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

                                   FORM 10-KSB

[X]  ANNUAL  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT  OF  1934
     For the fiscal year ended December 31, 2003

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF THE SECURITIES
     EXCHANGE  ACT  OF  1934
     For the transition period from _____________ to _____________

                        Commission file number:  0-24374

                                 FANTATECH INC.
              ----------------------------------------------------
              (Exact name of small business issuer in its charter)

DELAWARE                                             62-1690722
-------------------------------                ----------------------
(State of other jurisdiction of                (I.R.S. Employer
incorporation or organization)                 Identification Number)

         418-A Cloverleaf Drive, Baldwin Park, Los Angeles, CA91706, USA
         ---------------------------------------------------------------
          (Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: 626-820-1090

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  Common Stock, par
                                                          value $0.001 per share

Check  whether  the issuer (1) filed all reports required to be filed by Section
13  or  15(d)  of  the  Exchange Act during the preceding 12 months (or for such
shorter  period that the registrant was required to file such report(s), and (2)
has  been  subject  to  such  filing  requirements  for  the  past  90  days.
Yes [X]  No [ ]

Check  if  disclosure of delinquent filers in response to Item 405 of Regulation
S-B  is  not contained in this form, and no disclosure will be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-KSB or any amendment to
this  Form  10-KSB.  [X]

The  issuer's  revenues  for  the  fiscal  year  ended  December  31,  2003 were
$5,460,287.


<PAGE>
The  aggregate  market value of the issuer's common stock held by non-affiliates
of  the  issuer was $12,699,806, which was based on a closing bid price of $0.42
on  March  31,  2004.

The  issuer  had  40,192,063 shares of common stock issued and outstanding as of
December  31,  2003.

Transitional Small Business Disclosure Format:  Yes [ ] No [X]

Documents incorporated by reference:  None.


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PART I
ITEM 1.  DESCRIPTION  OF  BUSINESS

General
Fantatech Inc. (formerly known as Lucas Educational Systems, Inc.) is a Delaware
corporation  (the "Company"), and owns all of the capital stock of Intsys Shares
Limited,  a  British  Virgin  Islands  corporation ("Intsys"). Intsys owns three
subsidiary  companies  (the "Subsidiaries"). The three subsidiaries are Shenzhen
Digitainment  Co.  Ltd  ("SDCL"  or  "Digitainment",  located in Shenzhen, PRC),
Hytechnology  Ltd.  (located  in  Hong  Kong)  and Hytechnology Inc. (a Delaware
company).  In  addition,  SDCL  owns  40% of Fantatech Development Inc. ("FDI").
Unless  the  context  indicates,  reference  to  the  Company  shall include the
Subsidiaries.

SDCL was established in 1998 to take advantage of the growing demand for hi-tech
entertainment and amusement products. SDCL is engaged in design, development and
production  of  hi-tech  entertainment  and  amusement  products,  including  4D
theater, digital film, indoor entertainment center, large size indoor attraction
and  theme  parks.

Hytechnology  Ltd.  was formed by Intsys in 2002 and is engaged in the sales and
marketing  of  the  products  of  SDCL  outside  the  United  States  of America
(excluding  China).

Hytechnology  Inc.  was  formed  by  a third party and was acquired by Intsys in
2002.  It  is  engaged in the sales and marketing of the products of SDCL in the
United  States  of  America.

Fantatech Development, Inc. (FDI) was formed by SDCL, Shenzhen Huaqiang Industry
Company  Limited  (SHICL)  and Shenzhen Huaqiang Venture Capital Company Limited
(SHVCCL)  in  PRC in August 2003. FDI is owned 40% by SDCL, 40% by SHICL and 20%
by  SHVCCL,  and  is  intended  to  engage  in the construction and operation of
hi-tech  entertainment  and amusement centers and theme parks. Subsequent to the
formation  of  FDI,  SHVCCL (the 20% shareholder) assigned all of its management
and  control  rights  to  SDCL.

The  following is the organization chart of the Company as of December 31, 2003:

                            Fantatech Inc. (Delaware)
                                       |
                                       |
                                       | 100%
                           Intsys Share Limited (BVI)
                                       |
                                       |
                                       |
            ---------------------------------------------------
            |  70%                     |  99%                 |  65.41%
       Hytechnology              Hytechnology              Shenzhen
         Inc. (US)                    Ltd.            Digitainment Co. Ltd
                                  (Hong Kong)               (PRC)
                                                              |
                                                              |
                                                              |  40%
                                                              |
                                                          Fantatech
                                                         Development
                                                             Inc.
                                                            (PRC)


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<PAGE>
INDUSTRY  BACKGROUND
The  entertainment  products  in  earlier decades mainly focused on single-track
rides  such  as roller coasters, rotating horses and corsairs which produced the
novelty  of  rectilinear  or rotating mechanical movement. Though these products
are  still  in use today, the development and maturity of electronic and control
technology allowed us to adopt many hi-tech effects using light, sound, external
decorations  which  greatly  improved  the  entertainment  experience as well as
allowing  increased  safety,  reliability,  enjoyment  and  excitement.

The  invention  of  computers  greatly improved the performance of entertainment
facilities  and  further  allowed us to utilize technologies in computer powered
digital  control,  sound,  light  and  digital  imagery  and  ultimately made it
possible for us to form a new generation of integrated entertainment facilities.
From  the 1970s, development of simulation technology, followed naturally by the
dynamic-simulation  amusement  attraction, proved to be the outcome of symbiotic
applications  of modern hi-tech computer-controlled, hydraulics, digital imagery
and  Hi-Fi  sound. Also, computer networking technology and the Internet are the
latest  pieces  of  technology,  widely supplied to all industries including the
amusement  industry,  resulting  in  the  reality  of  network-linked  series of
amusement  products.  Computer,  video and film technology based interactive and
dynamic  entertainment  products  have  become  more  and  more  popular  in the
entertainment  industry.

Business  Scope
The  Company  designs, develops and produces hi-tech entertainment and amusement
products.  Its optimal integration team is experienced and creative in software,
film  production and some comprehensive serial products involved with wide range
field  and specialty, including computer, video and film, simulation, artificial
intelligence  and  system  integration.  The  Company  has  already successfully
launched  a  series of hi-tech popular amusement and entertainment products that
are  presently  applied  in many theme parks, entertainment centers and shopping
malls  worldwide. Many years ago, the Company realized the impending increase of
scientific  and  technical  requirements  for  amusement products as well as the
developing  trend  of multiple technique application on digital film and virtual
reality.  After  many  years,  the  Company  has  developed  the capabilities of
planning,  designing,  producing,  and  managing  CG  technology  based  hi-tech
entertainment  products, and we are among the few hi-tech companies in the world
who  can  create  an  entire  system  of  large  size  indoor  attraction.

The main business scope of the Company is as follows:

-    Design,  develop  and produce hi-tech entertainment and amusement products;

-    Design  and  develop  hi-tech  theme  parks  and  amusement  attractions;


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-    Invest  and  operate  hi-tech entertainment and amusement products with our
     own  development  and  production;

-    Invest  and  operate  indoor  entertainment  centers  catering  to  the
     entertainment  needs  of  shopping  malls;

-    Invest  and  operate  large-size  hi-tech  theme  parks.

PRODUCT  INTRODUCTION

The  products  developed  and  produced  by the Company can be divided into four
parts:  FantaWild  FunPlex,  FantaWild  4D  Theater,  Large-size attractions and
FantaWild  Theme  Park.

FantaWild  FunPlex
The  FantaWild  FunPlex  is  an  advanced  indoor  entertainment center designed
especially  for  shopping  malls  and  recreation areas. The FunPlex centers are
25,000  to  80,000  square  feet,  and  each  of  the  centers  is made up of 50
attractions.  The  Company intends to brand the FunPlex as a unique and exciting
family-based  entertainment  center  with  attractions  designed with all family
member  demographics  in  mind. These attractions are organized into 8 sections:
Cartoon  City,  VirtuaSports, FantaZone, MechaZone, FunPlex Photo Studio, Dragon
of  Destiny,  FantaWild  4D  Theater,  and  Story  House.  Each section contains
attractions  that  cater  to one or more family demographic (adults and parents,
youths  and  teenagers,  and  young  children  being  the  main three demos). In
addition,  there  is  a  Redemption  Center for the ticket system and the "Party
Central"  zone  for  serving food and hosting parties. The "It's Showtime!" zone
can  provide  live  entertainment or an area for business meetings. Each zone is
modular and can be expanded or swapped for another. A central controlling center
controls  all  attractions  and collects all revenue data, and a highly advanced
card system is able to keep track of customer behavior. The Company will develop
new  attractions  and platforms constantly, and keeps developing new content for
each  platform.  Thus  the  attractions  in  each  FunPlex can be kept fresh and
interesting  for  repeat  customers.

The 8 sections of FantaWild FunPlex are described as follows:

FantaZone
This  zone  appeals  to  all ages and features some of FantaWild's most exciting
games  and  simulators. All attractions in this zone have the features of either
3D technology, extreme player interaction or both; and all attractions appeal to
youths  and  adults.  The  attractions  in  FantaZone  namely Space Cop, Mini 3D
Theater,  Jungle  Safari,  City of Fire, Gunship Strike, Torpedoes Away, FW 360,
Grenade  Launcher  Assault  and  etc.

FunPlex  Photo  Studio
FunPlex  Photo  Studio  is  a  place  where  you  can  bring your creativity and
imagination  into  play.  The attractions in FunPlex Photo Studio mainly utilize
the computer and image processing technologies to manipulate images of people to
create  photos  with


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special  effects.  You  can  create  your  photo  and  completely  change  your
surroundings  and appearance. You can print your photo out onto photo paper or a
T-Shirt.  There  are  three  attractions  in this section: The Magic Photo Shop,
Smart-Aleck  Artist  and  FunPlex  Photo  Station.

Cartoon  City
All  the attractions are cartoon-influenced, which is simple and interesting for
the  young children. The children come into the cartoon paradise when they enter
this  area.  Cartoon  City  is  composed  of  following  attractions namely: The
Cartoon  Studio,  Big  Mouth,  Ali Baba's Cave, Jungle Drum King, Rolling Stone,
Pterodactyl  Island,  Drum  Prodigy,  Crazy,  Twistin' Bumper Cars, Happy Forest
Cannons  and  etc.

VirtuaSports
A  combination  of many virtual reality sports games, the VirtuaSports area will
give  players  many  indoor  and  outdoor activities without having to be there.
Novice  players  can  try out many hazardous and difficult real-life sports with
perfect  ease  and  safety;  and  without any practice, professional training or
expensive equipment. VirtuaSports is composed of more than 10 attractions namely
VR  Bowling,  Free  Kick  Shoot-out,  VR  Ping  Pong, Virtua Mecha-glider, Cycle
Challenge,  Speedway GT. Crazy Toy, Dragongfly, VR Archery, Speedboat Rescue and
etc.

MechaZone
MezhaZone  is  an  area  in  which  up  to  five  visitors  at a time can play a
multi-networked  computer  style  interactive  4D  videogame.  Players  sit  in
specially  molded  battle  chairs and the cockpit's features will simulate being
inside  of  the  robot's  control  center. From the inside, the view screen is a
porthole  and  the  walls  are  filled  with  many  indicators, alarm lights and
instruments  All  is  interactive  with  the  computer game. The indicators show
damage,  distance  to  the  enemy,  ammo  and  energy  levels.  The  biggest
characteristic  of  this  attraction  is  group  participation.

Story  House
A  magical  theater  where  the technology of illusionary images is applied. The
oriented  sound and the dynamic motion chair technology with the special effects
lighting  construct  a dreamy atmosphere of a fairy tale. Stories with different
subjects  are told coinciding with the image on the screen. The story is told by
a sweet voice and the image appears on five different screens, each portraying a
different  image.  In  sync  with the image, the voice comes around the tourists
from  different  areas  and  distance,  creating  a  story world. Meanwhile, the
special 4D seats can make such special effects as shaking, falling, leg ticklers
and  water  spraying  according  to  the  scenario.

Dragon  of  Destiny
Dragon  Of Destiny is a networked interactive network shooter game. Each station
is  designed  as  a  super-realistic  war  machine.  Players will act as magical
medieval warriors with riding half-mechanical-half-living dragons. Each player's
character  will  shoot at other targets with bright bolts of their battle magic.
The  cockpit  contains  a view screen and a control ball. Hit the buttons on the
ball  to  fire  your  magic  off  or  to  fly  faster.

FantaWild  4D  Theater


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<PAGE>
The cylindrical screen provides a wider viewing area than normal movie theaters,
which  was  invented  by  Intsys  and  an international patent has been granted.
Moreover, 4D chairs can produce such special effects as vibration, falling, wind
blowing,  water  spraying and leg ticklers. When these effects are combined with
other  simulations  like  virtual  fog, rain, lightning, air bubbles, and smell,
they  provide  a  unique  performance  and  rendering effect to the plots in the
movies.  Audiences  have  both  visual  and  sensory  experiences while they are
watching  the  movies.

Ideal  as  a  tourist attraction, the FunPlex comes equipped with a computerized
management  system  that  facilitates  organization  and  administration  of the
day-to-day  FunPlex  business.  The  system  can  be  used  to  print  daily
computer-generated  reports featuring revenue information and data on each day's
top-performing  attraction and peak operating hours. FunPlex visitors can pay by
buying  credits  on  a  Fanta-Transporter  card,  which  they  can swipe at each
attraction.  To  encourage repeat business, FantaWild FunPlex system offers gift
certificates  to  visitors.

The Company distributes FunPlex by the means of direct sale and revenue sharing.
In  the way of revenue sharing, the Company invests all the equipment in FunPlex
and  is  responsible for on-site installation, maintenance and update during the
cooperation  period.  Our  partner  will  be  responsible  for  ground  works,
decoration,  advertisement  and  daily  management.  The Company will recoup the
capital  outlay by collecting a proportion of monthly revenue. As of March 2004,
three  FunPlex are operating in Guangdong and Hunan Province of PRC. The Company
plans  to  open several more FunPlexes in different cities of PRC in the year of
2004.

FantaWild  4D  Theater  System

i.   FantaWild  4D  Theater
The  Company  manufactures  and  installs  all  of  the  equipment  needed for a
FantaWild  4D  Theater system. 4D theater is an ultimate sensory experience that
uses  several  different  3D technologies to create a unique and engaging visual
and  audio  experience.  The essential distinction between a 4D theater and a 3D
theater  is  the former's use of additional "4D" effects. Examples of 4D effects
include  special  effect chairs that can vibrate, simulate falling, spray water,
blow wind and tickle the viewer's legs when activated, and environmental effects
such  as  the  generation  of  air  bubbles,  snowflakes, smoke and fog and also
smells.  In  a 4D theater, 4D effects are synchronized with the on-screen action
to  produce  a  customized  entertainment  attraction  that totally immerses the
viewer  within  the  reality  of  the  film  experience.

To  satisfy  the  varied  needs  of consumers, the 4D theater is also capable of
utilizing  different  formats,  such  as  advancing  from flat screen theater to
cylindrical  screen  theater. Various motion bases, rotating bases, and tracking
cars  also  have  been introduced to coordinate the plots in movies. Cylindrical
screen 4D theaters with larger diameters and multiple screens will likely become
the  industry  standard  for  companies  that  want  to provide consumers with a
totally  immersing  theatrical  experience that represents an alternative to the
traditional  film  experience.

Flat  screen  4D  theater applies the conventional film play mode, with a screen
aspect  ratio of 16:9. Because of the non-curvature of a flat screen 4D theater,
the  audience's vision is generally limited to a smaller range when they watch a
4D  movie  and  objects


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in  the  movie move only in a perpendicular direction to the screen. Without the
special  effect chairs supplied by Intsys, a flat screen 4D theater would not be
any  different  from  a  traditional  theater.

The  major  difference  between  the  flat  screen 4D theater and cylindrical 4D
theater is that the cylindrical screen used in the latter type of theater is not
kept  in  one  specific  plain area, but rather at a section of one circle. In a
FantaWild  Cylindrical  Screen  4D Theater, the motions of 3D objects in a movie
are  not limited to one plane. The elimination of the plane motion limitation of
only  moving  in  a  perpendicular  direction  to the screen, and the ability to
generate  many  other  different motions like crossing and circling, are the two
principles  underlying  4D  cylindrical  technology.  In a FantaWild Cylindrical
Screen 4D Theater, movie images are seamlessly blended and the screen is made of
high  quality  unified  gain  material  with  audio  sound  speaker holes in its
surface.  To  satisfy  the  visual  requirements  of the audience when they view
cylindrical  screen  movies,  the  Company  also  has  specially  designed  and
manufactured  proprietary  cylinder-polarizing  glasses  to view the cylindrical
pictures.

The  Company  provides a multi-channel surround sound system that uses a digital
memory  and  play  system in its 4D theaters. The multi-channel digital surround
sound  system  is  designed  to  precisely locate the moving 3D objects that are
produced  on  a  FantaWild  Cylindrical 4D Screen Theater. The Company offers an
entire  package  to produce and develop a FantaWild client's sound system to fit
each  movie  plot  shown  in  a  FantaWild  4D  Theater.

Each  FantaWild  4D  Theater  system  comes  equipped with special effect chairs
designed  to  simulate  natural  phenomena.  Through the use of a special effect
control  system  (SPECON)  provided by the Company, special effects are added to
the  performance of the movie plots so that each viewer has a virtual, life-like
experience.  The FantaWild 4D Theater chairs can generate five different special
effects  (vibration, falling, water spraying, wind blowing and leg ticklers) all
of  which  are  controlled by the SPECON. Using the SPECON, the program and time
length  of  each  effect  can  be adjusted to match different visual and sensory
feelings.  The  special  effect  chairs  installed with FantaWild 4D Theater are
designed  so that there can be three to five chairs in one group. The groups can
be  arranged  or  combined  to  suit  the  needs  of  different  theaters.

The  Company  also offers environmental effects equipment options as part of its
4D  theater  packages  to  greatly  enhance  the  theater atmosphere provided to
audience  members.  The  equipment  that  can  be  supplied to FantaWild clients
includes:  (1)  An air bubble generator; (2) a strobe generator; (3) a smoke and
fog  generator;  (4) a snowflake generator; and (5) a smell generator. A setting
generator  that  generates  the  settings  according  to  the  film plot is also
provided  along  with  each  environmental  effects  equipment  option.

The  Company  has  already  successfully  installed more than thirty 4D theaters
worldwide,  including  the  USA,  Canada,  Venezuela, Italy, Kuwait, Philippine,
Vietnam  and  China.

ii.  FantaWild  4D  Films


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The Company's related company, Hyvision Digital Film Inc., independently creates
and  produces  three  to five new 4D films a year for exclusive distribution and
exhibition  at  FantaWild  4D  Theaters.  FantaWild clients can lease films on a
yearly  basis  through  the  Company.  The  current  library  of  films includes
"Dino-Rampage" (a futuristic film about dinosaurs spread over the city due to an
accident in a museum and how people combat with all kinds of dinosaurs), "Escape
from  Bane Manor" (a horror film set in a Victorian castle), "Strategic Command"
(an  action-packed  film  about  two  fictional  warring  factions),  "Deep  Sea
Adventure"  (a  futuristic  movie  about  a young man's adventurous and romantic
exploration of deep sea life), "UFO Space Flight" (a film about space travel and
alien  life), "An Ode to Life" (a film that journeys through the annals of time,
from  the  creation of the universe to the rule of the dinosaurs) and "Legend of
Pyramid"  (a  mystery-filled,  action-adventure  film  set  in  ancient  Egypt).

Large  Size  Attractions

Large  size  attractions  are  the  main  parts  of  theme  park  and recreation
facilities  which  bring  large  numbers  of tourists and increase entertainment
revenues.  Only a few companies have the ability to design and produce the large
size attraction due to technical difficulty and complicated development process.
During  the  year of 2003, the Company started to construct 4D Ride Dino-Rampage
in Tianjin, PRC and plans to have a grand opening in the fall of 2004. Also, the
Company  plans  to  construct a Floating Sphere 4D Theater in Beijing during the
year  of  2004.

The Large size attractions are described as follows:

i.   4D  Ride  Dino-Rampage
4D  Ride  Dino-Rampage is a large-size indoor modern attraction which integrates
the  elements of 3D animated movie clips, crafted dioramas, dynamic motion cars,
disaster  imitation  and  various  performance  tricks. 4D Ride Dino-Rampage can
facilitate  96 people simultaneously and the peak circulation is 1,440 man times
per hour. The peak circulation can reach 14,400 man times per day.

The story premise underlying this attraction is that in the year 2020, a time in
which  humanity  has made a great achievement in the field of biotechnology, the
Municipal Museum has performed a series of experiments regarding the incubations
of  ancient  dinosaur  eggs  and  embryos  that  have  received  worldwide media
attention.  Just  as  the  scientists  at  the  museum  are  on  the  verge of a
breakthrough,  an  unexpected  event  occurs  in which the genes of the dinosaur
embryos mutate radically and develop into actual live, dinosaurs over the course
of  one  night. The dinosaurs break out of the museum and proceed to wreak havoc
throughout  the  streets  of  the  city.

To  experience  the  4D Ride Dino-Rampage, tourists board a twelve-seat capacity
aero-bus  that is a dynamic motion car. The car allows three degrees of movement
including  swaying  left/right,  pitching  up  and down, and rotating. A falling
feature  is  also  built  into  each  car  seat.  All  car  movements  are
computer-controlled  and  are  synchronized  to  the various scenes of the movie
images  projected on 4D theater screens that are strategically placed in various
locations  throughout  the  attraction  site.  As  the tourists ride through the
attraction,  they  experience  3D  animated  movie  clips


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that  are  blended to look consistent with the actual outdoor city scene through
which  they  are  moving.

Special  effects features are an integral part of the 4D Ride Dino-Rampage. Such
effects  include  large  amounts  of  vapor (generated from a smoke machine) and
electrical  sparks (simulated by short-circuited powerlines that emit showers of
sparks).  The  special  effects  are  nearly  through  the  whole attraction and
skillfully  absorbed  into  the  film  plotlines  to  enhance the realism of the
attraction  for  the  tourists.

ii.  Floating  Sphere  4D  Theater
The  FantaWild  Floating  Sphere  4D  Theater  is  a new type of 4D theater that
integrates  such hi-tech elements as 3D visuals, spherical theater screen, large
rotating  mechanisms  and  on-site  special  effects. Owing to its ingenious and
spectacular  design,  it  represents  the  cutting  edge  of  state-of-the-art
technology  in  the  modern entertainment industry and is now a new milestone in
the  theater  technology  and  development.

Floating  Sphere  4D  Theater covers about sixteen thousand (16,000) square feet
(82  feet  long)  and  is  composed  of  huge  hemispherical  screen,  dynamic
motion-chair suspending system, rotating platform, special effects system and 3D
animated  movie  content.  Floating  Sphere 4D Theater can facilitate 60 persons
simultaneously  and  the  peak  circulation  per hour is 420 man times. The peak
circulation  can  reach  4,200  man  times  per  day.

iii. Try  To  Remember
Try to Remember perfectly combines traditional living theater with modern visual
science. The phantasm and gleaming effects make the Magic Theater a big hit with
the  audience.  The Magic Theater makes full use of Phantasmal Image technology,
aggregating  digital  video  production,  stage  lighting  systems  and computer
control  systems  to  achieve  a miraculous stage effect. For example, the actor
will  appear or disappear suddenly; smog will magically change into a young girl
or a flying bird. The dazzling special effects will woo the audience not believe
their  eyes.

iv.  The  Tornado  Experience
The Tornado Experience is a big sized film and video special skills performance,
which  involves  such  technologies  as  film  and  video, and mechanic and spot
simulated scenes. Actually the theater is made as a ship. The audience can see a
vivid  spot  of  waves, houses and big trees made by the computer system. As the
story  goes,  winds  blows  and  house  shakes  and  the fog becomes thicker and
thicker.  The  simulated special effects of storm, wind, flash and crashing down
of houses vividly represents the strong damage and havoc wild storms reap. Storm
Land  is  a  large  special  movie  performance and which combining movie, large
mechanism  and emulated scene. The theater is set up as a ship. The audience can
see  a vivid spot of waves, houses and big trees made by the computer system. As
the  story  goes,  winds  blows,  house  shakes  and the fog becomes thicker and
thicker.  The audience will feel that they are in a real situation, and they can
see  the  demolition  power  of  the  storm.

v.   Special  Effects  4D  Theater
The  Special  Effects 4D Theater is an upgraded new project based on 4D Theater,
coupled  with a theater environment matching the plot of movies. When the scenes
of


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the  movies  are  flawlessly  combined  with  the  spot  realistic  scenes,  the
environmental  special  effects  simulating smog, flash, bubble, touch and smell
will make the audience feel as if they are part of the scene.

vi.  Journey  To  The  Earth's  Core
Journey  to  the  Earth's Core is an indoor roller coaster which adopts multiple
illusionary  and  laser  lights to create a secret and exciting dynamic world in
which  visitors  will  experience  the  speed  of  the next generation of roller
coasters.  The  simulated  scenes and the prop matching virtual environment will
bring  visitors  towards the earth's core. They will pass the scenes of volcano,
deep  cave,  sea  floor  and  submarine world and finally go back to the ground.
During  the  trip,  the  vision  and  the special effect of fire, wind and water
combines  to  make a real frightening trip. Visitors will scream for their lives
while  enjoying  the  stimulating adventure of the roller coaster's swift twists
and  turns.

vii. Adventure  to  Mars
The  super simulated airship will take visitors close to the Moon and allow them
to  visit  a  space  station,  run  after comets, and fly to Mars. The realistic
design  of  the  airship,  and  the  grand  spectacle  bring visitors a lifelike
experience.  The special effect of the rotating platform and multiple degrees of
motion  are  so well simulated that visitors will think they have really visited
Mars.

viii. The  Milky  Way  Galaxy  Square
The  Galaxy  Plaza  is  the  center plaza of the FantaWild Theme Park. It is the
gathering  place  of  the  park.  There is a silver arch-shaped screen of 12,000
square  feet  on the top of the center of the plaza. The screen is 150 feet over
the  ground.  The  giant  picture  will  be  made  projected  by  60  projectors
synchronously.  The resolution rate can reach 4096 x 11520, and the programs can
be  either  entertainment  or commercial ads. It will be the largest screen with
the  highest  resolution  in  the  world.

FantaWild  Theme  Park

FantaWild  Theme  Park  is  a  theme  park  with  subject  of  stimulation  and
participation,  which makes use of hi-tech technology to simulate real world and
future world. The company develops and produces all the attractions in the Theme
Park and owns all the property right of the large attractions in side. FantaWild
Theme Park consists of 9 to 12 large size attractions.

Each  single  attraction  in  FantaWild Theme Park can be sold or invested as an
independent  item  or  as  an attractions combination, which is one of the major
products  that  the  company  supplies.

PRODUCT  QUALITY

The  Company  has a reputation for creating and producing premium quality 3D and
4D  entertainment  that  represents  the  cutting-edge  in  product  design  and
technological  development  for  entertainment  and recreation-oriented centers.
Through  ongoing  research  and  development  efforts  and the use of an optimal
integration  team  with  considerable  experience  in  the  diverse  fields  of
entertainment,  technology  and  design,


                                       11
<PAGE>
the Company is setting the standards for 4D theaters systems as well as advanced
theme  park  attractions  and  recreational  project  design.

The  Company  sets up a complete quality management system, which can fully meet
the  requirements  of production. There are several different principals applied
in  the  process  control  of  development  and  production.  The whole process,
including  supplier  authentication,  contract  examining,  product  design,
production,  test,  after  sale service and etc are under the effectual control.
Furthermore,  the  Company  attaches  importance  to  standardization of product
research  and  development  and  production.  Considering  the  international
distribution,  all the products are developed and produced according to relevant
international  standards.

The  Company  always  takes  customer  satisfaction  as  the sole tenet. All the
products  sold  by the Company are highly commented by the customer due to their
high  product  quality  and  good  service.

PRODUCTION

The  Company  develops,  designs  and  assembles  all  of  the  key elements and
proprietary  components  of its 4D theater systems, in-door entertainment center
and  large  size  attractions. The manufacturing plants are located in Shenzhen,
China.

Most parts of products including software, hardware, electronic control systems,
mechanics,  etc.  are  developed and produced by the Company itself. The Company
also  uses  materials  readily  available  from  the  market,  which  include
well-developed  software,  computer accessories and parts. For certain processes
which  involve  a lot of manpower such as metal works, decorating and packaging,
the  Company  sub-contracts  to  other third party factories. However, no matter
whatever  the  parts  of the products are produced, the final assembly, testing,
quality  control,  etc.  processes  are  done  within  the Company's own plants.

The  Company's whole production is carried out within the following departments:
-    Research  and  Development  Center
-    Video/Movie/Program  Production  Center
-    Mechanic  Design  Department
-    Electric  Design  Department
-    Structure  Design  Department
-    Automatic-control  Design  Department
-    Product  Assembly  Center
-    Quality  Control  Center

We  also create and produce entertainment content that is financed internally to
accompany  product  systems.  We rely on the strength of our optimal integration
team  to  develop  such  content  through  the  combined  use of their skills in
technology  and  story  development.

TRANSPORTATION  AND  DISTRIBUTION

We transport, configure and install all of the equipment necessary to run the 4D
theater  systems, indoor entertainment center and large size indoor attractions.
We  also


                                       12
<PAGE>
distribute  entertainment  products  under cooperation agreements that we invest
with  entertainment  products  and  recoup  the capital outlay by collecting the
monthly  revenue  of  these  attractions  or  lease agreements that provide some
entertainment products and 4D films on the base of certain lease fee.

RAW  MATERIALS

Raw  materials  used  include:
-    Computer hardware including main board, CPU, hard disk, RAM and other parts
-    Electronic  components
-    Optical  projectors
-    Optical  or  mechanical  transducers
-    Screens  and  displaying  equipment
-    Air  pressure  container
-    Hydraulic  systems
-    Fiber  or  plastic  parts
-    Metal  components  or  parts

We purchase our raw materials from both large international corporations such as
Intel,  Seagate  Technology  Inc., as well as local corporations in China. There
are  multiple  suppliers  for all of our raw material and components and we have
not  experienced  any  supply  interruptions.

MARKETING  AND  SALES

Our  sales  and  marketing  strategies  revolve  principally around developing a
reputable  brand  identity  and  ongoing  customer relationships, in addition to
continuously innovating and improving the quality of our products. We market our
products  through a direct sales force and marketing staff located in offices in
Baldwin  Park,  California,  Hong Kong and Shenzhen, China. In addition, through
Hytechnology  Inc.,  we  have participated actively in international exhibitions
such  as  IAAPA,  Euro  Amusement  Show,  AAE, Fun Expo, TPFC etc. since 2001 to
promote  our proprietary products to the international markets. Our future plans
to  penetrate  both international and local markets in year 2004 are through the
following  actions:

-    Direct  sell  of  about  10  FantaWild  4D  Theaters  worldwide;
-    Set  up  5-10  FantaWild FunPlex worldwide by the means of revenue sharing,
     including several middle size FunPlex and some large-size FunPlex more than
     80,000  square  feet;
-    Invest  and  operate  an  indoor theme park covering three hundred thousand
     (300,000)  square  feet in southern China. The theme park will include nine
     large size attractions of 4D Ride Dino-Rampage, Floating Sphere 4D Theater,
     Try  To  Remember,  The  Tornado  Experience,  Special  Effects 4D Theater,
     Journey  To  The Earth's Core, Adventure to Mars, FantaWild FunPlex and The
     Milky  Way  Galaxy  Square;

CUSTOMERS

Our  institutional  customers  include  recreation-oriented  companies,
theme/amusement parks, entertainment centers and individual investors.


                                       13
<PAGE>
Three  customers  accounted  for approximately 26%, 12% and 10% of sales for the
year  ended December 31, 2003. Two customers accounted for approximately 21% and
15%  of  sales  for  the  year ended December 31, 2002. As of December 31, 2003,
approximately  85% of accounts receivable were from trade transactions with four
customers, of which one customer accounted for approximately 44% of the accounts
receivable  balance.

REGULATION

We  are subject, from time to time, to various laws and regulations administered
by  various government bodies relating to the operation of our manufacturing and
distribution  facilities,  as  well  as  environmental  and  pollution  control,
including  air  emissions.  We  believe  that  we  are  in  compliance  with all
governmental laws and regulations related to its products and facilities, and we
do  not  expect  to  make  any  material  expenditure  in  2004  with respect to
compliance  with  any  such  regulations.

RESEARCH  AND  DEVELOPMENT

We  are  a hi-tech company specializing in entertainment product development and
design  with  proprietary  expertise  in  computer  technology,  video  and film
technology,  simulation,  artificial  intelligence,  and system integration. Our
ongoing  research  and  development  program  involves creating new products and
modifying  existing  products  to  meet  market demands and redesigning existing
products  to  reduce  the  cost  of  manufacturing. The research and development
department  is  staffed  with experienced design engineers. The cost of research
and  development  has  been  charged  to  operations.

STRATEGY

Our  strategy  is  to  capitalize  on  our  significant research and development
capabilities  and  the  strength  of our optimal integration team to enhance the
brand  identity  and  achieve  greater  economies  of scale. We are committed to
developing  innovative,  cutting-edge  3D,  4D  and other interactive simulation
dynamic  entertainment  products  that  will  define  the  next  generation  in
entertainment  industry.

COMPETITION

We compete with a number of video game developers, digital film developers, game
machine  providers,  indoor  attraction  manufacturers  and also certain content
providers  servicing  the entertainment markets. IWERKS Entertainment, Inc. is a
main  competitor  of  the  Company in the 4D theater field. However, IWERKS only
supplies  flat  screen 4D theater, whereas the Company provides both flat screen
4D  theater  and  cylindrical  4D theater, emphasizing the latter. Moreover, the
Company  can  develop  and  produce  multiple  types  of  hi-tech  entertainment
products,  including  4D  theaters,  indoor entertainment centers and large size
indoor  attractions  as  described  above.

We  are  not only a manufacturer of entertainment products, but also an investor
capable  of  investing  and  operating  our  own entertainment centers and theme
parks.  We  invest  in the products we develop and produce, which are always the
most


                                       14
<PAGE>
advanced  and  attractive entertainment products as a result of our continuously
updating  the  old  ones  and  developing  new  ones.

The  R&D  base  and  production  base of the Company are located in the low cost
region,  such  as China. So both the R&D cost and production cost are much lower
as compared with our competitors. Thus the Company can provide its products at a
competitive  price.  Its  creative  team  always  designs  the  most  attractive
entertainment  products  in high efficiency. Low cost, premium products quality,
commitment to ongoing research and development and technological innovation, and
the  strength  and  creativity  of  our  optimal integration team are factors in
enabling  the  Company  to  compete.

PATENTS  AND  TRADEMARKS

We have been granted for the patent in the area of stereo cylindrical imaging by
the  US  Patent  and  Trademark Office ("USPTO"). In addition, other inventions,
such  as  new  type  entertainment  simulation  means and apparatus, interactive
exercise  bicycle  etc.  have been submitted to the USPTO and State Intellectual
Property  Office  of  PRC  for  registration. The trademark "FantaWild" has been
registered  in  U.S.  and  PRC.

EMPLOYEES

As  of  March 2004, we had 343 employees, 30 of which are involved in management
and  administration,  170 in research and development, 20 in sales and marketing
and  123  in  engineering  and  production. All employees are primarily based in
Shenzhen,  China  but  some  management and sales staff work occasionally in the
Company's  offices  in  China and Los Angeles, California. Our employees are not
represented  by a collective bargaining organization and we have not experienced
a  work  stoppage.

GOVERNMENTAL REGULATION OF OUR OPERATIONS IN CHINA

Our  corporate  headquarters  are located in Los Angeles, California, USA and we
run  our  international business operation out of an office located in Shenzhen,
China.  Accordingly, our operations must conform to the governmental regulations
and  rules  of  China.

The  Chinese  Legal  System
The  practical  effect  of  the  People's  Republic of China legal system on our
business  operations  in  China  can be viewed from two separate but intertwined
considerations.  First,  as  a  matter  of substantive law, the Foreign Invested
Enterprise  laws  that are applied to our operation in China provide significant
protection  from  government interference. In addition, these laws guarantee the
full  enjoyment  of  the benefits of corporate Articles and contracts to Foreign
Invested  Enterprise  participants.  These  laws,  however,  do impose standards
concerning  corporate  formation  and  governance,  which  are not qualitatively
different from the general corporation laws of the United States. Similarly, the
People's  Republic  of China accounting laws mandate accounting practices, which
are  mostly  consistent  with  US  Generally Accepted Accounting Principles. The
China  accounting  laws require that an annual "statutory audit" be performed in
accordance  with  People's  Republic  of China accounting standards and that the
books  of  account  of  Foreign  Invested  Enterprises  are  maintained  in


                                       15
<PAGE>
accordance  with Chinese accounting laws. Article 14 of the People's Republic of
China  Wholly  Foreign-Owned  Enterprise  Law  requires  a  Wholly Foreign-Owned
Enterprise  to  submit  certain  periodic  fiscal  reports  and  statements  to
designated  financial  and  tax  authorities,  at  the  risk of business license
revocation.

Second,  while  the enforcement of substantive rights may appear less clear than
United  States  procedures,  the Foreign Invested Enterprises and Wholly Foreign
Owned  Enterprises are Chinese registered companies, which enjoy the same status
as  other  Chinese  registered  companies  in  business-to-business  dispute
resolution.  Because the terms of the respective Articles of Association provide
that  all business disputes pertaining to Foreign Invested Enterprises are to be
resolved  by  the  Arbitration Institute of the Stockholm Chamber of Commerce in
Stockholm, Sweden applying Chinese substantive law, the Chinese minority partner
in  our  joint venture companies will not assume a privileged position regarding
such  disputes.  Any  award  rendered  by  this  arbitration tribunal is, by the
express  terms  of  the  respective  Articles  of  Association,  enforceable  in
accordance  with  the  "United  Nations  Convention  on  the  Recognition  and
Enforcement  of  Foreign  Arbitral  Awards  (1958)."  Therefore,  as a practical
matter,  although  no assurances can be given, the Chinese legal infrastructure,
while  different  in  operation  from  its United States counterpart, should not
present  any  significant  impediment  to  the  operation  of  Foreign  Invested
Enterprises.

Economic  Reform  Issues
Although  the  majority  of  productive assets in China are owned by the Chinese
government,  in  the  past several years the government has implemented economic
reform  measures  that emphasize decentralization and encourage private economic
activity.  Because  these  economic  reform  measures  may  be  inconsistent  or
ineffectual,  there  are  no  assurances  that:

-    We will be able to capitalize on economic reforms;
-    The  Chinese  government  will  continue  its  pursuit  of  economic reform
     policies;
-    The economic policies, even if pursued, will be successful;
-    Economic  policies will not be significantly altered from time to time; and
-    Business  operations  in  China  will  not  become  subject  to the risk of
     nationalization.

Negative impact upon economic reform policies or nationalization could result in
investment  loss  in  our  common  stock.

Since  1979,  the  Chinese government has reformed its economic systems. Because
many  reforms are unprecedented or experimental, they are expected to be refined
and  improved.  Other  political, economic and social factors, such as political
changes,  changes in the rates of economic growth, unemployment or inflation, or
in the disparities in per capita wealth between regions within China, could lead
to  further  readjustment of the reform measures. This refining and readjustment
process  may  negatively  affect  our  operations.

Over  the  last  few  years,  China's economy has registered a high growth rate.
Recently, there have been indications that rates of inflation have increased. In
response,  the  Chinese  government  has taken measures to curb this excessively
expansive economy. These measures have included restrictions on the availability
of  domestic  credit,


                                       16
<PAGE>
reducing  the  purchasing  capability  of  certain of its customers, and limited
re-centralization  of  the  approval  process  for  purchases  of  some  foreign
products.  These  austerity  measures  alone may not succeed in slowing down the
economy's  excessive  expansion  or  control inflation, and may result in severe
dislocations in the Chinese economy. The Chinese government may adopt additional
measures  to further combat inflation, including the establishment of freezes or
restraints  on  certain  projects  or  markets.

To  date  reforms  to  China's  economic  system have not adversely impacted our
operations  and  are  not  expected  to  adversely  impact  operations  in  the
foreseeable  future;  however,  there  can  be  no assurance that the reforms to
China's  economic  system  will  continue  or  that  we will not be adversely be
affected by changes in China's political, economic, and social conditions and by
changes  in  policies  of  the  Chinese  government, such as changes in laws and
regulations,  measures  which may be introduced to control inflation, changes in
the  rate  or  method  of  taxation,  imposition  of  additional restrictions on
currency  conversion  and  remittance abroad, and reduction in tariff protection
and  other  import  restrictions.

China's  Accession  into  the  WTO
On  November 11, 2001, China signed an agreement to become a member of the World
Trade Organization sometimes referred to as the WTO, the international body that
sets  most  trade  rules,  further integrating China into the global economy and
significantly  reducing  the  barriers  to  international  commerce.  China's
membership  in the WTO was effective on December 11, 2001. China has agreed upon
its  accession  to  the  WTO  to  reduce tariffs and non-tariff barriers, remove
investment  restrictions,  provide  trading  and distribution rights for foreign
firms.  The  tariff  rate  reductions  and  other enhancements will enable us to
develop  better investment strategies. In addition, the WTO's dispute settlement
mechanism  provides a credible and effective tool to enforce members' commercial
rights.  Also,  with  China's entry to the WTO, it is believed that the relevant
laws  on  foreign  investment  in China will be amplified and will follow common
practices.

ITEM  2.  DESCRIPTION  OF  PROPERTIES.

Our  corporate  office  is  located  418-A  Cloverleaf  Drive, Baldwin Park, Los
Angeles,  CA  91706,  USA.  We  lease several premises for factory and office as
follows:

<TABLE>
<CAPTION>
                                Area         Expiration     Approximate
Location           Usage   (Square meter)  Date of Leases  Annual Rental
<S>               <C>      <C>             <C>             <C>
Shenzhen, PRC     Factory          11,169  July 2018       $      182,600
Shenzhen, PRC     Office            1,771  Sep 2005        $       14,400
Chengdu, PRC      Office               75  Oct 2004        $        2,200
Beijing, PRC      Office               45  Nov 2004        $        4,400
Los Angeles, USA  Office              300  Sep 2004        $       30,400
</TABLE>

ITEM  3.  LEGAL  PROCEEDINGS.

We  are  not  a  party  to  any  pending  or  to  the best of our knowledge, any
threatened  legal proceedings. None of our directors, officers or affiliates, or
owner  of  record  of


                                       17
<PAGE>
more  than  five  percent  (5%)  of our securities, or any associate of any such
director,  officer  or  security  holder  is  a  party  adverse to ours or has a
material  interest  adverse  to  ours  in  reference  to  pending  litigation.

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

No  matters  were  submitted to a vote of our security holders during the fiscal
year  ended  December  31,  2003.

PART II
ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

(a)  Market  Prices  of  Common  Stock
Our  common  stock  is  traded  on the Over-The-Counter Bulletin Board under the
symbol  "FNTA.OB".  The following table sets forth the high and low sales prices
for  the  shares  of  common  stock as reported on the Over-The-Counter Bulletin
Board  for  each quarterly period of the last two fiscal years. The sales prices
listed  below  represent  prices,  adjusted  for  stock  splits, between dealers
without  adjustments  for  retail markups, breakdowns or commissions and may not
represent  actual  transactions.

<TABLE>
<CAPTION>
                                       HIGH    LOW
                                       -----  -----
<S>                                    <C>    <C>
FISCAL YEAR ENDED DECEMBER 31, 2003
-----------------------------------
Three months ended March 31, 2003      $0.44  $0.35
Three months ended June 30, 2003       $0.44  $0.41
Three months ended September 30, 2003  $0.45  $0.41
Three months ended December 31, 2003   $0.45  $0.40

FISCAL YEAR ENDED DECEMBER 31, 2002
-----------------------------------
Three months ended March 31, 2002      $0.32  $0.22
Three months ended June 30, 2002       $0.21  $0.09
Three months ended September 30, 2002  $0.51  $0.09
Three months ended December 31, 2002   $0.40  $0.25
</TABLE>

(b) Shareholders
Our  common  shares  are  issued  in  registered  form.  Securities  Transfer
Corporation,  Dallas,  Texas  is the registrar and transfer agent for our common
stock.  As  of  March 15, 2004, there were 40,192,063 shares of our common stock
outstanding  and  we  had  approximately  251  shareholders  of  record.

(c)  Dividends
We  have never declared or paid any cash dividends on our common stock and we do
not anticipate paying any cash dividends in the foreseeable future. We currently
intend  to  retain  future  earnings,  if  any,  to  finance  operations and the
expansion of our businesses. Any future determination to pay cash dividends will
be  at  the  discretion  of  the  board  of directors and will be based upon our
financial  condition,  operating


                                       18
<PAGE>
results,  capital requirements, plans for expansion, restrictions imposed by any
financing  arrangements  and any other factors that the board of directors deems
relevant.

ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION

Cautionary  Statement  Pursuant  to  Safe  Harbor  Provisions  of  the  Private
Securities  Litigation  Reform  Act  of  1995:

This  Annual  Report  on Form 10-KSB for the fiscal year ended December 31, 2003
contains  "forward-looking"  statements  within  the  meaning  of  the  Federal
securities  laws.  These  forward-looking  statements  include,  among  others,
statements  concerning  the Company's expectations regarding sales trends, gross
and  net  operating  margin  trends,  political  and  economic  matters,  the
availability  of  equity capital to fund the Company's capital requirements, and
other  statements  of  expectations,  beliefs,  future  plans  and  strategies,
anticipated  events  or  trends, and similar expressions concerning matters that
are  not  historical facts. The forward-looking statements in this Annual Report
on  Form 10-KSB for the fiscal year ended December 31, 2003 are subject to risks
and  uncertainties  that  could  cause  actual results to differ materially from
those  results  expressed  in  or  implied  by  the statements contained herein.

OVERVIEW

Fantatech,  Inc., formerly Lucas Educational Systems, Inc., (the "Company"), was
incorporated  in  1996.  On  June 19, 2001, Halter Capital Corporation purchased
1,687,178  shares  of  common stock from various shareholders, thereby acquiring
approximately  50.5%  of  the  outstanding  shares  of  the  Company. All of the
existing  officers  and directors resigned and were replaced by a new management
team,  Messrs.  Kevin  B.  Halter  and  Kevin  Halter,  Jr.

On  November  6,  2002  (the  "Closing  Date"), pursuant to the terms of a Share
Exchange  Agreement  dated  as of November 6, 2002 (the "Exchange Agreement") by
and  among  the Company, Halter Capital Corporation, Kevin Halter and Fang Dehou
("Dehou"),  Li  Ming  ("Ming")  and  Liu  Lingxiao ("Lingxiao") (Dehou, Ming and
Lingxiao are herein referred to collectively, as the "Intsys Shareholders"), the
Company  acquired  (the  "Acquisition")  from the Intsys Shareholders all of the
issued  and  outstanding capital stock of Intsys Share Limited, a British Virgin
Islands  corporation  ("Intsys"). As consideration for the shares of Intsys, the
Company  issued 40,000,000 shares of common stock to the Intsys Shareholders and
certain  designees  of  the  Intsys  Shareholders.  The  consideration  for  the
Acquisition  was  determined  through  arms  length  negotiations  between  the
management  of  the  Company  and  the  Intsys  Shareholders.

On the Closing Date, Mr. Kevin B. Halter and Mr. Kevin Halter, Jr. resigned from
the  board of directors and Mr. Jinqiang Zhang, Mr. Guangwei Liang, Mr. Liechong
Li, Mr. Xinan Hu and Mr. Ming Li became members of the board of directors of the
Company. The newly elected directors then appointed Mr. Zhang as the Chairman of
the  board, Mr. Liang as Vice Chairman of the board and Chief Executive Officer,
Mr.


                                       19
<PAGE>
Ming  Li  as  Chief  Operational  Officer,  Ms. Fengming Peng as Chief Financial
Officer  and  Mr.  Jianguo  Cheng  as  Corporate  Secretary.

Until  the  Closing Date of the acquisition, the Company had only nominal assets
and  liabilities and had no business operations. As a result of the Acquisition,
the  Company  continued the business operations of Intsys. Intsys owns 65.41% of
Shenzhen  Digitainment Co., Ltd. ("SDCL"). SDCL is headquartered in China and is
engaged  in  the  development  of  hi-tech entertainment and amusement products,
including  4D  theater, digital film, indoor entertainment centers (FunPlex) and
large  size indoor attractions, intelligent low voltage engineering, theme sites
projects  and  the  exploitation,  design  and  production  of  computer systems
integration  projects.

In  August  2002,  Intsys formed Hytechnology Limited in Hong Kong. Hytechnology
Limited  is 99% owned by Intsys and is engaged in the sales and marketing of the
products  of  SDCL  outside  the  United  States  of  America (excluding China).

In  September 2002, Intsys acquired a 70% equity interest in Hytechnology, Inc.,
a  Delaware  corporation, from a third party for $172,000. Hytechnology, Inc. is
engaged  in the sales and marketing of the products of SDCL in the United States
of  America.

On  January  29,  2003,  the  Company  changed  its  name from Lucas Educational
Systems,  Inc.  to  Fantatech,  Inc.

In  August  2003,  SDCL, SHICL and SHVCCL formed FDI in PRC. FDI is owned 40% by
SDCL,  40%  by  SHICL  and  20%  by  SHVCCL,  and  is  intended to engage in the
construction  and  operation  of hi-tech entertainment and amusement centers and
theme  parks.  Subsequent  to the formation of FDI, SHVCCL (the 20% shareholder)
assigned  all  of  its  management  and  control  rights  to  SDCL.

Most  of  our  customers are located in the PRC, and sales to such customers are
generally  on  an open account basis. During the fiscal years ended December 31,
2003  and  2002, we relied on a small number of customers for most of the sales.
During  the  fiscal  year ended December 31, 2003, three customers accounted for
48.8%  of  total  sales  (Tianjin  Luqiang Property Development: 26.1%, Shenzhen
Youth Palace: 12.3%, Beijing Astronomical Museum: 10.4%). During the fiscal year
ended  December  31, 2002, two customers accounted for 36% of sales (21% and 15%
of  sales).  As  of  December 31, 2003, approximately 85% of accounts receivable
were  from  trade  transactions  with  four  customers,  of  which  one customer
accounted  for  approximately  44%  of  the  accounts  receivable balance. As of
December  31,  2002,  approximately  73%  of accounts receivable were from trade
transactions  with  five  customers,  of  which  one  customer  accounted  for
approximately  35%  of  the  accounts  receivable.

We  purchase  our  raw  material and certain components from different suppliers
located  in  the  PRC.  During  the  fiscal  year  ended December 31, 2003, five
suppliers accounted for 28% of total purchases: Hyvision Digital Co. Ltd. 10.4%,
Shenzhen  Thirty-Nine  Decorating  Projects  Co.  Ltd.  6.6%,  Meilin Decorating
Material  Co.  4.7%,  Tianjing  Follywein  Co.  Ltd  3%  and Shenzhen Huayuansin
Intelligence  Projects  Co.  Ltd.  2.8%.


                                       20
<PAGE>
Subsequent  to  the  year  ended December 31, 2003, three FantaWild FunPlex were
opened  in  Guangdong  and  Hunan  provinces  in  PRC. The Company plans to open
several  more  FunPlex  in  other  cities  of  PRC  during  the year of 2004. In
addition,  the  large  size  attraction,  4D  Ride  Dino-Rampage, has been under
construction  since  mid-2003.  It  is  located  in Tianjin, PRC and is covering
around 50,000 square feet. The Company plans to have the grand opening of the 4D
Ride  Dino-Rampage  during  the  Fall of 2004. In addition, the Company plans to
construct a Floating Sphere 4D Theater in Beijing during the year of 2004.

The consolidated financial statements of the Company include the accounts of the
Company  and  its  wholly-owned  and  majority-owned  subsidiaries. All material
intercompany  balances  and  transactions  are  eliminated at consolidation. The
consolidated  financial  statements  have  been  prepared  in  accordance  with
generally  accepted accounting principles in the United States and are presented
in  U.S.  Dollars ("$"). The functional currency of the Company's PRC operations
is the Chinese Renminbi ("RMB"). The accounts of foreign operations are prepared
in their local currency and are translated into USD using the applicable rate of
exchange. Transactions denominated in currencies other than the U.S. Dollars are
translated  into  U.S. Dollars at the applicable exchange rates. Monetary assets
and liabilities denominated in other currencies are translated into U.S. Dollars
at  the  applicable  rate  of  exchange at the balance sheet date. The resulting
transaction  gains  or  losses  are  credited  or  charged  to  the consolidated
statements  of  operations.

The 2002 numbers included in this filing were originally audited by Thomas Leger
&  Company  and included in the Form10-KSB for the year ended December 31, 2002.
On  May 13, 2004, the Company was informed that Thomas Leger & Company would not
be  reissuing their opinion for the inclusion of these numbers to be utilized in
the  current 10-KSB. We have included these numbers as unaudited. We will engage
Weinberg  &  Company, our current auditors, to reaudit the 2002 numbers. Because
of  the  late  date, they have not had sufficient time to finalize this process.
Immediately  upon  the completion of the audit, we will be filing a Form10-KSB/A
to  include  Weinberg's  opinion  on  the  audit  of  2002.

CONSOLIDATED  RESULTS  OF  OPERATIONS

Fiscal Years Ended December 31, 2003 and 2002:

REVENUE
The  Company generated revenues of $5,460,287 for the fiscal year ended December
31,  2003,  which was a $325,223 or 5.6% decrease from $5,785,510 for the fiscal
year  ended  December 31, 2002. This is primarily due to the outbreak of SARS in
China  during March to June in 2003. On the other hand, the Company continued to
explore  new  markets and focus on the development of projects for large hi-tech
amusement  centers  and  hi-tech  parks  like "4D Ride Dino-Rampage"", "Floating
Sphere  4D Theater" and "FantaWild FunPlex" as well as existing projects for "4D
Theater".  In  2002,  the  Company focused mainly on the construction of our "4D
Theater" and product sales of our "4D Theater" and other amusement products. The
focus in 2002 was primarily related to "4D Theater" which was the new product to
the  market  at  that  time.  In  2003, the Company devoted its resources to the
development of new projects - "Dino-Rampage" and "Fantawild FunPlex". Therefore,
the  Company  devoted  fewer


                                       21
<PAGE>
resources  to the marketing of the "4D Theater" project and caused a decrease in
the  sales  of  the  "4D  Theater".

GROSS  PROFIT
Gross  profit  margin  has improved to 30% for the fiscal year 2003 from 24% for
the  fiscal  year  2002.  This  is  primarily  due  to  the  increases number of
high-margin  sales.  The Company increased product sales to new overseas markets
including  the  U.S.,  Kuwait and Philippines during the year of 2003. Since the
products are relatively new in the developing countries, the Company can enjoy a
higher  profit  margin  in  such  sales.

SELLING  AND  MARKETING  EXPENSES
Selling  and  marketing  expenses  decreased  by $34,771 or 10% over the year to
$301,040  for  the year ended December 31, 2003 from $335,811 for the year ended
December  31, 2002. This is primarily due to the decrease in exhibition expenses
in  2003.

GENERAL  AND  ADMINISTRATIVE  EXPENSES
General  and  administrative expenses increased by $367,345 or 73% over the year
to  $873,999  for  the  year  ended December 31, 2002 from $506,654 for the year
ended  December 31, 2002. The increase is primarily due to the increase in legal
&  professional,  insurance, utility and salary and rental expenses. Also, since
the  Company  acquired  Hytechnology  Inc. and Hytechnology Ltd. from August and
September  2002, expenses that were incurred by these two subsidiaries were more
when  calculating  in  full  year  of  2003.

IMPAIRMENT  CHARGES
During  the  years  ended  December  31,  2003  and  2002,  the Company recorded
impairment  charges  of  $0  and  $126,495,  respectively.

MERGER  COSTS
Expenses  incurred  relating to the merger with Intsys Share Limited amounted to
$0  for  the  fiscal year ended December 31, 2003 whereas these expenses for the
fiscal  year  ended  December  31,  2002  was  $1,017,822.

INCOME  (LOSS)  FROM  OPERATIONS
Income  from  operations  for  the  fiscal  year 2003 increased by $1,095,476 to
$469,701,  as  compared  to  loss  of $625,775 for the fiscal year 2002. This is
primarily due to the merger costs of $1 million that were incurred in year 2002.

MINORITY  INTEREST
The Company recorded a minority interest of $124,998 and $115,870 for the fiscal
years  2003  and  2002,  respectively,  to reflect the interests of the minority
shareholders  in  Hytechnology,  Inc.  (30%),  Hytechnology  Limited  (1%), SDCL
(34.59%)  and  FDI  (60%  of  SDCL).

OTHER  INCOME  (LOSS)
For  the fiscal year ended December 31, 2003 and 2002, there was interest income
of  $56,409  and $7,951, interest expenses of $92,648 and $39,223, other expense
of  $3,053  and $0, and non-operating income of $1,796 and $0, respectively. The


                                       22
<PAGE>
Company had more interest income during 2003 because there was more cash deposit
during  the  year.  Interest  expenses were more in 2003 primarily due to a bank
loan of $2,168,675 that was obtained in August 2002. The Company repaid the loan
in  August  2003 and thus, we incurred more interest expenses during the year of
2003.  The  Company did not record any other income during the fiscal year 2002.

INCOME  TAX  EXPENSE
The  Company  is subject to income taxes on an entity basis on income arising or
derived  from  the  tax  jurisdiction  in which each entity is domiciled. Intsys
Share  Limited  is not liable for income taxes. The Company's 65.41% owned China
subsidiary  - SDCL is subject to Enterprise Income Tax in China at a rate of 15%
on  net income. However, based on the local tax rules, SDCL is entitled to a tax
holiday for the first two years of its operations and a 50% reduction of the tax
rate  for  the  third through fifth years (years 2001 - 2003) of operations. The
provision  for  taxes  on earnings of SDCL for the years ended December 31, 2003
and  2002  was  $38,060  and  $39,936  respectively.

NET INCOME / LOSS
The Company recorded a net income of $269,147 and a net loss of $812,853 for the
fiscal  years  ended December 31, 2003 and 2002, respectively. This is primarily
due  to  the  merger  costs of $1,017,822 incurred in connection with our merger
with  Intsys  Share  Limited  in  year  2002.

FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES

For  the  fiscal year ended December 31, 2003, our operations generated net cash
of  $1,880,610,  as compared to net cash of $818,018 was generated in the fiscal
year  ended December 31, 2002. This is primarily due to decrease of inventories,
increase  of  deposit  received  and  increase  of  accounts  payable,  accrued
liabilities  and  other  payables.

As  of  December 31, 2003, we had cash on hand of $5,240,816 and a current ratio
of  2.96.

We  had no significant capital expenditure commitment outstanding as of December
31, 2003. There was an increase of construction in progress of $1,660,740 in the
year  2003  as  the  Company  has  devoted more resources on the new projects of
FunPlex  and  4-D  Ride  Dino  Rampage.

We anticipate, based on currently proposed plans and assumptions relating to its
existing  operations,  that  our  projected cash flows from operations, combined
with  cash  that  we  expect to generate from the issuance of its securities and
from  borrowings,  will  be sufficient to support its planned operations for the
next  twelve  months.  Depending  on  our rate of growth, we may seek additional
capital  in  the  future  to  support  expansion of operations and acquisitions.

CRITICAL  ACCOUNTING  ESTIMATES

Our discussion and analysis of our financial condition and results of operations
is  based  upon  our  audited  financial statements, which have been prepared in
accordance


                                       23
<PAGE>
with  accounting  principals  generally  accepted  in  the  United  States.  The
preparation  of  these  financial  statements  requires us to make estimates and
judgments  that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of any contingent assets and liabilities. On an
ongoing  basis,  we  evaluate  our  estimates,  including  those  related  to
uncollectible receivables, investment values, income taxes, the recapitalization
and  contingencies. We base our estimates on various assumptions that we believe
to  be  reasonable  under the circumstances, the results of which form the basis
for  making  judgments  about carrying values of assets and liabilities that are
not  readily  apparent  from other sources. Actual results may differ from these
estimates  under  different  assumptions or conditions. The Company believes the
following  are  its  most critical accounting policies in that they are the most
important  to the portrayal of the Company's financial condition and results and
require management's most difficult, subjective or complex judgments.

Revenue  and  cost  recognition
The Company principally derives its revenue from (i) the design, development and
construction  of  4-dimension  cylindrical  screen  system, digital video, theme
sites  and  similar  computer  system  integration projects and (ii) the sale of
entertainment and amusement products, and (iii) equipment rental.

(i)  Long-term construction contract revenue and costs
Long-term  construction contract revenue and costs are recognized as revenue and
expenses  in the statement of operations by reference to the stage of completion
of  a  contract  (i.e.  the percentage of completion method) when the outcome of
that  contract  can be estimated reliably. The stage of completion of a contract
is  determined  based on the proportion that costs incurred to the balance sheet
date  bear  to  total estimated costs.  A loss on a contract is recognized as an
expense  immediately  when  it is probable that total contract costs will exceed
total  the  contract  revenue.

Costs  attributable  to  un-priced  change  orders  would be treated as costs of
contract  performance in the period in which the costs are incurred if it is not
probable  that  the  costs  will  be  recovered through a change in the contract
price.  If  it  is probable that the costs will be recovered through a change in
the  contract  price,  they would be treated as costs of contract performance in
the  period in which they are incurred, and contract revenue would be recognized
to  the  extent of the costs incurred. If it is probable that the contract price
will  be adjusted by an amount that exceeds the costs attributable to the change
order  and  the  amount  of  the  excess can be reliably estimated, the original
contract  price  would  also  be  adjusted  for  that  amount when the costs are
recognized  as  costs  of  contract  performance if its realization is probable.

(ii) Sale of entertainment and amusement products
Revenue from the sale of entertainment and amusement products is recognized when
the  products  are  delivered  to  the  customers.  Revenue  is adjusted for the
deduction  of  any  sales  returns  and  discounts.

(iii) Equipment rental income
Equipment  rental  income  is  recognized  when  the  rentals  become  due  and
receivable.

Income  taxes
The  Company  accounts  for  income tax using Statements of Financial Accounting
Standards  ("SFAS") No. 109 "Accounting for Income Taxes". SFAS No. 109 requires


                                       24
<PAGE>
an  asset  and  liability  approach  for  financial accounting and reporting for
income taxes and allows recognition and measurement of deferred tax assets based
upon  the  likelihood  of realization of tax benefits in future years. Under the
asset  and  liability  approach,  deferred  taxes  are  provided for the net tax
effects  of  temporary  differences  between  the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes.  A  valuation  allowance  is provided for deferred tax assets if it is
more  likely  than not these items will either expire before the Company is able
to realize their benefits, or that future deductibility is uncertain.

Inventories
Inventories consist of raw materials, work-in-process, and finished goods, which
are  held  for  resale  and  are  used  in  the  production of entertainment and
amusement production equipment that the Company sells and rents (See revenue and
cost  recognition).  Inventories are stated at the lower of cost, on a first-in,
first-out  basis,  or  net  realizable  value.  Costs  of  raw materials include
purchases  and  related costs incurred in bringing the products to their present
location  and  condition.

Asset  Impairment
The  Company  reviews  its  long-lived  assets  and identifiable intangibles for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying  amount  of  the asset may not be recoverable. In performing the review
for  recoverability,  the  Company  estimates  the future cash flows expected to
result from the use of the asset and its eventual disposition. If the sum of the
expected  future  cash flows (undiscounted and without interest charges) is less
than  the  carrying  amount  of  the  asset,  an  impairment loss is recognized.
Otherwise,  an  impairment  loss is not recognized. Measurement of an impairment
loss  for  long-lived  assets and identifiable intangibles would be based on the
fair  value of the asset. During the years ended December 31, 2003 and 2002, the
Company recorded impairment charges of $0 and $126,495, respectively.


Contractual  Obligations
The  following  table  summarizes our contractual obligations as of December 31,
2003:

<TABLE>
<CAPTION>
CONTRACTUAL OBLIGATIONS     PAYMENTS DUE BY PERIOD
-----------------------  -----------------------------
                           2004       2005      2006
                         ---------  --------  --------
<S>                      <C>        <C>       <C>
Operating Leases         $ 235,000  $171,000  $120,000
</TABLE>

Off-Balance  Sheet  Arrangements
As  of  December  31,  2003,  the  Company  does  not have any off-balance sheet
arrangements.

Inflation  and  Changing  Prices
Fluctuations  of  currency  exchange  rates  between  Renminbi and United States
dollar  could  adversely  affect  our  business  since  we  conduct our business
primarily  in  China,  and the sale of our products to corporations in China are
settled  in  Renminbi.  The  Chinese  government  controls  its foreign reserves
through  restrictions  on  imports  and


                                       25
<PAGE>
conversion  of  Renminbi  into foreign currency. Although the Renminbi to United
States  dollar  exchange  rate  has  been  stable  since January 1, 1994 and the
Chinese  government  has  stated  its intention to maintain the stability of the
value  of  Renminbi,  there  can be no assurance that exchange rates will remain
stable.  The  Renminbi  could devalue against the United States dollar. Exchange
rate  fluctuations  may  adversely  affect our revenue arising from the sales of
products in China and denominated in Renminbi and our financial performance when
measured  in  United  States  dollar.

Recent Accounting Pronouncements

In  January  2003,  (as  revised  in  December  2003)  The  Financial Accounting
Standards  Board  ("FASB")  issued  Interpretation  No.  46,  "Consolidation  of
Variable  Interest  Entities", an interpretation of Accounting Research Bulletin
("ARB")  No.  51,  "Consolidated  Financial  Statements".  Interpretation No. 46
addresses  consolidation  by business enterprises of variable interest entities,
which  have  one  or  both  or  the  following  characteristics:  (i) the equity
investment  at  risk  is  not  sufficient  to  permit  the entity to finance its
activities  without additional subordinated support from other parties, which is
provided  through  other  interest  that will absorb some or all of the expected
losses  of  the  entity;  (ii)  the  equity  investors  lack  one or more of the
following  essential  characteristics  of  a controlling financial interest: the
direct  or  indirect  ability  to  make  decisions about the entities activities
through  voting  rights  or  similar  rights;  or  the  obligation to absorb the
expected  losses  of  the  entity if they occur, which makes it possible for the
entity  to  finance  its  activities; the right to receive the expected residual
returns  of  the entity if they occur, which is the compensation for the risk of
absorbing  the  expected  losses.

Interpretation  No.  46, as revised (46R), also requires expanded disclosures by
the  primary  beneficiary  (as  defined) of a variable interest entity and by an
enterprise  that  holds  a  significant variable interest in a variable interest
entity  but  is  not  the  primary  beneficiary.

Interpretation  No. 46R, applies to small business issuers no later than the end
of  the first reporting period that ends after December 15, 2004. This effective
date  includes  those  entities  to  which Interpretation 46 has previously been
applied.  However,  prior  to  the required application Interpretation No. 46, a
public  entity  that is a small business issuer shall apply Interpretation 46 or
this  Interpretation to those entities that are considered to be special-purpose
entities  no  later  that  as of the end of the first reporting period that ends
after  December  15,  2003.

Interpretation  No.  46R  may  be applied prospectively with a cumulative-effect
adjustment  as  of  the  date  on  which  it  is  first  applied or by restating
previously  issued  financial  statements  for  one  or  more  years  with  a
cumulative-effect adjustment as of the beginning of the first year restated.

The  implementation  of the provisions of Interpretation No. 46R is not expected
to  have  a significant effect on the Company's consolidated financial statement
presentation  or  disclosure.


                                       26
<PAGE>
In  May  2003,  the  FASB issued SFAS No. 150, "Accounting For Certain Financial
Instruments  with  Characteristics of both Liabilities and Equity". SFAS No. 150
changes the accounting for certain financial instruments with characteristics of
both  liabilities  and equity that, under previous pronouncements, issuers could
account  for  as  equity.  The new accounting guidance contained in SFAS No. 150
requires  that  those  instruments  be  classified as liabilities in the balance
sheet.

SFAS  No.  150  affects  the issuer's accounting for three types of freestanding
financial  instruments.  One  type  is  mandatorily redeemable shares, which the
issuing company is obligated to buy back in exchange for cash or other assets. A
second  type includes put options and forward purchase contracts, which involves
instruments  that do or may require the issuer to buy back some of its shares in
exchange  for  cash  or  other  assets.  The  third type of instruments that are
liabilities under this Statement is obligations that can be settled with shares,
the monetary value of which is fixed, tied solely or predominantly to a variable
such  as  a  market  index,  or  varies inversely with the value of the issuers'
shares.  SFAS  No.  150  does  not  apply  to  features  embedded in a financial
instrument  that  is  not  a  derivative  in  its  entirety.

Most  of  the  provisions  of  SFAS  No.  150  are  consistent with the existing
definition  of  liabilities  in  FASB  Concepts  Statement  No.  6, "Elements of
Financial Statements". The remaining provisions of this Statement are consistent
with  the  FASB's  proposal  to  revise  that  definition  to  encompass certain
obligations  that  a  reporting  entity  can  or  must settle by issuing its own
shares. This Statement shall be effective for financial instruments entered into
or modified after May 31, 2003 and otherwise shall be effective at the beginning
of  the  first  interim  period  beginning  after  June  15,  2003,  except  for
mandatorily redeemable financial instruments of a non-public entity, as to which
the  effective  date  is  for  fiscal periods beginning after December 15, 2004.

The  implementation  of the provisions of SFAS No. 150 is not expected to have a
significant  effect  on  the  Company's  consolidated  financial  statement
presentation  or  disclosure.


                                       27
<PAGE>
ITEM  7.  FINANCIAL  STATEMENTS.

(a)  Financial  Statements

The following financial statements are set forth at the end hereof.

1.   Report of Independent Auditors

2.   Consolidated Balance Sheet as of December 31, 2003

3.   Consolidated Statements of Operations for the Years Ended December 31, 2003
     and  2002

4.   Consolidated  Statements  of  Changes in Stockholders' Equity for the Years
     Ended  December  31,  2003  and  2002

5.   Consolidated Statements of Cash Flows for the Years Ended December 31, 2003
     and  2002

6.   Notes to Consolidated Financial Statements


ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE.

Effective  February  2,  2004,  the  Company dismissed Thomas Leger & Co. L.L.P.
("TLC")  as  the  Company's  independent  accountants  and  retained  Weinberg &
Company,  P.A.  ("Weinberg")  as  the  Company's  independent  accountants.  The
dismissal  of  TLC and the engagement of Weinberg were approved by the Company's
Board  of  Directors.  The  reports  of  TLC  on the financial statements of the
Company  as  of and for the fiscal years ended December 31, 2002 did not contain
an  adverse opinion, or disclaimer of opinion; and was not qualified or modified
as  to  uncertainty,  audit  scope,  or  accounting  principles.

TLC  was  the  independent  accountants  for  the Company from November 30, 2002
through  February  2, 2004. During their engagement, there were no disagreements
between  the  Company  (and  its  subsidiaries) and TLC concerning any matter of
accounting  principles or practices, financial statement disclosure, or auditing
scope  or procedure, which disagreements, if not resolved to the satisfaction of
TLC,  would  have  caused  it  to  make  reference  to the subject matter of the
disagreements  in  connection  with  its  reports.

In  addition,  there  were  no  events  as described under Item 304(a)(1)(iv) of
Regulation  S-B  during  the  period from November 30, 2002 to February 2, 2004.

PART  III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH  SECTION  16(a)  OF  THE  EXCHANGE  ACT.


                                       28
<PAGE>
During  the  fiscal year ended December 31, 2003, there were some changes on the
directors  and  executive  officers  of  the  Company.

On April 15, 2003, Ms. Fengming Peng tendered her resignation as Chief Financial
Officer  of  the Company and the Board of Directors of the Company appointed Ms.
Fuxiao  Wang  in  her  place.

On  June  19,  2003, Mr. Liechong Li resigned as Director of the Company and the
Board  of  Directors  of the Company appointed Mr. Zhigang Rong as Director with
effect  from  the  same  date.

On November 26, 2003, Ms. Fuxiao Wang resigned as Chief Financial Officer of the
Company  and  the  Board  of Directors of the Company appointed Mr. Carl Yuen as
Chief  Financial  Officer  with  effect  from  the  same  date.

On  December  9,  2003, Mr. Jianguo Cheng resigned from Secretary of the Company
and  the  Board  of  Directors  of  the  Company  appointed  Mr. Zhigang Rong as
Secretary  with  effect  from  the  same  date.

The  following table and text sets forth the names and ages of all our directors
and executive officers and the key management personnel as of December 31, 2003.
Our Board of Directors is comprised of only one class. All of the directors will
serve  until  the next annual meeting of stockholders and until their successors
are elected and qualified, or until their earlier death, retirement, resignation
or  removal.  Executive  officers  serve  at  the  discretion  of  the  Board of
Directors, and are appointed to serve until the first Board of Directors meeting
following  the  annual  meeting  of  stockholders.  Also  provided  is  a  brief
description  of  the  business experience of each director and executive officer
and the key management personnel during the past five years and an indication of
directorships  held by each director in other companies subject to the reporting
requirements  under  the  Federal  securities  laws.

<TABLE>
<CAPTION>
Name               Age         Position held
--------------     ---     ----------------------
<S>                <C>     <C>
Jinqiang Zhang      62     Chairman
Guangwei Liang      40     Vice Chairman and CEO
Ming Li             47     Director and COO
Xinan Hu            35     Director
Zhigang Rong        40     Director and Secretary
Carl Yuen           30     CFO
</TABLE>

JINQIANG  ZHANG     Mr. Jinqiang Zhang has served as our Chairman since November
2002.  Mr.  Zhang has over 30 years' experience in manufacturing industry. Since
1980,  he  has  held  high positions with various large electronic manufacturing
corporations  in  China.  During  the  past  10  years,  he has been involved in
large-scale  fund  raising  activities,  property  development and hi-technology
project  investments  etc.

GUANGWEI  LIANG     Mr. Guangwei Liang has served as our Vice-Chairman and Chief
Executive  Officer  since  November  2002.  Mr.  Liang  has


                                       29
<PAGE>
over  15 years' experience in manufacturing industry. He holds a bachelor degree
in computer science and application from Shenzhen University, a master degree in
law and a doctoral degree in economics from Wuhan University. Since 1986, he has
served  in  the  management level for several electronics corporations in China.

MING  LI     Mr.  Ming  Li  has served as Chief Operating Officer since November
2002.  Mr.  Li  has over 20 years' experience in manufacturing and hi-technology
industries.  From  1984  to  1988,  he  participated  in  a  visiting program in
Stevenson  Polytechnic  in  the  United  States  and  worked  for  several  US
corporations.  Since  1998,  he  has  served  in  the  management  level  for
hi-technology  corporations  in  China.

XINAN  HU     Mr.  Xinan  Hu  was  appointed  as  director  of the Company since
November  2002. Mr. Hu has over 10 years' experience in manufacturing, chemical,
and  investment industries. He holds a bachelor degree in mechanical engineering
from  Shenyang  Chemical  College.  Since  1992, he has served in the management
level  for  several  corporations  in  China.  He  has  been involved in various
significant  investments,  fund  raising,  merger  and  acquisitions activities.

ZHIGANG  RONG     Mr. Zhigang Rong has served as a director of the Company since
June  2003.  Mr.  Rong  holds a bachelor degree of computer science and a master
degree  of  information  system  engineering from National University of Defense
Technology  in China. He is qualified for lecturer and senior engineer. Mr. Rong
is  experienced in R&D and corporate management. Since 1993, Mr. Rong has served
as  Manager,  Vice  General  Manger  and  General  Manager  of several technique
companies.

CARL  YUEN     Mr.  Carl  Yuen  has  served as our Chief Financial Officer since
November  2003.  Mr.  Yuen has rich experience in finance and accounting both in
Hong  Kong  and  the  United States. He started his career in Houston, Texas. He
joined  Greensmart  Corp.,  a  U.S.  listed  company in 2000 and served as Chief
Financial  Officer  since  2001.  Mr.  Yuen  received  BBA  and MBA degrees from
University  of  Houston,  Texas  in  1997  and  1998,  respectively.

(a)  Family  Relationships
There  are  no family relationships between or among the directors and executive
officers.

(b)  Involvement  in  Legal  Proceedings
To  the best of the Company's knowledge, during the past five years, none of the
following  occurred  with  respect  to a present or former director or executive
officer  of  the  Company:  (1)  any bankruptcy petition filed by or against any
business  of which such person was a general partner or executive officer either
at  the  time  of the bankruptcy or within two years prior to that time; (2) any
conviction  in  a  criminal  proceeding  or  being subject to a pending criminal
proceeding  (excluding  traffic  violations and other minor offenses); (3) being
subject  to  any order, judgment or decree, not subsequently reversed, suspended
or  vacated,  of  any  court  of  any  competent  jurisdiction,  permanently  or
temporarily enjoining, barring, suspending or otherwise limiting his involvement
in  any  type of business, securities or banking activities; and (4) being found
by  a  court  of  competent  jurisdiction  (in  a  civil  action),


                                       30
<PAGE>
the SEC or the Commodities Futures Trading Commission to have violated a federal
or  state securities or commodities law, and the judgment has not been reversed,
suspended  or  vacated.

(c)  Section  16(a)  Beneficial  Ownership  Compliance
Section  16(a)  of the Securities Exchange Act of 1934, as amended, requires our
executive  officers  and  directors  and  persons  who  own  more  than 10% of a
registered  class  of  our  equity  securities  to  file with the Securities and
Exchange  Commission  initial  statements  of  beneficial  ownership, reports of
changes  in  ownership  and  annual reports concerning their ownership of common
stock  and  other  of  our  equity securities, on Forms 3, 4 and 5 respectively.
Executive  officers, directors and greater than 10% shareholders are required by
Commission  regulations  to furnish the Company with copies of all Section 16(a)
reports  they  file. To the best of our knowledge (based solely upon a review of
the  Form  3, 4 and 5 filed), no officer, director or 10% beneficial shareholder
failed  to  file  on a timely basis any reports required by Section 16(a) of the
Securities  Exchange  Act  of  1934,  as  amended.

ITEM  10.  EXECUTIVE  COMPENSATION

No  compensation was paid to our Chief Executive Officer for remuneration during
fiscal years ended December 31, 2002 and 2003. $20,167 and $0 was paid to two of
the directors for director's remuneration during fiscal years ended December 31,
2003  and  2002,  respectively.  None  of  our  executive  officers  received
compensation  in  excess  of  $100,000.

On  January  6,  2004,  the  Board  of Directors of the Company approved and has
granted  4,000,000  shares  of  stock  option  to  the  officers and certain key
employees. The granted stock option has a strike price of $0.50, which was above
the market price of $0.40 of the Company's stock on the date of grant. The stock
option  has  a vest period and can be exercised in 50% from January 7, 2007, 80%
from January 7, 2008 and in whole from January 7, 2009 until their expiration on
January  6,  2014.

Shares  of  stock option were granted to the directors and executives are listed
as  below:

<TABLE>
<CAPTION>
                                          Shares of
Name/Title                               Stock Option
----------                               ------------
<S>                                      <C>
Jinqiang Zhang, Chairman                      300,000
Guangwei Liang, Vice Chairman & CEO           300,000
Ming Li, Director and COO                     200,000
Xinan Hu, Director                            120,000
Zhigang Rong, Director and Secretary          200,000
Carl Yuen, CFO                                      -
</TABLE>

COMPENSATION  AGREEMENTS
There  are currently no long-term employment or consulting agreements between us
and  our  executive  officers  or  directors.

BOARD  OF  DIRECTORS


                                       31
<PAGE>
During the year ended December 31, 2003, five meetings of the Board of Directors
were  held.  Additionally,  certain  corporate  actions  were  also conducted by
unanimous  written  consent  of the Board of Directors. Directors are reimbursed
for  any  out-of-pocket  expenses  incurred  in  attending  board  meetings.

The  Board  of  Directors  had  no  nominating  or  compensating  committees, or
committees  performing  similar functions, during the fiscal year ended December
31,  2003.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following table sets forth the number of our common shares owned by record,
or  to our knowledge, beneficially, by each of our officers and directors and by
each  person  owning  five  percent  or  more  of  our outstanding shares, as of
December  31,  2003. The percentage is based on 40,192,063 shares outstanding on
March  31,  2004.

Each  person  listed  below  has  personal  and sole beneficial ownership of the
shares  of  common  stock  listed  with  their  name:

<TABLE>
<CAPTION>
                                           Number       Percentage
Name/Title                                of Shares      Ownership
----------                                ---------     -----------
<S>                                       <C>           <C>
Jinqiang Zhang, Chairman                  5,206,835          12.95%
Guangwei Liang, Vice Chairman & CEO       2,787,100           6.93%
Ming Li, Director and COO                    53,226           0.13%
Xinan Hu, Director                        1,854,042           4.61%
Zhigang Rong, Director and Secretary         53,226           0.13%
Carl Yuen, CFO                                    -              -
                                          ---------     -----------
All directors and executive officers
(6 persons)                               9,954,429          24.75%

Person owning 5% or more
------------------------
Liechong Li                               2,597,948           6.46%
</TABLE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During  the  year  ended  December  31,  2003,  the  Company  purchased  certain
components  for  its products from Hyvision Digital Film Inc. ("Film Inc."). The
SDCL's  minority  shareholder,  Yongfeng  has  a 35% interest in Film Inc. Total
purchases from Film Inc. were $486,145 and $204,819 for the years ended December
31,  2003  and  2002,  respectively.  In addition, the Company sold products and
equipment  to  Film Inc. of $41,190 and $423,242 during the years ended December
31,  2003  and  2002,  respectively. The accounts receivable from Film Inc. were
$96,386  and  $121,445  for  the  years  ended  December  31,  2003  and  2002,
respectively. Mr. Guangwei Liang, Mr. Ming Li, Mr. Xinan Hu and Mr. Zhigang Rong
are  common  directors  of  Film  Inc.  and  the  Company.


                                       32
<PAGE>
ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)  Exhibits.
The  following is a list of exhibits filed as part of this Annual Report on Form
10-KSB. Where so indicated by footnote, exhibits which were previously filed are
incorporated  by  reference.

<TABLE>
<CAPTION>
Exhibit
Number   Description
-------  -----------
<S>      <C>
3.1      Certificate of Incorporation, Incorporated herein by reference from the
         filing on Form S-1, filed with the Commission on November 17, 1996
3.2      Certificate of Amendment to the Certificate of Incorporation, Incorporated
         herein by reference from the filing on Schedule 14C, filed with the
         Commission on December 30, 2002
4.1      Registration Rights Agreement, dated November 5, 2002, Incorporated
         herein by reference from the Filing on Form 8-K, filed on November 11,
         2002
4.2      Stock Purchase Agreement, dated November 4, 2002, Incorporated herein
         by reference from the Filing on Form 8-K, filed on November 11, 2002
4.3      Stock Purchase Agreement, dated October 16, 2002, Incorporated herein by
         reference from the Filing on Form 8-K, filed on November 11, 2002
4.4      Share Exchange Agreement, dated November 6, 2002, Incorporated herein
         by reference from the Filing on Form 8-K, filed on November 11, 2002
21.1     Subsidiaries of the Company
31.1     Certification by Chief Executive Officer
31.2     Certification by Chief Financial Officer
32.1     Certification by Chief Executive Officer Pursuant to Rule 13a-14(b) and 18
         U.S.C. Section 1350
32.2     Certification by Chief Executive Officer Pursuant to Rule 13a-14(b) and 18
         U.S.C. Section 1350
</TABLE>

(b)  Reports  on  Form  8-K.
During  the  three  months  ended December 31, 2003, the Company filed a current
report  on  Form  8-K  on November 14, 2003, regarding to relocate its principal
executive  to  418-A Cloverleaf Drive, Baldwin Park, Los Angeles, CA 91706, USA.


ITEM  14.  CONTROLS  AND  PROCEDURES

Based on their evaluation of the Company's disclosure controls and procedures as
of the end of the period covered by this report, the Chief Executive Officer and
Chief  Financial  Officer  have  concluded that such controls and procedures are
effective.  There were no significant changes in the company's internal controls
or  in  other


                                       33
<PAGE>
factors  that could significantly affect such controls subsequent to the date of
their  evaluation.

ITEM  15.  PRINCIPAL  ACCOUNTING  FEES  AND  SERVICES

The  following  is  a  summary  of  the fees billed to us by TLC & Weinberg, for
professional  services rendered for the fiscal years ended December 31, 2003 and
2002:

<TABLE>
<CAPTION>
                            Fiscal 2003      Fiscal 2002
     Fee Category               Fees             Fees
     ------------           ------------     ------------
<S>                         <C>              <C>
     Audit Fees             $     73,000     $     59,000
     Audit-Related Fees               --               --
     Tax Fees               $     10,000               --
     All Other Fees                   --               --
                            ------------     ------------
     Total Fees             $     83,000     $     59,000
                            ============     ============
</TABLE>

Audit  Fees.  These  are fees for professional services perform for the audit of
the  Company's  annual  financial  statements and review of financial statements
included  in  the  Company's  Form10-QSB filings, and services that are normally
provided  in  connection  with  statutory and regulatory filings or engagements.

Audit-Related Fees.  These are fees for assurance and related services performed
that  are  reasonably  related  to the performance of the audit or review of the
Company's  financial  statements. There were no such fees paid in 2002 and 2003.

Tax  Fees.  These  are  fees  for professional services performed by TLC for tax
compliance,  tax  advice  and tax planning. This includes preparation of federal
and  state  income  tax returns for the Company and its consolidated subsidiary.

All Other Fees.  These are fees for product and services other than the services
reported  above.  There  were  no  such  fees  paid  in  2002  and  2003.


                                       34
<PAGE>
                                   SIGNATURES

In  accordance  with Section 13 or 15(d) of the Exchange Act, the Company caused
this  report  to  be  signed  on  its  behalf by the undersigned, thereunto duly
authorized.


                                        FANTATECH  INC.

Dated:  May 18, 2004                    By  /s/  GUANGWEI LIANG
                                        ---------------------------------
                                        Name:  Guangwei Liang
                                        Title:  Chief Executive Officer


In  accordance  with  the  Securities Exchange Act of 1934, this report has been
signed  below  by  the  following  persons  on  behalf of the Company and in the
capacities  and  on  the  dates  indicated.


Dated:  May 18, 2004                    By  /s/  JINQIANG  ZHANG
                                        ---------------------------------
                                        Name:  Jinqiang Zhang
                                        Title:  Chairman

Dated:  May 18, 2004                    By  /s/  GUANGWEI  LIANG
                                        ---------------------------------
                                        Name:  Guangwei  Liang
                                        Title:  Chief Executive Officer
                                                and Vice Chairman

Dated:  May 18, 2004                    By  /s/  CARL  YUEN
                                        ---------------------------------
                                        Name:  Carl Yuen
                                        Title:  Chief Financial Officer

Dated:  May 18, 2004                    By  /s/  MING  LI
                                        ---------------------------------
                                        Name:  Ming Li
                                        Title:  Chief Operating Officer
                                                and Director

Dated:  May 18, 2004                    By  /s/  XINAN  HU
                                        ---------------------------------
                                        Name:  Xinan Hu
                                        Title:  Director

Dated:  May 18, 2004                    By  /s/  ZHIGANG  RONG
                                        ---------------------------------
                                        Name:  Zhigang Rong
                                        Title:  Secretary and Director


                                       35
<PAGE>
<TABLE>
<CAPTION>
                         FANTATECH INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                            Pages
                                                            -----
<S>                                                         <C>
Index                                                       F-1

Report of Independent Auditors                              F-2

Consolidated Balance Sheet as of December 31, 2003          F-3

Consolidated Statements of Operations for the Years
Ended December 31, 2003 and 2002                            F-4

Consolidated Statements of Changes in Stockholders'
Equity for the Years Ended December 31, 2003 and 2002       F-5

Consolidated Statements of Cash Flows for the Years
Ended December 31, 2003 and 2002                            F-6

Notes to Consolidated Financial Statements                  F-7 to F-18
</TABLE>


                                      F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Fantatech, Inc. and Subsidiaries:


We  have  audited the accompanying consolidated balance sheet of Fantatech, Inc.
and  Subsidiaries  (the  "Company"),  as  of  December  31, 2003 and the related
consolidated  statements of operations, changes in shareholders' equity and cash
flows  for  the year then ended. These consolidated financial statements are the
responsibility  of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the audit to obtain reasonable assurance about whether the consolidated
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  consolidated  financial  statements.  An  audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as  evaluating  the  overall  consolidated  financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly  in  all material respects, the financial position of Fantatech, Inc. and
Subsidiaries  as  of  December 31, 2003, and the results of their operations and
their  cash  flows  for  the  year  then  ended,  in  conformity with accounting
principles generally accepted in the United States of America.


WEINBERG & COMPANY, P.A.


Boca Raton, Florida
May 17, 2004


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                         FANTATECH INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2003

                                                               2003
                                                            -----------
<S>                                                         <C>
ASSETS
Current assets
   Cash                                                     $ 5,240,816
   Trade receivables, net of allowance of $29,299               512,019
   Related party receivable                                     116,278
   Inventories                                                1,458,317
   Cost and Estimated earnings in excess of
      billings on uncompleted contracts                         917,639
   Deposit and prepayments                                      697,728
   Other receivables                                             56,223
                                                            ------------

Total current assets                                          8,999,020

Property, plant and equipment, net                              666,171
Construction in progress                                      1,660,740
Trademarks                                                      170,950
                                                            ------------

Total assets                                                $11,496,881
                                                            ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
   Short-term loans-unsecured                               $   300,000
   Accounts payable                                             792,396
   Accrued liabilities and other payables                     1,319,652
   Deposits received                                            630,000
                                                            ------------

Total current liabilities                                     3,042,048

Minority interests                                            5,789,180
                                                            ------------

Total liabilities                                             8,831,228
                                                            ------------

Commitments and contingencies                                        -

Stockholders' equity
   Preferred stock; $0.001 par value; 10,000,000 shares
      authorized; no shares issued and outstanding                   -
   Common stock; $0.001 par value; 100,000,000 shares
      authorized, 40,192,063 shares issued and outstanding       40,192
   Additional paid-in capital                                 2,865,278
   Deficit                                                     (385,164)
   Reserve funds                                                145,347
                                                            ------------

Stockholders' equity                                          2,665,653
                                                            ------------

Total liabilities and stockholders' equity                  $11,496,881
                                                            ============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                         FANTATECH INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                 (Audited)    (Unaudited)
                                                    2003          2002
                                                ------------  ------------
<S>                                             <C>           <C>
SALES                                           $ 5,460,287   $ 5,785,510

COST OF SALES                                     3,815,547     4,424,503
                                                ------------  ------------

GROSS PROFIT                                      1,644,740     1,361,007

SELLING AND MARKETING EXPENSES                      301,040       335,811

GENERAL AND ADMINISTRATIVE EXPENSES                 873,999       506,654

IMPAIRMENT CHARGES                                        -       126,495

MERGER COSTS                                              -     1,017,822
                                                ------------  ------------

INCOME (LOSS) FROM OPERATIONS                       469,701      (625,775)

MINORITY INTERESTS' SHARE OF INCOME                 124,998       115,870

OTHER INCOME (LOSS)
  Interest expense                                  (92,648)      (39,223)
  Other expense                                      (3,053)            -
  Interest income                                    56,409         7,951
  Non-operating income                                1,796             -
                                                ------------  ------------

INCOME (LOSS) BEFORE TAX PROVISION                  307,207      (772,917)

INCOME TAX EXPENSE                                   38,060        39,936
                                                ------------  ------------

NET INCOME (LOSS)                               $   269,147   $  (812,853)
                                                ============  ============

WEIGHTED AVERAGE SHARES OUTSTANDING
  BASIC AND DILUTED                              40,192,063    40,029,467
                                                ============  ============

BASIC AND DILUTED NET INCOME (LOSS) PER SHARE   $      0.01   $     (0.02)
                                                ============  ============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                                                  FANTATECH INC. AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                           FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                                                                                        Total
                                                 Common Stock          Additional     Retained Earnings   Reserve   Stockholders'
                                             Shares       Amount    Paid-In Capital       (Deficit)        Funds        Equity
                                          ----------------------------------------------------------------------------------------
<S>                                       <C>            <C>        <C>               <C>                 <C>       <C>
Balances, December 31, 2001                          -   $      -   $     1,859,444   $         158,542   $145,347  $   2,163,333

Issuance of common stock for
   Intsys System Share Limited
   reverse merger                           50,000,000    500,000          (500,000)                  -          -              -

Net effect of Fantatech Inc. reverse
   merger including merger costs
   paid by shareholders                     (9,807,937)  (459,808)        1,505,834                   -          -      1,046,026

Net loss                                             -          -                 -            (812,853)         -       (812,853)
                                          ----------------------------------------------------------------------------------------

Balances, December 31, 2002 (Unaudited)     40,192,063   $ 40,192   $     2,865,278   $        (654,311)  $145,347  $   2,396,506

Net Income                                           -          -                 -             269,147          -        269,147
                                          ----------------------------------------------------------------------------------------

Balances, December 31, 2003 (Audited)       40,192,063   $ 40,192   $     2,865,278   $        (385,164)  $145,347  $   2,665,653
                                          ========================================================================================
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                                   FANTATECH INC. AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                                             (Audited)    (Unaudited)
                                                                               2003          2002
                                                                           -------------  -----------
<S>                                                                        <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                                               269,147     (812,853)
Adjustments to reconcile net income (loss) to
 net cash provided by operating activities:
  Depreciation expense                                                          309,766      552,364
  Impairment charges                                                                  -      126,495
  Minority interests' share of income                                           124,998      115,870
  Merger costs paid by shareholders                                                   -    1,017,822
Change in operating assets and liabilities:
  Decrease (increase) in trade receivables                                      253,557     (316,022)
  Decrease (Increase) in inventories                                            121,227     (223,581)
  (Increase) decrease in costs and estimated
    earnings in excess of billings on uncompleted contracts                    (322,848)      29,366
  (Increase) in deposits and prepayments                                       (289,330)     (61,715)
  (Increase) decrease in other receivables                                      (24,008)      34,410
  Decrease in related party receivable                                           21,179            -
  Decrease in billings in excess of costs and
    estimated earnings on uncompleted contracts                                       -      (49,573)
  Increase in deposits received                                                 630,000            -
  Increase in accounts payable, accrued liabilities and other payables          786,922      405,435
                                                                           -------------  -----------

Net cash provided by operating activities                                     1,880,610      818,018
                                                                           -------------  -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Capital expenditures                                                         (437,978)    (136,957)
  Construction in progress                                                   (1,660,740)           -
  Purchase of Hytechnology Inc.                                                       -     (172,000)
                                                                           -------------  -----------

Net cash used in investing activities                                        (2,098,718)    (308,957)
                                                                           -------------  -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Capital contributions                                                               -        1,537
  Proceeds from short term loan                                               2,891,566    2,468,675
  Principal repayments on short term loan                                    (5,060,241)           -
  Minority interests' contribution in subsidiary                              4,337,350            -
                                                                           -------------  -----------

Net cash provided by financing activities                                     2,168,675    2,470,212
                                                                           -------------  -----------

NET INCREASE IN CASH                                                          1,950,567    2,979,273

Cash and cash equivalents, at beginning of year                               3,290,249      310,976
                                                                           -------------  -----------

Cash and cash equivalents, at end of year                                     5,240,816    3,290,249
                                                                           =============  ===========

Supplementary disclosures of cash flow information:
  Interest paid                                                                  86,809       37,106
                                                                           =============  ===========

  Tax paid                                                                       54,886       18,383
                                                                           =============  ===========
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
None

<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                      F-6
<PAGE>
                         FANTATECH INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


1.   DESCRIPTION OF BUSINESS AND BUSINESS COMBINATION

Fantatech,  Inc.,  formerly Lucas Educational Systems, Inc., (the "Company") was
incorporated  in  the  State  of  Delaware.  During  November  2002, the Company
acquired  all  of  the  issued  and  outstanding  shares of Intsys Share Limited
(Intsys)  in  a  reverse  merger.  Intsys was incorporated in the British Virgin
Islands  on  April  29,  2002.  Intsys  is  a holding company for investments in
operating  companies  (See  Note  4).

During  May  2002,  Intsys  acquired  a 65.41% interest in Shenzhen Digitainment
Company Limited (SDCL or Digitainment) located in the People's Republic of China
(PRC)  and  the  former owners of the 65.41% interest in Digitainment became all
the  shareholders of Intsys. The business combination was deemed to be a reverse
merger  and the acquisition of the 65.41% interest in Shenzhen Digitainment Co.,
Ltd.  has  been  accounted  for  at  historical cost. SDCL is engaged in design,
development  and  production  of  hi-tech  entertainment and amusement products,
including  4D  theater,  digital  film,  indoor entertainment center, large size
indoor  attraction  and  theme  parks  (See  Note  4).

During  August  2002, Intsys formed Hytechnology Limited, ("Hytechnology/HK"), a
Hong  Kong  company.  Intsys  owns  99%  of  Hytechnology/HK. Hytechnology/HK is
engaged  in  the sales and marketing of the products of Digitainment outside the
United  States  of  America  (excluding  China).

During  September  2002,  Intsys acquired a 70% equity interest of HyTechnology,
Inc.  ("HyTechnology/USA"),  a  Delaware  Corporation,  from  a  third party for
$172,000. HyTechnology/USA is engaged in the sales and marketing of the products
of  Digitainment  in  the  United  States  of  America  (See  Note  4).

During August 2003, SDCL, Shenzhen Huaqiang Industry Company Limited (SHICL) and
Shenzhen  Huaqiang  Venture  Capital  Company  Limited (SHVCCL) formed Fantatech
Development,  Inc.  (FDI) in PRC. FDI is owned 40% by SDCL, 40% by SHICL and 20%
by  SHVCCL,  and  is  intended  to  engage  in the construction and operation of
hi-tech  entertainment  and amusement centers and theme parks. Subsequent to the
formation  of  FDI,  SHVCCL (the 20% shareholder) assigned all of its management
and  control  rights  to  SDCL.


2.   BASIS  OF  PRESENTATION  AND  CONSOLIDATION

The  accompanying  consolidated  financial statements are prepared in accordance
with  generally  accepted accounting principles in the United States of America.

The  consolidated  financial  statements include the financial statements of the
Company,  its  majority  owned  subsidiaries,  and  its  majority  controlled
subsidiary,  FDI.  All  significant  intercompany  balances  and  transactions,
including  intercompany profits and unrealized profits and losses are eliminated
on  consolidation.


                                      F-7
<PAGE>
                         FANTATECH INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash  and  cash  equivalents
----------------------------

Cash  and  cash  equivalents include cash on hand, demand and time deposits with
banks  and liquid investments with an original maturity of three months or less.

Inventories
-----------

Inventories consist of raw materials, work-in-process, and finished goods, which
are  held  for  resale,  used  in  the production of entertainment and amusement
production  equipment that the Company sells and rents, or moved to construction
in progress as the components of the amusement centers or parks are constructed.
(See revenue and cost recognition). Inventories are stated at the lower of cost,
on  a first-in, first-out basis, or net realizable value. Costs of raw materials
include  purchases  and related costs incurred in bringing the products to their
present  location  and  condition.

Property,  plant  and  equipment
--------------------------------

Property, plant and equipment are recorded at cost less accumulated depreciation
and  amortization.  Gains  or  losses  on  disposals  are  reflected  in current
operations. Major expenditures for betterments and renewals are capitalized. All
ordinary repair and maintenance costs are expensed as incurred. Depreciation for
financial reporting purposes is provided using the straight-line method over the
estimated  useful  lives of the assets, generally three to five years. Leasehold
improvements  are  amortized  on  a  straight-line basis over the shorter of the
useful life of the improvement or the term of the lease.

The  carrying  value  of  property, plant and equipment is assessed annually and
when  factors  indicating impairment is present, the carrying value of the fixed
assets  is  reduced  by the amount of the impairment. The Company determines the
existence  of  such  impairment  by measuring the fair market value of the asset
based  upon  the  expected  future cash flows (undiscounted and without interest
charges)  and  comparing  such  amount  to  the  net  asset  carrying  value. An
impairment  loss,  if it exists, is measured as the amount by which the carrying
amount of the asset exceeds the fair value of the asset.

Construction in progress
------------------------

Construction  in  progress  is  recorded at cost for construction of the hi-tech
amusement  centers  and  hi-tech  parks  such  as  "4-D  Ride  Dino-Rampage" and
"FantaWild  FunPlex".  Upon  to  the grand opening of the amusements centers and
parks, the cost of the construction in progress will be transferred and recorded
as  property,  plant  and  equipment.

Trademarks
----------

The  identifiable  intangible assets of the Company are trademarks acquired in a


                                      F-8
<PAGE>
                         FANTATECH INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


business  combination.  The  Company  adopted  the  provisions  of  Statement of
Financial  Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible
Assets",  at  the  beginning  of  2002.  Under  the  provisions of SFAS No. 142,
identifiable  intangibles  with  finite  lives  are  amortized  and  those  with
indefinite  lives are not amortized. The trademarks have been determined to have
an indefinite life and is therefore not being amortized. Management's impairment
review  of  the  trademark  did  not  indicate that an impairment was warranted.

Revenue and cost recognition
----------------------------

Revenue is recognized when the following four criteria are met:
1)   persuasive evidence of an arrangement exists,
2)   delivery has occurred on services have been rendered,
3)   the price is fixed, and
4)   collectibility is reasonably assured.

The Company principally derives its revenue from (i) the design, development and
construction  of  4-D  cylindrical screen system, digital video, theme sites and
similar  computer system integration projects and (ii) the sale of entertainment
and  amusement  products,  and  (iii)  equipment  rental.

(i)  Long-term  construction  contract  revenue  and  costs

Long-term  construction contract revenue and costs are recognized as revenue and
expenses  in the statement of operations by reference to the stage of completion
of  a  contract  (i.e.  the percentage of completion method) when the outcome of
that  contract  can be estimated reliably. The stage of completion of a contract
is  determined  based on the proportion that costs incurred to the balance sheet
date  bear  to  total estimated costs.  A loss on a contract is recognized as an
expense  immediately  when  it is probable that total contract costs will exceed
total  the  contract  revenue.

Costs  attributable  to  un-priced  change  orders  would be treated as costs of
contract  performance in the period in which the costs are incurred if it is not
probable  that  the  costs  will  be  recovered through a change in the contract
price.  If  it  is probable that the costs will be recovered through a change in
the  contract  price,  they would be treated as costs of contract performance in
the  period in which they are incurred, and contract revenue would be recognized
to  the  extent of the costs incurred. If it is probable that the contract price
will  be adjusted by an amount that exceeds the costs attributable to the change
order  and  the  amount  of  the  excess can be reliably estimated, the original
contract  price  would  also  be  adjusted  for  that  amount when the costs are
recognized  as  costs  of  contract  performance if its realization is probable.

(ii) Sale of entertainment and amusement products

Revenue from the sale of entertainment and amusement products is recognized when
the  products  are  delivered  to  the  customers.  Revenue  is adjusted for the
deduction  of  any  sales


                                      F-9
<PAGE>
                         FANTATECH INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


returns  and  discounts.  The  Company  did  not  record  any  sales returns and
discounts  for  the  years  ended  December  31,  2003  and  2002.

(iii)  Equipment  rental  income

Equipment  rental  income  is  recognized  when  the  rentals  become  due  and
receivable. The Company did not record any equipment rental income for the years
ended  December  31,  2003  and  2002.

Income  taxes
-------------

The  Company  accounts  for  income tax using Statements of Financial Accounting
Standards  ("SFAS") No. 109 "Accounting for Income Taxes". SFAS No. 109 requires
an  asset  and  liability  approach  for  financial accounting and reporting for
income taxes and allows recognition and measurement of deferred tax assets based
upon  the  likelihood  of realization of tax benefits in future years. Under the
asset  and  liability  approach,  deferred  taxes  are  provided for the net tax
effects  of  temporary  differences  between  the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes.  A  valuation  allowance  is provided for deferred tax assets if it is
more  likely  than not these items will either expire before the Company is able
to  realize  their  benefits,  or  that  future  deductibility  is  uncertain.

Stock based compensation
------------------------

The Company has adopted Statement of Financial Accounting Standards ("SFAS") No.
123,  which  defines  a  fair-value-based  method  of accounting for stock based
employee  compensation  and  transactions  in  which an entity issues its equity
instruments to acquire goods and services from non-employees. Stock compensation
for  stock  granted to non-employees has been determined in accordance with SFAS
No.  123  and  the  Emerging  Issues  Task  Force  consensus in Issue No. 96-18,
"Accounting  for  Equity Instruments that are issued to Other than Employees for
Acquiring,  or in Conjunction with Selling Goods or Services" ("EITF 96-18"), as
the  fair  value  of  the  consideration  received  or  the fair value of equity
instruments  issued,  whichever  is  more  reliably measured. There was no stock
based compensation incurred or outstanding as of December 31, 2003.

Research and development
------------------------

Research and development costs are expensed to operations as incurred.

Reserve funds
-------------

In  accordance with the PRC Companies Law, the Company is required to transfer a
percentage  of  its  profit after taxation, as determined in accordance with PRC
accounting  standards and regulations, to the surplus reserve funds. The surplus
reserve funds are comprised of the statutory surplus reserve fund and the public
welfare  reserve  fund.  Subject  to  certain  restrictions  set  out in the PRC
Companies  Law,  the  statutory  surplus  reserve  fund  may  be  distributed to
stockholders  in  the  form  of  share


                                      F-10
<PAGE>
                         FANTATECH INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


bonus issues and/or cash dividends. The public welfare fund is non-distributable
and must be used for the benefits of all the staff of the enterprise.

Earnings per share
------------------

Statement of Financial Accounting Standard No. 128, "Earnings per share", ("SFAS
No.  128")  requires  dual  presentation of basic and diluted earnings per share
("EPS")  with  a  reconciliation  of  the  numerator  and denominator of the EPS
computations.  Basic  EPS  amounts  are  based on the weighted average shares of
common  stock  outstanding.  Diluted  EPS  assumes  the  conversion, exercise or
issuance of all potential common stock instruments such as options, warrants and
convertible  securities,  unless  the  effect  is  to  reduce a loss or increase
earnings  per  share. For presentation and comparative purposes, the Company has
assumed  that  40,000,000 shares were outstanding during 2002 to the date of the
reverse merger of the Company and Intsys Share Limited.

Foreign  currency  translation
------------------------------

The  Company maintains its books and accounting records in Renminbi: ("RMB") the
PRC's currency. Translation of amounts from RMB in United States dollars ("US$")
has  been  made  at  the  single  rate  of  exchange  of  US$1.00:RMB8.30.  No
representation  is  made  that RMB amounts have been or could be, converted into
US$  at  that  rate.  There  has not been a material charge in the exchange rate
during the years ended December 31, 2003 and 2002.

On  January  1, 1994, the PRC government introduced a single rate of exchange as
quoted daily by the People's Bank of China (the "Unified Exchange Rate").

This  quotation  of the exchange rates does not imply free convertibility of RMB
to  other foreign currencies. All foreign exchange transactions continue to take
place either through the Bank of China or other banks authorized to buy and sell
foreign  currencies  at  the exchange rate quoted by the People's Bank of China.
Approval of foreign currency payments by the Bank of China or other institutions
require  submitting  a payment application form together with invoices, shipping
documents  and  signed  contracts.

Jointly  controlled  operations
-------------------------------

A jointly controlled operation is a joint venture in which two or more venturers
combine  their operations, resources and expertise in order to construct, market
and operate jointly a particular project under a contractual arrangement when no
corporation,  partnership  or other entity has been established. Different parts
of  the  construction  process  are  carried  out by each of the venturers. Each
venturer  bears its own costs and takes a share of the revenue from the project,
which is determined in accordance with the contractual arrangement.

In  respect  of  its  interests  in  jointly  controlled operations, the Company
recognizes  in  the  consolidated  financial  statements:


                                      F-11
<PAGE>
                         FANTATECH INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


(i)  the assets that it controls and the liabilities that it incurs are included
     in  the  Company's  consolidated  balance  sheet;  and
(ii) the expenses that it incurs and its share of the income that it earns  from
     the  sale  of  goods  or services by the joint ventures are included in the
     Company's  consolidated  statements  of  operations.

Fair values of financial instruments
------------------------------------

The  Company  values  its  financial  instruments  as  required by SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments". The Company's financial
instruments primarily consist of cash and cash equivalents, accounts receivable,
other  receivables, prepayments, accounts payable and accruals, short-term loans
and amount due to and due from related parties. The carrying values of financial
instruments  approximate the fair values because of their short-term maturities.

Long-Lived  Asset  Recoverability
---------------------------------

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
"Accounting  for  Impairment of Long-Lived Assets", long-lived assets, primarily
property,  plant and equipment, are tested for recoverability whenever events or
changes in circumstances indicate that its carrying amount may not be recovered.
If  the  carrying  value  of  the  asset  exceeds the expected future cash flows
(undiscounted  and without interest) from the asset, an impairment is indicated.
The  impairment loss recognized is the excess of the carrying value of the asset
over  its  fair  value.  During  the years ended December 31, 2003 and 2002, the
Company recorded impairment charges of $0 and $126,495, respectively.

Use  of  estimates
------------------

The  preparation  of  consolidated  financial  statements  in  conformity  with
generally  accepted  accounting  principles  in  the  United  States  of America
requires  management  to make estimates and assumptions that affect the reported
amounts  of  assets  and  liabilities,  disclosure  of  contingent  assets  and
liabilities  at  the  date  of  the  consolidated  financial statements, and the
reported  amounts  of  revenues and expenses during the reporting period. Actual
results  could  differ  from  those  estimates.

Recent accounting pronouncements
--------------------------------

In  January  2003,  (as  revised  in  December  2003)  The  Financial Accounting
Standards  Board  ("FASB")  issued  Interpretation  No.  46,  "Consolidation  of
Variable  Interest  Entities", an interpretation of Accounting Research Bulletin
("ARB")  No.  51,  "Consolidated  Financial  Statements".  Interpretation No. 46
addresses  consolidation  by business enterprises of variable interest entities,
which  have  one  or  both  or  the  following  characteristics:  (i) the equity
investment  at  risk  is  not  sufficient  to  permit  the entity to finance its
activities  without additional subordinated support from other parties, which is
provided  through  other  interest  that will absorb some or all of the expected
losses  of  the  entity;  (ii)  the  equity  investors  lack  one or more of the
following  essential  characteristics  of  a controlling financial interest: the
direct  or


                                      F-12
<PAGE>
                         FANTATECH INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


indirect  ability to make decisions about the entities activities through voting
rights or similar rights; or the obligation to absorb the expected losses of the
entity  if  they  occur,  which  makes it possible for the entity to finance its
activities;  the right to receive the expected residual returns of the entity if
they  occur,  which  is  the compensation for the risk of absorbing the expected
losses.

Interpretation  No.  46, as revised (46R), also requires expanded disclosures by
the  primary  beneficiary  (as  defined) of a variable interest entity and by an
enterprise  that  holds  a  significant variable interest in a variable interest
entity  but  is  not  the  primary  beneficiary.

Interpretation  No. 46R, applies to small business issuers no later than the end
of  the first reporting period that ends after December 15, 2004. This effective
date  includes  those  entities  to  which Interpretation 46 has previously been
applied.  However,  prior  to  the required application Interpretation No. 46, a
public  entity  that is a small business issuer shall apply Interpretation 46 or
this  Interpretation to those entities that are considered to be special-purpose
entities  no  later  that  as of the end of the first reporting period that ends
after  December  15,  2003.

Interpretation  No.  46R  may  be applied prospectively with a cumulative-effect
adjustment  as  of  the  date  on  which  it  is  first  applied or by restating
previously  issued  financial  statements  for  one  or  more  years  with  a
cumulative-effect adjustment as of the beginning of the first year restated.

The  implementation  of the provisions of Interpretation No. 46R is not expected
to  have  a significant effect on the Company's consolidated financial statement
presentation  or  disclosure.

In  May  2003,  the  FASB issued SFAS No. 150, "Accounting For Certain Financial
Instruments  with  Characteristics of both Liabilities and Equity". SFAS No. 150
changes the accounting for certain financial instruments with characteristics of
both  liabilities  and equity that, under previous pronouncements, issuers could
account  for  as  equity.  The new accounting guidance contained in SFAS No. 150
requires  that  those  instruments  be  classified as liabilities in the balance
sheet.

SFAS  No.  150  affects  the issuer's accounting for three types of freestanding
financial  instruments.  One  type  is  mandatorily redeemable shares, which the
issuing company is obligated to buy back in exchange for cash or other assets. A
second  type includes put options and forward purchase contracts, which involves
instruments  that do or may require the issuer to buy back some of its shares in
exchange  for  cash  or  other  assets.  The  third type of instruments that are
liabilities under this Statement is obligations that can be settled with shares,
the monetary value of which is fixed, tied solely or predominantly to a variable
such  as  a  market  index,  or  varies inversely with the value of the issuers'
shares.  SFAS  No.  150  does  not  apply  to  features  embedded in a financial
instrument  that  is  not  a  derivative  in  its  entirety.

Most  of  the  provisions  of  SFAS  No.  150  are  consistent with the existing
definition  of  liabilities  in  FASB  Concepts  Statement  No.  6, "Elements of
Financial  Statements".


                                      F-13
<PAGE>
                         FANTATECH INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


The  remaining  provisions  of  this  Statement  are  consistent with the FASB's
proposal  to  revise  that  definition  to  encompass certain obligations that a
reporting  entity  can or must settle by issuing its own shares.  This Statement
shall  be effective for financial instruments entered into or modified after May
31,  2003 and otherwise shall be effective at the beginning of the first interim
period  beginning  after  June  15,  2003,  except  for  mandatorily  redeemable
financial  instruments of a non-public entity, as to which the effective date is
for  fiscal  periods  beginning  after  December  15,  2004.

The  implementation  of the provisions of SFAS No. 150 is not expected to have a
significant  effect  on  the  Company's  consolidated  financial  statement
presentation  or  disclosure.


4.   BUSINESS  ACQUISITIONS

During  May  2002,  Intsys  Share Limited (Intsys) acquired a 65.41% interest in
Shenzhen  Digitainment  Company  Limited  (Digitainment) in a reverse merger for
50,000,000  shares  of  Intsys.  The  former  owners  of  the 65.41% interest in
Digitainment  became  all  the  shareholders  of  Intsys. The acquisition of the
65.41%  interest  in Digitainment has been accounted for at historical cost. The
proforma  effects  of  the  acquisition  are  not  material  to the consolidated
financial  statements.

During  September  2002, Intsys acquired 70% of the issued and outstanding stock
of  Hytechnology,  Inc. for $172,000 cash. The acquisition of Hytechnology, Inc.
has  been  accounted  for  using  the purchase method of accounting for business
acquisitions.  Accordingly,  the results of operations have been included in the
Company's  consolidated  financial statements since the date of acquisition. The
significant  asset  acquired  of  $170,950  is the trademark of "FantaWild". The
trademark  application  for  "FantaWild" was filed with the United States Patent
and Trademark Office during 2001. The trademark was officially registered during
the  year  of  2003.  The  Company believes the useful lives of the trademark is
indefinite and performs its impairment test in accordance with SFAS No. 142. The
proforma  effects  of  the  acquisition  are  not  material  to the consolidated
financial  statements.

During  November  2002,  the  Company acquired all of the issued and outstanding
shares  of  Intsys in a reverse merger. Under the terms of the merger agreement,
the  Company  issued  40,000,000  shares of common stock to the shareholders and
their  designees.  There  was no proforma difference in revenues, net income, or
earnings  per  share  for  the  year  ended  December  31,  2002.


5.   INVENTORIES

     Inventories are summarized as follows at December 31, 2003:
<TABLE>
<CAPTION>
<S>                             <C>
          Raw materials         $1,127,361
          Work-in-process          306,817
          Finished goods            24,139
                                ----------
                                $1,458,317
                                ==========
</TABLE>


                                      F-14
<PAGE>
                         FANTATECH INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


6.   COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS ON UNCOMPLETED CONTRACTS

A  summary  of  the  costs  and  estimated  earnings  in  excess  of billings on
uncompleted  contracts  as  of  December  31,  2003  is  as  follows:

<TABLE>
<CAPTION>
<S>                                                     <C>
          Costs incurred on uncompleted contracts         9,829,748
          Estimated earnings to date                      1,551,846
                                                        ------------
                                                         11,381,594

          Less: Billings to date                        (10,463,955)
                                                        ------------
                                                            917,639
                                                        ============
</TABLE>

Included in the accompanying balance sheet under the following captions:

<TABLE>
<CAPTION>
<S>                                                       <C>
          Costs and estimated earnings in excess          $917,639
            of billings on uncompleted contracts
          Billings in excess of costs and estimated              -
            earnings on uncompleted contracts
                                                          --------
                                                          $917,639
                                                          ========
</TABLE>


7.   PROPERTY, PLANT AND EQUIPMENT

Property, plant, and equipment consisted of the following at December 31, 2003:

<TABLE>
<CAPTION>
<S>                                                <C>
          Leasehold improvements                       410,168
          Plant and machinery                           68,219
          Furniture and fixtures                        98,963
          Computers and equipment                    1,640,727
          Motor vehicles                               241,127
                                                   ------------
                                                     2,459,204

          Less: Accumulated depreciation and
            Amortization                            (1,793,033)
                                                   ------------

                                                       666,171
                                                   ============
</TABLE>

Depreciation  and  amortization  expense was $309,766 and $552,364 for the years
ended  December  31,  2003  and  2002,  respectively.


8.   SHORT-TERM  LOANS

On August 27, 2002, the Company obtained a bank loan of $2,168,675. The interest
rate  on  the  bank loan was 5.31% per annum with interest payable monthly and a


                                      F-15
<PAGE>
                         FANTATECH INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


principal due date of August 27, 2003. The bank loan was repaid in full upon its
maturity. The loan was guaranteed by Shenzhen Huaqiang Holdings Limited.

Short-term  loans-unsecured  represents  $280,000  borrowed  from  Top  Link
Development  Limited,  an  unrelated  third party and $20,000 borrowed from Fang
Dehou,  a  related  party.  Fang  Dehou is a director of Intsys and Hytechnology
Limited,  the  Company's  subsidiaries.  Loans  in  the  amount  of $300,000 are
unsecured,  non-interest  bearing  and  payable  upon  demand.


9.   INCOME  TAXES

The  Company  is subject to income taxes on an entity basis on income arising or
derived  from  the  tax  jurisdiction  in  which  each  entity is domiciled. The
Company's  British  Virgin Island subsidiary is not liable for income taxes. The
Company's 65.41% owned PRC subsidiary is subject to Enterprise Income Tax in the
PRC  at a rate of 15% on net profits. However, based on the local tax rules, the
PRC  subsidiary  is  entitled  to  a  tax holiday for the first two years of its
operations  and  a  50%  reduction of the rate for the third through fifth years
(years  2001  -  2003) of operations. The provision for taxes on earnings of the
PRC  subsidiary  for  the years ended December 31, 2003 and 2002 was $38,060 and
$39,936,  respectively.  No other significant deferred tax assets or liabilities
existed  at  December  31,  2003.


10.  COMMITMENTS AND CONTINGENCIES

Operating  leases

The  following  are  the approximate minimum lease payments that will have to be
made  in  the years indicated based on operating leases in effect as of December
31,  2003:

<TABLE>
<CAPTION>
<S>                                          <C>
          2004                               $234,066
          2005                                190,041
          2006                                180,396
                                             --------

          Total minimum lease payments       $604,503
                                             ========
</TABLE>

The total rental expense incurred for the years ended December 31, 2003 and 2002
were  $251,194  and  $186,359,  respectively.

Litigation

The  Company  is not a party to any pending or any threatened legal proceedings.
None  of  the Company's directors, officers or affiliates, or owner of record of
more than five percent (5%) of the Company's securities, or any associate of any
such  director,  officer or security holder is a party adverse to the Company or
has  a  material  interest  adverse  to  the  Company  in  reference  to pending
litigation.


                                      F-16
<PAGE>
                         FANTATECH INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


11.  MAJOR  CUSTOMERS  AND  CONCENTRATIONS  OF  CREDIT  RISK

Financial  instruments which potentially expose the Company to concentrations of
credit  risk,  consist  of  cash and cash equivalents and accounts receivable at
December 31, 2003. The Company performs ongoing evaluations of its cash position
and  credit  evaluations  at  the  subsidiary  level  to  ensure collections and
minimize  losses.

Three  customers accounted for approximately 26.1%, 12.3% and 10.4% of sales for
the  year ended December 31, 2003. Two customers accounted for approximately 21%
and  15% of sales for the year ended December 31, 2002. As of December 31, 2003,
approximately  85% of accounts receivable were from trade transactions with four
customers, of which one customer accounted for approximately 44% of the accounts
receivable  balance.


12.  CURRENT  VULNERABILITY  DUE  TO  CERTAIN  CONCENTRATIONS

The  Company's  primary  operations  are  conducted in the PRC. Accordingly, the
Company's  business,  financial  condition  and  results  of  operations  may be
influenced  by the political, economic and legal environments in the PRC, and by
the  general  state  of  the  PRC's  economy.

The  Company's  operations  in the PRC are subject to special considerations and
significant  risks  not typically associated with companies in North America and
Western  Europe.  These  include  risks  associated  with,  among  others,  the
political,  economic  and  legal environments and foreign currency exchange. The
Company's  results  may  be  adversely  affected by changes in the political and
social  conditions  in  the  PRC,  and  by changes in governmental policies with
respect to laws and regulations, anti-inflationary measures, currency conversion
and  remittance  abroad,  and rates and methods of taxation, among other things.


13.  RELATED  PARTY  TRANSACTIONS

During  the  year  ended  December  31,  2003,  the  Company  purchased  certain
components  for  its products from Hyvision Digital Film Inc. ("Film Inc."). The
SDCL's  minority  shareholder,  Yongfeng  has  a 35% interest in Film Inc. Total
purchases from Film Inc. were $486,145 and $204,819 for the years ended December
31,  2003  and  2002,  respectively.  In addition, the Company sold products and
equipment  to  Film Inc. of $41,190 and $423,242 during the years ended December
31,  2003  and  2002,  respectively. The accounts receivable from Film Inc. were
$96,386  and  $121,445  for  the  years  ended  December  31,  2003  and  2002,
respectively. Mr. Guangwei Liang, Mr. Ming Li, Mr. Xinan Hu and Mr. Zhigang Rong
are  common  directors  of  Film  Inc.  and  the  Company.


14.  SEGMENT  REPORTING


                                      F-17
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                         FANTATECH INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


The  Company  discloses  segment  information  in  accordance with SFAS No. 131,
"Disclosure  About  Segments  of  an  Enterprise and Related Information," which
requires  companies  to report selected segment information on a quarterly basis
and to report certain entity-wide disclosures about products and services, major
customers,  and  the  material  countries  in  which the entity holds assets and
reports  revenue.

The  products  developed  and  produced  by the Company can be divided into four
parts:  FantaWild  FunPlex,  FantaWild  4D  Theater,  Large-size attractions and
FantaWild  Theme  Park.  Firstly,  the  FantaWild  FunPlex is an advanced indoor
entertainment  center  designed  especially  for  shopping  malls and recreation
areas.  The  FunPlex  covers  25,000 to 80,000 square feet, and is made up of 50
attractions.  Secondly,  the  Company  manufactures  and  installs  all  of  the
equipment  needed  for  a FantaWild 4D Theater system. 4D Theater is an ultimate
sensory  experience  that  uses  several  different  3D technologies to create a
unique and engaging visual and audio experience. Thirdly, large-size attractions
are  the  main  parts  of theme park and recreation facilities which bring large
numbers  of  tourists  and increase entertainment revenues. Only a few companies
have  the  ability  to  design  and  produce  the  large size attractions due to
technical  difficulties and complicated development processes. Lastly, FantaWild
Theme  Park is a theme park with subject of stimulation and participation, which
makes  use  of  hi-tech  technology to simulate real world and future world. The
Company develops and produces all the attractions in the Theme Park and owns all
the  property  rights  of  the  large  attractions  inside. FantaWild Theme Park
consists  of  9  to  12  large  size  attractions.

During the year of 2003, all revenue of the Company was generated from the sales
and rental income of 4D Theater. Around 21% of the Company's total sales of 2003
were  from  outside  of  PRC,  which  included  USA,  Canada,  Italy, Kuwait and
Philippine.

Three  customers accounted for approximately 26.1%, 12.3% and 10.4% of sales for
the year ended December 31, 2003. However, the Company does not believe it has a
material  reliance  on  any  one  customer  as  the  Company  will target on the
development  of  FantaWild  FunPlex  and  the  large  size  attractions.


15.  MINORITY  INTEREST

As  of  December  31,  2003,  the minority interest balance is $5,789,180. It is
comprised  of the minority shares of its subsidiaries, namely SDCL, Hytechnology
Inc,  Hytechnology  Ltd.  and FDI, which the Company did not own. As of December
31,  2003,  the  Company  owned  65.41%  interest  of  SDCL,  70%  interest  of
Hytechnology Inc., 99% interest of Hytechnology Ltd. and SDCL owned 40% interest
of  FDI.

Minority interest income of $124,998 in the fiscal year ended of 2003, and
$115,870 in the fiscal year ended of 2002 were recorded. The major increase in
the minority interest during 2003 is primary due to the $4,337,350 minority
interests' contributions made in the formation of FDI.


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