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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549

FORM 10-QSB

** ̈******  ANNUAL
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Quarterly report for the period ended **March 31,2004**

** ̈******  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.       
|                                       |                          
|**918 SHERWOOD AVENUE**                |                          
|**COQUITLAM B.C. CANADA**              | **V3K 1A6**              
|Address of Principal Executive Offices | Zip code                 
|                                       |                          
|**604-540-8282**                       | **604-540-8289**         
|Issuer's Telephone Number              | Issuer's Facsimile Number

**2nd Floor  5763 203 A Street, Langley
  B.C., V3A 1W7**
  Former Address of Registrant

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 **APPLICABLE ONLY TO CORPORATE ISSURER**

The number of shares outstanding of the issuer's only class
  of Common Stock $.001 par value was
  23,228,565 on May 19,2004

1

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INDEX

|PART I                  Financial
      Information                            |         | 
|------------------------------------------------------------------------------ | ------- | 
|                                                                               |         | 
|Item 1.      CONSOLIDATED FINANCIAL
      STATEMENTS.                          |         | 
|                                                                               |         | 
|Consolidated Balance Sheets as of March 31, 2004 (unaudited)                   |         | 
|and
      December 31, 2003 (audited) .                                        | 3       | 
|                                                                               |         | 
|Consolidated Statements of Operations for the three-month
      periods ended  |         | 
|March
      31, 2004, and March 31, 2003 (unaudited)                           | 4       | 
|                                                                               |         | 
|Consolidated Statements of Cash Flows for the three
      months periods ended |         | 
|March
      31, 2004 and March 31, 2003(unaudited)                             | 5       | 
|                                                                               |         | 
|Notes to the Financial Statements                                              | 6 to 12 | 
|                                                                               |         | 
|Item 2.     MANAGEMENTS DISCUSSION
      AND ANALYSIS OF RESULTS OF           |         | 
|OPERATIONS
      AND FINANCIAL CONDITIONS                                      | 13      | 
|                                                                               |         | 
|Item 3.     CONTROLS AND PROCEDURES                                            | 18      | 
|                                                                               |         | 
|Part II                  OTHER
      INFORMATION                               | 18      | 
|                                                                               |         | 
|1.
      LEGAL PROCEEDINGS                                                     | 18      | 
|                                                                               |         | 
|2.
      CHANGES IN SECURITIES                                                 | 19      | 
|                                                                               |         | 
|3.
      DEFAULT UPON SENIOR SECURITIES                                        | 19      | 
|                                                                               |         | 
|4.
      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                   | 19      | 
|                                                                               |         | 
|5.
      OTHER INFORMATION                                                     | 19      | 
|                                                                               |         | 
|6.
      EXHIBITS AND REPORTS ON FORM 8K                                       | 19      | 
|                                                                               |         | 
|Signatures                                                                     | 21      | 

2

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**UltraGuard Water Systems Corp.**
  Consolidated Balance Sheets 
  (Expressed in US dollars)

|                                                                    | March 31,   |   | December 31, |  
|------------------------------------------------------------------- | ----------- | - | ------------ | -
|                                                                    | 2004        |   | 2003         |  
|                                                                    | $           |   | $            |  
|                                                                    | (unaudited) |   | (audited)    |  
|ASSETS                                                              |             |   |              |  
|                                                                    |             |   |              |  
|Current Assets                                                      |             |   |              |  
|                                                                    |             |   |              |  
|Cash                                                                | 2,578       |   | 1,834        |  
|Accounts receivable                                                 | 15,496      |   | 2,971        |  
|Prepaid
      expenses and deposits                                 | 62,462      |   | 63,613       |  
|                                                                    |             |   |              |  
|Total Current Assets                                                | 80,536      |   | 68,418       |  
|                                                                    |             |   |              |  
|Property and Equipment (Note 4)                                     | 197         |   | 204          |  
|                                                                    |             |   |              |  
|Manufacturing Technology (Note 3)                                   | 1,108,452   |   | 1,104,852    |  
|                                                                    |             |   |              |  
|Total Assets                                                        | 1,189,185   |   | 1,173,474    |  
|                                                                    |             |   |              |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                |             |   |              |  
|                                                                    |             |   |              |  
|Current Liabilities                                                 |             |   |              |  
|                                                                    |             |   |              |  
|Accounts payable                                                    | 195,436     |   | 194,080      |  
|Accrued liabilities                                                 | 56,820      |   | 55,747       |  
|Wages and vacation
      pay payable                                | 1,687       |   | 3,004        |  
|Loans payable (Note
      5)                                        | 349,576     |   | 310,542      |  
|Amounts
      owing to related parties (Note 6)                     | 220,451     |   | 202,223      |  
|                                                                    |             |   |              |  
|Total Current Liabilities                                           | 823,970     |   | 765,596      |  
|                                                                    |             |   |              |  
|Stockholders Equity                                                |             |   |              |  
|                                                                    |             |   |              |  
|Common stock, (Note 7)                                              |             |   |              |  
|                                                                    |             |   |              |  
|100,000,000 shares
      authorized, with a par value of $ 0.001    |             |   |              |  
|                                                                    |             |   |              |  
|23,328,565 and
      22,453,565 issued and outstanding respectively | 23,329      |   | 22,454       |  
|                                                                    |             |   |              |  
|Additional paid-in
      capital                                    | 11,292,863  |   | 11,212,638   |  
|                                                                    |             |   |              |  
|Donated capital                                                     | 31,928      |   | 31,928       |  
|                                                                    |             |   |              |  
|Stock based compensation                                            | 527,636     |   | 499,269      |  
|                                                                    |             |   |              |  
|Deferred compensation                                               | (257,041    | ) | (320,700     | )
|                                                                    |             |   |              |  
|Deficit                                                             | (11,253,500 | ) | (11,037,711  | )
|                                                                    |             |   |              |  
|Total Stockholders Equity                                          | 365,215     |   | 407,878      |  
|                                                                    |             |   |              |  
|Total Liabilities and Stockholders Equity                          | 1,189,185   |   | 1,173,474    |  
|                                                                    |             |   |              |  
|Contingencies (Notes 1 and 9)                                       |             |   |              |  
|Subsequent Events (Note 10)                                         |             |   |              |  

(See Accompanying Notes to the Consolidated Financial Statements)
  
  3

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**UltraGuard Water Systems Corp.**
  Consolidated Statements of Operations and Deficit
  (Expressed in US dollars)
  (unaudited)

|                                                                               | Three Months |   |                 |  
|------------------------------------------------------------------------------ | ------------ | - | --------------- | -
|                                                                               | Ended        |   | Three Months    |  
|                                                                               | March 31,    |   | Ended           |  
|                                                                               | 2004         |   | March 31, 2003, |  
|                                                                               | $            |   | $               |  
|Project Revenue                                                                | 14,419       |   | 23,438          |  
|Project Costs                                                                  | 728          |   | 18,812          |  
|                                                                               |              |   |                 |  
|Total Gross Profit                                                             | 13,691       |   | 4,626           |  
|                                                                               |              |   |                 |  
|Expenses                                                                       |              |   |                 |  
|General and administrative                                                     | 193,367      |   | 120,406         |  
|Interest                                                                       | 7,745        |   | 12,437          |  
|Stock
      based compensation expense                                         | 28,368       |   | 28,368          |  
|                                                                               |              |   |                 |  
|Total Expenses                                                                 | 229,480      |   | 161,211         |  
|                                                                               |              |   |                 |  
|Net Loss for the Period                                                        | 215,789      |   | 156,585         |  
|                                                                               |              |   |                 |  
|Net Loss per Share                                                             | (0.01        | ) | (0.01           | )
|                                                                               |              |   |                 |  
|Weighted Average Number of Shares Outstanding                                  | 23,037,000   |   | 11,186,000      |  
|                                                                               |              |   |                 |  
|(Diluted loss per share has not been presented as the result is anti-dilutive) |              |   |                 |  

(See Accompanying Notes to the Consolidated Financial Statements)
  
  4

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**UltraGuard Water Systems Corp.**
  Consolidated Statements of Cash Flows
  (Expressed in US dollars)
  (unaudited)

|                                                                                   | Three Months |   | Three Months |  
|---------------------------------------------------------------------------------- | ------------ | - | ------------ | -
|                                                                                   | Ended        |   | Ended        |  
|                                                                                   | March 31,    |   | March 31,    |  
|                                                                                   | 2004         |   | 2003         |  
|                                                                                   | $            |   | $            |  
|Cash Flows to Operating Activities                                                 |              |   |              |  
|Net Loss                                                                           | (215,789     | ) | (156,585     | )
|Adjustments to reconcile
      net loss to cash                                    |              |   |              |  
|Depreciation                                                                       | 7            |   | 21           |  
|Foreign
      exchange                                                             | 39           |   | 112          |  
|Common
      stock issued for expenses                                             | 141,159      |   | 113,400      |  
|Accrual
      of interest                                                          | 5,034        |   | 7,845        |  
|Stock
      based compensation                                                     | 28,368       |   | 28,368       |  
|Change in non-cash
      working capital items                                     |              |   |              |  
|(Increase)
      in accounts receivable                                            | (12,525      | ) | (3,865       | )
|Decrease
      in inventory and contract work in progress                          |             |   | 441          |  
|(Increase)
      decrease in prepaid expenses and deposits                         | 1,151        |   | (81,588      | )
|Increase
      in accounts payable, accrued liabilities and wages and vacation pay |              |   |              |  
|payable                                                                            | 1,072        |   | 7,773        |  
|                                                                                   |              |   |              |  
|Net Cash Used in Operating Activities                                              | (51,484      | ) | (84,078      | )
|                                                                                   |              |   |              |  
|Cash Flows To Investing Activities                                                 |              |   |              |  
|Manufacturing
      technology option payments                                     |             |   | (6,776       | )
|                                                                                   |              |   |              |  
|Net Cash Used in Investing Activities                                              |             |   | (6,776       | )
|                                                                                   |              |   |              |  
|Cash Flows From Financing Activities                                               |              |   |              |  
|Increase in loans
      payable                                                    | 34,000       |   | 30,949       |  
|Increase
      in amounts owing to related parties                                 | 18,228       |   | 28,346       |  
|                                                                                   |              |   |              |  
|Net Cash Provided By Financing Activities                                          | 52,228       |   | 59,295       |  
|                                                                                   |              |   |              |  
|Increase (Decrease) in Cash                                                        | 744          |   | (31,559      | )
|Cash - Beginning of the Period                                                     | 1,834        |   | 40,206       |  
|                                                                                   |              |   |              |  
|Cash - End of the Period                                                           | 2,578        |   | 8,647        |  
|                                                                                   |              |   |              |  
|Non-Cash Financing Activities:                                                     |              |   |              |  
|Shares issued for
      asset purchase                                             | 3,600        |   | 71,200       |  
|Shares
      issued for expenses                                                   | 77,500       |   | 113,400      |  
|                                                                                   |              |   |              |  
|Supplementary Information                                                          |              |   |              |  
|Cash paid for interest                                                             | 2,711        |   | 4,592        |  
|Cash
      paid for income taxes                                                   |             |   |             |  

(See Accompanying Notes to the Consolidated Financial Statements)
  
  5

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|1. | Nature of Operations and Continuance of Business
      Up to February 2002 the Company focused its activities
        on the manufacturing and marketing of its Ultra GuardÚ 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.
        In January 2001, the Company ceased manufacturing operations, reduced
        level of staff in production, engineering and support and moved its offices
        to Langley. On February 5, 2002, the Company reached an agreement with
        the Clearwater Group (Clearwater) to assume the UVS manufacturing
        responsibilities of any new Ultra GuardÚ water treatment systems
        to be supplied to UVSs strategic alliance partner, US Filter. Clearwater
        would also provide warranty services on any previously sold UltraGuardÚ
        water treatment systems.
      At a special meeting held on November 15, 2002 the Company
        performed a reorganization whereby the issued shares were consolidated
        on a 1:50 basis, the authorized capital was increased to 100,000,000 shares
        and the name of the Company was changed to UltraGuard Water Systems Corp.
      During fiscal 2002, the Company 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 and Point of Entry units are installed at the water supply entry
        into the building. These UV products may include dual filtration cartridges
        in advance of the UV system.
      In December 2002, the Company 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 GuardÚ
        technology. Also in December 2002, the Company purchased Innovative Fuel
        Cell Technologies Inc. (IFCT) (see Note 3), the holder of
        an option to purchase worldwide rights to manufacture and market a Magnesium
        Air Fuel Cell to power UV drinking water and ancillary systems. IFTC owns
        100% of the shares of an Austrian company, UltraGuard Water Systems GmbH
        (UG GmbH). UG GmbH was to be the manufacturer and marketer
        the UV and Fuel Cell products for the European and African market. During
        fiscal 2003, due to lack of finances, the Company 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.
      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 March 31, 2004, the Company has not recognized significant
        revenue, has a working capital deficit of $743,434, and has accumulated
        operating losses of $11,253,500 since its inception. The continuation
        of the Company is dependent upon the continuing financial support of creditors,
        obtaining additional short-term and long-term equity or debt financing,
        the completion of product development of its newly acquired technology
        and achieving profitability. These conditions raise substantial doubt
        about the Company's ability to continue as a going concern. These financial
        statements do not include any adjustments that might arise from this uncertainty.
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|2. | Significant Accounting Policies
        Consolidated financial statements
        These financial statements include the accounts of the Company; its
          wholly-owned Nevada subsidiary Innovative Fuel Cell Technologies Inc.
          The Companys Austrian subsidiarys operations were discontinued
          during fiscal 2003. All significant intercompany transactions and balances
          have been eliminated.
        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.
        Property and equipment
        Property and equipment is recorded at cost. Depreciation is computed
          on a straight-line method using an estimated useful life of five years.
        Revenue recognition
        The Company will recognize revenue in accordance with Securities and
          Exchange Commission Staff Accounting Bulletin No. 101 (SAB 101),
          Revenue Recognition in Financial Statements. 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.
        Product sales are recognized at the time goods ar e shipped. System
          and project revenue is recognized utilizing the percentage of completion
          method that recognizes project revenue and profit during construction
          based on expected total profit and estimated progress towards completion
          during the reporting period. All related costs are recognized in the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

6

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|2. | Significant Accounting Policies (continued)
      period in which they occur.
      Estimates and assumptions
      The preparation of financial statements in conformity
        with generally accepted accounting principles 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
      Revenue, expenses and non-monetary balance sheet items
        in foreign currencies are translated into US dollars at the rate of exchange
        prevailing on the transaction dates. Monetary balance sheet items are
        translated at the rate prevailing at the balance sheet date. The resulting
        exchange gain or loss is included in general and administration expenses.
      Basic and Diluted Per Share Information
      The Company 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
      The Company 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 fair value at
        the date of grant. Alternatively, a company may account for granted stock
        awards to employees 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. The Company 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. The Company 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.
      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,
        the Company 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. An impairment
        loss is recognized when the carrying amount is not fully recoverable and
        exceeds fair market value.
      Financial Instruments
      The Company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 the Company 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 the Company
        to credit risk consist principally of cash. Cash was deposited with a
        quality credit 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
|-- | 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-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

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|2. | Significant Accounting Policies (continued)
      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
        the Company'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 the Company's results of operations or financial position.
      Interim Financial Statements
      These interim unaudited consolidated financial statements
        have been prepared on the same basis as the annual consolidated financial
        statements and in the opinion of management, reflect all adjustments,
        which include only normal recurring adjustments, necessary to present
        fairly the Companys financial position, results of operations and
        cash flows for the periods shown. The results of operations for such periods
        are not necessarily indicative of the results expected for a full year
        or for any future period.
      Manufacturing Technology
      On December 31, 2002, the Company acquired 100% of the
        shares of Innovative Fuels Cell Technologies Inc (IFCT). The Company issued
        5,000,000 common shares of the Companys common stock to the shareholders
        of IFCT to acquire IFCT and its wholly-owned Austrian subsidiary UltraGuard
        Water Systems GmbH (UG GmbH). These shares were valued at
        $1,007,000. The Company also issued 1,000,000 common shares of the Company
        to UG GmbH as part of the transaction. These shares are considered treasury
        shares and are not outstanding. The value placed on these shares was $201,400
        which amount has been recorded as a reduction of shareholders equity.
      IFCT is a Nevada corporation incorporated on September
        30, 2002. IFCT is the holder of an option 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 the Companys
        Point of Use Ultraviolet Water Purification System and for ancillary uses.
        IFCT was assigned this option on October 1, 2002 from a related party.
        IFCT had paid Cnd$2,500 as a down payment for the option with Cnd$97,500
        payable and 400,000 shares of the Company were to be issued.
      On March 14, 2003, the 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 to be issued to 500,000. On March
        6, 2003, the Company 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 to the vendors. An additional Cnd$5,000
        was paid on March 21, 2003 for the payment due on April 1, 2003. Commencing
        on May 1, 2003, the remaining balance of Cnd$87,500 was payable; Cnd$7,500
        on the first of each month thereafter until MagPower delivers the technical
        drawings, 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 will be delivered (100,000
        common shares from trust and 100,000 common shares from tre asury). These
        payments were not made; however, the Company delivered 10,000 shares to
        MagPower on May 1, 2003.
      On February 2, 2004, the Company and MagPower amended
        the License Agreement. MagPower now has sublicense rights in certain countries
        to the Companys ultraviolet products for sale and use by MagPower
        (or its sublicenses) with MagPowers magnesium fuel cell. In addition,
        the amended License 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 any
        remaining amount owing by the Company as a condition of the original License
        Agreement.
      As a condition of IFCTs Option Agreement, the
        Company was required to sell a minimum quantity of 2000 Fuel Cell units
        in fiscal 2003; however, MagPower has not provided the technology necessary
        to proceed with manufacturing. Once manufacturing commences the capitalized
        costs will be amortized to operations over its estimated useful life which
        will be determined at that time.
      The total consideration paid for the License Agreement
        as at March 31, 2004 was $1,108,452 which includes, the issuance of 5,000,000
        common shares of the Company valued at $1,007,000, the issuance of 500,000
        common shares valued at $74,800 cash payments of Cnd$12,500 and certain
        other organizational and acquisition costs of $18,292. This acquisition
        was treated as an acquisition of an asset and not a business combination.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8

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|4. | Property and Equipment
|-- | ----------------------

|                               |       |              | March 31,   | December 31,
|------------------------------ | ----- | ------------ | ----------- | ------------
|                               |       |              | 2004        | 2003        
|                               |       | Accumulated  | Net Book    | Net Book    
|                               | Cost  | Depreciation | Value       | Value       
|                               | $     | $            | $           | $           
|                               |       |              | (unaudited) | (audited)   
|                               |       |              |             |             
|Office furniture and equipment | 5,533 | 5,336        | 197         | 204         

|5. | Loans Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|6. | Amounts Owing to Related
        Parties
      Loans payable, including interest, in the original amount
        of $261,423 were partially repaid during the year ended December 31, 2003.
        The security pledged, 50% by West Peak Ventures of Canada Ltd (West Peak)
        and 50% by the Companys President to secure the loans was called
        and taken by the note holder. To compensate West Peak for its losses,
        the Company issued 1,556,000 common shares to West Peak in full payment
        for its loss amounting to $130,711. The Company agreed with the President
        of the Company to set an unsecured loan payable in the amount of $130,712
        with interest at 6% per annum as compensation for his losses.
      In addition to the above, the amounts owing to the President
        of the Company and the Chief Financial Officer (CFO) in the
        amount of $84,346 represent unpaid wages, expenses and consulting and
        are also due on demand, unsecured and non-interest bearing.
      As partial repayment of wages, in fiscal 2003, the President
        and the CFO were issued 2,400,000 shares of common restricted Rule 144
        shares of the Company valued at $81,120.

9

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|7. | Common Stock
|-- | ------------

|                                                             | Issued     |  | Common |  | Additional      |  
|------------------------------------------------------------ | ---------- |  | ------ |  | --------------- | -
|                                                             | Shares     |  | Stock  |  | Paid-in Capital |  
|                                                             | #          |  | $      |  | $               |  
|Balance, December 31, 2002                                   | 10,852,565 |  | 10,853 |  | 10,221,893      |  
|                                                             |            |  |        |  |                 |  
|Issuance of shares for Manufacturing Technology              | 400,000    |  | 400    |  | 70,800          |  
|Issuance of shares for consulting, wages and directors fees | 5,475,000  |  | 5,475  |  | 629,387         |  
|Issuance of shares for legal expenses                        | 600,000    |  | 600    |  | 67,400          |  
|Issuance of shares for related party compensation accruals   | 2,400,000  |  | 2,400  |  | 78,720          |  
|Issuance of shares to settle debt                            | 70,000     |  | 70     |  | 6,383           |  
|Issuance of shares for West Peak Security Loss               | 1,556,000  |  | 1,556  |  | 129,155         |  
|Issuance of shares for a note receivable                     | 1,100,000  |  | 1,100  |  | 108,900         |  
|Less: funds not yet received                                 |           |  |       |  | (100,000        | )
|                                                             |            |  |        |  |                 |  
|Balance, December 31, 2003 (audited)                         | 22,453,565 |  | 22,454 |  | 11,212,638      |  
|                                                             |            |  |        |  |                 |  
|Issuance of shares for Manufacturing Technology              | 100,000    |  | 100    |  | 3,500           |  
|                                                             |            |  |        |  |                 |  
|Issuance of shares for consulting fees                       | 775,000    |  | 775    |  | 76,725          |  
|                                                             |            |  |        |  |                 |  
|Balance, March 31, 2004 (unaudited)                          | 23,228,565 |  | 23,329 |  | 11,292,863      |  

|(a) | Private Placement
      On September 25, 2003, pursuant to a private placement,
        the Company issued 1,100,000 common restricted Rule 144 shares at $.09091
        per share for a $100,000 promissory note and interest. The note is non-interest
        bearing and due on December 29, 2003. If the note is not paid then the
        shares will be cancelled and returned to Treasury. Subsequent to December
        31, 2003, the Company agreed to extend the note until September 29, 2004.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(b) | Warrants Outstanding
      162,100 Class C warrants with an exercise price of $12.00
        per share expiring October 3, 2010 are outstanding as at March 31, 2004.
        The value of the Class C warrants issued totalled $1,134,700. This amount
        is being amortized to operations as stock compensation expense at $113,470
        per annum.                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | c.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | d.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

10

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|                            | Shares       |  |                  |  | Weighted Average  | 
|--------------------------- | ------------ |  | ---------------- |  | ----------------- | 
|                            | Under Option |  | Weighted Average |  | Remaining Life of | 
|                            | #            |  | Option Price $   |  | Options (Months)  | 
|December 31, 2003 (audited) | 125,000      |  | .13              |  | 32                | 
|Granted                     |             |  |                 |  |                   | 
|Expired                     |             |  |                 |  |                  | 
|Cancelled                   |             |  |                 |  |                  | 
|March 31, 2004 (unaudited)  | 125,000      |  | .13              |  | 29                | 

|    | These options were granted for services provided, or
        to be provided, to the Company. Statement of Financial Accounting Standards
        No. 123 (SFAS 123") requires that an enterprise recognize, or at
        its option, disclose the impact of the fair value of stock options and
        other forms of stock based compensation in the determination of income.
        The Company has elected under SFAS 123 to continue to measure compensation
        cost on the intrinsic value basis set out in APB Opinion No. 25. As options
        are granted at exercise prices based on the market price of the Companys
        shares at the date of grant, no compensation cost is recognized. However,
        under SFAS 123, the impact on net income and income per share of the fair
        value of stock options must be measured and disclosed on a fair value
        based method on a pro forma basis.
      The fair value of the employees purchase rights
        was estimated using the Black-Scholes model with the following assumptions
        on the above granted options: risk free interest rate was 5%, expected
        volatility of 100%, an expected life of 3 years and no expected dividends.
      During the year, the Company adopted the disclosure
        requirements of Statement of Financial Accounting Standards No. 148, Accounting
        for Stock-Based Compensation  Transition and Disclosure an Amendment
        of FASB Statement No. 123 (SFAS 148), to require more prominent
        disclosures in both annual and interim financial statements regarding
        the method of accounting for stock-based employee compensation and the
        effect of the method used on reporting results.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(f) | Benefit Plan (continued)
      If compensation expense had been determined pursuant
        to SFAS 123, the Companys net loss and net loss per share would
        have been as disclosed below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Three months |   | Three months |  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ | - | ------------ | -
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | ended        |   | ended        |  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | March 31,    |   | March 31,    |  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2004         |   | 2003         |  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | $            |   | $            |  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | (unaudited)  |   | (unaudited)  |  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |              |   |              |  
|   | Net loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |              |   |              |  
|   | As reported                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (215,789     | ) | (156,584     | )
|   | Stock
      Based Compensation  as reported                                                                                                                                                                                                                                                                                                                                                                                                                                 | 28,368       |   |             |  
|   | Stock
      Based compensation  determined under fair market value                                                                                                                                                                                                                                                                                                                                                                                                          | (29,238      | ) |             |  
|   | Pro
      forma                                                                                                                                                                                                                                                                                                                                                                                                                                                              | (216,659     | ) | (156,584     | )
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |              |   |              |  
|   | Basic net loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                     |              |   |              |  
|   | As reported                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (.01         | ) | (.01         | )
|   | Pro
      forma                                                                                                                                                                                                                                                                                                                                                                                                                                                              | (.01         | ) | (.01         | )
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|8. | Segmented Information
      The business of the Company is carried on in one industry
        segment (see Note 1).
      The Company currently operates 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 1) the Company now operates in one business segment
        and one geographical area

11

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|        |  | Three months ended |  |          | Three months ended |       
|------- |  | ------------------ |  | -------- | ------------------ | ------
|        |  | March 31, 2004     |  |          | March 31, 2003     |       
|        |  | (unaudited)        |  |          | (unaudited)        |       
|        |  |                    |  | United   |                    |       
|        |  | Canada             |  | States   |                    | Europe
|        |  | $                  |  | $        |                    | $     
|Revenue |  |                   |  | 14,419   |                    |      
|Expense |  |                   |  | 230,208  |                    |      
|Loss    |  |                   |  | (215,789 | )                  |      

|                             |  | As of          |  |           | As of          |       
|---------------------------- |  | -------------- |  | --------- | -------------- | ------
|                             |  | March 31, 2004 |  |           | March 31, 2003 |       
|                             |  | (unaudited)    |  |           | (unaudited)    |       
|                             |  |                |  | United    |                |       
|                             |  | Canada         |  | States    |                | Europe
|                             |  | $              |  | $         |                | $     
|Identifiable Tangible Assets |  |               |  | 80,733    |                |      
|Manufacturing Technology     |  |               |  | 1,108,452 |                |      
|Total Assets                 |  |               |  | 1,189,185 |                |      

|9.  | Legal Proceedings                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                 
|    | i.                                                                                                                                                                                              
|    |                                                                                                                                                                                                 
|    | ii.                                                                                                                                                                                             
|    |                                                                                                                                                                                                 
|    | i.                                                                                                                                                                                              
|    |                                                                                                                                                                                                 
|10. | Subsequent Events a) On
        April 28, 2004, the Company issued 200,000 common shares for legal services
        valued at $14,000. b) See Notes 5(b) and 9(c) for ongoing legal proceedings.

12

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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS AND
  FINACIAL CONDITIONS

The following discussion and analysis should be read in conjunction
  with our Financial Statements and the Notes attached. Information discussed
  in this report may include forward-looking statements regarding events or our
  financial performance and are subject to a number of risks and other factors,
  which could cause the actual results to differ materially from those, contained
  in the forward-looking statements. Among such factors are, 1) general
  business and economic conditions, 2) customer acceptance and demand for
  our products, 3) our overall ability to design, test and introduce new
  products on a timely basis,4) the nature of the markets addressed
  by our products, and, 5) other risk factors listed from time to time
  in documents filed by our Company with the SEC.

BASIS OF PRESENTATION

The financial statements include accounts of Ultraguard Water
  Systems Corp. and its 100% owned subsidiary, Innovative Fuel Cell Technologies
  Inc.

MANAGEMENT'S DISCUSSION

Our company was incorporated in Nevada in August 1990 and
  was inactive until eight Canadian and European individuals acquired it in July
  1995. The investors intent was to develop the company into the United
  States marketing arm of UV Systems Technology Inc., which was incorporated in
  British Columbia, Canada in 1993. Our company issued 1,600,000 shares of its
  restricted common stock ("Common Stock") to certain individual stockholders
  and one of our officers, as repayment of cash paid to others for expenses related
  to the acquisition.

In an effort to further advance our marketing objective, in
  September 1995, we entered into a marketing distribution agreement (embodying
  an earlier oral agreement) with UV Systems Technology Inc., for marketing rights
  for the UltraGuardR system in eight Western states. In July 1996
  we entered into a funding agreement with UVS. During this period, we structured
  an agreement with two principals and certain minority shareholders and exchanged
  common stock to acquire 50.69% of UVS. Under subsequent agreement dated February
  14, 2000 with the two principal shareholders Working Opportunity Fund and MDS
  Ventures Pacific, Inc., (49.39%) we acquired the remaining 49.31% of common
  stock and all outstanding preferred stock of UVS.

During the year ended August 31, 1999, the Company entered
  into a development to reconfigure its UV system. In the quarter ended February
  29, 2000, the Company produced the prototype of a new UV product line, the Ultra-Flow
  SLR. This product, with a designed disinfection capacity of up to 1.0 million
  gallons per day per lamp, will incorporate the Companys patented flow
  reactor chamber, the proprietary low pressure, high intensity UV lamp and the
  patented flow balanced weir. It encompasses layout flexibility; infinite automatic
  flow control and monitoring, future expansion can be easily accomplished. The
  client can monitor system and component performance locally or remotely. Additional
  features include full password- protected, Internet-based, web-monitored, microprocessor
  control, which will permit monitoring of the Ultra-Flow SLR UV system from the
  Company s plant or from any location equipped with an Internet connection.

On January 26, 2001 the Company entered into a Strategic Alliance
  Agreement, and related agreement with US Filters Wallace Tiernan Products
  Group, under which US Filter has the exclusive right to market the Companys
  Ultra Guard®UV system in North, South and Central America, and
  the Caribbean. See Our Products: Customers

13

---

In September 2001 we licensed the Korean company, VITROSYS,
  the exclusive rights to manufacture and sell our SLR Ultraviolet disinfection
  systems within the Republic of Korea and a non-exclusive right to manufacture
  for sale into other territories not currently represented by the Companys
  agents. VITROSYS will pay a royalty on each UV system sold. The royalty fee
  is variable, dependant on the selling price of the UV system. Under the License
  Agreement, the Company provided full manufacturing drawings, software technology
  and expertise, and a specified number of hours of training at the Companys
  facilities. As a requirement of the License Agreement, VITROSYS will be required
  to purchase from the Company, a key component for each SLR system. This key
  component is defined as the royalty verification component. Its purchase will
  trigger a sale and resultant royalty payment liability. The Korean market for
  UV has increased as a result of legislation that requires all municipal and
  Industrial wastewater to be disinfected.

Royalty revenues are payable by Vitzrosys from the sale of
  any UV system sold. During the first quarter of 2004 royalties in the amount
  of $12,500 were received as payment for 25 UV systems manufactured and delivered
  in Korea during 2003. Additional sales have occurred and marketing of the UV
  technology is ongoing. These activities provide an expectation that additional
  royalty revenue will be received in the future.

In September 1999 the formal order for a project in Toronto,
  Canada was secured for about C$ 685,000 (approximately $466,000). The project
  is now delivered and operating on demand. As this system is used only when high
  rainfall and storm runoff occurs, demand for it's operating is infrequent. Since
  installation, we are informed of two storm events, which required the UV system
  to be activated. This UV system delivered to Toronto is part of a C$50 million
  combined storm overflows (CSO) project (the world largest submersible CSO pumping
  station) and is used for disinfection of CSO before discharge into Lake Ontario.
  During this quarter, at the request of the customer Clearwater Industries (our
  product manufacturing licensee) replaced the computer operating system with
  a Programmable Logic Controller (PLC). This decision was taken to permit service
  of the UV System to be performed by a number of service companies versed in
  maintaining PLC control systems. This action provides the customer more flexibility
  and available service options and reflects the direction being taken by Clearwater
  on new system sales. Clearwater Industries reports that the UV System remedial
  work is complete. Final testing will not be conducted until spring 2003 as this
  site operates only during summer storm events. Tests conducted during 2002 were
  not successful, as effluent delivered to the UV system did not meet the design
  standards. The client requested an undertaking by Clearwater Industries to provide
  assurance of long-term support services. Clearwater was not prepared to provide
  those assurances although this was a requirement of the Joint Venture Agreements
  signed by the Company and Clearwater. As a result of that failure, the Client
  had the UV systems removed from the site.

After successful PDU testing in September & October 1998
  at the City of Peterborough wastewater treatment plant, we received an order
  in March 1999 valued at over C$1,100,000 (approximately $748,000.). The UV system
  will disinfect effluent flow in excess of 36 million gallons per day. The UV
  system delivery was completed in January 2002 and installed during February
  and March for operation starting May 15, 2002. Problems were encountered with
  the field wiring which affected the operating software. As well, problems were
  encountered with the installation of some of the structural components. In the
  second quarter, four of the five channels (48 of the 60 lamps) had been operated
  for about 30 days using the non-flow paced computer system. Clearwater reported
  that during this period, performance requirements were being met. Negotiation
  of the work and guarantees required by the customer to complete the balance
  of the system was being conducted between the City of Peterborough, Clearwater,
  our product-manufacturing licensee and with USFilter and Clearwater. These negotiations
  have been unsuccessful. In November we received notification that the City of
  Peterborough was cancelling our UV system contract. We have advised the City
  that we do not accept this cancellation and will strenuously defend our rights
  under the contract purchased order. We have made the appropriate loss provisions
  in our financial statements to reflect this cancellation.

Purchase orders for two additional UV systems valued at approximately
  C$150,000 approximately were produced during the 2000-2001 period and delivered
  into the Province of Ontario. The system in Ontario was removed from the site
  as a result of the failure of Clearwater to provide the required support and
  warranty services. Additional orders for shipment to Louisiana and Virginia
  were received, with an aggregate value of about $258,000. These two systems
  were delivered in 2001 as part of the USFilter Strategic Alliance. Maintenance
  and warranty was the responsibility of USFilter and was performed by USFilter.
  These two systems were tested, accepted and remain in place and in full operation.

During the first quarter of 2002 the Company took actions
  to reduce its overheads. Having completed the delivery of the UV systems that
  were produced during 2000 and up to January 26, 2002, we searched for a partner
  to work with for production of future UV systems orders. The Company identified
  Clearwater Technologies Inc., based in Langley, B.C. Canada (Clearwater)
  to perform these and other activities. Clearwater is engaged in the water industry,
  targeting the

14

---

treatment of potable water for smaller towns to which they
  provide complete packaged treatment plants. Clearwater agreed to assume the
  manufacturing of any new UV project sold to our Strategic Alliance partner,
  USFilter. Clearwater was also required to provide warranty services on the previously
  delivered UV products discussed in the preceding. The Company was to be paid
  a royalty on sales, the percentage scaled upward as the total sale volume increases.
  This association with Clearwater as our manufacturing partner permitted the
  company to move from its factory and reduce staff level in production,
  engineering and support. A number of key production staff moved to the Clearwater
  facility to assist in setting up for this manufacturing responsibility. The
  remaining staff at the Company works in a liaison and support role between USFilter
  and Clearwater.

This change of manufacturing strategy in the first quarter
  of 2002 significantly reduced our monthly operational costs. UVS became inactive
  with no further operations. Activities of UVS were limited to accounting functions,
  recording of accounts receivable collections and advising Clearwater and USFilter
  on project completion activities.

The Strategic Alliance Agreement with USFilter referred to
  above, and various other agreements were entered into on January 25, 2001 with
  US Filter/Wallace & Tiernan, Inc ("USFilter "). In general, the Strategic
  Alliance Agreement provides that U.S. Filter will market, offer and sell the
  Companys UltraGuard® ultraviolet disinfection systems (the
  "Systems"), including aftermarket components and spare parts, on an exclusive
  basis for ten years throughout a territory consisting of North America, Central
  America (including the Caribbean Zone) and South America (the "Territory").
  To insure adequate understanding of this Alliance, reference should be made
  to the various agreements filed on Form 8-K, February 27, 2001, which provide
  full details of these agreements.

On October 1, 2002 the directors mandated a debt and corporate
  restructuring of the Company. This mandate included the disposing of UVS and
  its associated debt, and the reduction of all other debt carried by the Company.
  Given the Companys inability to raise the additional funds necessary to
  continue the operations of UVS and with UVS liabilities exceeding assets by
  a significant amount, the board of directors and investors determined that by
  selling UVS the Company could continue viable operations pursuing a new product
  focus (see Our Products). On December 31, 2002 the Company entered into various
  agreements to complete the disposition of UVS and to remove of the excessive
  UVS liabilities carried on the Companys financial statements. The reader
  should refer to the Companys financial statements attached hereto for
  a complete understanding. Manufacturing and marketing of the UVS technology
  had been discontinued by the Company and was licensed to Clearwater Industries
  in early 2002. The purchasers of UVS were 659999 BC Ltd a corporation controlled
  by two officers and directors of UltraGuard. Terms of the sale included the
  transfer by UVS to the Company of all current and future revenue that may accrue
  as a result of the UVS technology, which was all revenue the Company could have
  accrued had it not sold UVS. The intent of 659999 BC Ltd is to keep UVS inactive.
  Full details of these agreements are available on Form 8K filed with the SEC
  on January 15, 2003.

On December 20, 2002 the Company negotiated the repayment
  of debt in the amount of $593,077 owed to the Elco Bank Clients in exchange
  for 593,077 common shares.

On August 27, 2003, prior to the expiration of the three year
  Termination Period, USFilter advised the Company they were terminating the Agreement,
  alleging that the Company had breached the Agreement in signing a manufacturing
  Agreement with Clearwater Technologies Inc and had failed to deliver Trust documents
  related to the manufacturing technology for the UV system as was required by
  the Agreements. The Company is reviewing these allegations and has had verbal
  communication on the matter with USFilter principals. As Clearwater is responsibility
  for manufacturing and sale of product worldwide and USFilter became Clearwaters
  marketing agent, the effect of this termination should be minimum as sales through
  USFilter have been significantly lower then was anticipated at the time of signing
  the Strategic Marketing Agreement in January 2001

Future revenue was expected from the wastewater technology
  through royalties expected from Clearwater, as a result of sales made to USFilter.
  As a result of the failure of Clearwater to perform in accordance with its contractual
  requirements, which resulted in USFilter cancelling our Strategic Alliance,
  royalties will not be received through this venue.

The Company has initiated a law suit amounting to about C$
  675,000 ($514,700) in specified damages against Clearwater, plus unspecified
  losses to recover monies owed under the Licence Agreement, the Joint Venture
  as a result of Clearwaters failure to comply and Clearwaters breach
  of the various agreements.

As a result of USFilters termination of the Agreement,
  the Company will explore the possibility of sale of licenses of the

15

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Single Lamp Reactor UV wastewater system to others within
  the terminated territory, which included North America, Central America (including
  the Caribbean Zone) and South America.

Recent US and world events as well as the increasing worldwide
  requirement for higher quality water for industry, health and human consumption,
  is accelerating the use of ultraviolet and other water purifications products.
  To capitalize on this market opportunity, our Company changed its market focus,
  moving away from manufacturing of our wastewater products, which we will continue
  to have marketed by others; to drinking water UV products and purification systems.

During the year 2002 we completed the development of a UV
  product to be used in drinking water applications. UV units for the drinking
  water market will target application such as point of entry (POE) and point
  of use (POU). POE UV systems will treat water at the entry point into residences,
  industry or any location requiring safe drinking water. POU systems will treat
  water at selected points within the home or establishment, using a system installed
  at the water faucet. Both POE and POU may be sold as stand-alone units or in
  combinations with various filters. Ultraviolet will not penetrate the envelope
  or the wrappings to disinfect the contents of the package but is applicable
  to external surface disinfection. Independent testing of the POU UV System,
  including CSA and UL approval is yet to accomplished. Test tests are to be conducted
  subject to availability of adequate resources.

On December 30, 2002. the Company issued six million shares
  of its common stock to the shareholders of Innovative Fuel Cell Technologies
  Inc (Innovative) for 100% of Innovative, a Nevada Incorporated company,
  the holder of an option to purchase a worldwide license from MagPower Systems
  Inc (MagPower) for their air magnesium fuel cell technology (Fuel Cell). The
  purchase price in the option agreement was C$100,000,and 400,000 shares of the
  Companys common stock, increased respectively in March 2003 to C$102,500
  and 500,000 shares of the Companys common stock at which time a worldwide
  License Agreement was signed for the manufacture and sale of the Fuel Cell .
  The increase in the price and the number of shares of common stock was as a
  result of negotiations to extend the use right to include ancillary uses among
  other things lighting and radio in areas where a UV disinfection systems has
  been installed. The Fuel Cell will provide the necessary power to operate ultraviolet
  disinfection systems, lighting and radio in areas of the world where no other
  forms of electrical power is unavailable. The product has applications in remote
  areas of all countries worldwide. Applications in developing countries such
  as Africa, some of the Middle East countries and China, where large numbers
  of the population are not serviced by an electrical grid and do not have a safe
  water supply, are market areas. As a requirement of the License Agreement, MagPower
  was to provide the manufacturing technology for then Fuel Cell. Due to delays
  in MagPowers development program, this information was incomplete, which
  curtailed any opportunity the Company may have had to market the products. By
  the end of 2003 the company had paid a portion of the License fee, leaving C$88,800
  remaining unpaid and 200,000 common share not delivered.

On February 2, 2004, the Company and MagPower entered into
  a amendment to the License Agreement. Under the amendment the Company agreed
  to sublicense the Companys ultraviolet products to MagPower for Africa
  and the countries of Asia including; India, China, Afghanistan, Kazakhstan,
  Bangladesh, Indonesia, Malaysia, Singapore, South Korea and Japan (Territory),
  for sale and use by MagPower (or its sublicenses) with MagPowers magnesium
  fuel cell. The amendment provided the Company the right to enter into sublicensing
  agreements in any country within the Territory if MagPower had not previously
  signed an agreement in that country. As well, the February 2nd, 2004
  amendment 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 the Company
  to MagPower.

Included in the Innovative assets was the Austrian Company,
  UltraGuard Water Systems GmbH (GmbH). The incorporation of GmbH was made
  by Innovative in contemplation of its sale of Innovative to the Company. GmbH
  is set up to manufacture and market Point of Use UV produces in Germany and
  the European Union Countries (EU) to exploit the EU and other European
  markets potential. In the third quarter of 2003 the Company closed its GmbH
  operation and wrote off its investment due to the inability to raise sufficient
  capital to continue funding the GmbH operations.

During 2004, the Company will focus its efforts on the following
  markets and products.

The licensing of the UltraGuard Single Lamp Reactor wastewater UV system
    The Magnesium Air Fuel Cell with UV for remote application
    The Point of Entry and Point of Use UV/Filtration system
    Other water disinfection, cleaning and related business opportunities


16

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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31,
  2004.

Three months ended March 31, 2004 compared to Three months
  ended March 31, 2003.

Revenues. During three months ended March 31, 2004, we reported
  revenues of $14,418 compared to revenue of $23,438 being reported in the three
  months of fiscal 2003, a decrease of 38%. The decrease is as a result of very
  low UV system components sales offset by royalty revenue.

Direct Project Costs. Project costs recorded during the three
  months of fiscal 2004 amounted to $727 compared to $18,813 recorded during the
  three months of fiscal 2003, a decrease of 2,588%. The decrease in cost was
  due to the low direct costs associated with royalty sales.

Gross Profit. Gross profit increased by $9,066 from $13,691during
  the three months of fiscal 2004, compared to $4,625 recorded during the comparable
  period of fiscal 2003. The increase was mainly from royalty sales with low direct
  costs.

General and Administrative Expense. For the three months ended
  March 31, 2004, we reported general and administrative expense of $193,367,
  an increase of $723,961 or 61% from $120,406 reported in the comparable period
  of the prior year. This increase resulted primarily from the increased consulting
  fees for product marketing.

Interest. For the three months ended March 31, 2004, we reported
  interest of $7,745, a decrease of $4,692 or 38%, from $12,437 reported in the
  comparable prior fiscal period. The decrease was as a result of a reduction
  of the rate of interest on loans outstanding in the three months of 2004 compared
  to the three month of 2003.

Stock Based Compensation Expense. For the three months ended
  March 31, 2004, we reported stock compensation expense of $28,368, the same
  amount as reported in the comparable three months of 2003. Stock based compensation
  is as a result of the Strategic Alliance signed with USFilter/WT.

Net Loss for the Period. For the three months ended March
  31, 2004, we reported a net loss for the period of $215,789, an increase of
  $59,204, or 58% over $156,585 in the comparable period of fiscal 2003. The increase
  in net loss was primarily due to the increase cost of general and administrative

Net Loss per Share. For the three months ended March 31, 2004,
  we reported a net loss per share for the period of $0.01 which is the same as
  the loss reported for the prior fiscal period.

LIQUIDITY

The nature of our business may be expected to include a normal
  lag time between the incurring of operating expenses and the collection of contract
  receivables. In addition, we are dependent on sales by licensees for any royalty
  revenue and will depend on sales from distributors, licensees and sales agents
  for product sales. For these and other reasons, we may experience periods of
  limited working capital and may be expected to require financing for working
  capital during those periods.

In addition, we will require financing over and above our
  current resources to sustain our operations and expand our marketing efforts.
  We cannot assure that the additional financing can be obtained on a timely basis,
  on terms that are acceptable or if at all.

During the period ended March 31, 2004 we financed our operations
  in part from short term loans and loans from related parties and minority shareholders
  of UVS. To fund operations of $51,000 during the quarter, we received $34,000
  in demand loans and $18,000 from related party. This resulted in an increase
  in cash of $744 from $1874 at the beginning of the quarter to $2,578 at the
  end of the quarter.

We expect that, during fiscal 2004, as and if sales increase,
  we will continue to depend on receipt of additional funds through public or
  private equity or debt sales or other lender financing to fund the subcontract
  manufacturing of products sold, and general operational and sales expenses.
  Except as previously indicated, no arrangements are currently in place to

17

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raise funds, although we actively continue to seek sources.
  Failure to receive these funds may be expected to have a material adverse effect
  on our company.

ITEM 3. - CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Company
  conducted an evaluation, under the supervision and with the participation of
  the Chief Executive Officer and Chief Financial Officer, of the Company's disclosure
  controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
  Securities Exchange Act of 1934 (the "Exchange Act"). Based on this evaluation,
  the Chief Executive Officer and Chief Financial Officer concluded that the Company's
  disclosure controls and procedures are effective to ensure that information
  required to be disclosed by the Company in reports that it files or submits
  under the Exchange Commission rules and forms. There was no change in the Company's
  internal control over financial reporting during the Company's most recently
  completed fiscal quarter that has materially affected, or is reasonably likely
  to materially affect, the Company's financial control over financial reporting.

PART II OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

On October 20, 1998 a suit was filed in the Supreme Court
  of British Columbia by Thomas O' Flynn against the Company, Kenneth Fielding
  (the Company's President and Director), and Charles P. Nield (a former Director
  and Vice President of the Company). O' Flynn alleges that in April of 1996,
  he purchased shares of the Common Stock based on a representation that they
  would be free trading in 40 days of "the filing of a prospectus". He further
  alleges that in September of 1996 he purchased additional shares of Common Stock
  based on the representation that the shares would be free trading within 40
  days of the Common Stock becoming free trading. O' Flynn alleges that the representation
  was a warranty and was incorrect. He further alleges that he suffered a loss
  because the share price decreased while he was holding the shares. He seeks
  damages for breach of warranty, negligence, misrepresentation and breach of
  fiduciary duty. The amount claimed is not specified. The Company filed an answer
  denying the claims and continues to actively defend the suit. Examination for
  discovery of Charles P. Nield was conducted in June 1999; since then there has
  been no further activity.

On April 25, 2003, Chelverton Fund Limited filed a suit in
  the Supreme Court of British Columbia against the Company for non-payment of
  debt in the amount of $155,000. The Company entered an appearance and filed
  a defense against this claim and attempted to negotiate a settlement. Chelverton
  filed additional information that supported their claim and the Company responded
  with a no defines position. Judgment was issued in the amount of
  $183,944 (C$234,642) including interest and legal costs. . Additional interest
  accruing during this quarter has increased the amount to $184,937. On April
  5, 2004 the Company appeared in Supreme Court to provide to Chelverton and the
  court, specific information pertaining to the Companys assets and its
  ability to pay the judgment including interest. At the April 5, 2004 the Court
  requested additional financial information, which the Company has now provided.

On June 6, 2003 a group of shareholders (Shareholder Group)
  filed a consent resolution, which among other things elected a new slate of
  directors and revised the company by-laws. The Company refused to accept the
  consent resolution or by-laws as in the opinion of the Companys legal
  counsel, the consent resolutions were not in accordance with Nevada Statutes
  or the filing requirements of the Security and Exchange Commission. At a directors
  meeting held June 9, 2003, the Company elected two additional directors; Edward
  White and Erin Strench to the Company board, bringing the total number of directors
  to five. On June 16, 2003 the Shareholder Group filed for and obtained a temporary
  restraining order (TRO) against the Company and its five directors prohibiting
  the Company from among other things, issuing stock, transferring assets, changing
  management and other actions that would affect the status quo of the
  Company. In addition, two shareholders issued writs against various directors,
  alleging breach of fiduciary duty in respect of the issue of certain common
  shares each to John Gaetz, Ken Fielding and others. On June 24, 2003, in discussions
  between legal counsel for plaintiff, respondent and the hearing Judge; Judge
  Adams, the TRO was vacated and a date of July 2, 2003 was set for a new TRO
  hearing to be held in Reno, Nevada. At the July 2, 2003 TRO hearing Judge Adams
  did not grant a TRO and requested the plaintiff and respondent file a series
  of three briefs outlining their position. The first brief was filed on July
  11, 2003 by our counsel. The plaintiff responded on July 18, 2003 and our counsel
  filed the final brief on July 25, 2003.

18

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The Judge has not made a ruling on the TRO. The Companys
  counsel has responded to the various other suits filed against the Company and
  its directors. Counsel for the Company was successful in moving these actions
  from Nevada State jurisdiction to federal jurisdiction. In March 2004 the Companys
  legal counsel filed to withdraw from the action as a result of non-payment of
  legal fees. The court approved the withdrawal on two of the four cases. By April
  29, 2004, the Plaintiff and the Defendant must file a proposed pre-trial order
  with the Federal Court, which upon approval, the Court will set down for trial.
  In the interim the parties to this dispute are attempting to reach a settlement
  on all matters. On April 28, 2004 the Company applied for and received a 45-day
  extension to file with the Federal Court the proposed pre-trial order.

The Company has made a provision for a loss of $27,000 in
  a lawsuit made by a former employee for wrongful dismissal.

Item 2. CHANGES IN SECURITIES

During the quarter ended March 31, 2004 the Company issued
  the following shares for the listed consideration

|Date      | Shares  | Residency/  | Consideration | Exemption
|--------- | ------- | ----------- | ------------- | ---------
|          |         | Citizenship | Valued at     |          
|          |         |             |               |          
|Feb 5/04  | 100,000 | CAN         | $3,600        | Reg.144  
|Feb 26/04 | 775,000 | China       | $77,500       | S-8      

*Registered on S-8 on Dec 2, 2003

ITEM 3. Default upon Senior Securities

None

ITEM 4. Submissions of Matters to a vote of Security Holders

None

ITEM 5. Other Information

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits (exhibit reference numbers refer to Item 601 of Regulation SB)

|Exhibit Number | Description                                                    | Method of Filing | 
|-------------- | -------------------------------------------------------------- | ---------------- | 
|               |                                                                |                  | 
|(3)(i)         | Articles of Incorporation                                      | (1)              | 
|               |                                                                |                  | 
|(3)(ii)        | Bylaws, as amended                                             | (2)              | 
|               |                                                                |                  | 
|(10)(iii)      | Agreement between Douglas Sommerville and Company dated12/6/96 | (3)              | 
|               |                                                                |                  | 
|(10)(iv)       | Agreement between John Gaetz and the Company dated 12/6/96     | (4)              | 
|               |                                                                |                  | 
|(10)(v)        | Sample Agreement among minority Shareholders of UV Systems     |                  | 
|               | Technology, Inc. and the Company each dated 2/28/97            | (5)              | 

19

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|(10)(vi)   | Marketing Distribution Agreement Between UV Systems Technology, Inc.           |                | 
|---------- | ------------------------------------------------------------------------------ | -------------- | 
|           | and the Company                                                                | (2)            | 
|           |                                                                                |                | 
|(10)(vii)  | Sales Representation Agreement between UV Systems Technology,                  |                | 
|           | Inc. and "The Representative"                                                  | (2)            | 
|           |                                                                                |                | 
|(10)(viii) | Exclusive Distributorship Agreement Between UV Waterguard Systems, Inc.        |                | 
|           | and Chiyoda Kohan Co., Ltd., and NIMAC Corporation                             | (2)            | 
|           |                                                                                |                | 
|(10)(ix)   | 1997 Stock Option Plan                                                         | (4)            | 
|           |                                                                                |                | 
|(10)(x)    | Interim Funding Agreement between UVS, MDS and WOF                             | (5)            | 
|           |                                                                                |                | 
|(10)(xi)   | Letter Agreement between the Company and Elco Bank and Trust                   |                | 
|           | Company Limited                                                                | (5)            | 
|           |                                                                                |                | 
|(10)(xii)  | Loan Agreement between the Company and TD Bank                                 | (6)            | 
|           |                                                                                |                | 
|(10)(xiii) | The Companys 1999 Long-Term Equity Incentive Plan                             | (7)            | 
|           |                                                                                |                | 
|(10)(xiv)  | Letter Agreement between Service Systems, UVS, MDS and WOF dated               |                | 
|           | Feb 13, 2000                                                                   | (7)            | 
|           |                                                                                |                | 
|(10)(xv)   | Lease dated October 2000 between Service Systems, UV Systems and               |                | 
|           | Slough Estates Canada Limited                                                  | (8)            | 
|           |                                                                                |                | 
|(10)(xvi)  | Legal Services Plan between Rosenfeld, Goldman & Ware, Inc                     | (9)            | 
|           |                                                                                |                | 
|(10)(xvii) | Post Effective Amendment to Legal Services Plan filed November 19, 2001        | (10)           | 
|           |                                                                                |                | 
|(10xviii)  | 2003 Benefit Plan S-8 March 24, 2004                                           | (11)           | 
|           |                                                                                |                | 
|(10xix)    | Independent Contractor/Consulting Agreement                                    | (12)           | 
|           |                                                                                |                | 
|(10xx)     | The Incentive Plan of UltraGuard                                               | (13)           | 
|           |                                                                                |                | 
|(31.1)     | Certification Pursuant to Section 302 of theSarbanes-Oxley Act of 2002.        | Filed Herewith | 
|           |                                                                                | Electronically | 
|           |                                                                                |                | 
|(31.2)     | Certification Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002. | Filed Herewith | 
|           |                                                                                | Electronically | 
|           |                                                                                |                | 
|(32.1)     | Certification Pursuant to 18 U.S.C. Section
      1350, Section 906 of the     | Filed Herewith | 
|           | Sarbanes-Oxley Act of 2002.                                                    | Electronically | 
|           |                                                                                |                | 
|(32.2)     | Certification Pursuant to 18 U.S.C. Section
      1350, Section 906 of the     | Filed Herewith | 
|           | Sarbanes-Oxley Act of 2002.                                                    | Electronically | 

20

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|(1)  | Incorporated by reference to the Corporation's Form 10SB
      effective on January 22, 1997                  
|---- | --------------------------------------------------------------------------------------------------------------
|(2)  | Incorporated by reference to the Corporation's Form S-8 filed
      with the Commission on October 6, 1997.   
|(3)  | Incorporation by reference to the Corporation's Form 10Q
      for the fiscal Year ended February 28, 1997.   
|(4)  | Incorporation by reference to the Corporation's Form 10KSB
      for the fiscal Year ended August 31, 1997.   
|(5)  | Incorporation by reference to the Corporation's Form 10KSB
      for the fiscal Year ended August 31, 1998.   
|(6)  | Incorporation by reference to the Corporation's Form 10KSB
      for the fiscal Year ended August 31, 1999.   
|(7)  | Incorporation by reference to the Corporation's Form 10KSB
      for the fiscal Year ended August 31, 2000.   
|(8)  | Incorporation by reference to the Corporation's Form 10Q
      for the fiscal Quarter ended November 30, 2000.
|(9)  | Incorporated by reference to the Corporation's Form S-8 filed
      with the Commission on November 19, 2003. 
|(10) | Incorporated by reference to the Corporation's S-8 POS filed
      with the Commission on March 23, 2003.     
|(11) | Incorporated by reference to the Corporation's Form S-8 filed
      with the Commission on March 28, 2003.    
|(12) | Incorporated by reference to the Corporation's Form S-8 filed
      with the Commission on June 11, 2003.     
|(13) | Incorporated by reference to the Corporation's Form S-8 filed
      with the Commission on December 2, 2003.  

(b)	Reports on Form 8-K during this quarter

None

21

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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

/s/
  Kenneth R. Fielding
  Kenneth R. Fielding, President

|Date:May 20, 2004  | /s/ Ken Fielding      
|------------------ | ----------------------
|                   | Ken Fielding, Director
|                   |                       
|                   |                       
|Date: May 20, 2004 | /s/ John R Gaetz      
|                   | John R Gaetz, Director

22

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