FORM 10-QSB

(Mark One)

|X|      QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
ACT OF 1934.
For the quarterly period ended September 30, 2003

OR

|_|      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.
                 (Name of Small Business Issuer in Its Charter)

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

 418-A Cloverleaf Drive, Baldwin Park,
 Los Angeles, California, CA91706, USA                     CA91706
----------------------------------------    ------------------------------------
(Address of Principal Executive Offices)                 (Zip Code)

                                 (626) 820-1090
                   ------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

                 Flat K, 12/F., International Industrial Centre,
                     2-8 Kwei Tei St., Fo Tan, Shatin, N.T.,
                                    Hong Kong

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


         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the Company was required to file such reports),  and (2) has
been subject to such filing requirements for past 90 days.

Yes   X     No
   -------    -------

                      APPLICABLE ONLY TO CORPORATE COMPANY

         State the number of shares  outstanding of each of the issuer's classes
of common equity,  as of the latest  practicable  date. As of September 30, 2003
there were 40,192,063 shares outstanding

         Transitional Small Business Disclosure Format (check one):

Yes         No   X
   -------    -------



<PAGE>

                                 FANTATECH, INC.
                                   FORM 10-QSB
                                      INDEX

                                                                            Page

                   PART I - FINANCIAL INFORMATION

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

Item 2.     Management's Discussion and Analysis or Plan of Operation.........8

Item 3.     Controls and Procedures..........................................14

                           PART II - OTHER INFORMATION

Item 2.     Changes in Securities............................................15

Item 6.     Exhibits and Reports on Form 8-K.................................15

SIGNATURES  .................................................................15



<PAGE>
<TABLE>
<CAPTION>

                         PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

                        FANTATECH, INC. AND SUBSIDIARIES
   CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
                             (UNITED STATES DOLLARS)

                                                                         September 30,     December 31,
                                                                              2003             2002
                                                                          (Unaudited)       (Audited)
                                                                         -------------    -------------
<S>                                                                      <C>              <C>
Current assets
   Cash                                                                  $     864,789    $   3,290,249
   Trade receivables, net of allowance of $53,220 and $25,036 for
     September 30, 2003 and December 31, 2002 respectively                     412,916          765,576
   Related party receivables                                                    62,518          137,457
   Inventories                                                               2,219,915        1,579,544
   Costs and estimated earnings in excess of billings on uncompleted
     contracts                                                                 913,707          594,791
   Deposits and prepayments                                                    805,085          408,398
   Other receivables                                                           113,818           32,215
                                                                         -------------    -------------

Total current assets                                                         5,392,748        6,808,230

Equity investment - Fantatech Development, Inc.                              2,891,566             --
Property, plant and equipment, net                                             553,496          537,959
Trademarks                                                                     170,950          170,950
                                                                         -------------    -------------

Total assets                                                             $   9,008,760    $   7,517,139
                                                                         =============    =============

Current liabilities
   Short-term bank loan                                                  $        --      $   2,168,675
   Short-term loans-unsecured                                                  300,000          300,000
   Billings on uncompleted contracts in excess of costs and estimated
     earnings                                                                     --               --
   Related party payable - Fantatech Development, Inc.                       2,891,566             --
   Other related party payables                                                351,205             --
   Accounts payable                                                            245,441          236,235
   Accrued liabilities and other payables                                    1,171,360        1,088,890
                                                                         -------------    -------------

Total current liabilities                                                    4,959,572        3,793,800
                                                                         -------------    -------------

Minority interest                                                            1,452,766        1,326,833
                                                                         -------------    -------------

Stockholders' equity
   Preferred stock; $0.001 par value; 10,000,000 shares authorized; no
     shares issued and outstanding                                                --               --
   Common stock; $ 0.001 par value; 100,000,000 shares authorized,
     40,192,063 shares issued and outstanding                                   40,192           40,192

   Additional paid-in capital                                                2,865,278        2,865,278
   Retained deficit                                                           (454,395)        (654,311)
   Reserve funds                                                               145,347          145,347
                                                                         -------------    -------------

Stockholders' equity                                                         2,596,422        2,396,506
                                                                         -------------    -------------

Total liabilities and stockholders' equity                               $   9,008,760    $   7,517,139
                                                                         =============    =============
</TABLE>

See notes to consolidated financial statements



                                       1
<PAGE>

                        FANTATECH, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                             (UNITED STATES DOLLARS)

                                                       2003            2002
                                                   ------------    ------------
SALES                                              $  1,317,971    $  1,751,240

COST OF SALES                                          (815,404)     (1,514,574)
                                                   ------------    ------------

GROSS PROFIT                                            502,567         236,666

SELLING AND MARKETING EXPENSES                          (91,446)        (81,977)

GENERAL AND ADMINISTRATIVE EXPENSES                    (182,787)       (108,650)
                                                   ------------    ------------

INCOME FROM OPERATIONS                                  228,334          46,039

OTHER INCOME (LOSS)
   Loss on disposition of fixed assets                     (955)           --
   Other income                                           5,814            --
   Interest expense                                     (27,998)         (8,617)
   Interest income                                       16,744           2,385
                                                   ------------    ------------

INCOME BEFORE TAX PROVISION                             221,939          39,807

INCOME TAX EXPENSE                                       (8,241)         (7,339)
                                                   ------------    ------------

INCOME BEFORE MINORITY INTEREST                         213,698          32,468

MINORITY INTEREST                                       (56,320)        (11,230)
                                                   ------------    ------------

NET INCOME                                         $    157,378    $     21,238
                                                   ============    ============


WEIGHTED AVERAGE SHARES OUTSTANDING
   BASIC AND DILUTED                                 40,192,063      40,000,000
                                                   ============    ============

BASIC AND DILUTED NET INCOME PER SHARE             $       0.00    $       0.00
                                                   ============    ============

Note:    The number of weighted average shares outstanding at September 30, 2002
         is the  amount of  shares  issued  for the  reverse  merger  and is for
         comparison purposes only.

See notes to consolidated financial statements


                                       2
<PAGE>

                        FANTATECH, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                             (UNITED STATES DOLLARS)

                                                       2003            2002
                                                   ------------    ------------

SALES                                              $  3,225,148    $  4,209,553

COST OF SALES                                        (1,988,368)     (3,351,360)
                                                   ------------    ------------

GROSS PROFIT                                          1,236,780         858,193

SELLING AND MARKETING EXPENSES                         (224,557)       (275,503)

GENERAL AND ADMINISTRATIVE EXPENSES                    (612,017)       (294,780)
                                                   ------------    ------------

INCOME FROM OPERATIONS                                  400,206         287,910

OTHER INCOME (LOSS)
   Loss on disposition of fixed assets                   (3,526)           --
   Other income                                           8,496            --
   Other expenses                                           (34)           --
   Interest expense                                     (92,912)         (9,386)
   Interest income                                       36,869           3,631
                                                   ------------    ------------

INCOME BEFORE TAX PROVISION                             349,099         282,155

INCOME TAX EXPENSE                                      (23,250)        (18,419)
                                                   ------------    ------------

INCOME BEFORE MINORITY INTEREST                         325,849         263,736

MINORITY INTEREST                                      (125,933)        (91,226)
                                                   ------------    ------------

NET INCOME                                         $    199,916    $    172,510
                                                   ============    ============


WEIGHTED AVERAGE SHARES OUTSTANDING
   BASIC AND DILUTED                                 40,192,063      40,000,000
                                                   ============    ============

BASIC AND DILUTED NET INCOME PER SHARE             $       0.00    $       0.00
                                                   ============    ============

Note:    The number of weighted average shares outstanding at September 30, 2002
         is the  amount of  shares  issued  for the  reverse  merger  and is for
         comparison purposes only.

See notes to consolidated financial statements



                                       3
<PAGE>
<TABLE>
<CAPTION>

                        FANTATECH, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                             (UNITED STATES DOLLARS)

                                                                             2003           2002
                                                                         -----------    -----------
<S>                                                                      <C>            <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income                                                               $   199,916    $   172,510
Adjustments to reconcile net income to net cash provided by
   operating activities:
   Depreciation expense                                                      259,411        427,267
   Loss on disposition of fixed assets, net                                    3,526           --
   Minority interest expense                                                 125,933         91,226
Changes in operating assets and liabilities:
   Decrease in trade receivables                                             352,660         56,159
   (Increase) decrease in related party receivables                           74,939        (22,883)
   Increase in inventories                                                  (640,371)       (80,467)
   (Increase) decrease in costs and estimated earnings in excess of
     billings on uncompleted contracts                                      (318,916)       186,939
   Increase in deposits and prepayments                                     (396,687)      (149,276)
   Increase in other receivables                                             (81,603)       (48,394)
   Increase in billings in excess of costs and estimated earnings on
     uncompleted contracts                                                      --           88,062
   Increase in trade and related party payable and accrued liabilities     3,334,448         92,552
                                                                         -----------    -----------

Net cash provided by operating activities                                  2,913,256        813,695
                                                                         -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Capital expenditures                                                     (278,475)       (12,510)
   Investment in Fantatech Development, Inc.                              (2,891,566)          --
                                                                         -----------    -----------

Net cash used by investing activities                                     (3,170,041)       (12,510)
                                                                         -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from bank loan                                                      --        2,168,675
   Principal repayments on bank loan                                      (2,168,675)          --
                                                                         -----------    -----------

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

NET INCREASE (DECREASE) IN CASH                                           (2,425,480)     2,969,860

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

Cash and cash equivalents, at end of period                              $   864,789    $ 3,280,836
                                                                         ===========    ===========

Supplementary disclosures of cash flow information:
   Interest paid                                                         $    92,929    $     9,386
                                                                         ===========    ===========
   Taxes paid                                                            $    18,166    $    60,853
                                                                         ===========    ===========
</TABLE>

See notes to consolidated financial statements



                                       4
<PAGE>

                                 FANTATECH, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (UNAUDITED)
                             (UNITED STATES DOLLARS)

1.       INTERIM CONDOLIDATED FINANCIAL STATEMENTS

         The  interim  consolidated  unaudited  financial  statements  have been
prepared by Fantatech,  Inc. and include all material  adjustments  which in the
opinion of the  management  are necessary for a fair  presentation  of financial
results for the three months and the nine months ended  September 30, 2003.  All
adjustments and provisions  included in these statements are of normal recurring
nature.  Certain  information and footnote  disclosures  made in the most recent
annual  consolidated  financial  statements  included in the Form 10-KSB for the
year ended  December  31,  2002 have been  condensed  or omitted for the interim
financial  statements;  accordingly,  the interim financial statements should be
read  in  conjunction  with  the  December  31,  2002   consolidated   financial
statements.  The results of operations for the interim period  presented are not
necessarily indicative of the results that can be expected for the entire year.

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements and the amount of revenues and expenses during the reporting periods.
Management  makes these  estimates using the best  information  available at the
time the estimates are made.  However,  actual  results could differ  materially
from those results.

2.       INVENTORIES

         Inventories  at September 30, 2003 and December 31, 2002 are summarized
as follows:

                                                  September 30,    December 31,
                                                       2003            2002
                                                   (Unaudited)      (Audited)
                                                  -------------   -------------

         Raw materials                            $   1,500,386   $   1,036,814
         Work-in-progress                               685,092         461,974
         Finished goods                                  32,477          80,756
         Consumable stores                                1,960            --
                                                  -------------   -------------

                                                  $   2,219,915   $   1,579,544
                                                  =============   =============









                                       5
<PAGE>
<TABLE>
<CAPTION>

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

                                                                 September 30,     December 31,
                                                                      2003             2002
                                                                  (Unaudited)       (Audited)
                                                                 -------------    -------------
<S>                                                              <C>              <C>
Costs incurred on uncompleted contracts                          $  10,706,978    $  10,167,426
Estimated earnings to date                                           2,248,850        2,134,073
                                                                 -------------    -------------

                                                                    12,955,828       12,301,499

Less: Billings to date                                             (12,042,121)     (11,706,708)
                                                                 -------------    -------------

                                                                 $     913,707    $     594,791
                                                                 =============    =============

Included in the accompanying balance sheet under the following
    captions:

Costs and estimated earnings in excess of billings on
    uncompleted contracts                                        $     913,707    $     594,791

Billings in excess of costs and estimated earnings on
    uncompleted contracts                                                 --               --
                                                                 -------------    -------------

                                                                 $     913,707    $     594,791
                                                                 =============    =============

4.       PROPERTY, PLANT AND EQUIPMENT

         Property,  plant,  and equipment at September 30, 2003 and December 31,
2002 consisted of the following:

                                                                 September 30,     December 31,
                                                                      2003             2002
                                                                  (Unaudited)       (Audited)
                                                                 -------------    -------------

        Leasehold improvements                                   $     209,352          209,352
        Plant and machinery                                             43,599           28,863
        Furniture and fixtures                                          93,015           87,488
        Computers and equipment                                      1,817,702        1,577,200
        Motor vehicles                                                 203,844          193,964
                                                                 -------------    -------------

                                                                     2,367,512        2,096,867

        Less: Accumulated depreciation                              (1,814,016)      (1,558,908)
                                                                 -------------    -------------

                                                                 $     553,496          537,959
                                                                 =============    =============
</TABLE>

                                       6
<PAGE>

5.       EQUITY  INVESTMENT  AND RELATED PARTY PAYABLE - FANTATECH  DEVELOPMENT,
         INC.

         Equity investment - Fantatech Development,  Inc. represents the initial
cash contribution of $2,891,566 to Fantatech Development, Inc., a company formed
by Shenzhen  Digitainment  Company  Limited (SDCL) (the  Company's  65.41% owned
subsidiary),  Shenzhen  Huaqiang  Industry Company Limited and Shenzhen Huaqiang
Innovation and Investment  Company  Limited in August 2003 in PRC, of which SDCL
has 40% direct interest.  Fantatech  Development,  Inc. is intended to engage in
the construction and operation of hi-tech  entertainment  amusement  centers and
theme parks.

         Related  party payable - Fantatech  Development,  Inc.  represents  the
short-term loan of $2,891,566 obtained from Fantatech Development, Inc. The loan
is unsecured, non-interest bearing and payable upon 7 days advance notice.

6. SHORT-TERM LOANS

         On August 27, 2002, the Company obtained a bank loan of $2,168,675. The
bank loan bears interest at 5.31% per annum with interest  payable monthly and a
principal due date of August 27, 2003. The bank loan was repaid in full upon its
maturity.  The loan was  guaranteed by Shenzhen  Huaqiang  Holdings  Limited,  a
related party.

         Short-term  loans-unsecured  represent  $280,000 borrowed from Top Link
Development  Limited,  an unrelated  third party and $20,000  borrowed from Fang
Dehou,  a related  party.  Fang Dehou is a director of Intsys Share  Limited and
Hytechnology  Limited,  the  Company's  subsidiaries.  Loans  in the  amount  of
$300,000 are unsecured,  non-interest bearing and payable during 2003. 7. INCOME
TAXES

         The  Company is subject  to income  taxes on an entity  basis on income
arising or derived from the tax  jurisdiction in which each entity is domiciled.
The Company's  British Virgin Island  subsidiary is not liable for income taxes.
The Company's 65.41% owned PRC subsidiary is subject to Enterprise Income Tax at
the PRC a rate of 15% on net profits. However, based on the local tax rules, the
PRC  subsidiary  is  entitled  to a tax  holiday  for the first two years of its
operations  and a 50%  reduction of the rate for the third  through  fifth years
(years 2001 - 2003) of operations.  Deferred tax assets and  liabilities are not
considered material at September 30, 2003 and December 31, 2002.

8.       EARNINGS PER SHARE

         Basic EPS amounts are based on the  weighted  average  shares of common
stock outstanding.  Diluted EPS assumes the conversion,  exercise or issuance of
all potential common stock instruments such as options, warrants and convertible
securities,  unless  the  effect is to reduce a loss or  increase  earnings  per
share.  For  presentation  and  comparative  purposes,  the  Company has assumed
40,000,000  shares were  outstanding  during the nine months ended September 30,
2002 to the date of the reverse merger of the Company and Intsys Share Limited.





                                       7
<PAGE>

       Item 2 - Management's Discussion and Analysis or plan of operation

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

OVERVIEW

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

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

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

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

         Until the  Closing  Date,  the  Company  had only  nominal  assets  and
liabilities and had no business operations. As a result of the Acquisition,  the
Company  continued  the  business  operations  of Intsys.  Intsys owns 65.41% of
Shenzhen  Digitainment Co., Ltd. ("SDCL"). As such, the information disclosed in
this report relates to the Company's operation of SDCL. The financial statements
for the three and nine  months  ended  September  30,  2002 are the  results  of
operations of SDCL.

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


                                       8
<PAGE>

         SDCL is  headquartered  in China and is engaged in the  development  of
hi-tech  entertainment  and amusement  products,  including 4D theater,  digital
film,  indoor   entertainment   centers  and  large  size  indoor   attractions,
intelligent low voltage engineering,  theme sites projects and the exploitation,
design and production of computer systems integration projects.

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

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

         In August 2003, SDCL,  Shenzhen  Huaqiang  Industry Company Limited and
Shenzhen  Huaqiang  Innovation and Investment  Company Limited formed  Fantatech
Development,  Inc. in PRC. Fantatech Development,  Inc. is 40% owned by SDCL and
is intended to engage in the construction and operation of hi-tech entertainment
and amusement centers and theme parks.

Results of operations - Three months ended September 30, 2003

Sales

         The Company generated revenues of $1,317,971 for the three months ended
September 30, 2003,  which was a $433,269 or 24.7% decrease from  $1,751,240 for
the three  months  ended  September  30,  2002.  This was  primarily  due to the
significant  decrease in  construction  revenue  from  $1,362,269  for the three
months  ended  September  30,  2002 to  $1,010,148  for the three  months  ended
September  30,  2003.  In the third  quarter of 2003,  the Company  continued to
explore new markets and focus on the  development  of projects for large hi-tech
amusement centres and hi-tech parks like  "Dino-Rampage" and "Fantawild FunPlex"
as well as existing  projects for "4D  theatre".  In 2002,  the Company  focused
mainly on the  construction  of our "4D  theatre"  and product  sales of our "4D
theatre" and other amusement  products.  The focus in 2002 was primarily related
to "4D theater"  which was the new product to the market at that time.  In 2003,
the  Company  devoted  its  resources  to  the  development  of new  projects  -
"Dino-Rampage"  and  "Fantawild  FunPlex"  therefore  the Company  devoted fewer
resources to the  marketing of the "4D theater"  project which caused a decrease
in the sales of the "4D theater".

Gross profit

         Gross  profit  margin  increased  to 38.1% for the three  months  ended
September  30, 2003,  from 13.5% for the three months ended  September 30, 2002.
This was  primarily  due to the increase in the gross profit margin for contract
works to 26.1% for the three months ended September 30, 2003, from 14.9% for the
three months ended September 30, 2002. In addition,  there was high gross profit
margin  of 70.3%  generated  from  product  sales  for the  three  months  ended
September 30, 2003, although it only accounted for 8.6% of the total revenue for
the three months ended  September  30, 2003,  as compared to 34.6% for the three
months ended September 30, 2002.

Selling and marketing expenses

         Selling and marketing  expenses increased by $9,469 or 11.6% to $91,446
for the three months ended  September 30, 2003 from $81,977 for the three months
ended  September  30,  2002.  This was  primarily  due to an  increase in travel
expenses from $3,337 in 2002 to $14,205 in 2003.


                                       9
<PAGE>

General and administrative expenses

         General  and  administrative  expenses  increased  by $74,137 or 68% to
$182,787  for the three months ended  September  30, 2003 from  $108,650 for the
three months ended September 30, 2002. This is primarily due to the increases in
insurance  expenses of $16,745,  motor vehicle running  expenses of $5,809,  and
office expenses of $3,972.  Fantatech, Inc. also incurred legal and professional
fees of $12,203 for the three months ended  September 30, 2003,  while it had no
such expenses in 2002. In addition, there were increases in rental and utilities
expenses of $15,628 and salary  expenses of $21,966 for the three  months  ended
September 30, 2003 which were incurred by Hytechnology,  Inc. Hytechnology, Inc.
was only acquired by the Company in September  2002.  Therefore,  these expenses
were not incurred for the three months ended September 30, 2002.

Income (loss) from operations

         As  gross  profit  margin  increased  significantly,  the  income  from
operations changed from $46,039 for the three months ended September 30, 2002 to
$228,334 for the three months ended September 30, 2003.

Other income (loss)

         There  was a loss on the  disposition  of fixed  assets of $955 for the
three months ended  September  30, 2003 as compared to no  disposition  of fixed
assets for the three months ended September 30, 2002.

         There was other income of $5,814 for the three  months ended  September
30, 2003 as compared to no other income for the three months ended September 30,
2002.

         Interest  expense  for  the  three  months  ended  September  30,  2003
increased to $27,998 from $8,617 for the three months ended  September 30, 2002.
This is  primarily  due to the new bank loan of  $2,168,675  obtained  in August
2002.

         Interest income for the three months ended September 30, 2003 increased
to $16,744 from $2,385 for the three months ended  September 30, 2002 due to the
increase in cash held in interest-bearing accounts.

Minority interests

         The Company recorded minority interest expense of $56,320 for the three
months ended September 30, 2003, an increase of $45,090 or 401% from $11,230 for
the three  months ended  September  30,  2002,  to reflect the  interests of the
minority shareholders in Hytechnology, Inc. (30%), Hytechnology Limited (1%) and
SDCL (34.6%).

Income tax expenses

         The  Company is subject  to income  taxes on an entity  basis on income
arising or derived from the tax  jurisdiction in which each entity is domiciled.
Intsys Share Limited is not liable for income taxes.  The Company's 65.41% owned
China  subsidiary,  SDCL, is subject to Enterprise Income Tax in China at a rate
of 15% on net income. However, based on the local tax rules, SDCL is entitled to
a tax holiday for the first two years of its  operations  and a 50% reduction of
the tax  rate  for  the  third  through  fifth  years  (years  2001 -  2003)  of
operations.  The  provisions  for taxes on earnings of SDCL for the three months
ended September 30, 2003 and 2002 were $8,241 and $7,339, respectively.


                                       10
<PAGE>

Net income (loss)

         The  Company  recorded a net income of  $157,378  for the three  months
ended  September  30,  2003 as compared to a net income of $21,238 for the three
months ended  September  30, 2002.  This was  primarily  due to the  significant
increases in gross profit margin in contract works and products sales.

Results of operations - Nine months ended September 30, 2003

Sales

         The Company generated  revenues of $3,225,148 for the nine months ended
September 30, 2003,  which was a $984,405 or 23.4% decrease from  $4,209,553 for
the nine months ended  September  30, 2002.  There was  significant  decrease in
contract revenue from $3,095,157 for the nine months ended September 30, 2002 to
$1,261,290 for the nine months ended  September 30, 2003. This was primarily due
to the  outbreak of SARS in China in May and June 2003  coupled  with the recent
change in business strategy.  In the second quarter of 2003, the Company started
to explore  new  markets  and focus on the  development  of  projects  for large
hi-tech amusement centres and hi-tech parks like  "Dino-Rampage"  and "Fantawild
FunPlex" as well as existing  projects for "4D  theatre".  In 2002,  the Company
focused mainly on the contract works and product sales of "4D theatre" and other
amusement  products.  Accordingly,  it resulted in the  significant  decrease in
contract  works since the second  quarter of 2003.  The major  contracts in 2002
were  primarily  related to "4D theater" which was new products to the market at
that time. In 2003, the Company mainly devoted its resources to the  development
of new projects - "Dino-Rampage"  and "Fantawild  FunPlex" and hence the Company
devoted  less  effort in  marketing  for "4D  theater"  project  which  caused a
decrease in the sales of "4D theater" related contract works.

Gross profit

         Gross  profit  margin  increased  to 38.3%  for the nine  months  ended
September 30, 2003, from 20.4% for the nine months ended September 30, 2002. The
increase was  primarily  due to the  increases in product  sales to new overseas
markets  including the U.S.,  Kuwait,  and  Philippines,  with an average profit
margin of 49.9% for the nine months ended  September  30,  2003,  as compared to
31.6% of the product sales for the same period in 2002. Products sales accounted
for 43.1% of the total revenue for the nine months ended September 30, 2003.

Selling and marketing expenses

         Selling  and  marketing  expenses  decreased  by  $50,946  or  18.5% to
$224,557 for the nine months ended September 30, 2003 from $275,503 for the nine
months  ended  September  30,  2002.  This was  primarily  due to a decrease  in
exhibition  expenses  from  $172,665  in 2002 to  $87,096  in 2003  offset by an
increase in traveling expenses from $11,112 in 2002 to $36,492 in 2003.

General and administrative expenses

         General and  administrative  expenses  increased by $317,237 or 108% to
$612,017 for the nine months ended September 30, 2003 from $294,780 for the nine
months  ended  September  30,  2002.  This was  primarily  due to  increases  in
insurance expenses of $32,111,  motor vehicle running expenses of $7,757,  wages
of  $11,287,  bad debt  expenses  of $16,494  and office  expenses  of  $17,226.
Fantatech,  Inc. also incurred  legal and  professional  fees of $69,956 for the
nine months ended September 30, 2003,  while it had no such expenses in 2002. In
addition,  there were the increases in rental and utilites  expenses of $50,071,
salary  expenses of $61,644,  motor vehicle  expenses of $16,556 and  commission


                                       11
<PAGE>

expenses  of $27,483  for the nine months  ended  September  30, 2003 which were
incurred by  Hytechnology,  Inc.  Hytechnology,  Inc.  was only  acquired by the
Company in September 2002.  Therefore,  these expenses were not incurred for the
nine months ended September 30, 2002.

Income from operations

         As the  increase in gross profit  margin was offset by the  significant
increase  in general and  administrative  expenses,  the income from  operations
increased by $112,296 or 39% to $400,206 for the nine months ended September 30,
2003, from $287,910 for the nine months ended September 30, 2002.

Other income (loss)

         There was a loss on the  disposition  of fixed assets of $3,526 for the
nine months  ended  September  30, 2003 as compared to no  disposition  of fixed
assets for the nine months ended September 30, 2002.

         There was other  income of $8,496 for the nine months  ended  September
30, 2003 as compared to no other income for the nine months ended  September 30,
2002.

         Interest expense for the nine months ended September 30, 2003 increased
to $92,912 from $9,386 for the nine months  ended  September  30, 2002.  This is
primarily due to the new bank loan of $2,168,675 obtained in August 2002.

         Interest  income for the nine months ended September 30, 2003 increased
to $36,869 from $3,631 for the nine months ended  September  30, 2002 due to the
increase in cash held in interest-bearing accounts.

Minority interests

         The Company recorded minority interest expense of $125,933 for the nine
months ended  September  30, 2003, as compared to minority  interest  expense of
$91,226 for the nine months ended  September  30, 2002, to reflect the interests
of the minority shareholders in Hytechnology,  Inc. (30%),  Hytechnology Limited
(1%) and SDCL (34.6%).

Income tax expenses

         The  Company is subject  to income  taxes on an entity  basis on income
arising or derived from the tax  jurisdiction in which each entity is domiciled.
Intsys Share Limited is not liable for income taxes.  The Company's 65.41% owned
China  subsidiary,  SDCL, is subject to Enterprise Income Tax in China at a rate
of 15% on net income. However, based on the local tax rules, SDCL is entitled to
a tax holiday for the first two years of its  operations  and a 50% reduction of
the tax  rate  for  the  third  through  fifth  years  (years  2001 -  2003)  of
operations.  The  provisions  for taxes on  earnings of SDCL for the nine months
ended September 30, 2003 and 2002 were $23,251 and $18,419, respectively.

Net income

         The Company  recorded  net income of $199,916 for the nine months ended
September  30, 2003 as compared to a net income of $172,510  for the nine months
ended September 30, 2002.  There was no significant  change in net income as the
increase in general and administrative expenses was in line with the increase in
gross profit margin.


                                       12
<PAGE>

Financial condition, liquidity, capital resources

         For the nine months ended September 30, 2003, our operations  generated
net cash of $2,913,256,  an increase of $2,099,561 or 258% from $813,695 for the
nine months ended  September 30, 2002.  For the nine months ended  September 30,
2003,  we used cash of  $3,170,041  and  $2,168,675  for investing and financing
activities respectively.

         As of  September  30,  2003,  we had  cash on hand of  $864,7895  and a
positive current ratio of 1.09.

         We had no significant capital expenditure  commitment outstanding as of
September 30, 2003.

Exchange rate

         Fluctuations  of currency  exchange  rates between  Renminbi and United
States dollar could adversely  affect our business since we conduct our business
primarily in China,  and the sale of our products to  corporations  in China are
settled in  Renminbi.  The Chinese  government  controls  its  foreign  reserves
through  restrictions  on  imports  and  conversion  of  Renminbi  into  foreign
currency.  Although the Renminbi to United States dollar  exchange rate has been
stable since January 1, 1994 and the Chinese government has stated its intention
to maintain the  stability  of the value of Renminbi,  there can be no assurance
that exchange rates will remain stable.  The Renminbi could  appreciate  against
the United States dollar.  Exchange rate  fluctuations  may adversely affect our
revenue  arising from the sales of products in China and denominated in Renminbi
and our financial performance when measured in United States dollar.

Recent accounting pronouncements

         In April 2002, The Financial  Accounting  Standards Board (FASB) issued
SFAS  Statement  No.  145,  "Recission  of  FASB  Statements  No.  4, 22 and 64.
Amendment of FASB  Statement No. 13, and Technical  Corrections".  The Statement
addresses the accounting for extinguishment of debt, sale-leaseback transactions
and certain lease  modifications.  The  Statement is effective for  transactions
occurring  after May 15,  2002.  The  Company  does not expect the  adoption  of
Statement No. 15 to have a material  impact on the Company's  future  results of
operations or financial position.

         In July 2002, the FASB issued SFAS Statement No. 146,  "Accounting  for
Cost  Associated  with Exit or  Diposal  Activities".  The  Statement  addresses
financial  accounting and reporting for costs  associated  with exit or disposal
activities and supercedes Emerging Issues Task Force Issue No. 94-3, "Liabilitiy
Recognition for Certain  Employee  Termination  Benefits and Other Costs to Exit
and  Activity  (Including  Certain  Costs  Incurred  in  a  Restructing)".   The
provisions of Statement  No. 146 are  effective for exit or disposal  activities
that are  initiated  after  December 31,  2002.  The Company does not expect the
adoption of Statement No. 146 to have a material impact on the Company's  future
results of operations or financial position.

         In October 2002, the FASB issued SFAS No. 147, "Acquisitions of Certain
Financial  Acquisitions of Financial  Institutions,  except Transactions between
Two or More Mutual Enterprises".  The Company does not expect this standard will
have any effect on its financial statements.

         In  November  2002,  the  FASB  issued  FASB   Interpretation  No.  45,
"Guarantor's  Accounting and Disclosure  Requirements for Guarantees,  Including
Indirect  Guarantees of  Indebtedness  of Others" (FIN 45). FIN 45 requires that


                                       13
<PAGE>

upon  issuance of a guarantee,  a guarantor  must  recognize a liability for the
fair value of an  obligation  assumed  under a guarantee.  FIN 45 also  requires
additional  disclosures  by a  guarantor  in its  interim  and annual  financial
statements  about  the  obligations   associated  with  guarantees  issued.  The
recognition  provisions  of FIN 45 are effective  for any  guarantees  issued or
modified after December 31, 2002. The disclosure  requirements are effective for
financial  statements  of interim or annual  periods  ending after  December 15,
2002.  The adoption of FIN 45 is not  expected to have a material  effect on the
Company's financial position, results of operations, or cash flows.

         In  December  2002,  the  FASB  issued  SFAS  No.148,  "Accounting  for
Stock-Based  Compensation.  Transition and Disclosure"  SFAS No. 148 amends SFAS
No. 123  "Accounting  for  Stock-Based  Compensation,"  to  provide  alternative
methods of transition  for a voluntary  change to the fair value based method of
accounting for  stock-based  employee  compensation.  In addition,  SFAS No. 148
amends  the  disclosure  requirements  of  SFAS  No.  123 to  require  prominent
disclosures in both annual and interim financial  statements about the method of
accounting for stock-based  employee  compensation  and the effect of the method
used on reported  results.  SFAS No. 148 is effective for fiscal years beginning
after  December 15, 2002.  The interim  disclosure  provisions are effective for
financial reports containing  financial statements for interim periods beginning
after  December 15,  2002.  The Company does not expect the adoption of SFAS No.
148 to have a material effect on our financial position,  results of operations,
or cash flows.

         In January 2003, the FASB issued  Interpretation  No. 46 "Consolidation
of Variable  Interest  Entities (an  interpretation  of ARB No. 51) ("FIN-46")."
FIN46  addresses  consolidation  by  business  enterprises  of certain  variable
interest entities,  commonly referred to as special purpose entities.  The Group
will be  required  to  implement  the  other  provisions  of FIN46 in 2003.  The
adoption  of FIN46 is not  expected  to have a  material  impact on the  Group's
consolidated financial statements.

         In April 2003, the FASB issued SFAS No. 149 "Amendment of Statement 133
on  Derivative  Instruments  and  Hedging  Activities."  SFAS No. 149 amends and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging activities under SFAS No. 133 "Accounting for Derivative Instruments and
Hedging  Activities."  It is effective  for  contracts  entered into or modified
after June 30, 2003 and for hedging relationships  designed after June 30, 2003.
All provisions of SFAS No. 149 should be applied prospectively.  The adoption of
SFAS 149 is not expected to have a material  impact on the Group's  consolidated
financial statements.

         In May 2003,  the FASB  issued SFAS No.  150,  "Accounting  for Certain
Financial Instruments with Characteristics of both Liabilities and Equity". SFAS
15  establishes  standards  for how an issuer  classifies  and measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires  that an issuer  classifies a financial  instrument  that is within its
scope as a liability (or as an asset in some circumstances). It is effective for
financial  instruments entered into or modified after May 31, 2003 and otherwise
is effective at the beginning of the first interim period  beginning  after June
15, 2003. It is to be implemented by reporting the cumulative effect of a change
in an accounting  principle for financial  instruments  created before  issuance
date of SFAS no. 150 and still  existing at the beginning of the interim  period
of  adoption.  Restatement  is  permitted.  The  adoption of SFAS No. 150 is not
expected  to  have a  material  impact  on the  Group's  consolidated  financial
statements.




                                       14
<PAGE>

                        ITEM 3 - CONTROLS AND PROCEDURES

         We had no significant capital expenditure  commitment outstanding as of
September 30, 2003.

1)       Evaluation of Disclosure Controls and Procedures

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

         Within  the 90 days  prior to the filing of this  report,  the  Company
carried out an evaluation,  under the supervision and with the  participation of
the  Company's  management,  including  its  principal  executive  and financial
officer  of the  effectiveness  of the  design and  operation  of the  Company's
disclosure  controls  and  procedures.  Based  upon  and as of the  date of that
evaluation,  the Company's  principal  executive and financial officer concluded
that the Company's  disclosure  controls and  procedures are effective to ensure
that information  required to be disclosed in the reports that Company files and
submits under the Exchange Act of 1934 is recorded,  processed,  summarized  and
reported as and when required.

2)       Changes in Internal Control

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



















                                       15
<PAGE>

                           PART II - OTHER INFORMATION

                         ITEM 2 - CHANGES IN SECURITIES

During the three months ended September 30, 2003, we did not issue any shares of
common stock.



                    ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits.

Exhibit
Number                                      Description
------                                      -----------

31.1     Certification of the Chief Executive Officer pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002
31.2     Certification of the Chief Financial Officer pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002
32.1     Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b)      Reports on Form 8-K.

         There was no report  filed on Form 8-K  during the three  months  ended
September 30, 2003.


                                   SIGNATURES

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

                                               FANTATECH, INC.

Dated: November 19, 2003                       By  /s/ Guangwei Liang
                                               ---------------------------------
                                               Name:  Guangwei Liang
                                               Title:  Chief Executive Officer



Dated: November 19, 2003                       By  /s/ Fuxiao Wang
                                               ---------------------------------
                                               Name:  Fuxiao Wang
                                               Title:  Chief Financial Officer





                                       16