enough money to complete the exploration of any property. We will try to raise
additional funds from a public offering, a private placement or loans. At the
present time, we have not made any plans to raise additional money and there is
no assurance that we would be able to raise additional money in the future. If
we need additional money and cannot raise it, we will have to suspend or cease
operations.

After we acquire a property, we
must conduct exploration to determine what amount of minerals, if any, exist on
the properties and if any minerals which are found can be economically extracted
and profitably processed. There is no assurance that we will ever acquire an
option on a property.

We intend to seek out raw
undeveloped property by retaining the services of a professional mining
geologist to be selected. As of the date of this report, we have not selected a
geologist. Our properties will in all likelihood be undeveloped raw land. That
is because raw undeveloped land is much cheaper than to purchase an existing developed property. A
developed property is one with a defined ore body.

14

---

Thereafter, exploration will be
initiated.

We do not know if we will find
mineralized material.

Our exploration program is
designed to economically explore any property we may obtain. Again, at the
present time we do not own any interest in any properties.

We do not claim to have any minerals
or reserves whatsoever.

|Our plan of
      operation, time frames involved and costs are as follows: |  
|--------------------------------------------------------------------------- | -
|Item or
      Activity                                                      |  
|Property Acquisition                                                        | $
|Consulting Service                                                          | $
|Surface Sampling & Geochemical Analysis                                     | $
|Mobilization/Demobilization Contractor                                      | $
|Dozer, Grader, Backhoe, ATV                                                 | $
|Reclamation/Bond                                                            | $
|Field Supplies                                                              | $
|Travel Expenses                                                             | $

We will allocate $10,000 for the
securing of one property in China. We have not selected a property at this time.
We intend to secure a property within the next twelve months, the costs of which
should not exceed $10,000.

Exploration expenditures consist
of fees to be paid for consulting services connected with exploration, the cost
of rock sampling (the collection of a series of small chips over a measured
distance, which is then submitted for a chemical analysis, usually to determine
the metallic content over the sampled interval, at pre-determined location(s) on
the property), and cost of analyzing these samples. Since we do not own an
interest in any properties, we have not begun exploration. Consulting fees will
not be paid except on an as needed basis and should not exceed $5,000.00 for the
next 12 months.

We will allocate a range of money
for exploration. That is because we do not know how much will ultimately be
needed for exploration. If our initial exploration proves positive results, we
will expand the exploration activities to include reverse circulation drilling.
This is a less expensive form of drilling that does not allow for the recovery
of a tube or core of rock. The material is brought up from depth as a series of
small chips of rock that are then bagged and sent in for analysis. This is a
quicker and cheaper method of drilling, but does not necessarily give one as
much information about the underlying rocks. If warranted, core drilling would
follow this stage.

If we discover significant
quantities of mineralized material, we will begin technical and economic
feasibility studies to determine if we have reserves. Only if we have reserves
will we consider developing the property.

15

---

Once we have secured a property,
and if through early stage exploration we find mineralized material and it is
feasible to expand the exploration program, we will attempt to raise additional
money through a subsequent private placement, public offering or
through loans. If we do not raise all of the money we need, we will have to find
alternative sources of funding, like a public offering, a private placement of
securities, or loans from our officers or others.

We have discussed this matter
with our officer and director, however, our officer and director is unwilling to
make any commitment to loan us any significant amounts of money at this time. At
the present time, we have not made any arrangements to raise additional cash. If
we need additional cash and can't raise it we will either have to suspend
operations until we do raise the cash, or cease operations entirely.

We will be conducting research in
the form of exploration of the property we intend to secure. Our exploration
program is explained in as much detail as possible in the business section of
this annual report. We are not going to buy or sell any plant or significant
equipment during the next twelve months. We will not buy any equipment until we
have located a body of minerals and we have determined they are economical to
extract from the land.

The breakdown of estimated times
and dollars was made in consultation with mining engineers in China.

We do not intend to interest
other companies in the property if we find mineralized materials. We intend to
try to develop the reserves ourselves.

If we are unable to complete
exploration because we do not have enough money, we will cease operations until
we raise more money. If we cannot or do not raise more money, we will cease
operations. If we cease operations, we don't know what we will do and we don't
have any plans to do anything else.

We cannot provide you with a more
detailed discussion of how our exploration program will work and what we expect
will be our likelihood of success. That is because we do not own an interest in
a property. We may or may not find any mineralized material. We hope we do, but
it is impossible to predict the likelihood of such an event.

We do not have a plan to take our
company to revenue generation. That is because we have not located an ore body
yet and it is impossible to project revenue generation from nothing.

If we do not find mineralized
material, we will allow any option to expire.

Limited Operating History

There is limited historical
financial information about us upon which to base an evaluation of our
performance. We are an exploration-stage corporation and have not generated any
revenues from operations. We cannot guarantee we will be successful in our
business operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital resources,
possible delays in the exploration of our properties, and possible cost overruns
due to price and cost increases in services.

To become profitable and
competitive, we must find and acquire other mineral properties and conduct more
comprehensive research and exploration of such properties before we start
production of any minerals we may find.

16

---

Results of Operations

For the years ended April 30,
2011 and 2010, the Company reported no revenue. For the year ended April 30,
2011, total expenses were $43,371, a $16,183, or 59%, increase from the $27,188
reported for the same period in 2010. Approximately $17,000 of this increase is
attributable to an increase in professional fees and filing fees.

Total expenses reported for the
years ended April 30, 2011 and 2010 primarily represent expenses incurred for
general administration, rent, travel, filing fees, professional services, and
bank service charges. Shareholders of the Company have been making advances to
the Company for the payment of operating expense; they have agreed to continue
providing capital for ongoing operations, until such time the Company can
generate revenues from commercial operations or increase capital through various
financing arrangements.

Liquidity and Capital Resources

To meet our initial need for cash
we raised $100,900 from our public offering. As of April 30, 2011, we had $578
in cash available. If we acquire a property, find mineralized material, and it
is economically feasible to remove the mineralized material, we will attempt to
raise additional money through a subsequent private placement, public offering
or through loans.

As of the date of this report, we have
yet to generate any revenues.

Since inception and up to April
30, 2011, we have issued 18,081,000 shares of our common stock and received
$100,910.

In January 2006, we issued
9,000,000 shares of common stock pursuant to the exemption from registration set
forth in section 4(2) of the Securities Act of 1933. In November 2006, we issued
9,081,000 shares of common stock pursuant to our registration statement. The
proceeds received of the shares issued in January and November were $10 and
$100,900, respectively. Our former president covered our initial expenses
covering incorporation, accounting and legal fees, and other operating expenses
of $32,054 and $3,500 for staking, for a total of $35,554, all of which was paid
directly to our attorney, accountant, and other vendors. We repaid $10,000
during the quarter ended July 31, 2007 to our former president. The amount owed
to our former president was non-interest bearing, unsecured and due on demand.
Further the agreement with our former president was oral and there was no
written document evidencing the agreement. On September 1, 2008, our former
president assigned the right to collect the debt owed by the Company for $25,554
to the current president of the Company. On April 29, 2009, our current
president waived the debt owed by the Company totaling $25,554 and the amount
was recognized as additional paid-in capital.

As of April 30, 2011, our total
current assets were $4,078 and our total current liabilities were $51,317 for a
working capital deficit of $47,239.

The financial statements have
been prepared on a going concern basis, which implies the Company will continue
to realize its assets and discharge its liabilities in the normal course of
business. Since inception, the Company has not generated revenues and has not
paid any dividends and is unlikely to either pay dividends or generate revenues
in the immediate or foreseeable future.

17

---

The continuation of the Company as a
going concern is dependent upon the continued financial support from its
shareholders, the ability of the Company to obtain necessary equity
financing, the Companys success in acquiring interests in properties that have
economically recoverable reserves, and the attainment of profitable operations.
As at April 30, 2011, the Company has not generated revenues and has accumulated
losses totaling $221,603 since inception. These factors raise substantial doubt
regarding the Companys ability to continue as a going concern. These financial
statements do not include any adjustments to the recoverability and
classification of recorded asset amounts and classification of liabilities that
might be necessary should the Company be unable to continue as a going
concern.

Recent accounting pronouncements

The Company does not expect the
adoption of any recently issued accounting pronouncements to have a significant
effect on its financial position or results of operations.

|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK.
|-------- | -----------------------------------------------------------------

We are a smaller reporting
company as defined by Rule 12b-2 of the Exchange Act and are not required to
provide the information under this item.

18

---

|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY
      DATA.
|------- | --------------------------------------------------

|CHINA FOREST ENERGY CORP.     
|------------------------------
|(AN EXPLORATION STAGE COMPANY)
|FINANCIAL STATEMENTS          
|                              
|APRIL 30, 2011                
|                              
|INDEX                         

|                                                              | PAGE(S) 
|------------------------------------------------------------- | --------
|REPORT OF INDEPENDENT REGISTERED PUBLIC
      ACCOUNTING FIRM | F2      
|BALANCE SHEETS                                                | F3      
|STATEMENTS OF OPERATIONS                                      | F4      
|STATEMENTS OF CASH FLOWS                                      | F5      
|STATEMENT OF CHANGES IN STOCKHOLDERS'
      DEFICIT           | F6      
|NOTES TO FINANCIAL STATEMENTS                                 | F7 - F11

F-1

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

|To the Board of Directors     
|------------------------------
|China Forest Energy Corp.     
|(An Exploration Stage Company)
|Zhejiang, P.R. China          

We have audited the accompanying balance sheets of China Forest
Energy Corp. (an Exploration Stage Company) (the Company) as of April 30, 2011
and 2010, and the related statements of operations, changes in stockholders
deficit and cash flows for the years then ended and for the period from January
26, 2006 (Inception) to April 30, 2011. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits. The financial
statements for the period from January 26, 2006 (Inception) to April 30, 2009
were audited by other auditors whose report expressed an unqualified opinion on
those financial statements. The financial statements for the period from January
26, 2006 (Inception) to April 30, 2009 include total revenues of $-0- and a net
loss of $151,044, respectively. Our opinion on the statements of operations,
changes in stockholders deficit and cash flows for the period from January 26,
2006 (Inception) to April 30, 2011, insofar as it relates to amounts from
January 26, 2006 (Inception) to April 30, 2009, is based solely on the report of
other auditors.

We conducted our audits in accordance with the 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 financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits 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 financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of China Forest
Energy Corp. as of April 30, 2011 and the results of its operations and its cash
flows for the two years then ended and for the period from January 26, 2006
(Inception) to April 30, 2011, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
2 to the financial statements, the Company has a working capital deficit,
generated no revenues since inception, and has an accumulated deficit. Those
conditions raise substantial doubt about the Companys ability to continue as a
going concern. Managements plans in regard to those matters are also described
in Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

|GBH CPAs, PC   
|---------------
|www.gbhcpas.com
|Houston, Texas 
|August 4, 2011 

F-2

---

|China Forest Energy Corp.     
|------------------------------
|(An Exploration Stage Company)
|Balance Sheets                

|                                                                                                                                                      |   | April 30, |  
|----------------------------------------------------------------------------------------------------------------------------------------------------- | - | --------- | -
|ASSETS                                                                                                                                                |   | 2011      |  
|                                                                                                                                                      |   |           |  
|Current Assets                                                                                                                                        |   |           |  
|                                                                                                                                                      |   |           |  
|Cash and cash
          equivalents                                                                                                                   | $ | 578       |  
|Prepaid expenses                                                                                                                                      |   | 3,500     |  
|                                                                                                                                                      |   |           |  
|Total Assets                                                                                                                                          | $ | 4,078     |  
|                                                                                                                                                      |   |           |  
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                 |   |           |  
|                                                                                                                                                      |   |           |  
|Current Liabilities                                                                                                                                   |   |           |  
|Accounts payable
          and accrued liabilities                                                                                                    | $ | 1,817     |  
|Notes payable                                                                                                                                         |   | 28,500    |  
|Advances from
          related party                                                                                                                 |   | 21,000    |  
|Total Current Liabilities                                                                                                                             |   | 51,317    |  
|                                                                                                                                                      |   |           |  
|Stockholders Deficit                                                                                                                                 |   |           |  
|Preferred stock, $0.00001 par value, 100,000,000 shares authorized, 
                                
          none issued and outstanding           |   | -         |  
|Common stock, $0.00001 par value, 900,000,000 shares authorized, 
                                
          18,081,000 shares issued and outstanding |   | 181       |  
|Additional paid-in
          capital                                                                                                                  |   | 174,183   |  
|Accumulated deficit during the exploration stage                                                                                                      |   | (221,603  | )
|Total Stockholders' Deficit                                                                                                                           |   | (47,239   | )
|                                                                                                                                                      |   |           |  
|Total Liabilities and Stockholders' Deficit                                                                                                           | $ | 4,078     |  

The accompanying notes are an integral part of these financial
statements.
F-3

---

|China Forest Energy Corp.     
|------------------------------
|(An Exploration Stage Company)
|Statements of Operations      

|                                                                               |   |            |   |   |                |   |   | For the Period |  
|------------------------------------------------------------------------------ | - | ---------- | - | - | -------------- | - | - | -------------- | -
|                                                                               |   |            |   |   |                |   |   | January 26,    |  
|                                                                               |   |            |   |   |                |   |   | 2006           |  
|                                                                               |   | Year Ended |   |   | (Inception) to |  
|                                                                               |   | April 30,  |   |   | April 30,      |  
|                                                                               |   | 2011       |   |   | 2010           |   |   | 2011           |  
|                                                                               |   |            |   |   |                |   |   |                |  
|REVENUES                                                                       | $ | -          |   | $ | -              |   | $ | -              |  
|                                                                               |   |            |   |   |                |   |   |                |  
|OPERATING EXPENSES                                                             |   |            |   |   |                |   |   |                |  
|General and
      administrative                                               |   | 42,721     |   |   | 27,188         |   |   | 217,453        |  
|Impairment of mineral property costs                                           |   | -          |   |   | -              |   |   | 3,500          |  
|Total operating expenses                                                       |   | 42,721     |   |   | 27,188         |   |   | 220,953        |  
|                                                                               |   |            |   |   |                |   |   |                |  
|Other expense                                                                  |   | 650        |   |   |                |   |   | 650            |  
|                                                                               |   |            |   |   |                |   |   |                |  
|NET LOSS                                                                       | $ | (43,371    | ) | $ | (27,188        | ) | $ | (221,603       | )
|                                                                               |   |            |   |   |                |   |   |                |  
|LOSS PER COMMON SHARE                                                          |   |            |   |   |                |   |   |                |  
|Basic and Diluted                                                              | $ | (0.00      | ) | $ | (0.00          | ) |   |                |  
|                                                                               |   |            |   |   |                |   |   |                |  
|WEIGHTED AVERAGE NUMBER OF COMMON SHARES
      OUTSTANDING  Basic and Diluted |   | 18,081,000 |   |   | 18,081,000     |   |   |                |  

The accompanying notes are an integral part of these financial
statements.
F-4

---

|China Forest Energy Corp.     
|------------------------------
|(An Exploration Stage Company)
|Statements of Cash Flows      

|                                                                                  |   |            |   |   |                |   |   | For the Period   |  
|--------------------------------------------------------------------------------- | - | ---------- | - | - | -------------- | - | - | ---------------- | -
|                                                                                  |   |            |   |   |                |   |   | from January 26, |  
|                                                                                  |   |            |   |   |                |   |   | 2006             |  
|                                                                                  |   | Year Ended |   |   | (Inception) to |  
|                                                                                  |   | April 30,  |   |   | April 30,      |  
|                                                                                  |   | 2011       |   |   | 2010           |   |   | 2011             |  
|                                                                                  |   |            |   |   |                |   |   |                  |  
|Cash flows from operating activities                                              |   |            |   |   |                |   |   |                  |  
|Net loss                                                                          | $ | (43,371    | ) | $ | (27,188        | ) | $ | (221,603         | )
|Adjustment to reconcile net loss to net cash used for operating
      activities: |   |            |   |   |                |   |   |                  |  
|Impairment of mineral
      property costs                                        |   | -          |   |   | -              |   |   | 3,500            |  
|Donated services                                                                  |   | 6,000      |   |   | 6,000          |   |   | 31,500           |  
|Donated
      rent                                                                |   | 3,000      |   |   | 3,000          |   |   | 15,750           |  
|Imputed interest                                                                  |   | 650        |   |   |                |   |   | 650              |  
|Changes in operating assets and liabilities                                       |   |            |   |   |                |   |   |                  |  
|Prepaid expenses                                                                  |   | (3,500     | ) |   | -              |   |   | (3,500           | )
|Accounts
      payable and accrued liabilities                                    |   | 317        |   |   | (3,500         | ) |   | 1,817            |  
|Net cash used in operating activities                                             |   | (36,904    | ) |   | (21,688        | ) |   | (171,886         | )
|                                                                                  |   |            |   |   |                |   |   |                  |  
|Cash flows from investing activities                                              |   |            |   |   |                |   |   |                  |  
|Mineral property costs                                                            |   | -          |   |   | -              |   |   | (3,500           | )
|Net cash used in investing activities                                             |   | -          |   |   | -              |   |   | (3,500           | )
|                                                                                  |   |            |   |   |                |   |   |                  |  
|Cash flows from financing activities                                              |   |            |   |   |                |   |   |                  |  
|Net advances from related
      party                                             |   | 7,000      |   |   | 14,000         |   |   | 46,554           |  
|Proceeds
      from note payable                                                  |   | 28,500     |   |   | -              |   |   | 28,500           |  
|Proceeds from issuance of
      common stock                                      |   | -          |   |   | -              |   |   | 100,910          |  
|Net cash provided by financing activities                                         |   | 35,500     |   |   | 14,000         |   |   | 175,964          |  
|                                                                                  |   |            |   |   |                |   |   |                  |  
|Net increase (decrease) in cash                                                   |   | (1,404     | ) |   | (7,688         | ) |   | 578              |  
|                                                                                  |   |            |   |   |                |   |   |                  |  
|Cash, beginning of period                                                         |   | 1,982      |   |   | 9,670          |   |   | -                |  
|                                                                                  |   |            |   |   |                |   |   |                  |  
|Cash, end of period                                                               | $ | 578        |   | $ | 1,982          |   | $ | 578              |  
|                                                                                  |   |            |   |   |                |   |   |                  |  
|Supplemental disclosures of cash flow
      information:                          |   |            |   |   |                |   |   |                  |  
|Interest paid                                                                     | $ | -          |   | $ | -              |   | $ | -                |  
|Income
      taxes paid                                                           | $ | -          |   | $ | -              |   | $ | -                |  
|Supplemental schedule of non-cash financing activities::                          |   |            |   |   |                |   |   |                  |  
|Capital
      contribution of shareholder loan                                    | $ | -          |   | $ | -              |   | $ | 25,554           |  

The accompanying notes are an integral part of these financial
statements.
F-5

---

|China Forest Energy Corp.                                               
|------------------------------------------------------------------------
|(An Exploration Stage Company)                                          
|Statement of Changes in Stockholders' Deficit                           
|For the period from January 26, 2006 (inception) to April
      30, 2011

Deficit**Accumulated**Additional
    
    
    
    
    
    **During the**Common Stock
    
    
    Paid-in
    
    
    **Donated**
    
    
    **Exploration**Shares
    
    
    Amount
    
    
    Capital
    
    
    **Capital**
    
    
    Stage
    
    
    TotalBalance, January 26, 2006 (inception)
    
    -
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    -Common shares issued for cash at $0.0000011 per share
    
    9,000,000
    
    
    90
    
    
    (80
    )
    
    -
    
    
    -
    
    
    10Donated rent and services
    
    -
    
    
    -
    
    
    -
    
    
    2,250
    
    
    -
    
    
    2,250Net loss for the period
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (6,062
    )
    
    (6,062
    )Balance, April 30, 2006
    
    9,000,000
    
    
    90
    
    
    (80
    )
    
    2,250
    
    
    (6,062
    )
    
    (3,802
    )Common shares issued for cash at $0.011101 per share
    
    9,081,000
    
    
    91
    
    
    100,809
    
    
    -
    
    
    -
    
    
    100,900Donated rent and services
    
    -
    
    
    -
    
    
    -
    
    
    9,000
    
    
    -
    
    
    9,000Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (66,106
    )
    
    (66,106
    )Balance, April 30, 2007
    
    18,081,000
    
    
    181
    
    
    100,729
    
    
    11,250
    
    
    (72,168
    )
    
    39,992Donated rent and services
    
    -
    
    
    -
    
    
    -
    
    
    9,000
    
    
    -
    
    
    9,000Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (39,063
    )
    
    (39,063
    )Balance, April 30, 2008
    
    18,081,000
    
    
    181
    
    
    100,729
    
    
    20,250
    
    
    (111,231
    )
    
    9,929Donated rent and services
    
    -
    
    
    -
    
    
    -
    
    
    9,000
    
    
    -
    
    
    9,000Payable waived by former president
    
    -
    
    
    -
    
    
    -
    
    
    25,554
    
    
    -
    
    
    25,554Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (39,813
    )
    
    (39,813
    )Balance, April 30, 2009
    
    18,081,000
    
    
    181
    
    
    100,729
    
    
    54,804
    
    
    (151,044
    )
    
    4,670Donated rent and services
    
    -
    
    
    -
    
    
    -
    
    
    9,000
    
    
    -
    
    
    9,000Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (27,188
    )
    
    (27,188
    )Balance, April 30, 2010
    
    18,081,000
    
    
    181
    
    
    100,729
    
    
    63,804
    
    
    (178,232
    )
    
    (13,518
    )Donated rent and services
    
    -
    
    
    -
    
    
    -
    
    
    9,000
    
    
    -
    
    
    9,000Imputed interest
    
    -
    
    
    -
    
    
    650
    
    
    -
    
    
    -
    
    
    650Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (43,371
    )
    
    (43,371
    )Balance, April 30, 2011
    
    18,081,000
    
    $
    181
    
    $
    101,379
    
    $
    72,804
    
    $
    (221,603
    )
    $
    (47,239
    )


The accompanying notes are an integral part of these financial
statements.
F-6

---

|China Forest Energy Corp.     
|------------------------------
|(An Exploration Stage Company)
|Notes to Financial Statements 
|April 30, 2011                

NOTE 1  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

China Forest Energy Corp. (the Company) was incorporated in
the State of Nevada on January 26, 2006. During 2011, the Company changed its
name from Henix Resources, Inc. to China Forest Energy Corp. The Company is an
Exploration Stage Company, as defined by Accounting Standards Codification
(ASC) 915. The Companys principal business is the acquisition, exploration
and development of mineral properties. On December 16, 2010, the Company filed
articles of merger with its wholly-owned subsidiary to change the Companys name
to China Forest Energy Corp.

Basis of Presentation

These financial statements and related notes are presented in
accordance with accounting principles generally accepted in the United States,
and are expressed in U.S. dollars. The Companys fiscal year-end is April
30.

Use of Estimates

The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The Company
regularly evaluates estimates and assumptions related to donated expenses and
deferred income tax asset valuation allowances. The Company bases its estimates
and assumptions on current facts, historical experience and various other
factors that it believes to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets
and liabilities and the accrual of costs and expenses that are not readily
apparent from other sources. The actual results experienced by the Company may
differ materially and adversely from the Companys estimates. To the extent
there are material differences between the estimates and the actual results,
future results of operations will be affected.

Earnings (Loss) Per Share

Basic earnings per share (EPS) is computed by dividing
earnings (loss) available to common shareholders (numerator) by the weighted
average number of shares outstanding (denominator) during the period. Diluted
EPS gives effect to all dilutive potential common shares outstanding during the
period using the treasury stock method and convertible preferred stock using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive. In periods where losses are
reported, the weighted-average number of common shares outstanding excludes
common stock equivalents, because their inclusion would be anti-dilutive. The
Company has no potentially diluted instruments outstanding at April 30, 2011 and
2010

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a
maturity of three months or less at the time of issuance to be cash
equivalents.

F-7

---

Income Taxes

Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amounts
expected to be realized.

Subsequent Events

The Company has evaluated subsequent events through the filing
date of this Form 10-K and has determined that there were no subsequent events
to recognize or disclose in these financial statements

Recent Accounting Pronouncements

The Company does not expect the adoption of any recently issued
accounting pronouncements to have a significant effect on its financial position
or results of operations.

NOTE 2  GOING CONCERN

These financial statements have been prepared on a going
concern basis, which implies the Company will continue to realize its assets and
discharge its liabilities in the normal course of business. Since inception, the
Company has not generated revenues and has not paid any dividends and is
unlikely to either pay dividends or generate revenues in the immediate or
foreseeable future. The continuation of the Company as a going concern is
dependent upon the continued financial support from its shareholders, the
ability of the Company to obtain necessary equity financing, the Companys
success in acquiring interests in properties that have economically recoverable
reserves, and the attainment of profitable operations. As at April 30, 2011, the
Company has a working capital deficit, generated no revenues since inception,
and has an accumulated deficit totaling $221,603 since inception. These factors
raise substantial doubt regarding the Companys ability to continue as a going
concern. These financial statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessary should the Company be unable to continue
as a going concern.

NOTE 3  RELATED PARTY TRANSACTIONS

On September 1, 2008, our former president assigned the right
to collect the debt owed by the Company for $25,554 to the current president of
the Company. On April 29, 2009, our current president waived the debt owed by
the Company totaling $25,554. The Company recognized $25,554 of debt waived as
additional paid-in capital during the year ended April 30, 2009.

As of April 30, 2011 and 2010, the Company was indebted to the
current president of the Company in the amount of $21,000 and $14,000
respectively, representing cash advances and expenses paid on behalf of the
Company. The balances consist of advances that are non-interest bearing,
unsecured and due on demand.

During the years ended April 30, 2011 and 2010, the Company
recognized $3,000 and $3,000, respectively, for donated rent and $6,000 and
$6,000, respectively, for donated services. These amounts were charged to
operations and recorded as additional paid-in capital.

F-8

---

NOTE 4  NOTES PAYABLE

On December 20, 2010, the Company obtained a loan with a
balance totaling $16,565 as of April 30, 2011 from an unrelated party. The loan
is non-interest bearing, unsecured and due on demand.

On April 1, 2011, the Company obtained a loan with a balance
totaling $4,500 paid for Dean Law Corporation legal fee retainer as of April 30,
2011 from an unrelated party. The loan is non-interest bearing, unsecured and
due on demand.

On April 13, 2011, the Company obtained a loan with a balance
totaling $4,435 as of April 30, 2011 from an unrelated party. The loan is
non-interest bearing, unsecured and due on demand.

On April 30, 2010, the Company obtained a loan with a balance
totaling $3,000 paid for W. L. MacDonald Law Corporation as of April 30, 2011
from an unrelated party. The loan is non-interest bearing, unsecured and due on
demand.

During the year ended April 30, 2011, the Company recorded
imputed interest in the amount of $650 on these non-interest bearing loans.

NOTE 5  MINERAL PROPERTY COSTS

In January 2006, the Company acquired a 100% interest in a
mineral claim located in the Province of British Columbia, Canada for $3,500.
The claim was registered in the name of the former president of the Company, who
had executed a trust agreement whereby our former president agreed to hold the
claim in trust on behalf of the Company. The cost of the mineral property was
initially capitalized. During the year ended April 30, 2009, the management of
the Company decided not to ask our former president to renew the claim on the
property when expired on January 30, 2009 as it had determined there were no
proven or probable reserves on the property. As of April 30, 2011, the Company
had fully impaired the cost of the mineral claim.

NOTE 6  COMMON STOCK

Effective December 16, 2010, the Company filed articles of
merger with its wholly-owned subsidiary to change the Companys name to China
Forest Energy Corp. and filed a certificate of change with the Nevada Secretary
of State to give effect to a forward split of the Companys authorized and
issued and outstanding shares of common stock on a nine (9) new for one (1) old
basis. Upon effect of the forward stock split, the authorized capital increased
from 100,000,000 to 900,000,000 shares of common stock and, correspondingly, the
issued and outstanding increased from 2,009,000 to 18,081,000 shares of common
stock, with a par value of $0.00001. The Companys preferred stock was
unaffected as a result of the forward split. The Companys financial statements
have been retroactively restated to incorporate the effect of the forward
split.

On January 12, 2011, the Company enter into share exchange
agreement with Zhejiang Forest Bamboo Tec Co., Ltd. a Peoples Republic of China
corporation and Forest Energy Co., Ltd., a British Virgin Islands corporation.
Forest Energy Co., Ltd. is the registered and beneficial owner of all of the
issued and outstanding common shares in the capital of Sinoport Enterprises
Limited, a British Virgin Islands corporation (Sinoport). Sinoport is the sole
owner of all share capital of USCNHK Group Limited, a Hong Kong corporation,
(USCNHK), and USCNHK is the owner of 95%, or 76,000,000 shares, of the share
capital of Zhejiang Forest Bamboo Tec Co., Ltd. The Company has agreed to issue
15,919,000 common shares to the Forest Energy Co., Ltd.s shareholder as
consideration for the purchase 50,000 common share of Zhejiang Forest Bamboo Tec
Co., Ltd. Upon closing of the share exchange, Yongfu Zhu, one of the Companys
current officers and directors, will cancel 9,000,000 shares of the Companys
common stock held in his name and the Company will have no more than 25,000,000
shares of common stock issued and outstanding. As of August 4,
2011, this share exchange agreement has not been closed because the parties
involved are still negotiating the terms.

F-9

---

NOTE 7  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. In assessing the
recoverability of deferred tax assets, we determine whether it is more likely
than not that some portion or all of the deferred tax assets will be realized. A
full valuation allowance against our deferred tax asset was recognized at April
30, 2011 and 2010 due to our uncertainty as to the utilization of the deferred
tax asset in the foreseeable future. The net change in the total valuation
allowance for the years ended April 30, 2011 and 2010 was an increase of
approximately $13,800 and $9,000, respectively. At April 30, 2011, for federal
income tax and alternative minimum tax reporting purposes, the Company had
approximately $220,000 of unused net operating losses available for carryforward
to future years. The benefit from the net operating loss carryforwards will
begin to expire in the year 2026 through 2031.

At April 30, 2011 and 2010, the net deferred tax asset
consisted of the following:

2011
    
    
    2010Deferred tax asset:Net operating loss carryforwards
    $
    74,800
    
    $
    61,000Less: valuation allowance
    
    (74,800
    )
    
    (61,000
    )Net deferred tax asset
    $
    -
    
    $
    -


Our effective tax rate applicable to continuing operations is
as follows:

Year EndedApril 30,
    
    
    April 30,2011
    
    
    2010Expected tax rate
    
    (34)%
    
    
    (34)%Change in valuation allowance
    
    34%
    
    
    34%Income tax provision (benefit)
    
    -%
    
    
    -% F-10


---

|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH
      ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|------- | -------------------------------------------------------------------------------------------

There have been no disagreements
on accounting and financial disclosures from the inception of our company
through the date of this Form 10-K. Our financial statements for the period from
inception to April 30, 2011, included in this report have been audited by GBH CPAs, PC at 6002 Rogerdale, Suite 500, Houston, Texas 77072 United States of America, as set forth in this annual report.

|ITEM 9A. | CONTROLS AND PROCEDURES.
|-------- | ------------------------

Evaluation of Disclosure Controls and
Procedures

We maintain disclosure controls
and procedures, as such term is defined in Rule 13a-15(e) under the Securities
Exchange Act of 1934 (the Exchange Act), that are designed to ensure that
information required to be disclosed in our Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission rules and forms, and that such information is
accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure. We conducted an evaluation (the Evaluation),
under the supervision and with the participation of our Chief Executive Officer
(CEO) and Chief Financial Officer (CFO), of the effectiveness of the design
and operation of our disclosure controls and procedures (Disclosure Controls)
as of the end of the period covered by this report pursuant to Rule 13a-15 of
the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our
Disclosure Controls were not effective as of the end of the period covered by
this report due to the material weaknesses described in Management's Report on
Internal Control over Financial Reporting below.

Limitations on the Effectiveness of Controls

Our management, including our CEO
and CFO, does not expect that our Disclosure Controls and internal controls over
financial reporting will prevent all errors and all fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of a simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management or board override
of the control.

The design of any system of
controls also is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions; over time,
controls may become inadequate because of changes in conditions, or the degree
of compliance with the policies or procedures may deteriorate.

19

---

Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control

There have been no changes in our
internal control over financial reporting during the year ended April 30, 2011
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting

CEO and CFO Certifications

Appearing immediately following
the Signatures section of this report there are Certifications of the CEO and
the CFO. The Certifications are required in accordance with Section 302 of the
Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this
report, which you are currently reading is the information concerning the
Evaluation referred to in the Section 302 Certifications and this information
should be read in conjunction with the Section 302 Certifications for a more
complete understanding of the topics presented.

Managements Report on Internal Control over Financial
Reporting

Our management is responsible for
establishing and maintaining adequate internal control over financial reporting.
Under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, we conducted an
evaluation of the effectiveness of our internal control over financial reporting
as of April 30, 2011 using the criteria established in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO).

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 Companys annual or interim financial statements will not be
prevented or detected on a timely basis. In its assessment of the effectiveness
of internal control over financial reporting as of April 30, 2011, the Company
determined that there were control deficiencies that constituted material
weaknesses, as described below.

1. We do not employ an Audit Committee  While not being
legally obligated to have an audit committee, it is managements view that such
a committee, including a financial expert member, is an utmost important entity
level control over the Companys financial statement. Currently the Board of
Directors acts in the capacity of the Audit Committee, consisting of two
members, one who is not independent of management as he is the sole officer and
the other member lacks sufficient financial expertise for overseeing financial
reporting responsibilities.

2. Dual signatures of cheques  we only have one cheque signing
authority. Management feels that the lack of dual signatures on cheques can
increase the likelihood of misappropriation of assets given the fact that there
is only one person with signing authority.

3. We did not maintain proper segregation of duties for the
preparation of our financial statements As of April 30, 2011 the majority of
the preparation of financial statements was carried out by one person. In
addition, the Company currently only has one officer and director having
oversight on all transactions. This has resulted in several deficiencies
including:

20

---

a)Significant,
non-standard journal entries were prepared and approved by the same person,
without being checked or approved by any other personnel within the Company. In
addition, approval of significant transactions was not documented as approved by
the Companys Board of Directors.

b)Lack of control over
preparation of financial statements and proper application of accounting
policies.

Accordingly, the Company
concluded that these control deficiencies resulted in a reasonable possibility
that a material misstatement of the annual or interim financial statements will
not be prevented or detected on a timely basis by the companys internal
controls.

As a result of the material
weaknesses described above, management has concluded that the Company did not
maintain effective internal control over financial reporting as of April 30,
2011 based on criteria established in Internal ControlIntegrated Framework
issued by COSO.

GBH, CPAs, PC, an independent registered public accounting firm, was not
required to and has not issued a report concerning the effectiveness of our
internal control over financial reporting as of April 30, 2011.

Continuing Remediation Efforts to address deficiencies in
Companys Internal Control over Financial Reporting

The Company is currently engaged in
the review, documentation and remediation of its disclosure controls and
procedures. Once the Company is engaged in a business of merit and has
sufficient personnel available, then our Board of Directors, in particular and
in connection with the aforementioned deficiencies, will establish the following
remediation measures:

|1. | Our Board of Directors will nominate an audit committee
      and audit committee financial expert.                                                                                                                                                                 
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                     
|2. | We will appoint additional personnel to assist with the
      preparation of the Companys financial statements; which will allow for
      proper segregation of duties, as well as additional manpower for proper
      documentation.                            
|   |                                                                                                                                                                                                                                                                     
|3. | Our Board of Directors will appoint a member of
      management to act as the secondary authorized signatory on the Companys
      bank account; to decrease the likelihood of misappropriation of the
      Companys assets.                                    
|   |                                                                                                                                                                                                                                                                     
|4. | We will establish policies to ensure that all significant
      transactions resulting in non-standard journal entries are reviewed and
      approved by the Companys Board of Directors and that approval be
      documented in the Companys corporate records.

|ITEM 9B. | OTHER INFORMATION
|-------- | -----------------

None.

21

---

PART III

|ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
      CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
      ACT.
|-------- | ----------------------------------------------------------------------------------------------------------------------------

Officers and Directors

Each of our directors serves
until his or her successor is elected and qualified. Each of our officers is
elected by the board of directors to a term of one (1) year and serves until his
or her successor is duly elected and qualified, or until he or she is removed
from office. The board of directors has no nominating, auditing or compensation
committees.

The name, address, age and position of
our sole officer and director is set forth below:

Name and Address
    Age
    Position(s)Zhengyu Wang
    42
    president, principal executive officer, the chairman of
      the board of directors and member of the board of directorsYongfu Zhu
    42
    treasurer, secretary, principal financial officer,
      principal accounting officer and member of the board of directors


Mr. Wang and Mr. Zhu will serve
until our next annual meeting of the stockholders. The Board of Directors elects
officers and their terms of office are at the discretion of the Board of
Directors.

Background of Officers and Directors

Zhengyu Wang, President

On January 6, 2011, Mr. Zhengyu
Wang was appointed president, principal executive officer and the Chairman of
the board of directors. Since January 1998, Mr. Wang has been Chairman of Forest
Group Co., Ltd., a parent company of China Forest Bamboo Tec Co., Ltd. Since
October 2002, Mr. Wang has been Chairman of the Board and CEO of China Forest
Bamboo Tec Co., Ltd. His responsibilities include overseeing day-to-day
operations of Zhejiang Forest Bamboo Tec Co., Ltd., a company that produces and
distributes carbonized bamboo for a variety of purposes. Mr. Wang is a graduate
of Zhejiang University (formerly known as Hangzhou University) in Hangzhou,
Zhejiang Province, graduating with a degree in Biology in July 1990. Mr. Wang
earned an Executive MBA from Fudan University in Shanghai in June 2005.

Yongfu Zhu, President

On September 5, 2008, Mr. Yongfu
Zhu was appointed president, principal executive officer, treasurer, principal
financial officer, principal accounting officer and secretary. Since August
2004, Mr. Zhu has been director, president and chief executive officer of APEX
Pacific International Investments Limited, a BVI company. Apex is engaged in the
business of international investments. Since September 1998, Mr. Zhu has been an
education consultant and instructor for Xinjian Middle School located in Zhejiang, China. On January 6, 2011, Mr.
Yongfu Zhu resignation as Companys President and CEO, Mr. Zhu will remain as
Companys director, CFO, Treasurer and Secretary.

22

---

Involvement in Certain Legal Proceedings

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

1. A petition under the Federal bankruptcy laws or any state
insolvency law was filed by or against, or a receiver, fiscal agent or similar
officer was appointed by a court for the business or property of such person, or
any partnership in which he was a general partner at or within two years before
the time of such filing, or any corporation or business association of which he
was an executive officer at or within two years before the time of such filing;

2. Such person was convicted in a criminal proceeding or is a
named subject of a pending criminal proceeding (excluding traffic violations and
other minor offenses);

3. Such person was the subject of any order, judgment, or
decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him from, or
otherwise limiting, the following activities:

| | i.   | Acting as a futures commission merchant, introducing
      broker, commodity trading advisor, commodity pool operator, floor broker,
      leverage transaction merchant, any other person regulated by the Commodity
      Futures Trading Commission, or an associated person of any of the
      foregoing, or as an investment adviser, underwriter, broker or dealer in
      securities, or as an affiliated person, director or employee of any
      investment company, bank, savings and loan association or insurance
      company, or engaging in or continuing any conduct or practice in
      connection with such activity
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ii.  | Engaging in any type of business practice; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | iii. | Engaging in any activity in connection with the purchase
      or sale of any security or commodity or in connection with any violation
      of Federal or State securities laws or Federal commodities
  laws;                                                                                                                                                                                                                                                                                                                                                                                                                           

4. Such person was the subject of any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any Federal or State
authority barring, suspending or otherwise limiting for more than 60 days the
right of such person to engage in any activity described in paragraph (f)(3)(i)
of this section, or to be associated with persons engaged in any such
activity;

5. Such person was found by a court of competent jurisdiction
in a civil action or by the Commission to have violated any Federal or State
securities law, and the judgment in such civil action or finding by the
Commission has not been subsequently reversed, suspended, or vacated;

6. Such person was found by a court of competent jurisdiction
in a civil action or by the Commodity Futures Trading Commission to have
violated any Federal commodities law, and the judgment in such civil action or
finding by the Commodity Futures Trading Commission has not been subsequently
reversed, suspended or vacated;

23

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7. Such person was the subject of, or a party to, any Federal
or State judicial or administrative order, judgment, decree, or finding, not
subsequently reversed, suspended or vacated, relating to an alleged violation
of:

| | i.   | Any Federal or State securities or commodities law or
      regulation; or                                                                                                                                                                                                                                                
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                           
| | ii.  | Any law or regulation respecting financial institutions
      or insurance companies including, but not limited to, a temporary or
      permanent injunction, order of disgorgement or restitution, civil money
      penalty or temporary or permanent cease-and-desist order, or removal or
      prohibition order; or
| |      |                                                                                                                                                                                                                                                                                                                           
| | iii. | Any law or regulation prohibiting mail or wire fraud or
      fraud in connection with any business entity; or                                                                                                                                                                                                            

8. Such person was the subject of, or a party to, any sanction
or order, not subsequently reversed, suspended or vacated, of any
self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act
(15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29)
of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange,
association, entity or organization that has disciplinary authority over its
members or persons associated with a member.

Committees of the Board

All proceedings of our board of directors were conducted by
resolutions consented to in writing by all the directors and filed with the
minutes of the proceedings of the directors. Such resolutions consented to in
writing by the directors entitled to vote on that resolution at a meeting of the
directors are, according to the corporate laws of the state of Nevada and the
bylaws of our company, as valid and effective as if they had been passed at a
meeting of the directors duly called and held.

Audit Committee and Charter

Currently our audit committee consists of our entire board of
directors. We have determined that we do not have a member of the audit
committee in the capacity as an independent director.

Our board of directors, acting as our audit committee, is
governed by an Audit Committee Charter adopted by our board of directors.

Nominating Committee and Charter

We currently do not have nominating committee or other
committees performing similar functions. There has not been any defined policy
or procedure requirements for shareholders to submit recommendations or
nomination for directors.

Audit Committee and Audit Committee Financial Expert

Our board of directors has determined that none of the members
of our audit committee qualifies as an "audit committee financial expert" as
defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent" as the
term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange
Act of 1934, as amended.

24

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We believe that the members of our board of directors are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated any material revenues to date. In addition, we
currently do not have nominating, compensation or committees performing similar
functions nor do we have a written nominating, compensation. Our board of
directors does not believe that it is necessary to have such committees because
it believes the functions of such committees can be adequately performed by our
board of directors.

Code of Ethics

We have adopted a corporate code
of ethics. We believe our code of ethics is reasonably designed to deter
wrongdoing and promote honest and ethical conduct; provide full, fair, accurate,
timely and understandable disclosure in public reports; comply with applicable
laws; ensure prompt internal reporting of code violations; and provide
accountability for adherence to the code.

Disclosure Committee and Charter

We have a disclosure committee
and disclosure committee charter. The disclosure committee is comprised of all
of our officers and directors. The purpose of the committee is to provide
assistance to the Chief Executive Officer and the Chief Financial Officer in
fulfilling their responsibilities regarding the identification and disclosure of
material information about us and the accuracy, completeness and timeliness of
our financial reports.

Compliance with Section 16(a) of the Securities Exchange Act
of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires
our executive officers and directors and persons who own more than 10% of our
common stock to file with the Securities and Exchange Commission initial
statements of beneficial ownership, reports of changes in ownership and annual
reports concerning their ownership of our common stock and other equity
securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and
greater than 10% shareholders are required by the SEC regulations to furnish us
with copies of all Section 16(a) reports that they file.

Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that during fiscal year ended April 30, 2011, all filing requirements applicable
to our officers, directors and greater than 10% percent beneficial owners were
complied with, with the exception of the following:

Name
    Number of Late
      Reports
    Number of
      Transactions Not Reported on a Timely
      Basis
    Failure to
      File Required FormsZhengyu Wang
    1(1)
    1
    N/AYongfu Zhu
    1(1)
    1
    N/A


|(1) | The director or officer was late filing a Form 3, Initial
      Statement of Beneficial Ownership.
|--- | --------------------------------------------------------------------------------------------------

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|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

The particulars of the compensation paid to the following
persons:

|                                                                                                                                                                                                                                                                                                                                                                          | o | our principal executive officer;                                                                                                                                                                                                              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                          | o | each of our two most highly compensated executive
      officers who were serving as executive officers at the end of the years
      ended April 30, 2011 and 2010; and                                                                      
|                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                          | o | up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual
      was not serving as our executive officer at the end of the years ended
      April 30, 2011 and 2010,
|                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                                                                                                                                               
|who we will collectively refer to as the named executive
      officers of our company, are set out in the following summary compensation
      table, except that no disclosure is provided for any named executive
      officer, other than our principal executive officers, whose total
      compensation did not exceed US$100,000 for the respective fiscal year:

SUMMARY
      COMPENSATION TABLEName and
      Principal Position
    Year
    Salary
      ($)
    Bonus
      ($)
    Stock
      Awards ($)
    Option
      Awards ($)
    Non-Equity Incentive
      Plan Compensa- tion ($)
    Change in Pension
      Value and Nonqualified Deferred
      Compensation Earnings ($)
    All Other
      Compensa- tion ($)
    Total
      ($)Zhengyu Wang(1)President, Chief Executive Officer, Chairman
      and Director
    2011 2010
    Nil N/A
    Nil N/A
    Nil N/A
    Nil N/A
    Nil N/A
    Nil N/A
    Nil N/A
    Nil N/AYongfu Zhu(2)Chief
      Financial Officer, Treasurer, Secretary and
      Director and Former President, and Chief
      Executive Officer
    2011 2010
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil


|(1) | Mr. Wang was appointed president, chief executive officer
      and director of our company on January 6, 2011.                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Mr. Zhu was appointed president, chief executive officer,
      chief financial officer, treasurer, secretary and director on September 5,
      2008 and resigned from his position as president and chief executive
      officer on January 6, 2011.

Other than as set out below, there are no arrangements or
plans in which we provide pension, retirement or similar benefits for
directors or executive officers. Our directors and executive officers may
receive share options at the discretion of our board of directors in the future.
We do not have any 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 share options may be granted at the discretion
of our board of directors.

26

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Stock Option Plan

To date, we have not adopted a stock option plan.

2011 Grants of Plan-Based Awards

There were no equity or non-equity awards granted to the named
executives in 2011.

Outstanding Equity Awards at Fiscal Year End

There were no outstanding equity awards as at April 30, 2011.

Option Exercises and Stock Vested

During our fiscal year ended April 30, 2011, there were no
options exercised by our named officers.

Compensation of Directors

We do not have any agreements for compensating our directors
for their services in their capacity as directors, although such directors are
expected in the future to receive stock options to purchase shares of our common
stock as awarded by our board of directors.

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.

Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management

None of our directors or executive officers or any associate or
affiliate of our company during the last two fiscal years, is or has been
indebted to our company by way of guarantee, support agreement, letter of credit
or other similar agreement or understanding currently outstanding.

Family Relationships

There are no family relationships between any of our executive
officers or directors.

|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
      OWNERS AND MANAGEMENT
|-------- | --------------------------------------------------------------------

The following table sets forth, as of July 29, 2011, certain
information with respect to the beneficial ownership of our common shares by
each shareholder known by us to be the beneficial owner of more than 5% of our
common shares, as well as by each of our current directors and executive
officers as a group. Each person has sole voting and investment power with
respect to the shares of common stock, except as otherwise indicated. Beneficial
ownership consists of a direct interest in the shares of common stock, except as
otherwise indicated.

27

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Name and Address
      **of Beneficial** Owner
    Amount and Nature of
      Beneficial Ownership
    Percentage of
      Class(1)Zhengyu Wang #41 Huangcheng Road
      Xinjian Township Jinyun County Zhejiang, P.R. China
    Nil
    0%Yongfu Zhu #41 Huangcheng
      Road Xinjian Township Jinyun County Zhejiang, P.R. China
    9,810,000
    54.25%Directors and Officers as a Group
    
    54.25%


| | (1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights. As a result, the percentage of outstanding shares of any person as
      shown in this table does not necessarily reflect the persons actual
      ownership or voting power with respect to the number of shares of common
      stock actually outstanding on July 29, 2011. As of July 29, 2011, there
      were 18,081,000 shares of our companys common stock issued and
      outstanding.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Changes in Control

We are unaware of any contract or other arrangement or
provisions of our Articles or Bylaws the operation of which may at a subsequent
date result in a change of control of our company. There are not any provisions
in our Articles or Bylaws, the operation of which would delay, defer, or prevent
a change in control of our company.

|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS
|-------- | ----------------------------------------------------

We currently act with two directors, consisting of Zhengyu Wang
and Yongfu Zhu.

We have determined that we do not have independent directors,
as that term is used in Rule 4200(a)(15) of the Rules of National Association of
Securities Dealers.

Currently our audit committee consists of our entire board of
directors. We currently do not have nominating, compensation committees or
committees performing similar functions. There has not been any defined policy
or procedure requirements for shareholders to submit recommendations or
nomination for directors.

Our board of directors has determined that none of our
directors qualify as an audit committee financial expert as defined in as
defined in Item 407(d)(5)(ii) of Regulation S-K.

28

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From inception to present date, we believe that the members of
our audit committee and the board of directors have been and are collectively
capable of analyzing and evaluating our financial statements and understanding
internal controls and procedures for financial reporting.

|ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES
|-------- | --------------------------------------

(1) Audit Fees

The aggregate fees billed for
each of the last two fiscal years for professional services rendered by the
principal accountant for our audit of annual financial statements and review of
financial statements included in our Form 10-Qs or services that are normally
provided by the accountant in connection with statutory and regulatory filings
or engagements for those fiscal years was:

2011
    $ 0
    Kempisty & Company CPA, P.C.2010
    $ 3,000
    Kempisty & Company CPA, P.C.2011
    $ 5,000
    GBH CPAs, PC2010
    $ 6,500
    GBH CPAs, PC


(2) Audit-Related Fees

The aggregate fees billed in each
of the last two fiscal years for assurance and related services by the principal
accountants that are reasonably related to the performance of the audit or
review of our financial statements and are not reported in the preceding
paragraph:

2011
    $ 0
    Kempisty & Company CPA, P.C.2010
    $ 0
    Kempisty & Company CPA, P.C.2011
    $ 0
    GBH CPAs, PC2010
    $ 0
    GBH CPAs, PC


(3) Tax Fees

The aggregate fees billed in each
of the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning was:

2011
    $ 0
    Kempisty & Company CPA, P.C.2010
    $ 0
    Kempisty & Company CPA, P.C.2011
    $ 0
    GBH CPAs, PC2010
    $ 0
    GBH CPAs, PC


(4) All Other Fees

The aggregate fees billed in each
of the last two fiscal years for the products and services provided by the
principal accountant, other than the services reported in paragraphs (1), (2),
and (3) was:

2011
    $ 0
    Kempisty & Company CPA, P.C.2010
    $ 0
    Kempisty & Company CPA, P.C.2011
    $ 0
    GBH CPAs, PC2010
    $ 0
    GBH CPAs, PC


29

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(5) Our audit committees
pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule
2-01 of Regulation S-X were that the audit committee pre-approve all accounting
related activities prior to the performance of any services by any accountant or
auditor.

(6) The percentage of hours
expended on the principal accountants engagement to audit our financial
statements for the most recent fiscal year that were attributed to work
performed by persons other than the principal accountants full time, permanent
employees was 0%.

PART IV

|ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
|-------- | ----------------------------------------

|Exhibit | Description                                                                                                                                            
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     |                                                                                                                                                        
|(3)     | Articles of
        Incorporation and Bylaws                                                                                                           
|3.1     | Articles of Incorporation (incorporated
        by reference to our Registration Statement on Form SB-2 filed on August
        17, 2006)              
|3.2     | Bylaws (incorporated
        by reference to our Registration Statement on Form SB-2 filed on August
        17, 2006)                                 
|3.3     | Articles of Merger (incorporated
        by reference to our Current Report on Form 8-K filed on December 23, 2010)                                    
|3.4     | Certificate of
        Change (incorporated by reference to our Current Report on Form 8- K filed
        on December 23, 2010)                        
|(10)    | Material Contracts                                                                                                                                     
|10.1    | Share Exchange
        Agreement dated January 12, 2011 (incorporated by reference to our Current
        Report on Form 8-K filed on January 18, 2011)
|(14)    | Code of Ethics                                                                                                                                         
|14.1    | Code of Ethics
        (incorporated by reference to our Annual Report on Form 10-KSB filed on
        July 30, 2007)                                  
|(31)    | Rule 13a-14(a)/15d-14(a) Certifications                                                                                                                
|31.1*   | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of principal executive
        officer.                                             
|31.2*   | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of principal financial
        officer.                                             

(32)
      Section 1350 Certifications32.1*
      Section 906 Certifications
        under Sarbanes-Oxley Act of 2002 of principal executive officer.32.2*
      Section
        906 Certifications under Sarbanes-Oxley Act of 2002 of principal financial
        officer.


30

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|                      |  | CHINA FOREST ENERGY CORP.                 
|--------------------- |  | ------------------------------------------
|                      |  | (Registrant)                              
|                      |  |                                           
|Dated: August 4, 2011 |  | /s/ Zhengyu Wang                          
|                      |  | Zhengyu Wang                              
|                      |  | President, Chief Executive Officer and    
|                      |  | Director                                  
|                      |  | (Principal Executive Officer)             
|                      |  |                                           
|Dated: August 4, 2011 |  | /s/ Yongfu Zhu                            
|                      |  | Yongfu Zhu                                
|                      |  | Treasurer, Secretary and Director         
|                      |  | (Principal Financial Officer and Principal
|                      |  | Accounting Officer)                       

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

|Dated: August 4, 2011 |  | /s/ Zhengyu Wang                          
|--------------------- |  | ------------------------------------------
|                      |  | Zhengyu Wang                              
|                      |  | President, Chief Executive Officer and    
|                      |  | Director                                  
|                      |  | (Principal Executive Officer)             
|                      |  |                                           
|                      |  |                                           
|Dated: August 4, 2011 |  | /s/ Yongfu Zhu                            
|                      |  | Yongfu Zhu                                
|                      |  | Treasurer, Secretary and Director         
|                      |  | (Principal Financial Officer and Principal
|                      |  | Accounting Officer)                       

---