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, 2005

                                       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.
      ---------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

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

    Unit B, 11/F, Vienna Mansion, 55 Paterson Street, Causeway Bay, Hong Kong
    -------------------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (852) 2577 3020
          -------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

                                 Not applicable
          -------------------------------------------------------------
    (Former name, former address and former fiscal year, if changed since last
                                     report)

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

As  of  May  15,  2004,  the  Company  had  30,096,117  common shares issued and
outstanding.

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


<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, 2005 (Unaudited) and
              December 31, 2004
            Condensed Consolidated Statements of Operations (Unaudited) - For the Three Months
              Ended March 31, 2005 and 2004
            Condensed Consolidated Statements of Cash Flows (Unaudited) - For the Three Months
              Ended March 31, 2005 and 2004
            Notes to Condensed Consolidated Financial Statements- As of March 31, 2005
              (Unaudited) and December 31, 2004

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

Item 3.     Controls and Procedures


Part II -   Other Information

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

Item 6.     Exhibits and Reports on Form 8-K


Signatures
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                FANTATECH INC. AND SUBSIDIARIES
                             CONDENSED CONSOLIDATED BALANCE SHEETS

                                                          March 31, 2005    December 31, 2004
                                                         -------------------------------------
                          ASSETS                            (Unaudited)
<S>                                                       <C>              <C>
Current assets
  Cash                                                    $     2,104,071  $         4,078,891
  Guaranteed trust fund deposit                                     9,160                    -
  Short term bills receivable                                     554,217              554,217
  Trade receivables, net of allowance for doubtful debts          174,141              470,858
  Related party receivable                                        222,534              477,701
  Inventories                                                   1,848,786            1,792,452
  Cost and estimated earnings in excess of
    billings on uncompleted contracts                           2,009,625            2,414,118
  Deposit and prepayments                                       1,438,135            1,428,410
  Other receivables                                               376,883              156,333
                                                         -------------------------------------
Total current assets                                            8,737,552           11,372,980

Property, plant and equipment, net                              5,783,763            3,743,796
Construction in progress                                        2,355,786            2,255,997
Trademarks                                                        170,950              170,950
                                                         -------------------------------------
Total assets                                              $    17,048,051  $        17,543,723
                                                         =====================================

        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Short-term bank loans                                   $     2,433,735  $         2,433,735
  Accounts payable                                                749,741              320,227
  Accrued liabilities and other payables                          894,427            1,059,114
  Related party payables                                          431,676              650,588
  Billings in excess of cost and estimated earnings
    on uncompleted contracts                                    1,432,113            1,629,408
  Deposits received                                             1,917,624            1,874,335
                                                         -------------------------------------
Total current liabilities                                       7,859,316            7,967,407

Minority interests                                              4,135,831            4,122,426
                                                         -------------------------------------
Total liabilities                                              11,995,147           12,089,833
                                                         -------------------------------------
Commitments and contingencies                                           -                    -

Stockholders' equity
  Preferred stock; $0.001 par value; 10,000,000 shares
    authorized; no shares issued and outstanding                        -                    -
  Common stock; $0.001 par value; 100,000,000 shares
    authorized, 30,096,117 shares issued and
    outstanding in 2005 and 2004, respectively.                    30,096               30,096
  Additional paid-in capital                                    4,587,190            4,587,190
  Retained earnings                                               290,271              691,257
  Reserve funds                                                   145,347              145,347
                                                         -------------------------------------
Stockholders' equity                                            5,052,904            5,453,890
                                                         -------------------------------------
Total liabilities and stockholders' equity                $    17,048,051  $        17,543,723
                                                         =====================================
<FN>
See notes to condensed 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, 2005        March 31, 2004
                                                --------------------  --------------------
<S>                                             <C>                   <C>

NET REVENUE :                                   $                     $
  Contracted sales                                          471,950             1,090,595
  Revenue sharing operations ("RSO")                        202,516                27,748
                                                --------------------  --------------------
TOTAL NET REVENUE                                           674,466             1,118,343
                                                --------------------  --------------------

COST OF REVENUE:
  Direct cost of sales                                      320,948               726,810
  Other cost of revenue - RSO                               193,314                14,044
                                                --------------------  --------------------
TOTAL COST OF REVENUE                                       514,262               740,854
                                                --------------------  --------------------

GROSS PROFIT                                                160,204               377,489
                                                --------------------  --------------------

OPERATING EXPENSES:
  Selling and marketing                                     189,402               136,482
  General and administrative                                345,250               307,485
                                                --------------------  --------------------
TOTAL OPERATING EXPENSES                                    534,652               443,967
                                                --------------------  --------------------

LOSS FROM OPERATIONS                                       (374,448)              (66,478)

OTHER INCOME (EXPENSES)
  Interest expense                                          (32,308)                    -
  Other income (expense)                                     14,865               (14,084)
  Interest income                                             3,986                25,180
  Non-operating income                                          357                 1,726
                                                --------------------  --------------------

LOSS FROM OPERATIONS                                       (387,548)              (53,656)

MINORITY INTERESTS' SHARE OF (INCOME) LOSS                  (13,405)               66,678

INCOME TAX EXPENSE                                               33                11,441
                                                --------------------  --------------------

NET (LOSS) INCOME                               $          (400,986)  $             1,581
                                                ====================  ====================

WEIGHTED AVERAGE SHARES OUTSTANDING
  BASIC AND DILUTED                                      30,096,117            20,096,117
                                                ====================  ====================

BASIC AND DILUTED NET (LOSS) INCOME PER SHARE   $             (0.01)  $              0.00
                                                ====================  ====================
<FN>
See notes to condensed consolidated financial statements.
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                        FANTATECH INC. AND SUBSIDIARIES
                          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)


                                                                      Three Months Ended    Three Months Ended
                                                                        March 31, 2005        March 31, 2004
                                                                     --------------------  --------------------
<S>                                                                  <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income                                                    $          (400,986)                1,581
Adjustments to reconcile net income to net cash
provided by operating activities:
  Depreciation expense                                                           238,418               120,880
  Minority interests' share of income (loss)                                      13,405               (66,678)
  Provision for doubtful accounts                                                 17,347                     -
Change in operating assets and liabilities:
  Decrease  in trade receivables                                                 279,370               256,989
  (Increase) in inventories                                                      (56,334)             (697,423)
  Decrease (Increase)  in costs and estimated earnings
    in excess of billings on uncompleted contracts                               404,493               (19,565)
  (Increase) in deposits and prepayments                                          (9,725)              (31,868)
  (Increase) decrease in other receivables                                      (220,550)               24,775
  (Increase)  in guaranteed unit trust fund                                       (9,160)                    -
  Decrease in related party receivable                                           255,167                72,290
  Increase (Decrease) in accounts payable, accrued liabilities and
    other payables                                                               264,827              (396,543)
  (Decrease) in related party payables                                          (218,912)                    -
  (Decrease) in billings in excess of costs and estimated earnings
    on uncompleted contracts                                                    (197,295)                    -
  Increase in deposits received                                                   43,289               866,076
                                                                     --------------------  --------------------
Net cash provided by operating activities                                        403,354               130,514
                                                                     --------------------  --------------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property, plant and equipment                                   (2,278,385)             (241,760)
  Construction in progress                                                       (99,789)                    -
                                                                     --------------------  --------------------
Net cash used in investing activities                                         (2,378,174)             (241,760)
                                                                     --------------------  --------------------

NET DECREASE IN CASH                                                          (1,974,820)             (111,246)

Cash and cash equivalents, at beginning of period                              4,078,891             5,240,816
                                                                     --------------------  --------------------

Cash and cash equivalents, at end of period                          $         2,104,071   $         5,129,570
                                                                     ====================  ====================

Supplementary disclosures of cash flow information:
  Interest paid                                                      $            32,308   $                 -
                                                                     ====================  ====================
  Tax paid                                                           $            12,679   $            10,727
                                                                     ====================  ====================
<FN>
See notes to condensed consolidated financial statements.
</TABLE>


                                        5
<PAGE>
                         FANTATECH INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              AS OF MARCH 31, 2005 (UNAUDITED)AND DECEMBER 31, 2004

1.   ORGANIZATION AND PRINCIPAL ACTIVITIES

Fantatech,  Inc.  (hereinafter  referred  to  as the "Company", which term shall
include,  when  the  context  so  requires,  its  subsidiaries  and affiliates),
formerly  Lucas  Educational  Systems,  Inc.,  was  incorporated in the State of
Delaware.  The  Company  designs, develops builds, installs and produces hi-tech
entertainment  and amusement attractions for group audiences including all kinds
of simulation attractions and equipments as well as 3D/4D theatres.

During  November  2002,  the  Company acquired all of the issued and outstanding
shares  of  Intsys Share Limited ("Intsys") in a reverse acquisition. Intsys was
incorporated  in  the  British  Virgin Islands ("BVI") on April 29, 2002. Intsys
currently owns three subsidiary companies namely: Shenzhen Digitainment Co., Ltd
("SDCL"  or "Digitainment"), incorporated in the People's Republic of China (the
"PRC"  or  "China"), Megabase Investment Limited ("Megabase"), a BVI company and
Hytechnology  Inc. ("Hytech US"), a Delaware corporation. In addition, SDCL owns
40%  of  Fantatech  Development  Inc.  ("FDI").

During May 2002, Intsys acquired a 65.41% interest in SDCL, a then joint venture
company  incorporated in the PRC trading under the name of Shenzhen Hytechnology
Inc.  The former owners of the 65.41% interest in Digitainment became all of the
shareholders  of  Intsys.  The  business  combination was deemed to be a reverse
merger and the acquisition of the 65.41% interest in SDCL has been accounted for
at  historical  cost.  SDCL  was  established  in 1998 and is engaged in design,
development  and  production  of  hi-tech  entertainment and amusement products,
including  4D theatre, simulation games, indoor entertainment center, large size
indoor  attraction  and  theme  parks.

In  August  2002, Intsys established Hytechnology Limited, ("Hytech HK"), a Hong
Kong  company  in which Intsys owns 99%. Hytech HK has been engaged in the sales
and  marketing  of  the  products  of  Digitainment outside the United States of
America (excluding China). On May 12, 2004, the Company disposed and sold Hytech
HK  to  Top  Link  Hi-Tech  Development (H.K.) Limited ("Top Link"), a Hong Kong
Corporation  ultimately  owned  by  Shenzhen Huaqiang Holdings Ltd. ("SHQ"). The
Chairman  and  President  of  SHQ  are also the Chairman and CEO of the Company.

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

In  August  2003, SDCL, Shenzhen Huaqiang Industry Company Limited ("SHICL") and
Shenzhen Huaqiang Venture Capital Company Limited ("SHVCCL") incorporated FDI in
PRC.  FDI  is owned 40% by SDCL, 40% by SHICL and 20% by SHVCCL, and is intended
to  engage  in  the sales and marketing of the products of Digitainment in China
and  to  assist  SDCL  to  solicit the cooperation for hi-tech entertainment and
amusement  centers  and  theme parks. Subsequent to the formation of FDI, SHVCCL
(the 20% shareholder) assigned all of its management and control rights to SDCL.
SHICL  and  SHVCCL  are  associates  of  SHQ.

In  October  2004,  the  Company  entered  into  an  agreement  ("Share Exchange
Agreement")  between  and among Intsys and Topforce Asia Limited ("Topforce"), a
BVI  corporation associated with Shenzhen Yongfengguo Investment and Development
Co., Ltd., the minority shareholder of SDCL. Under the Share Exchange Agreement,
the  Company  acquired  the  remaining  34.59%  of SDCL (the "Acquisition") from
Topforce  by  issuing  10,000,000  shares  of  its  common  stock  and  Topforce
transferred  to Intsys all of the equity interest of Megabase Investment Limited
("Megabase"),  a  BVI corporation, established to hold 34.59% equity interest in
SDCL.


                                        6
<PAGE>
All  of the Company's production and most of its business operations are located
in  the  PRC  and  are  conducted  in Renminbi ("RMB"), which is the currency of
China.  During the three months ended March 31, 2005 and 2004, the exchange rate
had  remained  stable  at  approximately  US$1.00  to  RMB  8.30.

The  Company  conducts  a certain portion of its purchases from related parties,
and  has  additional  continuing  transactions  with  such  parties.


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. All
material  intercompany balances and transactions, including intercompany profits
and  unrealized  profits  and  losses  are  eliminated  on  consolidation.

COMMENTS  - The interim unaudited condensed consolidated financial statements as
of March 31, 2005 and for the three months ended March 31, 2005 and 2004, 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 period
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 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 Form 10-KSB for the
fiscal  year  ended December 31, 2004. 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,  2005.

USE  OF  ESTIMATES  - The preparation of financial statements in conformity with
generally  accepted  accounting  principles  in  the  United  States  of America
requires  management  to  make certain estimates and assumptions that affect the
reported  amounts of assets and liabilities, including those related to cost and
estimated earnings in excess of billings on uncompleted contracts, allowance for
doubtful  accounts,  disclosure of contingent assets and liabilities at the date
of  the  financial statements and the amount of revenues and expenses during the
reporting  periods.  Actual  results  could  differ  from  those  estimates.

FOREIGN  CURRENCY TRANSLATION - The Company's major subsidiaries in PRC maintain
their  financial  records  and  the  statutory financial statements in Renminbi:
("RMB"),  the  functional currency and the currency of the PRC. In preparing the
financial  statements,  translation of amounts from RMB to United States dollars
("US$")  have  been  made  at the single rate of exchange of US$1.00:RMB8.30. No
representation  is made that RMB amounts could have been, or could be, converted
into United States dollars at that rate or at any other rate. There has not been
a  material  change in the exchange rate during the three months ended March 31,
2005  and  2004.

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


                                        7
<PAGE>
EARNINGS  PER  SHARE  -  Statement  of  Financial  Accounting  Standard No. 128,
"Earnings  per  share", ("SFAS No. 128") requires dual presentation of basic and
diluted  earnings  per  share ("EPS") with a reconciliation of the numerator and
denominator  of the EPS computations. Basic EPS 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  8)

Reclassifications  -  Certain  prior  year amounts in the accompanying unaudited
condensed consolidated financial statements have been reclassified to conform to
the  current  year  presentation.  These  reclassifications had no effect on the
results  of  operations  or  financial  position  for  any  year  presented.


3.   DEPOSIT IN GUARANTEED TRUST FUND

During  the  three  months  ended  March  31, 2005, the Company had a deposit of
$9,160  in a Guaranteed Unit Trust Fund with a licensed bank. The deposit can be
redeemed  at  any  time  with  capital  repayment  guaranteed.


4.   INVENTORIES

Inventories  as  at  March  31,  2005  and  December 31, 2004 were summarized as
follows:

<TABLE>
<CAPTION>
                   March 31, 2005    December 31, 2004
                    (Unaudited)
                 ------------------  ------------------
<S>              <C>                     <C>
Raw Materials    $        1,374,991  $        1,437,481
Work-in-process             320,007             195,525
Finished Goods              153,788             159,446
                 ------------------  ------------------
                          1,848,786  $        1,792,452
                 ==================  ==================
</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, 2005 and December 31, 2004 were summarized as follows:


                                        8
<PAGE>
<TABLE>
<CAPTION>
                                                      March 31, 2005     December 31, 2004
                                                        (Unaudited)
                                                    -------------------  -------------------
<S>                                                 <C>                  <C>
Cumulative costs incurred on uncompleted contracts  $        13,897,344  $       13,472,578

Cumulative estimated earnings to date                         3,630,835           3,665,374
                                                    -------------------  -------------------
                                                             17,528,179          17,137,952

Less: Billings to date                                     (16,950,667)         (16,353,242)
                                                    -------------------  -------------------
                                                    $          577,512   $          784,710
                                                    ===================  ===================
</TABLE>

Included in the accompanying balance sheet under the following captions:

<TABLE>
<CAPTION>
                                              March 31, 2005     December 31, 2004
                                                (Unaudited)
                                           -------------------  -------------------
<S>                                        <C>                  <C>
Costs and estimated earnings in excess     $                    $
  of billings on uncompleted contracts              2,009,625            2,414,118
Billings in excess of costs and estimated
  earnings on uncompleted contracts                (1,432,113)          (1,629,408)
                                           -------------------  -------------------
                                           $          577,512   $          784,710
                                           ===================  ===================
</TABLE>

6.  PROPERTY,  PLANT  AND  EQUIPMENT

Property,  plant,  and  equipment  as  at  March  31, 2005 and December 31, 2004
consisted  of  the  following:

<TABLE>
<CAPTION>
                                                     March 31, 2005    December 31, 2004
                                                      (Unaudited)
                                                  -------------------  -------------------
<S>                                               <C>                  <C>
Leasehold improvements                            $          423,270   $          412,964
Plant and machinery                                          461,320              455,927
Furniture and fixtures                                       107,758              105,353
Equipment invested in revenue sharing operations           5,175,490            3,017,555
Computers and equipment                                    1,003,723            1,009,350
Motor vehicles                                               313,936              295,633
                                                  -------------------  -------------------
                                                           7,485,497            5,296,782
Less: Acumulated depreciation and amortization            (1,701,734)          (1,552,986)
                                                  -------------------  -------------------
                                                  $        5,783,763   $        3,743,796
                                                  ===================  ===================
</TABLE>

Depreciation expense were $238,418 and $120,880 for the three months ended March
31,  2005  and  March  31,  2004,  respectively.


7.  STOCK  BASED  COMPENSATION

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


                                        9
<PAGE>
share. The stock options are vested and 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 any options will be
cancelled  one  month  after termination of employment. Subsequent to the 2 to 1
reverse  share  split  effective  from  June 30, 2004, the total number of stock
options  was  reduced to 2,000,000 shares and the strike price was automatically
adjusted  to  $1.0 per share. As the earliest exercisable date of all options is
on  or after January 7, 2007, no option activity was recorded during three month
period  ended  March  31,  2005.

On  December  16,  2004,  the  FASB  published Statement of Financial Accounting
Standards  No. 123 (Revised 2004), Share-Based Payment ("SFAS 123R").  SFAS 123R
requires  that  compensation cost related to share-based payment transactions be
recognized in the financial statements.  Share-based payment transactions within
the  scope  of  SFAS  123R  include  stock  options,  restricted  stock  plans,
performance-based awards, stock appreciation rights, and employee share purchase
plans.  The  provisions  of  SFAS  123R are effective as of the first interim or
annual  reporting  period  that  begins  after December 15, 2005 (Small Business
Issuers).  Accordingly,  the  Company will implement the revised standard at the
end  of  fiscal  year  2005. Currently, the Company accounts for its share-based
payment  transactions under the provisions of APB 25, which does not necessarily
require  the  recognition  of  compensation  cost  in  the financial statements.
Management  is  assessing  the  implications of this revised standard, which may
materially  impact  the  Company's results of operations in the fiscal year 2005
and  thereafter.

Currently,  the  Company follows 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 net 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 will be measured as the excess, if any, of the fair market
price  of  the  Company's  common stock at the date of grant above the amount an
employee  must  pay  to  acquire  the  common  stock.

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

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


                                       10
<PAGE>
<TABLE>
<CAPTION>
                                         Three months ended March 31,
                                      ---------------------------------
                                            2005              2004
                                      ---------------------------------
<S>                                   <C>                <C>
Net (loss) income
  As reported                         $       (400,986)          1,581
    Compensation expense for stock
      options based on fair value,
      net of taxes                             (69,047)        (69,047)
                                      ---------------------------------
    Pro forma net (loss)                      (470,033)        (67,466)
                                      ---------------------------------
Net income (loss) per share
    As reported - Basic and diluted   $          (0.01)           0.00
                                      ---------------------------------
    Pro forma - Basic and diluted                (0.02)          (0.00)
                                      ---------------------------------
</TABLE>

8.  EARNINGS  PER  SHARE

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

On January 6, 2004, the Company granted 4,000,000 shares of stock options to the
officers  and  key  employees  of  the  Company at an exercise price of $0.5 per
share.  Subsequent  to a 2 to 1 reverse share split, number of the stock options
reduced  proportionally  to 2,000,000 shares and the strike price was revised to
$1.00  per  share.  As  at  March 31, 2005, there were 2,000,000 shares of stock
option issued and outstanding but none of the stock option was exercisable until
January  7,  2007.  Although  the  average closing market price of the Company's
common  stock  as  at  March  31,  2005  was  approximately $1.01, which exceeds
slightly  the  exercise  price  of  $1.0  of  the  stock options, trading of the
company's  common stock was generally limited and sporadic, and the market price
reference  should  not  be deemed to constitute a reference for the computation.

These  stock  options were not considered to be potentially dilutive securities,
and  were not included in the calculation of loss per share for the three months
ended  March  31, 2005 because the Company incurred a loss during the period and
thus  their  effect  would  have been anti-dilutive. For the three months period
ended  March  31,  2004, the common shares issuable upon exercise of outstanding
stock  options  were also excluded from the calculation of diluted EPS since the
exercise  prices  exceeded  the  average  fair market value of the common stock.
Accordingly,  basic  and  diluted  EPS  is  the  same for the periods presented.


                                       11
<PAGE>
9.   RELATED PARTY TRANSACTIONS AND ARRANGEMENTS

(a)  Agreement with associated company

On  June  1, 2004, SDCL and FDI entered into an Agreement that SDCL engaged FDI,
its  controlled  associated  company,  as  its sales agent for the marketing and
distribution  of its amusement and simulation equipment as well as 3D/4D theatre
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 commission and incentive will be
reflected  in  the  ex-factory price and transferred to FDI through its purchase
from SDCL the related equipment and products. The Agreement can be terminated at
any  time  with  60  days  notice  to  the  other  party.

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  provided  that FDI may include in its sales
contract  a  cooperation  regarding  the  operation  of 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 those revenue sharing operations, which will be solely the
business  of  SDCL who will be responsible to contribute the equipment and fixed
assets  required  for  the  cooperation.  All  the revenues generating from such
cooperated  businesses will be received by SDCL, and all the related expenses as
stipulated  in  such  cooperation  contracts  will  be  borne  by  SDCL.

During  the  three  months  ended  March  31,  2005, SDCL sold to FDI a total of
$296,051  for  its resale to other customers, and FDI collected for SDCL a total
of $68,148 of the net revenue shared from three of the FunPlex amusement centers
signed  and  operated  for  SDCL.  During the three months ended March 31, 2004,
there  were  no  such  sale  and  revenue share transacted between SDCL and FDI.

(b)  Purchases of digital films and related components

During  the  three  months  ended March 31, 2005 and 2004, the Company purchased
certain  components  for  its  products  from  Hyvision Digital Film Inc. ("Film
Inc."),  an  affiliate  of  SHQ. Total purchases from Film Inc. were $72,289 and
$253,012,  respectively.

Amounts  due  from  Film Inc. were $180,723 and $24,096 as of March 31, 2005 and
2004,  respectively, which represented the advance payment made for the purchase
from  Film  Inc. Mr. Guangwei Liang and Mr. Ming Li are common directors of Film
Inc.  and  the  Company.

(c)  Sales to related parties

During  the  three  months  ended  March 31, 2005 and 2004, the Company sold its
amusement equipment to Hytech HK totaling $100,000 and $830, respectively. As at
March  31,  2005  and 2004, the amounts due from Hytech HK were $nil and $2,830,
respectively.

(d)  Related party receivables and payables

As  at  March 31, 2005 and 2004, the amounts payable and receivable from related
parties  are  summarized  as  follows:


                                       12
<PAGE>
<TABLE>
<CAPTION>
                                            March 31, 2005    March 31, 2004
                                           ----------------  ----------------
<S>                                        <C>               <C>
Amounts due from:
-----------------
Hytech HK (1)                              $             -   $         2,830
Shenzhen Huaqiang Industrial
  and Trading Co. Ltd. (2)                          17,470                 -
Chunren Xie (4)                                      1,500             1,500
Directors (5)                                       13,810            18,392
Film Inc. (6)                                      180,723            24,096
Shenzhen Huaqiang Technology Co., Ltd (7)            9,031                 -
                                           ----------------  ----------------
                                           $       222,534   $        46,818
                                           ================  ================
Amounts due to:
---------------
Hytech HK (1)                              $      (131,676)  $      (120,278)
Top Link Development Limited (3)                  (280,000)         (280,000)
Dehou FANG (3)                                     (20,000)          (20,000)
                                           ----------------  ----------------
                                           $      (431,676)  $      (420,278)
                                           ================  ================
</TABLE>

(1)  The amounts payable to Hytech HK represent the amount paid on behalf of the
     Company in respect of its administrative expenses incurred outside PRC. The
     amount  receivable  from  and  payable  to  Hytech  HK as at March 31, 2004
     totaling  $2,830 and $120,278, respectively, were not classified as related
     party  transactions  since  Hytech HK was then a subsidiary of the Company,
     which  amounts  were  eliminated  on  consolidation.  On  May 12, 2004, the
     Company  disposed and sold Hytech HK to Top Link Hi-Tech Development (H.K.)
     Limited  ("Top Link Hi-Tech"), a Hong Kong company ultimately owned by SHQ.
     These amounts are unsecured, non-interest bearing and have no definite term
     of  repayment.

(2)  Shenzhen  Huaqiang Industrial and Trading Co., Ltd. ("HIT") is an affiliate
     of  SHQ.  The  amount  was  loaned to HIT in relation to one of the revenue
     sharing  operations  which has been terminated and moved to other location.
     The  loan  is  unsecured, non-interest bearing and have no definite term of
     repayment.

(3)  The  amounts  due  from  Top Link Development Limited ("TLD") and Mr. Dehou
     Fang were classified as short term unsecured loans in 2003, which represent
     the  amounts loaned to Intsys Share Limited in 2002 for its payment for the
     acquisition  of Hytech US and other administrative expenses of the Company.
     TLD is the immediate holding company of Top Link Hi-Tech and Mr. Dehou Fang
     is  a  director  of  Intsys Share Limited. These related party loans in the
     amount of $300,000 are unsecured, non-interest bearing and have no definite
     term  of  repayment.

(4)  Chunren Xie is the 30% minority shareholder of Hytech US.

(5)  Amount  due  from  directors represented the cash advance for business trip
     and  trade  fairs.

(6)  The  amount  due from Film Inc. represented an advance deposit made to Film
     Inc.  for  the  purchase  of  digital  film  by  SDCL  and/or  FDI.

(7)  The  receivable due from Shenzhen Huaqiang Technology Co. Ltd. ("SHT") were
     the  interest  receivable  on  cash deposit placed with the clearing center
     organized  and  managed by SHT. The clearing center offered market interest
     rate  for  the  Company's  cash  fixed  deposit  and allowed flexibility of
     changing  deposit terms. SHT is a PRC company which holds 20.7% interest in
     the Company through a Share Swap arrangement effected on April 4, 2005. SHT
     is  also  a  20%  shareholder  of  Film  Inc.


                                       13
<PAGE>
10.  SEGMENT  REPORTING

The  Company  discloses  segment  information  in  accordance with SFAS No. 131,
"Disclosure  About  Segments  of  an  Enterprise and Related Information," which
requires  companies to report selected segment information 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 factors for determining reportable segments of the Company were based on the
nature  of  revenue  generated  from  its  products  and  services.  The revenue
generated  from  the  operations  of  the  Company  can be divided into two main
categories:  (1)  contracts  sales  of  equipment  or facilities used in hi-tech
amusement  centre  or  theme  park, 3D/4D theatre, and the related services; (2)
revenue sharing operations. Each segment involves different marketing strategies
and business techniques. The accounting policies of the segments are the same as
those  described  in the summary of significant accounting policies. The Company
evaluates  performance  based  on EBIT (earnings or loss before interest, taxes,
impairment  losses,  and  minority interest). The following table summarizes the
revenue and EBIT by segment for the three month periods ended March 31, 2005 and
2004.  Corporate  expenses  consist  of  general operating expenses that are not
directly  related  to  the  operations  of  the  segments.

<TABLE>
<CAPTION>
                                                March 31,    March 31,
                                                  2005         2004
                                               -----------  -----------
<S>                                            <C>          <C>
NET REVENUE:
  Contracted sales                             $  471,950   $1,090,595
  Revenue sharing operations                      202,516       27,748
                                               -----------  -----------
                                                  674,466    1,118,343
                                               ===========  ===========
EBIT (Unaudited)
  Contracted sales                                (38,400)     227,303
  Revenue sharing operations                        9,202       13,704
                                               -----------  -----------
                                                  (29,198)     241,007
  Corporate                                      (326,042)    (294,663)
                                               -----------  -----------
                                                 (355,240)     (53,656)
                                               ===========  ===========
Reconciliation of EBIT to net (loss) income:
  EBIT per segments                              (355,240)     (53,656)
  Minority interest (income) loss                 (13,405)      66,678
  Interest expenses, net                           32,308            -
  Income tax expenses                                  33       11,441
                                               -----------  -----------
NET (LOSS) INCOME                              $ (400,986)  $    1,581
                                               ===========  ===========
</TABLE>

During  the  three  months  ended  March  31,  2005,  approximately 21.1% of the
Company's contracted sale was from the Ukraine. There was no overseas sales made
for  the  three  months  ended  March  31,  2004.


11.  MINORITY  INTEREST

As  of  March  31,  2005,  the  minority interest balance was $4,135,831. It was
comprised  of  the  minority  shares  of  effectively  controlled  subsidiaries
including FDI and Hytech US. As of March 31, 2004, the minority interest balance
is  $5,722,502,  which  was comprised of the minority shares of SDCL, Hytech US,
Hytech  HK  and  FDI,  which  the Company did not own. As of March 31, 2005, the
Company  owned  70%  interest  in  Hytech  US  and  40%  interest  in  FDI.


                                       14
<PAGE>
During  the three months ended March 31, 2005, the Company recorded the minority
interests  share  of  income  of  $13,405, as compared to the minority interests
share  of  loss  of  $66,678  in  2004.

12.  SUBSEQUENT  EVENT

On April 4, 2005, a major shareholder of the Company, Vinsway Holding Limited
("Vinsway") (which was formerly controlled jointly by Mr. Jinqiang Zhang,
Guangwei Liang, Xinan Hu and Leichong Li and owns 6,222,963 shares of common
stock of the Company) through a share swap with Shenzhen Huaqiang Technology
Co., Ltd. ("SHT"), transferred all of its shares to SHT in exchange for an
aggregated 2.5% control in SHT.  SHT was incorporated in China with extensive
investments in different Chinese corporations. Xinan Hu, a former director of
the Company, is one of the Directors of SHT.

Subsequent  to  the  share  swap, SHT, through its effective control of Vinsway,
holds  a  significant  controlling  interest  of  20.68%  in the Company.  It is
expected  that  the  change  of  control  will  not  affect the stability of the
management  of  the  Company  as  well  as  its  shareholding  structure.


                                       15
<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, 2005
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,
as  amended,  including statements that include the words "believes", "expects",
"anticipates", or similar expressions. These forward-looking statements include,
among  others,  statements concerning the Company's expectations regarding sales
trends,  gross  margin  trends,  operating  costs,  the availability of funds to
finance  capital  expenditures  and  operations,  facility  expansion  plans,
competition,  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, 2005
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.

OVERVIEW

Fantatech  Inc.,  formerly Lucas Educational Systems, Inc., (the "Company"), was
incorporated  in  1996. Effective November 6, 2002, the Company acquired Intsys,
which, through its subsidiaries and affiliates, is engaged in the development of
hi-tech  entertainment  and  amusement  products,  including 4D theater, digital
film,  indoor entertainment centers (FunPlex) and large size indoor attractions,
intelligent  low  voltage engineering, theme site projects and the exploitation,
design  and  production  of  computer  systems  integration  projects.

The  Company  designs,  develops  and  produces  hi-technology entertainment and
amusement  products. Its technical team is experienced and creative in software,
film  production  and  comprehensive  serial  products  involving  wide range of
specialties, including computer engineering, digital film and video, simulation,
artificial  intelligence  and  system  integration.

Most  of  the  customers are located in the PRC, and sales to such customers are
generally  on  an  open  account  basis  with  deposit collected in advance. The
Company  purchased raw materials and certain components from different suppliers
located  in  the  PRC.

As  at  March  31,  2005,  there were ten revenue sharing FunPlex or 4D theaters
operating in different PRC cities including Changzhi, Dalian, Nanjing, Chenzhou,
Wuhan,  Beijing,  Zhuhai,  Chenzhou, Datong and Dongguan. A 4D Ride Dino-Rampage
also  commenced  its  operation  in Bejing in November 2004. The Dino Rampage in
Tianjin  has  been  scheduled  to  open  in  October 2005. As of March 2005, the
Company  has been contracted to build in the city of Chongqing a theme park with
10  to 12 large size attractions. A Floating Sphere 4D theatre is also currently
under  construction  and  scheduled  to  complete  in  December  2005.

During  the  three  months  ended  March  31,  2005,  the FunPlex in Nanjing and
Chenzhou  had  been  closed  down  due to the tenancy disputes between the local
venturers  and the landlords, to which the Company was not involved. The Company
is  planning  to relocate its equipment installed in those two premises to other
location  or  cities. It is anticipated that the value of those equipment can be
fully  recovered  through  the  reinstallation  in other revenue sharing FunPlex
locations,  and  no  impairment  provision  is  required.

The  unaudited  consolidated  financial  statements  of  the Company include the
accounts  of  the  Company and its wholly-owned and majority-owned subsidiaries.
All  material  intercompany  balances  and  transactions  are  eliminated  on
consolidation.  The  consolidated  financial  statements  have  been prepared in
accordance  with  generally  accepted accounting principles in the United States
and  are  presented  in  U.S.  Dollars  ("$").  The  functional  currency of the
Company's  PRC  operations  is  the  Renminbi


                                       16
<PAGE>
("RMB"). The accounts of foreign operations are prepared in their local currency
and  are translated into USD using the applicable rate of exchange. Transactions
denominated  in  currencies other than the U.S. Dollars are translated into U.S.
Dollars  at  the  applicable  exchange  rates.  Monetary  assets and liabilities
denominated  in  other  currencies  are  translated  into  U.S.  Dollars  at the
applicable rate of exchange at the balance sheet date. The resulting translation
gains  or  losses  are  credited  or  charged  to the consolidated statements of
operations.


CRITICAL  ACCOUNTING  POLICIES:

The  discussion and analysis of the Company's financial condition and results of
operations  is based upon its unaudited consolidated financial statements, which
have  been  prepared in accordance with accounting principals generally accepted
in the United States. The Company prepares its consolidated financial statements
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 consolidated
financial  statements.

Revenue  and  cost  recognition:

The Company principally derives and recognizes its revenue from the followings:

(1-a)  Long-term  construction  contract  revenue  and  costs  are recognized as
revenue and expenses in the statement of operations by reference to the stage of
completion  of  a  contract  (i.e. the percentage of completion method) when the
outcome of that contract can be estimated reliably. The stage of completion of a
contract  is  determined  based  on  the  proportion  that costs incurred to the
balance  sheet  date  bear  to  total  estimated  costs. A loss on a contract is
recognized  as  an  expense  immediately when it is probable that total contract
costs  will exceed total the contract revenue. The Company recorded $471,950 and
$1,090,595  as  revenues  from long-term contracts by reference to the stages of
completion.

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

(2) Revenue generated from admission fees shared from revenue sharing operations

Income  is  recognized  when  the  agreed percentage of revenue from the revenue
sharing  operations become due and receivable. The Company recorded $202,516 and
$27,748  as  revenues  from  its revenue sharing operations for the three months
ended  March  31,  2005  and  2004.

Income  taxes:

The  Company  accounts  for  income tax using Statements of Financial Accounting
Standards  ("SFAS") No. 109 "Accounting for Income Taxes". SFAS No. 109 requires
an  asset  and  liability  approach  for  financial accounting and reporting for
income taxes and allows recognition and measurement of deferred tax assets based
upon  the  likelihood  of realization of tax benefits in future years. Under the


                                       17
<PAGE>
asset  and  liability  approach,  deferred  taxes  are  provided for the net tax
effects  of  temporary  differences  between  the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes.  A  valuation  allowance  is provided for deferred tax assets if it is
more  likely  than not these items will either expire before the Company is able
to  realize  their  benefits,  or  that  future  deductibility  is  uncertain.

Inventories:

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

Asset  Impairment:

The  Company  reviews  its  long-lived  assets  and identifiable intangibles for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying  amount  of  the asset may not be recoverable. In performing the review
for  recoverability,  the  Company  estimates  the future cash flows expected to
result from the use of the asset and its eventual disposition. If the sum of the
expected  future  cash flows (undiscounted and without interest charges) is less
than  the  carrying  amount  of  the  asset,  an  impairment loss is recognized.
Otherwise,  an  impairment  loss is not recognized. Measurement of an impairment
loss  for  long-lived  assets and identifiable intangibles would be based on the
fair  value of the asset. During the three months ended March 31, 2005 and 2004,
no  impairment  charges  were  recorded.


CONSOLIDATED RESULTS OF OPERATIONS

Three months ended March 31, 2005 and 2004:

The  unaudited  consolidated statements of operations for the three months ended
March  31,  2004  have  been adjusted in order to provide comparison for segment
performance.  This  adjustment  had  no  effect on the operating results for the
period  concerned.

REVENUE
For  the  three months ended March 31, 2005, net sales were $674,466 as compared
to  net  sales  of  $1,118,343  for  the  three  months  ended  March  31, 2004.
Approximately  30.0%  and  2.5% of the net sales in 2005 and 2004, respectively,
were from the revenues generated from the revenue sharing operations.

During  the three months ended March 31, 2005, net contracted sales decreased by
$618,645  or  56.7%  to $471,950, as compared to $1,090,595 for the three months
ended  March  31,  2004. This was primarily due to the normal fluctuation of the
business  since  the  recognition  of revenue from contracted sales was based on
stages  of  completion,  with which most of the contracts in progress during the
three  months  ended  March 31, 2005 were in their early stages of construction.

During the three months ended March 31, 2005, the Company recorded revenues from
its revenue sharing operations totaling $202,516 as compared to $27,748 in 2004,
representing  an  increase  of  $174,768  or  629.8%.  The  increase  was mainly
attributable  to the increase in the number of FunPlex amusement centers opening
during  the  three  months  ended  March  31,  2005.

GROSS  PROFIT
For  the  three  months ended March 31, 2005, total gross profit was $160,204 or
23.8% of total net sales, as compared to total gross profit of $377,489 or 33.8%
of  total net sales for the three months ended March 31, 2004. Net of the effect
from  the  revenue  sharing  operations,  gross  profit  margin  decreased  by


                                       18
<PAGE>
1.4%,  which  was primarily due to the slightly lower contribution provided from
certain  contracted  sales  recognized  during  the  period  concerned.

During  the  three  months ended March 31, 2005, total gross profit from revenue
sharing operations was $9,202 or 4.5% of the total segment revenues, as compared
to  total gross profit of $13,704 or 49.4% of the total segment revenues for the
three  months  ended  March  31, 2004. The lower gross profit margin recorded in
2005  on  the revenue sharing operations was attributable to the larger scale of
resources  and  amount  of  depreciation  involved  with  the  ten  FunPlexes in
operations.  In  addition,  the  closing  of two FunPlex located in Chenzhou and
Nanjing  during  the  three  months ended March 31, 2005 has reduced the overall
gross  profit  from the revenue sharing operations. The Company anticipates that
the  gross  profit from those revenue sharing operations will increase gradually
following the relocation of this equipments from the two closed FunPlex to other
new  locations.

SELLING  AND  MARKETING  EXPENSES
Selling and marketing expenses increased by $52,920 or 38.8% to $189,402 for the
three months ended March 31, 2005 from $136,482 for the three months ended March
31,  2004.  This was primarily due to the increase in marketing, promotional and
exhibition  expenses  in  2005.

GENERAL  AND  ADMINISTRATIVE  EXPENSES
General  and  administrative expenses ("G&A expenses") consist of the management
office  operating  costs  of SDCl, FDI, Hytech US, 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, 2005, G&A expenses increased by $37,765 or 12.3% to $345,250 as
compared  to  the  G&A expenses of $307,485 for the three months ended March 31,
2004.  The  increase  is  primarily  due  to  the  increase in personnel related
expenses.

LOSS  FROM  OPERATIONS
Loss  from  operations  for  the  three months ended March 31, 2005 increased by
$307,970 to $374,448, as compared to the loss from operations of $66,478 for the
three  months  ended  March  31,  2004.  The  increase  in  operating  loss  was
attributable  to the decrease in contracted sales recognized and the increase in
selling,  general  and  administrative  expenses  in  2005.

OTHER  INCOME  (EXPENSES)
For  the  three  months  ended  March  31,  2005,  interest income was $3,986 as
compared  to  interest  income  of  $25,180 for the three months ended March 31,
2004,  due  primarily  to  the decrease in average bank deposit balance in 2005.

For  the  three months ended March 31, 2005, interest expense was $32,308, while
there  was  no  interest  expenses incurred for the three months ended March 31,
2004,  as a result the increase in average bank borrowings outstanding amount in
2005.

Other  income  was $14,865 for the three months ended March 31, 2005 as compared
to  other  expense  of  $14,084  for  the three months ended March 31, 2004. The
increase  in  other  income  was attributable to the miscellaneous income earned
from  the  sales  of  IC  card  and  repair  services.

MINORITY  INTEREST
During  the  three  months ended March 31, 2005, the Company recorded a minority
interests'  share  of  income of $13,405, as compared to the minority interests'
share  of loss of $66,678 for the three months ended March 31, 2004. As at March
31, 2005, the minority interests represented effectively the 60% shareholding in
FDI  and  30%  in  Hytech  US.

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 Hytechnology Inc. are both Delaware corporations and are subject to the
corporation  income  taxes  of  the  United  State  of  America.  Intsys  and


                                       19
<PAGE>
Megabase  are not liable for income taxes in BVI. The Company's PRC subsidiaries
and  associates are subject to Enterprise Income Tax in the PRC 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 (years 1999 to 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 PRC subsidiaries, calculated based on the prevailing
accounting  standards in PRC, for the three months ended March 31, 2005 and 2006
were  $33  and  $11,441,  respectively.

NET  (LOSS)  INCOME
The Company recorded a net loss of $400,986 for the three months ended March 31,
2005  as  compared  to the net income of $1,581 for the three months ended March
31,  2004.  This  was primarily due to the decrease in recognized contract sales
and  the  relative  increase  in  selling,  general and administrative expenses.


FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES

Operating
---------
For  the  three  months  ended March 31, 2005, the Company's operations provided
cash  resources  of $403,354, as compared to $130,514 for the three months ended
March  31,  2004,  primarily as a result of an increase in cash flows related to
inventories,  costs  and estimated earnings in excess of billings on uncompleted
contracts,  related  party  receivable  and  account  payable  and other accrued
liabilities,  offset  in  part  by  a  decrease  in  cash  flow related to other
receivables,  billings  in excess of costs and estimated earnings on uncompleted
contracts  and  related  party payables. The Company's cash balance decreased by
$1,974,820  to  $2,104,071 at March 31, 2005, as compared to $5,129,570 at March
31,  2004.  The Company's net working capital surplus decreased by $2,527,337 to
$878,236  at March 31, 2005, as compared to $3,405,573 at December 31, 2004, and
the  Company  had  a  current  ratio at March 31, 2005 of 1.11:1, as compared to
1.43:1  at  December  31,  2004.

The  costs and estimated earnings in excess of billings decreased by $404,493 or
16.8% to $2,009,625 at March 31, 2005, as compared to $2,414,118 at December 31,
2004, which was attributable to the gradual recognition of revenue from projects
under  construction. The billings in excess of costs and estimated earnings also
decrease  by  $197,295  or 12.11% to $1,432,113 at March 31, 2005 as compared to
$1,629,408  at  December  31,  2004.

During  the  three  months  ended  March 31, 2005, the Company recorded in other
receivables  a total of $177,180 representing the tax recoverable or receivable,
which  primarily consisted of tax credit generated from the input VAT on the raw
materials purchased and were available for offsetting the potential output value
added taxes ("VAT") liabilities when the Company invoices its customers.

During  the  three  months  ended  March  31, 2005, the Company has a deposit of
$9,160  in  Guaranteed  Unit Trust Fund with a licensed bank. The deposit can be
redeemed  at  any  time  with  capital  repayment  guaranteed.

During  the  three  months  ended  March  31, 2005, the total amount of accounts
payable,  accrued  liabilities and other payables increased by $264,827 or 19.2%
to  an  aggregate of $1,644,168 at March 31, 2005, as compared to $$1,379,341 at
December  31, 2004, which was due to the increase in purchases by the Company in
order  to  fulfill  the  uncompleted  contracts.

The  amount  receivable  from  related  party  decreased by $255,167 or 53.4% to
$222,534  at  March  31,  2005, as compared to $477,701 at December 31, 2004 due
primarily  to the repayment of trade receivable by Hytech HK. The amount payable
to  related  party  also decreased by $218,912 or 33.6% to $431,676 at March 31,
2005,  as compared to $650,588 at December 31, 2004 attributable to the decrease
in  amount  payable to Hytech HK in relation to the settlement of administrative
expenses  on  behalf  of  the  Company.


                                       20
<PAGE>
Investing
---------
Additions  to  property,  plant  and equipment for during the three months ended
March  31, 2005 aggregated $2,278,385, in which $2,157,935 was for investment in
the  revenue  sharing  FunPlex operations. In addition, there was an increase of
construction  in  progress of $99,789 or 4.4% at March 31, 2005 to $2,355,786 as
compared  to  $2,255,997  at  December  31, 2004 as the Company has devoted more
resources  on  the  new  projects of FunPlex, Sphere floating 4D theater and 4-D
Ride  Dino  Rampage.  As  at March 31, 2005, the Company had capital expenditure
requirement  of  approximately  $6,700,000 in order to complete the contracts on
hand.  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,  2005,  there was no change to the
Company's  short-term  bank loan totaling $2,433,735 as compared to the position
as of December 31, 2004. The bank loans bear interest at fixed rate of 5.31% per
annum  with  interest  payable monthly and the principal is due for repayment in
September  2005.  The  loan was guaranteed by Shenzhen Huaqiang Holdings Limited
("SHQ"),  a  related  party  to  the  Company.

The  Company anticipates that, based on currently 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, are sufficient
to  support the Company's working capital requirement for its planned operations
for  the next twelve months. Depending on the future rate of growth, the Company
may seek additional capital in the future to support its expansion in operations
and  acquisitions.


ITEM 3 - CONTROLS AND PROCEDURES

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.

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


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.


                                       21
<PAGE>
PART II - OTHER INFORMATION


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

During the three months ended March 31, 2005 and 2004, the Company did not issue
any  shares  of common stock or had any unregistered sales of equity securities.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits.

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

(b)  Reports on Form 8-K

There  was  no  report filed on the Form 8-K during the three months ended March
31,  2005.

On April 14, 2005, the Company filed a current report on Form 8-K, regarding the
resignation  of  two of the Company's directors and the appointment of Mr. Aiguo
Deng  and  Mr.  Hui  Zhao  as  directors  to  fill  the  vacant  seats.


                                       22
<PAGE>
                                   SIGNATURES


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



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



Dated:  May 24, 2005                        By /s/ Guangwei Liang
                                            -----------------------------
                                            Guangwei  Liang
                                            Chief Executive Officer



Dated:  May 24, 2005                        By  /s/  Carl Yuen
                                            -----------------------------
                                            Carl  Yuen
                                            Chief Financial Officer


                                       23