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 March 31, 2006


       |_| 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 of                   (I.R.S. Employer
     incorporation or organization)                 Identification Number)

  Suite 1801A, Tower 1, China Hong Kong City, Tsimshatsui, Kowloon, Hong Kong
          -----------------------------------------------------------
                    (Address of principal executive offices)

                                (852) 2302 1636
          -----------------------------------------------------------
                          (Issuer's telephone number)


          -----------------------------------------------------------
   (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  the  past  90 days. [X] Yes [ ] No

As of May 15, 2006, the Company had 30,096,117 shares of common stock issued and
outstanding.

Indicate  by check mark whether the registrant is a shell company (as defined in
Rule  12b-2  of  the  Exchange  Act)            [ ]  Yes  [X]  No

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

Documents  Incorporated  by  Reference:  None.


<PAGE>
<TABLE>
<CAPTION>
                              FANTATECH, INC. AND SUBSIDIARIES

                                        FORM 10-QSB

                                           Index


Part I - Financial Information
<S>         <C>
Item 1.     Financial Statements

            Condensed Consolidated Balance Sheets - March 31, 2006 (Unaudited) and
                December 31, 2005

            Condensed Consolidated Statements of Operations (Unaudited) -Three Months
                Ended March 31, 2006 and 2005

            Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) -
                Three Months Ended March 31, 2006 and 2005

            Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months
                Ended March 31, 2006 and 2005

            Notes to Condensed Consolidated Financial Statements (Unaudited) - Three Months
                Ended March 31, 2006

Item 2.     Management's Discussion and Analysis or Plan of Operation

Item 3.     Controls and Procedures

            Part II - Other Information

Item 1.     Legal Proceedings

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.     Defaults Upon Senior Securities

Item 4.     Submission of Matters to a Vote of Security Holders

Item 5.     Other Information

Item 6.     Exhibits

Signatures
</TABLE>


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

ITEM 1.  FINANCIAL  STATEMENTS
--------------------------------------------------------------------------------------------------------------

                                        FANTATECH, INC. AND SUBSIDIARIES
                                     CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                           March 31, 2006   December 31, 2005
                                                                          ----------------  ------------------
ASSETS                                                                       (Unadited)
<S>                                                                       <C>               <C>
Current assets
  Cash and cash equivalents                                               $        443,585  $        2,365,921
  Deposit at an affiliate's financial clearing center                                    -             321,728
  Guaranteed trust fund deposit                                                      9,190               9,330
  Trade receivables, net of allowance for doubtful accounts                      1,281,153           1,939,434
  Related party receivables                                                         54,435             193,721
  Inventories                                                                    3,196,705           3,037,087
  Cost and estimated earnings in excess of
    billings on uncompleted contracts                                              938,371             722,526
  Deposits and prepayments                                                       2,747,708           1,607,725
  Other receivables                                                                349,656             243,176
                                                                          ----------------  ------------------
Total current assets                                                             9,020,803          10,440,648

Interest in an associated company, accounted for using the equity method                 -              18,587
Property, plant and equipment, net                                               7,723,449           6,661,869
Construction in progress                                                         2,938,447           2,576,520
                                                                          ----------------  ------------------
Total assets                                                              $     19,682,699  $       19,697,624
                                                                          ================  ==================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Short-term bank loans                                                   $      2,494,699  $        2,478,315
  Accounts payable                                                               1,044,715           1,585,030
  Accrued liabilities and other payables                                           625,903           1,155,197
  Related party payables                                                         2,012,162             778,349
  Billings in excess of cost and estimated earnings
    on uncompleted contracts                                                       680,133             608,104
  Deposits received                                                              1,873,232           1,811,743
                                                                          ----------------  ------------------

Total current liabilities                                                        8,730,844           8,416,738

Minority interests                                                               4,318,461           4,289,988
                                                                          ----------------  ------------------
Total liabilities                                                               13,049,305          12,706,726
                                                                          ----------------  ------------------

Commitments and contingencies

Stockholders' equity
  Preferred stock; $0.001 par value; 10,000,000 shares
    authorized; shares issued and outstanding - none                                     -                   -
  Common stock; $0.001 par value; 100,000,000 shares
    authorized, 30,096,117 shares issued and outstanding                            30,096              30,096
  Additional paid-in capital                                                     4,587,190           4,587,190
  Retained earnings                                                              1,629,847           1,915,800
  Reserve funds                                                                    145,347             145,347
  Accumulated other comprehensive income                                           240,914             312,465
                                                                          ----------------  ------------------
Stockholders' equity                                                             6,633,394           6,990,898
                                                                          ----------------  ------------------
Total liabilities and stockholders' equity                                $     19,682,699  $       19,697,624
                                                                          ================  ==================
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                             FANTATECH, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


                                                 Three Months Ended    Three Months Ended
                                                   March 31, 2006        March 31, 2005
                                                --------------------  --------------------
<S>                                             <C>                   <C>
REVENUE :                                       $                     $
  Contracted sales                                          692,872               458,350
  Design service                                                  -                     -
  Revenue sharing operations                                326,714               216,116
                                                --------------------  --------------------
TOTAL REVENUE                                             1,019,586               674,466
                                                --------------------  --------------------

COST OF REVENUE:
  Cost of sales                                             535,394               332,772
  Cost of design service                                          -                     -
  Cost of revenue sharing operations                        313,907               181,490
                                                --------------------  --------------------
TOTAL COST OF REVENUE                                       849,301               514,262
                                                --------------------  --------------------

GROSS PROFIT                                                170,285               160,204
                                                --------------------  --------------------

OPERATING EXPENSES:
  Selling and marketing                                     220,584               189,402
  General and administrative                                322,048               345,250
  Loss on disposal of fixed assets                            1,286                     -
                                                --------------------  --------------------
TOTAL OPERATING EXPENSES                                    543,918               534,652
                                                --------------------  --------------------

LOSS FROM OPERATIONS                                       (373,633)             (374,448)

OTHER INCOME (EXPENSES)
  Interest expense                                          (34,591)              (32,308)
  Other income                                               18,098                15,222
  Interest income                                             2,014                 3,986
  Foreign exchange loss                                      (1,560)                    -
                                                --------------------  --------------------

LOSS BEFORE INCOME TAX, MINORITY INTERESTS
  AND EQUITY IN LOSS OF AN ASSOCIATED COMPANY              (389,672)             (387,548)

MINORITY INTERESTS                                         (122,636)               13,405

INCOME TAX                                                      262                    33
                                                --------------------  --------------------

LOSS BEFORE EQUITY IN LOSS OF AN ASSOCIATED
  COMPANY                                                  (267,298)             (400,986)

EQUITY IN LOSS OF AN ASSOCIATED COMPANY                     (18,657)                    -
                                                --------------------  --------------------

NET LOSS                                        $          (285,955)  $          (400,986)
                                                ====================  ====================

WEIGHTED AVERAGE SHARES OUTSTANDING
  BASIC AND DILUTED                                      30,096,117            30,096,117
                                                ====================  ====================

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


                                        4
<PAGE>
<TABLE>
<CAPTION>
                            FANTATECH, INC. AND SUBSIDIARIES
     CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

                                                         Three Months Ended March 31,
                                                           2006               2005
                                                     -----------------  ----------------
<S>                                                  <C>                <C>
Net loss                                             $       (285,955)  $      (400,986)

Other comprehensive income:
  foreign currency translation gains                          240,914                 -
                                                     -----------------  ----------------

Comprehensive loss                                            (45,041)         (400,986)
                                                     =================  ================
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                                          FANTATECH, INC. AND SUBSIDIARIES
                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                                                    Three Months Ended March 31,
                                                                                       2006               2005
                                                                                 -----------------  ----------------
<S>                                                                              <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                                                 (285,955)         (400,986)

Adjustments to reconcile net loss to net cash provided by operating activities:
  Depreciation expense                                                                    337,664           238,418
  Provision for doubtful accounts                                                           5,845            17,347
  Loss on disposal of fixed assets                                                          1,286                 -
  Foreign exchange loss                                                                     1,560                 -
  Minority interests                                                                     (122,636)           13,405
  Equity in loss of an associated company                                                  18,657                 -
Change in operating assets and liabilities:
  (Increase) decrease in --
  Guaranteed unit trust fund                                                                  140            (9,160)
  Trade receivables                                                                       652,436           279,370
  Related party receivables                                                               139,286           255,167
  Inventories                                                                            (159,618)          (56,334)
  Costs and estimated earnings in excess of billings on uncompleted contracts            (215,845)          404,493
  Deposits and prepayments                                                             (1,139,983)           (9,725)
  Other receivables                                                                      (106,480)         (220,550)
  (Decrease) increase in --
  Accounts payable, accrued liabilities and other payables                             (1,069,610)          264,827
  Related party payables                                                                1,233,813          (218,912)
  Billings in excess of costs and estimated earnings on uncompleted contracts              72,029          (197,295)
  Deposits received                                                                        61,489            43,289
                                                                                 -----------------  ----------------
Net cash provided by operating activities                                                (575,922)          403,354
                                                                                 -----------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property, plant and equipment                                            (1,355,264)       (2,278,385)
  Deposit at an affiliate's financial clearing center                                     321,728         2,020,561
  Increase in construction in progress                                                   (361,927)          (99,789)
                                                                                 -----------------  ----------------
Net cash used in investing activities                                                  (1,395,463)         (357,613)
                                                                                 -----------------  ----------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                    49,049                 -
                                                                                 -----------------  ----------------

NET (DECREASE) INCREASE IN CASH                                                        (1,922,336)           45,741

Cash and cash equivalents, at beginning of period                                       2,365,921            65,794
                                                                                 -----------------  ----------------
Cash and cash equivalents, at end of period                                      $        443,585   $       111,535
                                                                                 =================  ================

Supplementary disclosures of cash flow information:
  Interest paid                                                                  $         34,701   $        32,308
                                                                                 =================  ================

  Tax paid                                                                       $        422,353   $        12,679
                                                                                 =================  ================

Supplemental Disclosure of Non-Cash Investing and Financing Activities:

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


                                        6
<PAGE>
                        FANTATECH, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    THREE MONTHS ENDED MARCH 31, 2006 AND 2005

1.   ORGANIZATION  AND  PRINCIPAL  ACTIVITIES

Fantatech,  Inc., formerly Lucas Educational Systems, Inc. (hereinafter referred
to as the "Company", which term shall include, when the context so requires, its
subsidiaries  and  affiliates)  was incorporated in the Delaware in 1996. During
November  2002, the Company acquired all of the issued and outstanding shares of
Intsys Share Limited ("Intsys") in a reverse acquisition. The Company is engaged
in  the  design,  manufacturing, sale and operation of hi-tech entertainment and
amusement  attractions  for group audiences including simulation attractions and
equipment,  3D/4D theatres, indoor entertainment centers ("FunPlex") and outdoor
theme  parks.  The  Company's operations are located in the People's Republic of
China  (the  "PRC"  or "China"). The Company's wholly owned subsidiaries include
Intsys,  Shenzhen  Digitainment  Co., Ltd. ("SDCL"), Chongqing FantaWild FunPlex
Tour  Co.  Ltd.  ("Chongqing FTC") and Megabase Investment Limited ("Megabase").
In  addition,  the  Company's majority controlled companies include Hytechnology
Inc.  ("Hytech  US")  and  Fantatech  Development  Inc.  ("FDI").

In  August  2003, SDCL, Shenzhen Huaqiang Industry Company Limited ("SHICL") and
Shenzhen  Huaqiang  Venture Capital Company Limited ("SHVCCL") incorporated FDI.
Each  of SDCL and SHICL hold a 40% equity interest in FDI with the remaining 20%
equity  interest  held by SHVCCL.   FDI is engaged in the sales and marketing of
the products of SDCL in China and assists SDCL with soliciting contracts for the
development  of  hi-tech  entertainment  and  amusement centers and theme parks.
Subsequent  to  its formation, SHVCCL assigned all of its management and control
rights  in  FDI  to  SDCL.  SHICL and SHVCCL are affiliates of Shenzhen Huaqiang
Holdings  Limited  ("SHQ").  The  Chairman and the President of SHQ are also the
Chairman  and  the  Chief  Executive  Officer  ("CEO")  of  the  Company.

In  June  2005,  the  Company resolved to set up two management companies in the
cities  of  Chongqing and Tianjin in China, in order to manage the operations of
the  theme park in Chongqing and the large-size attraction "Dino-Rampage" in the
Tianjin  FunPlex,  respectively.  These  management  companies  are  intended to
facilitate the operations of the aforesaid large-size revenue sharing operations
and  will  be  budgeted  to  operate at a break-even level. In late August 2005,
Chongqing FTC, with registered capital of approximately $620,000, which is owned
90%  by  SDCL and 10% by FDI, formally commenced its operations of assisting and
coordinating  the  establishment  of  the Chongqing Theme Park. In late November
2005,  Tianjin  Longqiao  FantaWild  Kepu  Ltd. ("Tianjin LFK"), with registered
capital  of  approximately $37,000, which is owned 50% by FDI and 50% by Tianjin
Longqiao  Property  Development  Co.  Ltd. ("Longqiao PDL"), a third party local
partner, formally commenced its operations. There are seven members of the Board
of  Directors  of  Tianjin  LFK,  to  which  FDI  has  appointed  two directors.

2.   BASIS  OF  PRESENTATION  AND  SIGNIFICANT  ACCOUNTING  POLICIES

BASIS  OF  PRESENTATION  AND  CONSOLIDATION  -  The  interim unaudited condensed
consolidated  financial  statements  include  the  financial  statements  of the
Company,  its  subsidiaries  in  which  the Company has an effective controlling
interest,  including  its  effectively  controlled  associated company, FDI. The
Company's  investment in Tianjin LFK is accounted for using the equity method of
accounting  as  the  Company does not have effective control over its Board. All
material  intercompany balances and transactions, including intercompany profits
and  unrealized  profits  and  losses  are  eliminated  on  consolidation.

The  interim  unaudited  condensed consolidated financial statements as of March
31,  2006 and for the three months ended March 31, 2006 and 2005, in the opinion
of  the  management  of  the  Company,  reflect  all  adjustments  of normal and
recurring  nature,  which are necessary for a fair presentation of the Company's
financial position, results of operations and cash flows for the interim periods
presented.  Certain  information  and  footnote disclosures normally included in
financial  statements  have  been  condensed  or  omitted  pursuant to rules and
regulations  of  the  Securities and Exchange Commission, although management of
the  Company  believes  that  the  disclosures  are  adequate  to  make  the


                                        7
<PAGE>
information  presented  herein  not  misleading.  Accordingly,  these  unaudited
interim  financial  statements  should  be  read in conjunction with the audited
consolidated  financial  statements  and  the  notes  thereto  included  in  the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2005. The
results  of  operations  for  the  interim periods presented are not necessarily
comparable  to or indicative of the results of any other interim period or to be
expected  for  the  entire  year  ending  December  31,  2006.

USE  OF  ESTIMATES  - The preparation of financial statements in conformity with
accounting  principles  generally  accepted  in  the  United  States  of America
requires  management  to  make certain 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 reported amounts
of revenues and expenses during the respective reporting period.  Actual results
could  differ  from  those  estimates.  Significant estimates made by management
are,  among  others,  those related to costs and estimated earnings in excess of
billings  on  uncompleted  contracts,  billings in excess of costs and estimated
earnings  on  uncompleted  contracts,  and  the allowance for doubtful accounts.
Actual  results  could  differ  from  those  estimates.

FOREIGN  CURRENCY  TRANSLATION - All of the Company's production and most of its
business  operations are located in China and are conducted in Renminbi ("RMB"),
which  is  the  official  currency  of China. The Company's Chinese subsidiaries
maintain  their financial records and the statutory financial statements in RMB.
Revenue and expenditures denominated in currencies other than RMB are translated
into RMB at the prevailing exchange rate when recognized and recorded in the PRC
financial  records.  Monetary  assets  and  liabilities  denominated  in  other
currencies  are  also  translated into and recorded in RMB at the balances sheet
date.  Any transaction gain or loss is charged to the statement of operations of
the  PRC  subsidiaries in the period in which such gain or loss occurs.  The PRC
accounts denominated in RMB are then translated into USD, the reporting currency
of the Company, using the exchange rate prevailing at the balance sheet date for
consolidation  and  presentation.

On  July  21,  2005,  the  People's Bank of China ("PBC") announced that the RMB
would no longer be tied directly to the United States Dollar ("USD") but against
a  'basket' of foreign currencies under a managed floating exchange rate regime,
and  the  new  official parity exchange rate of USD to RMB was set at US 1.00 to
RMB  8.11  (previously, US1.00 to RMB 8.3), to be allowed to float within a band
of  +-0.3  percent around the central parity rate as published by the PBC daily.
The  Company  recorded  and  adjusted  its  exchange  rate  applicable  to  the
translation  of financial information in accordance with the announced change as
of  the effective date. Accordingly, as of March 31, 2006, the Chinese financial
statements  were translated from RMB to USD at the new prevailing exchange rate.
For  assets  and  liabilities  (other than equity and reserves) translation, the
published  closing  exchange  rate of US 1.00 to RMB 8.02 was applied, while for
revenues,  expenses,  gains  and losses, the weighted average rate of US 1.00 to
RMB  8.04  was  used  for translation. The resulting translation gains or losses
were  recorded  as  a  separate  component  of  stockholders'  equity.

This  quotation  of the exchange rates does not imply free convertibility of RMB
to USD. All foreign exchange transactions in China 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 Foreign Exchange Management Bureau or other
institutions  requires  submitting a payment application together with invoices,
shipping  documents,  signed  contracts  and  other  relevant  documentation.

The  Company's  other  subsidiaries in the US and British Virgin Islands ("BVI")
adopted  USD  as  their  functional  currency.  Transactions  denominated  in
currencies  other  than  the  functional  currency  of  these  subsidiaries  are
converted into their functional currency at the prevailing exchange rates at the
date  of  transaction  or  settlement.

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")


                                        8
<PAGE>
with  a reconciliation of the numerator and denominator of the EPS computations.
Basic  EPS  excludes  the  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 during the period.  Diluted EPS reflects the potential dilution that
could  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  (see  Note  9).

All  common  share  amounts represented herein have been restated to reflect a 1
for  2  reverse  stock  split  effective  June  30,  2004.

CHANGE  IN  METHOD  OF  ACCOUNTING  FOR  INVENTORY VALUATION FOR LOW VALUE ITEMS

On  January  1,  2006,  the  Company elected to change accounting method for low
value  inventory/stock  (i.e.  small parts, bolt and nut and consumables) to the
weighted  average  method, whereas in all prior years inventory was valued using
the  first-in,  first-out ("FIFO") method.  The new method of accounting for low
inventory/stock  was  adopted  to  enhance  operation  efficiency  and  resource
utilization.  The  numerous  species  of low value items only constitute a small
portion  of  the  overall product costs. Management believes that maintenance of
such  low  value  inventory  with  the  FIFO  method  has  reduced the warehouse
operation  efficiency  as  well as resource utilization in relation to inventory
control.

In  addition, based on the fast inventory turnover and stable unit price of such
low  value  inventory,  the  difference  between  the  two  methods would not be
material. Therefore, the new accounting method of weighted average is preferable
to  the  FIFO  method  in  relation  to  low  value  inventory.

Based  on  the estimated average price change within different categories of low
value  stock,  the  adoption  of  the  accounting principle would reduce the net
income  for  the year ended December 31, 2005 by $4,293 or 0.35%, while reducing
the net loss for the three months ended March 31, 2005 $352 or 0.09%.  Potential
effect  of  adopting  new  accounting  principle  would reduce the inventory and
retained  earnings  as  of  December 31, 2005 by $4,293.  Statement of Financial
Accounting  Standards  No.  154,  Accounting  Changes  and Error Corrections - A
Replacement  of  APB  Opinion  No.  20 and FASB Statement No. 3 ("SFAS No. 154")
demands  a  retrospective application but the Company did not do that because of
immateriality.

The  new  accounting  principle,  affecting only low value stock, was adopted by
management  and  approved  by  the  Audit  Committee.


3.  DEPOSIT  AT  AN  AFFILIATE'S  FINANCIAL  CLEARING  CENTER

Cash  on  deposit  at  the  financial  clearing  center  ("FCC")  operated by an
affiliate  as  at March 31, 2006 and December 31, 2005 is summarized as follows:

<TABLE>
<CAPTION>
                                        March 31, 2006   December 31, 2005

                                        ---------------  ------------------
<S>                                     <C>              <C>
Financial clearing center operated by:
  Shenzhen Huaqiang Holdings Limited    $             -  $          321,728
                                        ===============  ==================
</TABLE>

The  Company's Chinese subsidiaries are members of the financial clearing center
("FCC")  operated  by  Shenzhen  Huaqiang  Technology  Co.,  Ltd.  ("SHT"),  a
significant  shareholder (35.53%) of the Company, and Shenzhen Huaqiang Holdings
Co. Limited ("SHQ").  The role of each of SHT and SHQ is mainly a coordinator to
the  financial  arrangement  of  its  members.  The  Company  has  cash  on


                                        9
<PAGE>
deposit  at  the  FCC.  As  of  March 31, 2005, the Company has reclassified the
presentation of cash on deposit at financial clearing centers from cash and cash
equivalents  to  a  separate  category  on  its  statement of cash flow entitled
deposits at affiliate's financial clearing centers.  The reclassification had no
impact  on  the  Company's  working  capital  resources.

A FCC resembles an internal bank which accepts deposits from and grants loans to
its  members at the prevailing market rate of interest. A FCC also obtains loans
from  external  commercial  banks  and  then in turn sub-lends to its members in
order  to  meet  their  working  capital  requirements  with  less  complicated
application  procedures and no attendant financial charges. The cash deposits at
the  FCC  can  be  withdrawn  any time without any restrictions, except that the
respective  FCC can collect directly from the Company's account any overdue loan
principal  and  accrued  interest  in  case  the  Company  is  in default in its
repayment  obligations.


4.   INVENTORY

Inventory  at  March  31,  2006 and December 31, 2005 are summarized as follows:

<TABLE>
<CAPTION>
                                 March 31, 2006   December 31, 2005
                                  (Unaudited)
                                ----------------  ------------------
<S>                             <C>               <C>
     Raw Materials              $      1,657,512  $        1,766,203
     Work-in-process                   1,425,499           1,140,725
     Finished Goods                      113,694             130,159
                                ----------------  ------------------
                                $      3,196,705  $        3,037,087
                                ================  ==================
</TABLE>

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

Costs  and  estimated earnings in excess of billings on uncompleted contracts as
of  March  31,  2006  and  December  31,  2005  are  summarized  as  follows:

<TABLE>
<CAPTION>
                                                     March 31, 2006    December 31, 2005
                                                      (Unaudited)
                                                    ----------------  -------------------
<S>                                                 <C>               <C>
Cumulative costs incurred on uncompleted contracts  $    13,115,089   $       12,127,482

Cumulative estimated earnings to date                     2,952,214            2,808,758
                                                    ----------------  -------------------
                                                         16,067,303           14,936,240

Less: Billings to date                                  (15,809,065)         (14,821,818)
                                                    ----------------  -------------------
                                                    $       258,238   $          114,422
                                                    ================  ===================
</TABLE>


                                       10
<PAGE>
Included in the accompanying balance sheets under the following captions are the
following:

<TABLE>
<CAPTION>
                                            March 31, 2006    December 31, 2005
                                             (Unaudited)
                                           ----------------  -------------------
<S>                                        <C>               <C>
Costs and estimated earnings in excess
  of billings on uncompleted contracts     $       938,371   $          722,526
Billings in excess of costs and estimated
  earnings on uncompleted contracts               (680,133)            (608,104)
                                           ----------------  -------------------
                                           $       258,238   $          114,422
                                           ================  ===================
</TABLE>

6.   PROPERTY,  PLANT  AND  EQUIPMENT

Property,  plant,  and  equipment  as  at  March  31, 2006 and December 31, 2005
consisted  of  the  following:

<TABLE>
<CAPTION>
                                                  March 31, 2006    December 31, 2005
                                                   (Unaudited)
                                                 ----------------  -------------------
<S>                                              <C>               <C>
Leasehold improvements                           $       459,403   $          441,465
Plant and machinery                                      560,570              528,648
Furniture and fixtures                                   112,402              110,829
Equipment for revenue sharing operations               7,687,926            6,330,547
Computers and equipment                                1,046,434            1,059,747
Motor vehicles                                           287,228              285,462
                                                 ----------------  -------------------
                                                      10,153,963            8,756,698

Less: Acumulated depreciation and amortization
(net of write off on disposal)                        (2,430,514)          (2,094,829)
                                                 ----------------  -------------------
                                                 $     7,723,449   $        6,661,869
                                                 ================  ===================
</TABLE>

Depreciation  expense was $337,664 and $238,418 for the three months ended March
31,  2006  and  2005,  respectively.


7.   INTEREST  IN  AN  ASSOCIATED  COMPANY

The investment consists of the Company's 50% equity interest in Tianjin Longqiao
FantaWild  Kepu  Ltd.  ("Tianjin  LFK"),  which is held by FDI, (a 40% owned but
effectively  controlled  associated  company).  Tianjin  LFK  was established in
November 2005 to manage the Tianjin FunPlex entertainment center which commenced
its  formal  operation  in  February  2006.  Although Tianjin LFK is budgeted to
operate  at  a break-even level annually, actual profitability, especially on an
interim basis and at the initial stage of operation in particular, is subject to
substantial  variability.  The  Company  has  no  contractual obligation for any
losses  incurred  by  Tianjin  LFK.

The  condensed  unaudited  statements of operations of Tianjin LFK for the three
months  ended  March  31,  2006  are  as  follows:

<TABLE>
<CAPTION>
                                                   Three months ended
                                                     March 31, 2006
                                                  --------------------
<S>                                               <C>
     Net sales                                    $           182,470
                                                  ====================
     Net loss                                                (185,400)
                                                  ====================
     The Company's share of net loss                          (18,657)
                                                  ====================
     Loss in excess of investment (unrecognized)              (74,043)
                                                  ====================
</TABLE>


                                       11
<PAGE>
Reconciliation  of  the  investment  in  Tianjin  LFK  is  as  follow:

<TABLE>
<CAPTION>
                                                      Interest in an
                                                    associated company
                                                   --------------------
<S>                                                <C>
     As at January 1, 2006                         $            18,587
     Effect of exchange rate change on investment                   70
     Equity in loss of an associated company                   (18,657)
                                                   --------------------
                                                                     -
                                                   ====================
</TABLE>

Based  on  the  agreement  with  Tianjin  Longqiao Property Development Co. Ltd.
("Longqiao  PDL"),  the  local  venture  partner of the Tianjin FunPlex, revenue
income  from the FunPlex will be shared equally between the Company and Longqiao
PDL  net of the rental and administrative expenses of the FunPlex. For the three
months  ended  March  31,  2006, the Company recorded no income from the Tianjin
FunPlex  due  to  the  loss  incurred  by  Tianjin  LFK.


8.   STOCK  BASED  COMPENSATION

On  January  7,  2004, the Company granted a total of 2,000,000 stock options to
its  key  employees  to  purchase common stock at an exercise price of $1.00 per
share.  Market  price  of the Company's common stock at the grant date was $0.80
per  share.  The  stock  options  vest  and  are  exercisable  as  follows:

<TABLE>
<CAPTION>
     Scale   Vested and exercisable
     ------  ---------------------------
<S>          <C>
      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 options are cancelled one
month  after  termination  of  employment.

Prior  to  October  10, 2005, the Company followed 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. 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 income (loss) per common share of the estimated fair market value of
stock  options  issued  to  employees.  Accordingly, compensation cost for stock
options to employees is 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.


                                       12
<PAGE>
Pro  forma  Disclosure  - The fair value of stock options 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 and earnings per common share
would  have  been  as  follow:

<TABLE>
<CAPTION>
                                           Three months ended March 31,
                                        ----------------------------------
                                              2006              2005
                                        ----------------  ----------------
<S>                                     <C>               <C>
Net loss - as reported                  $      (285,955)  $      (400,986)
Compensation expense for stock options
Based on fair value, net of taxes                    --           (69,047)
                                        ----------------  ----------------
Net loss - pro forma                    $      (285,955)  $      (470,033)
                                        ================  ================
Net loss per share - Basic and diluted
  As reported                           $         (0.01)  $         (0.01)
                                        ================  ================
Pro forma                               $         (0.01)  $         (0.01)
                                        ================  ================
</TABLE>

Effective  October  10,  2005, the Board of Directors of the Company resolved to
cancel  all  of  the  issued and outstanding stock options which were previously
granted  to  the  Company's  key  employees.  In October 2005, all of the option
holders  entered  into  Option  Surrender  and  Cancellation Agreements with the
Company  and agreed to surrender unconditionally and irrevocably the options for
cancellation  with  no  additional  monetary  compensation  from  the  Company.


9.   EARNINGS  PER  SHARE

On  January  6,  2004,  the  Company granted stock options to purchase 2,000,000
shares  common  stock to certain officers and key employees of the Company at an
exercise  price  of  $1.00  per share. None of the outstanding stock options are
exercisable  prior  to January 7, 2007. All of the Company's outstanding options
were  cancelled  effective from October 10, 2005. As at March 31, 2006 and 2005,
there were nil and 2,000,000 stock options issued and outstanding, respectively.

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
ended  March  31, 2005 because the Company incurred losses during the period and
thus  their effect would have been anti-dilutive. As no option is outstanding as
of  March 31, 2006, basic and diluted EPS is the same for all periods presented.


10.  RELATED  PARTY  TRANSACTIONS  AND  ARRANGEMENTS

(a)  Agreement  with  associated  company
     ------------------------------------

On  June  1, 2004, SDCL and FDI entered into an Agreement pursuant to which SDCL
engaged  FDI,  its  controlled  associated  company,  as its sales agent for the
marketing  and  distribution of its amusement and simulation equipment and 3D/4D
theatres  in  China.

Commencing  January 1, 2005 and thereafter, FDI will be entitled to a commission
ranging  from 10% to 20% of the contract price, depending on the gross margin of
the specific contract and the size of the related project under the contract. In
addition, a 5% advertising and promotional incentive will be provided to FDI for
each contract solicited by FDI. The aforesaid commissions and incentives will be
reflected in the ex-factory price (reduced selling price) and transferred to FDI
through  its  purchase  from  SDCL  of  the  related equipment and products. The
agreement  can be terminated at any time with 60 days notice to the other party.


                                       13
<PAGE>
FDI  will  be  responsible for its own operating costs including staff salaries,
marketing  and  promotional  expenses, general office administrative expenses as
well  as  the  associated  sales  taxes  and  income  tax.

In  addition,  the  agreement  also  provides  that FDI may include in its sales
contracts  a  provision  for  the cooperative operation of any hi-tech amusement
center  "FunPlex" or theme park "FantaWild" when the proposed operating venue is
suitable  for the business. However, FDI will only act as the agent in such part
of the contract on behalf of SDCL.  FDI will have no direct or indirect economic
or  legal  interest  in the revenue sharing operations, which will be solely the
business of SDCL and SDCL will be responsible for contributing the equipment and
fixed  assets required for the cooperative operation. All revenues generating by
such  cooperated  businesses  will  be  received  by  SDCL,  and all the related
expenses  as  stipulated  in  such  cooperation contracts will be borne by SDCL.

In practice, the advertising and promotional incentives and commissions are paid
to  FDI  through  a  price reduction. SDCL reduces the sales price to FDI by the
amount  of the agreed percentage of incentives and commissions, which represents
a reduction in the revenue of SDCL. FDI can capture such portion of revenue from
its  onward  sales  to  the  ultimate  customers.  In  this  regard, the revenue
recognized  by  SDCL  is  in  compliance  with  EITF  No.  01-9, "Accounting for
Consideration  Given  by  a  Vendor  to  a Customer (Including a Reseller of the
Vendor's  Products)".

When FDI receives the commissions and incentives, which are reflected as reduced
costs  of  sales  for  FDI,  the income is included in FDI's gross profit, which
supports  FDI's  selling,  administrative  and  other  operating  functions.  No
further  incentives  are  passed  on  to  the  ultimate  customers  from  FDI.

The  revenue recognized by SDCL and the reduced costs of sales for FDI, however,
are  eliminated  in  preparing  the  consolidated  financial  statements  of the
Company.  Accordingly, the commission and incentive received by FDI are included
in  the  consolidated  gross  profit  only.

During the three months ended March 31, 2006 and 2005, SDCL sold its products to
FDI for an aggregate price of $nil and $296,051, respectively, for resale to end
customers.  During the three months ended March 31, 2006 and 2005, FDI collected
for SDCL a total of $83,947 and $68,148, respectively, of the net revenue shared
from  the  revenue  sharing  centers  operated  for  SDCL.

(b)  Contracts  with  related  party
     -------------------------------

On  January  24,  2006,  SDCL entered into an Equipment Sale Contract (the "Sale
Contract")  and an Equipment Installation Contract (the "Installation Contract")
with  Wuhu Huaqiang Tour City Development Co., Ltd. ("Wuhu Huaqiang").  Pursuant
to the Sale Contract, Wuhu Huaqiang will purchase from SDCL 22 sets of amusement
attractions/equipment  (the  "Equipment") for use in a specific theme park to be
built  in  the  City  of Wuhu, Anhui Province, China.  The consideration for the
Equipment  is  RMB 126,730,000 (approximately US$15,650,000) (the "Sale Price"),
plus a right to receive 8% of the theme park's Distributable Income for a period
of  15 years from commencement of theme park operations.  "Distributable Income"
means  the  theme park's Gross Revenue, less certain limited expenses (including
sales  tax  and  the  purchase  cost  of  souvenirs,  beverages, foods and other
commodities  sold in the theme park).  Wuhu Huaqiang has made an initial deposit
of  approximately  6%  of  the  Sale Price (approximately US$938,000) within one
month of the effective date of the Sale Contract.  The balance of the Sale Price
is payable in five separate installments to be made through May 30, 2007.  Under
the  Sale  Contract, Wuhu Huaqiang has guaranteed that the 8% revenue share from
the theme park's aggregate Distributable Income during such 15-year period shall
in  no  case  be  less  than  RMB  50,000,000  (approximately  US$6,170,000).

The  Installation Contract provides for the installation of the Equipment at the
theme  park  by  SDCL.  Total  consideration for the installation service is RMB
10,000,000  (approximately  US$1,230,000)  payable  in  five  equal installments
beginning one month after the signing of the Installation Contract and ending 10
days  after  completion  of the installation services. The installation services
are  scheduled  tobe  completed  by  July  18,  2007.


                                       14
<PAGE>
Management  believes  that  these  arrangements  with  Wuhu  Huaqiang  will  be
advantageous  to  the Company and that its participation in the large-size theme
park  business  will  enhance  its  reputation  in  the  industry with a minimum
investment.  Both the Sale and Installation Contracts were reviewed and approved
by  the  Company's  Audit  Committee  and  Board  of  Directors.

Wuhu  Huaqiang  is  a joint venture company incorporated in the City of Wuhu and
controlled  75%  by  SHQ,  a  related party of the Company. The Chairman and the
President  of  SHQ are also the Chairman and the Chief Executive Officer ("CEO")
of  the Company, respectively.  Neither the Chairman nor the CEO participated in
the discussion regarding or eventual Board approval of the Sale and Installation
Contract.  The  CEO  and  the Chief Operating Officer ("COO") of the Company are
also  each  directors  of  Wuhu  Huaqiang.

(c)  Purchases  of  digital  films  and  related  components
     -------------------------------------------------------

During  the  three  months  ended March 31, 2006 and 2005, the Company purchased
certain  components  for  its  products  from  Hyvision  Digital  Film  Inc.
("Hyvision"), an affiliate of SHQ, having a total value of $373,134 and $72,289,
respectively.  The  CEO  and  COO  of  the  Company  are  also each directors of
Hyvision.  SHT,  a  significant  shareholder  of  the  Company, has a 20% equity
interest  in  Hyvision.

(d)  Sales  to  related  parties
     ---------------------------

During  the  three  months  ended  March  31,  2006  and  2005, the Company sold
equipment  to  Hytechnology  Limited  ("Hytech  HK")  for  an aggregate price of
$10,500  and $100,000, respectively. Hytech HK is beneficially owned by Top Link
Development  Limited,  a  company  controlled  by  SHQ.

(e)  Related  party  receivables  and  payables
     ------------------------------------------

As  at  March 31, 2006 and December 31, 2005, the amounts payable and receivable
from  related  parties  are  summarized  as  follows:

<TABLE>
<CAPTION>
                                   March 31,2006    December 31, 2005
                                  ---------------  -------------------
<S>                               <C>              <C>
Amounts due from:
-----------------
Hytech HK (1)                     $       12,098   $          159,988
Shenzhen Huaqiang Industrial
  and Trading Co. Ltd. (2)                 7,843                7,791
Chunren Xie (3)                            1,500                1,500
Directors (4)                             28,949               24,442
Wuhu Huaqiang Tour City
Development Co. Ltd.  (5)                  4,045                    -
                                  ---------------  -------------------
                                  $       54,435   $          193,721
                                  ===============  ===================

Amounts due to:
---------------
Hytech HK (1)                     $     (144,531)  $         (141,506)
Top Link Development Limited (6)        (280,000)            (280,000)
Dehou Fang (6)                           (20,000)             (20,000)
Bilibest Industries Ltd (7)             (370,176)            (336,843)
Wuhu Huaqiang Tour City
  Development Co. Ltd. (5)            (1,197,455)                   -
                                  ---------------  -------------------
                                  $   (2,012,162)  $         (778,349)
                                  ===============  ===================
</TABLE>


                                       15
<PAGE>
(1)  The  amount  due  to Hytech HK represents the payment made on behalf of the
     Company in respect of its administrative expenses incurred outside the PRC.
     These amounts are unsecured, non-interest bearing and have no definite term
     of  repayment.  The  amount due from Hytech HK represents the trade account
     receivable  arising  from  the  sales  of  the  Company's  products.

(2)  Shenzhen Huaqiang Industrial and Trading Co., Ltd. (HIT) is an affiliate of
     SHQ.  This amount represents a payment made by the Company on behalf of HIT
     in  connection  with  one  of the revenue sharing operations that has since
     been  terminated  and  moved  to another location. The amount is unsecured,
     non-interest  bearing  and  has  no  definite  term  of  repayment.

(3)  Chunren  Xie  is  a  30%  minority  shareholder  of  Hytech  US.

(4)  Amounts  due from directors represent cash advances made for business trips
     and  trade  fairs.

(5)  The  amount  due  to  Wuhu  Huaqiang  Tour City Development Co. Ltd. ("Wuhu
     Huaqiang")  was  the  deposits  paid  to the Company in respect of the Sale
     Contract  and  Installation Contract as stated in (b) above. The amount due
     from  Wuhu  Huaqiang represented the balance of advance payment made by the
     Company  related  to  a  study tour on theme parks organized for the senior
     management  of  Wuhu  Huaqiang.

(6)  The  amounts due to Top Link Development Limited ("TLD") and Mr. Dehou Fang
     represent  the  amounts  loaned  to  Intsys  in 2002 for the acquisition of
     Hytech  US  and  other  administrative  expenses  of  the  Company.  TLD is
     controlled by SHQ and Mr. Dehou Fang is a director of Intsys. These related
     party  loans  aggregating  $300,000 are unsecured, non-interest bearing and
     have  no  definite  term  of  repayment.

(7)  The  amounts  due  to  Bilibest  Industries  Limited,  an affiliate of SHQ,
     represent payments made on behalf of the Company for certain administrative
     expenses  incurred  outside  China.  These  amounts  due  are  unsecured,
     non-interest  bearing  and  have  no  definite  term  of  repayment.


(f)  Deposits  at  financial  clearing  centers  operated  by  affiliates
     --------------------------------------------------------------------

See  Note  3.


11.  SEGMENT  REPORTING

The  following segment information is presented in accordance with SFAS No. 131,
"Disclosure  About  Segments  of  an  Enterprise and Related Information," which
requires  companies to report selected segment information 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 which
were assessed by the management separately.  The segment information is based on
the  management  approach adopted in the Company's internal organization and the
reported  revenue  and  operating  income for the measured segments are based on
information  provided  to  the  chief  operating  decision maker for performance
review  and  resources  allocation.

Management  of  the  Company monitors the performance of the operations in three
segments  with  respect to the nature of revenue generated from the sales of its
products  and  services,  which  are  divided  into  three main categories:  (1)
contract  sales  of equipment or facilities used in hi-tech amusement centers or
theme  parks, 3D/4D theaters and the related products; (2) contracts in relation
to  the  design of 4D theater, amusement center, large-size attraction and theme
park  -  newly  developed  business in 2005; and (3) revenue sharing operations.
During  the  three  months  ended  March 31, 2006 and 2005, there was no revenue
recorded  from  segment  in  relation  to  the  design  services.


                                       16
<PAGE>
Each  segment involves different marketing strategies and business techniques as
well  as  different resource allocation.  The Company's chief operating decision
maker  evaluates  performance  based  on EBIT (earnings or loss before interest,
taxes,  impairment  losses,  and  minority  interest).  The  segments related to
contracted  sales,  design  and revenue sharing operations are assessed based on
the  net income after deducting the relevant direct costs of sales, depreciation
expenses,  selling,  administrative  and  management  costs.  Other  corporate
expenses  consist  of  general  administrative  expenses  that  are not directly
related  to  the  operations  of  this  segment  are  classified  to  corporate.

The following tables summarize revenues and EBIT by segment for the three months
ended  March  31,  2006  and  2005.

<TABLE>
<CAPTION>
                                                                March 31, 2006
                                                --------------------------------------------------
                                                                           Revenue
                                                 Contracted    Design      Sharing
                                                   Sales      Services    Operations      Total
                                                ------------  ---------  ------------  -----------
<S>                                             <C>           <C>        <C>           <C>
REVENUE                                         $   692,872   $       -  $   326,714   $1,019,586
                                                ------------  ---------  ------------  -----------
Direct costs of production                          508,243           -            -      508,243
Salaries, wages and related personnel expenses      101,583           -       54,528      156,111
Selling and marketing expenses                      114,953           -       20,400      135,353
Depreciation of fixed assets                          2,990           -      267,188      270,178
                                                ------------  ---------  ------------  -----------
  Total Operating Expenses                          727,769           -      342,116    1,069,885
                                                ------------  ---------  ------------  -----------

LOSS FROM OPERATIONS                                (34,897)          -      (15,402)     (50,299)

Corporate administrative and other expenses               -           -            -      306,796
                                                ------------  ---------  ------------  -----------

EBIT                                                                                     (357,095)

Reconciliation of EBIT to net loss:
  Minority interests                                                                     (122,636)
  Interest (income) expenses, net                                                          32,577
  Income tax expenses                                                                         262
  Equity in loss of an associated company                                                  18,657
                                                                                       -----------
NET LOSS                                                                                 (285,955)
                                                                                       ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                 March 31, 2005
                                                ------------------------------------------------
                                                                           Revenue
                                                 Contracted    Design      Sharing
                                                   Sales      Services   Operations     Total
                                                ------------  ---------  -----------  ----------
<S>                                             <C>           <C>        <C>          <C>
REVENUE                                         $   458,350   $       -  $   216,116  $ 674,466
                                                ------------  ---------  -----------  ----------
Direct costs of production                          197,304           -            -    197,304
Salaries, wages and related personnel expenses      154,144           -       18,554    172,698
Selling and marketing expenses                      130,518           -       22,173    152,691
Depreciation of fixed assets                         14,785           -      166,187    180,972
                                                ------------  ---------  -----------  ----------
  Total Operating Expenses                          496,750           -      206,914    703,664
                                                ------------  ---------  -----------  ----------

LOSS FROM OPERATIONS                                (38,400)          -        9,202    (29,198)

Corporate administrative and other expenses               -           -            -    330,028
                                                ------------  ---------  -----------  ----------

EBIT                                                                                   (359,226)

Reconciliation of EBIT to net loss:
  Minority interests                                                                     13,405
  Interest (income) expenses, net                                                        28,322
  Income tax expenses                                                                        33
  Equity in loss of an associated company                                                     -
                                                                                      ----------
NET LOSS                                                                              $(400,986)
                                                                                      ==========
</TABLE>


                                       17
<PAGE>
The  following  table reconciles each reporting segment's assets to total assets
reported  on  the Company's consolidated balance sheets as of March 31, 2006 and
December  31,  2005,  respectively.

<TABLE>
<CAPTION>
                            March 31, 2006   December 31, 2005
                            ---------------  ------------------
<S>                         <C>              <C>
Contracted sales            $     4,773,377  $        3,299,046
Revenue sharing operations        6,669,080           5,631,597
Shared assets *                   8,240,242          10,766,981
                            ---------------  ------------------
Total Assets                $    19,682,699  $       19,697,624
                            ===============  ==================
</TABLE>

*  Shared  assets  represent assets that provide benefit to all of the Company's
operating  segments.
Shared  assets are not allocated to operating segments for internal reporting or
decision-making  purposes.

There  were  no intersegment revenues generated for the three months ended March
31,  2006  and  2005,  respectively.


12.  MINORITY  INTERESTS

As of March 31, 2006, the Company's minority interest balance was $4,318,461. It
was  comprised  of  the  minority shares of effectively controlled subsidiaries,
including  FDI,  Chongqing FTC and Hytech US. As of March 31, 2005, the minority
interest  balance  was $4,135,831, which was comprised of the minority shares of
Hytech  US  and  FDI,  which  the Company did not own. As of March 31, 2006, the
Company owned a 70% interest in Hytech US, a 94% interest in Chongqing FTC and a
40%  interest  in  FDI.

For  the  three  months  ended March 31, 2006, the Company recorded the minority
interests share of loss of $122,636, as compared to the minority interests share
of  income  of  $13,405  for  the  three  months  ended  March  31,  2005.


                                       18
<PAGE>
ITEM  2.  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  Quarterly  Report on Form 10-QSB for the three months ended March 31, 2006
contains  "forward-looking"  statements within the meaning of Section 27A of the
Securities  Act  of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, including statements that include the words "believes",
"expects",  "anticipates",  "intends",  "plans",  "may",  "will"  or  similar
expressions  that  are  intended  to  identify  forward-looking  statements.  In
addition,  any  statements  that  refer  to  expectations,  projections or other
characterizations  of  future  events or circumstances, including any underlying
assumptions,  are  forward-looking statements.  These forward-looking statements
may  include,  among  others,  statements  concerning the Company's expectations
regarding  its  business,  growth  prospects, sales trends, gross margin trends,
operating  costs,  the availability of funds to finance capital expenditures and
operations,  facility  expansion plans, competition, operating results 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 Quarterly Report on
Form  10-QSB for the three months ended March 31, 2006 involve known and unknown
risks,  uncertainties  and  other  factors  that could the cause actual results,
performance  or  achievements  of  the  Company  to differ materially from those
expressed  in  or  implied  by  the forward-looking statements contained herein.

Each  forward-looking  statement  should  be  read  in context with, and with an
understanding  of,  the  various  disclosures  of concerning the Company and its
business  made  elsewhere  in this Quarterly Report on Form 10-QSB for the three
months  ended  March  31,  2006,  as well as other public reports filed with the
United  States  Securities  and Exchange Commission.  Investors should not place
undue  reliance  on  any  forward-looking  statement  as  a prediction of actual
results  or  developments.  Except  as required by applicable law or regulation,
the  Company  undertakes  no  obligation to update or revise any forward-looking
statement contained in this Quarterly Report on Form 10-QSB for the three months
ended  March  31, 2006, whether as a result of new information, future events or
otherwise.

OVERVIEW

Fantatech,  Inc.,  (the  "Company"), through its subsidiaries and affiliates, is
engaged in the design, development, manufacturing, sale of hi-tech entertainment
and amusement products and the related operations, including 4D theaters, indoor
entertainment  centers  ("FunPlex"),  large  size  outdoor attractions and theme
parks,  each  which are designed and manufactured to provide virtual reality and
simulation  entertainment.  The  Company's  technical team is experienced in the
design  and  manufacturing  of  comprehensive,  integrated,  computerized
entertainment  products.

The  Company  both  manufactures  and  sells hi-tech amusement equipment for its
proprietary  FantaWild  FunPlexes, FantaWild 4D Theaters, large-size attractions
and  FantaWild  Theme Parks. The Company also operates these attractions through
revenue-sharing  operating  arrangements.  The  Company is becoming increasingly
involved  in the development of theme parks since, in the opinion of management,
there  are  attractive  growth  opportunities  for  such ventures in the Chinese
market. The Company provides its products to customers both directly and through
local  partners  in  revenue-sharing  operations.

Most  of  the  Company's  customers  are  located  in  China,  and sales to such
customers  are  generally  on  an open account basis with a deposit collected in
advance. The Company purchases raw materials and certain components from various
suppliers  located  in  China.  The  Company has not encountered any significant
difficulties in obtaining the required raw materials and it does not rely on one
or  more  suppliers  that  cannot  be  easily  replaced.

As  for  revenue-sharing operations, the Company supplies the equipment for each
of  its  4D  theaters,  FunPlex indoor entertainment centers, large size outdoor
attractions  and  theme  parks  (each,  a


                                       19
<PAGE>
"Revenue-Sharing  Center")  through  cooperation  agreements  with local venture
partners  in  different Chinese cities. The Company selects appropriate partners
and sells them a portion of the amusement equipment and machines required to set
up  a  Revenue-Sharing Center. The Company generally provides the balance of the
amusement and entertainment equipment required for the Revenue-Sharing Center to
its local venture partners in exchange for approximately 30% to 50% share of its
gross  revenue. The local partners are responsible for operating, promoting, and
providing  suitable  venues  for  the  Revenue-Sharing Centers.  In general, the
amount  of  equipment  required  to  be  purchased by a local venture partner is
calculated  such  that  the  Company's  gross  margin on the purchased equipment
covers its internal cost for the balance of the required equipment.  The Company
also  considers  the  credibility  of the local partner and the costs associated
with  the operating venues. The Revenue-Sharing Centers therefore require only a
minimal  cash  investment  on  the part of the Company, related primarily to the
provision  of  maintenance  services  after  commencement of the Revenue-Sharing
Center  operations.  With  respect  to  4D  theaters,  the  Company  generally
contributes  all  of  the  equipment  necessary for the theaters while the local
partner provides suitable venues. The Company retains all title to the equipment
it  provides  to  the Revenue-Sharing Centers (except for equipment purchased by
the  venture partner) and may repossess and relocate such equipment if its local
venture  partners  cannot  fulfill  their  obligations  under  the  cooperation
agreements. The Revenue-Sharing Center arrangements generally have terms of five
to ten years, which are approximately the estimated useful life of the equipment
involved.

During  the  three months ended March 31, 2006, one FunPlex indoor entertainment
center  and  one  4D  theatre  commenced operations in the cities of Tianjin and
Changchun,  respectively. As at March 31, 2006, there were a total of twenty-one
Revenue-Sharing  Centers  (thirteen  FunPlex  centers  and  eight  4D  theaters)
operating  in  different Chinese cities (including, in addition to the cities as
mentioned  above,  the  cities  of  Langfang, Taiyuan, Nanning, Yantai, Chifeng,
Shenyang, Zhongshan, Nanjing, Huaian, Zhuhai, Changzhi, Beijing, Dalian, Datong,
Wuhan,  Hangzhou,  Guangzhou  and  Dongguan).  The  first  4D  Ride Dino-Rampage
attraction  built  by the Company commenced its operation in the Beijing FunPlex
amusement center in November 2004. The large-size Dino Rampage attraction in the
Tianjin  FunPlex  was completed in December 2005, and commenced its operation in
February  2006.  As  of March 31, 2006, the Company has materially completed the
building  of  a  theme  park  with  ten  large  size  attractions in the city of
Chongqing,  in  which the Company has a revenue-sharing interest.  The Chongqing
theme  park  commenced  operations  in  late  April  2006.  A Floating Sphere 4D
theatre,  "Sky  Trailer",  in Beijing was put into operation in late April 2006.

During the three months ended March 31, 2006, the Company commenced construction
of  two  large-sized  theme  parks  located  in  the cities of Wuhu and Shantou,
respectively. The Company expects to complete the theme park located in the city
of  Shantou  by  the  end  of 2006, while the Wuhu Theme Park is scheduled to be
completed  by  the  middle  of  2007.

The unaudited condensed consolidated financial statements of the Company include
the accounts of the Company and its wholly-owned and majority-owned subsidiaries
as  well  as  the  controlled  associated  entities.  All  material intercompany
balances  and  transactions  are  eliminated  on consolidation. The consolidated
financial  statements  have  been prepared in accordance with generally accepted
accounting  principles  in  the  United  States  of America and are reported and
presented  in  U.S.  Dollars  ("$"  or  "USD").

All  of the Company's production and most of its business operations are located
in  China and are conducted in Renminbi ("RMB"), which is the currency of China.
Prior  to  July  21,  2005,  the  exchange rate remained stable at approximately
US$1.00  to  RMB  8.30.  On  July  21,  2005, the People's Bank of China ("PBC")
announced  that  RMB  would no longer be valued with respect to the U.S. Dollar,
but  against  a 'basket' of foreign currencies under a managed floating exchange
rate  regime, and the new official parity exchange rate of USD to RMB was set at
US$1.00  to  RMB  8.11,  to  be  allowed to float within a band of +-0.3 percent
around  the  central  parity  rate  as  published  by  the  PBC  daily.

For the three months ended March 31, 2005, the Chinese financial statements were
translated from RMB to USD at a single exchange rate of US 1.00 to RMB 8.3 since
the  exchange  rate  remained  fixed


                                       20
<PAGE>
during  such  periods. As of December 31, 2005, the Chinese financial statements
were  translated  from RMB to USD at the new prevailing closing exchange rate of
US  1.00  to  RMB  8.07.  For the three months ended March 31, 2006, the Chinese
financial  statements  were  translated  from  RMB  to USD at the new prevailing
closing  exchange  rate.  For  the  translation of assets and liabilities (other
than equity and reserves), the published closing exchange rate of US 1.00 to RMB
8.02  was  applied, while for revenues, expenses, gains and losses, the weighted
average  rate  of  US  1.00  to  RMB 8.04 for the period was used. The resulting
translation  gains  or  losses  were  recorded  as  a  separate  component  of
stockholders'  equity.

CRITICAL  ACCOUNTING  POLICIES:

The  discussion and analysis of the Company's financial condition and results of
operations  is  based  upon  the  Company's  unaudited  condensed  consolidated
financial  statements,  which  have  been prepared in accordance with accounting
principles  generally  accepted in the United States of America. The preparation
of these financial statements requires the use of estimates and assumptions that
affect  the  reported  amounts  of  assets and liabilities and the disclosure of
contingent  assets  and  liabilities at the date of the financial statements and
the  reported  amount  of  revenues  and  expenses  during the reporting period.
Management  periodically  evaluates  the estimates and judgments made, including
those  related  to  revenue  and cost recognition, inventories, income taxes and
impairment  of  assets.  Management  bases  their  estimates  and  judgments  on
historical  experience and on various factors that are believed to be reasonable
under  the  circumstances.  Actual  results may differ from these estimates as a
result  of  different  assumptions  or  conditions.

The following critical accounting policies affect the more significant judgments
and  estimates  used  in  the  preparation  of the Company's unaudited condensed
consolidated  financial  statements.

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

The  Company  principally derives its revenue from (1) the sale of entertainment
and  amusement  products,  (2)  long-term  contracts  related  to  designing and
manufacturing  and  assembling  of  4-D  screen  system,  simulation  amusement
equipment,  large-size  attractions,  and  theme  parks  and  (3) admission fees
generated  from  revenue  sharing  operations.

Revenue  is  recognized  when  the  following  four  criteria  are  met:

1)   persuasive  evidence  of  an  arrangement  exists,
2)   delivery  has  occurred  or  services  have  been  rendered,
3)   the  price  is  fixed,  and
4)   collectibility  is  reasonably  assured.

(1)  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, installed and tested.  Revenue is
adjusted  for  any reduction in sales due to change in product specifications or
sales  discounts  offered  to  the  customers.

(2)  Long-term  construction  contract  revenue  and  costs

Long-term  contract revenues 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 the
contract  can  be  estimated  reliably. The stage of completion of a contract is
determined  based  on the proportion of costs incurred at the balance sheet date
compared  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  contract  revenue.

Costs  attributable  to  unpriced change orders are treated as costs of contract
performance  in  the  period


                                       21
<PAGE>
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, those costs
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.

During  the  process  of  recognizing  the  revenue  generated from the sales of
products  as  described  in  (1)  and  (2)  above, the Company has evaluated the
criteria  for  multiple  deliverables  in  using separate unit of accounting for
identifiable  delivered  items  in  accordance  with  EITF  No.  00-21  "Revenue
Arrangements  with  Multiple Deliverables", and concluded that the amusement and
entertainment  products  designed,  manufactured and installed by the Company do
not  meet the stand-alone test since no part of the products will be or are sold
in  the market by the Company or by other similar vendors.  There is no reliable
evidence of fair value of the undelivered items and the contracts for sales have
no  general  right  of  return  relative  to  the  delivered  items.

In  addition,  the Company has evaluated the scope and applicability of SOP 97-2
"Software  Revenue  Recognition"  and  determined that the revenue earned on the
Company's  amusement  products containing software is incidental to the products
as  a whole.  The Company does not engage in businesses of licensing, selling or
leasing,  or  otherwise  marketing  computer  software.  The  software  does not
require  significant  production,  modification and customization and is not the
focus of the marketing efforts, nor is it what the customer perceives to obtain.
The post-contract services associated with the Company's products do not involve
multiple  element  arrangements  and the estimated cost for the one year product
warranty  is  insignificant,  and  there are no upgrades/enhancements offered to
customers currently or historically.  Accordingly, the Company believes that its
revenue  requires  no  software  revenue  recognition.

The  Company considers that profits on contracts are derived from its efforts in
all  phases  of  operations, including areas such as procurement and management.
Costs  incurred  closely  relate  to  contract  performance  and  are  therefore
considered  the  best  measure  to  determine  recognition  of  contracted sales
revenue.  The  Company  periodically  reviews  its  calculation  methodology  to
evaluate  the  accuracy  of  the  results  of  the  input  measures.

(3)  Revenue  generated  from  revenue  sharing  operations

Income  is recognized based on the agreed percentage of revenue when the revenue
from  Revenue-Sharing  Centers becomes due and receivable.  The Company recorded
$326,714  and $216,116 in revenue from its Revenue-Sharing Centers for the three
months  ended  March  31,  2006  and  2005,  respectively.

Asset  Impairment:
------------------

The  Company  reviews its long-lived assets, including the production facilities
and  the  amusement  and  entertainment  equipment  used  in the Revenue-Sharing
Centers,  as  well as identifiable intangibles for impairment whenever events or
changes  in  circumstances indicate that the carrying amount of an asset may not
be  recoverable  based  upon undiscounted cash flows expected to be generated by
such  assets  over their expected useful lives. If such assets are considered to
be  impaired, the impairment to be recognized is measured by the amount by which
the  carrying  amount of the assets exceeds the fair value of the assets. During
the  three  months  ended  March  31,  2006  and  2005, no impairment charge was
recorded.

Changein  Methodof  Accountingfor  Inventory  Valuationfor  Low  Value  Items
-----------------------------------------------------------------------------

On  January  1,  2006,  the  Company elected to change accounting method for low
value


                                       22
<PAGE>
inventory/stock (i.e. small parts, bolt and nut and consumables) to the weighted
average  method,  whereas  in  all  prior  years  inventory was valued using the
first-in,  first-out  ("FIFO") method.  Management believes that the adoption of
new  accounting  principle  will  enhance  operation  efficiency  and  resource
utilization.  Therefore,  the  new  accounting  method  of  weighted  average is
preferable  to  the  FIFO  method  in  relation  to  low  value  inventory.

Based  on  the estimated average price change within different categories of low
value  stock,  the  adoption  of  the  accounting principle would reduce the net
income  for  the year ended December 31, 2005 by $4,293 or 0.35%, while reducing
the net loss for the three months ended March 31, 2005 $352 or 0.09%.  Potential
effect  of  adopting  new  accounting  principle  would reduce the inventory and
retained  earnings  as  of December 31, 2005 by $4,293.  SFAS No. 154  demands a
retrospective  application  but  the  Company  did  not  do  that  because  of
immateriality.


CONSOLIDATED RESULTS OF OPERATIONS

Three months ended March 31, 2006 and 2005:

The  unaudited  condensed  consolidated  statements  of operations for the three
months  ended  March  31, 2005 have been adjusted in order to provide comparison
for  segment performance. This adjustment had no effect on the operating results
for  the  period  presented.

REVENUE

For the three months ended March 31, 2006, net sales were $1,019,586 as compared
to  net  sales  of  $674,466  for  the  three  months  ended  March  31,  2005.
Approximately  32.0%  and  32.0%  of the net sales during the three months ended
March 31, 2006 and 2005, respectively, were from the revenues generated from the
revenue  sharing  operations.

During  the three months ended March 31, 2006, net contracted sales increased by
$234,522  or  51.2%  to  $692,872,  as compared to $458,350 for the three months
ended  March  31,  2005.  This  was  primarily  due  to  the increase in revenue
recognized from the contract for the development of the Chongqing Theme Park. In
view  of  the  Company's  current sales contracts, especially in relation to the
theme parks in Wuhu and Shantou, respectively, and the gradual completion of the
these  projects,  the  Company  expects that the revenue to be recognized as net
contracted  sales  will  increase  during  the  remainder  of  2006.

During the three months ended March 31, 2006, the Company recorded revenues from
its  Revenue-Sharing  Centers  totaling $326,714 as compared to $216,116 for the
three  months  ended  March  31,  2005,  representing an increase of $110,598 or
51.2%.  The increase was mainly attributable to the increased numbers of FunPlex
amusement  centers (from ten to thirteen) and 4D theaters (from two to eight) as
at  March  31,  2006, as compared to the number of Revenue-Sharing Centers as at
March  31,  2005.  With  the scheduled opening of the theme park in Chongqing in
late  April  2006,  the  Company  anticipates  that revenue from Revenue-Sharing
Centers  will  continue  to  increase.

GROSS  PROFIT

For  the  three  months ended March 31, 2006, total gross profit was $170,285 or
16.7% of total net sales, as compared to total gross profit of $160,204 or 23.8%
of total net sales for the three months ended March 31, 2005. Net of the revenue
from  the  Revenue-Sharing Centers, gross profit margin decreased by 4.7% due to
difference  in  contract  profitability.  It  is  anticipated  that  due  to the
contracted  lower  profit margin from the Equipment Sale Contract related to the
Wuhu  Theme  Park,  the  gross profit may suffer a declining pressure during the
construction  period. The Company, however, has obtained the right to receive 8%
of  the  theme  park's  Distributable  Income  for  a  period  of  15 years from
commencement  of  theme  park  operation.  (See  Note  10  (b)  to the Condensed
Consolidated  Financial Statements)


                                       23
<PAGE>
Cost  of  revenue  in  relation  to  contracted  sales  mainly  consisted of raw
materials,  electronic  parts,  factory consumables, sub-contracting charges and
related  supplies  purchased  for  fabrication  and  assembling of the amusement
equipment,  factory  rent,  workers  wages and salaries, and the depreciation of
production facilities. Costs to revenue-sharing operations included depreciation
for  the  fixed  assets  used in the operations, maintenance costs, salaries for
engineers,  and  the  associated  traveling  and  lodging  expenses.

During  the  three  months  ended  March  31,  2006,  total  gross  profit  from
Revenue-Sharing  Centers  was  $12,807 or 3.9% of the total segment revenues, as
compared to total gross profit of $34,626 or 16.0% of the total segment revenues
for  the  three months ended March 31, 2005. The decrease in gross profit margin
was attributable to the decrease in revenue from some of the Centers despite the
increase  in  the  number  of  Revenue-Sharing  Centers.  As  most  of  the
Revenue-Sharing Centers are relatively new and have been operating for less than
two years (about half of the Revenue-Sharing Centers have been operated for less
than one year), these centers are still subject to fluctuation in the numbers of
patrons  visit  and thus admission revenue, especially for those Revenue-Sharing
Centers  located  in  the  newly  developed  business district which in turn are
subject  to  temporary lower-than-normal flow of shoppers and patrons. The local
partners  of  the  Revenue-Sharing  Centers  are  adjusting  and  fine-tuning
continuously  the promotional and marketing strategies in order to stimulate and
maintain  the local demand for the respective amusement Revenue-Sharing Centers.

In  addition,  since  November  2005,  the  operation  of  the FunPlex center in
Dongguan  was temporarily suspended due to the local partner's failure to secure
a  valid  license  from the local cultural department.  It is estimated that the
approval  process  may  require approximately nine months.  In the meantime, the
Company  has  taken  possession of certain high value equipment from FunPlex for
immediate  use  in  other sales or cooperation contracts, while the depreciation
for  the  remaining equipment in the FunPlex continued and was charged to costs.

The  Company anticipates that the gross profit from Revenue-Sharing Centers will
improve  gradually with more efficient management and operations of the existing
FunPlex amusement centers due to economies of scale and increased experience. In
view of the gradual opening of various theme parks located in Chongqing, Shantou
and  Wuhu  scheduled  in 2006 and 2007, the Company anticipates that the revenue
from  theme  park  operations  will  eventually  increase  due to their relative
large-size  operation.

SELLING  AND  MARKETING  EXPENSES

Selling and marketing expenses increased by $31,182 or 16.5% to $220,584 for the
three  months ended March 31, 2006, as compared to $189,402 for the three months
ended  March  31,  2005.  This  was  primarily due to the increase in marketing,
promotional,  sales  representative  offices  and exhibition related expenses in
2006,  as  a  result  of  expanded operations. The Company plans to continue its
marketing  and  promotional  efforts in order increase its business in China and
also  in  overseas  markets.

GENERAL  AND  ADMINISTRATIVE  EXPENSES

General  and  administrative expenses ("G&A Expenses") consist of the management
office  operating  costs  of  SDCL,  FDI, Hytech US, Chongqing FTC and the costs
associated  with the operation of the Company's executive offices, and the legal
and  accounting costs associated with the operation of a public company. For the
three months ended March 31, 2006, G&A Expenses decreased slightly by $23,202 or
6.7%  to  $322,048  as  compared  to  the G&A Expenses of $345,250 for the three
months  ended  March  31,  2005.

LOSS  FROM  OPERATIONS

Loss from operations for the three months ended March 31, 2006 decreased by $815
to  $373,633,  as compared to the loss from operations of $374,448 for the three
months ended March 31, 2005. The slight decrease in operating loss was primarily
attributable  to  the  slight  increase  in  gross  profit  and


                                       24
<PAGE>
decrease  in  G&A  Expenses  offset  by  the  increase  in selling and marketing
expenses  during  the  three  months  ended  March  31,  2006.

OTHER  INCOME  (EXPENSE)

For  the three months ended March 31, 2006, the Company recorded interest income
of  $2,014  as compared to $3,986 for the three months ended March 31, 2005, due
primarily  to  the  decrease  in  the  average bank deposit balance in 2006 as a
result of the increase in resources allocated to projects under construction and
Revenue-Sharing  Centers.

For  the  three  months  ended  March  31, 2006, interest expense was $34,591 as
compared  to  $32,308  for  the  three  months  ended  March  31,  2005.

Other  income  was $18,098 for the three months ended March 31, 2006 as compared
to  other  income  of  $15,222  for  the  three  months  ended  March  31, 2005.

MINORITY  INTERESTS

During  the three months ended March 31, 2006, the Company recorded the minority
interests'  share  of  loss  of $122,636, as compared to the minority interests'
share  of  income  of  $13,405  for the three months ended March 31, 2005. As of
March  31,  2006,  the  minority  interests  represented  effectively  the  60%
shareholding  in  FDI,  30%  in  Hytech  US  and  6%  in  Chongqing  FTC.

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. Fantatech
Inc.  and  Hytech  US  are  both  Delaware  corporations  and are subject to the
corporation  income  taxes  of the United States of America. Intsys and Megabase
are  not  liable  for  income  taxes  in BVI. The Company's Chinese subsidiaries
(SDCL)  and  associates  (FDI)  located  in  the City of Shenzhen are subject to
Enterprise  Income  Tax  ("EIT")  in China at a rate of 15% on net income, while
Chongqing  FTC is subject to an EIT rate of 33%. Based on the local tax rules in
Shenzhen,  SDCL  was  entitled  to  a tax holiday for the first two years of its
operations  (years  1999 and 2000) and a 50% reduction of the rate for the third
through  eighth  years  (years  2001  to  2006)  of  operations  due to its high
technology  content  of  businesses.  The provision for taxes on earnings of the
Chinese subsidiaries, calculated based on the prevailing accounting standards in
China,  for  the  three  months ended March 31, 2006 and 2005 were $262 and $33,
respectively.

EQUITY  LOSS  RELATED  TO  AN  ASSOCIATED  COMPANY

For  the  three months ended March 31, 2006, the Company recorded a $18,657 loss
reflecting  the Company's share of the net loss incurred by Tianjin LFK (limited
to the total amount of investment) during the three months ended March 31, 2006.
(See  Note  7  to  the  Condensed  Consolidated  Financial  Statements.)

NET  LOSS

The Company recorded a net loss of $285,955 for the three months ended March 31,
2006  as compared to a net loss of $400,986 for the three months ended March 31,
2005.  The  reduction  in  net  losses  sustained is primarily the result of the
increase  in  the share of losses by minority interests, offset partially by the
increase  in  the  equity  loss  of  an  associated  company.


FINANCIAL  CONDITION,  LIQUIDITY  AND  CAPITAL  RESOURCES

General
-------


                                       25
<PAGE>
The Company anticipates that, based on current plans and assumptions relating to
its  existing operations, its projected cash flow from operations, combined with
cash  on  hand, bank lines of credit, and other external credit sources, and the
credit  facilities  provided  by  affiliates  or  related parties, its financial
resources  are  sufficient to support the Company's working capital requirements
for  its  planned  operations  for the next twelve months, although there may be
temporary  lower  level  of  working  capital  occurred during the course of its
business.  Depending  on  the  future  rate  of  growth,  the  Company  may seek
additional  capital  in  the  future  to  support  its  expansion in operations.

In view of the continue growth of it's operations, the Company will continue its
efforts  in  arranging additional external short term bank loans for its working
capital  requirements.  The  Company is also monitoring the process of invoicing
its  customers  for  project  progress  payments in order to reduce the carrying
amounts  of  work  in  progress  and the costs incurred in excess of billings on
uncompleted  contracts.  Based  on  management's  evaluation  of  the  Company's
short-term  cash  requirements  and  liquidity resources, management anticipates
that  the  pressure  on the Company's cash flows will not be substantial for the
next  twelve  months. In addition, the projected progress payment related to the
sale  of  equipment to the theme parks in Wuhu and Shantou, respectively, should
provide  a stable source of working capital for the Company during the remainder
of  2006.

Operations
----------

During the three months ended March 31, 2006, the Company's operations used cash
resources  of  $575,922,  as  compared  to  the  net  cash provided by operating
activities  of  $403,354  for the three months ended March 31, 2005.  During the
three  months  ended  March  31,  2006,  the Company's cash balance decreased by
$1,922,336, to $443,585 at March 31, 2006, as compared to $2,365,921 at December
31,  2005.  Taking  into  account  the  cash  deposited at affiliates' financial
clearing  centers  ("FCCs")  (defined  in  Note  3 to the Condensed Consolidated
Financial  Statements)  the Company's total cash balance decreased by $2,244,064
to  $443,585  at March 31, 2006, as compared to $2,687,649 at December 31, 2005.
During  the three months ended March 31, 2006, the Company's net working capital
decreased  by  $1,733,951,  to  $289,959  at  March  31,  2006,  as  compared to
$2,023,910  at  December 31, 2005, and the Company had a current ratio of 1.03:1
at  March  31,  2006, as compared to 1.24:1 at December 31, 2005, representing a
decrease  in  total  current  assets  relative  to the total current liabilities
during  the  three  months  ended  March  31,  2006.

The  decrease  in  the  Company's  net  working capital was due primarily to the
Company's  continuing  investment  in  fixed assets for Revenue Sharing Centers,
including  4D theaters, FunPlex centers and theme parks. During the three months
ended  March  31,  2006,  the  Company  recorded  an increase in fixed assets of
approximately $1,300,000 for revenue sharing operations, which largely accounted
for the decrease in current assets and net working capital, and in turn affected
the  Company's  current  ratio  as  of  March  31,  2006.

The  Company  has  tightened  its criteria with respect to partner selection for
establishment  of additional revenue sharing operations in order to make sure it
has  sufficient  resources to administer its current revenue sharing centers and
to  complete  the contracts on hand, in particular, the contracts related to the
two  theme  parks  in Wuhu and in Shantou. Potential partners without self-owned
commercial  property at a prime city location for the cooperation venue will not
be considered. This is to avoid the possible disputes that may arise between the
local  partner  and  the  landlord,  which may cause the Company to relocate its
equipment  to other suitable sites. With the scheduled commencement of the theme
park  in  Chongqing  in late April 2006 and the Shantou theme park by the end of
2006,  together with the revenue generated from the contracts on hand as well as
revenue  sharing centers, the Company expects that it's net working capital will
gradually  improved  in  2006  and  thereafter.

Trade receivables, net of allowance for doubtful debts, decreased by $658,281 or
33.9% to $1,281,153 at March 31, 2006, as compared to $1,939,434 at December 31,
2005,  which  was  attributable  to  the  repayment  by customers of outstanding
amounts  and  the  difference  in  timing  of  invoicing in the normal course of
business. The Company provided a general allowance for doubtful debts of $37,872
and  $32,027  as  at  March  31,  2006  and  December  31,  2005,  respectively.


                                       26
<PAGE>
As  of  March  31,  2006,  costs and estimated earnings in excess of billings on
uncompleted contracts increased by $215,845 or 29.9% to $938,371, as compared to
$722,526  at  December  31,  2005,  which  was  attributable  to the increase in
resources  utilized  in the manufacturing of the equipment for the theme park in
Chongqing.  The  billings in excess of costs and estimated earnings increased by
$72,029  or  11.8%  to  $680,133  at  March 31, 2006, as compared to $608,104 at
December  31,  2005.

Deposits and prepayments made by the Company increased by $1,139,983 or 70.9% to
$2,747,708  at  March  31, 2006, as compared to $1,607,725 at December 31, 2005,
due  to  the increase in materials and sub-contracts involved for projects under
construction.

During  the  three  months  ended  March  31, 2006, the total amount of accounts
payable, accrued liabilities and other payables decreased by $1,069,609 or 39.0%
to  an  aggregate of $1,670,618, as compared to $2,740,227 at December 31, 2005,
which  was  due  primarily to the decrease in accrued amounts related to tax and
salaries.

The  amounts  receivable  from related parties decreased by $139,286 or 71.9% to
$54,435  at  March  31,  2006,  as compared to $193,721 at December 31, 2005 due
primarily  to  the  repayment  of  a  trade  receivable by Hytech HK. The amount
payable  to  related  parties increased by $1,223,813 or 158.5% to $2,012,162 at
March  31,  2006, as compared to $778,349 at December 31, 2005, which was mainly
attributable  to  the deposit received from Wuhu Huaqiang regarding its purchase
of  equipment  for  the  theme  park  in  Wuhu.

Investing
---------

For  the  three months ended March 31, 2006, the Company's investment activities
used  cash  resources  of  $1,395,463,  as  compared  to  $357,613  cash used in
investment  activities  for  the  three  months  ended  March  31,  2005.

Additions  to  property, plant and equipment during the three months ended March
31,  2006  aggregated  $1,355,264, of which $1,315,725 was for investment in the
Company's  Revenue-Sharing  Centers.  In  addition,  there  was  an  increase in
construction in progress of $361,927 or 12.3% at March 31, 2006 to $2,938,447 as
compared  to  $2,576,520  at  December  31, 2005 as the Company has devoted more
resources to the new Revenue-Sharing Centers. At March 31, 2006, the Company had
capital  expenditure  requirements  of  approximately  $6,200,000  in  order  to
complete  the  contracts  on hand for the coming six to nine months. The Company
believes  that  it  will  be  able to fund expected capital expenditures through
internal  cash  flow  and  external  resources.

Financing
---------

During  the three months ended March 31, 2006, short-term bank loan increased by
$16,384  to $2,494,699, as compared to $2,478,315 as of December 31, 2005, which
was  purely due to the effect of exchange rate change. The Loan is unsecured and
accrues  interest  at  a  rate of 5.58% per annum.  The short-term bank loan was
guaranteed  by  SHQ.

As at March 31, 2006 and December 31, 2005, the Company maintained cash deposits
of  $0  and $321,728 at the FCCs operated by SHT and SHQ, respectively. The cash
deposits  at  the  FCCs  can  be  withdrawn  any  time without any restrictions.

As at March 31, 2006 and December 31, 2005, the Company had no off-balance sheet
arrangements.


ITEM 3.  CONTROLS  AND  PROCEDURES

(a)  Evaluation  of  Disclosure  Controls  and  Procedures


                                       27
<PAGE>
Members  of  the  Company's  management,  including  its principal executive and
financial officers, have evaluated the effectiveness of the Company's disclosure
controls  and  procedures,  as  defined  by  paragraph (e) of Exchange Act Rules
13a-15  or  15d-15,  as of March 31, 2006, the end of the period covered by this
report.  Based  upon  that  evaluation,  the  Company's  principal executive and
financial  officers  have  concluded  that the Company's disclosure controls and
procedures  are  effective.

(b)  Changes  in  Internal  Controls

There were no changes in the Company's internal control over or in other factors
identified in connection with the evaluation required by paragraph (d) of
Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarterly period
ended March 31, 2006 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.


                                       28
<PAGE>
PART II - OTHER INFORMATION


ITEM 1.  LEGAL  PROCEEDINGS

Not applicable.

ITEM 2.  UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF  PROCEEDS

Not applicable.

ITEM 3.  DEFAULTS  UPON  SENIOR  SECURITIES

Not applicable.

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

Not applicable.

ITEM 5.  OTHER  INFORMATION

Not applicable.

ITEM 6.  EXHIBITS

A  list of the exhibits required to be filed as part of this report is set forth
in  the  Index  to  Exhibits,  which  immediately precedes such exhibits, and is
incorporated  herein  by  reference.


                                       29
<PAGE>
                                   SIGNATURES


Pursuant  to  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)


Date:  May  12,  2006                            By: /s/ GUANGWEI LIANG
                                                     ------------------
                                                     Guangwei  Liang
                                                     Chief Executive Officer


Date:  May  12,  2006                            By: /s/ GARY LUI
                                                     ------------------
                                                     Gary  Lui
                                                     Chief Financial Officer


                                       30
<PAGE>
<TABLE>
<CAPTION>
                                Index to Exhibits


Exhibit
 Number   Description of Document
--------  -----------------------
<S>       <C>
3.1(i)    Certificate of Incorporation, as amended (1)
3.1(ii )  Bylaws of Registrant (2)
10.1      Equipment  Sale  Contract  dated  January 24,  2006,  by and  between  Shenzhen
          Digitainment Co., Ltd.  and Wuhu City  Huaqiang Tour  City Development Co., Ltd.(3)
10.2      Equipment Installation Contract dated January 24, 2006, by and between Shenzhen
          Digitainment Co., Ltd.  and Wuhu City  Huaqiang Tour  City Development Co., Ltd. (3)
18.1      Letter on change in accounting principles dated May 12, 2006 issued by the Company's
          independent accountant.
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 the Chief Executive Officer pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002
32.2      Certification by the Chief Financial Officer pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002
</TABLE>

(1)  Incorporated by Reference from Company's report on Schedule 14C on December
     30,  2002.

(2)  Incorporated  by  Reference  from Company's Annual Report on Form 10KSB for
     the  year  ended  March  31,  1999.

(3)  Filed  as  an  Exhibit  to  the  Company's Current Report on Form 8-K filed
     January  25,  2006.


                                       31