ITEM 8.01 OTHER EVENTS As previously reported, China Direct Trading Corporation ("China Direct") entered into a Letter of Intent on 13 July 2006 with a minority investment group to establish a new majority-owned subsidiary (to be named "Complete Power Solutions of Miami, LLC" (A Florida limited liability company)) ("CPSM"). China Direct is still in the process of finalizing the structure and negotiations for the formation of CPSM, which did not commence operations as anticipated in mid-August 2006. Currently, the final structure of the relationship with CPSM would have CPSM operating as a subsidiary of Complete Power Solutions, LLC, a Florida limited liability company and a 51%-owned subsidiary of China Direct, ("CPS") rather than as a direct, wholly-owned subsidiary of China Direct. This alternative structure is being pursued because CPSM and CPS anticipate working closely together on sale of commercial and residential standby power generators as well as possible other, related businesses and CPS being involved in and responsible for more of CPSM operations than initially anticipated by China Direct. This proposed cooperation between CPSM and CPS argues for, in the opinion of China Direct and CPS, for CPSM to operate under CPS. China Direct anticipates that CPSM, as a subsidiary of CPS, will commence operations in late September 2006 or early October 2006.
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CEO Exchanges Common Stock for Series H Prefered Stock Monday September 11, 7:20 am ET
COOPER CITY, FL--(MARKET WIRE)--Sep 11, 2006 -- China Direct Trading Corporation, a Florida corporation (OTC BB:CHDT.OB - News) (CHDT) announced today that it had entered into an agreement with Howard Ullman, CHDT Chief Executive Officer and President, whereby Mr. Ullman agreed to exchange 20 million of his shares of CHDT Common Stock for 20 million shares of a newly-created class of Series H Preferred Stock, $0.10 par value. The sole purpose of the transaction was to reduce the issued and outstanding shares of Common Stock. The Series H Stock provides for the same voting rights and has equal liquidation and dividend distribution rights as the Common Stock. The Series H Stock has no redemption or exchange rights, but is convertible into shares of Common Stock on a one for one basis upon demand of the shareholder. The exchange should be consummated on or before September 15th, 2006. China Direct (www.chdt.us) is a holding company engaged through its operating subsidiaries in the following business lines: Overseas Building Supply (OBS) is engaged in manufacturing, distribution and logistics of building materials including but not limited to generators, roof tiles, interior doors, and insulation materials. CPS (www.completepower247.com) is a majority-owned subsidiary engaged in turnkey solutions for standby commercial and residential power generation. Souvenir Direct Inc. (SDI) is engaged in product development, manufacturing, distribution, logistics and product placement into mass retail of souvenir and gift items several countries. None of the web site URLs listed in this press release are incorporated into or are part of this press release.
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