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, 2005



[ ] 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, 2005



$0.001 Par Value     15,702,100 Class A Common Stock Shares







TABLE OF CONTENTS



PART 1

FINANCIAL INFORMATION



ITEM  1.  FINANCIAL  STATEMENTS



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



ITEM  3.  CONTROLS AND PROCEDURES







PART II

OTHER INFORMATION



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



INDEX  TO  EXHIBITS









PART 1. FINANCIAL INFORMATION



Item 1. Financial Statements.



Wintech Digital Systems Technology Corporation

Index To Unaudited Condensed 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  
|Notes to Condensed Consolidated Financial Statements | F-4  













Wintech Digital Systems Technology Corp.

Condensed Consolidated  Balance  Sheet as of Sept  30, 2005

(Unaudited) and June 30, 2005(Audited)



|ASSETS
Note                                  | As of   Sept  30, 2005 | As of June 30, 2005
|-------------------------------------------- | ---------------------- | -------------------
|(Unaudited)                                  | (Audited)             
|USD                                          | USD                   
|Current Assets                               |                        |                    
|Cash and cash equivalents                    | $854,826               | $976,601           
|Accounts receivable, trade, net of allowance | 45,181                 | 91,784             
|prepayments and other receivables            | 63,809                 | 46,444             
|Inventories
3                                | 284,679                | 223,678            
|Total Current Assets                         | 1,248,495              | 1,338,507          
|                                             |                        |                    
|Property and equipment                       | 335,787                | 330,329            
|Accumulated depreciation                     | (209,745)              | (202,533)          
|Total property and equipment                 | 126,042                | 127,796            
|                                             |                        |                    
|Total Assets                                 | $1,374,537             | $1,466,303         

































|                                 | LIABILITIES & STOCKHOLDERS' EQUITY

Current Liabilities                                                                        
|-------------------------------- | -------------------------------------------------------------------------------------------------------------------------------
|                                 | Accounts payable, trade                                                                                                        
|                                 | Accrued charges and other payables                                                                                             
|                                 | Due to a director                                                                                                              
|                                 | Taxes other than income                                                                                                        
|                                 | Income taxes payable                                                                                                           
|                                 | Surcharge  on  taxes  payable                                                                                                  
|                                 | Total Current Liabilities                                                                                                      
|                                 |                                                                                                                                
|                                 | Commitments and Contingencies                                                                                                  
|                                 |                                                                                                                                
|                                 | Stockholders'  Equity
Common stock, 200,000,000 shares authorized par value of $0.001; 15,702,100 shares issued and outstanding
|                                 |                                                                                                                                
|                                 | Non-voting shares par value of US$0.001; 1,200,000 shares                                                                      
|                                 |                                                                                                                                
|                                 | Additional paid in capital                                                                                                     
|                                 |                                                                                                                                
|                                 | Accumulated deficit                                                                                                            
|                                 |                                                                                                                                
|Amounts due from related parties | (107,597)                                                                                                                      
|                                 |                                                                                                                                
|                                 | Statutory reserves                                                                                                             
|                                 |                                                                                                                                
|                                 | Net Stockholders' Equity                                                                                                       
|                                 | Total Liabilities and Stockholders' Equity                                                                                     



See notes to condensed consolidated financial statements

F-1

Wintech Digital Systems Technology Corp.

Condensed Consolidated Statement of Operations





|                                                        | For the Three Months Ended Sep. 30
|------------------------------------------------------- | ----------------------------------
|                                                        | 2005                              
|                                                        | (Unaudited)
USD                   
|Revenues
Sales of Goods                                 | $217,689                          
|                                                        |                                   
|Cost of Goods                                           | (61,916)                          
|Gross Profit.                                    | 155,773                           
|Expenses                                                |                                   
|Selling, general and administrative expenses. | (231,710)                         
|Loss from Operations                                    | (75,937)                          
|Other Income                                            | 10,372                            
|Interest income                                         | 1,575                             
|Total Other Income                                      | 11,947                            
|                                                        |                                   
|Loss before income taxes                                | (63,990)                          
|Provisions for income tax..                          | 0                                 
|Net loss .                                         | $(63,990)                         
|Basic Loss Per Share                                    | (0.00)                            
|Diluted Loss Per Share                                  | (0.00)                            
|Weighted Average Shares Outstanding                     | 16,902,100                        



See notes to condensed consolidated financial statements

F-2

Wintech Digital Systems Technology Crop.

Condensed Consolidated Statement of Cash Flows



|                                                                            | For the Three Months Ended Sep 30
|--------------------------------------------------------------------------- | ---------------------------------
|                                                                            | 2005                             
|                                                                            | (Unaudited)
USD                  
|Cash Flows from Operating Activities                                        |                                  
|Net Loss                                                                    | $(63,990)                        
|                                                                            |                                  
|Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: |                                  
|Depreciation                                                                | 7,212                            
|                                                                            |                                  
|Changes in working capital:                                                 |                                  
|Decrease (Increase) in accounts receivable                                  | 46,603                           
|Decrease in inventories                                                     | (61,001)                         
|Decrease (Increase) in prepayments and other receivables                    | (17,365)                         
|(Decrease) Increase in accounts payable                                     | (38,187)                         
|Increase in income taxes payable                                            | 0                                
|(Decrease) Increase in taxes other than income                              | (5,598)                          
|Increase in accrued charges and other payables                              | 13,198                           
|Increase in surcharge on taxes payable                                      | 128                              
|Decrease in due to a director                                               | 0                                
|Net Cash Used in Operating Activities                                       | (119,000)                        
|                                                                            |                                  
|Cash Flows from Investing Activities                                        |                                  
|Due from related parties                                                    | 2,683                            
|Purchase of fixed assets                                                    | (5,458)                          
|Net Cash Used in Investing Activities                                       | (2,775)                          
|                                                                            |                                  
|                                                                            |                                  
|Decrease in Cash and Cash Equivalents                                       | (121,775)                        
|                                                                            |                                  
|Cash & Cash Equivalents at Beginning of Period                              | 976,601                          
|                                                                            |                                  
|Cash & Cash Equivalents at End of Period                                    | $854,826                         





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, 2005 and for the three-month period ended September 30, 2005, 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 accounting principles generally accepted in the United States of America 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, 2005.



The preparation of financial statements in conformity with accounting principles generally 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, 2005, the results of operations and cash flows for the three-month period ended September 30, 2005, have been made.  The results of operations for the three-month period ended September 30, 2005 are not necessarily indicative of the operating results for the full year.



Note 2

Recent Accounting Pronouncements



There are no new accounting pronouncements for which adoption is expected to have a material effect on our financial position or results of operations.



Note 3.

Inventories

|                                    | As of Sep  30, 2005 | As of June 30, 2005
|----------------------------------- | ------------------- | -------------------
|(Unaudited)                         | (Audited)          
|USD                                 | USD                
|Inventories comprise the following: |                     |                    
|                                    |                     |                    
|Raw materials                       | 123,230             | 96,894             
|Work-in-progress                    | 45,455              | 16,353             
|Finished goods                      | 115,994             | 110,431            
|                                    |                     |                    
|                                    | 284,679             | 223,678            





Note 4

Contingencies



The Company had been paying the PRC VAT at a basis of calculation which was not in accordance with the standard basis of calculation as stipulated by the PRC tax law.  The Company has made full tax provision in accordance with relevant tax law in the PRC, together with a surcharge that may be levied on the Company at a daily rate of 0.05% of the unpaid taxes.



Despite the fact the Company has made full provision of the taxes and related surcharge in the financial statements, the Company would potentially be liable to penalties ranging from 50% to 500% of the underpaid tax amounts.  The exact amount of penalty cannot be estimated with any reasonable degree of certainty.





Item 2.  Management's 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.





A.

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



Three months ended September 30, 2005 compared to three months ended September 30, 2004



Three Months ended

September 30, 2005                      September 30, 2004

(Unaudited)                                 (Unaudited)

Net sales        $217,689                                   $240,196



The decrease in revenue was due to the decrease in the sales price of such products as TDS510USB、TDS560PCI and TDS560USB. TI (Texas Instrument) development tools sales also decreased. Increased competition caused a decrease in the number of units sold, and in the sales price.  But since the sales of new products with higher margin increased, and the unit cost of the older products reduced, the gross profit margin in this quarter increased to 72% from 64% in the same quarter last year.



Costs consist primarily of material purchases, salaries for engineers, costs of promotion, rental expenses, depreciation and other miscellaneous expenses.  The decrease in the cost of products was primarily attributable to the decrease in sales.  The significant increase in SG&A is due to the Companys major R&D efforts in completing the consumers IP videophone.



Inventory increased by $61,001 compared with that as of June 30, 2005.  The increase of inventory is due to the decrease in sales in certain items and the increase in the stocking of materials to fill a customer IP videophone order.  Since the customer from Japan has paid a substantial deposit in June 2005 for their orders, inventory obsolescence is not an issue. Unfinished goods are mainly videophones that are still in production.



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, 2005, cash and cash equivalents were $854,826 versus  $976,601 as of June 30, 2005.  The decrease in cash is mainly due to the increased development costs and the decrease in  sales.



Business Risks.



With the worldwide launch of Wintechs VDP by Texas Instruments, Wintech has significantly changed its focus from  DSP (Digital Signal Processing) board and emulator development to video related products.  While Wintechs VDP has been released and has attracted interested from some of the largest companies in the world,  there is no guarantee at all that any of these companies will actually license the VDP from Wintech. Therefore, there is no guarantee that the revenue of the Company will increase significantly.  To manage the risk, Wintech also started to work with its manufacturer partner to make its own videophones. Wintech plans to  manufacture its own videophones for customers.  Again, there is no guarantee that Wintech will be able to sell significant quantities of its own videophones.



Competition.



As the Company changes its focus to video related products such as videophone, video surveillance and IPTV applications, the company will be facing tough competition from strong competitors around the world.  While Wintechs VDP is an advanced IP videophone solution and is supported by the marketing team of Texas Instrument, competitors may catch up quickly in this area.





Management of Growth.



The Company realizes that the DSP emulator and DSP development board market is limited. Therefore the Company has made great efforts in developing video related products.   On Feb. 15, 2005, Texas Instruments (TI) and Wintech announced Wintechs Videophone Development Platform (VDP). (Information and press coverage of VDP can be found by searching the keywords Wintech VDP on the Internet.)  With the help of TI, Wintech has been actively marketing VDP in US, China, Europe, Taiwan, Japan, and Korea.  The goal is to license our VDP hardware and software to companies who wish to develop their own IP videophone.  The Company has developed a prototype of an IP videophone and is working hard to release the final product before the end of the year.  The Company hopes to significantly increase its revenue and profit with the license of its VDP solution and with the sales of its own videophones in worldwide markets.  The Company has also signed license agreement with Microsoft and Texas Instruments on Windows Media 9 (WMT9) video codec and is ready to use WMT9 to develop video surveillance and IPTV applications.



Critical Accounting Policies



In presenting our financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein.  Several of the estimates and assumptions we are required to make related to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions.  If there is a significant unfavorable change to current conditions, it could result in a material adverse impact to our consolidated results of operations, financial position and liquidity.  We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time.  Presented below are those accounting policies that we believe require subjective and complex judgments that could potentially affect reported results.  However, the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex.







B.

Plan of Operation



The Company believes that its cash reserve is sufficient for its operations for the next 12 months. However, the Company may need to raise funding in order to financing the production of its IP videophones. Depending on the revenue from the sales and license of the video communication development platform, the company may or may not need to raise funds for this effort.





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



None.



Item 3.  Defaults Upon Senior Securities



None.



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



None.



Item 5. Other information



N/A.



Item  6. Exhibits and Reports on Form 8-K



None



CERTIFICATION PURSUANT TO

18 U.S.C. ss. 1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002



I, Jianpeng Zhang, Chief Financial Officer of Wintech Digital Systems Technology Corp., certify that:



1.   I have reviewed this quarterly report on Form 10-QSB for the period ended September 30, 2005 of Wintech Digital Systems Technology Corp.;



2.   Based on my knowledge, this 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 this report;



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



4.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have:



(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;



(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our  supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and



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



(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and



(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Dec. 14, 2005



/s/ Jianpeng Zhang

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

Jianpeng Zhang, Chief Financial Officer







CERTIFICATION PURSUANT TO

18 U.S.C. ss. 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



Solely for the purposes of complying with, and the extent required by 18 U.S.C.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned certifies, in his capacity as the Chief Financial officer of Wintech Digital Systems Technology Corp., that, to his knowledge, the Quarterly Report of the  company on Form 10-QSB for the period ended September 30, 2005, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the report fairly presents, in all material respects, the company's financial condition and results of operations.



Dec.14, 2005



/s/ Jianpeng Zhang

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

Jianpeng Zhang, Chief Financial Officer









CERTIFICATION PURSUANT TO

18 U.S.C. ss. 1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002



I, Yonghong Dong, Chief Executive Officer of Wintech Digital Systems Technology Corp., certify that:



1.   I have reviewed this quarterly report on Form 10-QSB for the period ended September 30, 2005 of Wintech Digital Systems Technology Corp.;



2.   Based on my knowledge, this 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 this report;



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



4.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have:



(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;



(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our  supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and



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



(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and



(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Dec.14 ,2005



/s/ Yonghong Dong

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

Yonghong Dong, Chief Executive Officer







CERTIFICATION PURSUANT TO

18 U.S.C. ss. 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



Solely for the purposes of complying with, and the extent required by 18 U.S.C.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned certifies, in his capacity as the  Chief Executive Officer of Wintech Digital Systems Technology Corp., that, to his knowledge, the Quarterly Report of the  company on Form 10-QSB for the period ended September 30, 2005, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the report fairly presents, in all material respects, the company's financial condition and results of operations.



Dec.14, 2005



/s/ Yonghong Dong

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

Yonghong Dong, Chief Executive Officer