Filed by Automated Filing Services Inc. (604) 609-0244 - Wescorp Energy Inc.

10QSB/A 1 form10qsba.htm AMENDMENT NO. 1 TO QUARTERLY REPORT FOR THE PERIOD ENDED JUNE 30, 2005 Filed by Automated Filing Services Inc. (604) 609-0244 - Wescorp Energy Inc. - Form 10QSB/A

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

FORM 10-QSB /A

Amendment No. 1

(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 2005

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

Commission File Number 000-30095

WESCORP ENERGY INC.
(Exact name of registrant as specified in its charter)

Delaware	98-044716
State or other jurisdiction of	(I.R.S. Employer
incorporation or organization	Identification No.)

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

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

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Number of shares outstanding of the registrant's class of common stock as of August 12, 2005 was 36,597,186.

Authorized share capital of the registrant as of August 12 2005, was 250,000,000 common shares, par value of $0.0001, and 50,000,000 preferred shares, par value of $0.0001

The Company recorded revenue of $431,428 for the quarter ended June 30, 2005.

FORWARD-LOOKING STATEMENTS

THIS QUARTERLY REPORT ON FORM 10-QSB/A CONTAINS PREDICTIONS, PROJECTIONS AND OTHER STATEMENTS ABOUT THE FUTURE THAT ARE INTENDED TO BE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (COLLECTIVELY, "FORWARD-LOOKING STATEMENTS"). FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES. A NUMBER OF IMPORTANT FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS. IN ASSESSING FORWARD-LOOKING STATEMENTS CONTAINED IN THIS QUARTERLY REPORT ON FORM 10-QSB/A, READERS ARE URGED TO READ CAREFULLY ALL CAUTIONARY STATEMENTS – INCLUDING THOSE CONTAINED IN OTHER SECTIONS OF THIS QUARTERLY REPORT ON THIS FORM 10-QSB/A. AMONG SAID RISKS AND UNCERTAINTIES IS THE RISK THAT THE ELLYCRACK TECHNOLOGY MAY NOT BE TECHNICALLY EFFECTIVE OR COST EFFECTIVE IN THE MARKETS TARGETED BY MANAGEMENT; THAT THE COMPANY WILL NOT COMPLETE ANY OTHER SUITABLE ACQUISITIONS, THAT ITS MANAGEMENT IS ADEQUATE TO CARRY OUT ITS BUSINESS PLAN AND THAT THERE WILL BE ADEQUATE CAPITAL; IN ADDITION, IF SAID ACQUISITIONS ARE COMPLETED THEY MAY BE UNSUCCESSFUL FOR TECHNICAL, ECONOMIC OR OTHER REASONS.

CURRENCIES

All amounts expressed herein are in US dollars unless otherwise indicated.

ITEM 1. FINANCIAL STATEMENTS

PART I - FINANCIAL INFORMATION

Index

Consolidated Balance Sheets at June 30, 2005 and December 31, 2004	F-1

Consolidated Statements of Operations for the three and six months ended June 30, 2005 and the three and six months ended June 30, 2004	F-2

Consolidated Statements of Cash Flows for the six months ended June 30, 2005 and the six months ended June 30, 2004	F-3

Notes to the Consolidated Financial Statements	F-4

WESCORP ENERGY INC.
CONSOLIDATED BALANCE SHEETS

		June 30,			December 31,
		2005			2004
		(restated)
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash and equivalents	$	1,003,443		$	48,428
Cash trust accounts		-			1,970
Accounts receivable		368,313			622,657
Inventory		723,141			510,193
Prepaid expenses		117,552			14,706
Note receivable		272,456			-
TOTAL CURRENT ASSETS		2,484,905			1,197,954

PROPERTY AND EQUIPMENT, net		98,839			105,838

OTHER ASSETS
Investments		993,648			918,648
Technology, net		3,468,163			3,725,064
Deposits		13,948			39,273
TOTAL OTHER ASSETS		4,475,759			4,682,985

TOTAL ASSETS	$	7,059,503		$	5,986,777

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	1,131,442		$	914,628
Other liabilities		265,879			265,786
Note payable, related party, net of unamortized discount		-			1,979,593
Due to shareholders		-			44,836
Deposit equity		1,924,681			-
Convertible debentures		1,552,319			-
TOTAL CURRENT LIABILITIES		4,874,321			3,204,843

LONG-TERM LIABILITIES
Other liabilities		844,515			851,572
TOTAL LONG-TERM LIABILITIES		844,515			851,572

COMMITMENTS AND CONTINGENCIES		-			-

STOCKHOLDERS' EQUITY
Preferred stock, 50,000,000 shares authorized, $0.0001
par value; no shares issued		-			-
Common stock, 250,000,000 shares authorized, $0.0001
par value; 36,597,186 and 35,017,615 shares
issued and outstanding, respectively		3,660			3,501
Additional paid-in capital		13,950,979			13,081,137
Subscription receivable		(62,272	)		-
Accumulated other comprehensive income (loss)		(310,623	)		(378,641	)
Accumulated deficit		(12,241,077	)		(10,775,635	)
TOTAL STOCKHOLDERS' EQUITY		1,340,667			1,930,362

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY	$	7,059,503		$	5,986,777

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

F-1

WESCORP ENERGY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended June 30,						Six Months Ended June 30,
		2005			2004			2005			2004
		(restated)						(restated)
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

REVENUES	$	431,428		$	200,109		$	1,052,022		$	200,109

COST OF SALES		213,466			100,311			520,693			100,311

GROSS PROFIT		217,962			99,798			531,329			99,798

EXPENSES
Consulting		111,018			223,133			310,245			421,817
Advertising and investor relations		64,772			67,995			109,449			122,408
Legal and accounting		40,149			215,680			146,821			264,077
Wages and benefits		200,575			(1,180	)		356,888			40,123
Office		50,401			41,627			124,488			41,627
Insurance		35,845			-			58,675			-
Travel		61,270			58,582			82,401			60,840
Depreciation		10,590			10,700			24,009			10,700
Amortization of technology		128,451			-			256,902			-
Research and development		16,502			-			44,851			-
TOTAL OPERATING EXPENSES		719,573			616,537			1,514,729			961,592

LOSS FROM OPERATIONS		(501,611	)		(516,739	)		(983,400	)		(861,794	)

OTHER INCOME (EXPENSES)
Interest and bank charges		(7,507	)		(48	)		(8,643	)		(48	)
Interest to shareholders and related parties		-			(66,027	)		-			(129,768	)
Interest on debentures		(77,140	)		-			(77,140	)		-
Financing costs		-			-			(192,468	)		-
Beneficial conversion interest		(207,000	)		-			(207,000	)		-
Interest income		3,209			-			3,209			-
TOTAL OTHER INCOME (EXPENSES)		(288,438	)		(66,075	)		(482,042	)		(129,816	)

LOSS BEFORE INCOME TAXES		(790,049	)		(582,814	)		(1,465,442	)		(991,610	)

INCOME TAXES		-			-			-			-

NET LOSS		(790,049	)		(582,814	)		(1,465,442	)		(991,610	)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss)		38,418			(3,078	)		68,018			(10,769	)

COMPREHENSIVE LOSS	$	(751,631	)	$	(585,892	)	$	(1,397,424	)	$	(1,002,379	)

BASIC AND DILUTED NET LOSS PER SHARE	$	(0.02	)	$	(0.02	)	$	(0.04	)	$	(0.03	)

WEIGHTED AVERAGE NUMBER
COMMON SHARES OUTSTANDING
BASIC AND DILUTED		36,500,395			35,406,227			36,125,296			29,029,000

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

F-2

WESCORP ENERGY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

		Six Months Ended June 30,
		2005			2004
		(restated)
		(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,465,442	)	$	(991,610	)
Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation		24,009			10,700
Amortization of technology		256,902			-
Shares issued for services		25,392			36,372
Beneficial conversion interest		207,000			-
Decrease (increase) in accounts receivable		254,344			(154,956	)
Decrease (increase) in inventory		(212,948	)		-
Decrease (increase) in prepaid expenses		(102,846	)		(8,298	)
Decrease (increase) in deferred tax asset		-			(66,880	)
Decrease (increase) in other assets		-			(64,456	)
Increase (decrease) in bank indebtedness		-			9,640
Increase (decrease) in accounts payable and accrued liabilities		216,814			193,603
Increase (decrease) in accounts payable, related parties		-			(26,613	)
Net cash used by operating activities		(796,775	)		(1,062,498	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(17,010	)		-
Cash provided by acquisition		-			111,878
Deposits		25,325			-
Note receivable		(272,456	)		-
Purchase of trademarks		-			(988	)
Investments		(75,000	)		(73,129	)
Net cash used in investing activities		(339,141	)		37,761
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on borrowing		(6,964	)		-
Payments on notes payable		-			(150,000	)
Repayment of shareholder loan		(44,836	)		-
Proceeds on convertible debentures		1,552,319			-
Sale of stock		575,336			1,530,191
Net cash provided by financing activities		2,075,855			1,380,191
Effect of exchange rates		13,106			6,429
Net increase in cash		953,045			361,883
Cash, beginning of period		50,398			113,886
Cash, end of period	$	1,003,443			475,769
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for interest and income taxes:
Interest expense	$	85,783			129,816
Income taxes	$	-			-

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Shares issued for services	$	25,392		$	36,372
Shares issued for subscriptions receivable	$	62,272		$	-

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

F-3

WESCORP ENERGY INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 2005

NOTE 1 – BASIS OF PRESENTATION

The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Regulation S-B as promulgated by the Securities and Exchange Commission ("SEC"). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements for the period ended December 31, 2004. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations.

Operating results for the six month period ended June 30, 2005 are not necessarily indicative of the results that may be expected for the year ending December 31, 2005.

NOTE 2 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Wescorp Energy Inc. (“the Company”) was incorporated in Delaware on August 11, 1998. Wescorp changed its business focus in early fiscal 2004, and as a result is no longer considered to be a development stage enterprise. The Company provides expertise to emerging companies by offering timely product solutions and/or strategic investment opportunities in the petroleum production and service industries. Wescorp intends to carry out this mandate through investments in companies or products where early stage product development has been completed.

The Company’s year end is December 31. The Company is headquartered in Edmonton, Alberta, Canada.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Accounting Method

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

Revenue and Cost Recognition
The Company recognizes revenue when the customer has accepted delivery of the product, has agreed it meets their requirements and, when no significant contractual obligations remain. Revenue is reported net of a provision for estimated product returns. We follow EITF Issue 00-10, “Accounting for Shipping and Handling Fees and Costs” (Issue 00-10). Issue 00-10 requires that all amounts billed to customers related to shipping and handling should be classified as revenues. The Company sells its products directly, using in-house sales employees. Cost of goods is primarily made up of product, labor, shipping and handling and allocated overhead.

F-4

Accounts Receivable
The Company carries its accounts receivable at net realizable value. On a periodic basis, the Company evaluates its accounts receivable and considers the need for an allowance for doubtful accounts, based on Company past and expected collections, and current credit conditions. At June 30, 2005, a valuation allowance of $19,433 (December 31, 2004 – nil) is deemed necessary. The Company's policy is to accrue interest on trade receivables at the discretion of management.

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

Inventories
Inventories are stated at the lower of cost or market on a weighted average basis.

Reclassifications
Certain amounts from prior periods have been reclassified to conform to the current period presentation. The reclassifications principally consist of revised reporting of operating results of the discontinued operations of the Company's subsidiaries in the prior fiscal period. As a result of these reclassifications no changes to the Company's accumulated deficit or net losses as presented has occurred.

Intangible Assets
In September 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 141, "Business Combinations" (hereinafter “SFAS No. 141”) and Statement of Financial Accounting Standard No. 142, "Goodwill and Other Intangible Assets" (hereinafter “SFAS No. 142”). SFAS No. 141 provides for the elimination of the pooling-of-interest method of accounting for business combinations with an acquisition date of July 1, 2001 or later. SFAS No. 142 prohibits the amortization of goodwill and other intangible assets with indefinite lives and requires periodic reassessment of the underlying value of such assets for impairment. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001. During 2002, the Company fully impaired its intangible assets which were charged to discontinued operations expense and subsequently disposed of during 2003. Application of the non-amortization provision of SFAS No. 142 is expected to result in no change to the Company’s results of operations.

The Company acquired DCR technology rights through its acquisitions of Flowstar and Vasjar which are included in intangible assets. These items represent the acquisition cost of the assets purchased from Flowstar and Vasjar in 2004 (See Note 9). The Company’s intangible assets are summarized as follows:

		June 30,		December 31,
		2005		2004
		(restated)
		(Unaudited)
DCR Technology acquired from Vasjar	$	3,503,824	$	3,503,824
DCR Technology acquired from Flowstar		414,073		414,073
		3,917,897		3,917,897
Accumulated Amortization		449,734		192,833
Net Technology Assets	$	3,468,163	$	3,725,064

The technology acquired from Flowstar relates to the right to use the DCR technology in markets in Canada and the technology acquired from Vasjar relates to markets outside of Canada. In accordance with SFAS No. 142, intangible assets with a finite life are amortized over their useful life. The useful life of an intangible asset to an entity is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of that entity. Amortization of the technology is recorded on a straight line basis over its useful life which is estimated to expire in March 2012. The Company periodically reviews its DCR technology rights to assess recoverability based on projected undiscounted cash flows from operations. Impairments are recognized in operating results when a permanent diminution in value occurs.

F-5

Accounting Pronouncements – Recent
In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 153. This statement addresses the measurement of exchanges of non-monetary assets. The guidance in APB Opinion No. 29, “Accounting for Non-monetary Transactions,” is based on the principle that exchanges of non-monetary assets should be measured based on the fair value of the assets exchanged. The guidance in that opinion, however, included certain exceptions to that principle. This statement amends Opinion 29 to eliminate the exception for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. A non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. This statement is effective for financial statements for fiscal years beginning after June 15, 2005. Earlier application is permitted for non-monetary asset exchanges incurred during fiscal years beginning after the date of this statement is issued. Management believes the adoption of this statement will have no impact on the financial statements of the Company.

In December 2004, the Financial Accounting Standards Board issued a revision to Statement of Financial Accounting Standards No. 123R, “Accounting for Stock Based Compensation.” This statement supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance. This statement establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. This statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. This statement does not change the accounting guidance for share based payment transactions with parties other than employees provided in Statement of Financial Accounting Standards No. 123. This statement does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, “Employers’ Accounting for Employee Stock Ownership Plans.” The Company has not yet determined the impact to its financial statements from the adoption of this statement.

In November 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 151, “Inventory Costs— an amendment of ARB No. 43, Chapter 4”. This statement amends the guidance in ARB No. 43, Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). This statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of “abnormal.” In addition, this statement requires that allocation of fixed production overhead to the costs of conversion be based on the normal capacity of the production facilities. This statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Management does not believe the adoption of this statement will have any immediate material impact on the Company.

In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity” (hereinafter “SFAS No. 150”). SFAS No. 150 establishes standards for classifying and measuring certain financial instruments with characteristics of both liabilities and equity and requires that those instruments be classified as liabilities in statements of financial position. Previously, many of those instruments were classified as equity. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003 and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of this statement has had no impact on the Company’s financial condition or results of operations.

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

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

F-6

Impairment or Disposal of Long-Lived Assets
In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (hereinafter “SFAS No. 144”). SFAS No. 144 replaces SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.” This standard establishes a single accounting model for long-lived assets to be disposed of by sale, including discontinued operations. SFAS No. 144 requires that these long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or discontinued operations. This statement is effective beginning for fiscal years after December 15, 2001, with earlier application encouraged. The Company adopted SFAS No. 144 which did not have a material impact on the financial statements of the Company for the years presented. All of the Company’s long-lived assets were disposed of during 2002 and 2003. New assets were acquired in 2004 as a result of the acquisition of 100% of the outstanding shares of Flowstar and Vasjar (see Note 9).

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

The components of inventory at June 30, 2005 and December 31, 2004 are as follows:

		June 30,		December 31,
		2005		2004
		(Unaudited)
Finished goods	$	657,544	$	471,222
Raw materials		65,597		38,971
Total inventory	$	723,141	$	510,193

Advertising Expenses
Advertising expenses consist primarily of costs incurred in the design, development, and printing of Company literature and marketing materials. The Company expenses all advertising expenditures as incurred. The Company's advertising expenses were $109,449 and $122,408 for the six months ended June 30, 2005 and the six months ended June 30, 2004 respectively.

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

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

Derivative Instruments
The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (hereinafter “SFAS No. 133”), as amended by SFAS No. 137, “Accounting for Derivative Instruments and Hedging Activities – Deferral of the Effective Date of FASB No. 133”, and SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities”. In April 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities” (hereinafter “SFAS No. 149”). SFAS No. 149 amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under SFAS No. 133. This statement is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of SFAS No. 149 is not expected to have a material impact on the financial position or results of operations of the Company.

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

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

F-7

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

Basic earnings per share includes no dilution and is computed by dividing net income available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. Although there were common stock equivalents outstanding at June 30, 2005 and at December 31, 2004, they were not included in the calculation of earnings per share because they would have been considered anti-dilutive.

Fair Value of Financial Instruments
The Company's financial instruments as defined by Statement of Financial Accounting Standard No. 107, "Disclosures about Fair Value of Financial Instruments," include cash, investments, a note receivable, accounts payable, accrued expenses and notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at June 30, 2005 and at December 31, 2004.

Foreign Currency Translation Gains/Losses
The Company’s reporting currency is the United States dollar. The Company’s functional currency for its subsidiary Flowstar Technologies Inc. is the Canadian dollar. The Company has adopted Financial Accounting Standard No. 52. Monetary assets and liabilities denominated in foreign currencies are translated into United States dollars at rates of exchange in effect at the balance sheet date. Gains or losses are included in income for the year. Non-monetary assets, liabilities and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction.

Going Concern
These consolidated financial statements have been prepared with the assumption being that the Company will continue on a going concern basis and that it will be able to realize assets and discharge liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has incurred an accumulated deficit of approximately $12,241,077 through June 30, 2005. The Company has changed its focus to provide expertise to emerging companies, offering timely product solutions and/or strategic investment opportunities in the oil and gas industries which will, if successful, mitigate these factors which raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. The Company has successfully raised $1,552,319 on a convertible debenture. Management feels that this will be sufficient to fund normal operations through 2005 (see Note 11).

Investments
The Company’s investments consist of non-marketable equity securities. These investments, for which the Company does not have the ability to exercise significant influence in the underlying company, are accounted for under the cost method of accounting. Dividends and other distributions of earnings, if any, are included in income when declared. The Company periodically evaluates the carrying value of its investments, which are recorded at the lower of cost or estimated net realizable value.

Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, after elimination of the intercompany accounts and transactions. Wholly owned subsidiaries of the Company are listed in Note 9.

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

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

F-8

NOTE 4 – NOTE RECEIVABLE

During the period the Company entered into an agreement to advance funds to an unrelated party in the form of a promissory note. This note carries interest at a rate of 7.25%, is due on September 30, 2005 and is secured by a general security agreement.

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is provided using the straight-line method over three to seven years. The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts. Maintenance and repairs are expensed as incurred. Replacements and betterments are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in results of operations.

		June 30, 2005				December 31, 2004
		(Unaudited)
				Accumulated				Accumulated
		Cost		Depreciation		Cost		Depreciation
Tools and Equipment	$	4,300	$	306	$	2,352	$	-
Furniture & Fixtures		12,489		4,504		11,447		3,309
Office Equipment		33,095		12,921		31,009		9,724
Automotive Equipment		78,734		37,295		78,734		24,280
Computer Hardware		31,080		10,350		21,705		6,359
Computer Software		10,655		6,145		8,097		4,026
Leasehold Improvements		748		741		748		556

Total		171,101	$	72,262		154,092	$	48,254

Less: accumulated depreciation		72,262				48,254

Total property, plant and equipment	$	98,839			$	105,838

NOTE 6 – INVESTMENTS

The components of investments at June 30, 2005 and December 31, 2004 are as follows:

		June 30,		December 31,
		2005		2004
		(Unaudited)
Synenco Energy Inc.	$	530,462	$	530,462
Ellycrack AS		463,186		388,186
Total investments	$	993,648	$	918,648

Agreement with Vasjar Trading Ltd.
In January of 2004, the Company entered into an agreement to acquire 100% of the common stock of Vasjar Trading Ltd. ("Vasjar"), a British Virgin Islands corporation.

Vasjar has five Barbados corporate subsidiaries, one of which holds intellectual property rights, including technology rights to the DCR system originally owned by Flowray.

On April 29, 2004, the Company tendered to Vasjar's two shareholders 2,400,000 shares of its common stock as a proposed settlement of the initial share delivery provisions for the Vasjar acquisition. Resolution of both of the shareholders situations has occurred.

As part of the agreement the Company also consented to issue an aggregate of up to 2,600,000 shares additional stock over the years 2005-2007 based on the achievement of Vasjar's minimum annual sales volumes during the years 2004-2006. In the event that earned shares are not timely delivered, the agreement provides for "penalty" shares to be issued and also provides Vasjar's two shareholders with the right to rescind the agreement and receive back their original shares. Wescorp was not able to deliver free-trading shares on April 1, 2005, and so the Company will be liable for to pay the Vasjar shareholders an additional 48,000 Wescorp shares for each month that the shares are not delivered, starting with the month of April 2005.

F-9

According to EITF 98-3 “Determining Whether a Non-monetary Transaction Involves Receipt of Productive Assets of a Business” the Company acquired 100% of the outstanding shares of Vasjar Trading Ltd., a British Virgin Islands company in order to acquire a single identifiable intangible asset, the rights to the technology related to the DCR 900 system.

Agreement with Ellycrack AS
Wescorp has purchased as an aggregate 655,000 shares of common stock of Ellycrack AS, a privately held company in Norway. Wescorp acquired 255,000 shares in consideration of $119,000 that was paid in three installments, $50,000 each on December 29, 2003 and February 2, 2004, and $19,000 in May 2004. On September 15, 2004, the Company issued 300,000 of its shares to Ellycrack AS in exchange for 400,000 shares of Ellycrack AS. The value ascribed to the Ellycrack shares of $150,000 was calculated based on the median trading price of Wescorp shares on that day (being $0.50) . In the first quarter of 2005, Wescorp paid $75,000 for 97,000 additional shares of Ellycrack at five Kroners per share.

Pursuant to a share purchase option agreement dated February 10, 2004, the Company has been granted an option to purchase additional shares to increase the Company's ownership up to 20% of the outstanding common voting shares of Ellycrack on a fully diluted basis as at June 30, 2004. The option is exercisable until the later of June 30, 2004 or the date that is four months after the completion date of the Company's testing of Ellycrack's technology. This testing has not been completed as of the writing of these financial statements. The purchase price for these Ellycrack shares will be equal to 11.85% of the total market value of $5,000,000 in respect of all the outstanding shares of Ellycrack as at June 30, 2004 as mutually agreed by the parties or approximately $592,500.

NOTE 7 – COMMON STOCK AND WARRANTS

Common Stock
The Company is authorized to issue 250,000,000 shares of $0.0001 par value common stock and 50,000,000 shares of $0.0001 par value preferred stock. All common stock shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company. The preferred shares may be issued in series, with the powers, rights and limitations of the preferred shares to be determined by the Company’s board of directors.

2005 Stock Transactions
In the first six months of 2005, the Company issued 1,579,571 shares for total proceeds of $663,000. These shares were issued on the exercise of various warrants at exercise prices of $0.25 to $1.00 per share.

Common Stock Warrants
As of August 8, 2005, the Company has the following common stock purchase warrants outstanding:

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

NOTE 8 – COMMITMENTS

Agreement with Ellycrack AS
In March of 2004, Ellycrack AS (“Ellycrack”) of Norway granted the Company an option exercisable until June 1, 2005 to acquire exclusive rights to use Ellycrack’s high intensive catalytic cracking technology and intellectual property. This would also include the exclusive rights to manufacture, and sell products or systems derived from or utilizing Ellycrack’s technology in North America.

Later in 2004, the Company entered into a joint venture (“JV”) agreement with Ellycrack (superseding prior agreements) that gives Wescorp a 50% interest in the rights to use and benefit from Ellycrack’s high intensive catalytic cracking technology and intellectual property worldwide. In exchange, the Company must pay for the construction and design modifications of a full scale prototype in Canada to the point that such a prototype is commercially saleable. After this point, all future costs will be shared equally between the Company and Ellycrack.

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NOTE 9 –ACQUISITIONS AND DISPOSITIONS OF SUBSIDIARIES

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

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

		Flowstar
		Technologies		Flowray
		Inc.		Inc.
Cash equivalents	$	131,704	$	6,587
Receivables		305,986		-
Inventory		290,906		-
Due from affiliate		-		103,054
Other current assets		23,856		-
Property and equipment		108,286		-
Note receivable		-		444,972
Deferred tax asset		64,777		-
Total Assets	$	925,515	$	554,613

Accounts payable	$	222,949	$	23,416
Deferred tax liability		-		9,938
Due to Wescorp		1,104,150		485,826
Long-term liability		25,385		-
Total Liabilities	$	1,352,484	$	519,180

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

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

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

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

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

Stage Three. On or before April 1, 2007, Wescorp will issue from 800,000 to 1,000,000 additional shares based on sales achieved in the 2006 calendar year; the lower figure being if sales are less than $6,000,000 and the upper figure being if sales are more than $11,250,000. Shares are required to be registered at delivery.

F-11

As part of the agreement the Company agreed to also issue up to an aggregate additional 2,600,000 shares of stock over the years 2005-2007 for the achievement of Vasjar's minimum annual sales volumes during the years 2004-2006. In the event that earned shares are not timely delivered, the agreement provides for "penalty" shares to be issued and also provides Vasjar's two shareholders with the right to rescind the agreement and receive back their original shares. Wescorp was not able to deliver free-trading shares on April 1, 2005, and so the Company will be liable for to pay the Vasjar shareholders an additional 48,000 Wescorp shares for each month that the shares are not delivered, starting with the month of April 2005.

Any Wescorp shares not earned in a particular calendar year because the sales did not achieve the upper sales target will be carried over and added to the shares to be issued in the next calendar year, subject to achievement of the next year’s escalating sales volumes.

The fair market value of the shares due to the Vasjar shareholders’ has been recorded as other short-term and long-term liabilities totaling $1,040,000.

On April 29, 2004, the Company issued and delivered to each of the shareholders of Vasjar 1,200,000 restricted shares of common stock, for a total of 2,400,000 shares, as a proposed settlement of the initial share delivery provisions for the Vasjar acquisition.

NOTE 10 – OTHER LIABILITIES

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

The following comprise the Company’s notes payable at June 30, 2005 and at December 31, 2004:

		June 30,		December 31,
		2005		2004
		(Unaudited)
Note payable – Interest at 0.0%, and secured by automotive assets of Flowstar	$	20,021	$	23,692
Note payable – Interest at 7.75%, compounded monthly and secured by automotive assets of
Flowstar		27,898		31,191
Notes payable – Interest at 0.0%, unsecured		1,062,475		1,062,475
Total notes payable	$	1,110,394	$	1,117,358
Portion due within one year		265,879		265,786
Long-term	$	844,515	$	851,572

Future principal payments are as follows:

		Annual
		Maturity
Year		Amount
2006	$	265,879
2007		412,604
2008		413,092
2009		7,673
2010		11,146
	$	1,110,394

For additional disclosures on notes payable to related parties, see Note 14.

NOTE 11 – CONVERTIBLE DEBENTURES

During the period the Company issued debentures which bear interest at the rate of 14% per annum, payable quarterly which mature on December 31, 2005. The debentures are secured by way of a security interest over the inventory and receivables of Flowstar Technologies Inc., a wholly owned subsidiary of the Company.

The debentures may, at the option of the holder, be converted into units of the Company a price of US$0.90 per unit at any time prior to the maturity date. Each unit shall be comprised of one common share of the Company and one common share purchase warrant each of which may be exercised at any time up to December 31, 2006 as follows:

F-12

	a)	if exercised on or before December 31, 2005 the holder of a warrant shall be entitled to purchase one common share for each warrant held for US$1.00 per common share; and

	b)	thereafter until the maturity date the holder of each warrant shall be entitled to purchase one (1) common share for each warrant held for US $2.00 per share common share.

The Company shall be entitled to prepay the debenture in whole or in part, at any time prior to the maturity date subject to the following:

	a)	the Company provides the holder with at least one months prior written notice (the "Notice Period") of the Company’s intention to repay the debenture ; and

	b)	at the date the notice is issued the weighted average trading price of the Company's common shares as traded on the NASD OTC Bulletin Board for the ten previous trading days was at least US $1.35 per share.

The convertible debentures contained a beneficial conversion feature computed at its intrinsic value, which was the difference between the conversion price and the fair value on the debenture issuance date of the units into which the debt was convertible, multiplied by the number of shares into which the debt was convertible at the commitment date. Since the beneficial conversion feature was to be settled by issuing equity, the amount attributed to the beneficial conversion feature, or $207,000, was recorded as an interest expense and a component of equity on the issuance date.

The fair value of the warrants attached to each unit was calculated using the Black-Scholes Option Pricing Model incorporating the following weighted average assumptions:

Risk free interest rate		3.0%

Expected dividend yield		Nil

Expected stock price volatility		117%

Expected warrant life	.	0.75 year

Weighted average grant date fair value per warrant		0.30

Measurement uncertainty
The Black-Scholes Option Pricing Model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The warrants attached to the units issued by the Company are non-transferable. Option pricing models require the input of subjective assumptions including expected share price volatility. The fair value estimate can vary materially as a result of changes in the assumptions.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

The Company had three consulting agreements. The agreements were effective from April 1, 2003 through March 31, 2005. The consultants were to be paid in cash or common stock, with a deemed price of $0.20 per share. The monthly fee for two consultants was $5,000 each and the other consultant was to receive $2,500 per month. Consultant expense for the quarter ended March 31, 2005 under these agreements was $37,500 (2004 - $37,500). At June 30, 2005, the Company has not issued this stock.

On September 3, 2003, the Company signed an agreement to settle its indebtedness to a former officer of the Company. At the date of the agreement, the individual received $15,000 and is to receive $7,500 per month and 3% of the gross proceeds of any equity financing completed by the Company after the date of the agreement subject to a maximum payment of $37,500 in respect to each financing. The total payment in aggregate will not exceed $150,000. This obligation was paid in full effective June 22, 2005.

At September 2003, the Company approved a transaction with a legal service provider in recognition of a previous credit accommodation. The transaction provided for a direct grant of 100,000 common stock and an additional 100,000 common stock warrants exercisable at $0.50 for five years and with a cashless exercise feature. As part of the transaction, the party agreed to cap legal service costs at an agreed maximum from September 2003 to December 2004, amounting to a reduction of $100 per hour. At June 30, 2005, the Company had not issued this stock or warrants.

F-13

NOTE 13 – LEASES

Operating Leases
The Company leases office space and manufacturing space in Edmonton, Alberta, Canada for $3,450 per month under a month to month operating lease agreement. The Company leases office space in Calgary, Alberta, Canada for $2,420 per month under an operating lease agreement, which expires November 2005. In addition the Company has entered into a lease agreement with respect to a vehicle which has minimum lease payments of $873 per month until June 2007.

NOTE 14 - RELATED PARTY TRANSACTIONS

Related Party Transactions
Summary of related party transactions as follows for the six months ended June 30, 2005 and the year ended December 31, 2004:

		June 30,		December 31,
		2005		2004
Consulting fees paid or accrued to directors of the Company	$	37,500	$	150,000
Interest paid or accrued to shareholders	$	NIL	$	247,351

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

On March 15, 2005, AHC agreed to convert this debt plus accrued and unpaid interest to units (“units”) of the Company at a price of $0.87 per unit. Each unit consists of one common stock share and one common stock share purchase warrant (the "warrant(s)") each of which may be exercised at any time up to December 31, 2006 as follows:

(a)	if exercised on or before December 31, 2005 the holder of each warrant shall be entitled to purchase one common share for each warrant held for $1.00 per common share; and

(b)	thereafter until December 31, 2006 the holder of each warrant shall be entitled to purchase one common share for each warrant held for $2.00 per common share.

The original note was denominated in Canadian dollars. Upon signing the above agreement the parties agreed to a value of the note in the amount of $1,924,681 as at March 15, 2005. Based on this valuation 2,212,277 shares will be issued as a result of this transaction.

Further, on January 28, 2003 the Company granted warrants to AHC which would allow them to purchase 1,000,000 shares of common stock at a price of $0.15 per share in connection with the above stated loan. The warrants expire on March 6, 2006. If these warrants were exercised the shares would have a market value of $780,000 at June 30, 2005.

The terms of the amounts due to shareholders at June 30, 2005 and at December 31, 2004 are as follows:

		June 30,		December 31,
		2005		2004
		(Unaudited)
Note payable –Interest at 15%, compounded semi-annually, paid annually with a maturity
date of December 31, 2005, unsecured, due to a shareholder.	$	-	$	1,979,593

Commitment to issue shares on the conversion of the above note payable – shares to be issued		1,924,681		-
subsequent to the quarter end

Advances from shareholders, non-interest bearing with no set terms of repayment.		-		44,836

Total amounts due to shareholders	$	1,924,681	$	2,024,429

F-14

NOTE 15 – SUBSEQUENT EVENTS

Conditional Purchase Agreement
As a condition on the acquisition of Vasjar the Company was required to issue on or before April 1, 2005 between 480,000 and 600,000 additional shares based on sales achieved in the 2004 calendar year. The lower figure was based on sales of less than $3,000,000, and the upper figure was based on sales in excess of $3,750,000. The shares were required to be registered at delivery.

Wescorp was not able to deliver free-trading shares on April 1, 2005, and so the Company will be liable to pay the former owners of Vasjar an additional 48,000 Wescorp shares for each month that the shares are not delivered, starting with the month of April 2005. If any of the Wescorp shares to be issued to the former owners of Vasjar have not been delivered for a period of 182 days after the applicable due date, they may at their option terminate the share purchase agreements, without notice or prior opportunity to cure. Wescorp has pledged to the former owners of Vasjar all the Vasjar shares as security to guarantee Wescorp’s performance under the share purchase agreements.

NOTE 16— CORRECTION FOR ERRORS

The accompanying consolidated financial statements have been restated to correct information concerning certain transactions that are described in general in this Note 16 and in more detail in respective Notes above. The cumulative effects of the financial statement amendments and the correction for an accounting error, as described above in this Note 16, resulted in the following changes to the Company’s financial statements: For the six months ended June 30, 2005, the Company had originally reported a net loss of $1,381,540 and the corrected net loss is $1,465,442. For the three months ended June 30, 2005, the Company had originally reported a net loss of $834,598 and the corrected net loss is $790,049. The Company had reported an accumulated deficit of $11,964,342 which is now recognized as $12,241,077. The Company’s losses per share remained the same at $0.04 per share and $0.02 per share for the six and three months ended June 30, 2005 respectively.

Reclassification of Goodwill
In March 2004, the Company obtained the rights for Canada to its DCR technology, through its acquisition of Flowstar and Flowray, in exchange for cash consideration of $414,073. Originally this amount was reported as Goodwill on the financial statements. The Company has determined that this amount should have been included as Technology and this amount has accordingly been reclassified on the June 30, 2005 balance sheet.

Amortization of Technology
In August 2004 the remaining world wide rights for the DCR technology were obtained through the acquisition of Vasjar in the amount of $3,503,824. The Company has determined that it is appropriate to amortize the value of the DCR technology on a straight line basis over its useful life which is estimated to expire in March 2012. Accordingly these financial statements reflect amortization of the Technology and a corresponding increase in the net loss in the amount of $256,902 and $128,451 for the six and three months ended June 30, 2005 respectively.

Beneficial Conversion Interest
The convertible debentures contained a beneficial conversion feature computed at its intrinsic value, which was the difference between the conversion price and the fair value on the debenture issuance date of the units into which the debt was convertible, multiplied by the number of shares into which the debt was convertible at the commitment date. Subsequent to the issuance of the original financial statements for the period ended June 30, 2005, it was determined by management that beneficial conversion interest originally recorded in the amount of $380,000 was overstated and should have been $207,000. Also, as a result of this error additional paid in capital originally recorded in the amount of $14,123,978 was overstated and should have been $13,950,979.

F-15

Item 2. Management's Discussion and Analysis Of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and related notes appearing elsewhere in this Form 10-QSB/A.

Overview

During the six months ended June 30, 2005 Wescorp has successfully raised $1,552,319 on the issuance of a convertible debentures and $600,728 on the exercise of outstanding warrants. An additional $110,000 was raised through the convertible debentures but the debenture agreement for these funds has not yet been signed. Furthermore, the loan from AHC Holdings Ltd. in the amount of Cdn $2,382,755 was converted to shares of the company at $0.87 per share valued at US $1,924,681, resulting in the complete elimination of this loan.

Revenue from operations for the second quarter of 2005 totaled $431,428 ($200,109 for the second quarter of 2004). The Company had no revenue from operations for the first quarter of 2004, as Flowray Inc. ("Flowray") and Flowstar Technologies Inc. ("Flowstar") (see "Acquisition of Flowstar and Flowray", below) became wholly owned subsidiaries after the end of the first quarter on March 31, 2004. Flowstar and Flowray were operating prior to their acquisition, and the operating results of this can be reviewed in the Proforma Financial Statements that are included in the 10Q report for the first quarter of 2004. The acquisition of Vasjar Trading Ltd. completed after the end of the second quarter in 2004 and accordingly, assets, liabilities and operations of Vasjar and its subsidiaries, as well as any consolidating entries associated therewith, were reflected in the third quarter of 2004.

To date our quarterly operations have experienced consistently negative cash flows. Management had anticipated that the Flowstar operations would generate increased sales and result in positive quarterly operating cash flows commencing by the end of the 2004 financial year. While Flowstar sales to date have been encouraging the flow meter business has not yet reached the break even level.

Flowstar Technologies Inc. produces advanced natural gas and gas liquids measurement devices based on a proprietary Digital Chart Recorder (DCR) and advanced turbine measurement technology. Flowstar DCR-based devices are self-contained, energy-efficient flow computers with turndown ratio of 40:1 or more for more precise flow measurements and volume calculations that are installed directly to the well-head. Currently these products carry a one year warranty and have no right of return. There is no price protection plan in place.

The rapid growth an organization experiences often places considerable operational, managerial, and financial strain on a company. To ensure the success of our new business plan, we must proactively adhere to the following:

1.	Continue to improve, upgrade, and expand our business infrastructure - In the third quarter of 2004 additional sources of supply for our Flowstar products were identified and developed. A service network for Flowstar was commenced with the successful completion of the first school to certify independent Certified Flowstar Service Technicians.

	Recently Flowstar has hired new sales personnel to promote the sale of flow meters.

2.	Continue to hire, train, and retain key management for our company and ensure any target company does the same - A corporate controller was hired late in March of 2005 and the Company has recently employed an investment relations executive.

3.	Continue to advance the commercialization development programs for target companies so they become cash flow positive as soon as is practically possible – In the third quarter of 2004 the requirement for the construction of a pilot plant in Canada to take the Ellycrack project was identified which resulted in the signing of a Memorandum of Understanding to build such a plant in return for expanding the Company's interests from licenses in North America to a 50% ownership in a Joint Venture covering the entire world.

4.	Maintain adequate financial resources – As noted above in the six months ended June 30, 2005 the Company undertook to raise over one million dollars through the issuance of a convertible debenture. This was successful, and the issuance was closed on April 28, 2005, resulting in the Company raising $1,552,319.

Our future opportunities for success greatly depend on the continued employment of and performance of senior management, including the successful hiring of any key personnel employed by potential target companies. We would be materially adversely affected if one or more of the senior management team does not continue to perform in their present positions, or if we or potential targets are unable to hire and train a sufficient number of qualified management, professional, technical, and regulatory personnel.

A.1 Acquisition of Flowstar and Flowray

On March31, 2004, we completed the acquisition of 100% of the outstanding shares of Flowstar and Flowray in consideration of cash payments to the selling shareholders totaling approximately $414,000 (CDN$550,000).

Flowstar has the non-exclusive worldwide license to use Flowray's technology relating to certain flow meters and to manufacture, market and sell products derived from the technology, including three major product lines used in measuring and recording natural gas flow. Flowray has developed a system known as the Digital Chart Recorder or "DCR" for measuring the flow of gas at the wellhead. Flowstar also markets liquid based totalizers, burner igniters, and Windows^©-based gas flow calculation software, and a line of liquid turbines for which there is no intellectual property, as the patents expired long ago.

Flowstar successfully field-tested the DCR-900 product in 2003. Units were commercially sold in the 2003 year, and were installed in various customer applications. Flowstar continues to develop and improve the DCR product line, including PDA/telephone software and a satellite communication system. The introduction of the DCR-1000 and testing of the differential pressure cell enhances Flowstar’s position as an industry leader providing advanced technological solutions for gas flow measurement equipment.

In 2005 management of Flowstar participated in the ISA Calgary 2005 Show and Conference on April 13 and 14, and the Canadian School of Hydrocarbon Measurement Exhibit in Calgary Alberta on March 22 and 23. Staff also attended the Coal Bed Methane Conference held on March 2 and 3.

In the third quarter of 2004, additional professional sales staff were identified and hired and a sales office was opened in Calgary, giving the company an important presence in the most influential oil and gas industry city in Canada. Management is optimistic about the future prospects for Flowstar and Flowray. Sales and purchase orders for the company in the first quarter totaled 322 units. Management feels that sales will continue to increase over the remaining six months of 2005. In an effort to boost revenue additional sales staff have recently been hired to promote the DCR product line in Alberta

Cash will be required to fund the manufacture of sufficient inventory and to finance the build up of trade accounts receivable that will increase as sales strengthen. Consequently, it is difficult to forecast the total cash required, as it will be contingent on the timing and amount of sales generated over the same period. However, management feels that with the recent closing of the convertible debenture financing, and barring any unforeseen difficulties, the company has sufficient cash to carry it through normal operations to the end of 2005.

A.2 Acquisition of Vasjar

In connection with the acquisition of Flowstar and Flowray, Wescorp also entered into share purchase agreements dated effective January 14, 2004 pursuant to which Wescorp acquired 100% of the outstanding shares of Vasjar Trading Ltd. (“Vasjar”), a British Virgin Islands corporation, Vasjar in turn owns 100% of the outstanding shares of Quadra Products International Inc. (“Quadra”) and Flowstar International, Inc. (formerly Penta Energy Products Inc.) (“Flowstar International”), both of which are Barbados corporations. (Pursuant to an agreement dated as effective August 30, 2003, Flowray had transferred to Quadra all of its intellectual property rights, including rights to the technology related to the DCR 900 system described below, in consideration of a promissory note in the principal amount of CDN$600,000 without interest. The promissory note is now an asset of Flowstar.

The acquisition of Vasjar was concluded on August 19^th, 2004. In consideration of the purchase of all the outstanding shares of Vasjar from two shareholder entities, Wescorp issued shares to said shareholders of Vasjar each as to 50% as follows:

(a)	an aggregate 2,400,000 shares of common stock of the Company on April 28, 2004; and

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

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

If Wescorp fails to deliver any of the Stage 1, 2 or 3 shares, Wescorp will be subject to a penalty of 10% additional shares to be issued to the Vasjar shareholders each month of delay, with a cumulative provision. Wescorp was not able to deliver free-trading shares on April 1, 2005, and so the Company will be liable for to pay the Vasjar shareholders an additional 48,000 Wescorp shares for each month that the shares are not delivered, starting with the month of April 2005. If any of the Wescorp shares to be issued to the Vasjar shareholders have not been delivered for a period of 182 days after the applicable due date, the Vasjar shareholders may at their option terminate the share purchase agreements, without notice or prior opportunity to cure. Wescorp has pledged to the Vasjar shareholders all the Vasjar shares as security to guarantee Wescorp’s performance under the share purchase agreements. Management has taken steps to deliver free trading shares to the Vasjar shareholders and it anticipates that this will be completed in the month of September 2005.

With the completion of the acquisition of Vasjar, the Company now owns all the proprietary technology originally owned by Flowray related to the DCR 900 system and other products. Quadra is planning to grant Flowstar International a license to use the technology and to manufacture, market and sell products derived from the technology, including the DCR 900 system, in all jurisdictions worldwide except Canada. Wescorp has become the parent company of Flowstar USA, which will hold the rights to manufacture, market and sell the DCR system in the United States. Flowstar's current worldwide license will be amended so that Flowstar will retain the rights to manufacture, market and sell the DCR system only in Canada.

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

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

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

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

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

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

Plan of Operation Overview

Prior to the second quarter of operations in 2004 we had not generated any revenues from products, services, or operations since the inception of our company. We are including herein a discussion of our plan of operation for the next 12 months for our revised business plan, which was initiated in late 2003.

In addition, though not required for regulatory purposes, we are also including some additional summary analysis and information regarding our financial condition, liquidity and capital resources. This analysis should be read jointly with the financial statements, related notes, and the cautionary statement regarding forward-looking statements, which appear elsewhere in this filing.

Plan of Operation for the Next Twelve Months

The Flowstar revenue from July 01, 2004 to June 30, 2005 of $2,080,444 is an indication that Flowstar will generate significantly higher operating revenues in the future that will enable it to operate profitably. Our overall future operations are dependent upon the identification and successful completion of additional long-term or permanent equity financing, the continued support of creditors and shareholders, and, ultimately, the achievement of profitability in all facets of our operations. There can be no assurances that we will be successful which would significantly affect our ability to roll out our revised business plan. We will continue to evaluate our projected expenditures relative to our available cash and to seek additional means of financing in order to meet our internal and external growth.

Over the past year, we have integrated the operations of Flowstar and Flowray into our corporate structure, have prepared a comprehensive updated plan to capitalize on the competitive advantages of the DCR products in Canada. Over the next several months, Management will be drawing up a plan of action to manufacture and distribute the DCR products throughout North America and the rest of the world.

The Company has recently closed financing by way of convertible debentures for an aggregate amount of $1,552,319 and an additional $110,000 for which no debenture agreement has been signed. The debentures are secured by the assets of Flowstar and carry interest at the rate of14% per annum with a due date of December 31, 2005. The debt is convertible into Units of the Company at a price of $0.90 per Unit. Each Unit purchased hereunder is comprised of One (1) common share of the Corporation (the "Common Share(s)") and One (1) Common Share purchase warrant (the "Warrant(s)") each of which may be exercised at any time up to December 31, 2006 as follows:

(a) if exercised on or before December 31, 2005 the holder of each Warrant shall be entitled to purchase one (1) Common Share for each Warrant held for $1.00 per Common Share; and

(b) thereafter until December 31, 2006 the holder of each Warrant shall be entitled to purchase one (1) Common Share for each Warrant held for $2.00 per Common Share.

Our operations have been funded to date by debt and equity financing. With the acquisition of Flowstar in 2004, we hope to achieve a positive operating cash flow in the 2005 fiscal year. However, in the event that this does not occur, we will be relying on debt and equity financings as sources of funding in order to provide our Company with sufficient capital to continue our development and operational plans. There can be no assurance that the past trend will continue, which would significantly affect the financial condition of our Company and our ability to effectively implement the proposed business plan for Flowstar and Ellycrack.

Over the next 12 months, we also plan to closely monitor and implement solutions to successfully manage our proposed future growth. This will include:

	1.	Improvement of controls to ensure that information is processed in a timely and efficient manner so that Regulatory Compliance requirements are met. This will also safeguard assets more effectively.

	2.	Retention of key management and staff with an emphasis on proper training and ongoing professional development to ensure we are up to date with the latest advancements that affect our target industries.

	3.	Identification of potential markets for current products and those under development to ensure we can optimize our revenues to generate profits and positive cash flows.

Until the Flowstar operation becomes cash flow positive, Wescorp’s cash on hand is our only source of liquidity. We do not have any lending arrangements in place with banking or financial institutions. We hope to secure conventional bank financing (line of credit) for Flowstar in 2006.

We believe that, with the successful completion of our current convertible debenture financing, our cash balances will be sufficient to carry our normal operations for the next twelve months, before any cash requirements that may be needed for target investments or acquisitions (which would otherwise accelerate our need to raise additional cash). To the extent that we require additional funds to support our operations or the expansion of our business, we may sell additional equity or issue debt. Any sale of additional equity securities will result in dilution to our stockholders. There can be no assurance that additional financing, if required, will be available to our company or on acceptable terms.

We anticipate that the only major purchases of capital assets in the next 12 months will be the building of the Ellycrack Pilot Plant. However, there may be some purchases of office equipment and shop equipment for Flowstar. Also, Flowstar will be conducting some research and development in its ongoing program to maintain the competitive advantage of its products. Wescorp’s current corporate employee count has increased with the hiring of a full time corporate controller and the recent addition of our VP Investor Relations and Corporate Communications. There may be some services that Wescorp will contract out for, given the specialized nature of the business of Flowstar. With the change in our business plan, we anticipate that any change in capital assets, research and development and employees would be subject to change in any targeted operating business that we may acquire, including that of Flowstar and Ellycrack.

Results from Operations – 2005 Compared to 2004

Revenues

Revenues increased by $231,319, or approximately 116% to $431,428 for the quarter ended June 30, 2005 from $200,109 for the quarter ended June 30, 2004. This increase was the result of the increased market acceptance of the DCR systems sold by Flowstar and increased marketing of the Flowstar products. Results for 2004 are indicative of the marketing of a virtually new product in the DCR system and the initial reluctance of the industry to accept the product as a viable alternative to existing technology. The increase in revenue of $851,913 for the six months ended June 30, 2005 from $200,109 for the six months ended June 30, 2004 can be attributed to the acquisition of Flowstar on March 31, 2004.

While revenue for the second quarter of 2005 did not match that of the first quarter of 2005, this decrease can be attributed to spring breakup in Alberta and the introduction of EUB Directive 17. Wetter than average conditions in the months of April and May resulted in a weaker than normal market during a period where sales are traditionally slow. Combine this with the government of Alberta’s introduction of EUB 17 which placed new measurement testing requirements on all devices which measure gas flow and revenues could not be maintained at the levels achieved in the first quarter of 2005.

Cost of Sales

As a percentage of revenues, cost of sales has been consistent in both the first and second quarter of 2005 at 49.5% . This is a slight improvement over the 50.1% cost of sales figures achieved in the second quarter of 2004. This is a strong indicator that the Company has been able to maintain its margins while increasing its market presence of the DCR systems.

Expenses

Operating expenses for the three months ended June 30, 2005 show an increase of $103,036 versus the same period in 2004. Consulting fees for the current year’s three month period ended June 30 are approximately half of those for 2004. In addition legal and accounting costs decreased by $175,531. Last year’s figures for legal and accounting were adversely affected by legal fees incurred to defend the Baum litigation as well as legal and other professional fees related to the acquisition of Flowstar and Flowray.

The above decreases were offset by substantial increases in wages and benefits. Part of the increase in wages and benefits is due to hiring former consultants as employees. Additional staff were hired to fill the management positions of VP Investor Relations and Communications and corporate controller. The Company has also hired administration staff necessary to support the operations of Flowstar and enhance internal controls. Furthermore the Company incurred costs of $128,451 for amortization of technology, $35,845 for insurance and $16,502 for research and development in the current quarter which did not exist in last year’s figures.

Other Income and Expenses

The Company had a loss from other items of $288,438 for the three months ended June 30, 2005 compared to a loss of $66,075 for the same period in 2004. Most of this loss can be attributed to the $207,000 in beneficial conversion interest required to account for the issuance of the convertible debentures. Interest incurred on the debentures in the amount of $77,140 was not in the prior year figures as these debentures have been issued in the current fiscal year. The 2004 figures reflect $66,027 in interest for amounts owing to shareholders and related parties the three months ended June 30, 2004. With the extinguishment of this debt in the current fiscal year no further interest expense has been incurred on this debt. Interest and bank charges have increase by $7,459 due to the financing of vehicles purchased by the Company subsequent to June 30, 2004. Interest income relates to the note receivable issued by the Company in the current quarter.

Net Loss

We incurred a net operating loss for the three months ended June 30, 2005 of $790,049 compared to a net loss of $582,814 for the comparable period in 2004. Had the Company not incurred $207,000 in beneficial conversion interest it would have only shown a loss of $583,049 in the current quarter.

Liquidity and Capital Resources – 2005 Compared to 2004

From inception, we have been dependent on investment capital and debt financing from our shareholders as our primary source of liquidity. To June 30, 2005, we have generated revenues from operations of only $2,280,553 (comprised of $1,228,531 for the three quarters to December 31, 2004 and $1,052,022 for the first six months of 2005). We had an accumulated deficit at June 30, 2005 of $12,241,077.

During the first quarter of 2005, our cash position increased to $1,003,443 at June 30, 2005 from $475,769 at June 30, 2004. We had cash used in operations of $796,775 in the first six months of fiscal 2005 compared to cash used in operations of $1,062,498 in the same period of fiscal 2004. We also had a net outflow of cash of $339,141 from investing activities in the first six months of 2005, which consisted of cash used of $75,000 for the purchase of shares in Ellycrack as noted in the "Financing" section above (2004 - 73,129), the purchase of plant and equipment of $17,010 (2004 - $nil), the issuance of a note receivable in the amount of $272,456 which was offset by the change in deposits of $25,325 (2004 - $nil). The 2004 figures reflect net balances received of $111,878 from Flowstar and Flowray on the purchase of their shares. The net cash used in operating and investing activities was financed by $2,075,855 from financing activities, resulting in a net increase in our cash position for the six month period of $953,045. The cash flow from financing activities is primarily a result of the issuance of some common stock shares net of shares issued for services in the amount of $575,336 and convertible debentures in the amount of $1,552,319 (see Part II, Item 2).

The Company had $5,718,836 in total liabilities at June 30, 2005 compared to $2,414,001 at the end of June 2004. Part of the increase can be attributed to additional trade payables and financing required to sustain the operations of Flowstar resulting in an increase of approximately $493 thousand. In addition, $1,040,000 in debt was incurred as part of the purchase of Vasjar.

The note payable to the related shareholder also increased in value by approximately $209 thousand as a result of the US dollar weakening against the Canadian dollar and additional interest accruing on the loan until it was crystallized into equity. This amount is reflected as deposit equity on the balances sheet as these shares are yet to be issued by the Company.

The Company also obtained additional financing of $2,153,047 through the issue of $600,728 in share capital and an additional $1,552,319 in convertible debentures. There was a repayment of $6,964 on loans used to finance the vehicles acquired after June 30, 2004.

ITEM 3. CONTROLS AND PROCEDURES

The management of Wescorp Energy Inc. (the “Company”), under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the Company’s “disclosure controls and procedures” (as defined in Exchange Act Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

There was no change in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ASI Claim

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

Baum Lawsuit

The Company was successful in its lawsuit with Mr. Mark Baum. Wescorp was awarded $42,471 plus court costs. Mr. Baum appealed the judgment. The final determination of the case at this time is not certain, nor is it certain when or if the Company will receive the court award and costs.

ITEM 2. CHANGES IN SECURITIES

To the end of the second quarter of 2005, Wescorp has raised $1,552,319 on the issuance of a convertible debenture (the closing of which was on April 28) and $635,500 on the exercise of outstanding warrants. In addition, the loan from AHC Holdings Ltd. for Cdn $2,382,755 (US$1,924,681) was converted to shares of the company at $0.87 per share, resulting in the complete elimination of the loan.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

No matters were submitted to a vote of our security holders during the three months ended June 30, 2005.

ITEM 5. OTHER INFORMATION

Not applicable

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Pursuant to Rule 601 of Regulation SB, the following exhibits are included herein or incorporated by reference.

Exhibit
Number	Description

2.1.1*	Loan Agreement dated January 28, 2003 between the Company and AHC Holdings Ltd. Addendum to the Loan Agreement dated February 6, 2003 providing AHC a warrant to purchase 1,000,000 shares of the Company's common stock at $0.15 per share as a bonus for providing the Loan. (Incorporated by reference to Form 8-K filed April 28, 2003).

2.1.13*	Share Purchase Agreement dated as of January 14, 2004 between the Company and the Trustee of the Epitihia Trust. (Incorporated by reference to Form 8-K/A filed on May 12, 2004).

2.1.14*	Share Purchase Agreement dated as of January 14, 2004 between the Company and the Trustee of the Abuelo Trust. (Incorporated by reference to Form 8-K/A filed on May 12, 2004).

2.1.15*	Amending Agreement dated as of June 16, 2004 between the Company and the Trustee of the Epitihia Trust.

2.1.16*	Amending Agreement dated as of June 16, 2004 between the Company and the Trustee of the Abuelo Trust.

2.1.17*	Hypothecation Agreement dated as of July 6, 2004 between the Company, the Trustee of the Epitihia Trust and Yearwood & Boyce.

2.1.18*	Hypothecation Agreement dated as of July 6, 2004 between the Company, the Trustee of the Abuelo Trust and Yearwood & Boyce.

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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

*Previously filed

(b) Reports on Form 8-K

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

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

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 31st day of July, 2006.

	WESCORP ENERGY INC.

Date: July 31, 2006	By: /s/ Douglas Biles
	Douglas Biles, Chief Executive Officer and Director

	By: /s/ Terry Mereniuk
	Terry Mereniuk, Chief Financial Officer and Director