UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


(Mark One)
              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended: March 31, 2006
                  --------------------------------------------

       [  ]   TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
                                  EXCHANGE ACT

                        For the transition period from to
      ------------------------------ --------------------------------------
                        Commission file number 000-28831
         --------------------------------------------------------------

                        China Direct Trading Corporation
--------------------------------------------------------------------------------
                     (Exact name of small business issuer as
                                             specified in its charter)

                     Florida                               84-1047159
--------------------------------------------------------------------------------
             (State or other jurisdiction              (IRS Employer
         of incorporation or organization)          Identification No.)

            10400 Griffin Road, Suite 109, Cooper City, Florida 33328
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (954) 252-3440
                            Issuer's telephone number


         (Former name,  former  address and former fiscal year, if changed since
last report.)


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDING DURING THE PRECEDING FIVE YEARS

         Check whether the registrant  filed all documents and reports  required
to be  filed  by  Section  12,  13 or  15(d)  of  the  Exchange  Act  after  the
distribution of securities under a plan confirmed by a court. Yes ----- No -----

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


<PAGE>




                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practical date: March 31, 2006  Approximately
543,122,028 shares

         Transitional Small Business Disclosure Format (check one).
Yes      ;  No   X
    ----       -----










































<PAGE>



                                     PART I

ITEM 1.  FINANCIAL STATEMENTS

                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                (Unaudited)
                                                                                 March 31,          December 31,
                                                                                    2006                2005
                                                                             ------------------  ------------------
Assets:
Current assets:
<S>                                                                          <C>                 <C>
   Cash                                                                      $          647,495  $            9,090
   Accounts receivable - net                                                          2,247,388               4,000
   Advances                                                                              25,189                   -
   Inventory                                                                            539,942              11,760
   Prepaid expense                                                                       28,935                   -
                                                                             ------------------  ------------------

     Total Current Assets                                                             3,488,949              24,850
                                                                             ------------------  ------------------

Fixed assets:
   Communications equipment                                                               9,317                   -
   Computer equipment                                                                    26,420               4,965
   Computer software                                                                      6,724                   -
   Transportation equipment                                                             230,617                   -
   Machinery and equipment                                                               10,029                   -
   Furniture and fixtures                                                                16,644                   -
   Leasehold improvements                                                                11,326                   -
   Less: Accumulated Depreciation                                                       (51,886)             (2,132)
                                                                             ------------------  ------------------

     Total Fixed Assets                                                                 259,191               2,833
                                                                             ------------------  ------------------

Other non-current assets:
   Deposits                                                                              25,600               1,775
                                                                             ------------------  ------------------

      Total other non-current assets                                                     25,600               1,775
                                                                             ------------------  ------------------

         Total assets                                                        $        3,773,740  $           29,458
                                                                             ==================  ==================
</TABLE>









<PAGE>



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


<TABLE>
<CAPTION>
                                                                                (Unaudited)
                                                                                 March 31,          December 31,
                                                                                    2006                2005
                                                                             ------------------  ------------------
Liabilities and Stockholders' Deficit:
Current Liabilities:
<S>                                                                          <C>                 <C>
   Accounts payable, trade                                                   $          702,671  $           35,666
   Accrued expenses                                                                     546,909             496,783
   Customer deposits                                                                  1,170,802              24,891
   Notes payable - current maturities                                                    69,623                   -
   Related party payables                                                                26,011              16,011
                                                                             ------------------  ------------------
         Total Current Liabilities                                                    2,516,016             573,351
                                                                             ------------------  ------------------

Long-Term Liabilities:
   Notes payable - less current maturities                                              136,082                   -
   Stockholder loans payable                                                            657,278                   -
   Investor loans payable                                                               250,000                   -
                                                                             ------------------  ------------------
         Total Long-Term Liabilities                                                  1,043,360                   -
                                                                             ------------------  ------------------

         Total Liabilities                                                            3,559,376             573,351
                                                                             ------------------  ------------------

Minority Interest                                                                       417,617                   -
                                                                             ------------------  ------------------

Stockholders' Deficit:
   Preferred Stock,  par value $.001 per share  Authorized  100,000,000  shares,
      Issued 8,000 shares at March 31, 2006 and
      December 31, 2005                                                                       8                   8
   Common Stock, par value $.0001 per share
      Authorized 600,000,000 shares,
      Issued 543,122,028 Shares at March 31, 2006 and
      December 31, 2005                                                                  54,313              54,313
   Additional paid-in capital                                                           832,665             832,665
   Accumulated deficit                                                               (1,090,239)         (1,430,879)
                                                                             ------------------  ------------------

     Total Stockholders' Deficit                                                       (203,253)           (543,893)
                                                                             ------------------  ------------------

     Total Liabilities and
       Stockholders' Deficit                                                 $        3,773,740  $           29,458
                                                                             ==================  ==================
</TABLE>




                             See accompanying notes.


<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                         (Unaudited)
                                                                                     For the Three Months
                                                                                       Ended March 31,
                                                                            --------------------------------------
                                                                                   2006                2005
                                                                            ------------------  ------------------
<S>                                                                         <C>                 <C>
Revenues                                                                    $        2,511,809  $          204,354
Cost of Sales                                                                       (1,882,545)           (172,275)
                                                                            ------------------  ------------------

        Gross Profit                                                                   629,264              32,079
                                                                            ------------------  ------------------

Operating Expenses:
  Sales and marketing                                                                   91,786               1,773
  Compensation                                                                         157,417              50,000
   Professional fees                                                                    31,868              12,813
  Other General and administrative                                                     159,084              52,521
                                                                            ------------------  ------------------

       Total Operating Expenses                                                        440,155             117,107
                                                                            ------------------  ------------------

Net Operating Income (Loss)                                                            189,109             (85,028)

Other Income (Expense):
  Interest expense                                                                     (15,009)               (740)
                                                                            ------------------  ------------------

Net Income (Loss) before minority interest                                             174,100             (85,768)

Minority interest                                                                     (131,382)                  -
                                                                            ------------------  ------------------

Net Income (Loss)                                                           $           42,718  $          (85,768)
                                                                            ==================  ==================

Weighted Average
Shares Outstanding                                                                 543,122,028         515,453,800
                                                                            ==================  ==================

Income (Loss) per Common Share                                              $                -  $                -
                                                                            ==================  ==================
</TABLE>










                             See accompanying notes.


<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                   (Unaudited)
                                                                              For the Three Months
                                                                                 Ended March 31,
                                                                      -------------------------------------
                                                                            2006                2005
                                                                      -----------------  ------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Continuing operations:
<S>                                                                   <C>                <C>
   Net Income (Loss)                                                  $          42,718  $          (85,768)
Adjustments necessary to reconcile net loss
   to net cash used in operating activities:
      Stock issued for expenses                                                       -               9,000
      Depreciation                                                                3,450                 224
     Minority interest in income                                                131,382                   -
     (Increase) decrease in advances                                            (25,189)              3,061
     (Increase) decrease in accounts receivable                              (2,243,388)                  -
     (Increase) decrease in inventory                                          (528,182)                  -
     (Increase) decrease in prepaids                                            (28,935)                  -
     (Increase) decrease in deposits                                            (23,825)                  -
      Increase (decrease) in accounts payable                                   667,005             (12,126)
      Increase (decrease) in accrued expenses                                    50,000              46,471
      Increase (decrease) in deposits from customers                          1,145,911                   -
                                                                      -----------------  ------------------

  Net Cash Used in continuing operations                                       (809,053)            (39,138)
                                                                      -----------------  ------------------

CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of fixed assets                                                       (306,112)                  -
                                                                      -----------------  ------------------
Net cash provided by (used) investing activities                               (306,112)                  -
                                                                      -----------------  ------------------

CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from sale of stock                                                           -                   -
Cash acquired in acquisition                                                    630,587                   -
Proceeds from loans                                                           1,122,983                   -
                                                                      -----------------  ------------------
Net Cash Provided by Financing Activities                                     1,753,570                   -
                                                                      -----------------  ------------------

Net (Decrease) Increase in
  Cash and Cash Equivalents                                                     638,405             (39,138)
Cash and Cash Equivalents
  at Beginning of Period                                                          9,090              77,503
                                                                      -----------------  ------------------
Cash and Cash Equivalents
  at End of Period                                                    $         647,495  $           38,365
                                                                      =================  ==================
</TABLE>




<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Continued)


<TABLE>
<CAPTION>
                                                                                (Unaudited)
                                                                            For the Three Months
                                                                              Ended March 31,
                                                                   --------------------------------------
                                                                          2006                2005
                                                                   ------------------  ------------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
<S>                                                                <C>                 <C>
  Interest                                                         $           15,009  $              740
  Franchise and income taxes                                       $                   $                   -

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
</TABLE>

         On January 27, 2006, the Company entered into a Purchase Agreement (the
"Purchase  Agreement")  with Complete Power Solutions  ("CPS") pursuant to which
the Company  acquired 51% of the member  interests  of CPS for a purchase  price
consisting of the payment of $637,000 in cash and the delivery of 600,000 shares
of  Company's  Series A  Convertible  Preferred  Stock (the  "Series A Preferred
Stock") having a stated value of $1,200,000.






















                             See accompanying notes.




<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         This  summary  of   accounting   policies  for  China  Direct   Trading
Corporation  and  Subsidiaries  is  presented  to  assist in  understanding  the
Company's  financial  statements.  The accounting  policies conform to generally
accepted  accounting  principles  and  have  been  consistently  applied  in the
preparation of the financial statements.

Interim Reporting

         The  unaudited  financial  statements  as of March 31, 2006 and for the
three month  periods  ended March 31, 2006 and 2005  reflect,  in the opinion of
management,  all adjustments  (which include only normal recurring  adjustments)
necessary to fairly state the financial  position and results of operations  for
the three  months.  Operating  results for interim  periods are not  necessarily
indicative of the results which can be expected for full years.

Organization and Basis of Presentation

         China Direct Trading  Corporation  (formerly  "CBQ,  Inc."),  a Florida
corporation, was initially incorporated September 18, 1986 under the laws of the
State of Delaware under the name "Yorkshire Leveraged Group, Incorporated",  and
then  changed  its  situs  to  Colorado  in  1989  by  merging  into a  Colorado
corporation,  named "Freedom Funding,  Inc.". Freedom Funding, Inc. then changed
its name to  "CBQ,  Inc." by  amendment  of its  Articles  of  Incorporation  on
November 25,  1998.  In May 2004,  the Company  changed its name to China Direct
Trading  Corporation and reincorporated  from the State of Colorado to the State
of Florida.

         Souvenir  Direct,  Inc. was incorporated on September 9, 2002 under the
laws of the State of Florida.

         On December 1, 2003, China Direct Trading Corporation  acquired 100% of
the outstanding common stock of Souvenir Direct, Inc. in a reverse  acquisition.
At this time, a new  reporting  entity was  created.  Souvenir  Direct,  Inc. is
considered the reporting entity for financial reporting purposes.

         On January 27, 2006, the Company entered into a Purchase Agreement with
Complete Power Solutions  ("CPS") to acquire 51% of the member interests of CPS.
CPS was organized by William Dato on September  20, 2004,  as a Florida  limited
liability company to distribute power generators in Florida and adjacent states.
CPS  currently  distributes  Guardian-brand  commercial  and  residential  power
generators.  CPS  sells  to Home  Depot  and  Lowe's  retail  stores  and  local
electrical contractors in Florida.

Nature of Business

         The  Company  is engaged  in the  business  of  marketing  and  selling
novelty,  gift, and promotional items in North America.  The items are typically
manufactured  in the  People's  Republic of China by  third-party  manufacturing
companies.



<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

         On January 27, 2006, the Company entered into a Purchase Agreement with
Complete Power Solutions  ("CPS") to acquire 51% of the member interests of CPS.
CPS  currently  distributes  Guardian-brand  commercial  and  residential  power
generators.  CPS  sells  to Home  Depot  and  Lowe's  retail  stores  and  local
electrical contractors in Florida.

Cash and Cash Equivalents

         For purposes of the statement of cash flows, the Company  considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

Inventory

         The Company's inventory consists of its power generators.  Inventory is
recorded at cost.

Fixed Assets

         Fixed  assets are stated at cost.  Depreciation  and  amortization  are
computed  using the  straight-  line method over the estimated  economic  useful
lives of the related assets as follows:

         Communications equipment                             3 - 7 years
         Computer equipment                                   3 - 7 years
         Computer software                                    3 - 7 years
         Transportation equipment                             3 - 7 years
         Machinery and equipment                              3 - 7 years
         Furniture and fixtures                               3 - 7 years
         Leasehold improvements                               Term of lease

         Upon sale or other disposition of property and equipment,  the cost and
related  accumulated  depreciation or amortization are removed from the accounts
and any gain or loss is included in the determination of income or loss.

         Expenditures  for  maintenance  and  repairs  are charged to expense as
incurred.  Major overhauls and betterments are capitalized and depreciated  over
their estimated economic useful lives.

         Depreciation  expense  was $3,450 and $224 for the three  months  ended
March 31, 2006 and 2005, respectively.







<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

Pervasiveness of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  required  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.

Principles of Consolidation

         The consolidated  financial statements for the three months ended March
31, 2006 and 2005 include the accounts of the parent entity and its wholly-owned
subsidiaries Souvenir Direct, Inc. and Overseas Building Supplies, LLC (formerly
China Pathfinder  Fund,  LLC), and its majority owned subsidiary  Complete Power
Solutions.

         The  results  of  subsidiaries  acquired  or sold  during  the year are
consolidated  from their effective dates of acquisition  through their effective
dates of disposition.

         All  significant  intercompany  balances  and  transactions  have  been
eliminated.

Net Income (Loss) Per Common Share

         Basic  earnings per common share were  computed by dividing net loss by
the weighted  average  number of shares of common stock  outstanding  during the
year.  Diluted  loss per common  share for the three months ended March 31, 2006
and 2005 are not presented as it would be anti- dilutive.

Concentration of Credit Risk

         The  Company has no  significant  off-balance-sheet  concentrations  of
credit  risk such as foreign  exchange  contracts,  options  contracts  or other
foreign hedging arrangements.

Reclassifications

         Certain   reclassifications  have  been  made  in  the  2005  financial
statements to conform with the 2006 presentation.

Major Suppliers

         The Company's major  suppliers are from the People's  Republic of China
and to a lesser extent a variety of Pacific Rim countries. The Company relies on
30 manufacturing  concerns in China for its products.  The loss of these Chinese
manufacturing sources would adversely impact on the business of the Company.


<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

Major Customers

         At March 31, 2006,  Souvenir Direct receives  approximately  40% of its
gross revenues from its top three  accounts.  The loss of these  customers would
adversely impact the business of the Company.

Revenue Recognition

         Sales are recorded when goods are shipped,  and profit is recognized at
that time. Allowances for sales returns, rebates and discounts are recorded as a
component on net sales in the period the allowances are recognized.

Advertising

         Advertising costs are expensed as incurred.

Income Taxes

         The Company  accounts for income taxes under the provisions of SFAS No.
109, "Accounting for Income Taxes." SFAS No.109 requires recognition of deferred
income  tax  assets  and   liabilities   for  the  expected  future  income  tax
consequences,  based on enacted tax laws, of temporary  differences  between the
financial reporting and tax bases of assets and liabilities.

NOTE 2 - LEASES

         On September 1, 2005,  the Company  entered into a lease  agreement for
approximately  1,200 square feet of office  space.  The lease  requires  monthly
lease payments of $1,775. The lease expires August 31, 2006. The office space is
used as the corporate  headquarters.  It is located at 10400 Griffin Road, Suite
109, Cooper City, Florida 33328.

         The Company also rents a storage  facility on a  month-to-month  basis.
Monthly rentals for the storage facility are approximately $150.

         Rental expense under these leases was  approximately  $6,000 and $8,000
for the three months ended March 31, 2006 and 2005, respectively.








<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - LEASES (continued)

         The minimum  future lease payments under these leases for the next five
years are:


Year Ended December 31,
-------------------------------------------
         2006                                             $       14,200
         2007                                                          -
         2008                                                          -
         2009                                                          -
         2010                                                          -
                                                          --------------
         Total minimum future lease payments              $       14,200
                                                          ==============

NOTE 3 - COMMITMENTS

         On December 1, 2003, the Company  entered into an employment  agreement
with Howard  Ullman,  the  Company's  President and CEO that provides for annual
compensation of $200,000.

         On January 27, 2006, the Company  entered into an employment  agreement
with William Dato,  the  President of Complete  Power  Solutions,  the Company's
majority-owned subsidiary that provides for annual compensation of $100,000.

NOTE 4 - STOCK TRANSACTIONS

Common Stock

         On September 9, 2002, the Company issued 100 shares of common stock for
$2,774 of start- up expenses.

         On December 1, 2003,  the Company  issued  97,000,000  shares of common
stock to acquire Souvenir Direct, Inc. in a reverse acquisition.  The 100 shares
that  were  previously  issued  were  retroactively   adjusted  to  reflect  the
equivalent  number of shares  that were  issued in  connection  with the reverse
acquisition.  The acquisition was recorded by a credit to common stock of $9,600
and a debit to paid-in  capital of $2,674 and a debit to  retained  earnings  of
$6,926.  Also on December 1, 2003,  an additional  414,628,300  shares of common
stock were issued to the previous  owners of CBQ,  Inc. All  references to stock
reflect the retroactive adjustment to the shares.

         In April  2004,  440,000  shares of common  stock were  returned to the
treasury and cancelled.

         In May 2004,  the Company issued  1,500,000  shares of common stock for
services valued at $27,000.

         In June 2004, the Company issued  2,000,000  shares of common stock for
services  valued at $36,000.  As of December  31,  2004,  expense of $27,000 and
prepaid expense of $9,000 was recorded.


<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - STOCK TRANSACTIONS (continued)

         In June 2004,  the Company  issued  200,000  shares of common stock for
services valued at $3,600.

         In July 2004,  the Company  issued  138,000  shares of common stock for
services valued at $5,520.

         In September  2004,  the Company  issued 240,000 shares of common stock
for services valued at $7,200.

         In November 2004, the Company issued 187,500 shares of common stock for
services valued at $9,375.

         In January 2005,  the Company  issued 500,000 shares of common stock to
settle a lawsuit. The value of settlement was $28,000.

         In April 2005, the Company issued  6,940,030 shares of common stock for
services valued at $200,000.

         In May 2005,  the Company  issued  100,000  shares of common  stock for
services valued at $3,000.

         In June 2005, the Company issued  9,523,810  shares of common stock for
accrued compensation of $200,000.

         In June 2005,  6,896,552  shares of common  stock were  returned to the
treasury and cancelled.

         In October 2005,  the Company issued  6,250,000  shares of common stock
for accrued compensation of $100,000.

         In November 2005, the Company issued 588,718 shares of common stock for
legal services valued at $12,500.

         In November 2005, the Company issued  1,140,000  shares of common stock
for legal services valued at $28,500.

         In December 2005, the Company issued  2,300,000  shares of common stock
for services valued at $40,000.

         In December 2005, the Company issued  5,555,555  shares of common stock
for accrued compensation of $100,000.




<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - STOCK TRANSACTIONS (continued)

         In December 2005, the Company issued  1,666,667  shares of common stock
for cash of $30,000.

Preferred Stock

         In February 2004, the Company sold 1,000 shares of preferred  stock for
cash of $5,000. In June 2004, the Company issued 7,100 shares of preferred stock
for services  valued at $128.  In May 2005,  100 shares of preferred  stock were
returned to the treasury and  cancelled.  The preferred  shares are  convertible
into common shares.

Warrants

         The Company has issued stock warrants to its officers and directors for
a total of 5,975,000  shares of the Company's  common stock. The warrants expire
between November 11, 2011 and July 20, 2014. The warrants have an exercise price
of $.03 to $.05.

         The Company  issued a stock  warrant to each of two former  officers of
the  Company  in  December  2003 for a total of 35,000  shares of the  Company's
common stock.  Each of the stock warrants expires on July 20, 2014,and  entitles
each former officer to purchase 10,000 and 25,000 shares,  respectively,  of the
Company's common stock at an exercise price of $0.05.

         The  Company  issued a stock  warrant for  50,000,000  shares of common
stock to Dutchess  Private Equities Fund, II, L.P.  ("Dutchess"),  as part of an
investment agreement between Dutchess and the Company. As part of the agreement,
Dutchess was to invest up to $2,500,000 to purchase the Company's  common stock.
The warrant was to expire August 3, 2014. On February 16, 2005,  the Company and
Dutchess  agreed to  postpone  the  implementation  of the  foregoing  financing
arrangement. As of the date of this Report, the Company and Dutchess have agreed
not to proceed with this financing  arrangement and the  aforementioned  warrant
has been cancelled.

NOTE 5 - RELATED PARTY PAYABLES

         On September  1, 2004,  China  Pathfinder  Fund,  LLC., a  wholly-owned
subsidiary of the Company  received  loans of $15,000 from  shareholders  of the
Company.  The loans  carry an  interest  rate of 5% per annum and are payable in
twelve equal monthly  installments with the first installment due and payable on
January 31,  2006.  At March 31,  2006,  the total amount due on these loans was
$16,011.

         During 2003 and 2004, a former  officer of the Company paid $300,000 to
settle a previously  filed  lawsuit on behalf of the Company.  This $300,000 has
been included in accrued liabilities at March 31, 2006 and December 31, 2005.




<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - INCOME TAXES

         As  of  December  31,  2005,  the  Company  had a  net  operating  loss
carryforward for income tax reporting purposes of approximately  $1,038,000 that
may be offset against future taxable income through 2025. Current tax laws limit
the amount of loss  available to be offset  against future taxable income when a
substantial  change in  ownership  occurs.  Therefore,  the amount  available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the  carryforwards  will expire  unused.  Accordingly,  the potential tax
benefits of the loss  carryforwards  are offset by a valuation  allowance of the
same amount.

NOTE 7 - LEGAL SETTLEMENTS

         In June 2001,  ITC/INFO Tech  ("Claimant")  obtained a default award of
$79,000  against the Company.  The award was based on  non-payment  for computer
goods shipped by ITC to two subsidiaries of the Company. The Company has offered
to settle the award for shares of restricted stock, but the Claimant has refused
to accept such an offer to date.  The Claimant has made no effort to enforce its
award since June 2001.  As of March 31, 2006 and December  31,  2005,  the award
amount has been included in the accrued expenses of the Company.

NOTE 8 - CONTINGENCIES

         Celeste Trust Reg.,  Esquire Trade,  et al. v. CBQ, Inc. (Case# 03 Civ.
9650 RMB; US District Court, SDNY,  12/4/2003).  A lawsuit filed against company
by three  plaintiffs on or about December 4, 2003, but which the company did not
receive  notice of until  the week of  February  18,  2004 or  thereabouts.  The
Plaintiffs  purchased  debentures  issued by Socrates  Technologies  Corporation
(STC), a public  Delaware  corporation in 2000.  When the Company  purchased the
assets of two STC  subsidiaries  in March 2001, the  plaintiffs  allege that the
Company  promised to issue to the Plaintiffs and others the  consideration  that
was to be  paid  to STC  for  the  acquired  assets  and  to so do in  order  to
compensate the plaintiffs for their investment in the STC debentures, which were
apparently  in default at that time.  The total  consideration  paid for the STC
subsidiaries'  assets were 7.65  million  shares of company  Common  Stock and a
Promissory Note made by the Company for $700,000  principal amount.  The Company
has defended  against the  Plaintiffs'  claims to date. If the  Plaintiffs win a
judgment on their claims,  the judgment,  if collected,  would prove potentially
ruinous the Company,  unless a settlement involving no cash was arranged between
the parties to the lawsuit.  The Plaintiff's  claims include a claim for receipt
of the money due under the Promissory Note with a principal  amount of $700,000.
The Company  lacks the cash flow or cash  reserves or funding  resources  to pay
such a claim,  either in a lump sum or over time. If the  Plaintiffs are awarded
the claimed  damages  against the Company in this lawsuit,  the Company would be
unable to pay such damages,  either in a lump-sum or under a schedule, and would
be insolvent.




<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - CONTINGENCIES (continued)

         The Plaintiff's complaint in Celeste was dismissed by the U.S. District
Court for the  Southern  District  of New York in early 2005 for failure to have
all essential  parties to the dispute as parties to the lawsuit.  The Plaintiffs
filed an amended complaint prior to the March 1, 2005 deadline for doing so. The
Company currently  intends to vigorously defend against the Plaintiff's  amended
complaint, which adds two former, now defunct,  subsidiaries involved in the STC
transaction as defendants. The assets of Networkland,  Inc. and Technet Computer
Services  Corporation  were  acquired  by the Company on March 15, 2001 and that
transaction is at the heart of the dispute in the Celeste case.  Currently,  the
Company's  second  motion to dismiss is scheduled to be heard by the Court on or
about  September  15,  2005.  The Court has also  heard  Plaintiff's  motion for
default judgment against the subsidiaries  involved in the STC transaction.  The
Court's decision may take several months to be issued.  The Company is uncertain
at this time of the final outcome of this litigation.

         Sun Trust  Bank  Dispute.  Sun Trust Bank line of credit and term note:
Prior to being  acquired  by the  company,  Quantum  Technology  Group  had a $4
million line of credit with Crestar Bank, which was subsequently acquired by Sun
Trust.  This  line of credit  was  guaranteed  by  Quantum  and five  individual
guarantors,  including  Ray  Kostkowski,  Anne Sigman,  Skip Lewis,  and Anthony
Saunders.  This line of credit was opened during April, 2000. On August 8, 2000,
the Company acquired all of the shares of Quantum.  Sun Trust asserted that $1.3
million of the line of credit had been used, and was owing to Sun Trust, as well
as line of credit, a $200,000 term loan from Sun Trust to Quantum, approximately
$200,000 in accrued  interest  and  $100,000  in  attorney  fees -- all of which
Suntrust had sought to collect from the individual guarantors. Sun Trust had not
sued the Company and has not raised its prior threat to sue in 2005.

         RAS Investment,  Inc., a company  affiliated with Anne Sigman, a former
employee of the  Company,  has advised the Company that RAS has acquired the Sun
Trust note and has  demanded  payment  in cash or stock.  As of the date of this
Report, the Company's  position remains as before,  that is, that the Company is
not  obligated  to pay the Sun Trust debts and any claims  made to collect  that
debt could be defeated by several potential defenses and counterclaims.

         The Company is a defendant to another  lawsuit  concerning a trade show
contract for approximately  $25,000,  but the Company does not believe that this
lawsuit is  material  in respect of  potential  liability  of the  Company.  The
Company has been and intends to vigorously defend itself in this lawsuit.

         As  reported  previously,  the  Company  has  received  two claims from
certain  former  shareholders  of  Cyberquest,   Inc.  that  they  hold  or  own
approximately  70,000  shares of a class of the Company's  redeemable  preferred
stock  that  was  issued  in  the  Company's  1998  acquisition  of  Cyberquest.
Cyberquest ceased  operations in 2000-2001 period.  The Company has investigated
these claims and has not been able to date to substantiate  any of the claims to
date  and the  claimants  have  not  pursued  their  claims  beyond  an  initial
communication asserting ownership of these shares of serial preferred stock.



<PAGE>



                CHINA DIRECT TRADING CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - SUBSIDIARY

         In February  2004,  the Company  established  a new  subsidiary,  China
Pathfinder Fund, LLC, a Florida limited liability company. During 2005, the name
was changed to Overseas Building Supplies,  LLC to reflect its shift in business
lines from business development to trading Chinese- made building supplies.

NOTE 10 - ACQUISITIONS

         On March 18, 2005,  the Company  entered into an agreement  whereby the
Company  was to  acquire  40% of the  outstanding  shares  of  Beijing  Hua  Wei
Furniture Manufacture Co., Ltd., ("HWFM"), a company organized under the laws of
the People's  Republic of China. The Company was to issue common stock valued at
$1,325,000 at closing to acquire its 40% interest in HWFM. On July 20, 2005, the
Company  announced  the  termination  of this  agreement  because HWFM failed to
satisfy one of the conditions to consummation of the acquisition.

         On January 27, 2006, the Company entered into a Purchase Agreement (the
"Purchase  Agreement")  with William Dato and Complete Power  Solutions  ("CPS")
pursuant to which the Company  acquired 51% of the member interests of CPS owned
by Mr. Dato for a purchase  price  consisting of the payment of $637,000 in cash
and the delivery of 600,000 shares of Company's  Series A Convertible  Preferred
Stock (the  "Series A Preferred  Stock")  having a stated  value of  $1,200,000,
which Series A Preferred  Stock are convertible  into  50,739,958  shares of the
Company's  Common  Stock  at the  demand  of Mr.  Dato.  The  cash  paid  in the
transaction  was  obtained  from  capital  provided  to the  Company  for use in
connection with  acquisitions by Howard Ullman,  our Chief Executive Officer and
President, and certain of our directors and principal shareholders.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

GENERAL  - This  discussion  should  be read in  conjunction  with  Management's
Discussion and Analysis of Financial  Condition and Results of Operations in the
Company's annual report on Form 10-KSB for the year ended December 31, 2005.

PLAN OF  OPERATIONS.  The Company's  plan of operations is to focus on expanding
OBS' building supplies business and CPS's power generator  distribution business
as the  primary  business  lines of t he Company.  The  Company  will devote its
available  resources  and funding to the  expansion  of OBS and CPS.  Except for
occasional  short-term  loans  from Mr.  Ullman,  SDI will have to  support  its
operations from cash flow from operations.

         The  Company's  current  plan  of  operations  also  includes  actively
reviewing mergers and acquisitions and investment  opportunities like CPS, which
opportunities  are in industries  that  complement the ability of the Company to
trade   Chinese-made   products  in  North  America.   The  Company  is  seeking
opportunities  that  potentially and immediately  enhance our sales revenues and
net worth as well as  possibly  contribute  a  positive  cash  flow and  enhance
shareholder  value beyond the  capability of our current core business  line. As
such, we are interested in investing in


<PAGE>



or  acquiring  companies  that  could  benefit  from  exploiting  the  Company's
financial and contacts with Chinese  manufacturing firms. Our strategic plan has
traditionally  been to remain a trading company with low overhead and focused on
exploiting its contacts with Chinese manufacturers to meet our customers' needs.
We have  concluded  that  ownership  of or  investment  in  companies  that  are
established  distributors  in the U.S. and  potential  distribution  channels of
Chinese-made  products in the U.S.  should be  considered as part of the overall
strategy to exploit our contacts with over 30 Chinese manufacturing companies.

We  received  in early  January  2006,  a credit  line  commitment  of  $500,000
(increased to $647,000) from its chief executive  officer and president,  Howard
Ullman, and three Company directors, Jeffrey Postal, Lorenzo Lamadrid and Laurie
Holtz  (collectively,  the  "lenders").  The credit line is to be used solely to
fund the cash  portion of any  acquisition  or  investment  by the  Company  The
funding was used to acquire the 51% membership interest in CPS. Under the credit
line, the Company has 4 years to repay any advances of credit,  which  repayment
shall be made in  calendar  quarterly  interest-only  payments  for the first 24
months  of  the  term  and  equal  calendar  quarterly  principal  and  interest
installment  payments for the last 24 months of the term.  The interest  rate is
8.5% per annum.  Upon  demand,  any lender may  convert  all or a portion of any
unpaid principal or interest into "restricted" shares (as defined in Rule 144 of
the Securities Act of 1933, as amended) of a new class of the Company  preferred
stock ("Series B Convertible  Preferred  Stock").  The rights,  designations and
privileges  of the Series B  Preferred  Stock  will be  negotiated  between  the
Company  and the  lenders;  provided,  however,  that  the  Preferred  Stock  is
convertible into "restricted" shares of Company Common Stock,  $0.0001 par value
per share,  ("Common  Stock") at a conversion ratio that entitles the lenders to
receive an aggregate of  33,333,333  "restricted"  shares of Common Stock (to be
adjusted for any future stock split or  recapitalization).  The conversion ratio
is based on the principal  amount of the debt  ($647,000)  divided by $0.015 per
share of Common Stock.  Any shares of Common Stock issued in a conversion of the
Series B Preferred Stock have piggyback  registration rights under the agreement
between the Company and the lenders for the credit line.

         The  Company  may  incur   significant   post-merger   or   acquisition
registration costs in the event management wishes to register a portion of their
shares for subsequent  sale. The Company will also incur  significant  legal and
accounting  costs in  connection  with the  acquisition  including  the costs of
preparing post- effective amendments,  Forms 8-K, agreements and related reports
and documents.

         While the  Company  believes  that SDI and CPS will be able to generate
sufficient  cash  flow to pay for their  respective  direct  overhead  costs and
internal  planned  growth in fiscal  year 2006,  neither  SDI nor our  company's
interest  in CPS  generate  sufficient  cash  flow  at  this  time  to  fund  an
acquisition program, or fund of the proposed enhanced and expanded marketing and
sales efforts for OBS and the overhead of our company. The Company will not have
sufficient  funds  (unless it is able to raise funds in a private  placement  or
debt financing) to undertake any significant business development,  or extensive
marketing,  in terms  of  scope  of  campaign  and  geographical  reach,  of new
products.  Accordingly,  following any future acquisition,  the Company will, in
all likelihood and unless the acquired business  generates  sufficient cash flow
and  profits,  be  required to either  seek debt or equity  financing  or obtain
funding from third parties, in exchange for which the Company may be required to
give up a  substantial  portion of its  interest in the  acquired  product or to
issue large number of shares of its capital  stock.  There is no assurance  that
the Company will be able either to obtain additional financing or interest third
parties  in  providing  funding  for  the  further  development,  marketing  and
manufacturing of any products acquired.



<PAGE>



RESULTS OF  OPERATIONS - For the three months ended March 31, 2006,  the Company
had net income of  approximately  $43,000.  For the three months ended March 31,
2005, the Company had a net loss of approximately $86,000.

         Total  Revenues - For the three  months  ended March 31, 2006 and 2005,
the  Company  had  total  sales  of   approximately   $2,512,000   and  $204,000
respectively,  for an  increase of  approximately  $2,308,000.  The  increase in
revenues was due to the acquisition of Complete Power Solutions.

         Costs and  Expenses - For the three  months  ended  March 31,  2006 and
2005,  the Company had cost of sales of  approximately  $1,883,000 and $172,000,
respectively.  The  increase  in the cost of sales  was due the  acquisition  of
Complete Power Solutions.  Operating expenses increased  approximately $323,000,
from  $117,000  for the three  months  ended March 31, 2005 to $440,000  for the
three months ended March 31, 2006.  This increase is  attributable  primarily to
the acquisition of Complete Power Solutions.  The cost of rent and other general
and administrative  costs also increased in for the three months ended March 31,
2006 as compared to the same period in 2005.

         Liquidity  and  Capital  Reserves.  Historically,  the  Company has not
generated  enough cash flow from  operations to cover its overhead costs and the
cost of growth.  The inadequacy of cash flow and the inability of the Company to
consistently obtain funding and ongoing funding on commercially reasonable terms
have  undermined  the former  business  operations of the Company and forced the
Company  to obtain  funding  from  management  and  through  the sale of Company
securities.

         As a small  business  and a  penny  stock  company,  the  Company  will
continue to face  difficulty  in obtaining  financing  or funding on  reasonable
commercial  terms. The Company expects future  development and expansion will be
financed  through cash flow from operations and other forms of financing such as
the sale of  additional  equity and debt  securities,  capital  leases and other
credit facilities. There are no assurances that such financing will be available
on terms  acceptable or favorable to the Company.  Further,  the increase in the
number of shares of common stock in the public markets may reduce the ability or
appeal of the Company to future sources of possible financing or funding.

         Government  Regulations.  The  Company  is  subject  to  all  pertinent
Federal, State, and Local laws governing its business. The Company is subject to
licensing  and   regulation  by  a  number  of   authorities  in  its  State  or
municipality. These may include health, safety, and fire regulations.

         Impact of  Inflation.  To date,  the  Company has not  experienced  any
significant  effect from  inflation.  The Company's major expenses have been the
cost of marketing its product lines to customers in North  America.  That effort
involves mostly Mr. Ullman  traveling to make direct marketing and sales pitches
to  customers  and  potential  customers  as well as showing the SDI products at
industry  trade shows  around North  America and visiting  China to maintain and
expand SDI's  distribution and  manufacturing  relationships  and channels.  The
Company  generally has been able to meet increase in costs by raising  prices of
its products.

         Country  Risks.  Almost  all of the  Company's  contract  manufacturing
operations and sources of products are located in China. As such, the Company is
subject to significant  risks not typically  faced by companies  operating in or
obtaining  products from North America and Western Europe.  Political,  economic
and trade conflicts between the United States and China, including


<PAGE>



possible conflict over North Korea's nuclear weapons program or the independence
of Taiwan,  could severely  hinder the ability of the Company to obtain products
and fill  customer  orders  from the  Company's  current  Chinese  manufacturing
sources.  Further,  Chinese  commercial  law is still  evolving  to  accommodate
increasing  capitalism  in Chinese  society,  especially  in terms of commercial
relationships and dealings with foreign  companies,  and can be unpredictable in
application or principal.  The same unpredictability  exists with respect to the
central Chinese  government,  which can  unilaterally  and without prior warning
impose new legal,  economic and commercial laws,  policies and procedures.  This
element of unpredictability heightens the risk of doing business in China.

         China is also under  international  pressure to value its currency in a
manner  that would  increase  the value of Chinese  currency in respect of other
world  currencies  and thereby  increase the cost of Chinese  goods in the world
market.  The Company does not believe that such  revaluation of Chinese currency
would  adversely  impact  its  business  because of the  low-cost  nature of the
Company's  products and the fact that U.S. dollars is the currency of use in all
of the Company's commercial transactions.

ITEM 3.  CONTROLS AND PROCEDURES

         The Company's Chief Executive  Officer and Chief Financial  Officer are
responsible for establishing and maintaining  disclosure controls and procedures
for the Company.

         (a) Evaluation of Disclosure Controls and Procedures

         As of the end of the period covered by this report, the Company carried
out an  evaluation,  under the  supervision  and with the  participation  of the
Company's management, including the Company's President, of the effectiveness of
the design and operation of the  Company's  disclosure  controls and  procedures
pursuant to Rule 13a-15 under the  Securities  Exchange Act of 1934,  as amended
(the  "Exchange  Act").  Based  upon the  evaluation,  the  Company's  President
concluded that, as of the end of the period, the Company's  disclosure  controls
and  procedures  were effective in timely  alerting him to material  information
relating to the Company  required to be included in the reports that the Company
files and submits pursuant to the Exchange Act.

         (b) Changes in Internal Controls

         Based on his evaluation as of March 31, 2006, there were no significant
changes in the Company's  internal  controls over financial  reporting or in any
other areas that could  significantly  affect the  Company's  internal  controls
subsequent to the date of his most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         On January 25, 2005, the U.S.  District Court for the Southern District
of New York dismissed without prejudice the lawsuit against China Direct Trading
Corporation  in the  previously-  reported civil case styled CELESTE TRUST REG.,
ESQUIRE TRADE,  ET AL. V. CBQ, INC.  (Case# 03 Civ. 9650 RMB; US District Court,
Southern  District  for New York,  12/4/2003).  The lawsuit was  dismissed  in a
response to China Direct Trading Corporation's motion to dismiss. The Plaintiffs
can  refile the  lawsuit if they a  complaint  on or before  March 1, 2005.  The
Plaintiffs filed an amended complaint


<PAGE>



with the  Court on or about  February  24,  2005.  While the  Company  currently
intends to defend  against the Amended  Complaint,  and  without  admitting  any
liability  in the  matter,  the  Company  may  also  explore  settlement  of the
litigation  in order to avoid any further  drain by this federal  lawsuit on the
Company's  resources.  The Company has filed a motion to dismiss the plaintiff's
amended  complaint,  which  motion  has not yet been  heard or ruled upon by the
Court.

         As  reported  previously,  the  Company  has  received  two claims from
certain  former  shareholders  of  Cyberquest,   Inc.  that  they  hold  or  own
approximately  70,000  shares of a class of the Company's  redeemable  preferred
stock  that  was  issued  in  the  Company's  1998  acquisition  of  Cyberquest.
Cyberquest ceased  operations in 2000-2001 period.  The Company has investigated
these claims and has not been able to date to substantiate  any of the claims to
date  and the  claimants  have  not  pursued  their  claims  beyond  an  initial
communication asserting ownership of these shares of serial preferred stock.

         The Company is a defendant to another  lawsuit  concerning a trade show
contract,  but the  Company  does not believe  that this  lawsuit is material in
respect of potential liability of the Company. The Company intends to vigorously
defend itself in this lawsuit.

         No director, officer or affiliate of the Company, or owner of record of
more than five percent (5%) of the  securities of the Company,  or any associate
of any such director, officer or security holder is a party adverse to us or has
a material interest adverse to us in reference to pending litigation.

         We are not  currently  a party to any other legal  proceedings  that we
believe  will have a  material  adverse  effect on our  financial  condition  or
results of operations.

ITEM 2.  CHANGES IN SECURITIES

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None/Not Applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

None/Not Applicable.

ITEM 5.  OTHER INFORMATION

None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

2.1      Purchase  Agreement,  dated January 27, 2006, by and among China Direct
         Trading Corporation, William Dato and Complete Power Solutions, LLC. +



<PAGE>



3.1      Articles of Incorporation of the Company *

3.1.1    Articles  of  Incorporation   of  China  Direct  Trading   Company,   a
         Wholly-owned subsidiary of the Company **

3.2      By-laws of the Company***

10.1     Voting  Agreement,  dated  January 27, 2006,  by and among China Direct
         Trading Corporation, William Dato and Howard Ullman. *****

10.2     Operating  Agreement,  dated  January  27,  2006,  for  Complete  Power
         Solutions, LLC. *****

10.3     Employment Agreement, dated January 27, 2006, among William Dato, China
         Direct Trading Corporation and Complete Power Solutions, LLC. *****

10.4     Form of July 20,  2005 sales  agency  agreement  between  China  Direct
         Trading Corporation and Sutter's Mill Specialties. *****

14       Code of Ethics, dated November 21, 2003, ++++

31       Certification  Pursuant  to Section  302 of the  Sarbanes  Oxley Act of
         2002.+


32       Certification  Pursuant  to  Section  302 of the  Sarbane  Oxley Act of
         2002.+

---------------

*        Incorporated  by  reference  to Annex C to the  Special  Meeting  Proxy
         Statement,  dated  April  15,  2004,  filed  by  China  Direct  Trading
         Corporation with the Commission on April 20, 2004.

**       Incorporated  by  reference  to Annex G to the  Special  Meeting  Proxy
         Statement,  dated  April  15,  2004,  filed  by  China  Direct  Trading
         Corporation with the Commission on April 20, 2004.

***      Incorporated  by  reference  to  Annex  D  the  Special  Meeting  Proxy
         Statement,  dated  April  15,  2004,  filed  by  China  Direct  Trading
         Corporation with the Commission on April 20, 2004.

****     Incorporated  by  reference  to  Annex  H  the  Special  Meeting  Proxy
         Statement,  dated  April  15,  2004,  filed  by  China  Direct  Trading
         Corporation with the Commission on April 20, 2004.

*****    Incorporated by reference to Form 10KSB, dated April 17, 2006.

+        Filed Herein

++++     Incorporated  by reference to Exhibit 14 to the  Company's  Form 10-KSB
         for the fiscal year ending  December 31, 2003, as filed by China Direct
         Trading Company with the Commission on April 20, 2004.


<PAGE>



(b) Reports on Form 8-K filed.

The following reports were filed on Form 8-K durin the first quarter of the 2006
fiscal year: January 4, 2006,  January 11, 2006, January 31, 2006,  February 28,
2006, March 10, 2006, March 13, 2006, May 1, 2006 and May 12, 2006.













<PAGE>



                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 15th day of May, 2006.

China Direct Trading Corporation

May 15, 2006

/s/ Howard Ullman
-----------------
Howard Ullman
CEO, President and Chairman
(Principal Executive Officer)
(Principal Financial and Accounting Officer)