Today, China Digital Animation Development, Inc. announced that it has entered into a stock purchase agreement with Chongqing Dinv Ares Filming Production Co., Ltd. (Dinv Ares), an award-winning film production company based in Chongqing, China. The acquisition will be an all-stock transaction in which China Digital Animation will issue one million shares of its common stock to Dinv Ares. In exchange, it will receive certain assets of the company.

The acquisition of Dinv Ares provides China Digital Animation with a talented, creative team of production professionals, in addition to assets such as: post-editing facilities, professional video cameras, lighting, audio and other auxiliary equipment. Dinv Ares also provides equipment rental, distribution and media agents for the entertainment industry. Dinv Ares’ acquired business lines generated revenue of $3 million, gross profit of $1.5 million and net income of $930,414 in 2009.

Mr. Qiang Fu, Chairman and Chief Executive Officer of China Digital Animation, commented, “Since its founding in 1997, Dinv Ares has built an excellent reputation for quality work in film production and 2-D animation, which perfectly complements our own core strengths in 3-D digital animation.”

Mr. Fu continued, “We welcome the senior management team and creative staff of Dinv Ares to China Digital, and we look forward to their contributions to the success of our combined organization.” In addition to numerous films and television programs already completed by Dinv Ares, the company is currently working on a 20-episode teleplay, preparing three others and is working on a feature film. Top film stars appearing in these productions are also very active in promoting their projects on local and national television in China, and Dinv Ares has excellent distribution capabilities, which complement those of China Digital Animation.”