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

FORM 10-QSB

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

For the period ended September 30, 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.

|**914 SHERWOOD AVENUE**                |            
|-------------------------------------- | -----------
|**COQUITLAM B.C.CANADA**               | **V3K 1A6**
|Address of Principal Executive Offices | Zip code   

**604-540-8282**
  Issuer's Telephone Number

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

NONE

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

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

Check whether the issuer: (1) filed all reports required to
  be filed by Section13 or 15(d) of the Exchange Act during the past 12 months
  (or for such shorter period that the registrant was required to file such reports),
  and (2) has been subject to such filing requirements for the past 90 days. Yes
  x No  ̈

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

The number of shares outstanding of the issuer's only class
  of Common Stock $.001 par value was 25,528,565 on November 22, 2004.

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INDEX

|PART I                                                                                  |                                                             | Financial Information                               |         
|--------------------------------------------------------------------------------------- | ----------------------------------------------------------- | --------------------------------------------------- | --------
|                                                                                        |                                                             |                                                     |         
|Item 1.                                                                                 | CONSOLIDATED FINANCIAL STATEMENTS.                          |                                                    
|                                                                                        |                                                             |                                                     |         
|Consolidated Balance Sheets
      as of September 30, 2004 (unaudited)                  |                                                            
|                                                                                        | and December 31, 2003 (audited) .                           | 3                                                  
|                                                                                        |                                                             |                                                     |         
|Consolidated Statements of Operations for
      the nine-month periods ended            |                                                            
|                                                                                        | September 30, 2004 and September 30, 2003
      (unaudited) | 4                                                  
|                                                                                        |                                                             |                                                     |         
|Consolidated Statements of Cash Flows for
      the three and nine months periods ended |                                                            
|                                                                                        | September 30, 2004 and September 30, 2003
      (unaudited) | 5                                                  
|                                                                                        |                                                             |                                                     |         
|Notes to the Financial Statements                                                       | 6 to 15                                                    
|                                                                                        |                                                             |                                                     |         
|Item 2.                                                                                 | MANAGEMENTS DISCUSSION AND ANALYSIS
      OF RESULTS OF    |                                                    
|                                                                                        |                                                             | OPERATIONS AND FINANCIAL CONDITIONS                 | 16 to 20
|                                                                                        |                                                             |                                                     |         
|Part II                                                                                 |                                                             | OTHER INFORMATION                                   |         
|                                                                                        |                                                             |                                                     |         
|                                                                                        | 1.                                                          | LEGAL PROCEEDINGS                                   | 20 to 21
|                                                                                        |                                                             |                                                     |         
|                                                                                        | 2.                                                          | CHANGES IN SECURITIES                               | 21      
|                                                                                        |                                                             |                                                     |         
|                                                                                        | 3.                                                          | DEFAULT UPON SENIOR SECURITIES                      | 21      
|                                                                                        |                                                             |                                                     |         
|                                                                                        | 4.                                                          | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS | 22      
|                                                                                        |                                                             |                                                     |         
|                                                                                        | 5.                                                          | OTHER INFORMATION                                   | 22      
|                                                                                        |                                                             |                                                     |         
|                                                                                        | 6.                                                          | EXHIBITS AND REPORTS ON FORM 8K                     | 22 to 29
|                                                                                        |                                                             |                                                     |         
|Signatures                                                                              |                                                            

(See Accompanying Notes to the Consolidated Financial Statements)

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

|                                                              |               |   | (Restated   |  
|------------------------------------------------------------- | ------------- | - | ------------ | -
|                                                              |               |   | Note 11)     |  
|                                                              | September 30, |   | December 31, |  
|                                                              | 2004          |   | 2003         |  
|                                                              | $             |   | $            |  
|                                                              | (unaudited)   |   | (audited)    |  
|ASSETS                                                        |               |   |              |  
|Current Assets                                                |               |   |              |  
|Cash                                                          | 3,028         |   | 1,834        |  
|Accounts receivable                                           | 2,841         |   | 2,971        |  
|Prepaid expenses and deposits                                 | 30,714        |   | 63,613       |  
|Total Current Assets                                          | 36,583        |   | 68,418       |  
|Property and Equipment (Note 4)                               | 157           |   | 204          |  
|Manufacturing Technology (Note 3)                             | 83,161        |   | 79,561       |  
|Total Assets                                                  | 119,901       |   | 148,183      |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                |               |   |              |  
|Current Liabilities                                           |               |   |              |  
|Accounts payable                                              | 198,361       |   | 194,080      |  
|Accrued liabilities                                           | 56,832        |   | 55,747       |  
|Wages and vacation pay payable                                | 1,711         |   | 3,004        |  
|Loans payable (Note 5)                                        | 373,157       |   | 310,542      |  
|Amounts owing to related parties
      (Note 6)               | 290,101       |   | 202,223      |  
|Total Current Liabilities                                     | 920,162       |   | 765,596      |  
|Contingencies (Notes 1 and 9)                                 |               |   |              |  
|Subsequent Events (Note 10)                                   |               |   |              |  
|Stockholders Equity (Deficit)                                |               |   |              |  
|Common Stock (Note 7)                                         |               |   |              |  
|100,000,000 shares authorized, with a par value of $ 0.001    |               |   |              |  
|25,528,565 and 22,453,565 issued and outstanding respectively | 25,529        |   | 22,454       |  
|Additional paid-in capital                                    | 572,252       |   | 420,227      |  
|Deferred compensation                                         | (69,792       | ) | (320,700     | )
|Deficit                                                       | (1,328,250    | ) | (739,394     | )
|Total Stockholders Equity (Deficit)                          | (800,261      | ) | (617,413     |  
|Total Liabilities and Stockholders Equity
      (Deficit)    | 119,901       |   | 148,183      |  

(See Accompanying Notes to the Consolidated Financial Statements)

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

|                                        | Accumulated   |               |   |               |   |               |   |              |  
|--------------------------------------- | ------------- | ------------- | - | ------------- | - | ------------- | - | ------------ | -
|                                        | from          |               |   | (Restated-    |   |               |   | (Restated-   |  
|                                        | September 30, |               |   | Note 11)      |   |               |   | Note 11)     |  
|                                        | 2002 (Date of | Three Months  |   | Three Months  |   | Nine Months   |   | Nine Months  |  
|                                        | Inception) to | Ended         |   | Ended         |   | Ended         |   | Ended        |  
|                                        | September 30, | September 30, |   | September 30, |   | September 30, |   | September 30 |  
|                                        | 2004          | 2004          |   | 2003          |   | 2004,         |   | 2003,        |  
|                                        |               |               |   |               |   |               |   |              |  
|                                        | $             | $             |   | $             |   | $             |   | $            |  
|Project Revenue                         | 48,538        | 1,350         |   | 9,231         |   | 15,869        |   | 32,669       |  
|Project Costs                           | 34,696        |              |   | 8,000         |   | 728           |   | 26,812       |  
|Total Gross Profit                      | 13,842        | 1,350         |   | 1,231         |   | 15,141        |   | 5,857        |  
|Expenses                                |               |               |   |               |   |               |   |              |  
|Foreign exchange loss                   | 20,100        |              |   |              |   |              |   |             |  
|General and administrative              | 1,175,954     | 179,029       |   | 208,809       |   | 580,031       |   | 437,768      |  
|Interest                                | 78,081        | 7,913         |   | 10,377        |   | 23,964        |   | 32,110       |  
|Provision for
      lawsuit             | 27,000        |              |   |              |   |              |   |             |  
|Total Expenses                          | 1,301,135     | 186,942       |   | 219,186       |   | 603,995       |   | 469,878      |  
|Net Loss From Operations                | 1,287,293     | 185,592       |   | 217,955       |   | 588,854       |   | 464,021      |  
|Other:                                  |               |               |   |               |   |               |   |              |  
|Loss from discontinued
      operations | 40,957        |              |   |              |   |              |   | 28,534       |  
|Net Loss For the Period                 | 1,328,250     | 185,592       |   | 217,955       |   | 588,854       |   | 492,555      |  
|                                        |               |               |   |               |   |               |   |              |  
|Basic and Diluted Net Loss per Share    |               | (0.01         | ) | (0.02         | ) | (0.02         | ) | (0.04        | )
|                                        |               |               |   |               |   |               |   |              |  
|Weighted Average Number of Shares       |               |               |   |               |   |               |   |              |  
|Outstanding                             |               | 25,529,000    |   | 13,268,000    |   | 24,340,000    |   | 12,227,000   |  

(See Accompanying Notes to the Consolidated Financial Statements)

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

|                                                                   | Nine Months Ended |   | Nine Months Ended |  
|------------------------------------------------------------------ | ----------------- | - | ----------------- | -
|                                                                   | September 30,     |   | September 30,     |  
|                                                                   | 2004              |   | 2003              |  
|                                                                   | $                 |   | $                 |  
|Cash Flows Used In Operating Activities                            |                   |   |                   |  
|Net Loss                                                           | (588,854          | ) | (492,555          | )
|Adjustments to reconcile net loss to cash                          |                   |   |                   |  
|Depreciation and amortization                                      | 47                |   | 61                |  
|Shares issued for consulting and legal
      services              | 388,408           |   | 207,190           |  
|Loan interest accrued                                              | 13,615            |   | 27,480            |  
|Accrual of related party wages                                     | 87,878            |   | 122,476           |  
|Changes in operating assets and liabilities                        |                   |   |                   |  
|(Increase) decrease in accounts receivable                         | 128               |   | (8,931            | )
|Decrease in inventory and contract
      work in progress          |                  |   | (262              | )
|(Increase) decrease in prepaid expenses
      and deposits         | 46,899            |   | (14,289           | )
|Increase in accounts payable, accrued
      liabilities, wages and |                   |   |                   |  
|vacation pay payable
      and customers deposits                 | 4,073             |   | 81,151            |  
|Net Cash Used in Operating Activities                              | (47,806           | ) | (77,679           | )
|Cash Flows Used in Investing Activities                            |                   |   |                   |  
|Manufacturing technology acquired                                  |                  |   | (6,776            | )
|Net Cash Used in Investing Activities                              |                  |   | (6,776            | )
|Cash Flows Provided By Financing Activities                        |                   |   |                   |  
|Proceeds from loans                                                | 49,000            |   | 45,384            |  
|Net Cash Provided by Financing Activities                          | 49,000            |   | 45,384            |  
|Increase (Decrease) in Cash                                        | 1,194             |   | (39,701           | )
|Cash - Beginning of the Period                                     | 1,834             |   | 40,206            |  
|Cash - End of the Period                                           | 3,028             |   | 1,135             |  
|Non-Cash Investing and Financing Activities:                       |                   |   |                   |  
|Shares issued for manufacturing technology                         | 3,600             |   | 71,200            |  
|Shares issued to settle debt                                       |                  |   | 137,164           |  
|Shares issued for notes receivable and expenses                    |                  |   | 110,000           |  
|                                                                   | 3,600             |   | 318,364           |  
|                                                                   |                   |   |                   |  
|Supplementary Information                                          |                   |   |                   |  
|Cash paid for interest                                             |                  |   | 4,592             |  
|Cash paid for income taxes                                         |                  |   |                  |  

(See Accompanying Notes to the Consolidated Financial Statements)

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|1. | Reverse Acquisition, Nature of Operations and Continuance of Business
      On December 31, 2002 (the acquisition date),
        UltraGuard Water Systems Corp. (UltraGuard) acquired all of
        the outstanding stock of Innovative Fuels Cell Technologies Inc (IFCT).
        UltraGuard issued 5,000,000 common shares to the shareholders of IFCT
        to acquire IFCT and its wholly-owned Austrian incorporated subsidiary
        UltraGuard Water Systems GmbH (UG GmbH). UltraGuard also issued
        1,000,000 common shares to UG GmbH as part of the transaction. These shares
        are considered treasury shares and are not outstanding. For accounting
        purposes the acquisition was treated as the acquisition of UltraGuard
        by IFCT with IFCT as the accounting acquirer (reverse acquisition). As
        a result, the historical financial statements prior to the acquisition
        date are those of IFCT from September 30, 2002 (date of inception of IFCT).
        See Note 3 for Operations of UltraGuard prior to the reverse acquisition.
        UltraGuard and IFCT, as at December 31, 2002, reverted back to being a
        development stage Company. IFCT is a Nevada corporation incorporated on
        September 30, 2002. IFCT is the holder of an option (the Option
        Agreement) to purchase worldwide manufacturing and marketing rights
        to a 12-volt Magnesium-Air Semi Fuel Cell (Fuel Cell) from MagPower Systems
        Inc. (MagPower) for use with UltraGuards Point of Use
        Ultraviolet Water Purification System and for ancillary uses. IFCT was
        assigned the Option Agreement on October 1, 2002 from a related party.
        The only cost incurred by the related party was a Cnd$2,500 down payment
        for the Option Agreement. A balance owing of Cnd$97,500 is payable and
        400,000 shares of UltraGuard is to be issued to complete the Option Agreement.
        On March 14, 2003, a License Agreement was executed between MagPower and
        IFCT. The terms of the License Agreement included additional rights to
        use the Fuel Cell for ancillary services to power items such as lighting
        and radio. As consideration for the additional rights, IFCT increased
        the option payments to be made to Cnd$100,000 and increased the number
        of common shares of UltraGuard to be issued to 500,000. On March 6, 2003,
        UltraGuard issued 400,000 shares into trust subject to certain criteria.
        On signing of the License Agreement IFCT paid Cnd$5,000 and delivered
        200,000 common shares of UltraGuard to the vendors of MagPower. An additional
        Cnd$5,000 was paid on March 21, 2003 for the payment due on April 1, 2003.
        Commencing on May 1, 2003, Cnd$7,500 was due and unpaid, however delivery
        of additional 100,000 common shares of UltraGuard was made on May 1, 2003.
        The remaining balance is due on the first of each month thereafter until
        MagPower delivers the technical drawings at a rate of Cnd$7,500 per month;
        and Cnd$15,000 per month thereafter until the full amount has been paid.
        Concurrent with the receipt of the technical drawings from the vendor,
        the remaining 200,000 common shares of UltraGuard will be delivered (100,000
        common shares from trust and 100,000 common shares from treasury). The
        payments due from May 1, 2003 monthly through September 30, 2003 amounting
        to Cnd$25,000 were not paid as at December 31, 2003. On February 2, 2004,
        UltraGuard and MagPower amended the agreement to sublicense to MagPower,
        in certain countries in the world, UltraGuards ultraviolet products
        for sale and use by MagPower (or its sublicenses) with MagPowers
        magnesium fuel cell. As well, the February 2, 2004 agreement provided
        for issuance and delivery of the remaining 200,000 common shares (100,000
        common shares from trust and 100,000 common shares from treasury), and
        cancellation by MagPower of the remaining C$88,800 owing by UltraGuard
        and IFCT as a condition of the License Agreement.
      As a condition of the Option Agreement, IFCT was required
        to sell a minimum quantity of 2000 Fuel Cell units in fiscal 2003. The
        drawings and technical information due from MagPower is still incomplete,
        therefore marketing efforts have not concentrated on product sale but
        on product awareness. The license will be amortized on a straight-line
        basis over five years once the option agreement has been completed. Royalties
        of C$25.00 per cell will be paid to MagPower based on number of units
        sold.
      The total consideration paid for the License Agreement,
        as at September 30, 2004 was $83,161, which includes the value of 500,000
        common shares being $74,800.
      During fiscal 2003, due to lack of finances, UltraGuard
        and IFCT discontinued its operation in Europe and closed UG GmbH and will
        concentrate its efforts on the North American market where its UV products
        and fuel cell products will be manufactured through subcontractors and
        will be marketed in North America through the Internet, wholesalers and
        sales representatives. A loss from discontinued operations of $40,957
        was charged to operations. Included in this loss is a write off of an
        intercompany loan between UltraGuard and UG GmbH of $11,230. There were
        no other assets or liabilities included in the loss from discontinued
        operations.
      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.
      In June 2004 the Company commenced with the business
        of vending bottled water using dispensing equipment to be installed at
        gas bars, convenience stores, car washes, etc. The first installation
        was completed on August 12, 2004. During this third quarter the Company
        has provided advertising and direct mailing information within the local
        and will evaluate the revenue receipts to establish a plan for additional
        dispensing systems and whether water dispensing should be a continued
        activity of the company.
|-- | 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6

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|1. | Reverse Acquisition, Nature of Operations and Continuance
        of Business (continued)
      The Company expects that as the magnesium fuel cell
        product becomes available for market at the end of the first quarter in
        year 2005. Marketing will be commenced when the first product delivery
        is assured. The earliest revenue expected from this activity is estimated
        to occur in the second to third quarter of year 2005.
      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 September 30, 2004, the Company has not recognized
        significant revenue, has a working capital deficit of $883,580, and has
        accumulated operating losses of $1,328,250 since inception. The continuation
        of the Company is dependent upon the continuing financial support of creditors
        and stockholders and obtaining short-term and long-term financing, the
        completion of product development and achieving profitability. These conditions
        raise substantial doubt about UltraGuards and IFCTs ability
        to continue as a going concern. These financial statements do not include
        any adjustments that might arise from this uncertainty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|2. | Significant Accounting Policies
      Consolidated financial statements
      These financial statements include the accounts of UltraGuard
        and IFCT (a Nevada Corporation). The operations of IFCTs Austrian
        were discontinued during fiscal 2003. All significant intercompany transactions
        and balances have been eliminated and costs of the closing of UG GmbH
        have been recorded.
      On December 31, 2002 (the acquisition date),
        UltraGuard Water Systems Corp. (UltraGuard) acquired all of
        the outstanding stock of Innovative Fuels Cell Technologies Inc (IFCT).
        For accounting purposes the acquisition was treated as the acquisition
        of UltraGuard by IFCT with IFCT as the accounting acquirer (reverse acquisition).
        As a result, the historical financial statements prior to the acquisition
        date are those of IFCT from September 30, 2002 (date of inception of IFCT).
        See Note 3 for Operations of UltraGuard prior to the reverse acquisition.
      Cash and cash equivalents
      Cash and cash equivalents include cash on hand, in banks
        and all highly liquid investments with maturity of three months or less
        when purchased. Cash equivalents are stated at cost, which approximates
        market.
      Property and equipment
      Property and equipment are recorded at cost. Depreciation
        is computed on a straight-line method using an estimated useful life of
        five years.
      Revenue recognition
      Product sales are recognized at the time goods are shipped
        by customers. System and project revenue are recognized utilizing the
        percentage of completion method based upon materials installed and labour
        costs incurred. All related costs including any contract revisions or
        changes are recognized in the period in which they occur.
      UltraGuard recognizes revenue in accordance with Securities
        and Exchange Commission Staff Accounting Bulletin No. 104 (SAB 104),
        Revenue Recognition. Revenue will be recognized only when
        the price is fixed or determinable, persuasive evidence of an arrangement
        exists, the service is performed, and collectibility is reasonably assured.
      Estimates and assumptions
      The preparation of financial statements in conformity
        with generally accepted accounting principles used in the United States
        requires management to make estimates and assumptions that affect the
        reported amounts of assets and liabilities in the financial statements
        and accompanying notes. Actual results could differ from these estimates.
      Foreign currency
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| | i)  | Translation of foreign currency transactions and balances:
      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.                                                                                  
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ii) | Translation of foreign subsidiary balances:
      Monetary balance sheet items are translated into US
        dollars at the rate of exchange on the balance sheet date. Non-monetary
        balance sheet items are translated into US dollars at the rate of exchange
        prevailing on the transaction dates. The foreign subsidiarys operating
        results are translated into US dollars using the average exchange rate
        for the year with any translation gain or loss and are included separately
        in operations.

7

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|2. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|   | Basic and Diluted Net Income (Loss) Per Share
      UltraGuard computes net income (loss) per share in accordance
        with SFAS No. 128, "Earnings per Share". This statement requires presentation
        of both basic and diluted earnings per share (EPS) on the face of the
        income statement. Basic EPS is computed by dividing net income (loss)
        available to common shareholders (numerator) by the weighted average number
        of common shares outstanding (denominator) during the period. Diluted
        EPS gives
      effect to all dilutive potential common shares outstanding
        during the period including stock options, using the treasury stock method,
        and convertible preferred stock, using the if-converted method. In computing
        Diluted EPS, the average stock price for the period is used in determining
        the number of shares assumed to be purchased from the exercise of stock
        options or warrants. Diluted EPS excludes all dilutive potential common
        shares if their effect is anti dilutive.
      Accounting for Stock-Based Compensation
      UltraGuard accounts for stock based compensation in
        accordance with SFAS No. 123, Accounting for Stock-Based Compensation.
        This statement requires that stock awards granted subsequent to January
        1, 1995, be recognized as compensation expense based on their fair value
        at the date of grant. Alternatively, a company may account for granted
        stock awards under Accounting Principles Board Opinion (APB) No. 25, Accounting
        for Stock Issued to Employees, and disclose pro forma income amounts
        which would have resulted from recognizing such awards at their fair value.
        UltraGuard has elected to account for stock-based compensation for employees
        under APB No. 25 and make the required pro forma disclosures for compensation
        expense in accordance with SFAS No. 123. UltraGuard accounts for stock
        issued for services to non-employees in accordance with SFAS No. 123.
        Compensation expense is based on the fair market value of the stock award
        or fair market value of the goods and services received whichever is more
        reliably measurable.
      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 September 30, 2004,
        UltraGuard has no items that represent comprehensive loss and, therefore,
        has not included a schedule of comprehensive loss in the financial statements.
      Long-Lived Assets
      SFAS No. 144, Accounting for the Impairment or
        Disposal of Long-Lived Assets establishes a single accounting model
        for long-lived assets to be disposed of by sale including discontinued
        operations. SFAS 144 requires that these long-lived assets be measured
        at the lower of the carrying amount or fair value less cost to sell, whether
        reported in continuing operations or discontinued operations.
      Financial Instruments
      UltraGuards financial instruments consist of cash,
        prepaid expenses, accounts payable, accrued liabilities and advances from
        related and non-related parties. Unless otherwise noted, it is managements
        opinion that UltraGuard is not exposed to significant interest, currency
        or credit risks arising from these financial instruments. The fair value
        of cash, accounts payable and accrued liabilities, advances from related
        parties and other advances approximates their carrying value due to the
        immediate or short-term maturity of these financial instruments.
      Concentration of Credit Risk
      Financial instruments that potentially subject UltraGuard
        to credit risk consist principally of cash. Cash was deposited with a
        high credit quality institution.
      Recent Accounting Pronouncements
      In December 2003, the United States Securities and Exchange
        Commission issued Staff Accounting Bulletin No. 104, "Revenue Recognition"
        (SAB 104), which supersedes SAB 101, "Revenue Recognition in Financial
        Statements." The primary purpose of SAB 104 is to rescind accounting guidance
        contained in SAB 101 related to multiple element revenue arrangements,
        which was superseded as a result of the issuance of EITF 00-21, "Accounting
        for Revenue Arrangements with Multiple Deliverables." While the wording
        of SAB 104 has changed to reflect the issuance of EITF 00-21, the revenue
        recognition principles of SAB 101 remain largely unchanged by the issuance
        of SAB 104. The adoption of SAB 104 did not have a material impact on
        UltraGuard's financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2. | Significant Accounting Policies
      Loss Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

8

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|2. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | UltraGuard estimates a loss from a loss contingency
        in accordance with Financial Accounting Standards (SFAS No.
        5 Accounting for Contingencies. UltraGuard accrues the loss
        by a charge to income when there is information available that it is probable
        that an asset has been impaired or a liability has been incurred and the
        amount of the loss can be reasonably estimated.
      Goodwill and Other Intangibles
      In July 2001, the Financial Accounting Standards Board
        ("FASB") issued statement of Financial Accounting Standards No. 142 ("SFAS
        142"), "Goodwill and Other Intangible Assets," which is effective for
        fiscal years beginning after December 15, 2001. SFAS 142 prohibits the
        amortization of goodwill and intangible assets with indefinite useful
        lives but requires that these assets be reviewed for impairment at least
        annually or on an interim basis if an event occurs or circumstances change
        that could indicate that their value has diminished or been impaired.
        Other intangible assets will continue to be amortized over their estimated
        useful lives. In addition, the standard includes provisions for the reclassification
        of certain existing recognized intangibles as goodwill, reassessment of
        the useful lives of existing recognized intangibles, reclassification
        of certain intangibles out of previously reported goodwill and the identification
        of reporting units for purposes of assessing potential future impairments
        of goodwill.
      Interim Financial Statements
      These interim unaudited financial statements have been
        prepared on the same basis as the annual 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3. | Operations of UltraGuard Prior to Reverse Acquisition with IFCT
      Up to February 2002 UltraGuard focused its activities
        on the manufacturing and marketing of its Ultra Guard® ultra violet
        based patented water treatment system through its wholly owned Canadian
        subsidiary, UV Systems Technology Inc. (UVS). These products
        and systems were sold primarily for municipal waste disinfection, treatment.
      During the period from acquiring UVS in August 1996
        to February 2002, operating activities had not generated profitability.
      On February 5, 2002, UltraGuard reached an agreement
        with the Clearwater Group (Clearwater) to assume the UVS manufacturing
        responsibilities of any new Ultra Guard® water treatment systems to
        be supplied to UVSs strategic alliance partner, US Filter. Clearwater
        would also provide warranty services on any previously sold Ultra Guard®
        water treatment systems.
      During fiscal 2002, UltraGuard commenced designing and
        developing the home use Point of Use and Point of Entry UV disinfection
        systems for drinking water. Point of Use systems are installed under a
        sink; Point of Entry units are installed at the water supply entry into
        the building. This UV product may include dual filtration cartridges in
        advance of the UV system.
      At a special meeting held on November 15, 2002 UltraGuard
        reorganized. Its shares were consolidated on a 1:50 basis; the authorized
        capital increased to 100,000,000 shares and the name was changed to UltraGuard.
        In December 2002, UltraGuard divested itself of the UVS operations while
        retaining any royalty or other revenues that may be received from the
        sale or use of the UVS patented Ultra Guard® technology.
      The debt load being carried by UltraGuard as a result
        of the UVS operations were impairing UltraGuards ability to obtain
        investment funds or make any other financing arrangements. On December
        30, 2002, the Company disposed of its 100% owned asset, UVS. Under the
        terms of these agreements, UltraGuard sold 100% of the shares of UVS to
        659999 BC Ltd, a Canadian private company, in exchange for the transfer
        and assignment to UltraGuard of all outstanding and future royalties from
        Clearwater Technologies Inc (Clearwater) and any other rights
        UVS may have under the License Agreement, which covered the UltraGuard®
        patents and technology. UVS entered into this Licence Agreement with Clearwater
        on February 5, 2002. No value was placed on this agreement. Full details
        of these Agreements between UVS and 659999 BC Ltd were filed with the
        Securities and Exchange Commission on Form 8-K dated January 15, 2003.
        Clearwater has failed to pay funds due under the various agreements, which
        they signed and had refused to pay any of the required payments. A writ
        of summons was issued against Clearwater in July 2003 in specific amounts
        totalling C$774,366 plus additional amounts for failure to perform, demand
        for return of leased equipment and cancellation of the Joint Venture Agreements.
        Clearwater has filed a defence against all claims. UltraGuard is continuing
        to pursue this action.
      See Note 1 for IFCTs reverse acquisition of UltraGuard
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4. | Property and Equipment
      Property and equipment is stated at cost less accumulated depreciation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

9

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| |                        |       |              | September 30, | December 31,
| | ---------------------- | ----- | ------------ | ------------- | ------------
| |                        |       |              | 2004          | 2003        
| |                        |       | Accumulated  | Net Book      | Net Book    
| |                        | Cost  | Depreciation | Value         | Value       
| |                        | $     | $            | $             | $           
| |                        |       |              | (unaudited)   | (audited)   
| |                        |       |              |               |             
| | Property and equipment | 5,533 | 5,376        | 157           | 204         

|5. | Loans Payable
|-- | -------------
|   |              

| | a) | Loans payable, including interest, in the 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 UltraGuards President, Ken Fielding, to secure the loans,
        was called and taken by the note holder. To compensate West Peak for its
        losses, UltraGuard issued 1,556,000 common shares to West Peak in full
        payment for their losses amounting to $130,711. UltraGuard agreed with
        Ken Fielding to set an unsecured loan payable in the amount of $130,712
        with interest at 6% per annum as compensation for his losses. This amount
        was transferred from loans payable to amounts owing to related parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | b) | Loans payable, totalling $125,000 plus accrued interest of $30,000 was
      renegotiated in December 2002 as a non-interest bearing loan amount set
      at $155,000. Payments were to be made, totalling $80,000, commencing February
      15, 2003 with final payment due June 16, 2003, with the remaining $75,000
      to be converted into common shares at a conversion price of 20% below the
      average bid price between December 7, 2002 and March 7, 2003, to be issued
      March 10, 2003. The payment due February 15, 2003 was not made. No payment
      was made on March 15, 2003 or subsequently. On April 25, 2003, Chelverton
      Fund Limited filed a suit in the Supreme Court of British Columbia against
      UltraGuard for non-payment of debt in the amount of $155,000 and on May
      2, 2003, UltraGuard was served with a writ of summons. UltraGuard entered
      an appearance and filed a defense against this claim and attempted to negotiate
      a settlement. Chelverton filed additional information to support their claim
      and UltraGuard responded with a no defense position and judgment
      was issued in the amount of $183,944 (C$234,642) including interest and
      legal costs. Additional interest has been accruing which has increased the
      amount to $186,933. On April 5, 2004 UltraGuard appeared in Supreme Court
      to provide to Chelverton and the court, specific information pertaining
      to UltraGuards assets and its ability to pay the judgment including
      interest. The hearing was adjourned; UltraGuard was required to provide
      additional detailed financial information, which it has now provided. No
      further activity has occurred during this quarter.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | c) | During fiscal 2003, the Company received cash loans of $61,549. As at
      September 30, 2004 this amount plus accrued interest of $9,922 were in default.
      These loans are unsecured and bear interest at 10% per annum. These loans
      were repayable on demand or when financing in excess of $250,000 was obtained
      by UltraGuard but not later than August 19, 2003. The Company has not reached
      a settlement agreement with the lender.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | d) | During fiscal 2003 Elco Bank & Trust Company Limited loaned $45,174.
      During the period ended September 30, 2004 additional loans amounting to
      $47,000 were received bringing the total amount owing to $98,651. The loans
      are unsecured and bear interest at 10% per annum and are due on December
      31, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | e) | During fiscal 2003 the Company received loans totalling $14,780. During
      the period ended September 30, 2004 additional loans of $2,000 were received
      bringing the total amount owing to $16,103, which are due on demand, unsecured,
      and non-interest bearing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

|6. | Amounts Owing to Related Parties
      These amounts, totalling $290,101, represent unpaid
        wages and consulting for two officer/directors in the amount of $149,953,
        which are due on demand, unsecured and non-interest bearing and include
        an amount of $130,712 plus accrued interest of $9,436 due to Ken Fielding
        as a result of actions taken discussed in Note 5. Imputed interest on
        previous non-interest bearing related party loans totalled $31,928 which
        was recorded as donated capital, calculated at 10% per annum. In fiscal
        2003, two officers/directors were issued 2,400,000 shares of common restricted
        stock of UltraGuard at $0.0338 per share totalling $81,120 for partial
        payment of wages.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|7. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| | (a) | Private Placement
      On September 25, 2003, pursuant to a private placement, UltraGuard issued
        1,100,000 common shares at
| | --- | ------------------------------------------------------------------------------------------------------------------------------------

10

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| |     | $.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 UltraGuard. Subsequent to December 31, 2003, UltraGuard agreed to extend
        the note to Octoberr 29, 2004. Subsequent to this quarter the Company
        extended the note until November 29, 2004 and reduced the amount to $11,000
        to reflect the current market value of the shares. (Note 10)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (b) | Warrants outstanding as at December 31, 2003:
      On October 3, 2000, 3,000,000 Class C warrants were
        issued pursuant to a Strategic Alliance and other agreements with US Filters
        Wallace and Tiernan Products Group, a wholly owned subsidiary of U.S.
        Filter (US Filter) to market and sell under license UltraGuards
        UltraGuard® ultraviolet disinfection technology for water and wastewater
        applications. The value of the 3,000,000 Class C Warrants issued totalled
        $656,700. In June 2001, UltraGuard entered into a funding agreement with
        US Filter/Wallace and Tiernan Products Group. As a term of the funding
        agreement, the warrant exercise price on the above 3,000,000 warrants
        was reduced to $0.24 per share. The expiry date of these warrants was
        changed to October 3, 2010. In addition, 5,105,000 Class C warrants were
        issued with an exercise price of $0.24 per share and an expiry date of
        October 3, 2010. These additional warrants were issued because of certain
        funding criteria being met. The value of the 5,105,000 Class C warrants
        issued totalled $478,000. An annual amount of $113,470 was being charged
        to operations prior to the reverse acquisition. As a result of the 1:50
        Reverse Split, the total number of C warrants were reduced to 162,100
        with an exercise price of $12.00 per share. As a result of the reverse
        acquisition and the 1:50 Reverse Split, these warrants were considered
        to have no value to the reorganized operation given the increase in exercise
        price significantly above fair value of the common shares and the new
        direction of the Company. As a result, no amount was charged to operations
        during fiscal 2003. On August 27, 2003 US Filter terminated the Strategic
        Alliance Agreement for defaults under the terms of the Agreement including
        failure of Clearwater to enter into a transfer agreement.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (d) | Incentive Plan
      On November 26, 2003, UltraGuard adopted The Incentive
        Plan that was registered with the Securities Exchange Commission on December
        1, 2003 on Form S-8. Under the plan, UltraGuard may issue 5,000,000 shares
        of common stock or grant options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (e) | 2003 Employee Benefit Plan
      On March 28, 2003, the Company filed a Form S8 Registration
        Statement with the U.S. Securities and Exchange Commission to register
        2,400,000 shares of common stock pursuant to the Companys 2003 Employee
        Benefit Plan (2003 Plan). This 2003 Plan is for persons employed
        or associated with the Company, including without limitation any employee,
        director, general partner, officer, attorney, accountant, consultant or
        advisor, is intended to advance the best interests of the Company by providing
        additional incentive to those persons who have a substantial responsibility
        for its management, affairs, and growth by increasing their proprietary
        interest in the success of the Company, thereby encouraging them to maintain
        their relationship with the Company. The determination of those eligible
        to receive options under the 2003 Plan, and the amount, price, type, timing
        and vesting of each Stock option and the terms and conditions shall rest
        at the sole discretion of the Companys Board of Directors, subject
        to the provisions of the 2003 Plan. This plan will terminate on the earliest
        of 5 years or date the last shares issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

| |                                | Shares       |  | Weighted Average |  | Weighted Average  | 
| | ------------------------------ | ------------ |  | ---------------- |  | ----------------- | 
| |                                | Under Option |  | Option Price     |  | Remaining Life of | 
| |                                | #            |  | $                |  | Options (Months)  | 
| | December 31, 2003 (audited)    | 125,000      |  | .13              |  | 32                | 
| | Granted                        |             |  |                 |  |                  | 
| | Expired                        |             |  |                 |  |                  | 
| | Cancelled                      |             |  |                 |  |                  | 
| | September 30, 2004 (unaudited) | 125,000      |  | .13              |  | 23                | 

11

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

| | (d) | 2003 Employee Benefit Plan (continued)
      The fair value of the employees purchase rights
        under SFAS 123 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.
      These options were granted for services provided, or
        to be provided, to UltraGuard. 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.
        UltraGuard 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 UltraGuard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.
      If compensation expense had been determined pursuant
        to SFAS 123, UltraGuards net loss and net loss per share would have
        been as disclosed below.
      During fiscal 2003, UltraGuard 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. The pro forma information
        is as follows:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                                     | As of         |   | As of         |  
| | ------------------------------------------------------------------- | ------------- | - | ------------- | -
| |                                                                     | September 30, |   | September 30, |  
| |                                                                     | 2004          |   | 2003          |  
| |                                                                     | $             |   | $             |  
| |                                                                     | (unaudited)   |   | (unaudited)   |  
| |                                                                     |               |   |               |  
| | Net loss                                                            |               |   |               |  
| | As reported                                                         | (588,854      | ) | (492,555      | )
| | Stock Based Compensation- as reported                               |              |   |               |  
| | Stock Based Compensation 
      determined under fair market value | (2,610        | ) | (1,160        | )
| | Pro forma                                                           | (591,464      | ) | (493,715      | )
| |                                                                     |               |   |               |  
| | Basic net loss per share                                            |               |   |               |  
| | As reported                                                         | (.02          | ) | (.04          | )
| | Pro forma                                                           | (.02          | ) | (.04          | )

| | (f) | Independent Contractor/Consulting Agreement Plan
      On June 11, 2003 UltraGuard registered and issued 1,500,000
        shares on Form S-8 to three consultants for product marketing consulting
        expenses.                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (g) | Long-Term Equity Incentive Plan
      UltraGuard has allotted 100,000 shares pursuant to a
        Long-Term Equity Incentive Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (h) | Legal Services Plan
      On March 24, 2003 UltraGuard filed a Form S-8 POS with
        the SEC, which cancelled the Plan and all remaining shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (i) | Valuation of Common Stock Issued for Services and Assets
      The Company applies EITF 96-18 Accounting for
        Equity Instruments that are Issued to Other Than Employers for Acquiring,
        or in Conjunction with Selling, Goods or Services, in accounting
        for shares issued to consultants. The value of these shares were based
        on calculating the fair market value of the stock determined by the stock
        price of the underlying stock.
      During the period ending September 30, 2004 UltraGuard
        issued the following common shares for asset acquisition and consulting
        services.

12

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

| |     |                                                                     
| | --- | --------------------------------------------------------------------
| | (i) | Valuation of Common Stock Issued for Services and Assets (continued)

| |                                            |           |  | Weighted    |            | 
| | ------------------------------------------ | --------- |  | ----------- | ---------- | 
| |                                            |           |  | Average     |            | 
| |                                            |           |  | Fair Market |            | 
| |                                            | Shares    |  | Value       | Total      | 
| |                                            | Issued    |  | Per Share   | Fair Value | 
| |                                            | #         |  | $           | $          | 
| | Consulting for services to be provided     |           |  |             |            | 
| | Pursuant to the incentive plan (Note 7(c)) | 775,000   |  | 0.10        | 77,500     | 
| | Pursuant to the incentive plan (Note 7(c)) | 2,000,000 |  | 0.03        | 60,000     | 
| | Legal                                      |           |  |             |            | 
| | Pursuant to the incentive plan (Note 7(c)) | 200,000   |  | 0.07        | 14,000     | 
| | For Asset Acquisition                      |           |  |             |            | 
| | Not pursuant to any plan                   | 100,000   |  | 0.036       | 3,600      | 
| |                                            | 3,075,000 |  | .05         | 169,100    | 

| |  | The terms of some of the agreements for future services
        are in excess of one year and have various expiry dates. As a result $247,250
        has been charged to operations as consulting and legal expenses and the
        balance of $69,792 has been charged to shareholders equity as deferred
        compensation.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| |         |         | Nine Months Ended  |         |  |         | Nine Months Ended  |        
| | ------- | ------- | ------------------ | ------- |  | ------- | ------------------ | -------
| |         |         | September 30, 2004 |         |  |         | September 30, 2003 |        
| |         |         | (unaudited)        |         |  |         | (unaudited)        |        
| |         | United  |                    |         |  | United  |                    |        
| |         | States  | Europe             | Total   |  | States  | Europe             | Total  
| |         | $       | $                  | $       |  | $       | $                  | $      
| | Revenue | 15,869  |                   | 15,869  |  | 32,669  |                   | 32,669 
| | Expense | 604,723 |                   | 604,723 |  | 496,690 | 28,534             | 525,224
| | Loss    | 588,854 |                   | 588,854 |  | 464,021 | 28,534             | 492,555

| |                          | As of              |        | As of             
| | ------------------------ | ------------------ | ------ | ------------------
| |                          | September 30, 2004 |        | September 30, 2003
| |                          | (unaudited)        |        | (unaudited)       
| |                          | United             |        |                   
| |                          | States             | Europe | Total             
| |                          | $                  | $      | $                 
| | Identifiable assets      | 36,740             |       | 36,740            
| | Manufacturing technology | 83,161             |       | 83,161            
| | Total assets             | 119,901            |       | 119,901           

|9. | Legal Proceedings/Contingency Accrual
|-- | -------------------------------------
|   |                                      

| | (a) | On October 20, 1998 a suit was filed in the Supreme
        Court of British Columbia by Thomas OFlynn against UltraGuard, Kenneth
        Fielding (UltraGuard's President and Director), and Charles P. Nield (a
        former Director and Vice President of UltraGuard), OFlynn alleges
        that in April of 1996, he purchased common shares of UltraGuard 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 common shares of UltraGuard based on the representation
        that the shares would be free trading within 40 days of the common shares
        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.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

|9. | Legal Proceedings/Contingency Accrual (continued)
      UltraGuard filed an answer denying the claims and will
        continue to actively defend the suit. The suit has
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

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| |     | remained inactive since early 1999. There has been
        no loss provision accrued pursuant to this action against UltraGuard as
        the probability of incurring a material loss is remote.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (b) | On April 25, 2003, Chelverton Fund Limited filed a suit in the Supreme
      Court of British Columbia against UltraGuard for non-payment of debt in
      the amount of $155,000. UltraGuard 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 UltraGuard responded
      with a no defines position. Judgment was issued in the amount
      of $183,944 (C$234,642) including interest and legal costs. On April 5,
      2004 the Company appeared in the Supreme Court of British Columbia to provide
      to Chelverton and the court, specific information pertaining to the Companys
      assets and its ability to pay the judgment including interest. The hearing
      was adjourned with a requirement that UltraGuard provide additional detailed
      financial information. This information has now been provided. No further
      action has occurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (c) | 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 UltraGuards by-laws. UltraGuard
        refused to accept the consent resolution or by-laws as in the opinion
        of UltraGuard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, UltraGuard
        elected two additional directors; Edward White and Erin Strench to UltraGuards
        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 UltraGuard and its five directors prohibiting UltraGuard,
        from among other things, issuing stock, transferring assets, changing
        management and other actions that would affect the status quo of
        UltraGuard. 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 UltraGuards
        counsel. The plaintiff responded on July 18, 2003 and UltraGuards
        counsel filed the final brief on July 25, 2003. The Judge has not made
        a ruling on the TRO. UltraGuards counsel has responded to the various
        other suits filed against UltraGuard and its directors. Counsel for UltraGuard
        was successful in moving these actions from Nevada State jurisdiction
        to federal jurisdiction. In March 2004 UltraGuards legal counsel
        filed to withdraw from the action as a result of non-payment of legal
        fees. The court approved the withdrawal of the lawyer 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. During this quarter the
        Company and the Plaintiff requested and received an extension to August
        26, 2004 to settle this matter or file the pre-trial order, which upon
        approval, the Court will set down for trial. On October 28, 2004 we jointly
        filed a pre-trial notice and on November 15, 2004 in a conference call
        with the sitting Judge a trial date was set for February 22, 2005. In
        the interim, the parties to this dispute have reached a settlement on
        all matters. Agreements are being drafted. No loss provision has been
        accrued, as the probability of incurring a material loss is remote.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (d) | UltraGuard has made a provision for a loss of $27,000
        in a lawsuit made by a former employee for wrongful dismissal. This amount
        represents the total probable loss of the lawsuit and has been fully accrued.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

|10. | Subsequent Events
|--- | -----------------
|    |                  

| | (a) | See notes 5(a) and 9(c) for ongoing legal proceedings.                 
| | --- | -----------------------------------------------------------------------
| |     |                                                                        
| | (b) | See note 7(a) for revaluation of notes receivable and payment extension
| |     |                                                                        

|11. | Restatements
      It was determined that the acquisition of Innovative
        Fuel Cell Technologies, Inc. ("IFCT") was a reverse acquisition of UltraGuard
        instead of an acquisition of IFCT by UltraGuard as previously reported
        and the Class C warrants were considered to have no value
        and thus annual charges of $113,470 were terminated as at December 31,
        2002. The shareholders of IFCT gained control of UltraGuard on December
        31, 2002. Certain disclosures and financial statement amounts have been
        restated as of December 31, 2002 and 2003. The December 31, 2002 operating
        results are now those of IFCT from September 30, 2002 (Date of Inception)
        to December 31, 2002. For the year ended December 31, 2002 net loss has
        been restated to decrease the loss from $657,617 to $12,292 and net loss
        per share has been restated to decrease the loss per share from $0.06
        per share to nil. For the year ended December 31, 2003 net loss has been
        restated to decrease the loss from $840,573 to $727,102 and net loss per
        share remained unchanged at $0.05 per share. The balance sheets as at
        December 31, 2002 and 2003 were restated to remove $1,025,291 of capitalized
        manufacturing technology and the stockholders' equity section was revised
        to eliminate the stockholders' equity of UltraGuard. Previously reported
        stockholders' equity as at December 31, 2002 of $453,335 has been reduced
        by $1,025,291 to a stockholders' deficit of $571,956 and the previously
        reported stockholders' equity as at December 31, 2003 of $407,878 has
        been reduced by $1,025,291 to a stockholders' deficit of $617,413. There
        was
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

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|11. | Restatements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | no change in stockholders equity as a result
        of the reduced valuation of the warrants. The cash flow statement for
        the fiscal year ended December 31, 2002 was restated accordingly and only
        certain disclosures were made for the year ended December 31, 2003. Since
        IFCT was in the development stage these financial statements were revised
        to include certain required disclosures for Development Stage Enterprises
        pursuant to Statement of Financial Accounting Standard ("SFAS") No. 7
        including accumulated from inception disclosures for the statement of
        operations and cash flows and stockholders' equity. Notes 1, 3 and 4 have
        been significantly revised to reflect the reverse acquisition.

15

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
  OF OPERATIONS AND FINANCIAL CONDITIONS

CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS

This report contains forward-looking statements within the
  meaning of Section 27A of the Securities Act and Section 21E of the Securities
  Exchange Act. Forward-looking statements deal with our current plans, intentions,
  beliefs and expectations and are statements of future economic performance.
  Statements containing terms like "believes", "does not believe", "plans", "expects",
  "intends", "estimates", "anticipates", and other phrases of similar meaning
  are considered to imply uncertainty and are forward-looking statements.

Forward-looking statements involve known and unknown risks
  and uncertainties that may cause our actual results in future periods to differ
  materially from what is currently anticipated. We make cautionary statements
  throughout this report and the documents we have incorporated by reference,
  including those stated under the heading "Risk Factors". You should read these
  cautionary statements as being applicable to all related forward-looking statements
  wherever they appear in this report, the materials referred to in this report,
  and the materials incorporated by reference into this report.

We cannot guarantee our future results, levels of activity,
  performance or achievements. Neither we nor any other person assumes responsibility
  for the accuracy and completeness of these forward-looking statements. We are
  under no duty to update any of the forward-looking statements after the date
  of this report.

Where we say "we", "us", "our", or "the Company", we mean
  UltraGuard Water Systems Corp and its subsidiaries.

MANAGEMENT DISCUSSION-OVERVIEW

Vancouver-based UltraGuard Water System Corp (UltraGuard)
  or (Company), (formerly Service Systems International, Ltd.), through
  its previously owned subsidiary UV Systems Technology, Inc. ("UVS") are committed
  to a legacy of a healthy planet for future generations through the development
  and commercialization of superior, cost-effective, environmentally friendly,
  ultraviolet-based water treatment products and systems.

The Company was incorporated in Nevada in August 1990 under
  the name Service Systems International Ltd and was inactive until eight Canadian
  and European individuals acquired it in July 1995.

Our offices are located at 914 Sherwood Avenue, Coquitlam
  British Columbia, Canada, V3K 1A6, our telephone number is (604) 540-8282 and
  our Internet website address is www.ultraguard.com.
  References in this document to we, us, our, and the company include Innovative
  Fuel Cell Technologies Inc and UltraGuard Water Systems GmbH, unless the context
  otherwise requires. ULTRA GUARDR and "WAVY LINES & DESIGNS" logo
  are our registered trademarks. Any other trademarks or trade names referred
  to in this document are the property of their respective owners.

For the period up to February 2002 we were the designer, manufacturer
  and marketer of state of the art ultraviolet disinfection systems for wastewater
  disinfection with additional application possibilities in potable water. During
  fiscal 2002 the Companys changed its business focus away from only providing
  ultraviolet equipment for wastewater disinfection to the treatment of water
  for drinking and other uses, coupled with ultraviolet and filtration.

In fiscal 2002 our Company discontinued manufacturing of the
  wastewater products and entered into various agreements to change it business
  focus. The wastewater business was licensed to Clearwater Industries Ltd.

The emphasis of our business remained in ultraviolet disinfection,
  however we now target drinking water with systems developed for low-flow drinking
  water application. The products currently developed and under development are
  used to disinfect and filter water. The systems identified are, Point of Entry
  (POE) purification system, which is installed where the water enters the home,
  and Point of Use (POU) purification system, which is located at the faucet

16

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During 2002, the Company was unable 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 for the disposition of UVS and the removal of the UVS
  debt and receivable carried on the Companys financial statements. Manufacturing
  and marketing of the UVS technology had been discontinued by the Company and
  was licensed to Clearwater Industries in February 2002. The purchaser of UVS
  was 659999 BC Ltd. 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.
  Full details of these agreements are available on Form 8K filed with the SEC
  on January 15, 2003.

In December 2002 we added an additional business focus; the
  manufacturing and marketing of a primary, alternative and emergency power generating
  Magnesium-Air power cell. Through a reverse acquisition concluded on December
  31, 2002 UltraGuard Water Systems Corp. (UltraGuard) acquired all
  of the outstanding stock of Innovative Fuels Cell Technologies Inc (IFCT).
  IFCT is the holder of an option to purchase worldwide manufacturing and marketing
  rights to a 12-volt Magnesium-Air Semi Fuel Cell from MagPower Systems Inc.
  for use with UltraGuards Point of Use and Point of Entry Ultraviolet Water
  Purification System, and for ancillary uses such as lighting, radio and other
  low energy electrical needs.

On March 14, 2003 IFCT exercised the license for the Fuel
  Cell..

OUR PRODUCTS

Point of Use and Point of Entry

Our Point of Use (POU) and Point of Entry (POE) ultraviolet
  purification systems with or without filtration are used for the drinking water
  and water for human contact. The POE is attached to the water supply line at
  its entry point into a building; the POU is attached under a sink directly in
  advance of the faucet. These products will meet the needs and requirements of
  the population of the North American marketplace. In Europe our Austrian company
  UltraGuard Water Systems GmbH is developing a POU product for the specific and
  demanding requirements of the European market.

Wastewater Systems

The UV disinfection system is sold under its registered trademark,
  UltraGuard® SLR System. The UltraGuard® system
  incorporates: 1) low-pressure, high intensity, high efficiency UV lamps, 2)
  infinitely variable ultraviolet lamp controllers, 3) a patented high-performance
  reactor module, 4) patented flow-balanced weirs, and 5) an automatic quartz
  sheath cleaning system. Currently this product is primarily sold for municipal
  wastewater disinfection. However, our UV technology can be applied to many treatment
  needs. These include industrial process water disinfection, potable water disinfection,
  and other fluid and air disinfection. UV disinfection systems have none of the
  safety issues with which chlorination systems must deal. UV has the advantage
  of being relatively simple to operate and maintain. UV disinfection is a physical,
  rather than chemical process, using UV radiation to permeate bacterial and viral
  cell walls and prevent the cells from replicating.

On February 5, 2002 we signed an agreement with Clearwater
  Technologies Inc wherein Clearwater agreed to assume the manufacturing for new
  UV projects. This agreement included Clearwaters requirements to supply
  these products to our Strategic Alliance partner, USFilter and to adhere to
  the terms and conditions contained within the USFilter Strategic Alliance Agreement.
  As well, Clearwater was required to provide warranty services on previously
  delivered UV products. The Company was to be paid a royalty on sales, the percentage
  scaled upward as the total sale volume increases. Clearwater failed to live
  up to its commitment, failed to pay the Company funds owed and generally failed
  to perform its commitments under the USFilter Strategic Alliance Agreement.

On July 23, 2003 UVS issued writ against Clearwater for recovery
  of amounts owing.

In August 2003 USFilter terminated the Alliance Agreement (and
  associated agreements).

Magnesium-Air Fuel Cells

In December 2002 we acquired the rights to a magnesium-air
  fuel cell system developed by MagPower Systems Inc. The magnesium air fuel cells
  will be manufactured to the specifications and technical data to

17

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be furnished by the developer MagPower Systems Inc. The magnesium air fuel cells provide greater safety and cost savings over the better-known hydrogen fuel cells. Both cell produce electricity through an electrochemical reaction but magnesium-based
fuel cells are more environmentally friendly, easier to recycle, more versatile and more efficient because they are simpler and safer.

Magnesium-Air Fuel Cells are cleaner; they support the global
  push for a sustainable environment. They are easily recycled, clean and consume
  no fossil fuels, produce no toxic emissions, thus reducing harmful greenhouse
  effects. To recharge the cell, you basically remove the spent magnesium core,
  replace it with a new core and add salt or seawater electrolyte.

Magnesium-Air Fuel Cells are safer; the simple magnesium anode
  and natural electrolyte make this cell less combustible than a hydrogen fuel
  cell. Unlike hydrogen fuel cells, which use pure hydrogen, with magnesium-based
  fuel cells, no safety sealed fuel storage is required, its fuel can be magnesium
  or magnesium-alloy. No special safety permits are required for transportation
  by plane. The magnesium-based fuel cell has an indefinite shelf life because
  the electrolyte can be removed before storing the cell. When power is needed,
  the electrolyte is poured back into the cell. Electrolyte in a non-magnesium
  fuel cell, power generator or battery cannot be removed, stored and reused by
  the consumer. This sustainability provides a reliable source of power for emergency
  situations.

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.

The magnesium air fuel cell will be packaged with the UV POU
  and POE purification systems to provide a permanent or portable purification
  system for either temporary service application, emergency stand-by or for remote
  dwellings or villages where electrical power is unavailable.

During 2004, MagPower has signed licensing rights in Australia
  and China for the Fuel Cell, has completed its prototype development and has
  leased manufacturing facilities in British Columbia, Canada for the manufacturing
  of the Fuel Cell. Production units are scheduled to be available in first quarter
  of 2005. MagPower's progress will be closely monitored. As soon as product is
  availability the Company can seriously market its point of use UV system with
  the Fuel cell.

As a result of the reverse takeover of Innovative Fuel Cell
  Technologies Inc on December 31, 2003, the Companys status changed to
  that of a development stage company. Therefore, consolidated balance sheets
  of UltraGuard Water Systems Corp and the related consolidated statements of
  operations and cash flows and stockholders equity, include operations
  for the period from September 30, 2002 (Date of Inception) to September 30,
  2004.As a development stage company, we have generated total revenue to September
  30, 2004 of $48,538. This amount was received for royalty and UV component sales,
  unrelated to the fuel cell acquisition.

Drinking Water Dispensers

During the quarter ended June 30, 2004, the Company commenced
  business in the bottled water industry sector. Working with The Water Clinic,
  a 20 year old company located in Winnipeg, Manitoba, Canada, the Company has
  purchased and installed its first bottled water-dispensing unit, the AquaPure
  system. The AquaPure system dispenses pure and safe drinking water, treated
  by reverse osmosis and disinfected by ultraviolet. The unit is coin operated
  and configured to refill 4.9 -gallon water bottles. The AquaPure system will
  be leased to and placed in convenience stores, gas bars, car washes, and other
  location, which offer ready access for the public. Revenues from the sales are
  split between the Company and the Leasor; 70% for the Company, 30% to the Leasor.
  During the quarter-ended September 30, 2004 we continued to test market at the
  first installation site. Using direct mailing marketing and local newspaper
  advertising, we contacted households in the immediate area of the installation,
  providing discounted pricing and free refills. To date results have been running
  at about 50% of expected sales. The program will continue until the end of December
  2004 after which a decision will be taken on whether to go forward with additional
  units or change our approach to the market. Assuming the program generates reasonable
  revenues, the Company will sign up other locations that have approached the
  Company for AquaPure system leases.

18

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eBay Marketing

In June 2004, the Company instituted a marketing program for
  its filtration products including point of use reverse osmosis units and various
  other water treatment systems and components. Using eBay Canada (eBay) as the
  marketing venue, sales have occurred and are slowly increasing. eBay was chosen
  as the marketing means to provide wide exposure of the Company's products for
  the general consumer and to provide an opportunity to the Company's shareholder
  base, to have direct access to these products. After reviewing the results of
  the past months, we have determined that this venue better suits a company without
  facilities, working from a home base with low overhead expenses, and in November,
  discontinued this method of marketing.

PLAN OF OPERATION

During fiscal 2004, we plan to continue product awareness
  marketing of the UltraGuard® magnesium fuel cell technology with the point
  of use and point of entry ultraviolet disinfection systems and filtration products.
  This marketing will be financed through the sale of equity shares and with common
  stock issued for services. We are informed by MagPower Systems that fuel cell
  products will be available at the end of the first quarter of year 2005. Funds
  for operations and product will be provide through the sale of equity shares
  and elated party loans. As we get nearer to and see that product will be available
  a more concerted marketing will commence. Based on this timing we expect that
  revenue generation can occur starting in the later part of the 2nd
  quarter 2005 and early 3rd quarter 2005.

The Company will focus its efforts on the following markets and products.

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

During the period from inception on September 30, 2002 to September 30, 2004
  we have incurred aggregate net losses of approximately $1,328,250. We will likely
  continue to incur significant additional operating losses as marketing efforts
  continue. Operating losses may fluctuate from quarter to quarter as a result
  of differences in the timing of expenses incurred and when revenue is recognized.

BASIS OF PRESENTATION

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

RESULTS OF OPERATIONS FOR THE NINE ONTHS ENDED SEPTEMBER 30,
  2004

Nine months ended September 30, 2004 compared to the Nine
  months ended September 30, 2003

Revenues. During the nine months ended September 30, 2004,
  we reported revenues of $15,869 compared to revenue of $32,669, a decrease of
  51% compared to the results being reported in the nine months of fiscal 2003,.
  The decrease in revenue is as a result of very low UV system and components
  sales offset somewhat by royalty revenue amounting to $12,500.

Direct Project Costs. Project costs recorded during the nine
  months ended September 30, 2004 amounted to $728 compared to $26,812 recorded
  during the nine months ended September 30, 2003. The decrease in cost was due
  to the low activities in UV and component sales and the low direct costs associated
  with royalty sales.

Gross Profit. Gross profit increased by $9,284 to $ 15,141,
  or 159%during the nine months ended September 30, 2004, compared to $5,857 recorded
  during the nine months ended September 30, 2003. The increase was mainly due
  to the low direct costs associated with royalty sales.

General and Administrative Expense. For the nine months ended
  September 30, 2004,, we reported general and administrative expense of $580,031,
  an increase of $142,263 or 43% from $437,768 reported in the comparable period
  of the prior year. This increase resulted primarily from increased consulting
  fees paid contracted under multi-month contracts for awareness marketing.

Interest. For the nine months ended September 30, 2004, we
  reported interest of $23,964, a decrease of $8,146 or 25%, from $32,110 reported
  in the comparable prior fiscal period. The decrease was as a result

19

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of a reduction in the rate of interest on loans outstanding
  in the six months of 2004 compared to the six month of 2003.

Net Loss for the Period. For the nine months ended September
  30, 2004, we reported a net loss for the period of $588,854, an increase of
  $96,299 or 20% over $492,555 in the comparable period of fiscal 2003. The increase
  in net loss was primarily due to the increase cost of consulting fees included
  in general and administrative expense.

Net Loss per Share. For the nine months ended September 30,
  2004, we reported a net loss per share for the period of $0.02 compared to $0.04
  reported during the comparable period of the prior year. The decrease in loss
  per shares is primarily as a result of the greater number of shares outstanding
  at September 30, 2004 over which the loss was shared

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER
  30, 2004

Three months ended September 30, 2004 compared to the three
  months ended September 30, 2003

Revenues. During three months ended September 30, 2004, we
  reported revenues of $ 1,350 compared to revenue of $ 9,231 being reported in
  the three months ended September 30,2003.

Direct Project Costs. Project costs recorded during the three
  months ended September 30, 2004 amounted to $nil compared to $8,000 recorded
  during the comparable three months of fiscal 2003.

Gross Profit. Gross profit increased by $119 for the three
  months ended September 30, 2004 from $ 1,231 during the comparable three months
  of fiscal 2003.

General and Administrative. For the three months ended September
  30, 2004, we reported general and administrative expense of $179,029, a decrease
  of $29,780 or 14% from $208,809 reported in the comparable period of the prior
  year. This decrease resulted primarily from a decreased in legal fees.

Interest. For the three months ended September 30, 2004, we
  reported interest of $7,913, a decrease of $2,464, or 24%, from $10,377 reported
  in the comparable prior fiscal period. The Company issued 1,626,000 shares to
  repay loans on $137,164 and reduced the rate of interest on a loan assumed by
  a related party during the three months of 2004 compared to the three month
  of 2003.

Net Loss for the Period. For the three months ended September
  30, 2004, we reported a net loss for the period of $185,592, a decrease of $
  32,363 or 15 % over $217,955 in the comparable period of fiscal 2003. The increase
  in net loss was primarily due to the decrease cost of interest included in general
  and administrative expense.

Net Loss per Share. For the three months ended September 30,
  2004, we reported a net loss per share for the period of $0.01 compared to $0.02
  reported during the comparable period of the prior year. The decrease in loss
  per shares results from the greater number of shares outstanding at September
  30, 2004 over which the loss was shared

Item 3.	CONTROL AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As at the end of the period covered by this report, the Company's
  Chief Executive Officer and Chief Financial Officer carried out an evaluation
  of the effectiveness of the design and operation of the Company's disclosure.
  The Company's disclosure controls and procedures are designed to ensure that
  information required to be disclosed by the Company in its periodic Securities
  and Exchange Commission ("SEC") filings is recorded, processed and reported
  within the time periods specified in the SEC's rules and forms. Based on that
  evaluation, the Chief Executive Officer and Chief Financial Officer concluded
  that, as at the end of the period covered by this report, the Company's disclosure
  controls and procedures are effective in timely alerting them to material information
  relating to the Company (including its consolidated subsidiaries) required to
  be included in the Company's periodic SEC filings.

20

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**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 Service Systems, Kenneth
  Fielding (Service Systems 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 Service Systems 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 defence 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 and judgment was issued in the amount
  of $193,944 (C$234,642) including interest and legal costs 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. The Company was required to and has,
  provided additional detailed financial information.

On June 6th, 2003 a group of shareholders consisting
  of the original owners of Innovative Fuel Cell Technologies Inc (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 Security and Exchange Commission. At a directors
  meeting held June 9th, 2003, the Company elected two additional directors;
  Edward a 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 director
  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 the
  four directors, alleging breach of fiduciary duty in respect of the issue of
  certain common shares 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. The Companys counsel
  has responded to the various other suits filed against the Company and its directors.
  The Company had attempted during the second quarter to have these cases moved
  from Nevada State court to federal court and in the third quarter we were advised
  that these cases would be heard in federal court. Subsequent to December 31,
  2003, 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 in 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. During this quarter the Company
  and the Plaintiff requested and received an extension to August 26, 2004 to
  settle this matter or file the pre-trial order, which upon approval, the Court
  will set down for trial. On October 28, 2004 we jointly filed a pre-trial notice
  and on November 15, 2004 in a conference call with the sitting Judge a trial
  date was set for February 22, 2005. During this fiscal period, one of the Plaintiffs
  withdrew from the action In the interim, the parties to this dispute have reached
  a settlement on all matters. Agreements are being drafted. No loss provision
  has been accrued, as the probability of incurring a material loss is remote

Item 2.	CHANGES IN SECURITIES

None

Item 3.	DEFAULT UPON SENIOR SECURITIES

None

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

None

Item 5. OTHER INFORMATION

None

Item6. EXHIBITS AND REPORTS ON FROM 8-K

ITEM 13. 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 dated          |    |  
|           | 12/6/96                                | (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 | )
|           |                                        |    |  
|(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       |    |  

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|           | 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                            | (10            | )
|           | 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 of Kenneth Fielding
      pursuant    | Filed herewith |  
|           | to Sec 302 of the Sarbanes-Oxley
      Act of 2002  | Electronically |  
|           |                                                     |                |  
|(31.2)     | Certification of John R Gaetz pursuant              | Filed herewith |  
|           | to Sec 302 of the Sarbanes-Oxley
      Act of 2002  | Electronically |  
|           |                                                     |                |  
|(32.1)     | Certification of Kenneth Fielding
      pursuant    | Filed Herewith |  
|           | Section 906 of the Sarbanes-Oxley
      Act of 2002 | Electronically |  
|           |                                                     |                |  
|(32.2)     | Certification of Kenneth Fielding
      pursuant    | Filed Herewith |  
|           | Section 906 of the Sarbanes-Oxley
      Act of 2002 | Electronically |  

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
      The Company filed two reports on Form 8-K in 2003, 
        On January 14, 2003 reporting the acquisition by stock exchange agreement
        dated December 30, 2002, details of the purchase of Innovative Fuel Cell Technologies
      On January 15, 2003 reporting the sale of UV Systems Technology Inc
        to 659999 BC Ltd on Dec 31, 2002.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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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: November 22, 2004 |                       
|----------------------- | ----------------------
|                        | Ken Fielding, Director

|Date: November 22, 2004 |                       
|----------------------- | ----------------------
|                        | John R Gaetz, Director

24

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