SOURCE: China Direct Trading Corp.

October 10, 2006 13:08 ET

Souvenir Direct and Capstone Industries to Consolidate

COOPER CITY, FL -- (MARKET WIRE) -- October 10, 2006 --China Direct Trading Corp. (OTCBB: CHDT) announced today that the Company's wholly owned subsidiaries, Souvenir Direct Inc. (SDI) and Capstone Industries, Inc. (CII), will consolidate into one company which will operate under "Capstone Industries, Inc." China Direct expects the consolidation to be consummated within the next 30 days. The consolidation will be achieved by an asset transfer from SDI to CII and then the dissolution of SDI.

"Consolidating Souvenir Direct into Capstone makes good business sense on several levels -- in terms of eliminating duplicative overhead, giving Capstone's proven management control over China Direct's complementary business lines and allowing me to focus on my strengths, strategic and business development for China Direct," said Mr. Howard Ullman, Chief Executive Officer and President of China Direct. "China Direct has great confidence in the ability of Stewart Wallach, the current senior executive of Capstone Industries, Inc. and the Chief Executive Officer and President of the consolidated entity, to grow these business lines," Mr. Ullman added.

About China Direct: 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) and Capstone Industries (CI) www.capstoneindustries.com are companies engaged in product development, manufacturing, distribution, logistics and product placement into mass retail of souvenir, gift, and book light items. None of the web site URLs listed in this press release is incorporated into or is part of this press release.

FORWARD-LOOKING STATEMENTS: This press release, including any financial information and projections, contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on China Direct's and its subsidiaries' managements' current expectations and assumptions, and involve risks and uncertainties. Such expectations and assumptions may prove to be faulty or incorrect and actual results may differ significantly, materially from those anticipated results set forth in such statements. Current revenues and revenue growth is not a reliable indicator of future financial results and should not be relied upon by investors as such an indicator. China Direct relies on outside investment to expand its operations. Such financing may not be available on affordable terms or at all in the future to sustain or grow such new operations and such operations may not generate sufficient income to fund operations and growth. Further, the fact that China Direct is establishing new operations is not an indicator of the future success by China Direct or by any such operation. China Direct and such new operations may lack sufficient management and sales personnel and resources to achieve or sustain revenues necessary to the survival of such new operations and each such new operation further strains China Direct's existing, limited management personnel and resources. China Direct and CPS undertake 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 China Direct, which is a "penny stock" company (and as such is deemed a "highly risky investment") should be evaluated together with the many uncertainties that affect our business, particularly those stated in the cautionary statements and risk factors in current and future China Direct SEC Filings, which statements we hereby incorporate by reference herein.

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