China Digital Animation Development, Inc. (fka CHDA)

[nennwert]

Termination of a Material Definitive Agreement

On August 19, 2010 the Registrant’s subsidiary, Heilongjiang Hairong Science & Technology Development Co., Ltd. (“Hairong”), entered into a Cancellation Agreement with Chongqing Dinv Ares Television Media, Ltd. (“Dinv Ares”) and Xiaoyang Fu. The Cancellation Agreement is effective as of August 12, 2010. The agreement terminates the prior agreements among the parties, which, as modified, contemplated that Hairong would acquire from Dinv Ares one of its subsidiaries: Chongqing Dinv Ares Filming Production Co., Ltd. In connection with the execution of the Cancellation Agreement, Xiaoyang Fu has returned to China Digital Animation Development the 500,000 shares of its common stock that were issued as a deposit against the future obligation to issue those shares in exchange for Chongqing Dinv Ares Filming Production Co., Ltd.