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UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION
  WASHINGTON, D.C. 20549

FORM 10-KSB/AAMENDMENT NO. 1

x ANNUAL REPORT PURSUANT
  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
  For the year ended December 31, 2003

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

Commission file number 000-21753

ULTRAGUARD WATER SYSTEMS CORP.
  Name of Small Business Issuer in Its Charter

|NEVADA                                 | 88-0263701        
|-------------------------------------- | ------------------
|State of Incorporation                 | I.R.S. Employer   
|                                       | Identification No.
|                                      
|914 SHERWOOD AVENUE                    |                   
|COQUITLAM B.C.CANADA                   | V3K 1A6           
|Address of Principal Executive Offices | Zip code          

604-540-8282
  Issuer's Telephone Number

Securities registered under Section 12(b) of the Act:

NONE

Securities registered under Section 12(g) of the Act:

COMMON STOCK, PAR VALUE $0.001 PER SHARE Title of class

Check whether the issuer: (1) filed all reports required to
  be filed by Section13 or 15(d) of the Exchange Act during the past 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  ̈

Check if there is no disclosure of delinquent filers in response
  to Item 405 of Regulation SB is not contained in this form, and no disclosure
  will be contained, to the best of registrant’s knowledge, in definitive
  proxy or information statements incorporated by reference in Part III of this
  Form 10-KSB or any amendments to this Form 10-KSB  ̈

The issuer’s revenues for its most recent fiscal year
  were $32,669

The aggregate market value of the voting and non voting common
  equity held by non-affiliates of the issuer amounting to in aggregate 17,153,570
  computed by reference to the price at which the common equity was sold, or the
  average bid and asked price of such common equity, on April 8,2004 was $ 1,243,643.
  The number of shares outstanding of the issuer's only class of Common Stock
  $.001 par value was 23,553,570 on April 12, 2004.

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Explanatory Note

This amendment No. 1 to Form 10-KSB for the year ended December
  31, 2003 has been filed to amend our annual audited financial statements under
  Item 7.

This amendment No. 1 on Form 10-KSB does not modify or update
  the disclosure therein in any way other than as required to reflect the amendments
  discussed above and certain other minor underlined amendments.

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Item 7. Consolidated Financial Statements (Restated  Note 11)

Index to Consolidated Financial Statements

Independent Auditors' Report

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Cash Flows

Consolidated Statement of Stockholders' Equity (Deficit)

Notes to the Consolidated Financial Statements

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Independent Auditors' Report

To the Board of Directors and Stockholders of 
  UltraGuard Water Systems Corp. (A Development Stage Company)

We have audited the accompanying consolidated balance sheets
  of UltraGuard Water Systems Corp. (A Development Stage Company) as of December
  31, 2003 and 2002, and the related consolidated statements of operations and
  cash flows and stockholders' equity for the period from September 30, 2002 (Date
  of Inception) to December 31, 2003 and the period from September 30, 2002 (Date
  of Inception) to December 31, 2002 and the year ended December 31, 2003. These
  consolidated financial statements are the responsibility of the Company's management.
  Our responsibility is to express an opinion on these consolidated financial
  statements based on our audits.

We conducted our audits in accordance with the Standards of
  the Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform the audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. An audit
  includes examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates by management, as well as evaluating
  the overall financial statement presentation. We believe that our audits provide
  a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of
  UltraGuard Water Systems Corp. as of December 31, 2003 and 2002, and the results
  of its operations and its cash flows and stockholders' equity for the period
  from September 30, 2002 (Date of Inception) to December 31, 2003 and the period
  from September 30, 2002 (Date of Inception) to December 31, 2002 and the year
  ended December 31, 2003 in conformity with generally accepted accounting principles
  used in the United States of America.

The accompanying consolidated financial statements have been
  prepared assuming UltraGuard Water Systems Corp. will continue as a going concern.
  As discussed in Note 1 to the financial statements, UltraGuard Water Systems
  Corp. has not generated profitable operations since inception and has a working
  capital deficit of $697,178 as at December 31, 2003. These factors raise substantial
  doubt about UltraGuard Water Systems Corp.'s ability to continue as a going
  concern. Management's plans in regard to these matters are also discussed in
  Note 1. These financial statements do not include any adjustments, which might
  result from the outcome of this uncertainty.

Chartered Accountants

Vancouver, Canada

April 8, 2004 except as to Note 11, which is as of September
  1, 2004

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UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Consolidated Balance Sheets 
  (Expressed in US dollars)

|                                                                    | (Restated  Note 11) |   | (Restated  Note 11) |  
|------------------------------------------------------------------- | -------------------- | - | -------------------- | -
|                                                                    | December 31,         |   | December 31,         |  
|                                                                    | 2003                 |   | 2002                 |  
|                                                                    | $                    |   | $                    |  
|ASSETS                                                              |                      |   |                      |  
|Current Assets                                                      |                      |   |                      |  
|Cash and short-term investments                                     | 1,834                |   | 40,206               |  
|Accounts receivable                                                 | 2,971                |   | 945                  |  
|Inventory and contract work in progress                             |                     |   | 6,638                |  
|Prepaid expenses
      and deposits                                 | 63,613               |   | 14,039               |  
|                                                                    |                      |   |                      |  
|Total Current Assets                                                | 68,418               |   | 61,828               |  
|Property and Equipment (Note 4)                                     | 204                  |   | 286                  |  
|Other Assets                                                        |                      |   |                      |  
|Manufacturing Technology
      (Note 1)                             | 79,561               |   | 1,585                |  
|                                                                    |                      |   |                      |  
|Total Assets                                                        | 148,183              |   | 63,699               |  
|                                                                    |                      |   |                      |  
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                      |                      |   |                      |  
|Current Liabilities                                                 |                      |   |                      |  
|Accounts payable                                                    | 194,080              |   | 123,947              |  
|Accrued liabilities (Note 9(d))                                     | 55,747               |   | 40,157               |  
|Wages and vacation pay payable                                      | 3,004                |   | 1,621                |  
|Customer deposits                                                   |                     |   | 11,719               |  
|Loans payable (Note 5)                                              | 310,542              |   | 439,124              |  
|Amounts owing to
      related parties (Note 6)                     | 202,223              |   | 19,087               |  
|                                                                    |                      |   |                      |  
|Total Current Liabilities                                           | 765,596              |   | 635,655              |  
|                                                                    |                      |   |                      |  
|Stockholders' Equity (Deficit)                                      |                      |   |                      |  
|Common stock, (Note 7) $.001 par value,                             |                      |   |                      |  
|100,000,000 shares authorized,                                      |                      |   |                      |  
|22,453,565 and 10,852,565 issued respectively (21,453,565
      and |                      |   |                      |  
|9,852,565 outstanding
      respectively)                           | 22,454               |   | 10,853               |  
|Additional paid-in capital                                          | 420,227              |   | (570,517             | )
|Stock based compensation (Note 7(b))                                | 113,471              |   |                     |  
|Deferred compensation (Note 7(h))                                   | (320,700             | ) |                     |  
|Deficit Accumulated During the Development
      Stage              | (852,865             | ) | (12,292              | )
|                                                                    |                      |   |                      |  
|Total Stockholders' Equity (Deficit)                                | (617,413             | ) | (571,956             | )
|                                                                    |                      |   |                      |  
|Total Liabilities and Stockholders'
      Equity (Deficit)          | 148,183              |   | 63,699               |  
|                                                                    |                      |   |                      |  
|                                                                   
|Contingencies (Notes 1 and 9)                                       |                      |   |                      |  
|Subsequent Events (Note 10)                                         |                      |   |                      |  

(See Accompanying Notes to the Consolidated Financial Statements)

---

UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Consolidated Statements of Operations 
  (Expressed in US dollars)

|                                                     |                     |   |              |   | (Restated  Note 11) | 
|---------------------------------------------------- | ------------------- | - | ------------ | - | -------------------- | 
|                                                     | Accumulated from    |   |              |   | For the Period from  | 
|                                                     | September 30, 2002  |   | For the Year |   | September 30, 2002   | 
|                                                     | (Date of Inception) |   | Ended        |   | (Date of Inception)  | 
|                                                     | to December 31,     |   | December 31, |   | to December 31,      | 
|                                                     | 2003                |   | 2003         |   | 2002                 | 
|                                                     | $                   |   | $            |   | $                    | 
|                                                     |                     |   |              |   |                      | 
|Project Revenue                                      | 32,669              |   | 32,669       |   |                     | 
|Project Costs                                        | 33,968              |   | 33,968       |   |                     | 
|                                                    
|Total Gross Profit (Loss)                            | (1,299              | ) | (1,299       | ) |                     | 
|                                                    
|Expenses                                             |                     |   |              |   |                      | 
|Foreign exchange loss                                | 20,100              |   | 20,100       |   |                     | 
|General and administrative                           | 595,922             |   | 583,630      |   | 12,292               | 
|Interest                                             | 54,117              |   | 54,117       |   |                     | 
|Provision for lawsuit (Note 9(d))                    | 27,000              |   | 27,000       |   |                     | 
|Stock based compensation expense                     | 113,470             |   | 113,470      |   |                     | 
|                                                    
|Total Expenses                                       | 810,609             |   | 798,317      |   | 12,292               | 
|                                                    
|Net Loss from Operations                             | 811,908             |   | 799,616      |   | 12,292               | 
|                                                    
|Other:                                               |                     |   |              |   |                      | 
|Loss from discontinued operations
      (Note 1)     | 40,957              |   | 40,957       |   |                     | 
|                                                    
|                                                     | 40,957              |   | 40,957       |   |                     | 
|                                                    
|Net Loss for the Year                                | 852,865             |   | 840,573      |   | 12,292               | 
|                                                    
|                                                    
|Net Loss per Share                                   |                     |   | (0.05        | ) |                     | 
|                                                    
|                                                    
|Weighted Average Number of Shares Outstanding after  |                     |   |              |   |                      | 
|giving retroactive effect to the reverse acquisition |                     |   |              |   |                      | 
|(Note 1)                                             |                     |   | 15,863,000   |   | 10,853,000           | 

(Diluted loss per share has not been presented as the result is anti-dilutive.)

(See Accompanying Notes to the Consolidated Financial Statements)

---

UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Consolidated Statements of Cash Flows 
  (Expressed in US dollars)

|                                                          |                     |   |              |   | (Restated  Note 11) |  
|--------------------------------------------------------- | ------------------- | - | ------------ | - | -------------------- | -
|                                                          | Accumulated from    |   |              |   | For the Period from  |  
|                                                          | September 30, 2002  |   | For the Year |   | September 30, 2002   |  
|                                                          | (Date of Inception) |   | Ended        |   | (Date of Inception)  |  
|                                                          | to December 31,     |   | December 31, |   | to December 31,      |  
|                                                          | 2003                |   | 2003         |   | 2002                 |  
|                                                          | $                   |   | $            |   | $                    |  
|Cash Flows From Operating Activities                      |                     |   |              |   |                      |  
|                                                          |                     |   |              |   |                      |  
|Net Loss                                                  | (852,865            | ) | (840,573     | ) | (12,292              | )
|                                                          |                     |   |              |   |                      |  
|Adjustments to reconcile net loss to cash                 |                     |   |              |   |                      |  
|Depreciation and amortization                             | 82                  |   | 82           |   |                     |  
|Foreign exchange                                          | 20,100              |   | 20,100       |   |                     |  
|Common stock issued for expenses,
      net of            |                     |   |              |   |                      |  
|cancellations                                             | 473,281             |   | 473,281      |   |                     |  
|Accrual of interest                                       | 38,681              |   | 38,681       |   |                     |  
|Stock based compensation                                  | 113,470             |   | 113,470      |   |                     |  
|                                                          |                     |   |              |   |                      |  
|Change in non-cash working capital items                  |                     |   |              |   |                      |  
|(Increase) in accounts receivable                         | (2,037              | ) | (2,025       | ) | (12                  | )
|Decrease in inventory and contract
      work in progress | 6,638               |   | 6,638        |   |                     |  
|(Increase) in prepaid expenses
      and deposits         | (49,574             | ) | (49,574      | ) |                     |  
|Increase in accounts payable,
      accrued liabilities,  |                     |   |              |   |                      |  
|wages and
      vacation pay payable and customers'       |                     |   |              |   |                      |  
|deposits                                                  | 93,741              |   | 79,852       |   | 13,889               |  
|                                                          |                     |   |              |   |                      |  
|Net Cash From (Used in) Operating Activities              | (158,483            | ) | (160,068     | ) | 1,585                |  
|                                                          |                     |   |              |   |                      |  
|Cash Flows Used in Investing Activities                   |                     |   |              |   |                      |  
|                                                          |                     |   |              |   |                      |  
|Manufacturing technology acquired                         | (8,361              | ) | (6,776       | ) | (1,585               | )
|                                                          |                     |   |              |   |                      |  
|Net Cash Used in Investing Activities                     | (8,361              | ) | (6,776       | ) | (1,585               | )
|                                                          |                     |   |              |   |                      |  
|Cash Flows From Financing Activities                      |                     |   |              |   |                      |  
|Cash received in reverse acquisition                      | 2,410               |   |             |   | 2,410                |  
|Increase in loans payable                                 | 93,151              |   | 93,151       |   |                     |  
|Increase in amounts owing
      to related parties        | 73,117              |   | 35,321       |   | 37,796               |  
|                                                          |                     |   |              |   |                      |  
|Net Cash Provided by Financing Activities                 | 168,678             |   | 128,472      |   | 40,206               |  
|                                                          |                     |   |              |   |                      |  
|Increase (Decrease) in Cash                               | 1,834               |   | (38,372      | ) | 40,206               |  
|                                                          |                     |   |              |   |                      |  
|Cash - Beginning of the Period                            |                    |   | 40,206       |   |                     |  
|                                                          |                     |   |              |   |                      |  
|Cash - End of the Period                                  | 1,834               |   | 1,834        |   | 40,206               |  
|                                                          |                     |   |              |   |                      |  
|Non-Cash Investing and Financing Activities:              |                     |   |              |   |                      |  
|Shares issued for manufacturing technology                | 71,200              |   | 71,200       |   |                     |  
|Shares issued for expenses                                | 783,982             |   | 783,982      |   |                     |  
|Shares issued to settle debts                             | 137,164             |   | 137,164      |   |                     |  
|Shares issued for notes receivable and expenses           | 110,000             |   | 110,000      |   |                     |  
|                                                          |                     |   |              |   |                      |  
|Supplementary Information                                 |                     |   |              |   |                      |  
|Cash paid for interest                                    | 4,991               |   | 4,991        |   | 856                  |  
|Cash paid for income taxes                                |                    |   |             |   |                     |  

(See Accompanying Notes to the Consolidated Financial Statements)

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UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Consolidated Statement of Stockholders' Equity (Deficit) 
  From September 30, 2002 (Date of Inception) to December 31, 2003 
  (Expressed in US dollars)

|                                      |            |   |        |   |            |   |              |  |              |   | Deficit     |   |          |  
|------------------------------------- | ---------- | - | ------ | - | ---------- | - | ------------ |  | ------------ | - | ----------- | - | -------- | -
|                                      |            |   |        |   |            |   |              |  |              |   | Accumulated |   |          |  
|                                      |            |   |        |   | Additional |   |              |  |              |   | During the  |   |          |  
|                                      | Issued     |   | Common |   | Paid In    |   | Stock-based  |  | Deferred     |   | Development |   |          |  
|                                      | Shares     |   | Stock  |   | Capital    |   | Compensation |  | Compensation |   | Stage       |   | Total    |  
|                                      | #          |   | $      |   | $          |   | $            |  | $            |   | $           |   | $        |  
|                                     
|Balance  September 30, 2002 (Date    |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|of Inception)                         |           |   |       |   |           |   |             |  |             |   |            |   |         |  
|                                     
|Stock issued for subscription         | 6,000,000  |   | 6,000  |   | (6,000     | ) |             |  |             |   |            |   |         |  
|                                     
|Adjustments for reverse acquisition   |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|(Note 1)                              |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|                                     
|- elimination of shares of Innovative |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|Fuel Cell Technologies, Inc.          |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|("IFCT")                              | (6,000,000 | ) | (6,000 | ) | 6,000      |   |             |  |             |   |            |   |         |  
|- add shares issued to shareholders   |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|of IFCT to effect reverse             |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|acquisition                           | 6,000,000  |   | 6,000  |   |           |   |             |  |             |   |            |   | 6,000    |  
|- add issued shares of UltraGuard     |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|Water Systems Corp. for the net       |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|liabilities assumed by IFCT at net    |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|book value                            | 4,852,565  |   | 4,853  |   | (570,517   | ) |             |  |             |   |            |   | (565,664 | )
|                                     
|Net loss for the period               |           |   |       |   |           |   |             |  |             |   | (12,292     | ) | (12,292  | )
|                                     
|Balance  December 31, 2002           | 10,852,565 |   | 10,853 |   | (570,517   | ) |             |  |             |   | (12,292     | ) | (571,956 | )
|                                     
|Issuance of shares for MagPower       |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|License Agreement                     | 400,000    |   | 400    |   | 70,800     |   |             |  |             |   |            |   | 71,200   |  
|Issuance of shares for consulting     |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|expenses                              | 5,475,000  |   | 5,475  |   | 629,387    |   |             |  |             |   |            |   | 634,862  |  
|Issuance of shares for legal expenses | 600,000    |   | 600    |   | 67,400     |   |             |  |             |   |            |   | 68,000   |  
|Issuance of shares for compensation   | 2,400,000  |   | 2,400  |   | 78,720     |   |             |  |             |   |            |   | 81,120   |  
|Issuance of shares for debt           | 70,000     |   | 70     |   | 6,383      |   |             |  |             |   |            |   | 6,453    |  
|Issuance of shares for West Peak      |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|Security Loss                         | 1,556,000  |   | 1,556  |   | 129,154    |   |             |  |             |   |            |   | 130,710  |  
|Issuance of shares for notes          |            |   |        |   |            |   |              |  |              |   |             |   |          |  
|receivable                            | 1,100,000  |   | 1,100  |   | 108,900    |   |             |  |             |   |            |   | 110,000  |  
|Less: funds not yet received          |           |   |       |   | (100,000   | ) |             |  |             |   |            |   | (100,000 | )
|                                     
|Stock based compensation              |           |   |       |   |           |   | 113,471      |  |             |   |            |   | 113,471  |  
|                                     
|Deferred compensation                 |           |   |       |   |           |   |             |  | (320,700     | ) |            |   | (320,700 | )
|                                     
|Net loss for the year                 |           |   |       |   |           |   |             |  |             |   | (840,573    | ) | (840,573 | )
|Balance, December 31, 2003            | 22,453,565 |   | 22,454 |   | 420,227    |   | 113,471      |  | (320,700     | ) | (852,865    | ) | (617,413 | )

(See Accompanying Notes to the Consolidated Financial Statements)

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UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements 
  (Expressed in US dollars)

|1. | Reverse Acquisition, Nature of Operations and Continuance
        of Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | On December 31, 2002 ("the acquisition date"), UltraGuard
        Water Systems Corp. ("UltraGuard") acquired all of the outstanding stock
        of Innovative Fuels Cell Technologies Inc ("IFCT"). UltraGuard issued
        5,000,000 common shares to the shareholders of IFCT to acquire IFCT and
        its wholly-owned Austrian incorporated subsidiary UltraGuard Water Systems
        GmbH ("UG GmbH"). UltraGuard also issued 1,000,000 common shares to UG
        GmbH as part of the transaction. These shares are considered treasury
        shares and are not outstanding. For accounting purposes the acquisition
        was treated as the acquisition of UltraGuard by IFCT with IFCT as the
        accounting acquirer (reverse acquisition). As a result, the historical
        financial statements prior to the acquisition date are those of IFCT from
        September 30, 2002 (date of inception of IFCT). See Note 3 for Operations
        of UltraGuard prior to the reverse acquisition. UltraGuard and IFCT, as
        at December 31, 2002, reverted back to being a development stage Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | IFCT is a Nevada corporation incorporated on September
        30, 2002. IFCT is the holder of an option ("the Option Agreement") to
        purchase worldwide manufacturing and marketing rights to a 12-volt Magnesium-Air
        Semi Fuel Cell (Fuel Cell) from MagPower Systems Inc. ("MagPower") for
        use with UltraGuard's Point of Use Ultraviolet Water Purification System
        and for ancillary uses. IFCT was assigned the Option Agreement on October
        1, 2002 from a related party. IFCT had paid Cnd$2,500 as a down payment
        for the Option Agreement with Cnd$97,500 payable and 400,000 shares of
        UltraGuard to be issued. On March 14, 2003, a License Agreement was executed
        between MagPower and IFCT. The terms of the License Agreement included
        additional rights to use the Fuel Cell for ancillary services to power
        items such as lighting and radio. As consideration for the additional
        rights, IFCT increased the option payments to be made to Cnd$100,000 and
        increased the number of common shares of UltraGuard to be issued to 500,000.
        On March 6, 2003, UltraGuard issued 400,000 shares into trust subject
        to certain criteria. On signing of the License Agreement IFCT paid Cnd$5,000
        and delivered 200,000 common shares of UltraGuard to the vendors of MagPower.
        An additional Cnd$5,000 was paid on March 21, 2003 for the payment due
        on April 1, 2003. Commencing on May 1, 2003, Cnd$7,500 was due and unpaid,
        however delivery of additional 100,000 common shares of UltraGuard was
        made on May 1, 2003. The remaining balance is due on the first of each
        month thereafter until MagPower delivers the technical drawings at a rate
        of Cnd$7,500 per month; and Cnd$15,000 per month thereafter until the
        full amount has been paid. Concurrent with the receipt of the technical
        drawings from the vendor, the remaining 200,000 common shares of UltraGuard
        will be delivered (100,000 common shares from trust and 100,000 common
        shares from treasury). The payments due from May 1, 2003 monthly through
        September 30, 2003 amounting to Cnd$25,000 were not paid as at December
        31, 2003. On February 2, 2004, UltraGuard and MagPower amended the agreement
        to sublicense to MagPower, in certain countries in the world, UltraGuard's
        ultraviolet products for sale and use by MagPower (or its sublicenses)
        with MagPower's magnesium fuel cell. As well, the February 2, 2004 agreement
        provided for issuance and delivery of the remaining 200,000 common shares
        (100,000 common shares from trust and 100,000 common shares from treasury),
        and cancellation by MagPower of the remaining C$88,800 owing by UltraGuard
        and IFCT as a condition of the License Agreement.
|  
|   | As a condition of the Option Agreement, IFCT was
        required to sell a minimum quantity of 2000 Fuel Cell units in fiscal
        2003. The drawings and technical information due from MagPower is still
        incomplete, therefore marketing efforts have not concentrated on product
        sale but on product awareness. Royalties of C$25.00 per cell will be paid
        to MagPower based on number of units sold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | The total consideration paid for the License Agreement
        as at December 31, 2003 was $79,561 which includes the value of 400,000
        common shares being $71,200.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | These consolidated financial statements have been
        prepared in accordance with United States generally accepted accounting
        principles, on a going concern basis, which contemplates the realization
        of assets and the satisfaction of liabilities and commitments in the normal
        course of business. As at December 31, 2003, the Company has not recognized
        significant revenue, has a working capital deficit of $697,178, and has
        accumulated operating losses of $852,865 since inception of IFCT being
        September 30, 2002. The continuation of UltraGuard and IFCT is dependent
        upon the continuing financial support of creditors and stockholders and
        obtaining short-term and long-term financing, the completion of product
        development and achieving profitability. These conditions raise substantial
        doubt about UltraGuard's and IFCT's ability to continue as a going concern.
        These financial statements do not include any adjustments that might arise
        from this uncertainty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  

---

UltraGuard Water Systems Corp.
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements 
  (Expressed in US dollars)

|1. | Reverse Acquisition, Nature of Operations and Continuance
        of Business (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | During fiscal 2003, due to lack of finances, UltraGuard
        and IFCT discontinued its operation in Europe and closed UG GmbH and will
        concentrate its efforts on the North American market where its UV products
        and fuel cell products will be manufactured through subcontractors and
        will be marketed in North America through the Internet, wholesalers and
        sales representatives. A loss from discontinued operations of $40,957
        was charged to operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | Funds were provided to UltraGuard on February 19,
        2003 through an agreement entered into with a Germany resident. Under
        the agreement the German resident provided a US$50,000 loan bearing interest
        at 10%, payable within 6 months or convertible into UltraGuard's common
        stock at $0.30 per share. This loan has not been repaid and remains outstanding
        at the end of 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | See Note 10, Subsequent Events, for additional proceeds
        from loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | Consolidated financial statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   | These financial statements include the accounts
        of UltraGuard. IFCT (a Nevada Corporation) and IFCT's Austrian based UltraGuard
        Water Systems GmbH (UG GmbH). The operations of IFCT were discontinued
        during fiscal 2003. All significant intercompany transactions and balances
        have been eliminated and costs of the closing of UG GmbH have been recorded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   | On December 31, 2002 ("the acquisition date"), UltraGuard
        Water Systems Corp. ("UltraGuard") acquired all of the outstanding stock
        of Innovative Fuels Cell Technologies Inc ("IFCT"). UltraGuard issued
        5,000,000 common shares to the shareholders of IFCT to acquire IFCT and
        its wholly-owned Austrian incorporated subsidiary UltraGuard Water Systems
        GmbH ("UG GmbH"). UltraGuard also issued 1,000,000 common shares to UG
        GmbH as part of the transaction. These shares are considered treasury
        shares and are not outstanding. For accounting purposes the acquisition
        was treated as the acquisition of UltraGuard by IFCT with IFCT as the
        accounting acquirer (reverse acquisition). As a result, the historical
        financial statements prior to the acquisition date are those of IFCT from
        September 30, 2002 (date of inception of IFCT). See Note 3 for Operations
        of UltraGuard prior to the reverse acquisition.
|  
|   | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | Cash and cash equivalents include cash on hand,
        in banks and all highly liquid investments with maturity of three months
        or less when purchased. Cash equivalents are stated at cost, which approximates
        market.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | Property and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   | Property and equipment are recorded at cost. Depreciation
        is computed on a straight-line method using an estimated useful life of
        five years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   | Product sales are recognized at the time goods are
        shipped by customers. System and project revenue are recognized utilizing
        the percentage of completion method based upon materials installed and
        labour costs incurred. All related costs including any contract revisions
        or changes are recognized in the period in which they occur.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | UltraGuard recognizes revenue in accordance with
        Securities and Exchange Commission Staff Accounting Bulletin No. 104 ("SAB
        104"), "Revenue Recognition." Revenue will be recognized only when the
        price is fixed or determinable, persuasive evidence of an arrangement
        exists, the service is performed, and collectibility is reasonably assured.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  

---

UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements 
  (Expressed in US dollars)

|2. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Estimates and assumptions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | The preparation of financial statements
        in conformity with generally accepted accounting principles used in the
        United States requires management to make estimates and assumptions that
        affect the reported amounts of assets and liabilities in the financial
        statements and accompanying notes. Actual results could differ from these
        estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | Foreign currency                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | Basic and Diluted Net Income (Loss)
        Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   | UltraGuard computes net income (loss)
        per share in accordance with SFAS No. 128, "Earnings per Share". This
        statement requires presentation of both basic and diluted earnings per
        share (EPS) on the face of the income statement. Basic EPS is computed
        by dividing net income (loss) available to common shareholders (numerator)
        by the weighted average number of common shares outstanding (denominator)
        during the period. Diluted EPS gives effect to all dilutive potential
        common shares outstanding during the period including stock options, using
        the treasury stock method, and convertible preferred stock, using the
        if-converted method. In computing Diluted EPS, the average stock price
        for the period is used in determining the number of shares assumed to
        be purchased from the exercise of stock options or warrants. Diluted EPS
        excludes all dilutive potential common shares if their effect is anti
        dilutive.                                                                                                                                     
|  
|   | Accounting for Stock-Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   | UltraGuard accounts for stock based compensation
        in accordance with SFAS No. 123, "Accounting for Stock-Based Compensation."
        This statement requires that stock awards granted subsequent to January
        1, 1995, be recognized as compensation expense based on their fair value
        at the date of grant. Alternatively, a company may account for granted
        stock awards under Accounting Principles Board Opinion (APB) No. 25, "Accounting
        for Stock Issued to Employees," and disclose pro forma income amounts
        which would have resulted from recognizing such awards at their fair value.
        UltraGuard has elected to account for stock-based compensation for employees
        under APB No. 25 and make the required pro forma disclosures for compensation
        expense in accordance with SFAS No. 123. UltraGuard accounts for stock
        issued for services to non-employees in accordance with SFAS No. 123.
        Compensation expense is based on the fair market value of the stock award
        or fair market value of the goods and services received whichever is more
        reliably measurable.
|  

---

UltraGuard Water Systems Corp.
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements 
  (Expressed in US dollars)

|2. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Comprehensive Loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | SFAS No. 130, "Reporting Comprehensive Income,"
        establishes standards for the reporting and display of comprehensive loss
        and its components in the financial statements. As at December 31, 2003,
        UltraGuard has no items that represent comprehensive loss and, therefore,
        has not included a schedule of comprehensive loss in the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | Long-Lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | SFAS No. 144, "Accounting for the Impairment or
        Disposal of Long-Lived Assets" establishes a single accounting model for
        long-lived assets to be disposed of by sale including discontinued operations.
        SFAS 144 requires that these long-lived assets be measured at the lower
        of the carrying amount or fair value less cost to sell, whether reported
        in continuing operations or discontinued operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | UltraGuard's financial instruments consist of cash,
        prepaid expenses, accounts payable, accrued liabilities, advances from
        related and non-related parties. Unless otherwise noted, it is management's
        opinion that UltraGuard is not exposed to significant interest, currency
        or credit risks arising from these financial instruments. The fair value
        of cash, accounts payable and accrued liabilities, advances from related
        parties and other advances approximates their carrying value due to the
        immediate or short-term maturity of these financial instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | Concentration of Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   | Financial instruments that potentially subject UltraGuard
        to credit risk consist principally of cash. Cash was deposited with a
        high credit quality institution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   | In December 2003, the United States Securities and
        Exchange Commission issued Staff Accounting Bulletin No. 104, "Revenue
        Recognition" (SAB 104), which supersedes SAB 101, "Revenue Recognition
        in Financial Statements." The primary purpose of SAB 104 is to rescind
        accounting guidance contained in SAB 101 related to multiple element revenue
        arrangements, which was superseded as a result of the issuance of EITF
        00-21, "Accounting for Revenue Arrangements with Multiple Deliverables."
        While the wording of SAB 104 has changed to reflect the issuance of EITF
        00-21, the revenue recognition principles of SAB 101 remain largely unchanged
        by the issuance of SAB 104. The adoption of SAB 104 did not have a material
        impact on UltraGuard's financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | In May 2003, the FASB issued SFAS No. 150, "Accounting
        for Certain Financial Instruments with Characteristics of both Liabilities
        and Equity". SFAS No. 150 establishes standards for how an issuer classifies
        and measures certain financial instruments with characteristics of both
        liabilities and equity. It requires that an issuer classify a financial
        instrument that is within its scope as a liability (or an asset in some
        circumstances). The requirements of SFAS No. 150 apply to issuers' classification
        and measurement of freestanding financial instruments, including those
        that comprise more than one option or forward contract. SFAS No. 150 does
        not apply to features that are embedded in a financial instrument that
        is not a derivative in its entirety. 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, except for mandatory redeemable financial instruments of
        non-public entities. It is to be implemented by reporting the cumulative
        effect of a change in an accounting principle for financial instruments
        created before the issuance date of SFAS No. 150 and still existing at
        the beginning of the interim period of adoption. Restatement is not permitted.
        The adoption of this standard is not expected to have a material effect
        on UltraGuard's results of operations or financial position.
|  

---

UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements
  (Expressed in US dollars)

|2. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | UltraGuard has adopted the provisions of FASB's
        SFAS No. 109, "Accounting for Income Taxes". SFAS No. 109 requires that
        deferred taxes reflect the tax consequences on future years of differences
        between the tax bases of assets and liabilities and their financial reporting
        amounts. At the date of adoption of SFAS 109, there was no material effect
        on UltraGuard's financial statements. As of December 31, 2003 UltraGuard
        has accumulated net operating losses in Canada and the United States available
        to offset future taxable income as scheduled below
|  

|Losses    |  | Expiration
|--------- |  | ----------
|$         |  | Date      
|          |  |           
|240,000   |  | 2011      
|202,000   |  | 2012      
|650,000   |  | 2013      
|152,000   |  | 2014      
|444,000   |  | 2015      
|517,000   |  | 2016      
|688,000   |  | 2017      
|479,000   |  | 2018      
|          |  |           
|3,372,000 |  |           

Pursuant to SFAS 109 UltraGuard is required to compute tax
    asset benefits for net operating losses carried forward. If total losses were
    recognized, UltraGuard would receive a tax benefit of $1,146,000. The potential
    benefit of net operating losses has not been recognized in the financial statements
    because UltraGuard cannot be assured that it is more likely than not that
    it will utilize the net operating losses in future years, therefore, a valuation
    allowance of $1,146,000 has been recognized. The tax asset and valuation allowance
    was $163,000 in 2002 (2001 - $234,000).

Loss Contingencies

UltraGuard estimates a loss from a loss contingency in accordance
    with Financial Accounting Standards ("SFAS" No. 5 "Accounting for Contingencies".
    UltraGuard accrues the loss by a charge to income when there is information
    available that it is probable that an asset has been impaired or a liability
    has been incurred and the amount of the loss can be reasonably estimated.

|3. | Operations of UltraGuard Prior to Reverse Acquisition
        with IFCT                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Up to February 2002 UltraGuard focused its activities
        on the manufacturing and marketing of its Ultra Guard® ultra violet
        based patented water treatment system through its wholly owned Canadian
        subsidiary, UV Systems Technology Inc. ("UVS"). These products and systems
        were sold primarily for municipal waste disinfection, treatment.                                     
|  
|   | During the period from acquiring UVS in August 1996
        to February 2002, operating activities had not generated profitability.                                                                                                                                                                                                                                                                               
|  
|   | On February 5, 2002, UltraGuard reached an agreement
        with the Clearwater Group ("Clearwater") to assume the UVS manufacturing
        responsibilities of any new Ultra Guard® water treatment systems to
        be supplied to UVS's strategic alliance partner, US Filter. Clearwater
        would also provide warranty services on any previously sold Ultra Guard®
        water treatment systems.
|  

---

UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements 
  (Expressed in US dollars)

|3. | Operations of UltraGuard Prior to Reverse Acquisition
        with IFCT (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | During fiscal 2002, UltraGuard commenced designing
        and developing the home use Point of Use and Point of Entry UV disinfection
        systems for drinking water. Point of Use systems are installed under a
        sink; Point of Entry units are installed at the water supply entry into
        the building. This UV product may include dual filtration cartridges in
        advance of the UV system.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | At a special meeting held on November 15, 2002 UltraGuard
        reorganized. Its shares were consolidated on a 1:50 basis; the authorized
        capital increased to 100,000,000 shares and the name was changed to UltraGuard.
        In December 2002, UltraGuard divested itself of the UVS operations while
        retaining any royalty or other revenues that may be received from the
        sale or use of the UVS patented Ultra Guard® technology.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   | The debt load being carried by UltraGuard as a result
        of the UVS operations were impairing UltraGuard's ability to obtain investment
        funds or make any other financing arrangements. On December 30, 2002,
        the Company disposed of its 100% owned asset, UVS. Under the terms of
        these agreements, UltraGuard sold 100% of the shares of UVS to 659999
        BC Ltd, a Canadian private company, in exchange for the transfer and assignment
        to UltraGuard of all outstanding and future royalties from Clearwater
        Technologies Inc ("Clearwater") and any other rights UVS may have under
        the License Agreement, which covered the UltraGuard® patents and technology.
        UVS entered into this Licence Agreement with Clearwater on February 5,
        2002. No value was placed on this agreement. Full details of these Agreements
        between UVS and 659999 BC Ltd were filed with the Securities and Exchange
        Commission on Form 8-K dated January 15, 2003. Clearwater has failed to
        pay funds due under the various agreements, which they signed and had
        refused to pay any of the required payments. A writ of summons was issued
        against Clearwater in July 2003 in specific amounts totalling C$774,366
        plus additional amounts for failure to perform, demand for return of leased
        equipment and cancellation of the Joint Venture Agreements. Clearwater
        has filed a defence against all claims. UltraGuard is continuing to pursue
        this action.
|  
|   | See Note 1 for UltraGuard's reverse acquisition
        with IFCT.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|4. | Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | Property and equipment is stated at cost less accumulated
        depreciation and reflects the residual value as at December 31, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  

| |                                |  |       |  |              |  | December 31, |  | December 31, | 
| | ------------------------------ |  | ----- |  | ------------ |  | ------------ |  | ------------ | 
| |                                |  |       |  |              |  | 2003         |  | 2002         | 
| |                                |  |       |  | Accumulated  |  | Net Book     |  | Net Book     | 
| |                                |  | Cost  |  | Depreciation |  | Value        |  | Value        | 
| |                                |  | $     |  | $            |  | $            |  | $            | 
| |                                |  |       |  |              |  |              |  |              | 
| | Office furniture and equipment |  | 5,533 |  | 5,329        |  | 204          |  | 286          | 
| |                                |  |       |  |              |  |              |  |              | 

|5. | Loans Payable
|-- | -------------
|  
|   | a)           
|  

---

UltraGuard Water Systems Corp.
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements 
  (Expressed in US dollars)

|5. | Loans Payable (continued)
|-- | -------------------------
|  
|   | b)                       
|  
|   | c)                       
|  
|   | d)                       
|  
|   | e)                       
|  

|6. | Amounts Owing to Related Parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | These amounts, totalling $202,223, represent unpaid
        wages and consulting for two officer/directors in the amount of $68,074,
        which are due on demand, unsecured and non-interest bearing and include
        an amount of $130,712 plus accrued interest of $3,437 due to Ken Fielding
        as a result of actions taken discussed in Note 5. Imputed interest on
        previous non-interest bearing related party loans totalled $31,928 which
        was recorded as donated capital, calculated at 10% per annum. In fiscal
        2003, two officers/directors were issued 2,400,000 shares of common restricted
        stock of UltraGuard at $0.0338 per share totalling $81,120 for partial
        payment of wages.
|  

|7. | Common Stock
|-- | ------------
|  
|   | (a)         
|  
|   |             
|  

---

UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements 
  (Expressed in US dollars)

|7. | Common Stock (continued)
|-- | ------------------------
|  
|   | (b)                     
|  
|   |                         
|  
|   | (c)                     
|  
|   |                         
|  
|   |                         
|  
|   | (d)                     
|  
|   |                         
|  
|   |                         
|  
|   |                         
|  
|   |                         
|  

| |                   | Shares       |  |                  |  | Weighted Average  | 
| | ----------------- | ------------ |  | ---------------- |  | ----------------- | 
| |                   | Under Option |  | Weighted Average |  | Remaining Life of | 
| |                   | #            |  | Option Price $   |  | Options (Months)  | 
| | December 31, 2002 |             |  |                 |  |                  | 
| | Granted           | 125,000      |  | .13              |  |                   | 
| | December 31, 2003 | 125,000      |  | .13              |  | 32                | 
| |                   |              |  |                  |  |                   | 

---

UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements 
  (Expressed in US dollars)

|7. | Common Stock (continued)
|-- | ------------------------
|  
|   | (d)                     
|  
|   |                         
|  
|   |                         
|  
|   |                         
|  
|   |                         
|  

| |  |                                                                     | Year ended   |   | Year ended   | 
| |  | ------------------------------------------------------------------- | ------------ | - | ------------ | 
| |  |                                                                     | December 31, |   | December 31, | 
| |  |                                                                     | 2003         |   | 2002         | 
| |  |                                                                     | $            |   | $            | 
|
| |  | Net loss                                                            |              |   |              | 
| |  | As reported                                                         | (840,573     | ) | 12,292       | 
| |  | Stock Based Compensation  as reported                              | 113,470      |   |             | 
| |  | Stock
      Based compensation  determined under fair market value | (115,500     | ) |             | 
| |  |                                                                     |              |   |              | 
| |  | Pro
      forma                                                     | (842,603     | ) | 12,292       | 
|
| |  | Basic net loss per share                                            |              |   |              | 
| |  | As reported                                                         | (.05         | ) |             | 
| |  | Pro forma                                                           | (.05         | ) |             | 

|    |                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(e) | Independent Contractor/Consulting Agreement Plan                                                                                                                                                                                                                                       
|   
|    | On June 11, 2003 UltraGuard registered and issued
        1,500,000 shares on Form S-8 to three consultants for product marketing
        consulting expenses amounting to $195,000. These services were valued
        based on the fair value of shares issued being $0.13 per share.
|   
|(f) | Long-Term Equity Incentive Plan                                                                                                                                                                                                                                                        
|   
|    | UltraGuard has allotted 100,000 shares pursuant
        to a Long-Term Equity Incentive Plan.                                                                                                                                                                                          
|   

---

UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements
  (Expressed in US dollars)

|7. | Common Stock (continued)
|-- | ------------------------
|  
|   | (g)                     
|  
|   |                         
|  
|   | (h)                     
|  
|   |                         
|  

| |                                | Issued    |  | Total      |  | Weighted Average  | 
| | ------------------------------ | --------- |  | ---------- |  | ----------------- | 
| |                                | Shares    |  | Fair Value |  | Fair Market Value | 
| |                                | #         |  | $          |  | Per Share $       | 
| | Consulting for future services | 5,100,000 |  | 614,400    |  | .12               | 
| | Consulting for past services   | 375,000   |  | 20,462     |  | .05               | 
| | Legal                          | 600,000   |  | 68,000     |  | .11               | 
| |                                |           |  |            |  |                   | 
| |                                | 6,075,000 |  | 702,862    |  | .12               | 

The terms of the consulting agreements for future services
    are over one year and have various expiry dates. As a result $293,700 has
    been charged to operations as consulting expense and the balance of $320,700
    has been charged to shareholders' equity as deferred compensation.


|8. | Segmented Information                                                                                                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | The business of UltraGuard is carried on in one
        industry segment (see Note 1).                                                                                                                                                                                                                                                                           
|  
|   | UltraGuard and IFCT currently operate in two geographic
        segments. The United States operations only consist of costs associated
        with debt and equity financing and being a public company. As a result
        of the disposition of UVS, (see Note 3) UltraGuard and IFCT now operate
        in one business segment and one geographical area.
|  

| |         | Year ended        | 
| | ------- | ----------------- | 
| |         | December 31, 2003 | 
| |         |                   | 
| |         | Canada            | 
| |         | $                 | 
| | Revenue |                  | 
| | Expense |                  | 
| |         |                   | 
| | Loss    |                  | 
| |         |                   | 

| |                          | As of             |  | As of             | 
| | ------------------------ | ----------------- |  | ----------------- | 
| |                          | December 31, 2003 |  | December 31, 2002 | 
| |                          |                   |  | United            | 
| |                          | Canada            |  | States            | 
| |                          | $                 |  | $                 | 
|
| | Identifiable assets      |                  |  | 68,622            | 
| | Manufacturing technology |                  |  | 79,561            | 
| |                          |                   |  |                   | 
| | Total assets             |                  |  | 148,183           | 

---

UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements 
  (Expressed in US dollars)

|9. | Legal Proceedings/Contingency Accrual
|-- | -------------------------------------
|  
|   | (a)                                  
|  
|   | (b)                                  
|  
|   | (c)                                  
|  
|   | (d)                                  
|  

---

UltraGuard Water Systems Corp. 
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements 
  (Expressed in US dollars)

|10. | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|11. | Restatements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|    | It was determined that the acquisition
        of Innovative Fuel Cell Technologies, Inc. ("IFCT") was a reverse acquisition
        of UltraGuard instead of an acquisition of IFCT by UltraGuard as previously
        reported. The shareholders of IFCT gained control of UltraGuard on December
        31, 2002. Certain disclosures and financial statement amounts have been
        restated as of December 31, 2002. The December 31, 2002 operating results
        are now those of IFCT from September 30, 2002 (Date of Inception) to December
        31, 2002. For the year ended December 31, 2002 net loss has been restated
        to decrease the loss from $657,617 to $12,292 and net loss per share has
        been restated to decrease the loss per share from $0.06 per share to nil.
        There were no restatements to net loss for the year ended December 31,
        2003. The balance sheets as at December 31, 2002 and 2003 were restated
        to remove $1,025,291 of capitalized manufacturing technology and the stockholders'
        equity section was revised to eliminate the stockholders' equity of UltraGuard.
        Previously reported stockholders' equity as at December 31, 2002 of $453,335
        has been reduced by $1,025,291 to a stockholders' deficit of $571,956
        and the previously reported stockholders' equity as at December 31, 2003
        of $407,878 has been reduce by $1,025,291 to a stockholders' deficit of
        $617,413. The cash flow statement for the fiscal year ended December 31,
        2002 was restated accordingly and no restatements were made for the year
        ended December 31, 2003. Since IFCT was in the development stage these
        financial statements were revised to include certain required disclosures
        for Development Stage Enterprises pursuant to Statement of Financial Accounting
        Standard ("SFAS") No. 7 including accumulated from inception disclosures
        for the statement of operations and cash flows and stockholders' equity.
        Notes 1, 3 and 4 have been significantly revised to reflect the reverse
        acquisition.
|   

---

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange
  Act of 1934, the registrant caused this registration statement to be signed
  on its behalf by the undersigned, thereunto duly authorized.

|                         | ULTRAGUARD WATER SYSTEMS CORP
|------------------------ | -----------------------------
|                         |                              
|Date: September 16, 2004 | By:                          
|                         |                              
|                         |                              
|                         |                              
|                         |                              
|Date: September 16, 2004 | By:                          
|                         |                              
|                         |                              
|                         |                              




---