FORM 10Q-SB

General Form for Registration of Securities

of Small Business Issuers



Under Section 12(b) or (g) of

the Securities Exchange Act of 1934



Wintech Digital Systems Technology Corporation

(Exact name of Registrant as specified in its charter)





|NEVADA                                         | 0-30553                   | 88-0325524                          
|---------------------------------------------- | ------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation) | (Commission  File Number) | (I.R.S. Employee Identification No.)





2nd Floor, Caihong Building, 11 Xinxi Road, Shangdi, Haidian District, Beijing, China 100085 (Address of principal executive offices)



Registrant's telephone number, including area code: (8610) 82782828



[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934





For the quarterly period ended September 30, 2003



[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934



Indicate  the  number of shares  outstanding  of each of the  registrant's

classes of common stock, as of the latest practicable date.



Class                     Outstanding as of   September  30, 2003



$0.001 Par Value     14,992,100 Class A Common Stock Shares







TABLE OF CONTENTS



PART 1



ITEM  1.  FINANCIAL  STATEMENTS



ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION



ITEM  3.  CONTROLS AND PROCEDURES







PART II

ITEM  1.  LEGAL  PROCEEDINGS



ITEM  2.  CHANGES  IN  SECURITIES AND USE OF PROCEEDS



ITEM  3.  DEFAULTS UPON SENIOR SECURITIES



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



ITEM  5.  OTHER INFORMATION



ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K



SIGNATURES



INDEX  TO  EXHIBITS









PART 1. FINANCIAL INFORMATION



Item 1. Financial Statements.



Wintech Digital Systems Technology Corporation

Index To Unaudited Consolidated Financial Statements



|                                                   | Pages
|-------------------------------------------------- | -----
|Condensed Consolidated  Balance  Sheet             | F-1  
|Condensed Consolidated  Statement  of  Operations  | F-2  
|Condensed Consolidated  Statement  of  Cash  Flows | F-3  













Wintech Digital Systems Technology Corp.

Condensed Consolidated  Balance  Sheet as of September  30, 2003

(Unaudited) and June 30, 2003 (Audited)



|ASSETS                                | As of  Sep. 30,
2003 | As of June 30,
2003
|------------------------------------- | -------------------- | -------------------
|(Unaudited)                           | (Audited)           
|USD                                   | USD                 
|Current Assets                        |                      |                    
|Cash & cash equivalents               | $780,290.00          | $707,101.00        
|Accounts receivable, net of allowance | 60,260.00            | 42,122.00          
|Other receivables                     | 62,355.00            | 48,162.00          
|Inventory                             | 279,633.00           | 293,620.00         
|Total Current Assets                  | 1,182,538.00         | 1,091,105.00       
|                                      |                      |                    
|Property & equipment                  | 210,229.00           | 210,229.00         
|Accumulated depreciation              | (112,057.00)         | (104,532.00)       
|Total property & equipment            | 98,172.00            | 105,697.00         
|                                      |                      |                    
|Total Assets                          | $1,280,710.00        | $1,196,702.00      





See notes to condensed consolidated financial statements















|                                 | L I A B I L I T I E S & S T O C K H O L D E R S' E Q U I T Y

Current Liabilities                                                                        
|-------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|                                 | Accounts payable                                                                                                                                         
|                                 | Accrued expenses                                                                                                                                         
|                                 | Due to a director                                                                                                                                        
|                                 | Other taxes payable                                                                                                                                      
|                                 | Income taxes payable                                                                                                                                     
|                                 | Total Current Liabilities                                                                                                                                
|                                 |                                                                                                                                                          
|                                 | Stockholders'  Equity
Common stock, 200,000,000 shares authorized par value of $0.001; 14,992,100 & 13,813,700 shares issued and outstanding respectively
|                                 |                                                                                                                                                          
|                                 | Issuance of non-voting shares par value of US$0.001; 1,200,000 & 1,700,000 shares                                                                        
|                                 |                                                                                                                                                          
|                                 | Additional paid in capital                                                                                                                               
|                                 |                                                                                                                                                          
|                                 | Accumulated deficit                                                                                                                                      
|                                 |                                                                                                                                                          
|Amounts due from related parties | (120,239.00)                                                                                                                                             
|                                 |                                                                                                                                                          
|                                 | Statutory reserves                                                                                                                                       
|                                 |                                                                                                                                                          
|                                 | Net Stockholders' Equity                                                                                                                                 
|                                 | Total Liabilities and Investors' Equity                                                                                                                  





F-1

Wintech Digital Systems Technology Corp.

Condensed Consolidated Statement of Operations Stated in USD ( Unaudited)



|                                                        | For the Three Months Ended Sep. 30
|------------------------------------------------------- | ----------------------------------
|                                                        | 2003                              
|                                                        | (Unaudited)
USD                   
|Revenues
Sales of Products and Services...             | $288,571.87                       
|                                                        |                                   
|Cost of Products and Services.                        | (111,844.93)                      
|Gross Profit.                                    | 176,726.94                        
|Expenses                                                |                                   
|Selling, general and administrative expenses. | (192,201.45)                      
|Loss from Operations                                    | (15,474.51)                       
|Other Income                                            | 100.00                            
|Interest income                                         | 1,079.62                          
|Total Other Income (Expenses)                           | 1,179.62                          
|                                                        |                                   
|Loss before income taxes                                | (14,294.89)                       
|Provisions for income tax..                          | 0.00                              
|Net loss .                                         | $(14,294.89)                      
|Basic Loss Per Share                                    | (0.001)                           
|Diluted Loss Per Share                                  | (0.001)                           
|Weighted Average Shares Outstanding                     | 15,786,535                        



See notes to condensed consolidated financial statements

F-2

Wintech Digital Systems Technology Crop.

Condensed Consolidated Statement of Cashflows Stated in USD(Unaudited)



|                                                                                          | For the Three Months Ended Sep. 30
|----------------------------------------------------------------------------------------- | ----------------------------------
|                                                                                          | 2003                              
|Cash Flows from Operating Activities                                                      |                                   
|Net Loss                                                                                  | $(14,295.00)                      
|                                                                                          |                                   
|Adjustments to Reconcile Net Loss to Net Cash Provided by (Used in) Operating Activities: |                                   
|Depreciation                                                                              | 7,525.00                          
|Expenses not involving cashflows - compensation cost
(note 2)                             | 18,655.00                         
|Change in Operating Assets & Liabilities                                                  |                                   
|(Increase) Decrease in accounts receivable                                                | (18,138.00)                       
|Decrease in inventory                                                                     | 13,987.00                         
|Increase in other receivable                                                              | (14,193.00)                       
|Decrease in due from related parties                                                      | 0.00                              
|Decrease (Increase) in accounts payable                                                   | 1,501.00                          
|Decrease in income taxes payable                                                          | (326.00)                          
|Increase in other taxes payable                                                           | 26,627.00                         
|Increase in accrued expenses                                                              | 10,302.00                         
|Increase in due to a director                                                             | 41,544.00                         
|Net Cash Provided by Operating Activities                                                 | 73,189.00                         
|                                                                                          |                                   
|Cash Flows from Investing Activities                                                      |                                   
|Purchase of fixed assets                                                                  | 0.00                              
|Net Cash Used in Investing Activities                                                     | 0.00                              
|                                                                                          |                                   
|                                                                                          |                                   
|Increase in Cash & Cash Equivalents                                                       | 73,189.00                         
|                                                                                          |                                   
|Cash & Cash Equivalents at Beginning of Period                                            | 707,101.00                        
|                                                                                          |                                   
|Cash & Cash Equivalents at End of Period                                                  | $780,290.00                       





See notes to condensed consolidated financial statements





F-3











Wintech Digital Systems Technology Corp.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





Note 1.       Basis of Presentation



The accompanying financial statements as of September 30, 2003 and for the three-month period ended September 30, 2003, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations.  However, the Company believes that the disclosures are adequate to make the information presented not misleading.  These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Companys audited annual financial statements for the year ended June 30, 2003.



The preparation of financial statements in conformity with accounting principles general accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities.  Actual results could differ from these estimates.



In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position as of September 30, 2003, the results of operations for the three-month period ended September 30, 2003 and cash flows for the three-month period ended September 30, 2003, have been made.  The results of operations for the three-month period ended September 30, 2003 are not necessarily indicative of the operating results for the full year.







Note 2.

Issuance of shares



Details of new shares issued during the period are disclosed in Part II, item 2.



Note 3.    Related party transactions

During the period, shares were issued to directors and officers of the Company as part of their compensation. Details are described in Part II, item 2.



Item 2.  Managements Discussion and Analysis or Plan of Operations





The following  discussion and analysis should be read in  conjunction  with the Company's financial statements and notes thereto included elsewhere in this Form 10-QSB.  Except for the historical  information contained herein, the discussion in this Form 10-QSB contains  certain  forward  looking  statements that involve risks and uncertainties,  such as statements of the Company's plans, objectives,

expectations and intentions.  The cautionary statements made in this Form 10-QSB should be read as being  applicable to all related forward  statements  wherever they appear in this Form  10-QSB.  The  Company's  actual  results  could differ materially from those discussed here.





A.

Managements Discussion and Analysis of Financial Condition and Results of Operations



Three-month ended September 30, 2003 compare to three-month ended September 30, 2002.



Three Months ended

September 30, 2003                    September 30, 2002

(Unaudited)                                 (Unaudited)

Net sales        $288,571.87                                   $194,247.35





The increase in revenue was due to the increase in the sales of new products, such as TDS510USB2.0 and the new University Experiment Systems. DSP6X sales and TI development tools sales also increased. With its price  advantage, the management expects that TDS510USB2.0 will bring increased sales in the international market in the future.



Costs  consist  primarily of material purchase, salaries for  engineers,  costs of promotion,  rental expenses for office,   depreciation  and other  miscellaneous  expenses.   The increase in costs (mainly the  cost of materials and cost  of promotion) was primarily  attributable  to  the increase of sales.



The inventory decreased by $13,987 compared with the same period in the previous year.  The decrease of inventory is due to the increase in sales, and enhanced planning in purchasing.





The Company is not aware of any  circumstances  or trends  which  would have a negative  impact  upon  future  sales or  earnings.  There have been no material fluctuations in the standard seasonal variations of the Company's business.  The accompanying financial statements include all adjustments, which in the opinion of  management  are  necessary  in order to make the  financial  statements  not misleading.





Liquidity  and  Capital  Resource.



As of September 30, 2003, cash and cash equivalents were $780,290.00 versus  $707,101.00  for that as of June 30,  2003.  The increase in cash is mainly due to the increase of sales and inventory reduction measures.



Business  Risks.



The Company believes that the main risk is the continued slow down in the technology sector, especially in the telecom sector. Engineers developing telecom equipment are major customers of the Wintech products. The slow-down in the telecom sector reduces the demand on DSP emulators and DSP development boards.   This means reduced sales and decrease in unit price.



Competition.



Competition is emerging in the Chinese market which resulted in price reduction and hurts the  Companys revenue.  But Wintech still has much stronger R&D capability than that of many competitors in China. As Wintech enters the global market, it faces about five major competitors in the US and Europe.  Wintech will rely on competitive price to compete  in the global market.



Management of Growth.



Since June, 2002, the Company has been making  progress in fine tuning its products for the global market while test marketing its products in the US, Korea, Japan, England, Taiwan and Israel. The Company believes that it can increase its revenue once it starts to enter the global market in full force, once its TDS560USB2.0 is released and TDS510USB2.0 is further improved.



B.

Plan of Operation



The Company believes that its cash reserve is sufficient for its operation in the next 12 month and there is no plan to raise funding during the next 12 months. The company is continuing in the development of TDS560USB2.0 and its IP-based Video phone product and hope to release TDS560USB2.0 in the next quarter.







Item  3.  Controls and Procedures

Evaluation of disclosure controls and procedures: The Company's chief executive officer and chief financial officer, after evaluating the effectiveness of the Company's disclosure controls and procedures (as defined in Sections 13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934, as amended), as of a date (the "Evaluation Date") within 90 days before the filing date of this quarterly report, have concluded that as of the Evaluation Date, the Company's disclosure controls and procedures were adequate and are designed to ensure that material information relating to the Company would be made known to such others within the Company.



Changes in internal controls: There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the Evaluation Date.















PART  II  -  OTHER  INFORMATION



Item  1.  Legal  Proceedings



None.



Item  2.  Changes  in  Securities and Use of  Proceeds



On August 25, 2003, the Company issued 500,000 shares to Mr. Kun Tan, who holds these shares on behalf of an algorithm development group (Group). These shares were issued according to an agreement signed in July 2002 with this Group.  According to the agreement, the Company acquired all the VOIP, imaging processing, and multimedia communication algorithms developed and owned by the Group for 2,100,000 shares of the Companys common stock.  The shares are to be issued in four installments, contingent to the terms and conditions set forth in the agreement.  The first payment of 400,000 shares was issued to the Group in July 2002.  The other two installments are to be paid during the next two years.



Also on August 25, 2003, the Company issued common stocks to the following directors and officers as part of their compensation: 420,000 were issued to Mr. Yonghong Dong, 10,000 shares were issued to Mr. Xiaming Chen, 98,400 shares where issued to Ms. Mingjuan Tan, 20,000 shares were issued to Mr. Mingrong Li, and 10,000 shares were issued to Mr. Changjiang Deng. Four key employees also received common stocks totaling 120,000 shares.  The issue price for these 678,400 shares was based on the net assets value of latest audited accounts for the year ended June 30, 2003 of US$0.0275 per share, totaling US$678 as issued common stock and US$17,977 as additional paid-in capital.  The amount was recognized as an expense in the three-month period ended September 30, 2003.



Item  3.  Defaults  Upon  Senior  Securities



None.



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



None.



Item  5.  Other  Information



None.



Item  6.  Exhibits  and  Reports  on  Form  8-K



None









CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Quartly Report of Wintech Digital System Technology Corp. (the "Company") on Form 10-QSB for the year ended September 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Yonghong Dong, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:



1. I have reviewed the Report on Form 10-QSB of the Company;



2. Based on my knowledge, the Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the Report;



3. Based on my knowledge, the financial statements, and other financial information included in the Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in the Report;



4. The Companys other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



a)

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;



b)

evaluated the effectiveness of the Company's disclosure controls and procedures as of a date within 45 days prior to the filing date of this annual report (the "Evaluation Date"); and



c)

presented in the Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;





5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):



a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and



b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls; and



6. The registrant's other certifying officers and I have indicated in the Report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



/s/  Yonghong Dong

-----------------------

By: Yonghong Dong

Chief Executive Officer

November 14, 2003



CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002





In connection with the Quartly Report of Wintech Digital System Technology Corp. (the "Company") on Form 10-QSB for the year ended September 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jianpeng Zhang, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:



1. I have reviewed the Report on Form 10-QSB of the Company;



2. Based on my knowledge, the Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the Report;



3. Based on my knowledge, the financial statements, and other financial information included in the Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in the Report;



4. The Companys other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



a)

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;



b)

evaluated the effectiveness of the Company's disclosure controls and procedures as of a date within 45 days prior to the filing date of this annual report (the "Evaluation Date"); and



c)

presented in the Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;





5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):



a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and



b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls; and



6. The registrant's other certifying officers and I have indicated in the Report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



/s/ Jianpeng Zhang

-------------------------

By: Jianpeng Zhang

Chief Financial Officer

November 14, 2003