On September 28, 2012, through our wholly-owned subsidiary CDI China, Inc. ("CDI China"), CD International Enterprises, Inc. sold its 51% interest in Shanghai Lang Chemical Co., Ltd., a PRC company ("Lang Chemical") pursuant to the terms of an Equity Transfer Agreement by and among CDI China, Black Stone Chemical Limited, Lang Chemical and Qian Zhu and Jingdong Chen, the minority owners of Lang Chemical. Mr. Chen also serves as chief executive officer of Lang Chemical, whose operations represent the majority of our basic material segment and approximately 29% of our consolidated revenues for the nine months ended June 30, 2012.

Under the terms of the Equity Transfer Agreement, Black Stone Chemical Limited purchased 2% of CDI China's interest and Mr. Chen and Ms. Zhu, his wife, purchased the remaining 49% interest for an aggregate purchase price of $1,221,532. Of this amount $600,000 was tendered at closing and the balance is payable over one year at an annual interest rate of 6%.

The terms of the Equity Transfer Agreement described above are qualified in their entirety by reference to the agreement which is filed as Exhibit 10.1 to this report. We expect to record a loss on the disposition of this subsidiary of approximately $1 million during the fourth quarter of fiscal 2012.

Item 9.01           Financial Statements and Exhibits.

(d)      Exhibits

10.1     Equity Transfer Agreement dated September 28, 2012 by
         and among CDI China, Inc., Black Stone Chemical Limited,
         Shanghai Lang Chemical Co., Ltd. and Qian Zhu and
         Jingdong Chen.