SOURCE: China Direct Trading Corp.

April 18, 2007 10:22 ET

China Direct 2006 Gross Revenues up 60 Percent Over 2005

Capstone Subsidiary Has $300,000 Gross Income in Fourth Quarter

FT. LAUDERDALE, FL -- (MARKET WIRE) -- April 18, 2007 -- China Direct Trading Corporation (OTCBB: CHDT) (Company), a trading company focused on placement of consumer products into the U.S. mass retail, today filed its form 10-KSB for FY2006.

For the years ended December 31, 2006 and 2005, the Company had gross revenues of approximately $1,525,694 and $911,583, respectively, an increase of approximately $614,111 or 60% year-to-year. The increase in revenues is partly due to the acquisition of Capstone Industries, which generated gross revenues of over $800,000 in the fourth quarter. The Company reflected a gain of $149,424 on the disposal of its 51% interest in Complete Power Solutions in the fourth quarter of FY 2006 and narrowed its net loss for the year from a loss of $733,571 in 2005 to a loss of $79,121 in 2006.

Cost of sales of was $862,654 in 2006 and $658,084 in 2005. Gross margins increased from $253,499 or 27% in 2005 to $663,040 or 43% in 2006. Operating expenses dropped 14% from $971,741 in 2005 to $848,695 in 2006 while general and administrative expenses increased approximately $30,000 or 17%, from $178,233 in 2005 to $209,037 in 2006. The results reflect increasing margins and lower operating costs due to the acquisition Capstone Industries and consolidation of wholly owned subsidiary Souvenir Direct Inc. into wholly owned Capstone.

Howard Ullman, CEO and President of China Direct Trading Corp., said, "China Direct will continue its current plan of enhancing shareholder value through better financial performance of its core business, the addition of products and markets, both through internal expansion and acquisitions of companies. We are currently working on a number of new product launches which we hope will accelerate revenue growth in FY 2007. We will discuss details during our conference call next Monday, April 23rd."

Balance Sheet and Consolidated Statement of Operations Financial Tables Follow:

            CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS



                                                     Restated
                                   For the Year    For the Year
                                       Ended           Ended
                                   December 31,    December 31,
                                       2006            2005
                                   -------------   -------------
Revenues                           $   1,525,694   $     911,583
Cost of Sales                           (862,654)       (658,084)
                                   -------------   -------------
    Gross Profit                         663,040         253,499
                                   -------------   -------------

Operating Expenses:
  Sales and marketing                    122,276          15,998
  Compensation                           237,907         404,580
  Professional fees                      193,073          92,930
  Consulting                              86,402         252,000
   Legal settlements                           -          28,000
  Other General and administrative       209,037         178,233
                                   -------------   -------------
     Total Operating Expenses            848,695         971,741
                                   -------------   -------------

Net Operating Income (Loss)             (185,655)       (718,242)
                                   -------------   -------------

Other Income (Expense):
  Interest expense                       (52,356)        (15,347)
  Interest income                          9,466              18
                                   -------------   -------------
     Total Other Income (Expense)        (42,890)        (15,329)
                                   -------------   -------------

Net Income (Loss) from continuing
 operations                             (228,545)       (733,571)

Discontinued Operations
   Income (Loss) from discontinued
    operations                           149,424               -
                                   -------------   -------------

Net Income (Loss)                  $     (79,121)  $    (733,571)
                                   =============   =============

Income (Loss) per Common Share
   Continuing operations           $           -   $           -
   Discontinued operation                      -               -
                                   -------------   -------------
   Net Income (Loss)               $           -   $           -
                                   =============   =============

Weighted average shares
 outstanding                         543,237,156     525,402,195
                                   =============   =============




            CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS



                                                     Restated
                                   December 31,    December 31,
                                       2006            2005
                                   -------------   -------------
Assets:

Current assets:
   Cash                            $     198,084   $       9,090
   Accounts receivable - net             560,475           4,000
   Inventory                              69,895          11,760
   Deposit on inventory                   19,569               -
   Prepaid expense                        16,162               -
   Note receivable from former
    subsidiary - short term              202,150               -
                                   -------------   -------------

     Total Current Assets              1,066,335          24,850
                                   -------------   -------------

Fixed assets:
   Computer equipment                      1,632               -
   Computer software                       3,790               -
   Machinery and equipment               100,528               -
   Furniture and fixtures                  4,965           4,965
   Less: Accumulated Depreciation        (80,571)         (2,132)
                                   -------------   -------------

     Total Fixed Assets                   30,344           2,833
                                   -------------   -------------

Other non-current assets:
   Note receivable from former
    subsidiary - long term               225,560               -
   Goodwill                            1,936,020               -
   Deposits                               16,775           1,775
                                   -------------   -------------

      Total other non-current
       assets                          2,178,355           1,775
                                   -------------   -------------

         Total assets              $   3,275,034   $      29,458
                                   =============   =============




            CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                                (Continued)




                                                     Restated
                                   December 31,    December 31,
                                       2006            2005
                                   -------------   -------------
Liabilities and Stockholders’
 Deficit:
Current liabilities:
   Accounts payable and accrued
    expenses                       $     416,539   $     376,849
   Customer deposits                           -          24,891
   Due to related parties                400,000         300,000
   Notes and loans payable to
    related parties - current
    maturities                           726,759          16,011
                                   -------------   -------------

     Total current liabilities         1,543,298         717,751
                                   -------------   -------------

Non-current liabilities
   Notes and loans payable to
    related parties                      767,589               -
   Investor loans payable                 54,038               -
                                   -------------   -------------

     Total non-current liabilities       821,627               -
                                   -------------   -------------

     Total Liabilities                 2,364,925         717,751
                                   -------------   -------------

Stockholders' Deficit:
   Preferred Stock, Series A, par
    value $.001 per share
    Authorized 100,000,000
    shares, Issued 607,000 at
    December 31, 2006 and 8,000
    shares at December 31, 2005              607               8
   Preferred Stock, Series B, par
    value $.10 per share
    Authorized 100,000,000
    shares, Issued 1,193,769 at
    December 31, 2006 and -0- at
    December 31, 2005                    119,377               -
   Common Stock, par value $.0001
    per share Authorized
    600,000,000 shares, Issued
    536,406,750 shares at December
    31, 2006 and 543,122,028
    shares at December 31, 2005           53,642          54,313
   Related party receivable           (1,775,864)              -
   Additional paid-in capital          4,166,747         832,665
   Accumulated deficit                (1,654,400)     (1,575,279)
                                   -------------   -------------

     Total Stockholders' Deficit         910,109        (688,293)
                                   -------------   -------------

     Total Liabilities and
      Stockholders’ Deficit        $   3,275,034   $      29,458
                                   =============   =============


About China Direct: China Direct (http://www.chdt.us) is a holding company engaged through its operating subsidiaries in the following business lines: Capstone Industries, Inc. (www.capstoneindustries.com) innovative designer, manufacturer, importer, distributor and holder of several patents in the consumer book light and multi task lighting categories and is also engaged in product development, manufacturing, distribution, logistics and product placement to importers, theme parks, and mass retail of souvenirs, gifts, and consumer products. Overseas Building Supply (OBS) is engaged in distribution of building materials including but not limited to roof tiles, interior doors, and insulation materials.

FORWARD-LOOKING STATEMENTS: This press release, including the financial information that follows, contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995, as amended. These statements are based on the Company's and its subsidiaries' current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include statements regarding product development, new product distribution efforts, anticipated success or basis for optimism about the potential of new business expansion efforts, product potential or financial performance. The fact that CHDT seeks or consummates investments in or acquisitions of other companies or undertakes business development efforts does not mean that such transactions or efforts will favorably affect CHDT's business or financial conditions -- in general or as forecasted. In fact, investments and acquisitions as well as business development efforts could have an adverse impact on CHDT. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. CHDT undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this press release and risks associated with any investment in CHDT, which is a small business concern and a "penny stock company" and, as such, a highly risky investment suitable for only those who can afford to lose such investment, should be evaluated together with the many uncertainties that affect CHDT's business, particularly those mentioned in the cautionary statements in current and future CHDT's SEC Filings, which statements CHDT incorporates by reference herein.

Contact Information

  • Contact:
    China Direct
    Rich Schineller
    Tel: +1-646-257-3902
    rich@chdt.us