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

                                   FORM 10-QSB

              |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934.

                For the quarterly period ended September 30, 2004

            |_| TRANSITION REPORT UNDER 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 as specified in its charter)

             Delaware                                   62-1690722
     -------------------------                  -----------------------
   (State or other Jurisdiction                    (I.R.S. Employer
         of Incorporation)                         Identification No.)

            317 W. Las Tunas Drive, Ste. #207, San Gabriel, CA 91776

          -------------------------------------------------------------
              (Address of Principal Executive Offices) (Zip Code)

                                 (626) 642 0500

          -------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

                                 Not applicable

          -------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)

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

State the number of shares outstanding of each of the issuer's classes of common
equity,  as  of  the  latest  practicable  date.
As  of  November  16,  2004,  the issuer had 30,096,117 common shares issued and
outstanding.

Transitional  Small  Business  Disclosure  Format  (check  one):  [_] Yes [X] No


<PAGE>
<TABLE>
<CAPTION>
                           FANTATECH INC.
                            FORM 10-QSB

                               Index

<S>                                                         <C>
                                                            Page
                                                            ------
               Part I - Financial Information

Item 1.  Financial Statements. . . . . . . . . . . . . . .       3

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations . . . . . . .      18

Item 3.  Controls and Procedures . . . . . . . . . . . . .     .27

                  Part II - Other Information

Item 2.  Changes in Securities . . . . . . . . . . . . . .      28

Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . .     .28

Signatures . . . . . . . . . . . . . . . . . . . . . . . .      29
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                       FANTATECH INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEET
                     AS OF SEPTEMBER 30, 2004 (UNAUDITED)


                     ASSETS
<S>                                                         <C>
Current assets
  Cash                                                     $ 5,328,411
  Trade receivables, net of allowance of $29,299               208,127
  Related party receivable                                     822,655
  Inventories                                                3,510,777
  Cost and estimated earnings in excess of
    billings on uncompleted contracts                          807,369
  Deposit and prepayments                                    1,221,901
  Other receivables                                            277,842
                                                           ------------

Total current assets                                        12,177,082

Property, plant and equipment, net                           2,972,669
Construction in progress                                       934,788
Trademarks                                                     170,950
                                                           ------------

Total assets                                               $16,255,489
                                                           ============

        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Short-term bank loans                                    $ 2,433,735
  Short-term loans-unsecured                                   300,000
  Accounts payable                                             317,262
  Accrued liabilities and other payables                     1,117,151
  Income tax payable                                            31,605
  Related party payable                                        314,844
  Deposits received                                          3,511,410
                                                           ------------

Total current liabilities                                    8,026,007

Minority interests                                           5,633,297
                                                           ------------

Total liabilities                                           13,659,304
                                                           ------------

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, 20,096,117 shares issued and outstanding        20,096
  Additional paid-in capital                                 2,885,374
  Deficit                                                     (454,632)
  Reserve funds                                                145,347
                                                           ------------

Stockholders' equity                                         2,596,185
                                                           ------------

Total liabilities and stockholders' equity                 $16,255,489
                                                           ============
<FN>
See  notes  to  condensed  consolidated  financial  statements
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                     FANTATECH INC. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
   FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)

                                                 2004          2003
                                             ------------  ------------
<S>                                          <C>           <C>
SALES                                        $ 1,082,452   $ 1,317,971

COST OF SALES                                    593,280       815,404
                                             ------------  ------------

GROSS PROFIT                                     489,172       502,567

SELLING AND MARKETING EXPENSES                   157,805        91,446

GENERAL AND ADMINISTRATIVE EXPENSES              390,277       182,452
                                             ------------  ------------

(LOSS) INCOME FROM OPERATIONS                    (58,910)      228,669

MINORITY INTERESTS' SHARE OF LOSS (INCOME)        16,829       (56,320)

OTHER INCOME (LOSS)
  Loss on disposition of fixed assets                  -          (955)
  Interest expense                                     -       (27,975)
  Other expense                                  (29,006)            -
  Interest income                                 48,716        16,744
  Non-operating income                             3,650         5,814
                                             ------------  ------------

(LOSS) INCOME FROM CONTINUING OPERATIONS
  BEFORE TAX PROVISION                           (18,721)      165,977

INCOME TAX EXPENSE                                11,722         8,241
                                             ------------  ------------

(LOSS) INCOME FROM CONTINUING OPERATION          (30,443)      157,736
                                             ============  ============

DISCONTINUED OPERATIONS
  Loss from operations of HTL                          -          (358)
                                             ------------  ------------

NET (LOSS) INCOME                            $   (30,443)  $   157,378
                                             ============  ============

WEIGHTED AVERAGE SHARES OUTSTANDING
  BASIC AND DILUTED                           20,096,117    20,096,117
                                             ============  ============

BASIC AND DILUTED NET LOSS PER SHARE
  (Loss) Income from continuing operations   $     (0.00)  $      0.01
  (Loss) from discontinued operations                  -         (0.00)
                                             ------------  ------------
  Net (loss) Income per share                $     (0.00)  $      0.01
                                             ============  ============
<FN>
See notes to condensed consolidated financial statements
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                      FANTATECH INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)

                                                    2004          2003
                                                ------------  ------------
<S>                                             <C>           <C>
SALES                                           $ 3,369,266   $ 2,366,223

COST OF SALES                                     2,141,621     1,077,256
                                                ------------  ------------

GROSS PROFIT                                      1,227,645     1,288,967

SELLING AND MARKETING EXPENSES                      437,282       224,557

GENERAL AND ADMINISTRATIVE EXPENSES               1,030,864       610,718
                                                ------------  ------------

(LOSS) INCOME FROM OPERATIONS                      (240,501)      453,692

MINORITY INTERESTS' SHARE OF LOSS (INCOME)          155,883      (125,933)

OTHER INCOME (LOSS)
  Loss on disposition of fixed assets                     -        (3,526)
  Interest expense                                        -       (88,353)
  Other expense                                     (75,777)          (34)
  Interest income                                    99,989        36,844
  Non-operating income                               21,556         6,800
                                                ------------  ------------

(LOSS) INCOME FROM CONTINUING OPERATIONS
  BEFORE TAX PROVISION                              (38,850)      279,490

INCOME TAX EXPENSE                                   31,611        23,250
                                                ------------  ------------

(LOSS) INCOME FROM CONTINUING OPERATIONS            (70,461)      256,240

DISCONTINUED OPERATIONS
  Loss from operations of HTL                          (284)      (56,324)
  Gain on disposal of HTL                             1,277             -
                                                ------------  ------------

NET (LOSS) INCOME                               $   (69,468)  $   199,916
                                                ============  ============

WEIGHTED AVERAGE SHARES OUTSTANDING
  BASIC AND DILUTED                              20,096,117    20,096,117
                                                ============  ============

BASIC AND DILUTED NET (LOSS) INCOME PER SHARE
  (Loss) income from continuing operations      $     (0.00)  $      0.01
  (Loss) income from discontinued operations           0.00         (0.00)
                                                ------------  ------------
  Net (loss) income per share                   $     (0.00)  $      0.01
                                                ============  ============
<FN>
See notes to condensed consolidated financial statements
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                                FANTATECH INC. AND SUBSIDIARIES
                        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)


                                                                        2004          2003
                                                                    ------------  ------------
<S>                                                                 <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income                                                   $   (69,468)  $   199,916
Less: income (loss) from discontinued operations                            993       (56,324)
                                                                    ------------  ------------
(Loss) income from continuing operations                                (70,461)      256,240
Adjustments to reconcile (loss) income from continuing operations
  net cash provided by operating activities:
    Depreciation expense                                                410,063       259,411
    Loss on disposition of fixed assets, net                                  -         3,526
    Minority interests' share of (loss) income                         (155,883)      125,933
Change in operating assets and liabilities:
    Decrease in trade receivables                                       303,892       352,660
    Decrease in related party receivables                                     -        74,939
    (Increase) in inventories                                        (2,052,460)     (640,371)
    Decrease (Increase) in costs and estimated earnings
      in excess of billings on uncompleted contracts                    110,270      (318,916)
    (Increase) in deposits and prepayments                             (524,173)     (396,687)
    (Increase) in other receivables                                    (221,619)      (81,603)
    Increase in deposits received                                     2,881,410             -
    Increase in related party payable                                   309,048             -
    (Decrease) Increase in accounts payable, accrued
      liabilities, income tax payable and other payables               (640,234)    3,334,448
                                                                    ------------  ------------

Net cash provided by operating activities                               349,853     2,969,580
                                                                    ------------  ------------

Net cash provided by (used in) discontinued operations                      993       (56,324)
                                                                    ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property, plant and equipment                        (1,990,609)     (278,475)
    Investment in Fantatech Development, Inc.                                 -    (2,891,566)
    Increase in related party receivable                               (706,377)            -
                                                                    ------------  ------------
Net cash used in investing activities                                (2,696,986)   (3,170,041)
                                                                    ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from short term bank loans                               2,433,735             -
    Principal repayments on short term loan                                   -    (2,168,675)
                                                                    ------------  ------------

Net cash provided by (used in) financing activities                   2,433,735    (2,168,675)
                                                                    ------------  ------------

NET INCREASE (DECREASE) IN CASH                                          87,595    (2,425,460)

Cash and cash equivalents, at beginning of period                     5,240,816     3,290,249
                                                                    ------------  ------------

Cash and cash equivalents, at end of period                         $ 5,328,411   $   864,789
                                                                    ============  ============

Supplementary disclosures of cash flow information:
    Interest paid                                                   $         -   $    92,929
                                                                    ============  ============

    Tax paid                                                        $    32,435   $    18,166
                                                                    ============  ============
<FN>
See notes to condensed consolidated financial statements
</TABLE>


                                        6
<PAGE>
FANTATECH INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)


1.   INTERIM  CONDENSED  CONDOLIDATED  FINANCIAL  STATEMENTS

The  interim  unaudited  condensed  consolidated  financial statements have been
prepared  by  Fantatech  Inc. and include all material adjustments, which in the
opinion  of  the  management  are necessary for a fair presentation of financial
results  for the three and nine months ended September 30, 2004. All adjustments
and  provisions  included  in  these  statements are of normal recurring nature.
Certain  information  and  footnote  disclosures  made in the most recent annual
consolidated financial statements included in the Form 10-KSB for the year ended
December  31,  2003  have  been  condensed  or omitted for the interim financial
statements;  accordingly,  the  interim  financial  statements should be read in
conjunction  with  the  December 31, 2003 consolidated financial statements. The
results  of  operations  for  the  interim periods presented are not necessarily
indicative  of  the  results  that  can  be  expected  for  the  entire  year.

The  preparation  of  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  and  disclosure of contingent assets and liabilities at the date of
the  financial  statements  and  the  amount of revenues and expenses during the
reporting  periods.  Management makes these estimates using the best information
available  at  the  time  the  estimates are made. However, actual results could
differ  material  from  those  results.


2.   CRITICAL  ACCOUNTING  POLICIES

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


                                        7
<PAGE>
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.

Trademarks
----------

The  identifiable  intangible assets of the Company are trademarks acquired in a
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  returns and discounts. The Company did not record any
sales  returns  and  discounts  for the nine months ended September 30, 2004 and
2003.

(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 nine
months  ended  September  30,  2004  and  2003.

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.


                                        8
<PAGE>
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 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.

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  nine  months  ended  September  30,  2004  and  2003.

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:

(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.


                                        9
<PAGE>
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.


3.   INVENTORIES

Inventories  at  September  30,  2004  are  summarized  as  follow:

<TABLE>
<CAPTION>
                  September 30,
                       2004
                   (Unaudited)
                  --------------
<S>               <C>
Raw Materials     $    1,926,175
Work-in-process        1,532,540
Finished Goods            52,062
                  --------------
                  $    3,510,777
                  ==============
</TABLE>


                                       10
<PAGE>
4.   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  September  30,  2004  is  as  follow:

<TABLE>
<CAPTION>
                                           September 30,
                                               2004
                                            (Unaudited)
                                          ---------------
<S>                                       <C>
Costs incurred on uncompleted contracts   $   10,039,122
Estimated earnings to date                     1,584,900
                                          ---------------
                                              11,624,022

Less: Billings to date                       (10,816,653)
                                          ---------------
                                          $      807,369
                                          ===============
</TABLE>

Included in the accompanying balance sheet under the following captions:

<TABLE>
<CAPTION>
                                             September 30,
                                                 2004
                                              (Unaudited)
                                             -------------
<S>                                          <C>
Costs and estimated earnings in excess
  of billings on uncompleted contracts       $     807,369

Billings in excess of costs and estimated
  earnings on uncompleted contracts                      -
                                             -------------
                                             $     807,369
                                             =============
</TABLE>


                                       11
<PAGE>
5.   PROPERTY,  PLANT  AND  EQUIPMENT

Property, plant, and equipment at September 30, 2004 consisted of the following:

<TABLE>
<CAPTION>
                                     September 30,
                                         2004
                                      (Unaudited)
                                    ---------------
<S>                                 <C>
Leasehold improvements              $      410,168
Plant and machinery                         98,131
Furniture and fixtures                     101,425
FunPlex                                  2,112,109
Computers and equipment                  2,159,274
Motor vehicles                             294,658
                                    ---------------
                                         5,175,765

Less: Acumulated depreciation and
          amortization                  (2,203,096)
                                    ---------------

                                    $    2,972,669
                                    ===============
</TABLE>

Depreciation  and  amortization  expense  was $410,063 for the nine months ended
September  30,  2004.


6.   SHORT-TERM  LOANS

Short-term loans-unsecured represent $280,000 borrowed from Top Link Development
Limited,  a  company  ultimately owned by Shenzhen Huaqiang Holdings Ltd., whose
Chairman  and  President  are  also  the  Chairman  and  CEO  of  the  Company,
respectively,  and  $20,000 borrowed from Fang Dehou, a director of Intsys Share
Limited,  the  Company's  subsidiary.  Loans  in  the  amount  of  $300,000  are
unsecured,  non-interest  bearing  and  payable  upon  demand.

During  the  quarter ended September 30, 2004, one of the Company's subsidiaries
obtained  two  bank loans in the amount of $2,433,735. One of the bank loans, in
the  amount  of  $265,060,  bears  interest  at  5.31%  per  annum and is due on
September  6,  2005.  Another  bank  loan,  in  the  amount of $2,168,675, bears
interest  at  5.31%  per  annum  and  is  due  on  September  30,  2005.


7.   STOCK  BASED  COMPENSATION

On  January  7,  2004,  the Company granted a total of 4,000,000 shares of stock
options to its key employees at the strike price of $0.5 per share. Market price
of  the share at the grant date was $0.4 per share. The stock options are vested
and  exercisable  as  follows:


                                       12
<PAGE>
<TABLE>
<CAPTION>
<S>     <C>
Scale   Vested and exercisable
------  ----------------------
50%     On or after January 7, 2007
80%     On or after January 7, 2008
100%    On or after January 7, 2009
</TABLE>

All  options  unexercised  expire  on  January  6,  2014 and any options will be
cancelled  one  month  after termination of employment. Subsequent to the 2 to 1
reverse  share  split  effective  from  June 30, 2004, the total number of stock
options  was  reduced to 2,000,000 shares and the strike price was automatically
adjusted  to  $1.0  per  share.

The Company has adopted Statement of Financial Accounting Standards ("SFAS") No.
123,  which  defines  a fair-value method of accounting for stock based employee
compensation and transaction in which an entity issues its equity instruments to
acquire  goods  and  services  from  non-employee.  Stock compensation for stock
granted to non-employees had 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 and 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.

The  provisions  of  SFAS No. 123 allow companies to either record an expense in
the financial statements to reflect the estimated fair value of stock options to
employees,  or  to  continue  to  follow the intrinsic value method set forth in
Accounting  Principles  Board  Opinion  No.  25, "Accounting for Stock Issued to
Employees",  but  to  disclose  on  an  annual basis the pro forma effect on net
income  (loss)  and  net income (loss) per share had the fair value of the stock
options  been  recorded in the financial statements. SFAS No. 123 was amended by
SFAS  No.  148,  which  now  requires companies to disclose in interim financial
statements  the  pro forma effect on net income (loss) and net income (loss) per
common  share  of  the  estimated  fair  market value of stock options issued to
employees.  The  Company  has  elected  to  continue  to account for stock-based
compensation  plans  utilizing  the  intrinsic  value  method.

Accordingly,  compensation  cost for stock options to employees will be measured
as the excess, if any, of the fair market price of the Company's common stock at
the  date  of  grant above the amount an employee must pay to acquire the common
stock.

In  accordance  with SFAS No. 123, the cost of stock options and warrants issued
to  non-employees  is  measured at the grant date based on the fair value of the
award.  The  fair value of the stock-based award at the grant date is determined
using the Black-Scholes option-pricing model. The resulting amount is charged to
expense  on the straight-line basis over the period in which the Company expects
to  receive  benefit,  which  is  generally  the  vesting  period.

Pro  forma  Disclosure - The fair value of stock options and warrants granted by
the  Company  has  been  estimated  on  the  grant  date using the Black-Scholes
option-pricing model. Had such stock options been accounted for pursuant to SFAS
No.  123,  the  effect  on  the  Company's results of operations would have been
changed  to  the  following  pro  forma  amounts:


                                       13
<PAGE>
<TABLE>
<CAPTION>
                                    Three months ended     Nine months ended
                                       September 30,         September 30,
                                   ----------------------  ---------------------
                                      2004        2003        2004       2003
                                   -----------  ---------  ----------  ---------
<S>                                <C>          <C>        <C>         <C>
Net (loss) income
  As reported                      $  (30,443)    157,378  $ (69,468)    199,916
  Compensation expense for stock
    options based on fair value,
    net of taxes                       45,571           0    136,713           0
                                   -----------  ---------  ----------  ---------
  Pro forma net (loss) income         (76,014)    157,378   (206,181)    199,916
                                   -----------  ---------  ----------  ---------

Net income (loss) per share
  As reported - Basic and diluted  $    (0.00)       0.01  $   (0.00)       0.01
                                   -----------  ---------  ----------  ---------
  Pro forma - Basic and diluted         (0.00)       0.01      (0.01)       0.01
                                   -----------  ---------  ----------  ---------
</TABLE>

8.   EARNINGS  PER  SHARE

The  Company  accounts  for  earnings  per share ("EPS") under the provisions of
Statement of Financial Accounting Standard No. 128, "Earnings per share", ("SFAS
No.  128"),  which  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 excludes dilutive effects of stock options, warrants and
convertible  securities,  if  any, and is computed by dividing net income (loss)
available to common stockholders by the weighted average number of common shares
outstanding  for  the  period.  Diluted EPS reflects the potential dilution that
would  occur  if  securities  or  other contracts to issue common stock, such as
convertible  preferred stock, warrants to purchase common stock and common stock
options,  were exercised or converted into common stock using the treasury stock
method,  unless  the  effect is to reduce a loss or increase earnings per share.

On January 6, 2004, the Company granted 4,000,000 shares of stock options to the
officers  and  key  employees  of  the  Company at an exercise price of $0.5 per
share.  Subsequent  to a 2 to 1 reverse share split, number of the stock options
reduced  proportionally  to 2,000,000 shares and the strike price was revised to
$1.00  per share. As at September 30, 2004, there were 2,000,000 shares of stock
option issued and outstanding but none of the stock option was exercisable until
January 7, 2007. Although the average market price of the Company's common stock
($1.2)  for  the  period exceeds slightly the exercise price ($1.0) of the stock
options,  trading  of  the  company's  common  stock  was  generally limited and
sporadic,  and  the  market price reference should not be deemed to constitute a
reference  for  the  computation.

These  stock  options were not considered to be potentially dilutive securities,
and  were not included in the calculation of loss per share for the three months
and  nine  months  ended  September 30, 2004 because the Company incurred a loss
during  such  periods  and  thus  their  effect  would  have been anti-dilutive.
Accordingly,  basic  and  diluted  EPS  is  the  same for the periods presented.


9.   MINORITY  INTEREST


                                       14
<PAGE>
As  of  September  30,  2004, the minority interest balance is $5,633,297. It is
comprised  of  the  minority  shares  of  its  subsidiaries,  namely  Shenzhen
Digitainment  Co.  Ltd.  ("SDCL"),  Hytechnology  Inc.  ("HTI")  and  Fantatech
Development  Inc.  ("FDI"),  which  the Company did not own. As of September 30,
2004,  the  Company  owned 65.41% interest of SDCL, 70% interest of Hytechnology
Inc.,  and  SDCL  owned  40% interest of FDI. However, subsequent to the quarter
ended September 30, 2004, the Company purchased the remaining 34.59% interest of
SDCL  through  its  wholly  owned  subsidiary,  Intsys  Shares Ltd. ("INT"). The
Company  is  now  holding  100%  of  SDCL  through  INT  (See  Note  13).

The  minority  interests'  share of the loss was $155,883 during the nine months
ended  September  30, 2004 and their share of the income was $125,933 during the
nine  months  ended  September  30,  2003.


10.  REVERSE  STOCK  SPLIT

On June 10, 2004, the Board of Directors of the Company approved that two shares
of  the  Company's  common stock, par value $0.001 per share ("Pre-Reverse-Split
Common  Stock") was reclassified into one share of the Registrant's reclassified
common  stock,  par  value  $0.001 per share ("Post-Reverse-Split Common Stock")
effective  on  June 30, 2004. Each fractional share of Post-Reverse-Split common
stock  was  rounded  up  to  the  next  whole number of share. The reverse split
reduced  the  Company's  issued and outstanding shares from 40,192,063 shares to
20,096,117 shares. The par value of the Company's common stock was not affected.
Retroactive  effect  has  been  given  to  share  and  per  share amounts in the
financial  statements  resulted  from the reverse stock split. Subsequent to the
reverse  stock  split,  the  Company's  new  trading symbol was changed to FNTN.


11.  DISPOSAL  OF  HYTECHNOLOGY  LIMITED

On  May  12,  2004,  the Company's wholly owned subsidiary, INT, sold 99% of the
issued  and  outstanding  shares of common stock of its subsidiary, Hytechnology
Limited ("HTL"), to Top Link Hi-Tech Development (H.K.) Limited ("Top Link") for
$1,277  pursuant  to  the  Bought and Sold Note. There is no direct relationship
between Top Link and the Company, nor Top Link and Intsys, nor Top Link and HTL.
However,  the ultimate ownership of Top Link is Shenzhen Huaqiang Holdings Ltd.,
as  it  owns  20% interest in Hyvision Digital Film Inc., a related party of the
Company.  HTL  was engaged in the sales and marketing of entertainment products,
including  the  products  of  SDCL,  a  subsidiary  of  the  Company.

During  the  fiscal  year  ended  December  31,  2003,  HTL generated revenue of
$860,925  or  15.8%  of  the Company's total revenue. HTL had a profit margin of
3.7% as compare to the Company's profit margin of 30.1%. The management believes
that  the  disposal  of HTL will have minimal impact in related to the Company's
net  profit  for the fiscal year ended 2004 as the Company will continue to sell
and  market  the  products  through  its  other  subsidiaries  subsequent to the
disposal.


                                       15
<PAGE>
12.  NEW  ACCOUNTING  PRONOUNCEMENTS

In  May 2003, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  ("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  Statement  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.


13.  SUBSEQUENT  EVENTS

Subsequent  to the quarter ended September 30, 2004, the Company entered into an
agreement  ("Share  Exchange  Agreement") between and among the Company, INT and
Topforce  Asia  Limited  ("TAL")  on  October 18, 2004. Under the Share Exchange
Agreement, the Company acquired 34.59% of SDCL (the "Acquisition") from TAL. The
Company  previously  purchased  65.41%  of  SDCL on May 2002. The Share Exchange
Agreement  is  based  upon  the  values  established  by  the 65.41% Purchase to
purchase  the  remaining  34.59% of SDCL at a later date upon mutually agreeable
terms.

Under  the  terms of the Share Exchange Agreement, the Company issued 10,000,000
shares of its common stock to TAL or its designee and TAL transferred to INT all
of  the  equity  interest  of  Megabase  Investment  Limited  ("MIL"),  a  BVI
corporation,  established  to  hold  34.59%  equity  interest  of  SDCL.

The  Company  evaluated  the  Acquisition  through  its  independent  board  of
directors.


                                       16
<PAGE>
The  independent  board  of  directors  engaged the service of Palisades Capital
Group,  LLC.  ("Palisades") to evaluate and issue a Fairness Opinion relative to
the  Acquisition.  Palisades  valued  the  34.59%  of SDCL and issued a Fairness
Opinion  as  to the number of shares of the Company being issued under the Share
Exchange  Agreement.


The  following  is  the new organization chart of the Company as of November 16,
2004:

<TABLE>
<CAPTION>
<S><C>
                           --------------------
                           |  FANTATECH INC.  |
                           | (FNTN) DELAWARE  |
                           --------------------
                                     |
                                     |
                                     |
                            100%     |
                           --------------------
                           | INTSYS SHARE LTD |
                           |    (INT) - BVI   |
                           --------------------
                                     |
                                     |
        -------------------------------------------------------------------
        |                                              |                  |
    70% |                                              |  100%            |
        |                                              |                  |
        |                                   ----------------------        |
                                            |   MEGABASE         |        |
----------------------                      |   INVESTMENT  LTD. |        | 65.41%
| HYTECHNOLOGY  INC. |                      |   (MIL)  -  BVI    |        |
| (HTI)              |                      ----------------------        |
| DELAWARE           |                                        |           |
----------------------                                        |           |
                                                       34.59% |           |
                                                              |           |
                                                                          |
                                                        ---------------------------
                                                        |  SHENZHEN               |
                                                        |  DIGITAINMENT  CO  LTD  |
                                                        |  (SDCL)  -  PRC         |
                                                        ---------------------------
                                                                     | 40%
                                                                     |
                                                                     |
                                                           ----------------------
                                                           |  FANTATECH         |
                                                           |  DEVELOPMENT  INC. |
                                                           |  (FDI)  -  PRC     |
                                                           ----------------------
</TABLE>


                                       17
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF
       OPERATIONS

This  quarterly report on Form 10-QSB contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the
Securities Exchange Act of 1934. These statements relate to future events or the
Company's  future  financial  performance. The Company has attempted to identify
forward-looking  statements  by terminology including "anticipates", "believes",
"expects",  "can",  "continue",  "could", estimates", "intends", "may", "plans",
"potential",  "predict",  "should"  or  "will" or the negative of these terms or
other comparable terminology. Although the Company believes that the expectation
reflected  in  the forward-looking statements are reasonable, the Company cannot
guarantee  future  results,  level of activity, performance or achievements. The
Company's  expectations  are  as  of the date this Form 10-QSB is filed, and the
Company  does  not  intend to update any of the forward-looking statements after
the  date  this  quarterly  report  on  Form  10-QSB  is  filed to confirm these
statements  to  actual  results,  unless  required  by  law.

As  used  in this quarterly report, the terms "we", "us", "our", and "Fantatech"
mean  Fantatech  Inc.,  unless  otherwise  indicated.

OVERVIEW

Fantatech  Inc.,  formerly Lucas Educational Systems, Inc., (the "Company"), was
incorporated  in  1996. The Company designs, develops and produces hi-technology
entertainment  and  amusement  products.  Its  technical team is experienced and
creative  in  software,  film  production  and  comprehensive  serial  products
involving  wide  range  of  specialties, including computer engineering, digital
film  and video, simulation, artificial intelligence and system integration. The
Company  has  successfully  launched  a  series  of  hi-technology amusement and
entertainment  products  that  are  presently  installed  in  many  theme parks,
entertainment  centers  and  shopping  malls  worldwide.  Several 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. Through out these years, the
Company  has  developed  the capabilities of planning, designing, producing, and
managing  technology  based hi-tech entertainment products, and is among the few
hi-tech companies in the world that can create, design and manufacture an entire
system  of  large  size  indoor  attraction.

During  the  nine  months  ended  September  30,  2004,  six  amusement centers,
FantaWild FunPlex, were opened in Guangdong, Hunan, Shanxi, Liaoning and Jiangsu
provinces in PRC. The Company schedules to open three more FunPlex in the fourth
quarter,  including  in the City of Beijing, Wuhan and Dalian. Also, the Company
sold  a  FunPlex  to  Ukraine  and  established  the first step for the label of
"FantaWild  FunPlex"  in  Europe. In addition, the Company has signed agreements
with investors and plans to open several more FunPlex in other cities of the PRC
and  Middle  East countries. The Company plans to open the FunPlex in Chongqing,
Tianjin,  Yantai  (Shandong  Province)  and  Dongguan  (Guangdong  Province).
Furthermore,  the  large  size  attraction,  4D  Ride  Dino-Rampage,  has  been
completely  constructed  and  is  under  the  final  stage of the testing. It is
located  in  the  City  of


                                       18
<PAGE>
Tianjin,  PRC  and  covers  approximately  50,000  square feet. Furthermore, the
Company  intends  to  construct  a  Floating  Sphere  4D Theater in Beijing. The
project  in  Beijing  will  cover  approximately  an area of 30,000 square feet.

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 of America 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.

CONSOLIDATED  RESULTS  OF  OPERATIONS

Three  months  ended  September  30,  2004  and  2003:

Revenue
The  Company  generated  revenues  of  $1,082,452  for  the  three  months ended
September  30,  2004,  which  was  a  $235,519, or 18% decrease, from $1,317,971
(Adjusted  retroactively  due to the disposal of HTL) for the three months ended
September  30,  2003. This was primarily due to the Company's shift in marketing
efforts  of its new acquisitions. This led to a decrease in sales for 4D theatre
for  the  quarter.  However, the Company expects that revenue levels to increase
with  the  opening  of  more  FunPlexes.

Gross  profit
Gross  profit  margin  has increased to 45% for the three months ended September
30,  2004,  from 38% (Adjusted retroactively due to the disposal of HTL) for the
three  months  ended September 30, 2003. The increase was due to the decrease in
cost  of  sales  related  to  the  sales  lost  for  the  quarter.

Selling  and  marketing  expenses
Selling and marketing expenses increased by $66,359, or 73%, to $157,805 for the
three  months  ended  September 30, 2004 from $91,446 for the three months ended
September  30,  2003.  This was primarily due to the increase of advertising and
trade  show  expenses  for  promoting the FantaWild FunPlex and other large size
amusement  centers.

General  and  administrative  expenses
General  and administrative expenses increased by $207,825, or 114%, to $390,277
for the three months ended September 30, 2004 from $182,452 for the three months
ended  September  30,  2003. This was primarily due to the increase in salaries,
consulting  and  professional  fees. Also, during the third quarter of 2004, the
Company  had  general  and  administrative  expenses  of  approximately $112,000
relating  to  FDI,


                                       19
<PAGE>
which was not a part of the Company during the three months ended September 30 ,
2003  because  it  was  not  formed  until  August  2003.

Income  (loss)  from  operations
The  Company recorded loss from operations of $58,910 for the three months ended
September  30,  2004 and income from operations of $228,669 for the three months
ended September 30, 2003. The loss increase during the third quarter of 2004 was
mainly because of decreasing gross profit, increasing general and administrative
expenses  and  selling  and  marketing  expenses.

Other  income  (loss)
There  was no loss on the disposition of fixed assets for the three months ended
September  30,  2004  as  compared to a loss of $955 on the disposition of fixed
assets  for  the  three  months  ended  September  30,  2003.

Interest  expense  for  the  three  months  ended September 30, 2003 was $27,975
(Adjusted retroactive due to the disposal of HTL) and the Company did not record
any  interest  expense  for  the  three months ended September 30, 2004. This is
primarily  due  to the fact that the bank loan of $2,168,675, which was obtained
in  August  2002,  had  been  fully  settled  upon  its maturity in August 2003.

Other  expenses  of  $29,006  and $0 were recorded during the three months ended
September  30,  2004  and  2003,  respectively.  This  was  primary  due  to  a
non-operating  expenses  occurred  during  the  third  quarter  of  2004.

Interest  income  for  the  three  months  ended September 30, 2004 increased to
$48,716  from  $16,744 (Adjusted retroactive due to the disposal of HTL) for the
three  months  ended  September  30,  2003  due  to the increase in cash held in
interest-bearing  accounts.

The  Company  recorded  a  non-operating  income of $3,650 and $5,814 during the
three  months  ended  September  30,  2004  and  2003,  respectively.

Minority  interests
The  Company recorded a minority interests' share of the loss of $16,829 for the
three  months  ended  September  30,  2004, as compared to a minority interests'
share of the income of $56,320 for the three months ended September 30, 2003, to
reflect  the interests of the minority shareholders in Hytechnology, Inc. (30%),
Hytechnology  Limited  (1%),  SDCL  (34.6%)  and  the  FDI  (60%  of  SDCL).

Income  tax  expenses
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, an intermediate holding company with no operation, is not liable
to  any income taxes of British Virgin Islands. 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% tax rate reduction
for  the third through fifth years (years 2001 - 2003) of operations. On October
2004,  the  Shenzhen  local  tax  authority granted SDCL a discretionary special
temporary  tax  relief  for


                                       20
<PAGE>
hi-tech  corporation  for  another  three  years starting from October 2004. The
provisions  for  taxes on earnings of SDCL were $11,722 and $8,241 for the three
months  ended  September  30,  2004  and  2003,  respectively.

Discontinued  operations
The Company recorded loss from operations of HTL of $0 and $358 during the three
months  ended  September  30,  2004  and  2003,  respectively.

Net  income  (loss)
The  Company recorded a net loss of $30,443 for the three months ended September
30,  2004  as  compared  to  a net income of $157,378 for the three months ended
September  30,  2003.  This  was  primarily  due  to  the  decrease of sales and
increasing  general  and  administrative  expenses. However, the Company expects
that  it  will  be  more profitable for year 2004 than the year of 2003 as there
will  be  more  FunPlex  and  amusement  centers  to  open  before the year end.

Nine  months  ended  September  30,  2004  and  2003:

Revenue
The Company generated revenues of $3,369,266 for the nine months ended September
30,  2004,  which  was  a  $1,003,043  or 42% increase from $2,366,223 (Adjusted
retroactively  due  to  the disposal of HTL) for the nine months ended September
30,  2003.  This  was primarily due to the Company opened several FunPlex during
the  period and could generate a steady revenue. As there will be more FantaWild
FunPlex  to be opened during the year, the Company expects that the revenue will
be  more than the prior year's level even though there will be less sales of 4-D
Theater.

Gross  profit
Gross profit margin has decreased to 36% for the nine months ended September 30,
2004, from 54% for the nine months ended September 30, 2003. This was due to the
decreases  in  product  sales to new overseas markets. In general, the price and
profit  margin  of  overseas markets is relatively higher than the local market.
Since  the  Company had less overseas sales during the period, the profit margin
dropped.

Selling  and  marketing  expenses
Selling  and marketing expenses increased by $212,725 or 95% to $437,282 for the
nine  months  ended  September  30, 2004 from $224,557 for the nine months ended
September  30,  2003.  This was primarily due to the increase of advertising and
trade  show  expenses  for  promoting the FantaWild FunPlex and other large size
amusement  centers.  That  lead  the Company's sales to go up with comparing the
same  period  in  2004  and  2003.

General  and  administrative  expenses
General  and  administrative expenses increased by $420,146 or 69% to $1,030,864
for  the  nine  months  ended  September  30,  2004  from  $610,718  (Adjusted
retroactively  due  to  the disposal of HTL) for the nine months ended September
30,  2003.  This  was primarily due to the increases in salaries, consulting and
professional  fees. The Company now has approximately 400 employees as comparing
to  approximately  300  employees  during  2003.  Also,  during  the first third
quarters  of  2004,  the  Company


                                       21
<PAGE>
had  general  and  administrative expenses of approximately $312,000 relating to
FDI, which was only a part of the Company during the nine months ended September
30,  2003  because  it  was  not  formed  until  August  2003.

Income  (loss)  from  operations
The  Company recorded loss from operations of $240,501 for the nine months ended
September  30,  2004  and income from operations of $453,692 for the nine months
ended  September  30,  2003. This was mainly due to the low profit margin and an
increase  in  general  and  administrative  expenses  and  selling and marketing
expenses.

Other  income  (loss)
There  was  no loss on the disposition of fixed assets for the nine months ended
September  30,  2004 as compared to a loss of $3,526 on the disposition of fixed
assets  for  the  nine  months  ended  September  30,  2003.

Interest  expense  for  the nine months ended September 30, 2003 was $88,353 and
the  Company  did  not  record  any  interest  expense for the nine months ended
September  30,  2004.  This  was primarily due to the fact that the bank loan of
$2,168,675,  which  was obtained in August 2002, had been fully settled upon its
maturity  in  August  2003.

Other  expenses  of  $75,777  and $34 were recorded during the nine months ended
September  30,  2004  and  2003,  respectively.  This  was  primary  due  to  a
non-operating  expenses  occurred  during  the  period  of  2004.

Interest  income  for  the  nine  months  ended  September 30, 2004 increased to
$99,989  from  $36,844  for  the nine months ended September 30, 2003 due to the
increase  in  cash  held  in  interest-bearing  accounts.

The  Company  recorded  a  non-operating income of $21,556 and $6,800 during the
nine  months  ended  September  30,  2004  and  2003,  respectively.

Minority  interests
The Company recorded a minority interests' share of the loss of $155,883 for the
nine months ended September 30, 2004, as compared to a minority interests' share
of  the  income  of  $125,933  for  the nine months ended September 30, 2003, to
reflect  the interests of the minority shareholders in Hytechnology, Inc. (30%),
Hytechnology  Limited  (1%),  SDCL  (34.6%)  and  the  FDI  (60%  of  SDCL).

Income  tax  expenses
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, an intermediate holding company with no operation, is not liable
to  any income taxes of British Virgin Islands. 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% tax rate reduction
for  the third through fifth years (years 2001 - 2003) of operations. On October
2004,  the  Shenzhen  local  tax  authority granted SDCL a discretionary special
temporary  tax  relief  for hi-tech corporation for another three years starting
from October 2004. The provisions for taxes on earnings of SDCL were $31,611 and
$23,250  for  the  nine  months  ended


                                       22
<PAGE>
September  30,  2004  and  2003,  respectively.

Discontinued  operations
The  Company recorded loss from operations of HTL of $284 and $56,324 during the
nine  months  ended  September  30,  2004  and  2003,  respectively. The Company
recorded  gain  on  disposal  of  HTL  of  $1,277  during  the nine months ended
September  30,  2004.

Net  income  (loss)
The  Company  recorded a net loss of $69,468 for the nine months ended September
30,  2004  as  compared  to  a  net income of $199,916 for the nine months ended
September  30, 2003. This is primarily due to the lower profit margin and higher
general and administrative expenses and selling and marketing expenses. However,
the  Company expects that it will be more profitable for year 2004 than the year
of  2003  as there will be more FunPlex and amusement centers to open before the
year  end.

Financial  condition,  liquidity,  capital  resources

For  the nine months ended September 30, 2004, our operations generated net cash
of  $87,595,  as compared to utilizing net cash of $2,425,460 in the nine months
ended  September  30,  2003.  This  is primarily due to the Company obtained two
short-term  bank loans in the amount of $2,433,735, increase in deposit received
from  customers and related parties and a decrease in trade receivable. However,
it  is  offset  by  the  significant  increase  in inventories and related party
receivable,  and  a  decrease  in  accounts  payable  and  accrued  liabilities.

As  of  September  30,  2004,  we  had cash on hand of $5,328,411 and a positive
current  ratio  of  1.52.

As  of September 30, 2004, we had two short term bank loans of total $2,433,735.
Those  were  obtained  in  September  2004  for  the  purpose of financing major
projects in Chongqing and Beijing. Both of the bank loans bear interest at 5.31%
per  annum and will be due on September 2005. As of September 30, 2003, we had a
bank  loan  of  $2,168,675, which was obtained in August 2002 for the purpose of
financing  a  major  project.  The loan bore interest at 5.31% per annum and was
repayable  on  August  27,  2003.  The  loan was guaranteed by Shenzhen Huaqiang
Holdings  Limited  and  was  fully  settled  upon  maturity.

The  Company  did have substantial capital expenditures of $1,990,609 during the
nine  months  of 2004 as the Company purchased computer equipments, vehicles and
there  are  all  together  six  FunPlex  were  established.

The  Company had no significant capital expenditure commitment outstanding as of
September  30,  2004.

The  Company  anticipates,  based  on  currently  proposed plans and assumptions
relating  to  its  existing  operations,  that  the  projected  cash  flows from
operations,  combined  with  cash  on  hand  and  bank  line  of credit, will be
sufficient  to  support  our  planned  operations  for  the  next twelve months.
Depending  on  the  Company's  rate  of  growth, the Company may seek additional
capital  in  the  future  to  support  expansion  of


                                       23
<PAGE>
operations  and  acquisitions.

New  Accounting  pronouncements

In  May 2003, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  ("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  Statement  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.

Critical  Accounting  Policies

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


                                       24
<PAGE>
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.

Trademarks
----------

The  identifiable  intangible assets of the Company are trademarks acquired in a
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  returns and discounts. The Company did not record any
sales  returns  and  discounts  for the nine months ended September 30, 2004 and
2003.

(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 nine
months  ended  September  30,  2004  and  2003.

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


                                       25
<PAGE>
outstanding  as  of  December  31,  2003.

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 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.

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  nine  months  ended  September  30,  2004  and  2003.

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:

(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.


                                       26
<PAGE>
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.


ITEM  3  -  CONTROLS  AND  PROCEDURES

Evaluation  of  Disclosure  Controls  and  Procedures

Disclosure  controls  and  procedures  are  designed  to ensure that information
required  to  be  disclosed in the reports filed or submitted under the Exchange
Act  of  1934  is  recorded, processed, summarized and reported, within the time
periods  specified  in  the  rules  and  forms  of  the  Securities and Exchange
Commission.  Disclosure  controls  and  procedures  include, without limitation,
controls  and  procedures  designed  to ensure that information include, without
limitation, controls and procedures designed to ensure that information required
to  be  disclosed  in  the  reports  filed  under  the  Exchange  Act of 1934 is
accumulated  and  communicated  to  the  Company's  management,  including  its
principal  executive  and  financial  officers,  as appropriate, to allow timely
decisions  regarding  required  disclosure.

As  of  the end of the period covered by this report, the Company carried out an
evaluation,  under  the  supervision and with the participation of the Company's
management,  including  its  principal  executive  and  financial officer of the
effectiveness  of  the design and operation of the Company's disclosure controls
and  procedures. Based upon and as of the date of that evaluation, the Company's
principal  executive  and  financial  officer  concluded  that  the  Company's
disclosure  controls  and  procedures  are  effective to ensure that information
required to be disclosed in the reports that Company files and submits under the
Exchange  Act  of  1934  is  recorded, processed, summarized and reported as and
required.

Changes  in  Internal  Control

There  were  no  changes  in the Company's internal controls or in other factors
that  could have significantly affected those controls subsequent to the date of
the  Company's  most  recent  evaluation.


                                       27
<PAGE>
PART II - OTHER INFORMATION

ITEM 2 - CHANGES IN SECURITIES
During  the  nine months ended September 30, 2004, the Company did not issue any
shares  of  common  stock.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits.

<TABLE>
<CAPTION>
<S>      <C>
Exhibit
Number   Description
-------  -----------
31.1     Certification of the Chief Executive Officer pursuant to Section
         302 of the Sarbanes-Oxley Act of 2002
31.2     Certification of the Chief Financial Officer pursuant to Section
         302 of the Sarbanes-Oxley Act of 2002
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 Financial Officer Pursuant to Rule 13a-14(b)
         and 18 U.S.C. Section 1350
</TABLE>

(b)  Reports  on  Form  8-K

     There  was  no  report  filed on the Form 8-K during the three months ended
     September  30,  2004. There was one report filed on the Form 8-K subsequent
     to  September  30,  2004.

<TABLE>
<CAPTION>
Form         Filing Date          Description
----         -----------          -----------
<S>          <C>                  <C>
8-K          October 20, 2004     A report on section 2, item 2.01, which
                                  announced the acquisition of
                                  Megabase Investment Ltd.
</TABLE>


                                       28
<PAGE>
                                   SIGNATURES

In  accordance  with the requirements of the Exchange Act, the registrant caused
this  report  to  be  signed  on  its  behalf by the undersigned, thereunto duly
authorized.

                                                       FANTATECH INC.
                                                       -------------------------
                                                       (Registrant)


Dated: November 22, 2004                               By /s/ Guangwei Liang
                                                       -------------------------
                                                       Guangwei Liang
                                                       Chief Executive Officer

Dated: November 22, 2004                               By /s/ Carl Yuen
                                                       -------------------------
                                                       Carl Yuen
                                                       Chief Financial Officer


                                       29
<PAGE>