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**UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION**
  Washington, D.C. 20549

FORM 10-QSB

(Mark One)x QUARTERLY REPORT PURSUANT TO SECTION
  13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the quarter ended June 30, 2005

OR

 ̈ TRANSITION REPORT
  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
  For the transition period from __________ to __________

Commission File Number 000-30095

WESCORP ENERGY INC.
  (Exact name of registrant as specified in its charter)

|Delaware                       | 33-0921967         
|------------------------------ | -------------------
|State or other jurisdiction of | (I.R.S. Employer   
|incorporation or organization  | Identification No.)

8709 – 50 Avenue, Edmonton AB, Canada T6E 5H4
  
  (Address of principal executive offices) (Zip Code)

(780) 482 - 4200
  Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|None                | None                                     

Securities registered pursuant to Section 12(g) of the Act:
  Common Stock, par value $.0001 per share
  (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No  ̈

Number of shares outstanding of the registrant's class of common stock as of August 12, 2005 was 36,597,186.

Authorized share capital of the registrant as of August 12, 2005, was 250,000,000 common shares, par value of $0.0001, and 50,000,000 preferred shares, par value of $0.0001

The Company recorded revenue of $431,428 for the quarter ended June 30, 2005.

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FORWARD-LOOKING STATEMENTS

THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS PREDICTIONS,
  PROJECTIONS AND OTHER STATEMENTS ABOUT THE FUTURE THAT ARE INTENDED TO BE "FORWARD-LOOKING
  STATEMENTS" WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT
  OF 1934, AS AMENDED (COLLECTIVELY, "FORWARD-LOOKING STATEMENTS"). FORWARD-LOOKING
  STATEMENTS INVOLVE RISKS AND UNCERTAINTIES. A NUMBER OF IMPORTANT FACTORS COULD
  CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
  STATEMENTS. IN ASSESSING FORWARD-LOOKING STATEMENTS CONTAINED IN THIS QUARTERLY
  REPORT ON FORM 10-QSB, READERS ARE URGED TO READ CAREFULLY ALL CAUTIONARY STATEMENTS
  – INCLUDING THOSE CONTAINED IN OTHER SECTIONS OF THIS QUARTERLY REPORT
  ON THIS FORM 10-QSB. AMONG SAID RISKS AND UNCERTAINTIES IS THE RISK THAT THE
  ELLYCRACK TECHNOLOGY MAY NOT BE TECHNICALLY EFFECTIVE OR COST EFFECTIVE IN THE
  MARKETS TARGETED BY MANAGEMENT; THAT THE COMPANY WILL NOT COMPLETE ANY OTHER
  SUITABLE ACQUISITIONS, THAT ITS MANAGEMENT IS ADEQUATE TO CARRY OUT ITS BUSINESS
  PLAN AND THAT THERE WILL BE ADEQUATE CAPITAL; IN ADDITION, IF SAID ACQUISITIONS
  ARE COMPLETED THEY MAY BE UNSUCCESSFUL FOR TECHNICAL, ECONOMIC OR OTHER REASONS.

CURRENCIES

All amounts expressed herein are in US dollars unless otherwise indicated.

ITEM 1. FINANCIAL STATEMENTS

PART I - FINANCIAL INFORMATION

Index

|Consolidated Balance Sheets at June 30,
      2005 and December 31, 2004                                                                            | F-1
|--------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|                                                                                                                                                    |    
|Consolidated Statements of Operations for
      the three and six months ended June 30, 2005 and the three and six months
      ended June 30, 2004 | F-2
|                                                                                                                                                    |    
|Consolidated Statements of Cash Flows for
      the six months ended June 30, 2005 and the six months ended June 30, 2004                           | F-3
|                                                                                                                                                    |    
|Notes to the Consolidated Financial Statements                                                                                                      | F-4

2

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WESCORP ENERGY INC. 
  CONSOLIDATED BALANCE SHEETS

|                                                         |   | June 30,    |   |   | December 31, |  
|-------------------------------------------------------- | - | ----------- | - | - | ------------ | -
|                                                         |   | 2005        |   |   | 2004         |  
|                                                         |   | (Unaudited) |   |   |              |  
|ASSETS                                                   |   |             |   |   |              |  
|CURRENT ASSETS                                           |   |             |   |   |              |  
|Cash and equivalents                                     | $ | 1,003,443   |   | $ | 48,428       |  
|Cash trust accounts                                      |   | -           |   |   | 1,970        |  
|Accounts receivable                                      |   | 368,313     |   |   | 622,657      |  
|Inventory                                                |   | 723,141     |   |   | 510,193      |  
|Prepaid expenses                                         |   | 117,552     |   |   | 14,706       |  
|Note receivable                                          |   | 272,456     |   |   | -            |  
|TOTAL CURRENT ASSETS                                     |   | 2,484,905   |   |   | 1,197,954    |  
|                                                        
|PROPERTY AND EQUIPMENT,
      net                        |   | 98,839      |   |   | 105,838      |  
|                                                        
|OTHER ASSETS                                             |   |             |   |   |              |  
|Investments                                              |   | 993,648     |   |   | 918,648      |  
|Technology                                               |   | 3,503,824   |   |   | 3,503,824    |  
|Goodwill                                                 |   | 414,073     |   |   | 414,073      |  
|Deposits                                                 |   | 13,948      |   |   | 39,273       |  
|TOTAL OTHER ASSETS                                       |   | 4,925,493   |   |   | 4,875,818    |  
|                                                        
|                                                        
|TOTAL ASSETS                                             | $ | 7,509,237   |   | $ | 6,179,610    |  
|                                                        
|LIABILITIES AND STOCKHOLDERS' EQUITY                     |   |             |   |   |              |  
|CURRENT LIABILITIES                                      |   |             |   |   |              |  
|Accounts payable and accrued liabilities                 | $ | 1,131,442   |   | $ | 914,628      |  
|Other liabilities                                        |   | 265,879     |   |   | 265,786      |  
|Note payable, related party, net of unamortized discount |   | -           |   |   | 1,979,593    |  
|Due to shareholders                                      |   | -           |   |   | 44,836       |  
|Deposit equity                                           |   | 1,924,681   |   |   | -            |  
|Convertible debentures                                   |   | 1,552,319   |   |   | -            |  
|TOTAL CURRENT LIABILITIES                                |   | 4,874,321   |   |   | 3,204,843    |  
|                                                        
|LONG-TERM LIABILITIES                                    |   |             |   |   |              |  
|Other liabilities                                        |   | 844,515     |   |   | 851,572      |  
|TOTAL LONG-TERM LIABILITIES                              |   | 844,515     |   |   | 851,572      |  
|                                                        
|COMMITMENTS AND CONTINGENCIES                            |   | -           |   |   | -            |  
|                                                        
|STOCKHOLDERS' EQUITY                                     |   |             |   |   |              |  
|Preferred stock, 50,000,000 shares authorized, $0.0001   |   |             |   |   |              |  
|par value; no shares issued                              |   | -           |   |   | -            |  
|Common stock, 250,000,000 shares authorized, $0.0001     |   |             |   |   |              |  
|par value; 36,597,186
      and 35,017,615 shares        |   |             |   |   |              |  
|issued and outstanding,
      respectively               |   | 3,660       |   |   | 3,501        |  
|Additional paid-in capital                               |   | 14,123,978  |   |   | 13,081,137   |  
|Subscription receivable                                  |   | (62,272     | ) |   | -            |  
|Accumulated other comprehensive income (loss)            |   | (310,623    | ) |   | (378,641     | )
|Accumulated deficit                                      |   | (11,964,342 | ) |   | (10,582,802  | )
|TOTAL STOCKHOLDERS' EQUITY                               |   | 1,790,401   |   |   | 2,123,195    |  
|                                                        
|TOTAL LIABILITIES AND                                    |   |             |   |   |              |  
|STOCKHOLDERS' EQUITY                                     | $ | 7,509,237   |   | $ | 6,179,610    |  

The accompanying notes are an integral part of these financials
  statements.

F-1

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WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                   |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |  
|-------------------------------------------------- | - | --------------------------- | - | - | ------------------------- | -
|                                                   |   | 2005                        |   |   | 2004                      |  
|                                                   |   | (Unaudited)                 |   |   | (Unaudited)               |  
|                                                  
|REVENUES                                           | $ | 431,428                     |   | $ | 200,109                   |  
|                                                  
|COST OF SALES                                      |   | 213,466                     |   |   | 100,311                   |  
|                                                  
|GROSS PROFIT                                       |   | 217,962                     |   |   | 99,798                    |  
|                                                  
|EXPENSES                                           |   |                             |   |   |                           |  
|Consulting                                         |   | 111,018                     |   |   | 223,133                   |  
|Advertising and investor
      relations           |   | 64,772                      |   |   | 67,995                    |  
|Legal and accounting                               |   | 40,149                      |   |   | 215,680                   |  
|Wages and benefits                                 |   | 200,575                     |   |   | (1,180                    | )
|Office                                             |   | 50,401                      |   |   | 41,627                    |  
|Insurance                                          |   | 35,845                      |   |   | -                         |  
|Travel                                             |   | 61,270                      |   |   | 58,582                    |  
|Depreciation                                       |   | 10,590                      |   |   | 10,700                    |  
|Research and development                           |   | 16,502                      |   |   | -                         |  
|TOTAL OPERATING EXPENSES                           |   | 591,122                     |   |   | 616,537                   |  
|                                                  
|LOSS FROM OPERATIONS                               |   | (373,160                    | ) |   | (516,739                  | )
|                                                  
|OTHER INCOME (EXPENSES)                            |   |                             |   |   |                           |  
|Interest and bank charges                          |   | (7,507                      | ) |   | (48                       | )
|Interest to shareholders
      and related parties |   | -                           |   |   | (66,027                   | )
|Interest on debentures                             |   | (77,140                     | ) |   | -                         |  
|Financing costs                                    |   | -                           |   |   | -                         |  
|Beneficial conversion interest                     |   | (380,000                    | ) |   | -                         |  
|Interest income                                    |   | 3,209                       |   |   | -                         |  
|TOTAL OTHER INCOME (EXPENSES)                      |   | (461,438                    | ) |   | (66,075                   | )
|                                                  
|LOSS BEFORE INCOME TAXES                           |   | (834,598                    | ) |   | (582,814                  | )
|                                                  
|INCOME TAXES                                       |   | -                           |   |   | -                         |  
|                                                  
|NET LOSS                                           |   | (834,598                    | ) |   | (582,814                  | )
|                                                  
|OTHER COMPREHENSIVE INCOME (LOSS)                  |   |                             |   |   |                           |  
|Foreign currency translation
      gain (loss)     |   | 38,418                      |   |   | (3,078                    | )
|                                                  
|COMPREHENSIVE LOSS                                 | $ | (796,180                    | ) | $ | (585,892                  | )
|                                                  
|BASIC AND DILUTED NET LOSS
      PER SHARE         | $ | (0.02                       | ) | $ | (0.02                     | )
|                                                  
|WEIGHTED AVERAGE NUMBER                            |   |                             |   |   |                           |  
|COMMON SHARES OUTSTANDING                          |   |                             |   |   |                           |  
|BASIC AND DILUTED                                  |   | 36,500,395                  |   |   | 35,406,227                |  

The accompanying notes are an integral part of these financial
  statements.

F-2

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WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                      |   | Six Months Ended June 30, |  
|--------------------------------------------------------------------- | - | ------------------------- | -
|                                                                      |   | 2005                      |  
|                                                                      |   | (Unaudited)               |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                 |   |                           |  
|Net loss                                                              | $ | (1,381,540)               |  
|Adjustments to reconcile net loss                                     |   |                           |  
|to net cash used by operating activities:                             |   |                           |  
|Depreciation                                                          |   | 24,009                    |  
|Shares issued
      for services                                      |   | 25,392                    |  
|Beneficial
      conversion interest                                  |   | 380,000                   |  
|Amortization
      on discount of note payable                        |   | -                         |  
|Decrease (increase)
      in accounts receivable                      |   | 254,344                   |  
|Decrease (increase)
      in inventory                                |   | (212,948                  | )
|Decrease (increase)
      in prepaid expenses                         |   | (102,846                  | )
|Decrease (increase)
      in deferred tax asset                       |   | -                         |  
|Decrease (increase)
      in other assets                             |   | -                         |  
|Increase (decrease)
      in bank indebtedness                        |   | -                         |  
|Increase (decrease)
      in accounts payable and accrued liabilities |   | 216,814                   |  
|Increase (decrease)
      in accounts payable, related parties        |   | -                         |  
|Net cash used
      by operating activities                           |   | (796,775                  | )
|CASH FLOWS FROM INVESTING ACTIVITIES:                                 |   |                           |  
|Purchase of
      equipment                                           |   | (17,010                   | )
|Cash provided
      by acquisition                                    |   | -                         |  
|Deposits                                                              |   | 25,325                    |  
|Note receivable                                                       |   | (272,456                  | )
|Purchase of
      trademarks                                          |   | -                         |  
|Investments                                                           |   | (75,000                   | )
|Net cash used
      in investing activities                           |   | (339,141                  | )
|CASH FLOWS FROM FINANCING ACTIVITIES:                                 |   |                           |  
|Repayments
      on borrowing                                         |   | (6,964                    | )
|Payments on
      notes payable                                       |   |                           |  
|Repament of
      shareholder loan                                    |   | (44,836                   | )
|Proceeds on
      notes payable                                       |   |                           |  
|Proceeds on
      converitble debentures                              |   | 1,552,319                 |  
|Sale of stock                                                         |   | 575,336                   |  
|Net cash provided
      by financing activities                       |   | 2,075,855                 |  
|Effect of exchange rates                                              |   | 13,106                    |  
|Net increase in cash                                                  |   | 953,045                   |  
|Cash, beginning of period                                             |   | 50,398                    |  
|Cash, end of period                                                   | $ | 1,003,443                 |  
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                                   |   |                           |  
|Cash paid for interest and income taxes:                              |   |                           |  
|Interest expense                                                      | $ | 85,783                    |  
|Income taxes                                                          | $ | -                         |  
|                                                                      |   |                           |  
|NON-CASH INVESTING AND FINANCING ACTIVITIES:                          |   |                           |  
|                                                                      |   |                           |  
|Stock issued for conversion of notes payable,
      amounts due       |   |                           |  
|to shareholders and accounts payable                                  | $ | -                         |  
|Shares issued for services                                            | $ | 25,392                    |  
|Shares issued for subscriptions receivable                            | $ | 62,272                    |  

The accompanying notes are an integral part of these financial
  statements.

F-3

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WESCORP ENERGY INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  (Unaudited) 
  June 30, 2005

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NOTE 1 – BASIS OF PRESENTATION

The foregoing unaudited interim financial statements have
  been prepared in accordance with generally accepted accounting principles for
  interim financial information and with the instructions to Form 10-QSB and Regulation
  S-B as promulgated by the Securities and Exchange Commission ("SEC"). Accordingly,
  these financial statements do not include all of the disclosures required by
  generally accepted accounting principles for complete financial statements.
  These unaudited interim financial statements should be read in conjunction with
  the audited financial statements for the period ended December 31, 2004. In
  the opinion of management, the unaudited interim financial statements furnished
  herein include all adjustments, all of which are of a normal recurring nature,
  necessary for a fair statement of the results for the interim period presented.

The preparation of financial statements in accordance with
  generally accepted accounting principles requires the use of estimates and assumptions
  that affect the reported amounts of assets and liabilities, disclosure of contingent
  assets and liabilities known to exist as of the date the financial statements
  are published, and the reported amounts of revenues and expenses during the
  reporting period. Uncertainties with respect to such estimates and assumptions
  are inherent in the preparation of the Company's financial statements; accordingly,
  it is possible that the actual results could differ from these estimates and
  assumptions that could have a material effect on the reported amounts of the
  Company's financial position and results of operations.

Operating results for the six month period ended June 30,
  2005 are not necessarily indicative of the results that may be expected for
  the year ending December 31, 2005.

NOTE 2 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Wescorp Energy Inc. (“the Company”) was incorporated
  in Delaware on August 11, 1998. Wescorp changed its business focus in early
  fiscal 2004, and as a result is no longer considered to be a development stage
  enterprise. The Company provides expertise to emerging companies by offering
  timely product solutions and/or strategic investment opportunities in the petroleum
  production and service industries. Wescorp intends to carry out this mandate
  through investments in companies or products where early stage product development
  has been completed.

The Company’s year end is December 31. The Company is
  headquartered in Edmonton, Alberta, Canada.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented
  to assist in understanding the financial statements. The financial statements
  and notes are representations of the Company’s management, which is responsible
  for their integrity and objectivity. These accounting policies conform to accounting
  principles generally accepted in the United States of America and have been
  consistently applied in the preparation of the financial statements.

Accounting Method
  The Company’s financial statements are prepared using the accrual basis
  of accounting in accordance with accounting principles generally accepted in
  the United States of America.

Accounts Receivable
  The Company carries its accounts receivable at net realizable value. On a periodic
  basis, the Company evaluates its accounts receivable and considers the need
  for an allowance for doubtful accounts, based on Company past and expected collections,
  and current credit conditions. At June 30, 2005, a valuation allowance of $19,433
  (December 31, 2004 – nil) is deemed necessary. The Company's policy is
  to accrue interest on trade receivables at the discretion of management.

Product Warranties
  The Company sold the majority of its products with one-year unconditional repair
  or replacement warranties. Warranty expense is included in cost of sales.

F-4

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Inventories
  Inventories are stated at the lower of cost or market on a weighted average
  basis.

Restatement and Reclassification
  Certain amounts from prior periods have been reclassified to conform to the
  current period presentation. The reclassifications and restatements principally
  consist of revised reporting of operating results of the discontinued operations
  of the Company's subsidiaries in the prior fiscal period. This reclassification
  has resulted in no changes to the Company's accumulated deficit or net losses
  presented.

Intangible Assets
  In September 2001, the Financial Accounting Standards Board issued Statement
  of Financial Accounting Standards No. 141, "Business Combinations" (hereinafter
  “SFAS No. 141”) and Statement of Financial Accounting Standard No.
  142, "Goodwill and Other Intangible Assets" (hereinafter “SFAS No. 142”).
  SFAS No. 141 provides for the elimination of the pooling-of-interest method
  of accounting for business combinations with an acquisition date of July 1,
  2001 or later. SFAS No. 142 prohibits the amortization of goodwill and other
  intangible assets with indefinite lives and requires periodic reassessment of
  the underlying value of such assets for impairment. SFAS No. 142 is effective
  for fiscal years beginning after December 15, 2001. During 2002, the Company
  fully impaired its intangible assets which were charged to discontinued operations
  expense and subsequently disposed of during 2003. Application of the non-amortization
  provision of SFAS No. 142 is expected to result in no change to the Company’s
  results of operations, even though the Company acquired new non-amortizable
  intangible assets in the year ended December 31, 2004.

Goodwill represents the excess of the purchase price and related
  direct costs over the fair value of net assets acquired as of the date of the
  acquisition of Flowstar Technologies Inc. (Flowstar). The Company periodically
  reviews its goodwill to assess recoverability based on projected undiscounted
  cash flows from operations. Impairments are recognized in operating results
  when a permanent diminution in value occurs. At December 31, 2004, an impairment
  of $533,181 on the Company’s goodwill was deemed necessary.

The Company acquired DCR technology rights from Vasjar which
  are included in intangible assets. These items represent the acquisition cost
  of the assets purchased from Vasjar in 2004 (see Note 9). The Company’s
  intangible assets are summarized as follows:

|                       |   | June 30,  |  |   | December 31 | 
|---------------------- | - | --------- |  | - | ----------- | 
|                       |   | 2005      |  |   | 2004        | 
|DCR Technology         | $ | 3,503,824 |  | $ | 3,503,824   | 
|Goodwill               |   | 414,073   |  |   | 414,073     | 
|Net Intangibles Assets | $ | 3,917,897 |  | $ | 3,917,897   | 

Accounting Pronouncements – Recent
  In December 2004, the Financial Accounting Standards Board issued Statement
  of Financial Accounting Standards No. 153. This statement addresses the measurement
  of exchanges of non-monetary assets. The guidance in APB Opinion No. 29, “Accounting
  for Non-monetary Transactions,” is based on the principle that exchanges
  of non-monetary assets should be measured based on the fair value of the assets
  exchanged. The guidance in that opinion, however, included certain exceptions
  to that principle. This statement amends Opinion 29 to eliminate the exception
  for non-monetary exchanges of similar productive assets and replaces it with
  a general exception for exchanges of non-monetary assets that do not have commercial
  substance. A non-monetary exchange has commercial substance if the future cash
  flows of the entity are expected to change significantly as a result of the
  exchange. This statement is effective for financial statements for fiscal years
  beginning after June 15, 2005. Earlier application is permitted for non-monetary
  asset exchanges incurred during fiscal years beginning after the date of this
  statement is issued. Management believes the adoption of this statement will
  have no impact on the financial statements of the Company.

In December 2004, the Financial Accounting Standards Board
  issued a revision to Statement of Financial Accounting Standards No. 123R, “Accounting
  for Stock Based Compensation.” This statement supersedes APB Opinion No.
  25, “Accounting for Stock Issued to Employees,” and its related
  implementation guidance. This statement establishes standards for the accounting
  for transactions in which an entity exchanges its equity instruments for goods
  or services. It also addresses transactions in which an entity incurs liabilities
  in exchange for goods or services that are based on the fair value of the entity’s
  equity instruments or that may be settled by the issuance of those equity instruments.
  This statement focuses primarily on accounting for transactions in which an
  entity obtains employee services in share-based payment transactions. This statement
  does not change the accounting guidance for share based payment transactions
  with parties other than employees provided in Statement of Financial Accounting
  Standards No. 123. This statement does not address the accounting for employee
  share ownership plans, which are subject to AICPA Statement of Position 93-6,
  “Employers’ Accounting for Employee Stock Ownership Plans.”
  The Company has not yet determined the impact to its financial statements from
  the adoption of this statement.

F-5

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In November 2004, the Financial Accounting Standards Board
  (FASB) issued Statement of Financial Accounting Standards No. 151, “Inventory
  Costs— an amendment of ARB No. 43, Chapter 4”. This statement amends
  the guidance in ARB No. 43, Chapter 4, “Inventory Pricing,” to clarify
  the accounting for abnormal amounts of idle facility expense, freight, handling
  costs, and wasted material (spoilage). This statement requires that those items
  be recognized as current-period charges regardless of whether they meet the
  criterion of “abnormal.” In addition, this statement requires that
  allocation of fixed production overhead to the costs of conversion be based
  on the normal capacity of the production facilities. This statement is effective
  for inventory costs incurred during fiscal years beginning after June 15, 2005.
  Management does not believe the adoption of this statement will have any immediate
  material impact on the Company.

In May 2003, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 150, “Accounting for Certain
  Financial Instruments with Characteristics of Both Liabilities and Equity”
  (hereinafter “SFAS No. 150”). SFAS No. 150 establishes standards
  for classifying and measuring certain financial instruments with characteristics
  of both liabilities and equity and requires that those instruments be classified
  as liabilities in statements of financial position. Previously, many of those
  instruments were classified as equity. SFAS No. 150 is effective for financial
  instruments entered into or modified after May 31, 2003 and otherwise is effective
  at the beginning of the first interim period beginning after June 15, 2003.
  The adoption of this statement has had no impact on the Company’s financial
  condition or results of operations.

Stock-Based Compensation
  In December 2002, the Financial Accounting Standards Board issued Statement
  of Financial Accounting Standards No. 148, “Accounting for Stock-Based
  Compensation – Transition and Disclosure” (hereinafter “SFAS
  No. 148”). SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based
  Compensation,” to provide alternative methods of transition for a voluntary
  change to the fair value based method of accounting for stock-based employee
  compensation. In addition, the statement amends the disclosure requirements
  of SFAS No. 123 to require prominent disclosure in both annual and interim financial
  statements about the method of accounting for stock-based employee compensation
  and the effect of the method used on reported results. The provisions of the
  statement are effective for financial statements for fiscal years ending after
  December 15, 2002. As the Company accounts for stock-based compensation using
  the intrinsic value method prescribed in APB No. 25, “Accounting for Stock
  Issued to Employees”, the adoption of SFAS 148 has had no impact on the
  Company’s financial condition or results of operations.

Exit and Disposal Activities
  In June 2002, the Financial Accounting Standards Board issued Statement of Financial
  Accounting Standards No. 146, “Accounting for Costs Associated with Exit
  or Disposal Activities” (hereinafter “SFAS No. 146”). SFAS
  No. 146 addresses significant issues regarding the recognition, measurement,
  and reporting of costs associated with exit and disposal activities, including
  restructuring activities. SFAS No. 146 also addresses recognition of certain
  costs related to terminating a contract that is not a capital lease, costs to
  consolidate facilities or relocate employees, and termination benefits provided
  to employees that are involuntarily terminated under the terms of a one-time
  benefit arrangement that is not an ongoing benefit arrangement or an individual
  deferred-compensation contract. SFAS No. 146, which was issued in June 2002
  and is effective for activities after December 31, 2002, has not materially
  impacted the Company’s financial statements for the periods presented.

Impairment or Disposal of Long-Lived Assets
  In August 2001, the Financial Accounting Standards Board issued Statement of
  Financial Accounting Standards No. 144, “Accounting for the Impairment
  or Disposal of Long-Lived Assets” (hereinafter “SFAS No. 144”).
  SFAS No. 144 replaces SFAS No. 121, “Accounting for the Impairment of
  Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.” This standard
  establishes a single accounting model for long-lived assets to be disposed of
  by sale, including discontinued operations. SFAS No. 144 requires that these
  long-lived assets be measured at the lower of carrying amount or fair value
  less cost to sell, whether reported in continuing operations or discontinued
  operations. This statement is effective beginning for fiscal years after December
  15, 2001, with earlier application encouraged. The Company adopted SFAS No.
  144 which did not have a material impact on the financial statements of the
  Company for the years presented. All of the Company’s long-lived assets
  were disposed of during 2002 and 2003. New assets were acquired in 2004 as a
  result of the acquisition of 100% of the outstanding shares of Flowstar and
  Vasjar (see Note 9).

F-6

---

Inventory
  Inventories are stated at the lower of average cost or market. The cost of finished
  goods includes the cost of raw material, direct and indirect labor, and other
  indirect manufacturing costs.

The components of inventory at June 30, 2005 and December 31, 2004 are as
  follows:

|                |   | June 30, |  |   | December 31, | 
|--------------- | - | -------- |  | - | ------------ | 
|                |   | 2005     |  |   | 2004         | 
|Finished goods  | $ | 657,544  |  | $ | 471,222      | 
|Raw materials   |   | 65,597   |  |   | 38,971       | 
|Total inventory | $ | 723,141  |  | $ | 510,193      | 

Advertising Expenses
  Advertising expenses consist primarily of costs incurred in the design, development,
  and printing of Company literature and marketing materials. The Company expenses
  all advertising expenditures as incurred. The Company's advertising expenses
  were $109,449 and $122,408 for the six months ended June 30, 2005 and
  the six months ended June 30, 2004 respectively.

Cash and Cash Equivalents
  For purposes of the statements of cash flows, the Company considers all highly
  liquid investments (or short-term debt) with original maturities of three months
  or less to be cash equivalents. Cash trust accounts are funds received from
  stock sales and administered by the Company’s corporate counsel. These
  funds are not restricted.

Concentration of Credit Risk
  The Company maintains its cash in a commercial account at a major Canadian financial
  institution.

Derivative Instruments
  The Financial Accounting Standards Board issued Statement of Financial Accounting
  Standards No. 133, “Accounting for Derivative Instruments and Hedging
  Activities” (hereinafter “SFAS No. 133”), as amended by SFAS
  No. 137, “Accounting for Derivative Instruments and Hedging Activities
  – Deferral of the Effective Date of FASB No. 133”, and SFAS No.
  138, “Accounting for Certain Derivative Instruments and Certain Hedging
  Activities”. In April 2003, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 149, “Amendment of Statement
  133 on Derivative Instruments and Hedging Activities” (hereinafter “SFAS
  No. 149”). SFAS No. 149 amends and clarifies the accounting for derivative
  instruments, including certain derivative instruments embedded in other contracts
  and for hedging activities under SFAS No. 133. This statement is effective for
  contracts entered into or modified after June 30, 2003 and for hedging relationships
  designated after June 30, 2003. The adoption of SFAS No. 149 is not expected
  to have a material impact on the financial position or results of operations
  of the Company.

If certain conditions are met, a derivative may be specifically
  designated as a hedge, the objective of which is to match the timing of gain
  or loss recognition on the hedging derivative with the recognition of (i) the
  changes in the fair value of the hedged asset or liability that are attributable
  to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction.
  For a derivative not designated as a hedging instrument, the gain or loss is
  recognized in income in the period of change.

Historically, the Company has not entered into derivatives
  contracts to hedge existing risks or for speculative purposes.

Earnings Per Share
  On January 1, 1998, the Company adopted Statement of Financial Accounting Standard
  No. 128, which provides for calculation of "basic" and "diluted" earnings per
  share.

Basic earnings per share includes no dilution and is computed
  by dividing net income available to common shareholders by the weighted average
  common shares outstanding for the period. Diluted earnings per share reflect
  the potential dilution of securities that could share in the earnings of an
  entity similar to fully diluted earnings per share. Although there were common
  stock equivalents outstanding at June 30, 2005 and at December 31, 2004, they
  were not included in the calculation of earnings per share because they would
  have been considered anti-dilutive.

Fair Value of Financial Instruments
  The Company's financial instruments as defined by Statement of Financial Accounting
  Standard No. 107, "Disclosures about Fair Value of Financial Instruments," include
  cash, investments, a note receivable, accounts payable, accrued expenses and
  notes payable. All instruments are accounted for on a historical cost basis,
  which, due to the short maturity of these financial instruments, approximates
  fair value at June 30, 2005 and at December 31, 2004.

F-7

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Foreign Currency Translation Gains/Losses
  The Company’s functional currency is the Canadian dollar. The Company
  has adopted Financial Accounting Standard No. 52. Monetary assets and liabilities
  denominated in foreign currencies are translated into United States dollars
  at rates of exchange in effect at the balance sheet date. Gains or losses are
  included in income for the year, except gains or losses relating to long-term
  debt which are deferred and amortized over the remaining term of the debt. Non-monetary
  assets, liabilities and items recorded in income arising from transactions denominated
  in foreign currencies are translated at rates of exchange in effect at the date
  of the transaction.

Going Concern 
  These consolidated financial statements have been prepared with the assumption
  being that the Company will continue on a going concern basis and that it will
  be able to realize assets and discharge liabilities in the normal course of
  business. As shown in the accompanying financial statements, the Company has
  incurred an accumulated deficit of approximately $11, 964,342 through June
  30, 2005. The Company has changed its focus to provide expertise to emerging
  companies, offering timely product solutions and/or strategic investment opportunities
  in the oil and gas industries which will, if successful, mitigate these factors
  which raise substantial doubt about the Company’s ability to continue
  as a going concern. The financial statements do not include any adjustments
  relating to the recoverability and classification of recorded assets, or the
  amounts and classification of liabilities that might be necessary in the event
  the Company cannot continue in existence. The Company has successfully raised
  $1,552,319 on a convertible debenture. Management feels that this will be
  sufficient to fund normal operations through 2005 (see Note 11).

Investments
  The Company’s investments consist of non-marketable equity securities.
  These investments, for which the Company does not have the ability to exercise
  significant influence in the underlying company, are accounted for under the
  cost method of accounting. Dividends and other distributions of earnings, if
  any, are included in income when declared. The Company periodically evaluates
  the carrying value of its investments, which are recorded at the lower of cost
  or estimated net realizable value.

Principles of Consolidation
  The consolidated financial statements include the accounts of the Company and
  its wholly owned subsidiaries, after elimination of the intercompany accounts
  and transactions. Wholly owned subsidiaries of the Company are listed in Note
  9.

Provision for Taxes Income taxes are provided based upon the liability method of accounting
  pursuant to Statement of Financial Accounting Standards No. 109, “Accounting
  for Income Taxes” (hereinafter “SFAS No. 109”). Under this
  approach, deferred income taxes are recorded to reflect the tax consequences
  in future years of differences between the tax basis of assets and liabilities
  and their financial reporting amounts at each year-end. A valuation allowance
  is recorded against deferred tax assets if management does not believe the Company
  has met the “more likely than not” standard imposed by SFAS No.
  109 to allow recognition of such an asset.

Restatement and Reclassification
  Certain amounts from prior periods have been reclassified to conform to the
  current period presentation. The reclassifications and restatements principally
  consist of revised reporting of operating results of the discontinued operations
  of the Company’s subsidiaries in the prior fiscal period. This reclassification
  has resulted in no changes to the Company’s accumulated deficit or net
  losses presented.

Use of Estimates
  The process of preparing financial statements in conformity with accounting
  principles generally accepted in the United States of America requires the use
  of estimates and assumptions regarding certain types of assets, liabilities,
  revenues, expenses and common stock equivalents. Such estimates primarily relate
  to unsettled transactions and events as of the date of the financial statements.
  Accordingly, upon settlement, actual results may differ from estimated amounts.

NOTE 4 – NOTE RECEIVABLE

During the period the Company entered into an agreement to
  advance funds to an unrelated party in the form of a promissory note. This note
  carries interest at a rate of 7.25%, is due on September 30, 2005 and is secured
  by a general security agreement.

F-8

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NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is
  provided using the straight-line method over three to seven years. The Company
  evaluates the recoverability of property and equipment when events and circumstances
  indicate that such assets might be impaired. The Company determines impairment
  by comparing the undiscounted future cash flows estimated to be generated by
  these assets to their respective carrying amounts. Maintenance and repairs are
  expensed as incurred. Replacements and betterments are capitalized. The cost
  and related reserves of assets sold or retired are removed from the accounts,
  and any resulting gain or loss is reflected in results of operations.

|                                    |         | June 30, 2005 |   |        | December 31, 2004 | 
|----------------------------------- | ------- | ------------- | - | ------ | ----------------- | 
|                                    |         |               |   |        | Accumulated       | 
|                                    |         | Cost          |   |        | Depreciation      | 
|Tools and Equipment                 | $       | 4,300         |   | $      | 306               | 
|Furniture & Fixtures                |         | 12,489        |   |        | 4,504             | 
|Office Equipment                    |         | 33,095        |   |        | 12,921            | 
|Automotive Equipment                |         | 78,734        |   |        | 37,295            | 
|Computer Hardware                   |         | 31,080        |   |        | 10,350            | 
|Computer Software                   |         | 10,655        |   |        | 6,145             | 
|Leasehold Improvements              |         | 748           |   |        | 741               | 
|                                   
|Total                               | 171,101 |               | $ | 72,262 |                   | 
|                                   
|Less: accumulated depreciation      |         | 72,262        |   |        |                   | 
|                                   
|Total property, plant and equipment | $       | 98,839        |   |        |                   | 

NOTE 6 – INVESTMENTS

The components of investments at June 30, 2005 and December 31, 2004 are as
  follows:

|                    |   | June 30, |  |   | December 31, | 
|------------------- | - | -------- |  | - | ------------ | 
|                    |   | 2005     |  |   | 2004         | 
|Synenco Energy Inc. | $ | 530,462  |  | $ | 530,462      | 
|Ellycrack AS        |   | 463,186  |  |   | 388,186      | 
|Total investments   | $ | 993,648  |  | $ | 918,648      | 

Agreement with Vasjar Trading Ltd. 
  In January of 2004, the Company entered into an agreement to acquire 100% of
  the common stock of Vasjar Trading Ltd. ("Vasjar"), a British Virgin Islands
  corporation.

Vasjar has five Barbados corporate subsidiaries, one of which
  holds intellectual property rights, including technology rights to the DCR system
  originally owned by Flowray.

On April 29, 2004, the Company tendered to Vasjar's two shareholders
  2,400,000 shares of its common stock as a proposed settlement of the initial
  share delivery provisions for the Vasjar acquisition. Resolution of both of
  the shareholders situations has occurred.

As part of the agreement the Company also consented to issue
  an aggregate of up to 2,600,000 shares additional stock over the years 2005-2007
  based on the achievement of Vasjar's minimum annual sales volumes during the
  years 2004-2006. In the event that earned shares are not timely delivered, the
  agreement provides for "penalty" shares to be issued and also provides Vasjar's
  two shareholders with the right to rescind the agreement and receive back their
  original shares. Wescorp was not able to deliver free-trading shares on April
  1, 2005, and so the Company will be liable for to pay the Vasjar shareholders
  an additional 48,000 Wescorp shares for each month that the shares are not delivered,
  starting with the month of April 2005.

Agreement with Ellycrack AS
  Wescorp has purchased as an aggregate 655,000 shares of common stock of Ellycrack
  AS, a privately held company in Norway. Wescorp acquired 255,000 shares in consideration
  of $119,000 that was paid in three installments, $50,000 each on December
  29, 2003 and February 2, 2004, and $19,000 in May 2004. On September 15,
  2004, the Company issued 300,000 of its shares to Ellycrack AS in exchange for
  400,000 shares of Ellycrack AS. The value ascribed to the Ellycrack shares of
  $150,000 was calculated based on

F-9

---

the median trading price of Wescorp shares on that day (being
  $0.50) . In the first quarter of 2005, Wescorp paid $75,000 for 97,000
  additional shares of Ellycrack at five Kroners per share.

Pursuant to a share purchase option agreement dated February
  10, 2004, the Company has been granted an option to purchase additional shares
  to increase the Company's ownership up to 20% of the outstanding common voting
  shares of Ellycrack on a fully diluted basis as at June 30, 2004. The option
  is exercisable until the later of June 30, 2004 or the date that is four months
  after the completion date of the Company's testing of Ellycrack's technology.
  This testing has not been completed as of the writing of these financial statements.
  The purchase price for these Ellycrack shares will be equal to 11.85% of the
  total market value of $5,000,000 in respect of all the outstanding shares
  of Ellycrack as at June 30, 2004 as mutually agreed by the parties or approximately
  $592,500.

NOTE 7 – COMMON STOCK AND WARRANTS

Common Stock|
  The Company is authorized to issue 250,000,000 shares of $0.0001 par value
  common stock and 50,000,000 shares of $0.0001 par value preferred stock.
  All common stock shares have equal voting rights, are non-assessable and have
  one vote per share. Voting rights are not cumulative and, therefore, the holders
  of more than 50% of the common stock could, if they choose to do so, elect all
  of the directors of the Company. The preferred shares may be issued in series,
  with the powers, rights and limitations of the preferred shares to be determined
  by the Company’s board of directors.

2005 Stock Transactions
  In the first six months of 2005, the Company issued 1,579,571 shares for total
  proceeds of $663,000. These shares were issued on the exercise of various
  warrants at exercise prices of $0.25 to $1.00 per share.

Common Stock Warrants
  As of August 8, 2005, the Company has the following common stock purchase warrants
  outstanding:

|Number of shares |  | Exercise |  | Expiration    
|---------------- |  | -------- |  | --------------
|under warrants   |  | price    |  | date          
|571,429          |  | $0.35    |  | September 2005
|2,607,494        |  | $0.35    |  | December 2005 
|1,500,000        |  | $0.15    |  | March 2006    
|300,000          |  | $0.25    |  | December 2006 
|1,000,000        |  | $0.15    |  | June 2008     
|5,978,923        |  |          |  |               

NOTE 8 – COMMITMENTS

Agreement with Ellycrack AS
  In March of 2004, Ellycrack AS (“Ellycrack”) of Norway granted the
  Company an option exercisable until June 1, 2005 to acquire exclusive rights
  to use Ellycrack’s high intensive catalytic cracking technology and intellectual
  property. This would also include the exclusive rights to manufacture, and sell
  products or systems derived from or utilizing Ellycrack’s technology in
  North America.

Later in 2004, the Company entered into a joint venture (“JV”)
  agreement with Ellycrack (superseding prior agreements) that gives Wescorp a
  50% interest in the rights to use and benefit from Ellycrack’s high intensive
  catalytic cracking technology and intellectual property worldwide. In exchange,
  the Company must pay for the construction and design modifications of a full
  scale prototype in Canada to the point that such a prototype is commercially
  saleable. After this point, all future costs will be shared equally between
  the Company and Ellycrack.

NOTE 9 –ACQUISITIONS AND DISPOSITIONS OF SUBSIDIARIES

Acquisition of Flowstar and Vasjar
  On March 31, 2004, Wescorp completed the purchase of 100% of the outstanding
  shares of Flowstar Technologies Inc. (“Flowstar”) in exchange for
  $414,073 pursuant to the share purchase and subscription agreement dated
  June 9, 2003 as amended January 14, 2004. On August 19, 2004, the Company concluded
  the acquisition of 100% of the outstanding shares of Vasjar Trading Ltd. (“Vasjar”),
  a British Virgin Islands company. Its wholly owned subsidiary (Quadra Products
  International Inc. or “Quadra”) owns the rights to the technology
  related to the DCR 900 system. The purchase called for the payment of 2,400,000
  common stock shares of Wescorp initially, with an additional minimum 2,080,000
  common stock shares issued over three years (480,000 before April 01, 2005,
  800,000

F-10

---

before April 01, 2006 and 800,000 before April 01, 2007).
  An additional 520,000 shares are payable over this three year period if certain
  sales targets are achieved. If Wescorp fails to deliver any of the shares due
  before April 01, 2006, then the Company will be subject to a penalty of 10%
  additional shares for each month of delay, with a cumulative provision. If any
  of the Wescorp shares to be issued have not been delivered for a period of 182
  days after the applicable due date, then the Vasjar shareholders may at their
  option terminate the share purchase agreements without notice or opportunity
  to cure. Wescorp has pledged to the Vasjar shareholders all of the Vasjar shares
  it holds as security to guarantee Wescorp’s performance under the share
  purchase agreements.

The assets and liabilities acquired were as follows as of
  March 31, 2004:

|                       |   | Flowstar     |  |   |         | 
|---------------------- | - | ------------ |  | - | ------- | 
|                       |   | Technologies |  |   | Flowray | 
|                       |   | Inc.         |  |   | Inc.    | 
|Cash equivalents       | $ | 131,704      |  | $ | 6,587   | 
|Receivables            |   | 305,986      |  |   | -       | 
|Inventory              |   | 290,906      |  |   | -       | 
|Due from affiliate     |   | -            |  |   | 103,054 | 
|Other current assets   |   | 23,856       |  |   | -       | 
|Property and equipment |   | 108,286      |  |   | -       | 
|Note receivable        |   | -            |  |   | 444,972 | 
|                      
|Deferred tax asset     |   | 64,777       |  |   | -       | 
|Total Assets           | $ | 925,515      |  | $ | 554,613 | 
|                      
|Accounts payable       | $ | 222,949      |  | $ | 23,416  | 
|Deferred tax liability |   | -            |  |   | 9,938   | 
|Due to Wescorp         |   | 1,104,150    |  |   | 485,826 | 
|Long-term liability    |   | 25,385       |  |   | -       | 
|Total Liabilities      | $ | 1,352,484    |  | $ | 519,180 | 

In connection with the acquisition of Flowstar, Wescorp acquired
  100% of the outstanding shares of Vasjar Trading Ltd. (“Vasjar”),
  a British Virgin Islands corporation. Vasjar in turn owns 100% of the outstanding
  shares of Quadra International Inc. (“Quadra”) and Flowstar International,
  Inc. (formerly Penta Energy Products Inc.) (“Flowstar International”),
  both of which are Barbados corporations. In consideration of the purchase of
  all the outstanding shares of Vasjar from two shareholder entities, Wescorp
  issued shares to the shareholders of Vasjar each as to 50% as follows:

(a) an aggregate 2,400,000 shares of common stock of the Company
  effective April 30, 2004; and

(b) up to an aggregate 2,600,000 additional shares of common
  stock of the Company to be issued in stages as follows:

> Stage One. On or before April 1, 2005, Wescorp will issue from 480,000
>     to 600,000 additional shares based on sales achieved in the 2004 calendar
>     year; the lower figure being if sales are less than $3,000,000, and the
>     upper figure being if sales are more than $3,750,000. Shares are required
>     to be registered at delivery.
>   Stage Two. On or before April 1, 2006, Wescorp will issue from 800,000
>     to 1,000,000 additional shares based on sales achieved in the 2005 calendar
>     year; the lower figure being if sales are less than $4,500,000 and the
>     upper figure being if sales are more than $7,500,000. Shares are required
>     to be registered at delivery.
>   Stage Three. On or before April 1, 2007, Wescorp will issue from
>     800,000 to 1,000,000 additional shares based on sales achieved in the 2006
>     calendar year; the lower figure being if sales are less than $6,000,000
>     and the upper figure being if sales are more than $11,250,000. Shares
>     are required to be registered at delivery.

As part of the agreement the Company agreed to also issue
  up to an aggregate additional 2,600,000 shares of stock over the years 2005-2007
  for the achievement of Vasjar's minimum annual sales volumes during the years
  2004-2006. In the event that earned shares are not timely delivered, the agreement
  provides for "penalty" shares to be issued and also provides Vasjar's two shareholders
  with the right to rescind the agreement and receive back their original shares.
  Wescorp was not able to deliver free-trading shares on April 1, 2005, and so
  the Company will be liable for to pay the Vasjar shareholders an additional
  48,000 Wescorp shares for each month that the shares are not delivered, starting
  with the month of April 2005.

F-11

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Any Wescorp shares not earned in a particular calendar year
  because the sales did not achieve the upper sales target will be carried over
  and added to the shares to be issued in the next calendar year, subject to achievement
  of the next year’s escalating sales volumes.

The fair market value of the shares due to the Vasjar shareholders’
  has been recorded as other short-term and long-term liabilities totaling $1,040,000.

On April 29, 2004, the Company issued and delivered to each
  of the shareholders of Vasjar 1,200,000 restricted shares of common stock, for
  a total of 2,400,000 shares, as a proposed settlement of the initial share delivery
  provisions for the Vasjar acquisition.

NOTE 10 – OTHER LIABILITIES

Vehicle Loans
  During the year ended December 31, 2004, the Company purchased trucks for $65,504.
  The underlying notes are secured by the vehicles and are for thirty-five months.
  The monthly payments are $1,207.

The following comprise the Company’s notes payable at
  June 30, 2005 and at December 31, 2004:

|                                                                                               |   | June 30,  |  |   | December 31, | 
|---------------------------------------------------------------------------------------------- | - | --------- |  | - | ------------ | 
|                                                                                               |   | 2005      |  |   | 2004         | 
|Note payable – Interest at 0.0%, and secured by automotive
      assets of Flowstar            | $ | 20,021    |  | $ | 23,692       | 
|Note payable – Interest at 7.75%, compounded monthly
      and secured by automotive assets of |   |           |  |   |              | 
|Flowstar                                                                                       |   | 27,898    |  |   | 31,191       | 
|Notes payable – Interest at 0.0%, unsecured                                                    |   | 1,062,475 |  |   | 1,062,475    | 
|Total notes payable                                                                            | $ | 1,110,394 |  | $ | 1,117,358    | 
|Portion due within one year                                                                    |   | 265,879   |  |   | 265,786      | 
|Long-term                                                                                      | $ | 844,515   |  | $ | 851,572      | 

Future principal payments are as follows:

|     |   | Annual   
|---- | - | ---------
|     |   | Maturity 
|Year |   | Amount   
|2006 | $ | 265,879  
|2007 |   | 412,604  
|2008 |   | 413,092  
|2009 |   | 7,673    
|2010 |   | 11,146   
|     | $ | 1,110,394

For additional disclosures on notes payable to related parties,
  see Note 14.

NOTE 11 – CONVERTIBLE DEBENTURES

During the period the Company issued debentures which bear
  interest at the rate of 14% per annum, payable quarterly which mature on December
  31, 2005. The debentures are secured by way of a security interest over the
  inventory and receivables of Flowstar Technologies Inc., a wholly owned subsidiary
  of the Company.

The debentures may, at the option of the holder, be converted
  into units of the Company a price of US$0.90 per unit at any time prior
  to the maturity date. Each unit shall be comprised of one common share of the
  Company and one common share purchase warrant each of which may be exercised
  at any time up to December 31, 2006 as follows:

> a) if exercised on or before December 31, 2005 the holder of a warrant shall
>     be entitled to purchase one common share for each warrant held for US$1.00
>     per common share; and
>   b) thereafter until the maturity date the holder of each warrant shall be
>     entitled to purchase one (1) common share for each warrant held for US $2.00
>     per share common share.

The Company shall be entitled to prepay the debenture in whole
  or in part, at any time prior to the maturity date subject to the following:

F-12

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| | a) | the Company provides the holder with at least one
        months prior written notice (the "Notice Period") of the Company’s
        intention to repay the debenture; and                                                            
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) | at the date the notice is issued the weighted average
        trading price of the Company's common shares as traded on the NASD OTC
        Bulletin Board for the ten previous trading days was at least US $1.35
        per share.

The convertible debentures contained a beneficial conversion
  feature computed at its intrinsic value, which was the difference between the
  conversion price and the fair value on the debenture issuance date of the units
  into which the debt was convertible, multiplied by the number of shares into
  which the debt was convertible at the commitment date. Since the beneficial
  conversion feature was to be settled by issuing equity, the amount attributed
  to the beneficial conversion feature, or $380,000, was recorded as an interest
  expense and a component of equity on the issuance date. It is management’s
  opinion that the fair market value of the units noted above would be worth 80%
  of the market price of free trading stock as the shares in these units are restricted
  in trading and represent a large block of shares that current market conditions
  could not absorb.

The fair value of the warrants attached to each unit was calculated
  using the Black-Scholes Option Pricing Model incorporating the following weighted
  average assumptions:

|Risk free interest rate                            | 3.0%     
|-------------------------------------------------- | ---------
|                                                   |          
|Expected dividend yield                            | Nil      
|                                                   |          
|Expected stock price volatility                    | 117%     
|                                                   |          
|Expected warrant life                              | 0.75 year
|                                                   |          
|Weighted average grant date fair value per warrant | 0.30     

Measurement uncertainty
  The Black-Scholes Option Pricing Model was developed for use in estimating the
  fair value of traded options that have no vesting restrictions and are fully
  transferable. The warrants attached to the units issued by the Company are non-transferable.
  Option pricing models require the input of subjective assumptions including
  expected share price volatility. The fair value estimate can vary materially
  as a result of changes in the assumptions.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

The Company had three consulting agreements. The agreements
  were effective from April 1, 2003 through March 31, 2005. The consultants were
  to be paid in cash or common stock, with a deemed price of $0.20 per share.
  The monthly fee for two consultants was $5,000 each and the other consultant
  was to receive $2,500 per month. Consultant expense for the quarter ended
  March 31, 2005 under these agreements was $37,500 (2004 - $37,500).
  At June 30, 2005, the Company has not issued this stock.

On September 3, 2003, the Company signed an agreement to settle
  its indebtedness to a former officer of the Company. At the date of the agreement,
  the individual received $15,000 and is to receive $7,500 per month and
  3% of the gross proceeds of any equity financing completed by the Company after
  the date of the agreement subject to a maximum payment of $37,500 in respect
  to each financing. The total payment in aggregate will not exceed $150,000.
  This obligation was paid in full effective June 22, 2005.

At September 2003, the Company approved a transaction with
  a legal service provider in recognition of a previous credit accommodation.
  The transaction provided for a direct grant of 100,000 common stock and an additional
  100,000 common stock warrants exercisable at $0.50 for five years and with
  a cashless exercise feature. As part of the transaction, the party agreed to
  cap legal service costs at an agreed maximum from September 2003 to December
  2004, amounting to a reduction of $100 per hour. At June 30, 2005, the Company
  had not issued this stock or warrants.

NOTE 13 – LEASES

Operating Leases
  The Company leases office space and manufacturing space in Edmonton, Alberta,
  Canada for $3,450 per month under a month to month operating lease agreement.
  The Company leases office space in Calgary, Alberta, Canada for $2,420 per
  month under an operating lease agreement, which expires November 2005. In addition
  the Company has entered into a lease agreement with respect to a vehicle which
  has minimum lease payments of $873 per month until June 2007.

F-13

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NOTE 14 - RELATED PARTY TRANSACTIONS

Related Party Transactions
  Summary of related party transactions as follows for the six months ended June
  30, 2005 and the year ended December 31, 2004:

|                                                            |   | June 30, |  |   | December 31, | 
|----------------------------------------------------------- | - | -------- |  | - | ------------ | 
|                                                            |   | 2005     |  |   | 2004         | 
|Consulting fees paid or accrued to directors of the Company | $ | 37,500   |  | $ | 150,000      | 
|Interest paid or accrued to shareholders                    | $ | NIL      |  | $ | 247,351      | 

Related Party Notes Payable
  On January 28, 2003, the Company entered into an agreement with AHC Holdings,
  Inc. (“AHC”), under which AHC would lend Wescorp up to $1,750,000.
  AHC is a private company beneficially owned and controlled by a director of
  the Company. The loan was structured as a borrowing facility, was unsecured
  and all advances bore interest at the rate of 15% per annum. All advances, regardless
  of the date advanced, were due on December 31, 2005. As of December 31, 2004,
  the Company had borrowed approximately $1,979,593 including accrued and
  unpaid interest.

On March 15, 2005, AHC agreed to convert this debt plus accrued
  and unpaid interest to units (“units”) of the Company at a price
  of $0.87 per unit. Each unit consists of one common stock share and one
  common stock share purchase warrant (the "warrant(s)") each of which may be
  exercised at any time up to December 31, 2006 as follows:

(a) if exercised on or before December 31, 2005 the holder
  of each warrant shall be entitled to purchase one common share for each warrant
  held for $1.00 per common share; and

(b) thereafter until December 31, 2006 the holder of each
  warrant shall be entitled to purchase one common share for each warrant held
  for $2.00 per common share.

The original note was denominated in Canadian dollars. Upon
  signing the above agreement the parties agreed to a value of the note in the
  amount of $1,924,681 as at March 15, 2005. Based on this valuation 2,212,277
  shares will be issued as a result of this transaction.

Further, on January 28, 2003 the Company granted warrants
  to AHC which would allow them to purchase 1,000,000 shares of common stock at
  a price of $0.15 per share in connection with the above stated loan. The
  warrants expire on March 6, 2006. If these warrants were exercised the shares
  would have a market value of $780,000 at June 30, 2005.

The terms of the amounts due to shareholders at June 30, 2005
  and at December 31, 2004 are as follows:

|                                                                                                   |   | June 30,  |  |   | December 31, | 
|-------------------------------------------------------------------------------------------------- | - | --------- |  | - | ------------ | 
|                                                                                                   |   | 2005      |  |   | 2004         | 
|Note payable –Interest at 15%, compounded semi-annually,
      paid annually with a maturity       |   |           |  |   |              | 
|date of December 31, 2005, unsecured, due to a shareholder.                                        | $ | -         |  | $ | 1,979,593    | 
|                                                                                                  
|Commitment to issue shares on the conversion of the above
      note payable – shares to be issued |   | 1,924,681 |  |   | -            | 
|subsequent to the quarter end                                                                      |   |           |  |   |              | 
|                                                                                                  
|Advances from shareholders, non-interest bearing with no set
      terms of repayment.             |   | -         |  |   | 44,836       | 
|                                                                                                  
|Total amounts due to shareholders                                                                  | $ | 1,924,681 |  | $ | 2,024,429    | 

F-14

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NOTE 15 – SUBSEQUENT EVENTS

Conditional Purchase Agreement

As a condition on the acquisition of Vasjar the Company was
  required to issue on or before April 1, 2005 between 480,000 and 600,000 additional
  shares based on sales achieved in the 2004 calendar year. The lower figure was
  based on sales of less than $3,000,000, and the upper figure was based on
  sales in excess of $3,750,000. The shares were required to be registered
  at delivery.

Wescorp was not able to deliver free-trading shares on April
  1, 2005, and so the Company will be liable to pay the former owners of Vasjar
  an additional 48,000 Wescorp shares for each month that the shares are not delivered,
  starting with the month of April 2005. If any of the Wescorp shares to be issued
  to the former owners of Vasjar have not been delivered for a period of 182 days
  after the applicable due date, they may at their option terminate the share
  purchase agreements, without notice or prior opportunity to cure. Wescorp has
  pledged to the former owners of Vasjar all the Vasjar shares as security to
  guarantee Wescorp’s performance under the share purchase agreements.

F-15

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Item 2. Management's Discussion and Analysis Of Financial
  Condition and Results of Operations

The following discussion and analysis of our financial condition
  and results of operations should be read in conjunction with our Consolidated
  Financial Statements and related notes appearing elsewhere in this Form 10-QSB.

Overview

During the six months ended June 30, 2005 Wescorp has successfully
  raised $1,552,319 on the issuance of a convertible debentures and $600,728
  on the exercise of outstanding warrants. An additional $110,000 was raised
  through the convertible debentures but the debenture agreement for these funds
  has not yet been signed. Furthermore, the loan from AHC Holdings Ltd. in the
  amount of Cdn $2,382,755 was converted to shares of the company at $0.87
  per share valued at US $1,924,681, resulting in the complete elimination
  of this loan.

Revenue from operations for the second quarter of 2005 totaled
  $431,428 ($200,109 for the second quarter of 2004). The Company had
  no revenue from operations for the first quarter of 2004, as Flowray Inc. ("Flowray")
  and Flowstar Technologies Inc. ("Flowstar") (see "Acquisition of Flowstar and
  Flowray", below) became wholly owned subsidiaries after the end of the first
  quarter on March 31, 2004. Flowstar and Flowray were operating prior to their
  acquisition, and the operating results of this can be reviewed in the Proforma
  Financial Statements that are included in the 10Q report for the first quarter
  of 2004. The acquisition of Vasjar Trading Ltd. completed after the end of the
  second quarter in 2004 and accordingly, assets, liabilities and operations of
  Vasjar and its subsidiaries, as well as any consolidating entries associated
  therewith, were reflected in the third quarter of 2004.

To date our quarterly operations have experienced consistently
  negative cash flows. Management had anticipated that the Flowstar operations
  would generate increased sales and result in positive quarterly operating cash
  flows commencing by the end of the 2004 financial year. While Flowstar sales
  to date have been encouraging the flow meter business has not yet reached the
  break even level.

The rapid growth an organization experiences often places
  considerable operational, managerial and financial strain on a company. To ensure
  the success of our new business plan, we must proactively adhere to the following:

|1. | Continue to improve, upgrade and expand our business
        infrastructure - In the third quarter of 2004 additional sources of supply
        for our Flowstar products were identified and developed. A service network
        for Flowstar was commenced with the successful completion of the first
        school to certify independent Certified Flowstar Service Technicians.                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Recently Flowstar has hired new sales personnel
        to promote the sale of flow meters.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|2. | Continue to hire, train and retain key management
        for our company and ensure any target company does the same - A corporate
        controller was hired late in March of 2005 and the Company has recently
        employed an investment relations executive.                                                                                                                                                                                                                                                                                                                          
|  
|3. | Continue to advance the commercialization development
        programs for target companies so they become cash flow positive as soon
        as is practically possible – In the third quarter of 2004 the requirement
        for the construction of a pilot plant in Canada to take the Ellycrack
        project was identified which resulted in the signing of a Memorandum of
        Understanding to build such a plant in return for expanding the Company's
        interests from licenses in North America to a 50% ownership in a Joint
        Venture covering the entire world.
|  
|4. | Maintain adequate financial resources – As
        noted above in the six months ended June 30, 2005 the Company undertook
        to raise over one million dollars through the issuance of a convertible
        debenture. This was successful, and the issuance was closed on April 28,
        2005, resulting in the Company raising $1,552,319.                                                                                                                                                                                                                                           

Our future opportunities for success greatly depend on the
  continued employment of and performance of senior management, including the
  successful hiring of any key personnel employed by potential target companies.
  We would be materially adversely affected if one or more of the senior management
  team does not continue to perform in their present positions, or if we or potential
  targets are unable to hire and train a sufficient number of qualified management,
  professional, technical and regulatory personnel.

3

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A.1 Acquisition of Flowstar and Flowray

On March31, 2004, we completed the acquisition of 100% of
  the outstanding shares of Flowstar and Flowray in consideration of cash payments
  to the selling shareholders totaling approximately $414,000 (CDN$550,000).

Flowstar has the non-exclusive worldwide license to use Flowray's
  technology relating to certain flow meters and to manufacture, market and sell
  products derived from the technology, including three major product lines used
  in measuring and recording natural gas flow. Flowray has developed a system
  known as the Digital Chart Recorder or "DCR" for measuring the flow of gas at
  the wellhead. Flowstar also markets liquid based totalizers, burner igniters,
  and Windows©-based gas flow calculation software, and a line
  of liquid turbines for which there is no intellectual property, as the patents
  expired long ago.

Flowstar successfully field-tested the DCR-900 product in
  2003. Units were commercially sold in the 2003 year, and were installed in various
  customer applications. Flowstar continues to develop and improve the DCR product
  line, including PDA/telephone software and a satellite communication system.
  The introduction of the DCR-1000 and testing of the differential pressure cell
  enhances Flowstar’s position as an industry leader providing advanced
  technological solutions for gas flow measurement equipment.

In 2005 management of Flowstar participated in the ISA Calgary
  2005 Show and Conference on April 13 and 14, and the Canadian School of Hydrocarbon
  Measurement Exhibit in Calgary Alberta on March 22 and 23. Staff also attended
  the Coal Bed Methane Conference held on March 2 and 3.

In the third quarter of 2004, additional professional sales
  staff were identified and hired and a sales office was opened in Calgary, giving
  the company an important presence in the most influential oil and gas industry
  city in Canada. Management is optimistic about the future prospects for Flowstar
  and Flowray. Sales and purchase orders for the company in the first quarter
  totaled 322 units. Management feels that sales will continue to increase over
  the remaining six months of 2005. In an effort to boost revenue additional sales
  staff have recently been hired to promote the DCR product line in Alberta

Cash will be required to fund the manufacture of sufficient
  inventory and to finance the build up of trade accounts receivable that will
  increase as sales strengthen. Consequently, it is difficult to forecast the
  total cash required, as it will be contingent on the timing and amount of sales
  generated over the same period. However, management feels that with the recent
  closing of the convertible debenture financing, and barring any unforeseen difficulties,
  the company has sufficient cash to carry it through normal operations to the
  end of 2005.

A.2 Acquisition of Vasjar

In connection with the acquisition of Flowstar and Flowray,
  Wescorp also entered into share purchase agreements dated effective January
  14, 2004 pursuant to which Wescorp acquired 100% of the outstanding shares of
  Vasjar Trading Ltd. (“Vasjar”), a British Virgin Islands corporation,
  Vasjar in turn owns 100% of the outstanding shares of Quadra Products International
  Inc. (“Quadra”) and Flowstar International, Inc. (formerly Penta
  Energy Products Inc.) (“Flowstar International”), both of which
  are Barbados corporations. (Pursuant to an agreement dated as effective August
  30, 2003, Flowray had transferred to Quadra all of its intellectual property
  rights, including rights to the technology related to the DCR 900 system described
  below, in consideration of a promissory note in the principal amount of CDN$600,000
  without interest. The promissory note is now an asset of Flowstar.

The acquisition of Vasjar was concluded on August 19th,
  2004. In consideration of the purchase of all the outstanding shares of Vasjar
  from two shareholder entities, Wescorp issued shares to said shareholders of
  Vasjar each as to 50% as follows:

|(a) | an aggregate 2,400,000 shares of common stock of the Company on April
      28, 2004; and                             
|--- | ----------------------------------------------------------------------------------------------------------------------
|   
|(b) | up to an aggregate 2,600,000 additional shares of common stock of the
      Company to be issued in stages as follows:

> Stage One.On or before April 1, 2005, Wescorp will
>     issue from 480,000 to 600,000 additional shares based on sales achieved in
>     the 2004 calendar year; the lower figure being if sales are less than $3,000,000,
>     and the upper figure being if sales are more than $3,750,000. Shares are
>     required to be registered at delivery.
>   Stage Two. On or before April 1, 2006, Wescorp will
>     issue from 800,000 to 1,000,000 additional shares based on sales achieved
>     in the 2005 calendar year; the lower figure being if sales are less than $4,500,000
>     and the upper figure being if sales are more than $7,500,000. Shares are
>     required to be registered at delivery; and

4

---

> Stage Three. On or before April 1, 2007, Wescorp will issue from
>     800,000 to 1,000,000 additional shares based on sales achieved in the 2006
>     calendar year; the lower figure being if sales are less than $6,000,000
>     and the upper figure being if sales are more than $11,250,000. Shares
>     are required to be registered at delivery.
>   Any Wescorp shares not earned in a particular calendar year because the
>     sales did not achieve the upper sales target will be carried over and added
>     to the shares to be issued in the next calendar year, subject to achievement
>     of the next year’s escalating sales volumes.

If Wescorp fails to deliver any of the Stage 1, 2 or 3 shares, Wescorp will be subject to a penalty of 10% additional shares to be issued to the Vasjar shareholders each month of delay, with a cumulative provision. Wescorp was not able to deliver
free-trading shares on April 1, 2005, and so the Company will be liable for to pay the Vasjar shareholders an additional 48,000 Wescorp shares for each month that the shares are not delivered, starting with the month of April 2005. If any of the
Wescorp shares to be issued to the Vasjar shareholders have not been delivered for a period of 182 days after the applicable due date, the Vasjar shareholders may at their option terminate the share purchase agreements, without notice or prior
opportunity to cure. Wescorp has pledged to the Vasjar shareholders all the Vasjar shares as security to guarantee Wescorp’s performance under the share purchase agreements. Management has taken steps to deliver free trading shares to the
Vasjar shareholders and it anticipates that this will be completed in the month of September 2005.

With the completion of the acquisition of Vasjar, the Company now owns all the proprietary technology originally owned by Flowray related to the DCR 900 system and other products. Quadra is planning to grant Flowstar International a license to use
the technology and to manufacture, market and sell products derived from the technology, including the DCR 900 system, in all jurisdictions worldwide except Canada. Wescorp has become the parent company of Flowstar USA, which will hold the rights to
manufacture, market and sell the DCR system in the United States. Flowstar's current worldwide license will be amended so that Flowstar will retain the rights to manufacture, market and sell the DCR system only in Canada.

5

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B. Memorandum of Understanding to Form a Joint Venture with and Shares of Ellycrack AS

Pursuant to a letter of intent dated February 10, 2004 Ellycrack AS (“Ellycrack”), of Florø, Norway, had granted Wescorp or its subsidiary options to acquire three separate exclusive territorial licenses in Canada, the United
States and Mexico to make, use, copy, develop and exploit Ellycrack’s technology and intellectual property and to design, manufacture, market and sell products or systems derived from or utilizing Ellycrack’s technology or sublicense
others to do the same in each territory.

However, on September 28th, 2004, Ellycrack and the Company signed a Memorandum of Understanding (MOU) to form a 50% / 50% Joint Venture to make, use, copy, develop and exploit Ellycrack's technology and intellectual property and to
design, manufacture, market and sell products or systems derived from or utilizing Ellycrack's technology or sublicense others to do the same on a world-wide basis.

The principle features of the MOU is to cancel the options to purchase licenses in Canada, the United States and Mexico and to replace it with an obligation to build and operate a pilot plant in Canada to determine the overall economics of the
technology and subject to the viability of these economics, to market the technology on a world-wide basis. For further details see our 8-K filed with The Securities Exchange Commission on Sept 28th, 2004.

The Company has purchased an aggregate 659,000 shares of Ellycrack representing 13.15% of Ellycrack's outstanding shares; 259,000 shares in consideration of $123,129 and 400,000 shares in exchange for 300,000 shares of our common stock issued to
Ellycrack. The MOU provides an option for the Company to increase its equity interest up to 20% via a combination of purchase and share swap. For further details see our 8-K filed with The Securities Exchange Commission on September 28th,
2004. In the first quarter of 2005, Wescorp paid $75,000 for 97,000 additional shares of Ellycrack at five Kroners per share.

Ellycrack has developed what is believed to be a cost effective technology in which heavy oil can be upgraded to “lighter” more commercially saleable oil in a highly intensive cracking process which could be located directly at the oil
field. By upgrading the oil in the field, it would allow oil companies to eliminate on-site storage tanks as well as the costly process of transporting the heavy oil great distances to an upgrader. The oil could be transported directly to a refinery
for refining into ordinary petroleum products.

Plan of Operation Overview

Prior to the second quarter of operations in 2004 we had not generated any revenues from products, services or operations since the inception of our company. We are including herein a discussion of our plan of operation for the next 12 months for
our revised business plan, which was initiated in late 2003.

In addition, though not required for regulatory purposes, we are also including some additional summary analysis and information regarding our financial condition, liquidity and capital resources. This analysis should be read jointly with the
financial statements, related notes, and the cautionary statement regarding forward-looking statements, which appear elsewhere in this filing.

Plan of Operation for the Next Twelve Months

The Flowstar revenue from July 01, 2004 to June 30, 2005 of $1,671,939 is an indication that Flowstar will generate significantly higher operating revenues in the future that will enable it to operate profitably. Our overall future operations
are dependent upon the identification and successful completion of additional long-term or permanent equity financing, the continued support of creditors and shareholders, and, ultimately, the achievement of profitability in all facets of our
operations. There can be no assurances that we will be successful which would significantly affect our ability to roll out our revised business plan. We will continue to evaluate our projected expenditures relative to our available cash and to seek
additional means of financing in order to meet our internal and external growth.

Over the past year, we have integrated the operations of Flowstar
  and Flowray into our corporate structure, have prepared a comprehensive updated
  plan to capitalize on the competitive advantages of the DCR products in Canada.
  Over the next several months, Management will be drawing up a plan of action
  to manufacture and distribute the DCR products throughout North America and
  the rest of the world.

The Company has recently closed financing by way of convertible
  debentures for an aggregate amount of $1,552,319 and an additional $110,000
  for which no debenture agreement has been signed. The debentures are secured
  by the assets of Flowstar and carry interest at the rate of14% per annum with
  a due date of December 31, 2005. The debt is convertible into Units of the Company
  at a price of $0.90 per Unit. Each Unit purchased hereunder is comprised
  of One (1) common share of the Corporation (the "Common Share(s)") and One (1)
  Common Share purchase warrant (the "Warrant(s)") each of which may be exercised
  at any time up to December 31, 2006 as follows:

6

---

(a) if exercised on or before December 31, 2005 the holder
  of each Warrant shall be entitled to purchase one (1) Common Share for each
  Warrant held for $1.00 per Common Share; and

(b) thereafter until December 31, 2006 the holder of each
  Warrant shall be entitled to purchase one (1) Common Share for each Warrant
  held for $2.00 per Common Share.

Our operations have been funded to date by debt and equity
  financing. With the acquisition of Flowstar in 2004, we hope to achieve a positive
  operating cash flow in the 2005 fiscal year. However, in the event that this
  does not occur, we will be relying on debt and equity financings as sources
  of funding in order to provide our Company with sufficient capital to continue
  our development and operational plans. There can be no assurance that the past
  trend will continue, which would significantly affect the financial condition
  of our Company and our ability to effectively implement the proposed business
  plan for Flowstar and Ellycrack.

Over the next 12 months, we also plan to closely monitor and
  implement solutions to successfully manage our proposed future growth. This
  will include:

| | 1. | Improvement of controls to ensure that information
        is processed in a timely and efficient manner so that Regulatory Compliance
        requirements are met. This will also safeguard assets more effectively.    
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. | Retention of key management and staff with an emphasis
        on proper training and ongoing professional development to ensure we are
        up to date with the latest advancements that affect our target industries.
|
| | 3. | Identification of potential markets for current
        products and those under development to ensure we can optimize our revenues
        to generate profits and positive cash flows.                                  

Until the Flowstar operation becomes cash flow positive, Wescorp’s
  cash on hand is our only source of liquidity. We do not have any lending arrangements
  in place with banking or financial institutions. We hope to secure conventional
  bank financing (line of credit) for Flowstar in 2006.

We believe that, with the successful completion of our current
  convertible debenture financing, our cash balances will be sufficient to carry
  our normal operations for the next twelve months, before any cash requirements
  that may be needed for target investments or acquisitions (which would otherwise
  accelerate our need to raise additional cash). To the extent that we require
  additional funds to support our operations or the expansion of our business,
  we may sell additional equity or issue debt. Any sale of additional equity securities
  will result in dilution to our stockholders. There can be no assurance that
  additional financing, if required, will be available to our company or on acceptable
  terms.

We anticipate that the only major purchases of capital assets
  in the next 12 months will be the building of the Ellycrack Pilot Plant. However,
  there may be some purchases of office equipment and shop equipment for Flowstar.
  Also, Flowstar will be conducting some research and development in its ongoing
  program to maintain the competitive advantage of its products. Wescorp’s
  current corporate employee count has increased with the hiring of a full time
  corporate controller and the recent addition of our VP Investor Relations and
  Corporate Communications. There may be some services that Wescorp will contract
  out for, given the specialized nature of the business of Flowstar. With the
  change in our business plan, we anticipate that any change in capital assets,
  research and development and employees would be subject to change in any targeted
  operating business that we may acquire, including that of Flowstar and Ellycrack.

Results from Operations – 2005 Compared to 2004

Revenues

Revenues increased by $231,319, or approximately 116%
  to $431,428 for the quarter ended June 30, 2005 from $200,109 for the
  quarter ended June 30, 2004. This increase was the result of the increased market
  acceptance of the DCR systems sold by Flowstar and increased marketing of the
  Flowstar products. Results for 2004 are indicative of the marketing of a virtually
  new

7

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product in the DCR system and the initial reluctance of the
  industry to accept the product as a viable alternative to existing technology.
  The increase in revenue of $851,913 for the six months ended June 30, 2005
  from $200,109 for the six months ended June 30, 2004 be attributed to the
  acquisition of Flowstar on March 31, 2004

While revenue for the second quarter of 2005 did not match
  that of the first quarter of 2005, this decrease can be attributed to spring
  breakup in Alberta and the introduction of EUB Directive 17. Wetter than average
  conditions in the months of April and May resulted in a weaker than normal market
  during a period where sales are traditionally slow. Combine this with the government
  of Alberta’s introduction of EUB 17 which placed new measurement testing
  requirements on all devices which measure gas flow and revenues could not be
  maintained at the levels achieved in the first quarter of 2005.

Cost of Sales

As a percentage of revenues, cost of sales has been consistent
  in both the first and second quarter of 2005 at 49.5% . This is a slight improvement
  over the 50.1% cost of sales figures achieved in the second quarter of 2004.
  This is a strong indicator that the Company has been able to maintain its margins
  while increasing its market presence of the DCR systems.

Expenses

Operating expenses for the three months ended June 30, 2005
  show a slight decrease of $25,415 versus the same period in 2004. Consulting
  fees for the current year’s three month period ended June 30 are approximately
  half of those for 2004. In addition legal and accounting costs decreased by
  $175,531. Last year’s figures for legal and accounting were adversely
  affected by legal fees incurred to defend the Baum litigation as well as legal
  and other professional fees related to the acquisition of Flowstar and Flowray.

The above decreases were offset by substantial increases in
  wages and benefits. Part of the increase in wages and benefits is due to hiring
  former consultants as employees. Additional staff were hired to fill the management
  positions of VP Investor Relations and Communications and corporate controller.
  The Company has also hired administration staff necessary to support the operations
  of Flowstar and enhance internal controls. Furthermore the Company incurred
  costs or $35,845 for insurance and $16,502 for research and development
  in the current quarter which did not exist in last year’s figures.

Other Income and Expenses

The Company had a loss from other items of $461,438 for
  the three months ended June 30, 2005 compared to a loss of $66,075 for the
  same period in 2004. Most of this loss can be attributed to the $380,000
  in beneficial conversion interest required to account for the issuance of the
  convertible debentures. Interest incurred on the debentures in the amount of
  $77,140 was not in the prior year figures as these debentures have been
  issued in the current fiscal year. The 2004 figures reflect $66,027 in interest
  for amounts owing to shareholders and related parties the three months ended
  June 30, 2004. With the extinguishment of this debt in the current fiscal year
  no further interest expense has been incurred on this debt. Interest and bank
  charges have increase by $7,459 due to the financing of vehicles purchased
  by the Company subsequent to June 30, 2004. Interest income relates to the note
  receivable issued by the Company in the current quarter.

Net Loss

We incurred a net operating loss for the three months ended
  June 30, 2005 of $834,598 compared to a net loss of $584,598 for the
  comparable period in 2004. Had the Company not incurred $380,000 in beneficial
  conversion interest it would have only shown a loss of $454,598 in the current
  quarter.

8

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Liquidity and Capital Resources – 2005 Compared to
  2004

From inception, we have been dependent on investment capital
  and debt financing from our shareholders as our primary source of liquidity.
  To June 30, 2005, we have generated revenues from operations of only $1,872,048
  (comprised of $820,026 for the three quarters to December 31, 2004 and $1,052,022
  for the first six months of 2005). We had an accumulated deficit at June 30,
  2005 of $11,964,342.

During the first quarter of 2005, our cash position increased
  to $1,003,443 at June 30, 2005 from $475,769 at June 30, 2004. We had
  cash used in operations of $796,775 in the first six months of fiscal 2005
  compared to cash used in operations of $1,062,498 in the same period of
  fiscal 2004. We also had a net outflow of cash of $339,141 from investing
  activities in the first six months of 2005, which consisted of cash used of
  $75,000 for the purchase of shares in Ellycrack as noted in the "Financing"
  section above (2004 - 73,129), the purchase of plant and equipment of $17,010
  (2004 - $nil), the issuance of a note receivable in the amount of $272,456
  which was offset by the change in deposits of $25,325 (2004 - $nil).
  The 2004 figures reflect net balances received of $111,878 from Flowstar
  and Flowray on the purchase of their shares. The net cash used in operating
  and investing activities was financed by $2,075,855 from financing activities,
  resulting in a net increase in our cash position for the six month period of
  $953,045. The cash flow from financing activities is primarily a result
  of the issuance of some common stock shares net of shares issued for services
  in the amount of $575,336 and convertible debentures in the amount of $1,552,319
  (see Part II, Item 2).

The Company had $5,718,836 in total liabilities at June
  30, 2005 compared to $2,414,001 at the end of June 2004. Part of the increase
  can be attributed to additional trade payables and financing required to sustain
  the operations of Flowstar resulting in an increase of approximately $493
  thousand.. In addition, $1,040,000 in debt was incurred as part of the purchase
  of Vasjar.

The note payable to the related shareholder also increased
  in value by approximately $209 thousand as a result of the US dollar weakening
  against the Canadian dollar and additional interest accruing on the loan until
  it was crystallized into equity. This amount is reflected as deposit equity
  on the balances sheet as these shares are yet to be issued by the Company.

The Company also obtained additional financing of $2,153,047
  through the issue of $600,728 in share capital and an additional $1,552,319
  in convertible debentures. There was a repayment of $6,964 on loans used
  to finance the vehicles acquired after June 30, 2004.

ITEM 3. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures designed
  to ensure that information required to be disclosed in reports filed under the
  Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
  and reported within the specified time periods. As of the end of the period
  covered by this report, Wescorp's Chief Executive Officer and its Chief Financial
  Officer evaluated, with the participation of Wescorp management, the effectiveness
  of the Company's disclosure controls and procedures. Based on the evaluation,
  which disclosed that there was a significant deficiency in that the last filing
  as required by the aforementioned Act was late Wescorp's Chief Executive Officer
  and Chief Financial Officer each concluded that the Company's disclosure controls
  and procedures were not as effective as required and are currently in the process
  of upgrading these procedures and hiring additional staff to ensure that the
  new procedures will be complied with. There were several changes in the Company's
  internal controls over financial reporting that occurred during the Company's
  most recent quarter to increase the effectiveness of, the Company's internal
  control over financial reporting.

Disclosure controls and procedures are our controls and other
  procedures that are designed to ensure that information required to be disclosed
  by us in the reports that we file or submit under the Exchange Act is recorded,
  processed, summarized and reported, within the time periods specified in the
  Securities and Exchange Commission's rules and forms. Disclosure controls and
  procedures include, without limitation, controls and procedures designed to
  ensure that information required to be disclosed by us in the reports that we
  file under the Exchange Act is accumulated and communicated to our management,
  including our principal executive office and principal officer, as appropriate
  to allow timely decisions regarding required disclosure.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ASI Claim

Shortly after year end, the Company settled a claim made by
  Advanced Systems Foundation (“ASI”) regarding ASI’s claim
  of entitlement to shares of Wescorp stock in settlement of unpaid debts from
  Sentry Telecom Systems, Inc., a former subsidiary of the Company. The settlement
  calls for ASI to receive a certificate for 592,826 Wescorp common stock shares
  with a fair market value of approximately $224,000.

Baum Lawsuit

The Company was successful in its lawsuit with Mr. Mark Baum.
  Wescorp was awarded $42,471 plus court costs. Mr. Baum appealed the judgment.
  The final determination of the case at this time is not certain, nor is it certain
  when or if the Company will receive the court award and costs.

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ITEM 2. CHANGES IN SECURITIES

To the end of the second quarter of 2005, Wescorp has raised
  $1,552,319 on the issuance of a convertible debenture (the closing of which
  was on April 28) and $635,500 on the exercise of outstanding warrants. In
  addition, the loan from AHC Holdings Ltd. for Cdn $2,382,755 (US$1,924,681)
  was converted to shares of the company at $0.87 per share, resulting in
  the complete elimination of the loan.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

No matters were submitted to a vote of our security holders
  during the three months ended June 30, 2005.

ITEM 5. OTHER INFORMATION

Not applicable

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Pursuant to Rule 601 of Regulation SB, the following
  exhibits are included herein or incorporated by reference.

|Exhibit |                                                                                                                                                                                                                                                                                                                                                                                        
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                                                        
|2.1.1*  | Loan Agreement dated January 28, 2003
        between the Company and AHC Holdings Ltd. Addendum to the Loan  Agreement
        dated February 6, 2003 providing AHC a warrant to purchase 1,000,000 shares
        of the Company's  common stock at $0.15 per share as a bonus
        for providing the Loan. (Incorporated by reference to Form 8-K filed 
        April 28, 2003).
|        |                                                                                                                                                                                                                                                                                                                                                                                        
|2.1.13* | Share Purchase Agreement dated as of
        January 14, 2004 between the Company and the Trustee of the Epitihia 
        Trust. (Incorporated by reference to Form 8-K/A filed on May 12, 2004).                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                                                                        
|2.1.14* | Share Purchase Agreement dated as of
        January 14, 2004 between the Company and the Trustee of the Abuelo 
        Trust. (Incorporated by reference to Form 8-K/A filed on May 12, 2004).                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                                                                        
|2.1.15* | Amending Agreement dated as of June 16,
        2004 between the Company and the Trustee of the Epitihia Trust.                                                                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                                                                                        
|2.1.16* | Amending Agreement dated as of June 16,
        2004 between the Company and the Trustee of the Abuelo Trust.                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                                                        
|2.1.17* | Hypothecation Agreement dated as of July
        6, 2004 between the Company, the Trustee of the Epitihia Trust and 
        Yearwood & Boyce.                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                                                        
|2.1.18* | Hypothecation Agreement dated as of July
        6, 2004 between the Company, the Trustee of the Abuelo Trust and 
        Yearwood & Boyce.                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                        
|31.1    | Certification
        of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002                                                                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                                                                        
|31.2    | Certification
        of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002                                                                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                                                                        
|32.1    | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to 18
        U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002                                                                                                                                                                                  

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(b) Reports on Form 8-K

March 21, 2005 reporting the converting of the AHC Holdings Loan to Company shares.

April 29, 2005 reporting the closing of the Convertible Debenture for total proceeds of $ 1,656,819.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
  Securities Exchange Act of 1934, the registrant has duly caused this report
  to be signed on its behalf by the undersigned, thereunto duly authorized, on
  this 12th day of August, 2005.

|                      | WESCORP ENERGY INC.                                 
|--------------------- | ----------------------------------------------------
|                     
|Date: August 12, 2005 | By: */s/ Douglas Biles*                             
|                      | Douglas Biles, Chief Executive Officer and Director 
|                     
|                      | By: */s/ Terry Mereniuk*                            
|                      | Terry Mereniuk, Chief Financial Officer and Director

12

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