**U.S.
      Securities and Exchange Commission**


Washington,
      D.C. 20549








**FORM
      10-QSB**







**[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 SECURITIES EXCHANGE**


ACT
      OF
      1934 for the transition period from _______ to _______







**CHINA
      DIGITAL MEDIA CORPORATION**


(Exact
      name of small business issuer as specified in its charter)





**HAIRMAX
      INTERNATIONAL CORP.**


(Former
      name of registrant)









**Nevada**
            **13-3422912****(State
                or other jurisdiction of**
            **(IRS
                Employer Identification No.)****incorporation
                or organization)**




**2505-06,
      25/F, Stelux House, 698 Prince Edward Road E. Kowloon, Hong
      Kong**


(Address
      of principal executive offices)





**(011)
      852-2390-8600**


(Issuer's
      telephone number)












Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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 days. Yes [x] No [ ]





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





Number
      of
      shares of common stock outstanding as of May 8, 2006: 31,687,365





Number
      of
      shares of preferred stock outstanding as of May 8, 2006: 1,875,000












**INDEX
                    TO FORM 10-QSB**Page
                    No.**PART
                    I**Item
                    1.    Financial Statements
                    (Unaudited)
                3Condensed Consolidated Balance Sheet- March 31, 2006 (unaudited)
                3Condensed Consolidated Statements of
                    Operations- Three Months Ended March 31, 2006 (unaudited)
                4Condensed Consolidated Statements of Cash
                    Flows-
                    Three Months Ended March 31, 2006 (unaudited)
                5Notes to Condensed Consolidated Financial Statements
                    (unaudited)
                6-9Item
                    2.    Management's Discussion and
                    Analysis of Financial Condition And
                    Results of Operations
                10-14Item
                    3.    Quantitative and Qualitative Disclosures
                    About Market Risk
                14-15**PART
                    II**Item
                    1.    Legal Proceedings
                16Item
                    2.    Changes in
                    Securities
                16Item
                    3.    Defaults Upon Senior
                    Securities
                16Item
                    4.    Submission of Matters to a Vote of
                    Security Holders
                16Item
                    5.    Other Information
                16Item 6.   
                  Exhibits and Reports on Form 8-K
                16




2
 *Index*




**ITEM1.**




**CHINA
                  DIGITAL MEDIA CORPORATION AND SUBSIDIARIES****CONDENSED
                  CONSOLIDATED BALANCE
                  SHEET****AS
                  OF MARCH 31, 2006
                  (Unaudited)**
 **ASSETS****CURRENT
                    ASSETS**Cash
                    and cash equivalents
                
                $
                1,521,682Accounts
                    receivable, net of allowances
                
                
                4,807,758Inventories,
                    net
                
                
                297,658Deposits
                    on investments in joint ventures
                
                
                323,064Other
                    receivables and prepaid expenses
                
                
                806,450**Total
                    Current Assets**
                
                
                7,756,612**INTANGIBLE
                    ASSETS**
                
                
                392,521**INVESTMENTS
                    IN TELEVISION SERIES, NET**
                
                
                661,391**PROPERTY
                    AND EQUIPMENT, NET**
                
                
                10,773,248**TOTAL
                    ASSETS**
                
                $
                19,583,771**LIABILITIES
                    AND STOCKHOLDERS' EQUITY****CURRENT
                    LIABILITIES**Accounts
                    payable
                
                $
                4,995,152Other
                    payables and accrued liabilities
                
                
                50,180Due
                    to a director
                
                
                76,696Due
                    to a stockholder
                
                
                60,974Due
                    to a related company
                
                
                129,337Value
                    added tax payable
                
                
                39,125Income
                    tax payable
                
                
                2,182,669**Total
                    Current Liabilities**
                
                
                7,534,132**COMMITMENTS
                    AND CONTINGENCIES**
                
                
                -**MINORITY
                    INTERESTS**
                
                
                22,330**STOCKHOLDERS'
                    EQUITY**Series
                    A convertible preferred stock, $0.001 par value, 40,000,000
                    sharesauthorized,1,875,000
                    shares issued and outstanding
                
                
                1,875Series
                    B convertible preferred stock, $0.001 par value, 1,000
                    sharesauthorized,
                    no shares were issued and outstanding
                
                
                -Common
                    stock, $0.001 par value, 5,000,000,000 shares
                    authorized,31,687,365
                    shares issued and outstanding
                
                
                31,687Additional
                    paid-in capital
                
                
                5,863,532Deferred
                    stock compensation
                
                
                (33,433
                )Retained
                    earningsUnappropriated
                
                
                5,202,712Appropriated
                
                
                956,343Accumulated
                    other comprehensive income
                
                
                4,594**Total
                    Stockholders' Equity**
                
                
                12,027,309**TOTAL
                    LIABILITIES AND STOCKHOLDERS' EQUITY**
                
                $
                19,583,771The
                    accompanying notes are an integral part of these unaudited condensed
                    consolidated financial
                    statements


3
 *Index*


**CHINA
                  DIGITAL MEDIA CORPORATION AND SUBSIDIARIES****CONDENSED
                  CONSOLIDATED STATEMENTS OF OPERATIONS AND****COMPREHNSIVE
                  INCOME****FOR
                  THE THREE MONTHS ENDED MARCH 31, 2006 and 2005
                  (UNAUDITED)**
 2006
                
                2005**NET
                    SALES**Revenue
                    from digitalization of television signals
                
                $
                1,455,371
                
                $
                690,616Revenue
                    from television advertising
                
                
                1,732,033
                
                
                -Revenue
                    from software development
                
                
                22,851
                
                
                485Revenue
                    from investments in television series
                
                
                174,629
                
                
                -Government
                    grant received
                
                
                311,837
                
                
                302,3713,696,721
                
                
                993,472**COST
                    OF SALES**
                
                
                (1,935,864
                )
                
                (121,025
                )**GROSS
                    PROFIT**
                
                
                1,760,857
                
                
                872,447**OPERATING
                    EXPENSES**Selling,
                    general and administrative expenses
                
                
                551,849
                
                
                171,656Depreciation
                    and amortization
                
                
                578,048
                
                
                263,136Total
                    Operating Expenses
                
                
                1,129,897
                
                
                434,792**INCOME
                    FROM OPERATION**
                
                
                630,960
                
                
                437,655**OTHER
                    INCOME (EXPENSES)**Interest
                    income
                
                
                17,252
                
                
                198Other
                    income
                
                
                77,947
                
                
                -Interest
                    paid to a related company, a director and a stockholder
                
                
                (1,777
                )
                
                -Total
                    Other Income
                
                
                93,421
                
                
                198**NET
                    INCOME BEFORE TAXES AND MINORITY INTERESTS**
                
                
                724,381
                
                
                437,853Income
                    tax expenses
                
                
                (285,559
                )
                
                -Minority
                    interests
                
                
                5,727
                
                
                -**NET
                    INCOME**
                
                $
                444,549
                
                $
                437,853**OTHER
                    COMPREHENSIVE INCOME**Foreign
                    currency translation gain
                
                
                43,300
                
                
                -**COMPREHENSIVE
                    INCOME**
                
                $
                487,849
                
                $
                437,853**Net
                    income per share-basic**
                
                $
                0.01
                
                $
                0.02**Net
                    income per share-diluted**
                
                $
                0.01
                
                $
                0.02Weighted
                    average number of shares outstanding during the year -
                    basic
                
                
                30,906,343
                
                
                23,051,117Weighted
                    average number of shares outstanding during the year-
                    diluted
                
                
                40,339,795
                
                
                23,051,117The
                    accompanying notes are an integral part of these unaudited condensed
                    consolidated financial
                    statements


4
 *Index*


**CHINA
                  DIGITAL MEDIA CORPORATION AND SUBSIDIARIES****CONDENSED
                  CONSOLIDATED STATEMENTS OF CASH FLOWS****FOR
                  THE THREE MONTHS ENDED MARCH 31, 2006 and 2005
                  (UNAUDITED)**
 2006
                
                2005**CASH
                    FLOWS FROM OPERATING ACTIVITIES**Net
                    income
                
                $
                444,549
                
                $
                437,853Adjusted
                    to reconcile net income to cash providedby
                    operating activities:Amortization
                    - cost of sales
                
                
                109,724
                
                
                -Depreciation
                
                
                578,048
                
                
                263,136Stock
                    issued for services
                
                
                17,000
                
                
                -Minority
                    interests
                
                
                (5,727
                )
                
                -Changes
                    in operating assets and liabilities(Increase)
                    decrease in:Accounts
                    receivable, net of allowance
                
                
                (363,671
                )
                
                (702,103
                )Other
                    receivables and prepaid expenses
                
                
                (55,859
                )
                
                (9,485
                )Inventories
                
                
                128,369
                
                
                (237,750
                )Due
                    from directors
                
                
                -
                
                
                20,717Increase
                    (decrease) in:Due
                    to a director
                
                
                76,696
                
                
                (32,000
                )Due
                    to a stockholder
                
                
                60,974
                
                
                -Due
                    to a related company
                
                
                (89,057
                )
                
                38,988Accounts
                    payable
                
                
                771,813
                
                
                569,564Other
                    payables and accrued liabilities
                
                
                (240,477
                )
                
                (3,277
                )Taxes
                    payable
                
                
                331,112
                
                
                (5,993
                )Net
                    cash provided by operating activities
                
                
                1,763,494
                
                
                339,650**CASH
                    FLOWS FROM INVESTING ACTIVITIES**Deposits
                    on investments in joint ventures
                
                
                (323,064
                )
                
                -Purchase
                    of property and equipment
                
                
                (1,457,460
                )
                
                (406,221
                )Net
                    cash used in investing activities
                
                
                (1,780,524
                )
                
                (406,221
                )**CASH
                    FLOWS FROM FINANCING ACTIVITIES**Proceeds
                    from private placement
                
                
                387,500
                
                
                -Net
                    cash provided by financing activities
                
                
                387,500
                
                
                -**EFFECT
                    OF EXCHANGE RATE ON CASH**
                
                
                27,300
                
                
                -**NET
                    INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**
                
                
                397,770
                
                
                (66,571
                )**CASH
                    AND CASH EQUIVALENTS AT BEGINNING OF PERIOD**
                
                
                1,123,912
                
                
                160,177**CASH
                    AND CASH EQUIVALENTS AT END OF PERIOD**
                
                $
                1,521,682
                
                $
                93,606The
                    accompanying notes are an integral part of these unaudited condensed
                    consolidated financial
                    statements


5
 *Index*





**CHINA
      DIGITAL MEDIA CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**AS
      OF MARCH 31, 2006 (UNAUDITED)**







**NOTE
      1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES**





(A)
      Basis
      of Presentation





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America for interim financial information and pursuant to
      the
      rules and regulations of the Securities and Exchange Commission. Accordingly,
      they do not include all of the information and footnotes required by generally
      accepted accounting principles for complete financial statements.





In
      the
      opinion of management, the unaudited condensed consolidated financial statements
      contain all adjustments consisting only of normal recurring accruals considered
      necessary to present fairly the Company's consolidated financial position at
      March 31, 2006, the consolidated results of operations for the three months
      ended March 31, 2006 and 2005, and consolidated statements of cash flows for
      the
      three months ended March 31, 2006 and 2005. The consolidated results for the
      three months ended March 31, 2006 are not necessarily indicative of the results
      to be expected for the entire fiscal year ending December 31, 2006. These
      consolidated financial statement should be read in conjunction with the
      consolidated financial statements and notes for the year ended December 31,
      2005
      appearing in the Company's annual report on Form 10-KSB as filed with the
      Securities and Exchange Commission.





(B)
            Principles
                of Consolidation





The
      accompanying unaudited condensed consolidated financial statements for the
      three
      months ended March 31, 2006 include the unaudited financial statements of China
      Digital Media Corporation (“CDMC”) and its wholly owned or controlled
      subsidiaries, China Digimedia Holding Limited (“CDHL”), Arcotect (Guangzhou)
      Limited (“AGL”), Guangdong M-Rider Media Company (“M-Rider”) and Digimedia
      Services (Shenzhen) Limited (“Digimedia Shenzhen”) and its 90% variable interest
      entity (“VIE”) in Guangdong HuaGuang DigiMedia Culture Development Limited
      (“HuaGuang”) (collectively, the Company). The minority interest represents the
      minority shareholders’ 10% proportionate share of the profits of
      HuaGuang.





The
      accompanying unaudited condensed consolidated financial statements for the
      three
      months ended March 31, 2005 include the financial statements of CDMC and its
      wholly owned subsidiaries, CDHL and AGL.





All
      significant inter-company balances and transactions have been eliminated in
      consolidation.





(C)
            Revenue
                Recognition





Software
      development





The
      Company provides various information technology professional services to its
      customers based on a negotiated fixed-price time and materials contract. The
      Company recognizes services-based revenue from all of its contracts when the
      services have been performed, the customers have approved the completion of
      the
      services and invoices have been issued and collectibility is reasonably assured.




6
 *Index*


**CHINA
        DIGITAL MEDIA CORPORATION & SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF MARCH 31, 2006 (UNAUDITED)**


Digitalization
      of television signals





The
      Company entered into an agreement with Nanhai Network Company to assist its
      subscribers on the conversion of television signals from analog into digital
      by
      providing STB and smart cards to the subscribers in Nanhai City on a lease
      basis. The Company is entitled to a portion of fees payable by the existing
      subscribers under a subscription agreement entered into between the subscribers
      and the Nanhai Network Company. Revenue is recognized on a straight line basis
      in accordance with the terms of the subscription agreement. The Company also
      charges installation fees and sells STB and smart cards to new subscribers.
      Revenue arising from these services is recognized when the subscriber is
      invoiced for the STB and smart cards upon the completion of installation
      works.





Government
      grant





The
      local
      government of Nanhai City also approved a grant of Rmb10,000,000
      ($1,247,348) each year for five years to finance the purchase of STB and
      smart cards for sale and lease to subscribers. The grant is recognized as
      revenue on receipt from the local government.





Television
      Advertising sales





The
      Company acts as an advertising agent for certain television channels by selling
      advertising air time spaces and television program backdrops to customers.
      The
      Company's advertising services revenue is derived from billings that are earned
      when the advertisements are placed and revenue is recognized as the media
      placements appear. During 2006, the Company purchase blocks of advertising
      slots
      and was the primary obligor and carried all of the credit risk for the
      advertisement placements and accordingly, recorded the full amount of such
      billings from the advertisement placements as revenue. Deferred revenues are
      recognized as a liability when billings are received in advance of the date
      before revenues are earned.





Television
      series





The
      Company invested in the production of two television series. Revenue from
      investments in television series is recognized upon receipt from the production
      company.




**NOTE
      2 - SEGMENT INFORMATION**





The
      Company operates in five reportable segments; digitalization of television
      signals, television advertising sales, software development, investment in
      television series and other. The accounting policies of the segments are the
      same as described in the summary of significant accounting policies. The Company
      evaluates segment performance based on income from operations. All inter-company
      transactions between segments have been eliminated on consolidation. As a
      result, the components of operating income for one segment may not be comparable
      to another segment. The following is an unaudited summary of our segment
      information for the three months ended March 31, 2006 and 2005:


**Digitalization**
              
              
              
              
              
              **Investments****of
                  Television**
              
              **Television**
              
              **Software**
              
              **in
                  television****Signals**
              
              **Advertising**
              
              **Development**
              
              **series**
              
              **Others**
              
              **Total****2006****Revenues**
              
              $
              1,767,208
              
              $
              1,732,033
              
              $
              22,851
              
              $
              174,629
              
              $
              0
              
              $
              3,696,721**Gross
                  profit**
              
              
              1,547,425
              
              
              135,039
              
              
              22,851
              
              
              55,542
              
              
              0
              
              
              1,760,857**Total
                  assets**
              
              
              15,850,373
              
              
              2,149,617
              
              
              92,823
              
              
              1,082,253
              
              
              408,705
              
              
              19,583,771**Capital
                  expenditure**
              
              
              1,431,110
              
              
              5,211
              
              
              1,265
              
              
              310,590
              
              
              0
              
              
              1,748,176**Depreciation
                  and amortization**
              
              
              560,909
              
              
              3,080
              
              
              3,140
              
              
              0
              
              
              10,919
              
              
              578,048**2005****Revenues**
              
              $
              983,809
              
              $
              -
              
              $
              (3,164
              )
              $
              -
              
              $
              12,827
              
              $
              993,472**Gross
                  profit**
              
              
              862,602
              
              
              -
              
              
              (2,982
              )
              
              -
              
              
              12,827
              
              
              872,447**Total
                  assets**
              
              
              7,490,622
              
              
              -
              
              
              69,495
              
              
              -
              
              
              31,696
              
              
              7,591,813**Capital
                  expenditure**
              
              
              406,221
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              406,221**Depreciation
                  and amortization**
              
              
              260,339
              
              
              -
              
              
              1,678
              
              
              -
              
              
              1,119
              
              
              263,136




7
 *Index*


**CHINA
        DIGITAL MEDIA CORPORATION & SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF MARCH 31, 2006 (UNAUDITED)**


**NOTE
      3 - DEPOSIT ON INVESTMENTS IN JOINT VENTURES**





On
      February 15, 2006, HuaGuang entered into two joint venture agreements (the
“JV
      Agreements”) to form two joint ventures with a provincial television station for
      a term of twenty years. The Company’s interests in the joint ventures are 49%
      and 51%. Pursuant to the JV Agreements, the provincial television station will
      outsource its entire advertising time slots into the two joints ventures for
      a
      term of five years each, with rights to use their production resources and
      equipment. As of March 31, 2006, the joint ventures were in the process of
      formation and the Company contributed cash of $323,064 towards fulfilling the
      registered capital and working capital requirements of the joint ventures.





**NOTE
      4 - COMMITMENTS AND CONTINGENCIES**





Capital
      commitments




According
      to the amended Articles of Association of AGTL, CDHL has to fulfill registered
      capital contributions of $5 million within two years from July 16, 2004. As
      of
      March 31, 2006, the Company has fulfilled $4,739,990 of the registered capital
      requirement and has outstanding registered capital commitments of $260,010.




On
      January 31, 2006, HuaGuang entered into an Asset Transfer Agreement (the “AT
      Agreement”) with Guiyang Classic & Fashion Advertising Co., Limited
      (“Guiyang Classic”), a television program production company organized and
      existing under the laws of the PRC, pursuant to which HuaGuang will acquire
      all
      media related businesses, assets, contracts and management from Guiyang Classic
      and inject those assets into a newly formed PRC subsidiary known as Guizhou
      HuaGuang Digimedia Company Limited. Pursuant to the terms of the AT Agreement,
      the Company will pay $2,200,000 to Guiyang Classic by a combination of cash
      and
      restricted common stock of the Company, subject to certain adjustments in the
      event that the acquired assets generate a profit of less of than $2,500,000
      in
      the next two years. The completion of this transaction is subjected to certain
      conditions, including official PRC Government approval and due diligence. The
      Company expects to complete the acquisition during the second quarter of 2006.




Contingent
      consideration





During
      2005, HuaGuang acquired all of the issued and outstanding capital of M-Rider
      for
      a total consideration of $1,047,559 of which $132,927 was payable in cash and
      $914,632 payable by the issue of shares of the Company’s common stock. On the
      effective date of August 25, 2005, CDHL paid the cash consideration of $132,927
      and 29,158 shares of the Company’s common stock having a value of $62,141 were
      issued to the stockholders of M-Rider. As of March 31, 2006, the Company is
      contingently liable to issue shares of common stock to the value of $852,491
      one
      year from the effective date, adjusted proportionately for the achievement
      by
      M-Rider by that date that their net operating cash flow is not less than
      $1,129,512.





**NOTE
      5 - COMMON STOCK**




On
      March
      15, 2006, the Company issued 310,000 shares of restricted common stock at $1.25
      per share to a corporate investor for an aggregate consideration of $387,500
      under a Stock Purchase Agreement dated March 14, 2006. The Company relied on
      an
      exemption from registration pursuant to Regulation S under the Securities Act
      of
      1933 in connection with the issuance of the shares.




8
 *Index*


**CHINA
        DIGITAL MEDIA CORPORATION & SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF MARCH 31, 2006 (UNAUDITED)**


On
      March
      29, 2006, the Company issued 2,381 shares of restricted common stock with a
      fair
      value of $3,000 to a consultant retained by a
      stockholder. The fair value of $3,000 on this stock issue was charged to the
      stockholder’s account in the accompanying financial statements. The Company
      relied on an exemption from registration pursuant to Section 4(2) under the
      Securities Act in connection with the issuance of the shares.





On
      March
      30, 2006, the Company issued 335,308 shares of restricted common stock with
      a
      fair value of $577,065 for the outstanding participation costs in the production
      of two television series. The Company relied on an exemption from registration
      pursuant to Section 4(2) under the Securities Act in connection with the
      issuance of the shares.





During
      2006, the Company recognized expense of $17,000 and recorded deferred stock
      compensation of $33,433 as of March 31, 2006, for services provided by
      CEOcast, Inc. for one year commencing from September 27,
      2005.





During
      2006, CDHL contributed registered capital of $512,821 to AGL.





**NOTE
      6 -** **RELATED
      PARTY TRANSACTIONS**





As
      of
      March 31, 2006, a director and a related company loaned to the Company $76,696
      and $129,337 respectively as short-term unsecured loans. The loans bear interest
      at 6% per annum and have no fixed repayment terms.





As
      of
      March 31, 2006, a stockholder loaned to the Company $60,974 as short-term
      unsecured loans. The loan bears interest at 6% per annum and has no fixed
      repayment terms.





9
 *Index*





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





We
      are
      hereby providing cautionary statements identifying important factors that could
      cause our actual results to differ materially from those projected in forward
      looking statements made in this quarterly report on Form 10-QSB. Any statements
      that express, or involve discussions as to, expectations, beliefs, plans,
      objectives, assumptions or future events or performance (often, but not always,
      through the use of words or phrases such as "likely will result", "are expected
      to", "will continue", "is anticipated", "estimated", "intends", "plans" and
      "projection") are not historical facts and may be forward-looking statements
      and
      involve estimates and uncertainties which could cause actual results to differ
      materially from those expressed in the forward-looking statements.





We
      caution that the factors described herein could cause actual results to differ
      materially from those expressed in any forward-looking statements and that
      the
      investors should not place undue reliance on any such forward-looking
      statements. Further, any forward-looking statement speaks only as of the date
      on
      which such statement is made, and we undertake no obligation to update any
      forward-looking statement to reflect events or circumstances after the date
      on
      which such statement is made or to reflect the occurrence of unanticipated
      events or circumstances. Consequently, no forward-looking statement can be
      guaranteed.




New
      factors emerge from time to time, and it is not possible for us to predict
      all
      such factors. Further, we cannot assess the impact of each such factor on our
      results of operations or the extent to which any factor, or combination of
      factors, may cause actual results to differ materially from those contained
      in
      any forward-looking statements.





**Overview**





China
      Digital Media Corporation (”CDMC”) was previously known as HairMax
      International, Inc. (“Hairmax”), a Nevada corporation. It was incorporated in
      Nevada in 1987. Arcotect Digital Technology Limited, a corporation organized
      under the laws of Hong Kong, consummated a reverse merger with Hairmax in March,
      2005, and Hairmax subsequently changed its name to China Digital Media
      Corporation, which is now our corporate name. With the termination of the
      original businesses of Hairmax, all of China Digital Media Corporation’s
      businesses are now located in the People’s Republic of China (the “PRC” or
‘China”). Arcotect Digital Technology Limited has changed its name to China
      Digimedia Holdings Limited (“CDHL”), and is a wholly-owned subsidiary of CDMC.


.


We
      are
      engaged in the media industry in the PRC, the business of broadcasting media
      and
      cable television. Our business plan is to strengthen our branding and to enlarge
      our presence and involvement in the media industry through investment, mergers,
      acquisitions and alliance partnerships. In view of the rapid growth and
      potential opportunities we believe to exist in China's media industry, we will
      continue to invest our resources into the media market across
      China.




Cable
      TV operations and digital broadcast technology development




Arcotect
      (Guangzhou) Ltd, (“AGL”) a wholly owned foreign subsidiary of CDMC doing
      business in China, is the sole contractor and operator of digital television
      (“DTV”) services in Nanhai, Guangdong Province, a city with over 410,000
      residential and commercial cable television subscribers. The cable broadcasting
      system had been completely analog.




10
 *Index*




On
      February 6, 2004, we signed a Co-operative Agreement for Total Migration into
      DTV System for the Nanhai District and subsequently signed a supplementary
      agreement on July 8, 2005 (collectively, the “Co-operative Agreements”) with the
      city-owned cable company. Pursuant to the Co-operative Agreements, we are
      responsible for:





(1)
            migrating
                all cable television subscribers in Nanhai from an analog to a digital
                system (“Migration”) by the end of
                2007;


(2)
            providing
                the first digital set-top-box (“STB”) to DTV subscribers on a lease basis;
                and


(3)
            providing
                operational support services including operating pay-TV and interactive
                services based on DTV technology.





The
      broadcast system that decrypts the signal with the Company’s set-top-box and
      appropriate smart cards, can carry up to 800 digital channels of pay-TV programs
      and value added multimedia services. Currently, the services consists of 148
      channels, including a 48-channel basic package and 100 pay channels bundled
      into
      various value added packages, such as World Movie, Life & Leisure, World
      Sports, News, Drama and Family.




As
      of
      March 31, 2006, the Company migrated over 160,000 out of approximately 410,000
      subscribers in Nanhai. During the quarter, the Company decided to purchase
      new
      digital set-top-box which is integrated with new middle ware technology from
      a
      new STB supplier. The advanced set-top-box will enable the Company to provide
      additional value added services which can be deployed in the future according
      to
      a business plan of the Company.




In
      September 2005, the Company commenced trials of HDTV broadcasts, providing
      dramatically improved resolution and sound quality to select subscribers. In
      the
      first quarter of 2006, the Company deployed on an IP (Internet Protocol) based
      STB which was equipped with a Java platform and an Ethernet port to facilitate
      various interactive services we intend to offer in the future; such as targeted
      advertising, interactive TV programs, online shopping and console games, as
      well
      as interactive education services. The Company is currently negotiating
      partnerships with various vendors to provide interactive services, transforming
      a television set into an interactive multimedia platform.





In
      early
      May of 2006, the Company in Nanhai moved its office into a new premise with
      more
      than 10,000 sq. ft. The new office building is also the headquarter of Nanhai
      TV
      Bureau and Network Company.





TV
      advertising sales




In
      August
      2005, the Company acquired 100% control of Guangdong M-Rider Media Company
      Limited through our strategy partner - HuaGuang. M-Rider is an advertising
      sales
      company engaged in the distribution of television commercials. The Company
      pays
      fixed fees to the television stations and is responsible for reselling
      commercial airtime to international and local advertising customers, either
      directly or through agents. The Company also provides consulting on scheduling
      and other issues like media planning and arrangement to enhance the
      effectiveness of clients’ commercial.




In
      December 2005, M-Rider signed its largest wholesaler contract with Southern
      International Media Advertising Co., Ltd., to manage and operate the commercial
      airtime of a provincial station’s channel for a one year term starting on
      January 1, 2006, extendable for an additional year. This model also has the
      potential to be applied to other TV stations in other cities as well as in
      other
      provinces throughout China.




11
 *Index*





TV
      program production and investment




With
      a
      growing subscription base, we intend to capitalize on our distribution platform
      through the production of original programming. Our plan is to develop a
      long-term presence in television program production, but we realize that program
      production is a relatively high risk venture. In order to obtain sufficient
      production experience, we have decided to participate through a strategic
      partner, Guangdong Runshi Movie & Music Production Co., Ltd., which has two
      ingredients essential for success in China: a Class A license that allows
      filming before submitting to censorship, which is cost effective, and a good
      program distribution network.





We
      have
      made a minority investment in two television series, XiGuan Affairs, with 40
      episodes, and The Story of a Small Town, with 24 episodes. XiGuan Affairs has
      already generated revenue in the last quarter of 2005 and the first quarter
      of
      2006. The production of The Story of a Small Town has been completed and will
      begin marketing and sales in the second quarter of 2006.





TV
      Channel Operation




In
      January 2006, the Company entered into an acquisition agreement, through its
      VIE, HuaGuang to purchase the media assets and personnel of Guiyang Classic
      & Fashion Advertising Co., Ltd., a television program production and
      advertising company in China. The target’s management team has over a decade of
      business experience in the media industry and a track record of successful
      television program production for different television channels.




In
      February 2006, the Company’s VIE, HuaGuang, entered into two joint venture
      agreements with a provincial television station for a term of 20 years engaging
      HuaGuang in a TV channel operation starting in May 2006, including content
      management, advertising sales and program production. Pursuant to the joint
      venture contracts, the provincial television station provides the exclusive
      use
      of a television channel, including production resources and equipment, while
      outsourcing its entire advertising time slots into the two joint ventures for
      an
      initial term of five years. One of the joint ventures, with 49% of the interest
      owned by HuaGuang, is responsible for sourcing and producing content, as well
      as
      schedule planning. The second joint venture, with 51% ownership interest by
      HuaGuang, will serve as the exclusive advertising agent to manage TV
      commercials. With a potential coverage of 8 million households, the channel
      is
      scheduled to have approximately 1,700 hours of self-produced television content
      each year, focusing on lifestyle and entertainment programs.





The
      Company relied on three suppliers for approximately 99% of its purchases in
      the
      first quarter of 2006 for the Nanhai digitalization of TV system in the Nanhai
      project and relied on one TV channel for approximately 90% of its purchase
      of TV
      advertising time slot in the first quarter of 2006 for the advertising agency
      sales of M-Rider. As of March 31, 2006, accounts payable to these suppliers
      amounted to $2,526,207, $1,966,491 and $336,784 for the Nanhai project, and
      $50,181 for M-Rider’s operations, respectively. Management believes that there
      are alternate sources of supply in the event that any of these suppliers ceased
      to provide goods and services to the Company.




For
      the
      three months period ended March 31, 2006, the Company did not derive revenue
      from any one customer that amounted to more than 10% of its total
      revenue.





At
      present, some of our targeted businesses are subject to certain restrictions
      in
      the PRC. In order to enable us to invest in certain media sectors such as TV
      advertising and content production before related government regulations and
      policies are opened up to foreign investors, we have strategically partnered
      with a Chinese registered company, Guangdong HuaGuang DigiMedia Culture
      Development Limited (“HuaGuang”), formerly known as Guangdong Pukonyi Culture
      Development Limited, to hold investments in programs production and advertising
      operations on our behalf. In this way, we are not the direct owner of the
      programming and advertising operations. We anticipate that this arrangement
      will
      be continued until further relaxation of broadcasting policy in China. Before
      transferring the entire equity interest in HuaGuang to us according to our
      Alliance Agreement with HuaGuang, we have obtained control and manage the
      operations of HuaGuang and receive 90% of its gross profit through various
      levels of agreements signed between our subsidiaries in China and HuaGuang.
      We
      have been advised by our Chinese counsel that these arrangements are necessary
      because we, a Nevada corporation, are considered a foreign company for the
      purposes of Chinese foreign investment laws. They also benefit the Company
      inasmuch as the Company can control and have the economic benefit of investment
      through HuaGuang, even though it is not the legal owner of these investments.




12
 *Index*





**RESULTS
      OF OPERATIONS**





**Other
      Comprehensive Income**





We
      had
      other comprehensive income, for the three months ended March 31, 2006 of
      $43,300. The gain is principally attributable to the appreciation of RMB against
      the Dollar.





**Net
      Income**





We
      had
      net income of $444,549, or $0.01 per common share for the three months ended
      March 31, 2006, compared to the net income of $437,853 for the same period
      ended
      March 31, 2005. The increase in net income was attributable to the increase
      in
      number of basic digital television subscribers and subscription of additional
      value-added services in Nanhai operations in comparison with the same period
      in
      2005. Net income before taxes and minority interests increased by 65% to
      $724,381 from last period of 2005. The marginal increase in net income was
      primarily due to an increase of income taxes provision of $285,559 for the
      three
      months ended March 31, 2006.





**Minority
      Interest**





Minority
      interest in the statement of operation represents the minority shareholders’
share of the profits in our consolidated variable interest entity. For the
      three
      months ended March 31, 2006, we recognized minority’s share of our profit of
      $5,727.





**Earnings
      before interest, tax, depreciation and amortization
      (“EBITDA”)**





EBITDA
      for the three months ended March 31, 2006 was $1,209,008. The increase of
      $508,217, or 73%, over $700,791 for the three months ended March 31, 2005 was
      primarily due to the substantial increases in total revenue.




**Sales**





Total
      net
      sales increased by $2,703,249 or 272% from $993,472 for the three months ended
      March 31, 2005 to $3,696,721 for the same period ended March 31, 2006. The
      increase in total net sales was due to the consolidation of revenue from the
      newly acquired subsidiary, M-Rider and the share of the revenue from the
      investment in the television series. Together with an increase in the number
      of
      television subscribers, sales of value-added services and the increase of
      commercial accounts, total revenues for digital television operations had
      contributed a growth for the three months ended March 31, 2006 as compared
      to
      the comparable period in 2005. Advertising revenue was a new income source upon
      acquisition of M-Rider. In December 2005, M-Rider signed its largest wholesaler
      contract with Southern International Media Advertising Co., Ltd. to manage
      and
      operate the commercial airtime of a provincial station’s channel starting on
      January 1, 2006. For the first quarter, total revenue from television
      advertising represented 47% of the total revenues of the Company.





Due
      to
      business expansion of the Company into the agency business of television
      advertising, gross profit margin dropped significantly from 88% during the
      three
      months ended March 31, 2005 to 48% during the three months ended March 31,
      2006.




13
 *Index*





**Expenses**





Selling,
      general, administrative and depreciation and amortization expenses for the
      three
      months ended March 31, 2006 increased by $695,105 or 160% to $1,129,897 in
      comparison with the three month period ended March 31, 2005. Selling, general
      and administrative expenses increased by $380,194 for the three months ended
      March 31, 2006 over the same period last year due to an increase in business
      activities, appointment of additional personnel for the development of new
      value-added products and services and the operation of newly acquired
      subsidiary. Depreciation and amortization increased by $314,912 for the three
      months ended March 31, 2006 due to the increase in the acquisition of STBs
      for
      the migration project in Nanhai.





**Liquidity
      and Capital Resources**





On
      March
      31, 2006, we had cash of $1,521,682 and a working capital surplus of $222,480.
      This compares with cash of $93,606 and a working capital deficit of $2,087,620
      at March 31, 2005. The increase in cash and improvement in working capital
      from
      a deficit to a surplus was mainly due to receivable collections from Nanhai
      Network Company, increased retained earnings and additional paid in capital
      for
      the Company. Operating activities had a net generation of cash in the amount
      of
      $1,763,494 during the three months ended March 31, 2006 reflecting an excess
      of
      revenues over expenditure and increased depreciation as mentioned
      above.





Net
      cash
      used in investing activities for the three months ended March 31, 2006 was
      $1,780,524 as compared with net cash used in investing activities of $406,221
      for the three months ended March 31, 2005. The increase in net cash used in
      investing activities was due to an increase in purchases of STBs and investment
      in subsidiaries, compared to the comparable period in 2005.





Net
      cash
      provided by financing activities for the three months ended March 31, 2006
      was
      $387,500. The net cash provided by financing activities was attributable through
      a private placement.




We
      continued to receive cash from Nanhai Network Company according to the project
      schedule and plan of television digitalization migration. The Company's
      investment in STBs and smart cards remained the substantial accounts payable
      at
      March 31, 2006. Due to our acquisition and expansion of operations, additional
      cash was invested. Two additional joint venture investments are expected to
      commence operation in the second quarter of 2006.




**ITEM
      3. CONTROLS AND PROCEDURES**





**Quarterly
      Evaluation of Controls**





As
      of the
      end of the period covered by this quarterly report on Form 10-QSB, we evaluated
      the effectiveness of the design and operation of (i) our disclosure controls
      and
      procedures ("Disclosure Controls"), and (ii) our internal control over financial
      reporting ("Internal Controls"). This evaluation ("Evaluation") was performed
      by
      our President and Chief Executive Officer, Ng Chi Shing ("CEO") and Lui Chi
      Keung, our Chief Financial Officer ("CFO"). In this section, we present the
      conclusions of our CEO and CFO based on and as of the date of the Evaluation,
      (i) with respect to the effectiveness of our Disclosure Controls, and (ii)
      with
      respect to any change in our Internal Controls that occurred during the most
      recent fiscal quarter that has materially affected, or is reasonably likely
      to
      materially affect our Internal Controls.





**CEO
      and CFO Certifications**





Attached
      to this quarterly report, as Exhibits 31.1 and 31.2, are certain certifications
      of the CEO and CFO, which are required in accordance with the Exchange Act
      and
      the Commission's rules implementing such section (the "Rule 13a-15(c)/15d-(e)
      Certifications"). This section of the quarterly report contains the information
      concerning the Evaluation referred to in the Rule 13a-15(c)/15d-(e)
      Certifications. This information should be read in conjunction with the Rule
      13a-15(c)/15d-(e) Certifications for a more complete understanding of the topic
      presented.




14
 *Index*





**Disclosure
      Controls and Internal Controls**





Disclosure
      Controls are procedures designed with the objective of ensuring that information
      required to be disclosed in our reports filed with the Commission under the
      Exchange Act, such as this quarterly report, is recorded, processed, summarized
      and reported within the time period specified in the Commission's rules and
      forms. Disclosure Controls are also designed with the objective of ensuring
      that
      material information relating to the Company is made known to the CEO and the
      CFO by others, particularly during the period in which the applicable report
      is
      being prepared. Internal Controls, on the other hand, are procedures which
      are
      designed with the objective of providing reasonable assurance that (i) our
      transactions are properly authorized, (ii) the Company's assets are safeguarded
      against unauthorized or improper use, and (iii) our transactions are properly
      recorded and reported, all to permit the preparation of complete and accurate
      financial statements in conformity with accounting principals generally accepted
      in the United States.





**Limitations
      on the Effectiveness of Controls**





Our
      management does not expect that our Disclosure Controls or our Internal Controls
      will prevent all error and all fraud. A control system, no matter how well
      developed and operated, can provide only reasonable, but not absolute assurance
      that the objectives of the control system are met. Further, the design of the
      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 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 override of the control. The design of a 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 objectives under all potential future conditions. Over
      time, control may become inadequate because of changes in conditions, or because
      the degree of compliance with the policies or procedures may deteriorate.
      Because of the inherent limitations in a cost-effective control system,
      misstatements due to error or fraud may occur and not be detected.




**Scope
      of the Evaluation**





The
      CEO
      and CFO's evaluation of our Disclosure Controls and Internal Controls included
      a
      review of the controls' (i) objectives, (ii) design, (iii) implementation,
      and
      (iv) the effect of the controls on the information generated for use in this
      quarterly report. In the course of the Evaluation, the CEO and CFO sought to
      identify data errors, control problems, acts of fraud, and they sought to
      confirm that appropriate corrective action, including process improvements,
      was
      being undertaken. This type of evaluation is done on a quarterly basis so that
      the conclusions concerning the effectiveness of our controls can be reported
      in
      our quarterly reports on Form 10-QSB and annual reports on Form 10-KSB. The
      overall goals of these various evaluation activities are to monitor our
      Disclosure Controls and our Internal Controls, and to make modifications if
      and
      as necessary. Our intent in this regard is that the Disclosure Controls and
      the
      Internal Controls will be maintained as dynamic systems that change (including
      improvements and corrections) as conditions warrant.





Among
      other matters, we sought in our Evaluation to determine whether there were
      any
      significant deficiencies or material weaknesses in our Internal Controls, which
      are reasonably likely to adversely affect our ability to record, process,
      summarize and report financial information, or whether we had identified any
      acts of fraud, whether or not material, involving management or other employees
      who have a significant role in our Internal Controls. This information was
      important for both the Evaluation, generally, and because the Rule
      13a-15(c)/15d-(e) Certifications, Item 5, require that the CEO and CFO disclose
      that information to our Board and to our independent auditors, and to report
      on
      related matters in this section of the quarterly report. In the professional
      auditing literature, "significant deficiencies" are referred to as "reportable
      conditions". These are control issues that could have significant adverse affect
      on the ability to record, process, summarize and report financial data in the
      financial statements. A "material weakness" is defined in the auditing
      literature as a particularly serious reportable condition where the internal
      control does not reduce, to a relatively low level, the risk that misstatement
      cause by error or fraud may occur in amounts that would be material in relation
      to the financial statements and not be detected within a timely period by
      employee in the normal course of performing their assigned functions. We also
      sought to deal with other controls matters in the Evaluation, and in each case,
      if a problem was identified; we considered what revisions, improvements and/or
      corrections to make in accordance with our ongoing procedures.





**Conclusions**





Based
      upon the Evaluation, our disclosure controls and procedures are designed to
      provide reasonable assurance of achieving our objectives. Our CEO and CFO have
      concluded that our disclosure controls and procedures are effective at that
      reasonable assurance level to ensure that material information relating to
      the
      Company is made known to management, including the CEO and CFO, particularly
      during the period when our periodic reports are being prepared, and that our
      Internal Controls are effective at that assurance level to provide reasonable
      assurance that our financial statements are fairly presented inconformity with
      accounting principals generally accepted in the United States. Additionally,
      there has been no change in our Internal Controls that occurred during our
      most
      recent fiscal quarter that has materially affected, or is reasonably likely
      to
      affect, our Internal Controls.




15
 *Index*





**PART
      II. OTHER INFORMATION**





**Item
      1. Legal Proceedings**





On
      May
      24, 2005, a Complaint was filed against us, among others, in the United States
      District Court for the Southern District of New York, in a matter captioned
      as
“Ziegler, Ziegler & Associates LLP and Scott Ziegler, Plaintiffs, v. China
      Digital Media Corporation and John Does 1-10, Defendants.” In the Complaint, the
      Plaintiffs allege, among other things, that we and John Does 1-10 used Plaintiff
      Scott Zeigler’s e-mail address and Plaintiff Ziegler, Ziegler & Associates,
      LLP’s internet domain name to distribute promotional information about us over
      the internet. The Plaintiffs seek a several types of relief, including damages
      in an amount not less than $1,250,000. Pre-trial discovery has commenced in
      the
      matter. The file number of the civil action is 05 CV 4960. We made a motion
      to
      dismiss the complaint on the grounds that the Plaintiffs failed
      to establish that the District Court for the Southern District
      has personal jurisdiction over CDMC.  The Court has allowed the
      Plaintiffs to take discovery on the jurisdictional issue only, before deciding
      whether it will allow Plaintiffs to prosecute their case.  Plaintiffs
      have started, but not yet completed jurisdictional discovery.




The
      Company contested the allegations of the Plaintiffs and has retained counsel
      admitted to practice in the U.S. District Court for the Southern District of
      New
      York to vigorously defend the action. The Company did not hire a stock promoter
      or a spammer to distribute promotional e-mails, and the emails themselves recite
      that they were paid for by a shareholder of our Company, and not by the Company
      or an affiliate. We believe that the shareholder referred to in the emails
      was
      promoting its own interest and we had nothing to do with such activity. We
      believe we have no liability in this matter.





**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds**




On
      March
      15, 2006, the Company issued 310,000 shares of our restricted common stock
      to
      Asia Achieve Holdings Limited for an aggregate consideration of $387,500, and
      in
      connection therewith, the Company and Asia Achieve Holdings Limited entered
      into
      a Stock Purchase Agreement on March 14, 2006. Proceeds of the issuance of stock
      were used as working capital by the Company.





**Item
      3. Defaults Upon Senior Securities**





None.





**Item
      4. Submission of Matters to a Vote of Security Holders**





None.





**Item
      5. Other Information**





None





**Item
      6. Exhibits and Reports**




16
 *Index*


**EXHIBIT
                  NO.**
              **DESCRIPTION
                  OF EXHIBIT**31.1
              Certification
                  of Chief Executive Officer pursuant to
                  Rule 13a-14(a) under the Securities Exchange Act of 1934,
                  as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                  2002.31.2
              Certification
                  of Chief Financial Officer pursuant to
                  Rule 13a-14(a) under the Securities Exchange Act of 1934,
                  as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                  2002.32
              Certification
                  of Chief Executive Officer and Chief
                  Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.




REPORTS
      DESCRIPTION OF REPORT




Form
      8-K,
      filed 1-03-06 Disclosure of appointment of two new Board members of the Company





Form
      8-K,
      filed 1-04-06 Disclosure of sale of $1.0 million of common stock to Manta
      Finance Limited in a private placement





Form
      8-K,
      filed 1-18-06 Disclosure of entry into a Management Agreement for three years
      with Daniel Ng, Chairman and CEO





Form
      8-K,
      filed 2-06-06 Disclosure of Huagang’s entry into an Asset Transfer Agreement
      with Guiyang Classic & Fashion Advertising
      Co., Ltd.





Form
      8-K,
      filed 2-22-06 Disclosure of Huagang’s entry into two separate joint venture
      agreements with respect to a provincial television
      station





Form
      8-K,
      filed 5-10-06 Disclosure of ownership restructuring and transfer by Daniel
      Ng of
      23,250,000 shares of common stock and 1,875,000
      shares of Series A Convertible Preferred Stock of the Company to Modern Delta
      Holdings Limited,
      an investment holding company controlled by Daniel Ng




17
 *Index*




**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.




**CHINA
                DIGITAL MEDIA CORPORATION**
              (Registrant)Date: *May
              15, 2006*
            By:
            /s/ *Lui
              Chi Keung**Lui Chi Keung*
              *Chief Financial Officer*




Date: *May
              15, 2006*
            By:
            /s/ *Ng
              Chi Shing**Ng Chi Shing*
              *Chief Executive Officer*






18