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

FORM 10-QSB

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

Quarterly report for the period ended **March 31,
  2005**

o  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 59,049,806 on May 10, 2004.

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INDEX

|PART I     | Financial Information                                                                                                       | 3       
|---------- | --------------------------------------------------------------------------------------------------------------------------- | --------
|           |                                                                                                                             |         
|Item 1.    | CONSOLIDATED FINANCIAL STATEMENTS                                                                                           | 3       
|           |                                                                                                                             |         
|           | Consolidated Balance Sheets as of March
      31, 2005 (unaudited) and December 31, 2004 (audited)                          | 4       
|           |                                                                                                                             |         
|           | Consolidated Statements of Operations for
      the three-month periods ended March 31, 2005 and March 31, 2004 (unaudited) | 5       
|           |                                                                                                                             |         
|           | Consolidated Statements of Cash Flows for
      the three periods ended March 31, 2005 and March 31, 2004 (unaudited)       | 6       
|           |                                                                                                                             |         
|           | Notes to the Financial Statements                                                                                           | 7 to 16 
|           |                                                                                                                             |         
|Item 2.    | MANAGEMENT’S DISCUSSION AND ANALYSIS
      OF RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS                                | 17 to 21
|           |                                                                                                                             |         
|Part II    | OTHER INFORMATION                                                                                                           |         
|           |                                                                                                                             |         
|Item 1.    | LEGAL PROCEEDINGS                                                                                                           | 21 to 22
|           |                                                                                                                             |         
|Item 2.    | CHANGES IN SECURITIES                                                                                                       | 22      
|           |                                                                                                                             |         
|Item 3.    | DEFAULT UPON SENIOR SECURITIES                                                                                              | 22      
|           |                                                                                                                             |         
|Item 4.    | SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS                                                                   | 22      
|           |                                                                                                                             |         
|Item 5.    | OTHER INFORMATION                                                                                                           | 22      
|           |                                                                                                                             |         
|Item 6.    | EXHIBITS AND REPORTS ON FORM 8K                                                                                             | 23 to 24
|           |                                                                                                                             |         
|Signatures | 25                                                                                                                         

2

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PART I - FINANCIAL INFORMATION

Item 1.     CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Cash
  Flows

Notes to the Consolidated Financial
  Statements

3

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

|                                                                    | March 31,   |   | December 31, |  
|------------------------------------------------------------------- | ----------- | - | ------------ | -
|                                                                    | 2005        |   | 2004         |  
|                                                                    | $           |   | $            |  
|                                                                    | (unaudited) |   | (audited)    |  
|                                                                    |             |   |              |  
|ASSETS                                                              |             |   |              |  
|                                                                    |             |   |              |  
|Current Assets                                                      |             |   |              |  
|                                                                    |             |   |              |  
|Cash                                                                | 26,502      |   | 1,877        |  
|Accounts receivable                                                 | 6,319       |   | 4,645        |  
|Prepaid expenses and deposits                                       | 4,768       |   | 1,268        |  
|                                                                    |             |   |              |  
|Total Current Assets                                                | 37,589      |   | 7,790        |  
|                                                                    |             |   |              |  
|Property and Equipment (Note 4)                                     | 122         |   | 140          |  
|                                                                    |             |   |              |  
|Assets held for Sale (Note 1)                                       | 83,161      |   | 83,161       |  
|                                                                    |             |   |              |  
|Total Assets                                                        | 120,872     |   | 91,091       |  
|                                                                    |             |   |              |  
|LIABILITIES AND STOCKHOLDERS’ DEFICIT                               |             |   |              |  
|                                                                    |             |   |              |  
|Current Liabilities                                                 |             |   |              |  
|                                                                    |             |   |              |  
|Accounts payable                                                    | 202,817     |   | 208,937      |  
|Accrued liabilities                                                 | 55,542      |   | 60,793       |  
|Loans payable (Note
      5)                                        | 338,780     |   | 389,265      |  
|Amounts owing to related parties
      (Note 6)                     | 410,893     |   | 347,265      |  
|                                                                    |             |   |              |  
|Total Current Liabilities                                           | 1,008,032   |   | 1,006,260    |  
|                                                                    |             |   |              |  
|Contingencies (Notes 1 and 9)                                       |             |   |              |  
|Subsequent Events (Note 10)                                         |             |   |              |  
|                                                                    |             |   |              |  
|Stockholders’ Deficit                                               |             |   |              |  
|                                                                    |             |   |              |  
|Common stock, (Note 7)                                              |             |   |              |  
|                                                                    |             |   |              |  
|100,000,000 shares
      authorized, with a par value of $0.001     |             |   |              |  
|                                                                    |             |   |              |  
|34,846,565 and 33,358,565
      issued and outstanding respectively | 34,847      |   | 33,359       |  
|                                                                    |             |   |              |  
|Additional paid-in
      capital                                    | 665,130     |   | 640,578      |  
|                                                                    |             |   |              |  
|Deferred compensation
      (Note 7(d))                             | (23,338     | ) | (55,917      | )
|                                                                    |             |   |              |  
|Deficit                                                             | (1,563,799  | ) | (1,533,189   | )
|                                                                    |             |   |              |  
|Total Stockholders’ Deficit                                         | (887,160    | ) | (915,169     | )
|                                                                    |             |   |              |  
|Total Liabilities and Stockholders’ Deficit                         | 120,872     |   | 91,091       |  

(The Accompanying Notes are an Integral Part of These Financial
  Statements)

4

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

|                                              | Accumulated from    |   | Three Months |   | Three Months |  
|--------------------------------------------- | ------------------- | - | ------------ | - | ------------ | -
|                                              | September 30, 2002  |   | Ended        |   | Ended        |  
|                                              | (Date of Inception) |   | March 31,    |   | March 31,    |  
|                                              | to March 31, 2005   |   | 2005         |   | 2004         |  
|                                              | $                   |   | $            |   | $            |  
|                                              |                     |   |              |   |              |  
|Project Revenue                               | 47,704              |   | -            |   | 14,419       |  
|                                              |                     |   |              |   |              |  
|Project Costs                                 | 34,696              |   | -            |   | 728          |  
|                                              |                     |   |              |   |              |  
|Total Gross Profit                            | 13,008              |   | -            |   | 13,691       |  
|                                              |                     |   |              |   |              |  
|Expenses                                      |                     |   |              |   |              |  
|                                              |                     |   |              |   |              |  
|Foreign exchange loss                         | 29,020              |   | -            |   | -            |  
|General and administrative                    | 1,464,284           |   | 116,719      |   | 193,367      |  
|Interest                                      | 114,33              |   | 12,688       |   | 7,745        |  
|Provision for lawsuit (Note 9(d))             | 27,000              |   | -            |   | -            |  
|                                              |                     |   |              |   |              |  
|Total Expenses                                | 1,634,647           |   | 129,407      |   | 201,112      |  
|                                              |                     |   |              |   |              |  
|Net Loss from Operations                      | 1,621,639           |   | 129,407      |   | 187,421      |  
|                                              |                     |   |              |   |              |  
|Gain on debt settlement                       | (98,797             | ) | (98,797      | ) | -            |  
|                                              |                     |   |              |   |              |  
|Net Loss before discontinued operations       | 1,522,842           |   | 30,610       |   | -            |  
|                                              |                     |   |              |   |              |  
|Discontinued Operations (Note 1)              | 40,957              |   | -            |   | -            |  
|                                              |                     |   |              |   | -            |  
|Net Loss for the Period                       | 1,563,799           |   | 30,610       |   | 187,421      |  
|                                              |                     |   |              |   |              |  
|Net Loss per Share - Basic and Diluted        |                     |   | -            |   | (0.01        | )
|                                              |                     |   |              |   |              |  
|Weighted Average Number of Shares Outstanding |                     |   | 34,054,000   |   | 23,037,000   |  

(The Accompanying Notes are an Integral Part of These Financial
  Statements)

5

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

|                                                     | Three Months    |   | Three Months    |  
|---------------------------------------------------- | --------------- | - | --------------- | -
|                                                     | Ended March 31, |   | Ended March 31, |  
|                                                     | 2005            |   | 2004            |  
|                                                     | $               |   | $               |  
|                                                     |                 |   |                 |  
|Cash Flows Used In Operating Activities              |                 |   |                 |  
|                                                     |                 |   |                 |  
|Net Loss                                             | (30,610         | ) | (187,421        | )
|                                                     |                 |   |                 |  
|Adjustments to reconcile
      net loss to cash      |                 |   |                 |  
|                                                     |                 |   |                 |  
|Gain on debt settlement                              | (98,797         | ) |                 |  
|Depreciation and amortization                        | 32,597          |   | 7               |  
|Shares issued to settle debt and expenses            | 26,040          |   | 141,159         |  
|Loan interest accrued                                | -               |   | 5,034           |  
|Accrual of related party wages                       | -               |   | 18,228          |  
|                                                     |                 |   |                 |  
|Changes in operating
      assets and liabilities    |                 |   |                 |  
|                                                     |                 |   |                 |  
|(Increase) in accounts receivable                    | (1,674          | ) | (12,525         | )
|(Increase) decrease in prepaid expenses and deposits | (3,500          | ) | 1,151           |  
|Increase (decrease) in accounts payable and accruals | (11,371         | ) | 1,111           |  
|                                                     |                 |   |                 |  
|Net Cash from (Used in) Operating Activities         | (87,315         | ) | (33,256         | )
|                                                     |                 |   |                 |  
|Cash Flows From Financing Activities                 |                 |   |                 |  
|                                                     |                 |   |                 |  
|Cash received in reverse
      acquisition           | -               |   | -               |  
|Increase in loans
      from unrelated parties       | 48,312          |   | 34,000          |  
|Increase in advances to related
      parties        | 63,628          |   | -               |  
|                                                     |                 |   |                 |  
|Net Cash Provided by Financing Activities            | 111,940         |   | 34,000          |  
|                                                     |                 |   |                 |  
|Increase in Cash (decrease)                          | 24,625          |   | 744             |  
|                                                     |                 |   |                 |  
|Cash - Beginning of the Period                       | 1,877           |   | 1,834           |  
|                                                     |                 |   |                 |  
|Cash - End of the Period                             | 26,502          |   | 2,578           |  
|                                                     |                 |   |                 |  
|Non-Cash Investing and Financing Activities:         |                 |   |                 |  
|                                                     |                 |   |                 |  
|Shares issued for
      manufacturing technology     | -               |   | 3,600           |  
|Shares issued for
      legal fees                   | 3,500           |   | -               |  
|Shares issued to settle
      debt                   | 5,040           |   | -               |  
|Shares issued for consulting expenses                | 17,500          |   | -               |  
|                                                     |                 |   |                 |  
|Supplementary Information                            |                 |   |                 |  
|                                                     |                 |   |                 |  
|Cash paid for interest                               | -               |   | 2,711           |  

(The Accompanying Notes are an Integral Part of These Financial
  Statements)

6

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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 December 31, 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 during the period ended December 31, 2003. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

7

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|1. | Reverse Acquisition, Nature of Operations and Continuance
        of Business (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | 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.                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | These consolidated financial statements have been
        prepared in accordance with United States generally accepted accounting
        principles, on a going concern basis, which contemplates the realization
        of assets and the satisfaction of liabilities and commitments in the normal
        course of business. As at March 31, 2005, the Company has not recognized
        significant revenue, has a working capital deficit of $970,443, and
        has accumulated operating losses of $1,563,799 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 the Company’s ability
        to continue as a going concern. These financial statements do not include
        any adjustments that might arise from this uncertainty.
|  
|   | Subsequent to March 31, 2005, on April 21, 2005
        the Company’s Board of Directors voted to reorganize UltraGuard.
        As a part of the reorganization, the Company will change its business
        focus from water filtration and disinfection to restaurant franchising.
        On May 4, 2005 the Company filed a form PRE 14A with the SEC, calling
        a Special Meeting of the shareholders to be held on June 13, 2005. At
        the meeting, the shareholders will be voting to change the Company’s
        name to Creative Eateries Corporation and approve a 1:100 reverse split.                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | On May 3, 2005, the Board of Directors approved
        the sale of all of UltraGuard’s filtration and disinfection technologies
        and intellectual property to Innovative Fuel Cell Technologies Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

8

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|2. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   | The Company 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | Basic and Diluted Net Income (Loss)
        Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | The Company computes net income (loss)
        per share in accordance with SFAS No. 128, "Earnings per Share". This
        statement requires presentation of both basic and diluted earnings per
        share (EPS) on the face of the income statement. Basic EPS is computed
        by dividing net income (loss) available to common shareholders (numerator)
        by the weighted average number of common shares outstanding (denominator)
        during the period. Diluted EPS gives effect to all dilutive potential
        common shares outstanding during the period including stock options, using
        the treasury stock method, and convertible preferred stock, using the
        if-converted method. In computing Diluted EPS, the average stock price
        for the period is used in determining the number of shares assumed to
        be purchased from the exercise of stock options or warrants. Diluted EPS
        excludes all dilutive potential common shares if their effect is anti
        dilutive.

9

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|2. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Accounting for Stock-Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | The Company accounts for stock based compensation
        in accordance with SFAS No. 123, “Accounting for Stock- Based Compensation.”
        This statement requires that stock awards granted subsequent to January
        1, 1995, be recognized as compensation expense based on 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.
        The Company has elected to account for stock-based compensation for employees
        under APB No. 25 and make the required pro forma disclosures for compensation
        expense in accordance with SFAS No. 123. The Company accounts for stock
        issued for services to non-employees in accordance with SFAS No. 123.
        Compensation expense is based on the fair market value of the stock award
        or fair market value of the goods and services received whichever is more
        reliably measurable.
|  
|   | Comprehensive Loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   | SFAS No. 130, “Reporting Comprehensive Income,”
        establishes standards for the reporting and display of comprehensive loss
        and its components in the financial statements. As at March 31, 2005 and
        2004, the Company has no items that represent comprehensive loss and,
        therefore, has not included a schedule of comprehensive loss in the financial
        statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | Long-Lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   | SFAS No. 144, “Accounting for the Impairment
        or Disposal of Long-Lived Assets” establishes a single accounting
        model for long-lived assets to be disposed of by sale including discontinued
        operations. SFAS 144 requires that these long-lived assets be measured
        at the lower of the carrying amount or fair value less cost to sell, whether
        reported in continuing operations or discontinued operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | The Company’s financial instruments consist
        of cash, prepaid expenses, accounts payable, accrued liabilities and advances
        from related and non-related parties. The Company is not exposed to significant
        interest, currency or credit risks arising from these financial instruments.
        The fair value of cash, accounts payable and accrued liabilities, advances
        from related parties and other advances approximates their carrying value
        due to the immediate or short- term maturity of these financial instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | Concentration of Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   | Financial instruments that potentially subject the
        Company to credit risk consist principally of cash. Cash was deposited
        with a high credit quality institution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

10

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|2. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | In December 2004, the Financial Accounting Standards
        Board (FASB) issued Statement of Financial Accounting Standard (SFAS)
        No. 123R, “Share Based Payment”. SFAS 123R is a revision
        of SFAS No. 123 “Accounting for Stock-Based Compensation”,
        and supersedes APB Opinion No. 25, “Accounting for Stock Issued
        to Employees” and its related implementation guidance. SFAS
        123R establishes standards for the accounting for transactions in which
        an entity exchanges its equity instruments for goods or services. It also
        addresses transactions in which an entity incurs liabilities in exchange
        for goods or services that are based on the fair value of the entity’s
        equity instruments or that may be settled by the issuance of those equity
        instruments. SFAS 123R focuses primarily on accounting for transactions
        in which an entity obtains employee services in share-based payment transactions.
        SFAS 123R does not change the accounting guidance for share-based payment
        transactions with parties other than employees provided in SFAS 123 as
        originally issued and Emerging Issues Task Force Issue No. 96-18, “Accounting
        for Equity Instruments That Are Issued to Other Than Employees for Acquiring,
        or in Conjunction with Selling, Goods or Services”. SFAS 123R
        does not address the accounting for employee share ownership plans, which
        are subject to AICPA Statement of Position 93-6, “Employers’
        Accounting for Employee Stock Ownership Plans”. SFAS 123R requires
        a public entity to measure the cost of employee services received in exchange
        for an award of equity instruments based on the grant-date fair value
        of the award (with limited exceptions). That cost will be recognized over
        the period during which an employee is required to provide service in
        exchange for the award – the requisite service period (usually the
        vesting period). SFAS 123R requires that the compensation cost relating
        to share-based payment transactions be recognized in financial statements.
        That cost will be measured based on the fair value of the equity or liability
        instruments issued. The scope of SFAS 123R includes a wide range of share-based
        compensation arrangements including share options, restricted share plans,
        performance-based awards, share appreciation rights, and employee share
        purchase plans. Public entities (other than those filing as small business
        issuers) will be required to apply SFAS 123R as of the first interim or
        annual reporting period that begins after June 15, 2005. Public entities
        that file as small business issuers will be required to apply SFAS 123R
        in the first interim or annual reporting period that begins after December
        15, 2005. For nonpublic entities, SFAS 123R must be applied as of the
        beginning of the first annual reporting period beginning after December
        15, 2005. The adoption of this standard is not expected to have a material
        effect on the Company’s results of operations or financial position.
|  
|   | In December 2004, FASB issued SFAS No. 153, “Exchanges
        of Nonmonetary Assets - An Amendment of APB Opinion No. 29”.
        The guidance in APB Opinion No. 29, “Accounting for Nonmonetary
        Transactions”, is based on the principle that exchanges of nonmonetary
        assets should be measured based on the fair value of the assets exchanged.
        The guidance in that Opinion, however, included certain exceptions to
        that principle. SFAS No. 153 amends Opinion No. 29 to eliminate the exception
        for nonmonetary exchanges of similar productive assets and replaces it
        with a general exception for exchanges of nonmonetary assets that do not
        have commercial substance. A nonmonetary exchange has commercial substance
        if the future cash flows of the entity are expected to change significantly
        as a result of the exchange. The provisions of SFAS No. 153 are effective
        for nonmonetary asset exchanges occurring in fiscal periods beginning
        after June 15, 2005. Early application is permitted and companies must
        apply the standard prospectively. The adoption of this standard is not
        expected to have a material effect on the Company’s results of operations
        or financial position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   | Loss Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   | The Company estimates a loss contingency in accordance
        with Statement of Financial Accounting Standards (“SFAS” No.
        5 “Accounting for Contingencies”. The Company 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

11

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|2. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | 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.
|  
|   | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | Potential benefits of income tax losses are not
        recognized in the accounts until realization is more likely than not.
        The Company has adopted SFAS No. 109 “Accounting for Income Taxes”
        as of its inception. Pursuant to SFAS No. 109 the Company is required
        to compute tax asset benefits for net operating losses carried forward.
        Potential benefit of net operating losses have not been recognized in
        these financial statements because the Company cannot be assured it is
        more likely than not it will utilize the net operating losses carried
        forward in future years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   | Reclassifications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | Certain reclassifications have been made to the
        prior year’s financial statements to conform to the current period’s
        presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

12

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|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.
|  
|   | See Note 1 for IFCT’s reverse acquisition
        of UltraGuard.                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|4. | Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | Property and equipment is stated at cost less accumulated
        depreciation.                                                                                                                                                                                                                                                                                                                                                                                             

| |                        |       |              | March 31,   | December 31,
| | ---------------------- | ----- | ------------ | ----------- | ------------
| |                        |       |              | 2005        | 2005        
| |                        |       | Accumulated  | Net Book    | Net Book    
| |                        | Cost  | Depreciation | Value       | Value       
| |                        | $     | $            | $           | $           
| |                        |       |              | (unaudited) | (audited)   
| |                        |       |              |             |             
| | Property and equipment | 5,533 | 5, 411       | 122         | 197         

|5. | Loans Payable
|-- | -------------
|  
|   | a)           
|  
|   | b)           
|  
|   | c)           
|  
|   | d)           
|  
|   | e)           

13

---

|5. | Loans Payable (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|6. | Amounts Owing to Related Parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   | Unpaid wages, consulting and loans amounting
        to $410,893 owing to two officers/directors are due on demand, unsecured
        and will bear interest calculated at 10% effective April 1, 2005. Included
        in this amount of $410,893 are amounts owing to the President of the
        Company a result of actions discussed in Note 5(a), loans amounting to
        $15,000, and consulting and expenses amounting to $47,504 advanced
        during the period ending March 31, 2005. In fiscal 2003, two officers/directors
        were issued 2,400,000 shares of common restricted stock of the Company
        at $0.0338 per share totalling $81,120 for partial payment of
        wages.
|  
|7. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|7. | Common Stock (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| |  |                                                          |           | Fair Market |           
| |  | -------------------------------------------------------- | --------- | ----------- | ----------
| |  |                                                          | Shares    | Value       | Total     
| |  |                                                          | Issued    | Per Share   | Fair Value
| |  |                                                          | #         | $           | $         
| |  | Consulting for services provided or to be
      provided |           |             |           
| |  | Pursuant
      to the incentive plan (Note 7(b))         | 1,288,000 | 0.0175      | 22,540    
| |  | Legal                                                    |           |             |           
| |  | Pursuant to the incentive
      plan (Note 7(b))         | 200,000   | 0.0175      | 3,500     
| |  |                                                          |           |             |           
| |  |                                                          | 1,488,000 |             | 26,040    

|   |                                                                                                                                                                                                                                | The terms of some of the agreements for future services
        are in excess of one year and have various expiry dates. As a result,
        during the period ending March 31, 2004, $32,597 has been charged
        to operations as consulting and legal expenses and the balance of $23,338
        has been recorded as deferred compensation.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|8. | Segmented Information                                                                                                                                                                                                         
|  
|   | As a result of the disposition of UVS,
        (see Note 3) UltraGuard and IFCT now operate in one business segment and
        one geographical area. All of the Company’s identifiable assets
        are located in Canada.
|  
|9. | Legal Proceedings/Contingency Accrual                                                                                                                                                                                         

14

---

| | a) | On October 20, 1998 a suit was filed in the Supreme
        Court of British Columbia by an original shareholder (“the plaintiff”)
        against the Company’s President and Director, and a former Director
        and Vice President of the Company. The plaintiff alleges that in April
        of 1996, he purchased common shares of the Company based on a representation
        that they would be free trading in 40 days of "the filing of a prospectus."
        The plaintiff further alleges that in September of 1996 he purchased additional
        common shares of the Company based on the representation that the shares
        would be free trading within 40 days of the common shares becoming free
        trading and that the representation was a warranty and was incorrect.
        The plaintiff further alleges that he suffered a loss because the share
        price decreased while he was holding the shares and is seeking 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 will continue to actively defend the suit. The
        suit has remained inactive since early 1999. There has been no loss provision
        accrued pursuant to this action against the Company 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 the Company’s by-laws. the Company
        refused to accept the consent resolution or by-laws as in the opinion
        of the Company’s legal counsel, the consent resolutions were not
        in accordance with Nevada Statutes or the filing requirements of the Security
        and Exchange Commission. At a directors meeting held June 9, 2003, the
        Company elected two additional directors; Edward White and Erin Strench
        to the Company’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 the Company and its five directors
        prohibiting the Company, from among other things, issuing stock, transferring
        assets, changing management and other actions that would affect the status
        quoof the Company. In addition, two shareholders issued writs against
        various directors, alleging breach of fiduciary duty in respect of the
        issue of certain common shares to the Company’s officers and others.
        On June 24, 2003, in discussions between legal counsel for plaintiff,
        respondent and the hearing Judge, 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 the TRO hearing Judge 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 the Company’s
        counsel. The plaintiff responded on July 18, 2003 and the Company’s
        counsel filed the final brief on July 25, 2003. The Judge has not made
        a ruling on the TRO. The Company’s counsel has responded to the
        various other suits filed against the Company and its directors. Counsel
        for the Company was successful in moving these actions from Nevada State
        jurisdiction to federal jurisdiction. In March 2004 the Company’s
        legal counsel filed to withdraw from the action as a result of non-payment
        of legal fees. The court approved the withdrawal of the lawyer on two
        of the four cases. By April 29, 2004, the Plaintiff and the Defendant
        were required to file a proposed pre-trial order with the Federal Court.
        Te 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 the Company
        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.
        Prior to the trial date the parties reached a settlement on all matters.
        Under the terms of the settlement, the Plaintiffs agreed to and have dismissed
        all of the lawsuits and have cancelled all debts owed by the Company to
        the Plaintiff amounting to about $98,797.
|
| | d) | The Company 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 recorded
        as an accrued liability as of December 31, 2004 and 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | e) | The debt load being carried by the Company as a
        result of the UVS operations were impairing the Company’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, the Company sold 100% of the shares
        of UVS to 659999 BC Ltd, a Canadian private company, in exchange for the
        transfer and assignment to the Company 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.
        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. The case is at the stage of production of documents.
        UVS has confirmed its intention to pursue the case vigorously. Clearwater
        has filed a defence against all claims.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

15

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|10. | Subsequent Events
|--- | -----------------
|    |                  
|    | a)               
|   
|    | b)               

16

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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 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

17

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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.

Subsequent to the March 31, 2005, on April 21, 2005, the Company’s
  directors voted to change its business focus and move UltraGuard into restaurant
  franchising by signing an agreement with the American Restaurant Development
  Company to identify opportunities in restaurant franchising. The directors also
  voted to reorganize the Company and bring to a special meeting of shareholders,
  which subject to filing the required forms with the Securities and Exchange
  Commission, will be held on June 13, 2005. This meeting will request shareholder
  approval of a name change to Creative Eateries Corporation and a reverse split
  of the Companies common stock of 1:100.

On May 3, 2005 the directors approved the sale of all of UltraGuard’s
  filtration and disinfection technologies and intellectual property to Innovative
  Fuel Cell Technologies Inc.

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

18

---

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 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 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.As a development stage company, we have
  generated total revenue to March 31, 2005 of $47,704. 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,

19

---

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 Company has no plans to install any further
  dispensing units.

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

On May 5, 2005 the Company filed an 8-K with the Securities
  and Exchange Commission announcing that the Company’s business would change
  from its current water related activities focus, moving to restaurant franchising.
  On April 21, 2005 the Company’s board of directors approved a consulting
  agreement with the American Restaurant Development Corporation (ARDC) to introduce
  UltraGuard to restaurant concepts, which the Company plans to develop into a
  nationwide restaurant franchise business. The restaurant concepts will vary
  from fast casual to casual dining and each concept will feature a specific ethic
  fare such as Asian, Mexican or Italian, as well as burgers, noodles, and barbeque
  to name a few. Most restaurants will be sold as franchises, although there will
  be a limited number corporate owned stores to be used for training and sales
  purposes. ARDC has over ten years experience in franchising and has been instrumental
  in the opening and selling of over 1,000 restaurants generating over $400
  million in cumulative sales as stated by ADRC. UltraGuard will draw on the experience
  of ARDC and industry contacts to develop a viable restaurant franchise business.

To meet the financial needs moving forward the Company plans
  to raise money through the sales of the Company’s restricted common stock
  via a public offering document and sale of debt financing instruments. In addition
  the Company will generate revenue through the sales of the franchise concepts
  introduced by ARDC. As ARDC will receive their compensation through the sales
  of franchises, expenses related to restaurant franchising over the next twelve
  months are expected to be less than $200,000.

As UltraGuard’s current technology and intellectual
  property do not fit the new business model, the Board has approved to sell this
  technology and intellectual property into the Company’s wholly owned subsidiary;
  Innovative Fuel Cell Technologies Inc. As soon as a final strategy has been
  developed, the Company’s directors will be making announcements of its
  plans for Innovative Fuel Cell Technologies Inc.

As a result of these changes in business direction, the Company
  has called a special meeting to be held on June 13, 2005 where the Company will
  ask for shareholder approval for a corporate name change to Creative Eateries
  Corporation and to approve a 1:100 reverse split.

During this period of reorganization and restructuring, we
  will likely continue to incur significant additional operating losses. 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 THREE MONTHS ENDED MARCH 31,
  2005

Three months ended March 31, 2005 compared to the three
  months ended March 31, 2004

Revenues. During the three months ended March 31, 2005, we
  reported revenues of $Nil compared to revenue of $14,419, a decrease
  of 100% compared to the results being reported in the three months of fiscal
  2004.

20

---

Direct Project Costs. Project costs recorded during the three
  months ended March 31, 2005 amounted to nil compared to $728 recorded during
  the three months of fiscal 2004. No cost of sale were incurred.

Gross Profit. No Gross profit was recorded due to there being
  neither sales nor cost of sales

General and Administrative Expense. For the three months ended
  March 31, 2005, we reported general and administrative expense of $116,719,
  an decrease of $76,648 or 40% from $193,367 reported in the comparable
  period of the prior year. This increase resulted primarily from decreased consulting
  fees paid during the period

Interest. For the three months ended March 31, 2005, we reported
  interest of $12,688, an increase of $4,943 or 64% from $7,745 reported
  in the comparable prior fiscal period. The increase was as a result of an increase
  in the loans payable amount outstanding compared to the amount outstanding for
  the comparable three months of 2004.

Net Loss for the Period. For the three months ended March
  31, 2005, we reported a net loss for the period of $30,610, a decrease of
  $156,811 or 84% over $187,421 in the comparable period of fiscal 2004.
  The decrease in net loss was primarily due to a decrease in consulting fees
  and a gain amounting to $98,797 received in the settlement of lawsuits with
  a shareholder group.

Net Loss per Share. For the three months ended March 31, 2005,
  we reported a net loss per share for the period of nil compared to $0.01
  reported during the comparable period of the prior year. The decrease in loss
  per shares is primarily as a result of the reduced loss and the weighted average
  shares outstanding at March 31, 2005 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.
  Based on the 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 to ensure that information
  required to be disclosed in the reports that we file or submit under the Exchange
  Act is recorded, processed, summarized and reported within the time periods
  specified in the Commission’s rules and forms and to ensure that information
  required to be disclosed by us in the reports that we file or submit under the
  Exchange Act is accumulated and communicated to our management, including our
  principal executive and principal financial officer, or persons performing similar
  functions, as appropriate to allow timely decisions regarding disclosure

PAR**T 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”

21

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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. On October 28, 2004 the Company 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. Prior to the trial date the parties
  reached a settlement on all matters. Under the terms of the settlement, the
  Plaintiffs agreed to and have dismissed all of the lawsuits and have cancelled
  all debts owed by the Company to the Plaintiff amounting to about $98,797.

Item 2.         CHANGES
  IN SECURITIES

None

Item 3.         DEFAULT
  UPON SENIOR SECURITIES

None

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

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

22

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|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 12/6/9                                                                    | (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 Systems, UVS, MDS and WOF
      dated Feb 13, 2000                                               | (7)             
|               |                                                                                                                                   |                 
|(10)(xv)       | Lease dated October 2000 between Service Systems, UV Systems
      and Slough Estates Canada Limited                              | (8)             
|               |                                                                                                                                   |                 
|(10)(xvi)      | Legal Services Plan between Rosenfeld, Goldman & Ware,
      Inc.                                                                 | (9)             
|               |                                                                                                                                   |                 
|(10)(xvii)     | Post Effective Amendment to Legal Services Plan filed November
      19, 2001                                                     | (10)            
|               |                                                                                                                                   |                 
|(10xviii)      | 2003 Benefit Plan S-8                                                                                                             | (11)            
|               |                                                                                                                                   |                 
|(10xix)        | Independent Contractor/Consulting Agreement                                                                                       | (12)            
|               |                                                                                                                                   |                 
|(10xx)         | The Incentive Plan of UltraGuard                                                                                                  | (13)            

23

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|(10xxi) | 2004 Incentive Plan of UltraGuard                                                              | (14)                                     
|------- | ---------------------------------------------------------------------------------------------- | -----------------------------------------
|        |                                                                                                |                                          
|(31.1)  | Certification of Kenneth
      Fielding pursuant to Sec 302 of the Sarbanes-Oxley Act of 2002  | Filed
      herewith
      Electronically
|        |                                                                                                |                                          
|(31.2)  | Certification of John
      R Gaetz pursuant to Sec 302 of the Sarbanes-Oxley Act of 2002      | Filed
      herewith
      Electronically
|        |                                                                                                |                                          
|(32.1)  | Certification of Kenneth
      Fielding pursuant Section 906 of the Sarbanes-Oxley Act of 2002 | Filed
      Herewith
      Electronically
|        |                                                                                                |                                          
|(32.2)  | Certification of John
      R Gaetz pursuant Section 906 of the Sarbanes-Oxley Act of 2002     | Filed
      Herewith
      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.  
|    | (14) | Incorporated by reference to the Corporation's Form
        S-8 filed with the Commission on December 21, 2004. 
|    |      |                                                                                                                 
|(b) |      | Reports on Form 8-K                                                                                             

The Company filed one reports on Form 8-K in 2004,

On November 23, 2004 reporting the resignation of Director Edward A White

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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: May18, 2005 | /s/ Ken Fielding      
|----------------- | ----------------------
|                  | Ken Fielding, Director
|                  |                       
|                  |                       
|                  |                       
|Date: May18, 2005 | /s/ John R Gaetz      
|                  | John R Gaetz, Director

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