---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB/A

(Mark One)

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934 
  For the quarter ended March 31, 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                       | 98-0447716         
|------------------------------ | -------------------
|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 - 4200Registrant'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 May 9th, 2005 was 36,597,186.

Authorized share capital of the registrant as of May
9th, 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 $620,595 for the quarter ended
March 31, 2005.

---

FORWARD-LOOKING STATEMENTS

THIS QUARTERLY REPORT ON FORM 10-QSB/A 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/A, READERS ARE URGED TO READ
CAREFULLY ALL CAUTIONARY STATEMENTS  INCLUDING THOSE CONTAINED IN OTHER
SECTIONS OF THIS ANNUAL REPORT ON THIS FORM 10-KSB. 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 March 31, 2005 and December 31, 2004                                                            
|-------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                     
|Consolidated
      Statements of Cash Flows for the three months ended March 31, 2005 and the
      three months ended March 31, 2004
|                                                                                                                                     
|Consolidated
      Statements of Operations for the three months ended March 31, 2005 and the
      three months ended March 31, 2004
|                                                                                                                                     
|Notes
      to the Consolidated Financial Statements                                                                                 

2

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WESCORP ENERGY INC. 
  CONSOLIDATED BALANCE SHEETS

|                                                         |   | March 31,   |   |   | December 31, |  
|-------------------------------------------------------- | - | ----------- | - | - | ------------ | -
|                                                         |   | 2005        |   |   | 2004         |  
|                                                         |   | (restated)  |   |   |              |  
|                                                         |   | (Unaudited) |   |   | (Unaudited)  |  
|ASSETS                                                   |   |             |   |   |              |  
|CURRENT ASSETS                                           |   |             |   |   |              |  
|Cash and equivalents                                     | $ | 368,914     |   | $ | 48,428       |  
|Cash trust accounts                                      |   | -           |   |   | 1,970        |  
|Accounts receivable                                      |   | 437,172     |   |   | 622,657      |  
|Inventory                                                |   | 596,217     |   |   | 510,193      |  
|Prepaid expenses                                         |   | 87,985      |   |   | 14,706       |  
|TOTAL CURRENT ASSETS                                     |   | 1,490,288   |   |   | 1,197,954    |  
|                                                         |   |             |   |   |              |  
|PROPERTY AND EQUIPMENT, net                              |   | 99,574      |   |   | 105,838      |  
|                                                         |   |             |   |   |              |  
|OTHER ASSETS                                             |   |             |   |   |              |  
|Investments                                              |   | 993,648     |   |   | 918,648      |  
|Technology, net                                          |   | 3,596,614   |   |   | 3,725,064    |  
|Deposits                                                 |   | 31,241      |   |   | 39,273       |  
|TOTAL OTHER ASSETS                                       |   | 4,621,503   |   |   | 4,682,985    |  
|                                                         |   |             |   |   |              |  
|TOTAL ASSETS                                             | $ | 6,211,365   |   | $ | 5,986,777    |  
|                                                         |   |             |   |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                     |   |             |   |   |              |  
|CURRENT LIABILITIES                                      |   |             |   |   |              |  
|Accounts payable and accrued liabilities                 | $ | 1,372,682   |   | $ | 914,628      |  
|Other liabilities                                        |   | 265,929     |   |   | 265,786      |  
|Note payable, related party, net of unamortized discount |   | 1,969,824   |   |   | 1,979,593    |  
|Due to shareholders                                      |   | -           |   |   | 44,836       |  
|Notes payable                                            |   | 200,000     |   |   | -            |  
|TOTAL CURRENT
      LIABILITIES                          |   | 3,808,435   |   |   | 3,204,843    |  
|                                                         |   |             |   |   |              |  
|LONG-TERM
      LIABILITIES                              |   |             |   |   |              |  
|Other liabilities                                        |   | 848,132     |   |   | 851,572      |  
|TOTAL LONG-TERM
      LIABILITIES                        |   | 848,132     |   |   | 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; 36,146,186 and 35,017,615 shares        |   |             |   |   |              |  
|issued and outstanding,
      respectively               |   | 3,614       |   |   | 3,501        |  
|Additional paid-in capital                               |   | 13,406,024  |   |   | 13,081,137   |  
|Subscription receivable                                  |   | (54,772     | ) |   | -            |  
|Accumulated other comprehensive income (loss)            |   | (349,042    | ) |   | (378,641     | )
|Accumulated deficit                                      |   | (11,451,026 | ) |   | (10,775,635  | )
|TOTAL STOCKHOLDERS'
      EQUITY                         |   | 1,554,798   |   |   | 1,930,362    |  
|                                                         |   |             |   |   |              |  
|TOTAL LIABILITIES AND                                    |   |             |   |   |              |  
|STOCKHOLDERS' EQUITY                                     | $ | 6,211,365   |   | $ | 5,986,777    |  

The accompanying notes are an integral part of these financials
  statements.
  3

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WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                   |   | Three Months Ended March 31, |  
|-------------------------------------------------- | - | ---------------------------- | -
|                                                   |   | 2005                         |  
|                                                   |   | (restated)                   |  
|                                                   |   | (Unaudited)                  |  
|                                                   |   |                              |  
|REVENUES                                           | $ | 620,595                      |  
|                                                   |   |                              |  
|COST OF SALES                                      |   | 307,227                      |  
|                                                   |   |                              |  
|GROSS PROFIT                                       |   | 313,368                      |  
|                                                   |   |                              |  
|EXPENSES                                           |   |                              |  
|Consulting                                         |   | 199,227                      |  
|Advertising
      and investor relations           |   | 44,677                       |  
|Legal and accounting                               |   | 106,672                      |  
|Wages and
      benefits                           |   | 156,313                      |  
|Office                                             |   | 74,087                       |  
|Insurance                                          |   | 22,830                       |  
|Travel                                             |   | 21,131                       |  
|Depreciation                                       |   | 13,419                       |  
|Amortization of technology                         |   | 128,451                      |  
|Research
      and development                     |   | 28,349                       |  
|TOTAL OPERATING EXPENSES                           |   | 795,156                      |  
|                                                   |   |                              |  
|LOSS FROM OPERATIONS                               |   | (481,788                     | )
|                                                   |   |                              |  
|OTHER INCOME (EXPENSES)                            |   |                              |  
|Interest
      and bank charges                    |   | (1,136                       | )
|Interest to shareholders
      and related parties |   | -                            |  
|Financing
      costs                              |   | (192,468                     | )
|TOTAL OTHER INCOME (EXPENSES)                      |   | (193,604                     | )
|                                                   |   |                              |  
|LOSS FROM CONTINUING OPERATIONS                    |   | (675,392                     | )
|                                                   |   |                              |  
|INCOME TAX BENEFIT                                 |   | -                            |  
|                                                   |   |                              |  
|NET LOSS                                           |   | (675,392                     | )
|                                                   |   |                              |  
|OTHER COMPREHENSIVE INCOME                         |   |                              |  
|Foreign currency
      translation gain            |   | 29,599                       |  
|                                                   |   |                              |  
|COMPREHENSIVE LOSS                                 | $ | (645,793                     | )
|                                                   |   |                              |  
|BASIC AND
      DILUTED NET LOSS PER SHARE         | $ | (0.02                        | )
|                                                   |   |                              |  
|WEIGHTED AVERAGE NUMBER                            |   |                              |  
|COMMON SHARES OUTSTANDING                          |   |                              |  
|BASIC AND
      DILUTED                            |   | 33,329,668                   |  

The accompanying notes are an integral part of these financial
  statements. 
  4

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WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                      |   | Three Months Ended March 31, |  
|--------------------------------------------------------------------- | - | ---------------------------- | -
|                                                                      |   | 2005                         |  
|                                                                      |   | (restated)                   |  
|                                                                      |   | (Unaudited)                  |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                 |   |                              |  
|Net loss                                                              | $ | (675,392                     | )
|Adjustments to reconcile net loss                                     |   |                              |  
|to net cash used by operating activities:                             |   |                              |  
|Depreciation                                                          |   | 13,419                       |  
|Amortization
      of technology                                      |   | 128,451                      |  
|Shares
      issued for services                                      |   | 25,392                       |  
|Warrants issued
      for services                                    |   | -                            |  
|Amortization
      on discount of note payable                        |   | -                            |  
|Decrease (increase)
      in accounts receivable                      |   | 185,485                      |  
|Decrease
      (increase) in inventory                                |   | (86,024                      | )
|Decrease (increase)
      in prepaid expenses                         |   | (73,279                      | )
|Increase
      (decrease) in accounts payable and accrued liabilities |   | 458,054                      |  
|Increase (decrease)
      in liabilities                              |   | -                            |  
|Net
      cash used by operating activities                           |   | (23,894                      | )
|CASH FLOWS FROM INVESTING ACTIVITIES:                                 |   |                              |  
|Purchase
      of equipment                                           |   | (7,155                       | )
|Cash provided
      by acquisition                                    |   | -                            |  
|Deposits                                                              |   | 8,032                        |  
|Investments                                                           |   | (75,000                      | )
|Net
      cash used in investing activities                           |   | (74,123                      | )
|CASH FLOWS FROM FINANCING ACTIVITIES:                                 |   |                              |  
|Repayments
      on borrowing                                         |   | (3,297                       | )
|Payments on
      notes payable                                       |   | -                            |  
|Repament
      of shareholder loan                                    |   | (44,836                      | )
|Proceeds on
      notes payable                                       |   | 200,000                      |  
|Sale
      of stock                                                   |   | 244,836                      |  
|Net cash provided
      by financing activities                       |   | 396,703                      |  
|Effect of exchange rates                                              |   | 19,830                       |  
|Net increase in cash                                                  |   | 318,516                      |  
|Cash, beginning of period                                             |   | 50,398                       |  
|Cash, end of period                                                   | $ | 368,914                      |  
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                                   |   |                              |  
|Cash paid for interest and income taxes:                              |   |                              |  
|Interest expense                                                      | $ | 1,134                        |  
|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                      | $ | 54,772                       |  

The accompanying notes are an integral part of these financial
  statements. 
  5

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F-6

|WESCORP ENERGY INC.                           
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|March 31, 2005                                
|                                              

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 three month period ended March 31,
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 MethodThe 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.

Revenue and Cost RecognitionThe Company recognizes
revenue when the customer has accepted delivery of the product, has agreed it
meets their requirements and, when no significant contractual obligations
remain. Revenue is reported net of a provision for estimated product returns. We
follow EITF Issue 00-10, Accounting for Shipping and Handling Fees and Costs
(Issue 00-10). Issue 00-10 requires that all amounts billed to customers related
to shipping and handling should be classified as revenues. The Company sells its
products directly, using in-house sales employees. Cost of goods is primarily
made up of product, labor, shipping and handling and allocated overhead.

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F-7

|WESCORP ENERGY INC.                           
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|March 31, 2005                                
|                                              

Accounts ReceivableThe 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 March 31, 2005, a valuation allowance of $21,813 (December 31,
2004  nil) is deemed necessary. The Company's policy is to accrue interest on
trade receivables at the discretion of management.

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

InventoriesInventories are stated at the lower of
cost or market on a first-in, first-out basis.

Restatement and ReclassificationCertain 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 AssetsIn 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 in discontinued operations expense and subsequently disposed of
during 2003. Application of the nonamortization provision of SFAS No. 142 is
expected to result in no change to the Companys results of operations.

The Company acquired DCR technology rights through its
acquisitions of Flowstar and Vasjar which are included in intangible assets.
These items represent the acquisition cost of the assets purchased from Flowstar
and Vasjar in 2004 (See Note 8). The Companys intangible assets are summarized
as follows:

March 31,
    
    
    December 31,2005
    
    
    2004(restated)DCR Technology acquired from Vasjar
    $
    3,503,824
    
    $
    3,503,824DCR Technology acquired from Flowstar
    
    414,073
    
    
    414,0733,917,897
    
    
    3,917,897Accumulated Amortization
    
    321,284
    
    
    192,833Net Technology Assets
    $
    3,596,613
    
    $
    3,725,064


The technology acquired from Flowstar relates to the right to
use the DCR technology in markets in Canada and the technology acquired from
Vasjar relates to markets outside of Canada. In accordance with SFAS No. 142,
intangible assets with a finite life are amortized over their useful life. The
useful life of an intangible asset to an entity is the period over which the
asset is expected to contribute directly or indirectly to the future cash flows
of that entity. Amortization of the technology is recorded on a straight line
basis over its useful life which is estimated to expire in March 2012. The
Company periodically reviews its DCR technology rights 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
March 31, 2005, no impairment of the Companys DCR technology is deemed
necessary.

Accounting Pronouncements  RecentIn December 2004,
the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 153. This statement addresses the measurement of
exchanges of nonmonetary assets. The guidance in APB Opinion No. 29, Accounting
for Nonmonetary Transactions, is based on the principle that exchanges of
nonmonetary 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
nonmonetary exchanges of similar productive assets and replaces it with a
general exception for exchanges of nonmonetary assets that do not have
commercial substance. A nonmonetary 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
nonmonetary asset

---

F-8

|WESCORP ENERGY INC.                           
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|March 31, 2005                                
|                                              

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.

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 CompensationIn 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 ActivitiesIn 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 AssetsIn 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

---

F-9

|WESCORP ENERGY INC.                           
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|March 31, 2005                                
|                                              

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 8).

InventoryInventories 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 March 31, 2005 and December 31,
  2004 are as follows:

March 31,
    
    
    December 31,2005
    
    
    2004Finished goods
    $
    558,242
    
    $
    471,222Raw materials
    
    37,976
    
    
    38,971Total inventory
    $
    596,217
    
    $
    510,193


Asset Retirement ObligationsIn June 2001, the
Financial Accounting Standards Board issued Statement of Financial Accounting
Standards No. 143, Accounting for Asset Retirement Obligations (hereinafter
SFAS No. 143). SFAS No. 143 establishes guidelines related to the retirement
of tangible long-lived assets of the Company and the associated retirement
costs. This statement requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred if a
reasonable estimate of fair value can be made. The associated asset retirement
costs are capitalized as part of the carrying amount of the long-lived assets.
This statement is effective for financial statements issued for the fiscal years
beginning after June 15, 2002 and with earlier application encouraged. The
Company adopted SFAS No. 143 and the adoption of this standard did not have a
material impact on the financial statements of the Company.

Transfers and Servicing of Financial Assets and
Extinguishment of LiabilitiesIn September 2000, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standard No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishment
of Liabilities (hereinafter SFAS No. 140). This statement provides accounting
and reporting standards for transfers and servicing of financial assets and
extinguishment of liabilities and also provides consistent standards for
distinguishing transfers of financial assets that are sales from transfers that
are secured borrowings. SFAS No. 140 is effective for recognition and
reclassification of collateral and for disclosures relating to securitization
transactions and collateral for fiscal years ending after December 15, 2000, and
is effective for transfers and servicing of financial assets and extinguishments
of liabilities occurring after March 31, 2001. The adoption of this standard did
not have a material effect on the Companys results of operations or financial
position.

Variable Interest EntitiesIn January 2003, the
Financial Accounting Standards Board issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51
(hereinafter FIN 46). FIN 46 requires certain variable interest entities to be
consolidated by the primary beneficiary of the entity if the equity investors in
the entity do not have the characteristics of a controlling financial interest
or do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other parties.
FIN 46 is effective for all new variable interest entities created or acquired
after January 31, 2003. The provisions of FIN 46 must be applied for the first
interim or annual period beginning after June 15, 2003. The Company does not
have any entities that require disclosure or new consolidation as a result of
adopting the provisions of FIN 46.

Advertising ExpensesAdvertising 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 $44,677 and
$54,413 for the quarter ended March 31, 2005 and the quarter ended March 31,
2004 respectively.

Cash and Cash EquivalentsFor 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 RiskThe Company maintains
its cash in a commercial account at a major Canadian financial institution.

Derivative InstrumentsThe Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 133,
Accounting for Derivative

---

F-10

|WESCORP ENERGY INC.                           
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|March 31, 2005                                
|                                              

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 ShareOn 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 March 31, 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 InstrumentsThe 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 March 31, 2005 and at December 31, 2004.

Foreign Currency Translation Gains/LossesThe
Companys reporting currency is the United States dollar. The Companys
functional currency for its subsidiary Flowstar Technologies Inc. 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. 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 $11,129,743 through March 31, 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. After the quarter end and prior to the completion
of this report, the Company successfully raised $1,656,819 on a convertible
debenture. Management feels that this will be sufficient to fund normal
operations through 2005 (see Note 14).

InvestmentsThe Companys investments consist of
nonmarketable 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 ConsolidationThe 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 8.

---

F-11

|WESCORP ENERGY INC.                           
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|March 31, 2005                                
|                                              

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.

ReclassificationsCertain 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 EstimatesThe 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  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.

|                                          |  | March 31, 2005 |  |  | December 31, 2004 | 
|----------------------------------------- |  | -------------- |  |  | ----------------- | 
|                                          |  |                |  |  | Accumulated       | 
|                                          |  | Cost           |  |  | Depreciation      | 
|Manufacturing Equipment                   |  | 3,019          |  |  | 139               | 
|Furniture & Fixtures                      |  | 12,489         |  |  | 3,882             | 
|Office Equipment                          |  | 31,249         |  |  | 11,260            | 
|Automotive Equipment                      |  | 79,386         |  |  | 32,604            | 
|Computer Hardware                         |  | 25,443         |  |  | 8,088             | 
|Computer Software                         |  | 8,913          |  |  | 5,026             | 
|Leasehold Improvements                    |  | 748            |  |  | 674               | 
|                                          |  |                |  |  |                   | 
|Total                                     |  | 161,247        |  |  | 61,673            | 
|                                          |  |                |  |  |                   | 
|Less: accumulated
      depreciation      |  | 61,673         |  |  |                   | 
|                                          |  |                |  |  |                   | 
|Total property, plant and
      equipment |  | 99,574         |  |  |                   | 

NOTE 5  INVESTMENTS

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-900
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

---

F-12

|WESCORP ENERGY INC.                           
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|March 31, 2005                                
|                                              

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.

According to EITF 98-3 Determining Whether a Non-monetary
Transaction Involves Receipt of Productive Assets of a Business the Company
acquired 100% of the outstanding shares of Vasjar Trading Ltd., a British Virgin
Islands company in order to acquire a single identifiable intangible asset, the
rights to the technology related to the DCR 900 system.

Agreement with Ellycrack ASWescorp 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. The Company had also purchased in
2004 an additional 400,000 shares of Ellycrack in exchange for 300,000 shares of
common stock of the Company. In the first quarter of 2005, Wescorp paid $75,000
for 97,000 additional shares of Ellycrack at five Kroners per share. (See Note 7
below)

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.
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 6  COMMON STOCK AND WARRANTS

Common StockThe 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 TransactionsIn the first quarter of 2005,
the company issued 1,128,571 shares for total proceeds of $325,000. These shares
were issued on the exercise of various warrants at exercise prices of $0.25 and
$0.35 per share.

WarrantsAs of May 15, 2005, the Company has the
following warrants outstanding:

Number of
    
    Exercise
    
    Expirationwarrants
    
    price
    
    date571,429
    
    $0.35
    
    September 20052,607,494
    
    $0.35
    
    December 20051,500,000
    
    $0.15
    
    March 2006300,000
    
    $0.25
    
    December 20061,000,000
    
    $0.15
    
    June 20085,978,923


NOTE 7 - INVESTMENTS

Agreement with Ellycrack ASDuring the years ending
December 31, 2004 and 2003, the Company paid $148,187 for 289,609 shares of
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.

---

F-13

|WESCORP ENERGY INC.                           
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|March 31, 2005                                
|                                              

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 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.

NOTE 8 ACQUISITIONS AND DISPOSITIONS OF SUBSIDIARIES

Acquisition of Flowstar and VasjarOn 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 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:

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

---

F-14

|WESCORP ENERGY INC.                           
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|March 31, 2005                                
|                                              

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.

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 9  OTHER LIABILITIES

Vehicle LoansDuring 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 March 31,
2005 and at December 31, 2004:

|                                                                                               |   | March 31, |  |   | December 31, | 
|---------------------------------------------------------------------------------------------- | - | --------- |  | - | ------------ | 
|                                                                                               |   | 2005      |  |   | 2004         | 
|                                                                                               |   |           |  |   |              | 
|Note payable  Interest at 0.0%, and
      secured by automotive assets of Flowstar            | $ | 21,931    |  | $ | 23,692       | 
|Note payable  Interest at 7.75%, compounded monthly and
      secured by automotive assets of |   |           |  |   |              | 
|Flowstar                                                                                       |   | 29,655    |  |   | 31,191       | 
|Notes payable  Interest at 0.0%, unsecured                                                    |   | 1,062,475 |  |   | 1,062,475    | 
|Total
      notes payable                                                                      | $ | 1,114,061 |  | $ | 1,117,358    | 
|Portion due within one
      year                                                              |   | 265,929   |  |   | 265,786      | 
|Long-term                                                                                      | $ | 848,132   |  | $ | 851,572      | 

Future principal payments are as follows:

AnnualMaturityYear
    
    Amount2006
    $
    265,9292007
    
    412,7712008
    
    413,2662009
    
    9,4192010
    
    12,676$
    1,114,061


For additional disclosures on notes payable to related parties,
see Note 13.

---

F-15

|WESCORP ENERGY INC.                           
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|March 31, 2005                                
|                                              

NOTE 10  NOTES PAYABLE

During the period the Company received cash for Debentures
issued subsequent to March 31, 2004. The Debentures bear interest at the rate of
14% per annum, are payable quarterly and 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. (See Note 14)

NOTE 11  COMMITMENTS AND CONTINGENCIES

The Company has three consulting agreements. The agreements
were effective from April 1, 2003 through March 31, 2005. The consultants are to
be paid in cash or common stock, with a deemed price of $0.20 per share. The
monthly fee for two consultants is $5,000 each and the other consultant receives
$2,500 per month. Consultant expense for the quarter ended March 31, 2005 under
these agreements was $37,500 (2003 - $112,500, 2004 -
$150,000). At March 31, 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.

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 March 31, 2005, the Company
had not issued this stock or warrants.

NOTE 12  LEASES

Operating LeasesThe 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.

NOTE 13 - RELATED PARTY TRANSACTIONS

Related Party TransactionsSummary of related party
transactions as follows for the three months ended March 31, 2005 and the year
ended December 31, 2004:

|                                                          |   | March 31, |  |   | 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 PayableOn 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 January 01,
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.

---

F-16

|WESCORP ENERGY INC.                           
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|March 31, 2005                                
|                                              

Further, on January 28, 2003 the Company granted AHC warrants
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.
These warrants have a fair market value at March 31, 2005 of $920,000.

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

|                                                                                             |   | March 31, |  |   | 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  |   | 1,969,824 |  |   | -            | 
|issued subsequent to the quarter end                                                         |   |           |  |   |              | 
|                                                                                             |   |           |  |   |              | 
|Advances from shareholders, non-interest
      bearing with no set terms of repayment.       |   | -         |  |   | 44,836       | 
|                                                                                             |   |           |  |   |              | 
|Total amounts due to shareholders                                                            | $ | 1,969,824 |  | $ | 2,024,429    | 

NOTE 14  SUBSEQUENT EVENTS

Convertible Debentures

Subsequent to March 31, 2004 the Company issued Debentures in
the amount of $1,656,819 which bear interest at the rate of 14% per annum, are
payable quarterly and 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:

| | 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.

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-17

|WESCORP ENERGY INC.                           
|----------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|March 31, 2005                                
|                                              

**NOTE 15 CORRECTION FOR ERRORS**

The accompanying consolidated financial statements have been
restated to correct information concerning certain transactions that are
described in general in this Note 15 and in more detail in respective Notes
above. The cumulative effects of the financial statement amendments and the
correction for an accounting error, as described above in this Note 15, resulted
in the following changes to the Companys financial statements: For the quarter
ended March 31, 2005, the Company had originally reported a net loss of $546,941
and the corrected net loss is $645,793. The Company had reported an accumulated
deficit of $11,129,743, which is now recognized as $11,451,026. The Companys
losses per share remained the same at $0.02 per share.

Reclassification of GoodwillIn March 2004, the
Company obtained the rights for Canada to its DCR technology, through its
acquisition of Flowstar and Flowray, in exchange for cash consideration of
$414,073. Originally this amount was reported as Goodwill on the financial
statements. The Company has determined that this amount should have been
included as Technology and this amount has accordingly been reclassified on the
March 31, 2005 balance sheet.

Amortization of TechnologyIn August 2004 the
remaining world wide rights for the DCR technology for were obtained through the
acquisition of Vasjar in the amount of $3,503,824. The Company has determined
that it is appropriate to amortize the value of the DCR technology on a straight
line basis over its useful life which is estimated to expire in March 2012.
Accordingly these financial statements reflect amortization of the Technology
and a corresponding increase in the net loss in the amount of $128,451.

---

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

To the date of this report and subsequent to March 31, 2005,
Wescorp has raised $1,656,819 on the issuance of a convertible debenture and
$635,500 on the exercise of outstanding warrants. In addition, the loan from AHC
Holdings Ltd. for Cdn $2,382,755 (US$1,969,824) was converted to shares of the
company at $0.87 per share, resulting in the complete elimination of the
loan.

Revenue from operations for the first quarter of 2005 totaled
$620,595 (Nil for the same quarter in 2004, and $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 April 1, 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 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 the end of 2004, our quarterly operations 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. Flowstar
sales to date have been encouraging, but the flow meter business has not yet
reached the break even level.

Flowstar Technologies Inc. produces advanced natural gas and
  gas liquids measurement devices based on a proprietary Digital Chart Recorder
  (DCR) and advanced turbine measurement technology. Flowstar DCR-based devices
  are self-contained, energy-efficient flow computers with turndown ratio of 40:1
  or more for more precise flow measurements and volume calculations that are
  installed directly to the well-head. Currently these products carry a one year
  warranty and have no right of return. There is no price protection plan in place.

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.                                                                                                                                                                                                
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 2. | Continue to hire, train and retain key management for our
      company and ensure any target company does the same  A new corporate
      controller has been hired and the Company has started the recruiting
      process for 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 this quarter, the Company undertook to raise over one million dollars
      through the issuance of a convertible debenture. This was successful, and
      the issuance was closed subsequent to the quarter end on April 28, 2005,
      resulting in the Company raising $1,656,819.                                                                                                                                                                                                                           

Our future opportunities for success greatly depend on the
continued employment of and performance by 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.

A.1 Acquisition of Flowstar and Flowray

On March 31, 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-900" 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-900
product, including PDA/telephone software and a satellite communication system.
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 2nd and 3rd. 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 three
quarters of 2005. 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 increase. 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 will acquire 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

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.

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 900 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 900 system only in Canada.

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

The following discussion of the plan of operation, financial
condition, results of operations, cash flows and changes in financial position
of our Company should be read in conjunction with our most recent financial
statements and notes appearing elsewhere in this Form 10-QSB. 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 March 31, 2005 of
$1,280,512 is an indication that Flowstar will generate significantly higher
operating revenues in the future and that it will be able to operate profitably
in the future. 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 nine months, 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 a financing by way of a
convertible debenture to certain for an aggregate amount of $1,656,819. The
debenture is secured by the assets of Flowstar and carries interest at 14%
payable at the 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:

(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 and Flowray operations become cash flow
positive, Wescorps cash on hand is currently 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 and Flowray 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 recent hiring of a full
time corporate controller. 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

We incurred a net operating loss for the first quarter ended
March 31, 2005 of $481,788 compared to a net loss of $345,055 for the comparable
period in 2004. This loss includes operating expenses and general and
administrative costs totaling$795,156 compared to $345,055 for the three
months ended March 31, 2004. The 2005 figure includes the operating, general and
administrative expenses for Wescorp as well as for Flowstar and Flowray (the two
companies acquired on March 31, 2004). The 2004 figure reflected a quarter when
Wescorp had little operating activity. As a result, the 2005 figure includes
advertising and investor relations costs of $44,677 (compared to $54,413 in
2004), consulting expenses of $199,227 (versus $198,684 in 2004), legal and
accounting (primarily related to the preparation of the Company's 10-QSB and 8-K
reports) of $106,672 (compared to $48,397 in 2004), office and general expenses
of $74,087 (versus $nil in 2004), insurance expense of $22,830 (compared to $nil
in 2004), travel expense of $21,131 (versus $2,258 in 2004), research and
development of $28,349 (versus $nil in 2004), depreciation of $13,419 (compared
to $nil in 2004), and amortization of technology of $128,451 (versus $nil in
2004).

---

The Company had a loss from other items of $193,604 for the
first quarter of 2005 compared to a loss of $63,741 for the same period in 2004.
The loss from other items for the first three months of 2005 consisted of mostly
of $192,468 in financing costs related to the capital raised from convertible
debentures. The loss from the comparable 2004 period came from interest paid to
shareholders and related parties

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
March 31, 2005, we have generated revenues from operations of only $1,480,621
(comprised of $820,026 for the three quarters to December 31, 2004 and $620,595
for the first quarter of 2005). We had an accumulated deficit at March 31, 2005
of $11,451,026.

During the first quarter of 2005, our cash position decreased
to $368,914 at March 31, 2005 from $1,054,419 at March 31, 2004. We had cash
used in operations of $23,894 in the first three months of fiscal 2005 compared
to cash used in operations of $338,646 in the same period of fiscal 2004. We
also had a net outflow of cash of $74,123 from investing activities in the first
quarter 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 - 50,000),
the purchase of plant and equipment of $7,155 (2004 - $nil), which was offset by
the change in deposits of $8,032 (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
$396,703 from financing activities, resulting in a net increase in our cash
position for the three month period of $318,516. The cash flow from financing
activities is primarily a result of the issuance of some common stock shares
(see Part II, Item 2).

The Company had $4,656,567 in total liabilities at March 31,
2005 compared to $2,026,044 at the end of March 2004. The increase is primarily
a result of additional trade payables and financing required to sustain the
operations of Flowstar resulting in an increase of approximately $1.1 million.
In addition, $1,040,000 in debt was incurred as part of the purchase of Vasjar.
The company also obtained additional financing of approximately $400,000 through
the issue of $200,000 in share capital and an additional $200,000 related to
convertible debentures which were issued subsequent to March 31, 2005. There was
a repayment of $3,297 on loans used to finance the acquisition of vehicles in
2004.

ITEM 3. CONTROLS AND PROCEDURES

The management of Wescorp Energy Inc. (the Company), under
the supervision and with the participation of the Companys Chief Executive
Officer and Chief Financial Officer, conducted an evaluation of the Companys
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
or 15d-15(e)) as of the end of the period covered by this report. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Companys disclosure controls and procedures were effective as of the
end of the period covered by this report.

There was no change in the Companys internal control over
financial reporting identified in connection with the evaluation required by
paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the
Companys last fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the Companys internal control over financial
reporting.

PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ASI ClaimShortly 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 LawsuitThe Company was successful in its
lawsuit with Mr. Mark Baum. Wescorp was awarded $42,471 plus court costs. Mr.
Baum appealed the judgment subsequent to the year end. 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.

---

ITEM 2. CHANGES IN SECURITIES

To the end of the first quarter of 2005, Wescorp has raised
$1,656,819 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 March 31, 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 Rule 13a-14 and Rule 15d-14(a),
        promulgated under the Securities and Exchange Act of 1934                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|31.2    | Certification
        of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
        promulgated under the Securities and Exchange Act of 1934                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|32.1    | Certification
        pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
        of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial
        Officer)                                                                                                                                                                                

*Previously filed

---

(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
24th day of April, 2004.

|                     | WESCORP ENERGY INC.                                       
|-------------------- | ----------------------------------------------------------
|                     |                                                           
|Date: April 24, 2006 | By:
      /s/ Douglas Biles                               
|                     | Douglas Biles, Chief Executive Officer and
      Director 
|                     |                                                           
|                     | By:
      /s/ Terry Mereniuk                              
|                     | Terry Mereniuk, Chief Financial Officer and
      Director

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