---

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

FORM 10-QSB

(Mark One)x QUARTERLY REPORT PURSUANT TO SECTION
  13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the quarter ended 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                       | 33-0921967         
|------------------------------ | -------------------
|State or other jurisdiction of | (I.R.S. Employer   
|incorporation or organization  | Identification No.)

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

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

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

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

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

Indicate by check mark whether the registrant (1) has filed
  all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
  Act of 1934 during the preceding 12 months (or for such shorter period that
  the registrant was required to file such reports), and (2) has been subject
  to such filing requirements for the past 90 days. 
  Yes x No  ̈

Number of shares outstanding of the registrant's class of common
  stock as of 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.

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FORWARD-LOOKING STATEMENTS

THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS PREDICTIONS,
  PROJECTIONS AND OTHER STATEMENTS ABOUT THE FUTURE THAT ARE INTENDED TO BE "FORWARD-LOOKING
  STATEMENTS" WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT
  OF 1934, AS AMENDED (COLLECTIVELY, "FORWARD-LOOKING STATEMENTS"). FORWARD-LOOKING
  STATEMENTS INVOLVE RISKS AND UNCERTAINTIES. A NUMBER OF IMPORTANT FACTORS COULD
  CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
  STATEMENTS. IN ASSESSING FORWARD-LOOKING STATEMENTS CONTAINED IN THIS QUARTERLY
  REPORT ON FORM 10-QSB, READERS ARE URGED TO READ CAREFULLY ALL CAUTIONARY STATEMENTS
  – INCLUDING THOSE CONTAINED IN OTHER SECTIONS OF THIS 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                                                             | F-1
|------------------------------------------------------------------------------------------------------------------------------------- | ---
|                                                                                                                                      |    
|Consolidated Statements
      of Operations for the three months ended March 31, 2005 and the three months
      ended March 31, 2004 | F-2
|                                                                                                                                      |    
|Consolidated Statements
      of Stockholders' Equity                                                                                 | F-3
|                                                                                                                                      |    
|Consolidated Statements
      of Cash Flows for the three months ended March 31, 2005 and the three months
      ended March 31, 2004 | F-4
|                                                                                                                                      |    
|Notes to the Consolidated
      Financial Statements                                                                                  | F-5

2

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WESCORP ENERGY INC. 
  CONSOLIDATED BALANCE SHEETS

|                                                         |   | March 31,   |   |  |   | December 31, |  
|-------------------------------------------------------- | - | ----------- | - |  | - | ------------ | -
|                                                         |   | 2005        |   |  |   | 2004         |  
|                                                         |   | (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                                               |   | 3,503,824   |   |  |   | 3,503,824    |  
|Goodwill                                                 |   | 414,073     |   |  |   | 414,073      |  
|Deposits                                                 |   | 31,241      |   |  |   | 39,273       |  
|TOTAL OTHER ASSETS                                       |   | 4,942,786   |   |  |   | 4,875,818    |  
|                                                        
|                                                        
|TOTAL ASSETS                                             | $ | 6,532,648   |   |  | $ | 6,179,610    |  
|                                                        
|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                                      |   | (11,129,743 | ) |  |   | (10,582,802  | )
|TOTAL STOCKHOLDERS' EQUITY                               |   | 1,876,081   |   |  |   | 2,123,195    |  
|                                                        
|TOTAL LIABILITIES AND                                    |   |             |   |  |   |              |  
|STOCKHOLDERS' EQUITY                                     | $ | 6,532,648   |   |  | $ | 6,179,610    |  

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

F-1

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WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                   |   | Three Months Ended March 31, |  
|-------------------------------------------------- | - | ---------------------------- | -
|                                                   |   | 2005                         |  
|                                                   |   | (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                       |  
|Research and development                           |   | 28,349                       |  
|TOTAL OPERATING EXPENSES                           |   | 666,705                      |  
|                                                  
|LOSS FROM OPERATIONS                               |   | (353,337                     | )
|                                                  
|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                    |   | (546,941                     | )
|                                                  
|INCOME TAX BENEFIT                                 |   | -                            |  
|                                                  
|NET LOSS                                           |   | (546,941                     | )
|                                                  
|OTHER COMPREHENSIVE INCOME                         |   |                              |  
|Foreign currency translation
      gain            |   | 29,599                       |  
|                                                  
|COMPREHENSIVE LOSS                                 | $ | (517,342                     | )
|                                                  
|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.

F-2

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WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

|                                                                       | Common Stock |  |  |   |        |  |  |   |                 |  |  |   |              |   |  |   | Accumulated |   |  |   |               |  
|---------------------------------------------------------------------- | ------------ |  |  | - | ------ |  |  | - | --------------- |  |  | - | ------------ | - |  | - | ----------- | - |  | - | ------------- | -
|                                                                       |              |  |  |   |        |  |  |   |                 |  |  |   |              |   |  |   |             |   |  |   | Other         |  
|                                                                       | Number       |  |  |   |        |  |  |   | Additional      |  |  |   | Subscription |   |  |   | Deficit     |   |  |   | Comprehensive |  
|                                                                       | of Shares    |  |  |   | Amount |  |  |   | Paid-in Capital |  |  |   | Receivable   |   |  |   | Accumulated |   |  |   | Income (Loss) |  
|Balance, December 31, 2002                                             | 21,644,766   |  |  | $ | 2,165  |  |  | $ | 5,429,465       |  |  | $ |              |   |  | $ | (6,539,091  | ) |  | $ | 22,358        |  
|Shares issued pursuant to debt settlement agreement in                 |              |  |  |   |        |  |  |   |                 |  |  |   |              |   |  |   |             |   |  |   |               |  
|March and September                                                    | 248,355      |  |  |   | 24     |  |  |   | 72,501          |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|Shares issued for services                                             | 250,000      |  |  |   | 25     |  |  |   | 62,475          |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|Warrants issued in conjunction with promissory notes                   | -            |  |  |   | -      |  |  |   | 104,236         |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|Warrants issued for consulting services                                | -            |  |  |   | -      |  |  |   | 190,000         |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|Warrants issued for financing fees                                     | -            |  |  |   | -      |  |  |   | 90,000          |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|Common stock issued in private placement at $0.25
      per share      |              |  |  |   |        |  |  |   |                 |  |  |   |              |   |  |   |             |   |  |   |               |  
|and warrants at $0.05 each                                             | 3,783,494    |  |  |   | 378    |  |  |   | 1,134,670       |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|Foreign currency translation loss                                      | -            |  |  |   | -      |  |  |   | -               |  |  |   |              |   |  |   | -           |   |  |   | (22,344       | )
|Net loss for the year ended December 31, 2003                          | -            |  |  |   | -      |  |  |   | -               |  |  |   | -            |   |  |   | (259,934    | ) |  |   | -             |  
|Balance, December 31, 2003                                             | 25,926,615   |  |  |   | 2,592  |  |  |   | 7,083,347       |  |  |   | -            |   |  |   | (6,799,025  | ) |  |   | 14            |  
|Common stock issued for acquisition of Vasjar at $0.83
      per share | 2,400,000    |  |  |   | 240    |  |  |   | 1,991,760       |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|Common stock issued as financing fees                                  | 380,000      |  |  |   | 38     |  |  |   | 484,162         |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|                                                                       |              |  |  |   | -      |  |  |   |                 |  |  |   |              |   |  |   |             |   |  |   |               |  
|Common stock and warrants issued for cash                              | 3,231,000    |  |  |   | 323    |  |  |   | 1,615,176       |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|                                                                       |              |  |  |   | -      |  |  |   |                 |  |  |   |              |   |  |   |             |   |  |   |               |  
|Common stock issued for services                                       | 1,580,000    |  |  |   | 158    |  |  |   | 1,361,842       |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|                                                                       |              |  |  |   | -      |  |  |   |                 |  |  |   |              |   |  |   |             |   |  |   |               |  
|Common stock shares committed for Synenco Energy shares                | 600,000      |  |  |   | 60     |  |  |   | 179,940         |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|                                                                       |              |  |  |   | -      |  |  |   |                 |  |  |   |              |   |  |   |             |   |  |   |               |  
|Common stock shares issued for Ellycrack shares                        | 400,000      |  |  |   | 40     |  |  |   | 239,960         |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|                                                                       |              |  |  |   | -      |  |  |   |                 |  |  |   |              |   |  |   |             |   |  |   |               |  
|Warrants exercised                                                     | 500,000      |  |  |   | 50     |  |  |   | 124,950         |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|Foreign currency translation loss                                      | -            |  |  |   | -      |  |  |   | -               |  |  |   |              |   |  |   | -           |   |  |   | (378,655      | )
|                                                                       |              |  |  |   |        |  |  |   |                 |  |  |   |              |   |  |   |             |   |  |   |               |  
|Net loss for the year ended December 31, 2004                          | -            |  |  |   | -      |  |  |   | -               |  |  |   | -            |   |  |   | (3,783,777  | ) |  |   | -             |  
|Balance, December 31, 2004                                             | 35,017,615   |  |  |   | 3,501  |  |  |   | 13,081,137      |  |  |   | -            |   |  |   | (10,582,802 | ) |  |   | (378,641      | )
|Warrants exercised - March 08, 2005                                    | 428,571      |  |  |   | 43     |  |  |   | 149,957         |  |  |   |              |   |  |   | -           |   |  |   | -             |  
|Warrants exercised - January 10,2005                                   | 600,000      |  |  |   | 60     |  |  |   | 149,940         |  |  |   | (29,772      | ) |  |   | -           |   |  |   | -             |  
|Warrants exercised - January 13, 2005                                  | 100,000      |  |  |   | 10     |  |  |   | 24,990          |  |  |   | (25,000      | ) |  |   | -           |   |  |   | -             |  
|Foreign currency translation gain                                      | -            |  |  |   | -      |  |  |   | -               |  |  |   |              |   |  |   |             |   |  |   | 29,599        |  
|Net loss for the period ended March 31, 2005                           | -            |  |  |   | -      |  |  |   | -               |  |  |   | -            |   |  |   | (546,941    | ) |  |   | -             |  
|Balance, March 31, 2005 (Unaudited)                                    | 36,146,186   |  |  | $ | 3,614  |  |  | $ | 13,406,024      |  |  | $ | (54,772      | ) |  | $ | (11,129,743 | ) |  | $ | (349,042      | )

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

F-3

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WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                      |   | Three Months Ended March 31, |  
|--------------------------------------------------------------------- | - | ---------------------------- | -
|                                                                      |   | 2005                         |  
|                                                                      |   | (Unaudited)                  |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                 |   |                              |  
|Net loss                                                              | $ | (546,941                     | )
|Adjustments to reconcile net loss                                     |   |                              |  
|to net cash used by operating activities:                             |   |                              |  
|Depreciation                                                          |   | 13,419                       |  
|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.

F-4

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

Accounts Receivable
  The Company carries its accounts receivable at net realizable value. On a periodic
  basis, the Company evaluates its accounts receivable and considers the need
  for an allowance for doubtful accounts, based on Company past and expected collections,
  and current credit conditions. At 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.

F-5

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

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

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

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

Goodwill represents the excess of the purchase price and related
  direct costs over the fair value of net assets acquired as of the date of the
  acquisition of Flowstar Technologies Inc. (Flowstar). The Company periodically
  reviews its goodwill to assess recoverability based on projected undiscounted
  cash flows from operations. Impairments are recognized in operating results
  when a permanent diminution in value occurs. At March 31, 2005 and at December
  31, 2004, an impairment of $533,181 on the Company’s goodwill was
  deemed necessary.

The Company acquired DCR 900 technology rights from Vasjar
  which are included in intangible assets. These items represent the acquisition
  cost of the assets purchased from Vasjar in 2004 (see Note 8). The Company’s
  intangible assets are summarized as follows:

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

Accounting Pronouncements – Recent
  In December 2004, the Financial Accounting Standards Board issued Statement
  of Financial Accounting Standards No. 153. This statement addresses the measurement
  of exchanges of 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 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

F-6

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

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

Impairment or Disposal of Long-Lived Assets
  In August 2001, the Financial Accounting Standards Board issued Statement of
  Financial Accounting Standards No. 144, “Accounting for the Impairment
  or Disposal of Long-Lived Assets” (hereinafter “SFAS No. 144”).
  SFAS No. 144 replaces SFAS No. 121, “Accounting for the Impairment of
  Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.” This standard
  establishes a single accounting model for long-lived assets to be disposed of
  by sale, including discontinued operations. SFAS No. 144 requires that these
  long-lived assets be measured at the lower of carrying amount or fair value
  less cost to sell, whether reported in continuing operations or discontinued
  operations. This statement is effective beginning for fiscal years after December
  15, 2001, with earlier application encouraged. The Company adopted SFAS No.
  144 which did not have a material impact on the financial statements of the
  Company for the years presented. All of the Company’s long-lived assets
  were disposed of during 2002 and 2003. New assets were acquired in 2004 as a
  result of the acquisition of 100% of the outstanding shares of Flowstar and
  Vasjar (see Note 8).

F-7

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

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

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

Asset Retirement Obligations
  In 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 Liabilities
  In 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 Entities
  In 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 Expenses
  Advertising expenses consist primarily of costs incurred in the design, development,
  and printing of Company literature and marketing materials. The Company expenses
  all advertising expenditures as incurred. The Company's advertising expenses
  were $44,677 and $54,413 for the quarter ended March 31, 2005 and the
  quarter ended March 31, 2004 respectively.

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

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

Derivative Instruments
  The Financial Accounting Standards Board issued Statement of Financial Accounting
  Standards No. 133, “Accounting for Derivative Instruments and Hedging
  Activities” (hereinafter “SFAS No. 133”), as amended by SFAS
  No. 137, “Accounting for Derivative Instruments and Hedging Activities
  – Deferral of the Effective Date of FASB No. 133”, and SFAS No.
  138, “Accounting for Certain Derivative Instruments and Certain Hedging
  Activities”. In April 2003, the Financial Accounting Standards Board issued
  Statement of

F-8

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

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

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

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

Basic earnings per share includes no dilution and is computed
  by dividing net income available to common shareholders by the weighted average
  common shares outstanding for the period. Diluted earnings per share reflect
  the potential dilution of securities that could share in the earnings of an
  entity similar to fully diluted earnings per share. Although there were common
  stock equivalents outstanding at 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 Instruments
  The Company's financial instruments as defined by Statement of Financial Accounting
  Standard No. 107, "Disclosures about Fair Value of Financial Instruments," include
  cash, investments, a note receivable, accounts payable, accrued expenses and
  notes payable. All instruments are accounted for on a historical cost basis,
  which, due to the short maturity of these financial instruments, approximates
  fair value at March 31, 2005 and at December 31, 2004.

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

Going Concern 
  These consolidated financial statements have been prepared with the assumption
  being that the Company will continue on a going concern basis and that it will
  be able to realize assets and discharge liabilities in the normal course of
  business. As shown in the accompanying financial statements, the Company has
  incurred an accumulated deficit of approximately $11,129,743 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).

Investments
  The 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 Consolidation
  The consolidated financial statements include the accounts of the Company and
  its wholly owned subsidiaries, after elimination of the intercompany accounts
  and transactions. Wholly owned subsidiaries of the Company are listed in Note
  8.

F-9

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

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

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

NOTE 4 – 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-10

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April 1, 2005, and so the Company will be liable for to pay
  the Vasjar shareholders an additional 48,000 Wescorp shares for each month that
  the shares are not delivered, starting with the month of April 2005.

Agreement with Ellycrack AS
  Wescorp has purchased as an aggregate 655,000 shares of common stock of Ellycrack
  AS, a privately held company in Norway. Wescorp acquired 255,000 shares in consideration
  of $119,000 that was paid in three installments, $50,000 each on December
  29, 2003 and February 2, 2004, and $19,000 in May 2004. 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 Stock
  The Company is authorized to issue 250,000,000 shares of $0.0001 par value
  common stock and 50,000,000 shares of $0.0001 par value preferred stock.
  All common stock shares have equal voting rights, are non-assessable and have
  one vote per share. Voting rights are not cumulative and, therefore, the holders
  of more than 50% of the common stock could, if they choose to do so, elect all
  of the directors of the Company. The preferred shares may be issued in series,
  with the powers, rights and limitations of the preferred shares to be determined
  by the Company’s board of directors.

2005 Stock Transactions
  In the first 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.

Warrants

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

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

NOTE 7 - INVESTMENTS

Agreement with Ellycrack AS
  During 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.

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).

F-11

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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 Vasjar
  On March 31, 2004, Wescorp completed the purchase of 100% of the outstanding
  shares of Flowstar Technologies Inc. (“Flowstar”) in exchange for
  $414,073 pursuant to the share purchase and subscription agreement dated
  June 9, 2003 as amended January 14, 2004. On August 19, 2004, the Company concluded
  the acquisition of 100% of the outstanding shares of Vasjar Trading Ltd. (“Vasjar”),
  a British Virgin Islands company. Its wholly owned subsidiary (Quadra Products
  International Inc. or “Quadra”) owns the rights to the technology
  related to the DCR 900 system. The purchase called for the payment of 2,400,000
  common stock shares of Wescorp initially, with an additional minimum 2,080,000
  common stock shares issued over three years (480,000 before April 01, 2005,
  800,000 before April 01, 2006 and 800,000 before April 01, 2007). An additional
  520,000 shares are payable over this three year period if certain sales targets
  are achieved. If Wescorp fails to deliver any of the shares due before April
  01, 2006, then the Company will be subject to a penalty of 10% additional shares
  for each month of delay, with a cumulative provision. If any of the Wescorp
  shares to be issued have not been delivered for a period of 182 days after the
  applicable due date, then the Vasjar shareholders may at their option terminate
  the share purchase agreements without notice or opportunity to cure. Wescorp
  has pledged to the Vasjar shareholders all of the Vasjar shares it holds as
  security to guarantee Wescorp’s performance under the share purchase agreements.

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

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

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

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

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

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

F-12

---

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

The following comprise the Company’s notes payable at 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:

|     |   | Annual   
|---- | - | ---------
|     |   | Maturity 
|Year |   | Amount   
|2006 | $ | 265,929  
|2007 |   | 412,771  
|2008 |   | 413,266  
|2009 |   | 9,419    
|2010 |   | 12,676   
|     | $ | 1,114,061

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

F-13

---

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 Leases
  The Company leases office space and manufacturing space in Edmonton, Alberta,
  Canada for $3,450 per month under a month to month operating lease agreement.
  The Company leases office space in Calgary, Alberta, Canada for $2,420 per
  month under an operating lease agreement, which expires November 2005.

NOTE 13 - RELATED PARTY TRANSACTIONS

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

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.

F-14

---

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-15

---

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.

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 April 1, 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

3

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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.

4

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

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

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

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

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

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

Plan of Operation Overview

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:

5

---

(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 $353,337 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$666,705 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), and depreciation of $13,419 (compared to $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

6

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Liquidity and Capital Resources – 2005 Compared to
  2004

From inception, we have been dependent on investment capital
  and debt financing from our shareholders as our primary source of liquidity.
  To 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 $11,129,743.

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

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

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

Baum Lawsuit
  The Company was successful in its lawsuit with Mr. Mark Baum. Wescorp was awarded
  $42,471 plus court costs. Mr. Baum appealed the judgment 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.

7

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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 Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                             
|31.2    |  | Certification of Chief Financial
      Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                             
|32.1    |  | Certification of Chief Executive
      Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
      as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                   

8

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(b) Reports on Form 8-K

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

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

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
  Act of 1934, the registrant has duly caused this report to be signed on its
  behalf by the undersigned, thereunto duly authorized, on this 19th
  day of May, 2005.

|                   | WESCORP ENERGY INC.                                 
|------------------ | ----------------------------------------------------
|                  
|Date: May 23, 2005 | By: /s/ Douglas Biles                               
|                   | Douglas Biles, Chief Executive Officer and Director 
|                  
|                   | By:/s/ Terry Mereniuk                               
|                   | Terry Mereniuk, Chief Financial Officer and Director

9

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