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

FORM 10-KSB

(Mark One)
x Annual Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934 For the fiscal year ended January 31, 2005

¨ Transition Report Under Section 13 Or 15(d) Of The Securities Exchange Act Of 1934 For the transition period from _____ to _____

COMMISSION FILE NUMBER 000-50026

XLR MEDICAL CORP.
(Name of small business issuer in its charter)

NEVADA	88-0488851
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Suite 204, 1480 Gulf Road
Point Roberts, Washington 98281	98281
(Address of principal executive offices)	(Zip Code)

Issuer's telephone number 360-220-5219

Securities registered under Section 12(b) of the Exchange Act: NONE.

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

COMMON STOCK, $0.00001 PAR VALUE PER SHARE.

Check whether the issuer (1) filed all reports required to be filed by Section 13 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 S-B 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 amendment to this Form 10-KSB. ¨

Revenues for the fiscal year ended January 31, 2005 were: Nil.

The aggregate value of the voting stock held by non-affiliates of the registrant, computed as the average of the closing bid and asked prices as of May 27, 2005 was $11,599,940.

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. As of May 27, 2005, the Issuer had 25,799,880 Shares of Common Stock outstanding.

Note: If determining whether a person is an affiliate will involve an unreasonable effort and expense, the issuer may calculate the aggregate market value of the common equity held by non-affiliates on the basis of reasonable assumptions, if the assumptions are stated.

Transitional Small Business Disclosure Format (Check one): Yes ¨ No x

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TABLE OF CONTENTS

PAGE

PART I
Item  1.	Description of Business	1
Item  2.	Description of Property	5
Item  3.	Legal Proceedings	5
Item  4.	Submission of Matters to a Vote of Security Holders	5
PART II
Item  5.	Market for Common Equity and Related Stockholder Matters	6
Item  6.	Management’s Discussion and Analysis Or Plan of Operation	7
Item  7.	Financial Statements	15
Item  8.	Changes in and Disagreements with Accountants On Accounting  and Financial Disclosure	16
Item  8 A.	Controls and Procedures	16
Item  8 B.	Other Information	16
Part III
Item  9.	Directors and Executive Officers, Promoters And Control Persons; Compliance with Section 16(a) of the Exchange Act	17
Item  10.	Executive Compensation	22
Item  11.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	24
Item  12.	Certain Relationships and Related Transactions	26
Item  13.	Exhibits	26
Item  14.	Principal Accountant Fees and Services	28
SIGNATURES		29

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PART I

Certain statements contained in this Form 10-KSB constitute "forward-looking statements". These statements, identified by words such as “plan”, "anticipate”, "believe”, "estimate”, "should”, "expect" and similar expressions, include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Management's Discussion and Analysis or Plan of Operation" and elsewhere in this Form 10-KSB. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (“SEC”), particularly our quarterly reports on Form 10-QSB and our current reports on Form 8-K.

As used in this Annual Report, the terms "we”, "us”, "our”, “the Company” and “XLR” mean XLR Medical Corp., unless otherwise indicated. All dollar amounts in this Annual Report are in U.S. dollars unless otherwise stated.

ITEM 1. DESCRIPTION OF BUSINESS.

We were incorporated on February 2, 2001 under the laws of the State of Nevada. Until September 13, 2004, our business was focused on the acquisition, exploration and development of mineral properties. Following a review of our business, our Board of Directors determined that it was in the Company’s best interests to discontinue our mineral exploration business and to change the focus of our operations to the pursuit of opportunities in the biotechnology field.

Effective on September 13, 2004, we abandoned our mineral exploration business to focus on the business opportunities presented by our acquisition of TSI Medical Corp. (“TSI”) and by the unique cancer treatment technology currently being developed by Exelar Medical Corporation (“EMC”). EMC is a joint venture company established by TSI and the Exelar Corporation (“Exelar”), the original developers of the technology.

Our acquisition of and merger with TSI has been accounted for as a reverse acquisition. As such, TSI has been treated as the acquiring entity for accounting and financial reporting purposes. As such, the fiscal year end of TSI, being January 31, 2004, has been adopted for purposes of our reporting obligations under the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), commencing on September 15, 2004.

Acquisition of and Merger with TSI Medical Corp.

Effective on September 13, 2004, we acquired all of the outstanding shares of TSI. The acquisition of TSI was effected pursuant to an Agreement and Plan of Merger (the “First Merger Agreement”) between us, Carlo Civelli, Bruno Mosimann, TSI and our wholly owned subsidiary incorporated specifically for the purpose of acquiring TSI, TSI Med Acquisition Corp. (“Acquisition Sub”). Pursuant to the First Merger Agreement, TSI merged with and into Acquisition Sub (the “First Merger”), with Acquisition Sub continuing as the surviving corporation and as our wholly-owned subsidiary. On September 15, 2004, we completed a “short form” merger (the “Second Merger”) with Acquisition Sub under the laws of Nevada and changed our name to XLR Medical Corp. Effective on September 15, 2004, the symbol under which we trade on the OTC Bulletin Board was changed to “XLRC”.

In order to effect the acquisition of TSI, we issued the following securities to the former security holders of TSI:

(a) 9,492,667 shares of our common stock (the “Company Shares”) were issued in exchange for 9,492,667 shares of TSI’s common stock (the “TSI Shares”);

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(b)	Options to purchase an aggregate of 1,450,000 Company Shares at $0.50 per share expiring on May 31, 2009 (the “Company Options”) were issued in exchange for options to purchase a total of 1,450,000 TSI Shares at the same price and with the same expiration date (the “TSI Options”); and
(c)	54,367 warrants entitling the holder to purchase one Company Share at $0.75 per share, expiring on October 1, 2006 (the “Company Warrants”), were issued in exchange for 54,367 warrants to purchase one TSI Share at the same price and with the same expiration date (the “TSI Warrants”).

Concurrent with the First Merger, Mr. Civelli and Mr. Mosimann each surrendered 30,000,000 Company Shares (60,000,000 Company Shares in total) for cancellation without the payment of any consideration and Mr. Civelli and Mr. Mosimann resigned as directors and officers of the Company and new directors and officers were appointed.

As TSI’s successor, we have assumed all of TSI’s liabilities and obligations, including TSI’s obligations with respect to a finder’s fee payable to Imaging Technology Ventures, Inc. (“ITV”) for introducing TSI to the business opportunities presented by the EMC Technology. In satisfaction of the finder’s fee, we will issue 300,000 Company Shares to ITV. We also assumed TSI’s obligations with respect to a private placement of securities completed by TSI shortly before the First Merger (the “TSI Private Placement”). Under the TSI Private Placement, TSI offered for sale 500,000 units at $0.35 per unit, with each consisting of one TSI Share and one share purchase warrant entitling the holder to acquire one additional TSI Share at a price of $0.35 per share. During the period ended October 31, 2004, we issued to subscribers 440,005 units consisting of one Company Share and one share purchase warrant entitling the holder to acquire one additional Company Share at a price of $0.35 per share (see Part II, Item 5. “Market for Common Equity and Related Stockholder Matters”).

We have also assumed TSI’s liabilities with respect to a loan agreement dated March 8, 2004 (the “CFW Loan”), pursuant to which TSI’s subsidiary, 689158 B.C. Ltd., borrowed $500,000 from The Charles F. White Corporation (“CFW”). The loan was guaranteed by TSI and was repayable on July 2, 2004 with interest at 12% per annum and a bonus of $80,000. As security for the guarantee, TSI pledged 826,420 shares in the common stock of TechniScan, Inc. (“TechniScan”). TechniScan is a medical technology company engaged in the business of developing and marketing a proprietary imaging system for detecting breast cancer. Effective on February 28, 2005, we entered into a forbearance and amendment agreement (the “Forbearance Agreement”) with CFW whereby CFW granted us until March 31, 2005 to repay the amounts owing under the CFW Loan. We were unable to repay the CFW Loan by that date and are currently in default of the CFW Loan and the Forbearance Agreement. However, CFW has not yet provided us with notice of our default and has not yet sought to enforce their remedies under those agreements.

TSI Medical Corp.

TSI was incorporated in the State of Nevada under the name Purcell Ventures Inc. on December 21, 2000 for the purpose of pursuing business opportunities presented by emerging technologies.

On March 22, 2004, TSI entered into a Technology Acquisition and Funding Agreement (the “Funding Agreement”) with EMC and Exelar, pursuant to which Exelar transferred to EMC the cancer treatment technology currently being developed by it and TSI agreed to provide EMC with equity financing in periodic installments.

The EMC Technology

EMC is currently developing a unique technology to be used in the treatment of cancerous tumors (the “EMC Technology”). The EMC Technology utilizes small super-conducting magnets to control therapeutic radiation doses delivered by photon linear accelerators. Accelerators generate therapeutic beams of X-rays (technically called high energy photon beams). Photons are packets of energy that travel though space at the speed of light. An accelerator is to a radiation therapy beam what a flashlight is to a beam of visible light. However, each photon in a flashlight beam carries only about 1/10,000,000th of the energy of a single photon in an accelerator beam. It is this huge scale-up in photon energy that allows an accelerator beam to penetrate into the body to destroy cancer cells within it. The photons from an accelerator are so energetic that when one collides with an electron in a DNA molecule (or any other chemical) in the body, the electron is ejected with great speed and the molecule is disrupted. The recoiling electron travels onward, predominantly

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in the same direction as the incoming photon. The recoiling electron can penetrate through downstream tissue for some centimeters and on its way destroy many additional molecules. If the molecules are part of the cancer, this contributes to curative effects. If, however, the recoiling electrons travel into healthy tissue belonging to important organs, this can lead to immediately deleterious side-effects and/or significant long-term consequences to the patient.

The EMC Technology is based upon a unique realization that, by applying a locally intense magnetic field to the exterior of the patient's body in the near vicinity of where the photon beam passes through the cancer, one can locally trap significant numbers of the recoiling electrons. The magnetic field causes the recoiling electrons to spiral within the tumor region rather than traveling more or less straight ahead beyond the tumor and into healthy tissue. This patented concept can therefore potentially increase the dosage to a tumor while reducing the exposure of nearby healthy tissue. The magnetic field can also be utilized to simplify alignment of the beam with the tumor and enhance the targeting of moving tumors like those in the lung that shift during respiration.

A prototype device incorporating the EMC Technology (the “Device”) has been developed by Exelar. The Device employs a single, super-conducting magnet slightly larger than the size of a hockey puck. It operates at near absolute 0° (Kelvin). It is cooled by a commercial low temperature refrigerator (cryo-cooler) and is insulated by an evacuated metal case (thermos bottle). Physically, the Device is the size of a beer keg, with the magnet enclosure the size of a stein. Two pizza box sized units hold the evacuation pump and power source. The unit is attached to a gantry, is easily maneuverable and operates as an add-on device in conjunction with a photon accelerator.

Testing of the Device has been done on “phantom” synthetic tissue. Precision dose data is collected in three dimensions inside the phantom. The results of the testing show these effects:

1.	The creation of a “hot spot” of radiation inside the body along the beam with the magnetic field as compared to the beam without the magnetic field.
2.	A significant reduction in the radiation dose “downstream” beyond the hotspot.
3.	An indication that the recoiling elections congregate in higher density tissue (such as tumors).

The data from phantom testing indicates 25% to 40% dose enhancement.

The prototype is currently running in a clinical environment on a Varion 2100 C accelerator at Rush-Presbyterian-St. Luke’s Medical Centre in Chicago.

Technology Acquisition and Funding Agreement

Pursuant to the Funding Agreement with Exelar and EMC, we have the right to acquire up to a 51% interest in EMC by providing funding to EMC as follows:

Funding Date	Amount to be Paid	Number of Shares of  EMC to be Acquired	Cumulative % Ownership of EMC
March 25, 2004	$325,000 (already paid)	162,500	6.7%
June 23, 2004	$575,000 (already paid)	287,500	16.5%
September 21, 2004	$1,550,000	775,000	35.0%
December 20, 2004	$1,000,000	500,000	43.1%
March 20, 2005	$1,300,000	650,000	51.0%
Total	4,750,000	2,375,000	51.0%

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As of the date of filing this Annual Report, we have not provided EMC with the September 21, 2004 financing payment of $1,550,000, the December 20, 2004 financing payment of $1,000,000 or the March 20, 2005 payment of $1,300,000. Exelar had previously agreed not to exercise its default rights with respect to the September 21, 2004 payment in exchange for our agreement to shorten the period during which we may cure a default under the Funding Agreement from 20 days after receipt of notice of default to 3 days after receipt of such notice. We are currently in discussions with Exelar to amend the terms of the Funding Agreement; however, there is no assurance that we will be able to reach an agreement. As of the date of filing this Annual Report, Exelar has not exercised its default rights with respect to the remaining payments under the Funding Agreement; however, there is no assurance that it will continue to refrain from exercising those default rights. In March, 2005, we announced that we had reached a non-binding agreement in principle with an investor based in New York (the “Investor”) for a $4,700,000 convertible note financing, an amount that would have been sufficient to allow us to meet our financing obligations under the Funding Agreement. However, we have recently received notice from the Investor that, due to circumstances outside of our control, he will not be completing the convertible note financing. As a result, we will not receive any of the expected funds from the Investor. We are currently exploring our options and are seeking alternative sources of financing.

Under the terms of the Funding Agreement, we will receive one share of EMC for each $2.00 of funding provided until a total of $4,750,000 in funding is provided. If we default on any of our funding obligations, Exelar may, at its option, convert our shares of EMC into non-voting shares, remove all of our nominees to EMC’s board of directors and reduce our percentage interest in EMC such that the effective price of the EMC shares will be increased to:

(a)	$3.00 per share if we default on any of the financing payments to be made on or before September 21, 2004; and
(b)	$2.50 per share if we default on any of the financing payments to be made after September 21, 2004.

If we complete our funding obligations and the board of the directors of EMC determines that additional funding is required to complete the development and commercialization of the EMC Technology, we will have the option of increasing our percentage ownership in EMC to 60% by providing an additional $1,500,000 in financing.

Also under the Funding Agreement, Exelar will have the option to convert its shares of EMC into Company Shares. The number of Company Shares that Exelar will be entitled to upon conversion will be equal to 49% of the Company Shares outstanding at the time of conversion. Exelar’s option to convert can be exercised upon the earliest of the following events:

(a)	completion of our funding obligations to EMC;
(b)	default by us of any of our funding obligations to EMC;
(c)	March 1, 2005; or
(d)	an initial public offering of our stock.

As we are now past March 1, 2005, Exelar may exercise its conversion rights at any time.

Currently we have provided $900,000 in financing under the Funding Agreement. As a result we currently own approximately 16.5% of EMC, with Exelar owning the remaining 83.5% .

COMPETITION

See “Risk Factors” under Item 6. “Management’s Discussion and Analysis or Plan of Operation”.

GOVERNMENT REGULATIONS AND ENVIRONMENT

See “Risk Factors” under Item 6. “Management’s Discussion and Analysis or Plan of Operation”.

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RESEARCH AND DEVELOPMENT

See “Risk Factors” under Item 6. “Management’s Discussion and Analysis or Plan of Operation”.

EMPLOYEES

We have no full-time employees. Our officers and directors have agreed to provide their services to us on an as needed basis.

ITEM 2. DESCRIPTION OF PROPERTY.

Our corporate headquarters is located at Suite 204, 1480 Gulf Road, Point Roberts, Washington. We are currently operating under a month to month lease and do not own any real estate. We believe that all of our facilities are adequately maintained and suitable for their present use.

Mineral Claims

Prior to September 13, 2004, we were primarily engaged in the business of acquiring, exploring and developing mineral properties. In February, 2001, we acquired a 100% interest in six mineral claims located in the Lillooet Mining Division in the Province of British Columbia, Canada. In order to maintain title to these mineral claims, we were required to pay an annual fee with the Ministry of Sustainable Resource Management for the Province of British Columbia. As our Board of Directors has determined that it is in our best interests to abandon our mineral exploration business in order to focus our resources on the business opportunities presented by the EMC Technology, we have allowed our title to these mineral claims to expire.

ITEM 3. LEGAL PROCEEDINGS.

We are not a party to any material legal proceedings and to our knowledge, no such proceedings are threatened or contemplated.

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

No matters were submitted to our security holders for a vote during the fourth quarter of our fiscal year ended January 31, 2005.

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PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Market Information

Our shares are currently trading on the OTC Bulletin Board (the “OTCBB”) under the symbol “XLRC”. Our shares traded on the OTCBB under the stock symbol RLYM from January 16, 2003 to September 15, 2004. The high and the low bid prices for our shares for the last two fiscal years of actual trading, as reported by the OTCBB, as applicable, were:

QUARTER	HIGH ($)	LOW ($)
1st Quarter ended April 30,  2003	N/A	N/A
2nd Quarter ended July 31, 2003	N/A	N/A
3rd Quarter ended October 31, 2003	0.1167	0.1167
4th Quarter ended January 31, 2004	0.5875	0.1167
1st Quarter ended April 30, 2004	0.51	0.275
2nd Quarter ended July 31,  2004	0.65	0.13
3rd Quarter ended October 31, 2004	0.52	0.28
4th Quarter ended January 31, 2005	0.56	0.255

The above quotations have been adjusted to reflect our 2-for-1 stock split on July 22, 2004 and 6-for-1 stock split on February 5, 2004. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. Quotations for our fiscal quarters ending April 30, 2003 through July 31, 2003 were unavailable from the OTCBB.

Holders of Common Stock

As of May 27, 2005, there were 171 registered holders of our common stock.

Dividends

We have neither declared nor paid any cash dividends on our capital stock and do not anticipate paying cash dividends in the foreseeable future. Our current policy is to retain any earnings in order to finance the expansion of our operations. Our Board of Directors will determine future declarations and payments of dividends, if any, in light of the then-current conditions they deem relevant and in accordance with applicable corporate law.

Recent Sales of Unregistered Securities

Except as described below, all unregistered sales of our equity securities made during the year ended January 31, 2005 have been reported by us in a Quarterly Report on Form 10-QSB or a Current Report on Form 8-K.

In satisfaction of the finder’s fee payable to ITV, we have issued 300,000 Company Shares to ITV. These shares were issued to ITV in satisfaction of a commitment provided by TSI to ITV at the time that TSI entered into the Funding Agreement with EMC and Exelar. At that time, TSI promised to issue 300,000 shares of its common stock to ITV as a finder’s fee for introducing TSI to Exelar and the business opportunities presented by the EMC Technology. ITV is a private company controlled by Douglas P. Boyd, Ph.D., our Chairman of the Board and one of our directors. These shares were issued to ITV pursuant to the exemption to registration contained in Section 4(2) of the Securities Act on the basis that the sale of these shares to ITV did not involve a public offering of our securities.

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Proposed Private Placement

On September 20, 2004, our Board of Directors approved a private placement offering of up to 8,000,000 units at a price of $0.40 per unit (the “Offering”). Total proceeds of the Offering, assuming all units offered are sold, net of commissions, will be $2,880,000. Each unit issued under the Offering will consist of one Company Share and one-half of one share purchase warrant. Each one full share purchase warrant issued under the Offering will entitle the holder to purchase one additional Company Share at a price of $0.50 per share, expiring one year from the date of closing of the Offering. The net proceeds of the Offering are intended to be used by us to meet our financing obligations under the Funding Agreement and as general working capital. Although the Offering has been approved by our Board of Directors, there is no assurance that the Offering will be completed or that we will be able to sell all of the units offered.

If the Offering is completed, it is expected that any issuances of our securities will be made pursuant to the exemptions to registration contained in Regulation S promulgated under the Exchange Act on the basis that the Offering will be made only to people who are not “U.S. Persons”, as defined under Regulation S.

Convertible Note Financing

In March, 2005, we announced that we had negotiated a $4,700,000 convertible note financing with an investor based in New York (the “Investor”). We had reached a non-binding letter of intent with the Investor which was subject to the completion of a formal private placement agreement. However, we have recently received notice from the Investor that, due to circumstances outside of our control, he will not be completing the convertible note financing. As a result, we will not receive any of the expected funds from the Investor. We are currently exploring our options and are seeking alternative sources of financing.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

PLAN OF OPERATION

Subject to our receiving the necessary financing, our plan of operation for the next twelve months is to meet our funding obligations to EMC under the Funding Agreement. Under the Funding Agreement, we are required to provide EMC with aggregate financing in the amount of $3,850,000 and are currently in default of our obligations (see “Technology Acquisition and Funding Agreement” above). As of the date of filing this Annual Report, Exelar has not exercised its default rights under the Funding Agreement; however, there is no assurance that it will continue to refrain from exercising these rights. The amounts payable to EMC under the Funding Agreement are in excess of our current financial resources and we will not be able to proceed with our plan of operations unless we acquire significant additional financing.

We had reached a non-binding agreement in principle for a $4,700,000 convertible note financing, an amount that would have been sufficient to allow us to meet our obligations under the Funding Agreement. Completion of the convertible note financing was subject to the finalization of formal agreements. However, we have received notice from the proposed investor that he will not be completing the convertible note financing. As a result, we will not receive any of the expected funds from the convertible note financing.

We plan to pursue equity financing through the sale of Company Shares on a private placement basis. Our Board of Directors has approved the offering of up to 8,000,000 units to be issued at a price of $0.40 per unit for total potential proceeds net of commissions of $2,880,000. However, there is no assurance that the Offering will be completed or that all of the units offered will be sold.

Currently we do not have any other financing arrangements in place and there is no assurance that we will be able to acquire sufficient financing in order to allow us to meet our funding obligations to EMC. If we are not able to obtain the necessary financing, Exelar may, at its option, reduce our percentage interest in EMC, convert our EMC shares into non-voting shares and/or remove any of our nominees from EMC’s board of directors as provided under the Funding Agreement.

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RESULTS OF OPERATIONS

The financial statements accompanying this Annual Report contemplate our continuation as a going concern. However, we have sustained substantial losses and are still in the development stage. Additional funding will be necessary to meet our funding obligations to EMC and to allow EMC to continue development and marketing of the EMC Technology. We intend to arrange for the sale of additional Company Shares to obtain additional operating capital for at least the next twelve months. There can be no assurance that we will be able to raise the capital necessary to continue our operations.

In accordance with generally accepted accounting principles, TSI has been treated as the acquiring entity for accounting purposes. As such, the results of operations presented in this Annual Report reflect the financial results of TSI for the period from inception on December 21, 2000 onwards and the financial results of Relay Mines Limited from the date of the Second Merger on September 15, 2004 onwards.

Summary of Year End Results

	Year Ended January 31
					Percentage
	2005		2004		Increase / (Decrease)
Revenue	$ --		$ --		--
Expenses	(805,531	)	(530,339	)	51.9%
Loss Before Other Items	(805,531	)	(530,339	)	51.9%
Interest Expense	(154,404	)	(14,714	)	949.4%
Impairment Losses On Investments	(1,285,568	)	--		100%
Net Income (Loss)	$ (2,245,503	)	$ (545,053	)	312.0%

Revenues

We have not earned any revenues to date and we do not anticipate earning revenues until such time as testing and development of the EMC Technology has been completed. We are presently in the development stage of our business and we can provide no assurance that EMC will be able to complete commercial development or successfully sell or license products incorporating the EMC Technology once development is complete.

Expenses

The major components of our expenses for the year are outlined in the table below:

	Year Ended January 31
			Percentage
	2005	2004	Increase / (Decrease)
Consulting and Management Fees	$557,357	$224,550	148.2	%
General and Administrative	248,174	305,789	(18.8	)%
Total	$805,531	$530,339	51.9	%

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The overall increase in our expenses corresponds with our increase in activity during the fiscal year ended January 31, 2005 as a result of our acquisition of an interest in EMC and the EMC Technology. During the year, we incurred management fees of $299,210 paid to one of our former directors and management fees of $80,512 to our former secretary and director.

Impairment Charges

During the year, we recorded impairment charges of $385,568 and $900,000 for our investments in TechniScan and EMC, respectively. We recorded these impairment charges in order to reflect the uncertain value of these investments.

LIQUIDITY AND FINANCIAL CONDITION

Cash Flows					Year Ended January 31
					2005			2004
Net Cash used in Operating Activities				$	(562,540	)	$	(338,665	)
Net Cash used in Investing Activities					(300,010	)		(385,568	)
Net Cash provided by Financing Activities					881,018			730,656
Net Increase in Cash During Period				$	18,468		$	6,423
Working Capital
								Percentage
		At January 31, 2005			At January 31, 2004			Increase / (Decrease)
Current Assets	$	24,923		$	6,455			286.1	%
Current Liabilities		(1,474,628	)		(425,193	)		246.8	%
Working Capital Deficit	$	(1,449,705	)	$	(418,738	)		246.2	%

As at January 31, 2005, we had cash on hand of $24,923. The increase in our current liabilities is largely a result of increases in our operating activities during the year ended January 31, 2005 and the resulting increase in our capital requirements. As at January 31, 2005, we owed $471,965 to various of our current and former officers and directors for expenses incurred on behalf of the Company. In addition, we had loans payable in the amount of $876,000, made up of amounts owing under the CFW Loan and of amounts borrowed from private investors. In addition, we had accounts payable and accrued liabilities of $45,102 and $81,561, respectively.

We currently have insufficient capital reserves to meet our obligations under the Funding Agreement. As such, we are technically in default of the provisions of the Funding Agreement; however, we have not yet received a notice of default from Exelar. In March, 2005, we announced that we had reached a non-binding agreement in principle with an investor based in New York (the “Investor”) for a $4,700,000 convertible note financing, an amount that would have been sufficient to allow us to meet our financing obligations under the Funding Agreement. However, we have recently received notice from the Investor that, due to circumstances outside of our control, he will not be completing the convertible note financing. As a result, we will not receive any of the expected funds from the Investor. We are currently exploring our options and are seeking alternative sources of financing.

Our Board of Directors has also approved a private placement offering of 8,000,000 units at a price of $0.40 per unit for total potential proceeds of $2,880,000 net of conversions. However, there is no assurance that the private placement offering will be completed or that we will be able to sell all units offered under the private placement. Even if all units are sold under the private placement, the funds received will be insufficient to allow us to meet all of our obligations under the Funding Agreement without additional financing.

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We are a development stage company and we currently have no sources of revenue to provide incoming cash flows with which to sustain future operations. Our ability to emerge from the development stage is dependent on our ability to raise additional financing and to generate future revenues, of which there is no assurance. As such, our auditors have expressed the opinion that there is a substantial doubt as to our ability to continue as a going concern.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

CRITICAL ACCOUNTING POLICIES

We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are more thoroughly described in Note 2 to the audited consolidated financial statements included in this Annual Report.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Long-Lived Assets

In accordance with Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets”, the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes an impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.

Stock-Based Compensation

The Company has adopted a stock option plan to fulfill an obligation under the Merger with TSI. The Company accounts for stock-based awards using the intrinsic value method of accounting in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25). Under the intrinsic value method of accounting, compensation expense is recognized if the exercise price of the Company’s employee stock options is less than the market price of the underlying common stock on the date of grant.

Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” (SFAS 123), established a fair value based method of accounting for stock-based awards. Under the provisions of SFAS 123, companies that elect to account for stock-based awards in accordance with the provisions of APB

10

25 are required to disclose the pro forma net income (loss) that would have resulted from the use of the fair value based method under SFAS 123.

The Company issues stock to non-employees for services. The Company accounts for stock issued for services to non-employees in accordance with SFAS No. 123 “Accounting for Stock-Based Compensation”. Compensation expense is based on the fair market value of the stock award or fair market value of the good and services received whichever is more reliably measurable.

The Company will also adopt the disclosure requirements of Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure an Amendment of FASB Statement No. 123” (SFAS 148), to require more prominent disclosures in both annual and interim financial statements regarding the method of accounting for stock-based employee compensation and the effect of the method used on reported results.

RISK FACTORS

Need For Financing

We will not be able to meet our funding obligations to EMC without acquiring substantial additional financing in the near future.

As of the date of filing of this Annual Report, we had not provided EMC with the $1,550,000 financing payment due by September 21, 2004, the $1,000,000 payment due by December 20, 2004 or the $1,300,000 payment due by March 20, 2005. Although Exelar has not exercised its default rights at this time, there is no assurance that we will be able to acquire sufficient financing to meet our obligations under the Funding Agreement. If sufficient financing is not available or obtainable, our ability to acquire or retain our interest in EMC may be substantially limited and investors may lose a substantial portion or all of their investment. We currently do not have sufficient financing arrangements in place to meet our funding obligations to EMC and there is no assurance that we will be able to acquire the required financing on acceptable terms or at all.

Liabilities of TSI

As a result of our acquisition of and merger with TSI, we have assumed all of TSI’s liabilities.

We are currently in default of the CFW Loan as amended by the Forbearance Agreement. This loan is secured by 826,240 shares of TechniScan, Inc. (“TechniScan”). TechniScan is a medical technology company engaged in the business of developing and marketing a proprietary imaging system for detecting breast cancer. CFW has not yet exercised its default rights; however, there is no assurance that it will continue to refrain from exercising those rights. If CFW exercises its default rights before we are able to obtain sufficient financing to repay the CFW Loan, we may lose our rights to the TechniScan shares and CFW may seek to take legal action to enforce their rights. If CFW is successful in any legal proceedings it may bring, our ability to meet our plan of operations and to continue as a going concern may be substantially limited.

Limited Operating History And Risks Of A New Business Venture

TSI was incorporated on December 21, 2000 and, until its entry into the Funding Agreement on March 22, 2004, had been involved in organizational and development activities and seeking business opportunities. TSI had not earned any revenues prior to its merger with Acquisition Sub and has not earned any revenues since that time.

Potential investors should be aware of the difficulties normally encountered by a new enterprise and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties complications and delays encountered in connection with the development of a business in the area in which we and EMC intend to operate and in connection with the formation and commencement of operations of a new business in general. These include, but are not limited to, unanticipated problems relating to research and development programs, marketing, approvals by the FDA, competition and additional costs and expenses that may exceed current estimates. There is no history upon

11

which to base any assumption as to the likelihood that we or EMC will prove successful, and there can be no assurance that we or EMC will generate any operating revenues or ever achieve profitable operations.

EMC’s Operations Are Subject To Extensive Government Regulations

EMC’s operations will be subject to extensive government regulations in the United States. In order to sell its devices, EMC must satisfy numerous mandatory procedures, regulations, and safety standards established by the federal and state regulatory agencies. There can be no assurance that EMC can successfully comply with all present or future government regulations.

The Health Care Industry Is Subject To Continuing Reform Measures By Governments And Third Party Payors, Which Contribute To The Uncertainty Of Pricing And Reimbursements To Us

The levels of revenue and profitability of medical devices may be affected by government and third party payors for medical services and their continuing efforts to contain or reduce the costs of health care and by initiatives of third party payors with respect to the availability of reimbursements for medical services. In the United States, there have been, and we expect that there will continue to be, a number of federal and state proposals to implement similar governmental control. Although we cannot predict what legislative reforms may be proposed or adopted or what actions federal, state or private payors for health care services may take in response to any health care reform proposals or legislation, the existence and pendency of such proposals could have a material adverse effect on us and EMC.

Whether a medical procedure is subject to reimbursement from third party payors impacts upon the likelihood that a service will be purchased. Third party payors are increasingly challenging the prices charged for medical procedures. There can be no assurance that any procedures using EMC’s medical devices will be reimbursable. To the extent that any or all medical procedures using EMC’s medical devices are not reimbursable by third party payors, EMC’s ability to sell products on a competitive basis will be adversely affected, which could have a material adverse effect on us and EMC.

Rapid Technological Changes In Our Industry Could Make Our Products Obsolete

The medical devices industry is characterized by rapid technological change and intense competition. New technologies, products and industry standards will develop at a rapid pace which could make EMC’s planned product obsolete. The advent of new devices and procedures and advances in new drugs and genetic engineering are especially threatening. EMC’s and our future success will depend upon EMC’s ability to develop and introduce product enhancements to address the needs of its customers. Material delays in introducing product enhancements may cause customers to forego purchases of EMC’s product and purchase those of competitors.

EMC Must Receive And Maintain Government Clearances Or Approvals In Order To Market Its Products

EMC’s products and future manufacturing activities are subject to extensive, rigorous and changing federal and state regulation in the United States and to similar regulatory requirements in other major international markets, including the European Union and Japan. These regulations and regulatory requirements are broad in scope and govern, among other things:

• product design and development;
• product testing;
• product labeling;
• product storage;
• pre-market clearance and approval;
• advertising and promotion; and
• product sales and distribution.

Furthermore, regulatory authorities subject a marketed product, its manufacturer and the manufacturing facilities to continual review and periodic inspections. EMC will be subject to ongoing FDA requirements, including required submissions of safety and other post-market information and reports, registration requirements, quality systems regulations, and recordkeeping requirements. The quality systems regulations include requirements relating to quality control and quality assurance, as well as the corresponding

12

maintenance of records and documentation. EMC’s prospective distributors, depending on their activities, will also be subject to certain requirements under federal and state laws and registration requirements covering the distribution of products. Regulatory agencies may change existing requirements or adopt new requirements or policies that could affect EMC’s regulatory responsibilities or the regulatory responsibilities of a prospective distributor. EMC may be slow to adapt or may not be able to adapt to these changes or new requirements.

Later discovery of previously unknown problems with EMC’s products, manufacturing processes, or failure to comply with applicable regulatory requirements may result in enforcement actions by the FDA and other international regulatory authorities, including, but not limited to:

• warning letters;
• patient or physician notification;
• restrictions on our products or manufacturing processes;
• voluntary or mandatory recalls;
• product seizures;
• refusal to approve pending applications or supplements to approved applications that EMC submits;
• refusal to permit the import or export of EMC’s products;
• fines;
• injunctions;
• suspension or withdrawal of marketing approvals or clearances; and
• civil and criminal penalties.

Should any of these enforcement actions occur, EMC’s and our business, financial condition and results of operations could be materially and adversely affected.

Asserting And Defending Intellectual Property Rights May Impact Results Of Operations

In the medical devices industry, competitors often assert intellectual property infringement claims against one another. The success of EMC’s business depends on its ability to successfully defend its intellectual property rights. Future litigation may have a material impact on EMC’s and our financial condition even if EMC is successful in developing and marketing products. EMC may not be successful in defending or asserting its intellectual property rights.

An adverse outcome in any litigation or interference proceeding could subject EMC to significant liabilities to third parties and require it to cease using the technology that is at issue or to license the technology from third parties. In addition, a finding that any of its intellectual property rights are invalid could allow its competitors to more easily and cost-effectively compete. Thus, an unfavorable outcome in any patent litigation or interference proceeding could have a material adverse effect on EMC’s and our business, financial condition or results of operations.

The cost to EMC of any patent litigation or interference proceeding could be substantial. Uncertainties resulting from the initiation and continuation of patent litigation or interference proceedings could have a material adverse effect on its ability to compete in the marketplace. Patent litigation and interference proceedings could also absorb significant management time.

EMC May Be Subject To Product Liability Lawsuits

EMC may be subject to product liability claims. The United States Supreme Court has stated that compliance with FDA regulations will not shield a company from common law negligent design claims or manufacturing and labeling claims based on state rules. Such claims may absorb significant management time and could degrade EMC’s reputation and the marketability of its products. If product liability claims are made with respect to EMC’s products, they may need to recall the implicated product which could have a material adverse effect on EMC’s and our business, financial condition and results of operations. In addition, although EMC may maintain product liability insurance, it cannot be sure that such insurance will be adequate to cover potential product liability lawsuits. Insurance is expensive and in the future may not be available on acceptable terms, if at all. If a successful product liability claim or series of claims exceeds insurance

13

coverage, it could have a material adverse effect on EMC’s and our business, financial condition and results of operations.

Competition

The business environment in which EMC intends to operate is highly competitive. EMC expects to experience competition from companies involved in the medical technology industry. Certain of EMC’s potential competitors will have greater technical, financial, marketing, sales and other resources than EMC.

Dependence On Key Personnel

Our success will largely depend on the performance of our directors and officers and those of EMC. Our success will also depend on EMC’s ability to attract and retain highly skilled technical, research, management, regulatory compliance, sales and marketing personnel. Competition for such personnel is intense. The loss of the services of such personnel or the inability to attract and retain other key personnel could impair the development of EMC’s and consequently our business, operating results and financial condition.

Potential Legal, Regulatory, And/Or Compliance Risk

EMC will be required to comply with certain regulations, rules, and/or directives, including FDA approval. If EMC is not able to obtain FDA approval of its device under section 510(k) of the United States Food, Drug and Cosmetic Act as anticipated, it will be required to enter into an expensive and lengthy process to obtain FDA approval for the use of its device. Potential regulatory conditions and/or compliance therewith and the effects of such to EMC, may have a materially adverse affect upon EMC’s and our business operations, prospects and/or financial condition.

14

ITEM 7. FINANCIAL STATEMENTS.

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)

			Index
1.	Report of Independent Registered Public Accounting Firm		F–1
2.	Audited Financial Statements for the Year Ended January 31, 2005, including:
	a.	Consolidated Balance Sheets at January 31, 2005 and January 31, 2004;	F–2
	b.	Consolidated Statements of Operations for the years ended January 31, 2005 and January 31, 2004;	F–3
	c.	Consolidated Statements of Cash Flows for the years ended January 31, 2005 and January 31, 2004; and	F–4
	d.	Consolidated Statement of Stockholders’ Deficit for the years ended January 31, 2005 and January 31, 2004;	F–5
	e.	Notes to the Consolidated Financial Statements	F–6

15

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of
XLR Medical Corp. (formerly Relay Mines Limited)
(A Development Stage Company)

We have audited the accompanying balance sheet of XLR Medical Corp. (formerly Relay Mines Limited) as of January 31, 2005, and the related statements of operations, cash flows and stockholders’ deficit for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. The accompanying balance sheet of XLR Medical Corp. as of January 31, 2004, and the related statements of operations, cash flows and stockholders’ deficit for the year then ended and for the period from December 21, 2000 (Date of Inception) to January 31, 2004 were audited by other auditors in their report dated October 20, 2004. Those auditors expressed an unqualified opinion on those financial statements and included an explanatory paragraph describing the substantial doubt about the Company's ability to continue as a going concern.

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

In our opinion, the aforementioned financial statements referred to above present fairly, in all material respects, the financial position of XLR Medical Corp. as of January 31, 2005, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has no business operations and has suffered recurring operating losses since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ “Manning Elliott”

CHARTERED ACCOUNTANTS

Vancouver, Canada

May 13, 2005, except for Notes 12(a) and (c) as to which the date is June 6, 2005

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Consolidated Balance Sheets
(expressed in U.S. dollars)

	January 31,		January 31,
	2005		2004
	$		$
ASSETS
Current Assets
Cash	24,923		6,455
Total Current Assets	24,923		6,455
Investments (Notes 3 and 4)	–		385,568
Total Assets	24,923		392,023
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable	45,102		3,316
Accrued liabilities	81,561		–
Due to related parties (Note 5)	471,965		266,877
Loans payable (Note 7)	876,000		155,000
Total Liabilities	1,474,628		425,193
Contingencies and Commitments (Notes 1 and 4)
Stockholders’ Deficit
Common Stock (Note 8)
Authorized: 100,000,000 shares, par value of $0.00001
Issued and outstanding: 25,799,880 and 9,492,667 shares, respectively	258		95
Additional Paid-in Capital	1,689,616		866,811
Additional Common Stock Subscribed	6,000		–
Deficit Accumulated During the Development Stage	(3,145,579	)	(900,076	)
Total Stockholders’ Deficit	(1,449,705	)	(33,170	)
Total Liabilities and Stockholders’ Deficit	24,923		392,023

The Accompanying Notes are an Integral Part of the Consolidated Financial Statements
F-2

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Consolidated Statements of Operations
(expressed in U.S. dollars)

	Accumulated from
	December 21, 2000		For the Year
	(Date of Inception)		Ended
	to January 31,		January 31,
	2005		2005		2004
	$		$		$
Revenue	–		–		–
Expenses
Consulting and management fees (Note 5) (1)	895,407		557,357		224,550
General and administrative	672,486		248,174		305,789
Total Expenses	1,567,893		805,531		530,339
Loss Before Other Items	(1,567,893	)	(805,531	)	(530,339	)
Impairment losses on investments (Notes 3 and 4)	(1,408,568	)	(1,285,568	)	–
Interest expense (Note 7)	(169,118	)	(154,404	)	(14,714	)
Net Loss for the Period	(3,145,579	)	(2,245,503	)	(545,053	)
Net Loss Per Share – Basic and Diluted			(0.14	)	(0.06	)
Weighted Average Shares Outstanding			15,620,000		8,963,000
(1) Stock-based compensation is included in the following:
Consulting and management fees	68,960		68,960		–

The Accompanying Notes are an Integral Part of the Consolidated Financial Statements
F-3

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Consolidated Statements of Cash Flows
(expressed in U.S. dollars)

	Accumulated from
	December 21, 2000
	(Date of Inception)		Year Ended
	to January 31,		January 31,
	2005		2005		2004
	$		$		$
Cash Flows Used in Operating Activities
Net loss	(3,145,579	)	(2,245,503	)	(545,053	)
Adjustments to reconcile net loss to net cash used in operating
activities:
Impairment losses on investments	1,285,568		1,285,568		–
Stock-based compensation	68,960		68,960		–
Changes in operating assets and liabilities
Accounts payable and accrued liabilities	126,663		123,347		(11,389	)
Due to related parties	471,965		205,088		217,777
Net Cash Used in Operating Activities	(1,192,423	)	(562,540	)	(338,665	)
Cash Flows Used In Investing Activities
Net book value of assets acquired in reverse merger, net of cash	599,990		599,990		–
Investment in Exelar Medical Corp.	(900,000	)	(900,000	)	–
Investment in TechniScan Inc.	(385,568	)	–		(385,568	)
Net Cash Used in Investing Activities	(685,578	)	(300,010	)	(385,568	)
Cash Flows From Financing Activities
Cash received in reverse merger	18		18		–
Proceeds from loans payable	876,000		721,000		155,000
Proceeds from sale of common stock	1,026,906		160,000		575,656
Net Cash Provided by Financing Activities	1,902,924		881,018		730,656
Increase in Cash	24,923		18,468		6,423
Cash – Beginning of Period	–		6,455		32
Cash – End of Period	24,923		24,923		6,455
Non-cash Investing and Financing Activities
Stock-based compensation	68,960		68,960		–
Supplemental Disclosures
Interest paid	–		–		–
Income taxes paid	–		–		–

The Accompanying Notes are an Integral Part of the Consolidated Financial Statements
F-4

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Consolidated Statement of Stockholders’ Deficit
From December 21, 2000 (Date of Inception) to January 31, 2005
(expressed in U.S. dollars)

								Accumulated
	Common Stock						Additional	Deficit
	Number				Additional		Common	During the
	Of				Paid-In		Stock	Development
	Shares		Amount		Capital		Subscribed	Stage		Total
			$		$		$	$		$
Balance, December 21, 2000 (Date of
inception)	–		–		–		–	–		–
Balance, January 31, 2001	–		–		–		–	–		–
January 11, 2002 - Shares issued for cash
at $ 0.001	5,000,000		5,000		–		–	–		5,000
January 29, 2002 - Shares issued for cash
at $ 0.01	3,000,000		3,000		27,000		–	–		30,000
Net loss for the year	–		–		–		–	(14,573	)	(14,573	)
Balance, January 31, 2002	8,000,000		8,000		27,000		–	(14,573	)	20,427
							–
Shares issued for cash at $0.50	512,500		513		255,737		–	–		256,250
Net loss for the year	–		–		–		–	(340,450	)	(340,450	)
Balance, January 31, 2003	8,512,500		8,513		282,737		–	(355,023	)	(63,773	)
June 23, 2003 – Shares issued for cash at
$0.50	432,500		432		215,818		–	–		216,250
September 30, 2003 – Shares issued for
cash at $0.75	547,667		548		410,202		–	–		410,750
September 30, 2003 – Share issuance
costs	–		–		(51,344	)	–	–		(51,344	)
Net loss for the year	–		–		–		–	(545,053	)	(545,053	)
Balance, January 31, 2004	9,492,667		9,493		857,413		–	(900,076	)	(33,170	)
Adjustment for change in par value	–		(9,398	)	9,398		–	–		–
	9,492,667		95		866,811		–	(900,076	)	(33,170	)
Recapitalization transactions – September
13, 2004
Shares of Relay Mines Limited	73,367,208		734		(734	)	–	–		–
Cancellation of shares of two directors	(60,000,000	)	(600	)	600		–	–		–
Shares issued pursuant to subscriptions
received prior to the recapitalization	2,500,000		25		(25	)	–	–		–
Net assets of Relay Mines Limited
acquired (Note 5)	–		–		600,008		–	–		600,008
Shares issued for cash on October 15,
2004	440,005		4		153,996		–	–		154,000
Share subscriptions received	–		–		–		6,000	–		6,000
Stock options issued for services on
October 19, 2004	–		–		68,960		–	–		68,960
Net loss for the year	–		–		–		–	(2,245,503	)	(2,245,503	)
Balance, January 31, 2005	25,799,880		258		1,689,616		6,000	(3,145,579	)	(1,449,705	)

The Accompanying Notes are an Integral Part of the Consolidated Financial Statements
F-5

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)

1.	Nature of Operations, Recapitalization and Continuance of Business
	Relay Mines Limited (“Relay”) was incorporated in the State of Nevada on February 2, 2001. Pursuant to an Agreement and Plan of Merger dated August 12, 2004 and an Agreement and Plan of Merger dated September 13, 2004 (the “Merger”), Relay acquired and merged with, by way of reverse merger, TSI Medical Corp., a Nevada corporation (“TSI”). The Merger of TSI by Relay is considered a recapitalization of TSI whereby TSI is considered the acquirer for accounting and financial reporting purposes. The consolidated financial statements include the accounts of Relay since the reverse merger (September 13, 2004) and the historical accounts of TSI since the date of its inception, December 21, 2000. All significant intercompany balances and transactions have been eliminated on consolidation. Relay changed its name to XLR Medical Corp. (the “Company” or “TSI” for transactions entered into prior to the Merger) and changed its trading symbol to XLRC.
	TSI is involved in a joint venture with Exelar Corporation (“Exelar”) for the purpose of developing a patented technology that utilizes small superconducting magnets to focus and control dosages of therapeutic radiation for the treatment of cancerous tumours (the “Technology”). Under a Technology Acquisition and Funding Agreement dated March 22, 2004 with Exelar Corporation (the “Exelar Agreement”), Exelar transferred the Technology to its wholly-owned subsidiary, Exelar Medical Corporation (“EMC”), and TSI agreed to provide funding to EMC in exchange for rights to acquire up to a 60% interest in EMC.
	Upon completion of the Merger on September 13, 2004 with TSI, the Company:

a)	caused 60,000,000 common shares, previously issued to two directors of the Company, to be returned to treasury and cancelled for no consideration;
b)	issued 9,492,667 common shares to the shareholders of TSI to acquire 100% of the issued and outstanding shares of TSI on a one-for-one basis;
c)	agreed to adopt a stock option plan providing for the grant of options to purchase up to 1,450,000 common shares at $0.50 per share expiring May 31, 2009 to the holders of outstanding TSI options;
d)	issued warrants to acquire 54,367 common shares at $0.75 per share expiring October 1, 2006 to the holders of outstanding TSI warrants;
e)	assumed an obligation of TSI to issue units at $0.35 per unit. A total of 440,005 units were subscribed for and $154,002 was received. These units have been issued. Each unit consists of one common share and one warrant. The warrant allows the holder to acquire one additional common share at $0.35 per share; and
f)	assumed an obligation of TSI to issue 300,000 common shares as a finder’s fee in connection with TSI’s acquisition of its interest in EMC.

The Company is a development stage company as defined by Statement of Financial Accountings Standards  (“SFAS”) No. 7 “Accounting and Reporting by Development Stage Enterprises”. In a development stage company,  management devotes most of its activities in developing a market for its products and/or services. The Company is  presently in its developmental stage and currently has no sources of revenue to provide incoming cash flows to  sustain future operations. The ability of the Company to emerge from the development stage with respect to any  planned principal business activity is dependent upon its successful efforts to raise additional equity financing and  then generate significant revenue. Management has plans to seek additional capital through equity and/or debt  offerings. There is no guarantee that the Company will be able to complete any of the above objectives. These  factors raise substantial doubt regarding the Company’s ability to continue as a going concern. 

At January 31, 2005, the Company had a working capital deficit of $1,449,705 and has incurred losses of  $3,145,579 since inception. The Company will not be able to complete its funding obligations under the Exelar  Agreement without acquiring substantial additional financing in the near future. If financing is not available or  attainable, the Company’s ability to retain or increase its interest in EMC will be substantially limited. The Company  currently does not have sufficient financing arrangements in place to meet its funding obligations to EMC and there  is no assurance that the Company will be able to acquire the required financing on acceptable terms or at all. The  Company expects to fund itself by the sale of shares or the issuance of debt. 

F-6

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)

2.      Summary of Significant Accounting Principles

a)	Basis of Accounting and Fiscal Year End
	These consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States and are presented in U.S. dollars. The Company has changed its fiscal year end of June 30 to that of TSI, which is January 31 because of the reverse merger. The historical financial statements presented are those of TSI.
b)	Use of Estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
c)	Cash and Cash Equivalents
	The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.
d)	Long-Lived Assets
	In accordance with Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.
e)	Foreign Currency Translation
	The Company’s functional and reporting currency is the United States dollar. Foreign currency transactions are primarily undertaken in Canadian dollars and are translated into United States dollars using exchange rates at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are remeasured at each balance sheet date at the exchange rate prevailing at the balance sheet date. Foreign currency exchange gains and losses are charged to operations. The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
f)	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". SFAS No. 128 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 shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period 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 shares if their effect is anti dilutive.
g)	Financial Instruments
	The carrying value of cash, accounts payable, accrued liabilities, due to related parties, and loans payable approximate fair value due to the relatively short maturity of these instruments.
h)	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 January 31, 2005 and 2004, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

F-7

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)

2. Summary of Significant Accounting Principles (continued)

i)	Stock-Based Compensation
	The Company has adopted a stock option plan to fulfill an obligation under the Merger with TSI. The Company accounts for stock-based awards using the intrinsic value method of accounting in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25). Under the intrinsic value method of accounting, compensation expense is recognized if the exercise price of the Company’s employee stock options is less than the market price of the underlying common stock on the date of grant.
	Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation”, (SFAS 123), established a fair value based method of accounting for stock-based awards. Under the provisions of SFAS 123, companies that elect to account for stock-based awards in accordance with the provisions of APB 25 are required to disclose the pro forma net income (loss) that would have resulted from the use of the fair value based method under SFAS 123.
	The Company issues stock to non-employees for services. The Company accounts for stock issued for services to non-employees in accordance with SFAS No. 123 “Accounting for Stock-Based Compensation”. 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.
	The Company has also adopted the disclosure requirements of Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure an Amendment of FASB Statement No. 123” (SFAS 148), to require more prominent disclosures in both annual and interim financial statements regarding the method of accounting for stock-based employee compensation and the effect of the method used on reported results.
	2004 Stock Option Plan
	The Company adopted a Stock Option Plan dated September 13, 2004 under which the Company is authorized to grant options to acquire up to a total of 1,450,000 common shares.
	The Company recognized stock-based compensation expense of $68,960 (2004 - $nil) which is included in consulting and management fees expense. The following table illustrates the effect on net loss per share as if the fair value method had been applied to all outstanding and vested awards in each year.

	Year ended
	January 31,
	2005		2004
	$		$
Net loss — as reported	(2,245,503	)	(545,053	)
Add: Stock-based compensation expense included in
net loss — as reported	68,960		–
Deduct: Stock-based compensation expense
determined under fair value method	(499,960	)	–
Net loss — pro forma	(2,676,503	)	(545,053	)
Net loss per share (basic and diluted) — as reported	(0.14	)	(0.06	)
Net loss per share (basic and diluted) — pro forma	(0.17	)	(0.06	)

	The fair value of the options granted during the year was estimated at the date of grant using the Black- Scholes option pricing model using the following weighted average assumptions: risk free interest rate of 2.40%, expected volatility of 152%, an expected option life of 2.5 years and no expected dividends. The weighted average fair value of options granted was $0.34 per share. Had the Company determined compensation cost based on the fair value at the date of grant for its employee stock options, the net loss would have increased by $431,000 for the year ended January 31, 2005. There was no dilutive impact of potential common shares associated with stock options, by application of the treasury stock method, as the Company had net losses.
(j)	Reclassifications
	Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation.

F-8

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)

2.      Summary of Significant Accounting Principles (continued)

k)	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 the Company’s inception. Pursuant to SFAS No. 109, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefit of net operating losses has not been recognized in these financial statements because the Company cannot be assured that it is more likely than not that it will be able to utilize the net operating losses carried forward in future years.
l)	Recent Accounting Pronouncements
	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.
	In December 2004, FASB issued SFAS No. 123R (“SFAS 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 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. The adoption of this standard is not expected to have a material effect on the Company’s results of operations or financial position.
	In March 2005, the SEC staff issued Staff Accounting Bulletin No. 107 (“SAB 107”) to give guidance on the implementation of SFAS 123R. The Company will consider SAB 107 during implementation of SFAS 123R.

F-9

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)

3.	Investment in TechniScan Inc.
	On June 25, 2003, TSI and TechniScan, Inc. (“TechniScan”) executed an operating agreement (the “Operating Agreement”) to effect a joint venture to form a Utah limited liability company called SafeScan Medical Systems, LLC (“SafeScan”) for the purposes of commercializing TechniScan’s Proprietary Inverse Scattering Technology. However, as of November 15, 2003, TSI failed to comply with the capital contribution obligation of the Operating Agreement. As a result, TSI converted its capital contribution to the joint venture into an investment in the common shares of TechniScan. TSI acquired 826,420 shares at $0.40 per share. TechniScan is a medical technology company engaged in the business of developing and marketing a proprietary imaging system for detecting breast cancer. Upon the conversion, TSI had no further interest in SafeScan or any of its assets. These shares are lodged as security for a loan (Note 7(a)). During the year ending January 31, 2005, the Company recognized an impairment loss of $385,568, due to the uncertainty of future cash flows produced by the investment since TechniScan has no revenue and is developing a new technology.
4.	Investment in Exelar Medical Corp.
	On March 22, 2004, TSI entered into a Technology Acquisition and Funding Agreement (the “Exelar Agreement”) with Exelar and EMC to acquire and develop a technology utilizing super-conducting magnets to control therapeutic radiation doses delivered by photon linear accelerators (the “Technology”). TSI will participate in the development and commercialization of the Technology by funding the acquisition and development of the Technology. Under the Exelar Agreement, Exelar transferred the Technology to its wholly owned subsidiary, EMC, and TSI agreed to provide funding to EMC in exchange for rights to acquire up to a 60% interest in EMC. Under the Exelar Agreement, to complete the acquisition of the first 51% of EMC, TSI must:

i)	fund EMC $900,000 by June 23, 2004 (funded) to earn a 16.5% interest (earned);
ii)	fund EMC a further $1,550,000 by September 21, 2004 to earn an additional 18.5% interest (extended but not in default);
iii)	fund EMC a further $1,000,000 by December 20, 2004 to earn an additional 8.1% interest (extended but not in default); and
iv)	fund EMC a further $1,300,000 by March 20, 2005 to earn an additional 7.9% interest.

Under the Exelar Agreement the Company will receive one share of EMC for every $2 of funding. If the Company  defaults on any of its funding obligations, Exelar may, at its option, convert the Company’s shares of EMC into  non-voting shares, remove the Company’s nominees from the Board of EMC and reduce the Company’s interest  in EMC by 1/3 if the default occurs on or before the September 21, 2004 funding deadline and by 1/5 if the default  occurs after the September 21, 2004 funding deadline. 

If EMC requires additional funding, the Company has the option to acquire an additional 9% interest, for a total of  60%, by funding EMC a further $1,500,000. Exelar has an option to convert up to 100% of its shares of EMC into  such number of common shares as shall, after their issuance, represent 49% of the outstanding and issued shares  of the Company, on a fully diluted basis. Exelar’s option to convert cannot be exercised until the earliest of the  following events has occurred: 

i)	Completion of the Company’s funding obligations to EMC;
ii)	Default by the Company of any of its funding obligations to EMC;
iii)	March 1, 2005; or
iv)	An initial public offering of the Company’s shares.

	During the year ending January 31, 2005, the Company recognized an impairment loss of $900,000, due to the uncertainty of future cash flows produced by the investment since EMC has no revenue and is developing a new technology.
5.	Related Party Transactions

a)      Various officers, directors and the former President of the Company are due a total of $471,965 (2004 - $266,877) for expenses paid on behalf of the Company or for services performed for the Company. These amounts are non-interest bearing, unsecured and due on demand.

F-10

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)

5.      Related Party Transactions (continued)

b)	The Company incurred management fees of $15,000 (2004 - $Nil) to the President and CEO of the Company during the year ended January 31, 2005.
c)	The Company incurred management fees of $299,210 (2004 - $90,000) to a former director during the year ended January 31, 2005. See Note 12(c)
d)	The Company incurred management fees of $23,300 (2004 - $7,550) to the Vice-President of the Company during the year ended January 31, 2005.
e)	The Company incurred management fees of $69,000 (2004 - $16,000) to the CFO of the Company during the year ended January 31, 2005.
f)	The Company incurred management fees of $80,512 (2004 - $54,000) to the former Secretary and director of the Company during the year ended January 31, 2005. See Note 12(c).

6.	Recapitalization Transaction
	On September 13, 2004, TSI recapitalized itself by merging with Relay, a publicly listed company.
	The following table provides a reconciliation of the net assets acquired of Relay in this recapitalization transaction.

			Transactions from
	Relay		July 1, 2004 to		Relay
	June 30, 2004		September 13, 2004		September 13, 2004
	(audited)		(unaudited)		(unaudited)
	$		$		$
Cash	18		–		18
Advance to TSI Medical Corp.	625,000		97,320		722,320
Total Assets	625,018		97,320		722,338
Less liabilities	(21,254	)	(1,076	)	(22,330	)
Less loan from Aton Select Fund Ltd.	–		(100,000	)	(100,000	)
Net assets acquired	603,764		(3,756	)	600,008

Summary of Transactions:
a)	On July 27, 2004, Relay received a loan from Aton Select Fund Ltd. In the amount of $100,000. These funds were advanced to TSI prior to the recapitalization of TSI.
b)	Professional fees of $3,756 were incurred and charged to operations.

7. Loans Payable

a)

By a Loan Agreement dated March 8, 2004, TSI’s subsidiary, 689158 B.C. Ltd., borrowed $500,000 from Charles F. White Corp. (“CFW”). The loan was guaranteed by TSI and was repayable on July 2, 2004 with interest at 12% per annum and a bonus of $80,000 payable at maturity. As security for the guarantee, TSI pledged its shares in the common stock of TechniScan (Note 3). The bonus has been included in interest expense. In the event of default, additional interest was to accrue on the unpaid amount at 2% per month, compounded monthly. TSI received notice that the loan was in default.

On February 28, 2005, the Company entered into a Forbearance and Amendment Agreement with CFW, in which CFW agreed to refrain from enforcing its rights and remedies against the Company until March 31, 2005. Under the terms of the Agreement, the Company agreed to pay to CFW the proceeds of any transaction not in the ordinary course of its business, provided that the Company has a working capital surplus in excess of $100,000. The payment of any such proceeds will be credited against the amounts owing to CFW under the Loan Agreement. The terms of the Loan Agreement were amended as follows:

(i)      Interest on the $500,000 principal amount will accrue at 12% per annum from the date of advancement of the funds, without any additional interest thereon; and

F-11

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)

7.      Loans Payable (continued)

(ii)      Interest on the $80,000 bonus payable will accrue at 24% per annum, beginning on the date of default under the Loan Agreement, being July 2, 2004.

As at January 31, 2005, interest expense of $57,059 on the loan and $11,549 on the bonus has been accrued and is included in accrued liabilities.
Although default has occurred under the Forbearance and Amendment Agreement, CFW has not enforced its right and remedies against the Company as at May 13, 2005.
b)	A person related to CFW loaned the Company $25,000. This amount is non-interest bearing, unsecured and due on demand.
c)	On July 27, 2004, Relay received a loan from Aton Select Fund Ltd. in the amount of $100,000, which is non- interest bearing, unsecured and due on demand. These funds were advanced to TSI to assist TSI in funding the obligations due pursuant to the Exelar Agreement as discussed in Note 4.
d)	On October 19, 2004, the Company received a loan from Carnavon Trust Reg. in the amount of $71,000 which is interest bearing at 5% per annum, unsecured and due on demand. The former President of the Company is a director of Carnavon Trust Reg.
e)	On December 20, 2004, the Company received a loan from Clarion Finanz AG in the amount of $100,000, which is interest bearing at 5% per annum, unsecured and due on demand. The former President of the Company is a director of Clarion Finanz AG.

8.      Common Stock

a)	Prior to the recapitalization of TSI, Relay had 73,367,208 shares of common stock issued and outstanding. Pursuant to the Merger as outlined in Note 1, a total of 60,000,000 shares of common stock held by two former directors were cancelled without payment of consideration and 9,492,667 shares of TSI’s common stock were exchanged for 9,492,667 shares of the Company’s common stock.
b)	On June 23, 2004, Relay received stock subscriptions for 2,500,000 units at a price of $0.25 per unit for total proceeds of $625,000. These funds were wired to Relay’s lawyer’s trust account and then advanced to TSI Medical Corp. ahead of the Merger. These units were issued on October 4, 2004. Each unit consisted of one common share and one-half of one share purchase warrant. Each whole warrant entitles the holder to purchase an additional share of common stock at a price of $0.25 per share for a period of one year.
c)	Prior to the recapitalization of TSI, TSI offered for sale a private placement of 500,000 units at a price of $0.35 per unit. Each unit consists of one share and one warrant. The warrant allows the warrant holder to acquire one additional share at $0.35 per share. Pursuant to the Merger, the Company assumed the obligation of TSI to issue units. On October 15, 2004, the Company issued 440,005 units for total cash proceeds of $154,000. Each unit issued consisted of one share of the Company and one warrant, which allows the warrant holder to acquire one additional share of the Company at $0.35 per share for a period ending August 30, 2005.

9.	Stock Option Plan
	The Company has a Stock Option Plan to issue 1,450,000 shares to former holders of TSI options, approved September 13, 2004. Pursuant to the Plan the Company has granted stock options to the former holders of TSI Medical Corp. options.

F-12

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)

9.	Stock Option Plan (continued)
	The following table summarizes the continuity of the Company’s stock options:

	January 31, 2005		January 31, 2004
		Weighted		Weighted
		average		average
	Number of	exercise price	Number of	exercise price
	shares	$	shares	$
Outstanding, beginning of year	–	–	–	–
Granted	1,450,000	0.50	–	–
Exercised	–	–	–	–
Forfeited / cancelled	–	–	–	–
Outstanding, end of year	1,450,000	0.50	–	–

Additional information regarding options outstanding as at January 31, 2005 is as follows:

		Outstanding		Exercisable
		Weighted
		average	Weighted		Weighted
		remaining	average		average
Exercise Price	Number of	contractual life	exercise price	Number of	exercise price
$	shares	(years)	$	shares	$
0.50	1,450,000	4.3	0.50	1,450,000	0.50

10.	Warrants
	As at January 31, 2004, the Company had no warrants outstanding.
	As at January 31, 2005, the Company had the following warrants outstanding:

Exercise Price	Number of
$	Warrants	Expiry Date
0.35	440,005	August 30, 2005
0.25	1,250,000	October 4, 2005
	1,690,005

11.

Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has incurred net operating losses of approximately $1,791,000 since inception on December 21, 2000, which commence expiring in 2021. 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. For the years ended January 31, 2005 and 2004, the valuation allowance established against the deferred tax assets increased by $302,000 and $185,000, respectively. The components of the net deferred tax asset at January 31, 2005 and 2004, and the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are indicated below:

F-13

XLR Medical Corp.
(formerly Relay Mines Limited)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)

11.      Income Taxes (continued)

	2005		2004
	$		$
Net Operating Loss	1,791,000		900,000
Statutory Tax Rate	35%		34%
Effective Tax Rate	–		–
Deferred Tax Asset	626,850		306,000
Valuation Allowance	(626,850	)	(306,000	)
Net Deferred Tax Asset	–		–

12.      Subsequent Events

a)	a) The Company entered into a non-binding Letter of Intent on March 17, 2005, subject to the completion of a formal private placement agreement, to issue a $4,700,000 convertible note to an investor. The proceeds will be used to fund the completion of the Company’s acquisition of a 51% interest in EMC. Refer to Note 4. The convertible note will be secured by the Company’s interest in EMC and will be convertible at the option of the holder into units at $0.40 per unit. Each unit will consist of one share of the Company’s common stock and one-half of one share purchase warrant. Each whole share purchase warrant will entitle the holder to purchase one additional share of the Company’s common stock at a price of $0.60 per share for a period of five years from the date the convertible note is issued. Subject to the approval of EMC, the investor will also be assigned the Company’s option to acquire an additional interest of approximately 9% of EMC by providing the additional funding to EMC. On June 6, 2005, the Company received notice from the investor that he has withdrawn from the Letter of Intent and will not be entering into any financing agreement with the Company.
b)	On April 5, 2005, a new director was issued options to acquire 700,000 common shares at an exercise price of $0.70 per share expiring April 6, 2009.
c)	On May 26, 2005, the Board of Directors resolved to record cash advances of $209,210 and $12,500 made to a former director (see Note 5(c)) and the former Secretary and director of the Company (see Note 5(f)), respectively, during the year as management fees.

F-14

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 8A. CONTROLS AND PROCEDURES.

(A)	Evaluation Of Disclosure Controls And Procedures
	As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Our disclosure controls and procedures are designed to provide a reasonable level of assurance that our disclosure control objectives are achieved. Our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are, in fact, effective at providing this reasonable level of assurance as of the period covered.
(B)	Changes In Internal Controls Over Financial Reporting
	In connection with the evaluation of our internal controls during our last fiscal quarter, our principal executive officer and principal financial officer have determined that there are no changes to our internal controls over financial reporting that has materially affected, or is reasonably likely to materially effect, our internal controls over financial reporting.

ITEM 8B. OTHER INFORMATION.

Except as described below or as otherwise described in this Annual Report, all information required to be disclosed in a Current Report on Form 8-K since the end of our third quarter for the fiscal year ended January 31, 2005 has been reported by us by the filing of such reports with the SEC.

Regulation FD Disclosure

In March, 2005, we announced that we had reached a non-binding agreement in principle with an investor based in New York (the “Investor”) for a $4,700,000 convertible note financing, an amount that would have been sufficient to allow us to meet our financing obligations under the Funding Agreement. However, we have recently received notice from the Investor that, due to circumstances outside of our control, he will not be completing the convertible note financing. As a result, we will not receive any of the expected funds from the Investor. We are currently exploring our options and are seeking alternative sources of financing.

A copy of the press release announcing that we will not be receiving the expected financing from the Investor is attached as an exhibit to this report.

Reports Filed on Form 8-K

The following Current Reports on Form 8-K have been filed by us since the end of our third quarter for the fiscal year ended January 31, 2005:

Date of Form 8-K	Date of Filing with the SEC	Description of the Form 8-K
February 28, 2005	March  3, 2005	Disclosure of entry into Forbearance and Amendment Agreement with CFW.
March 16, 2005	March  22, 2005	Disclosure of convertible note financing.
April 5, 2005	April 20, 2005	Disclosure of appointment of new director and officer.

16

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

The following information sets forth the names of our officers and directors, their present positions with our company, and their biographical information.

Name	Age	Position
Douglas P. Boyd, Ph.D.	63	Chairman of the Board and a Director
Peter A. Hogendoorn	49	Chief Executive Officer, President and a Director
Logan B. Anderson	50	Chief Financial Officer, Treasurer, Secretary and a Director

Douglas P. Boyd, Ph.D. has been the Chairman of our Board of Directors and one of our directors since April 5, 2005. Dr. Boyd is an internationally recognized expert in radiology and computed tomography (“CT”) imaging systems, and has pioneered the development of fan-beam CT scanners, Xenon detector arrays and EBT scanners. Dr. Boyd has been awarded 13 U.S. patents and was awarded the prestigious Conway Safe Skies Award in 1992 for contributions made to airline safety for developing a high speed CT baggage screening device for detecting explosives. In addition to acting on the board of directors for a number of private development stage technology companies, Dr. Boyd also serves as an Adjunct Professor of Radiology at the University of California, San Francisco, has published more than 100 scientific papers, and is a frequent speaker at universities and symposiums.

From 2001 to 2004, Dr. Boyd was the Chief Scientist at GE Imatron, a company he helped found in 1983 and which was acquired by General Electric in 2001. Imatron is a medical technology company engaged in designing, marketing, manufacturing and servicing electron beam tomography (“EBT”) scanners. From 1990 to 2001, Dr. Boyd acted as Chairman of the Board and Chief Technology Officer for Imatron, and from 1983 to 1990, Dr. Boyd served as President and Chief Executive Officer for Imatron.

From 1990 to 2004, Dr. Boyd served as a member of the Board of Directors and as Chairman of the Audit Committee for InVision Technologies, Inc. InVision is a company that manufactures explosives detection systems for the aviation industry and began as a joint venture company of Imatron. InVision was acquired by General Electric in 2004.

From 1997 to 2002, Dr. Boyd served as a member of the Board of Directors and as Chairman of the Board for AccuImage Diagnostics Corp. AccuImage is engaged in the development, marketing and sale of software used for medical data and interactive medical image visualization. AccuImage was acquired by Merge Technologies Incorporated in 2005.

From 2001 to 2004, Dr. Boyd served as a member of the Board of Directors for TherMatrx, Inc., a private corporation that developed an advanced microwave therapy device used to treat benign prostate hyperplasia. TherMatrx was acquired in 2004 by American Medical Systems Holdings Inc.

Dr. Boyd currently serves as a member of the Board of Directors of TechniScan Inc. and as Managing Director of Imaging Technology Ventures Inc. (“ITV”). TechniScan is a private company developing a new form of ultrasound scanner to be used for detecting breast cancer. We currently own 826,420 shares of TechniScan. Our shares of TechniScan are currently pledged as security for a $500,000 loan from The Charles F. White Corporation.

Peter A. Hogendoorn has been a director of XLR since September 13, 2004. Effective on December 10, 2004, Mr. Hogendoorn was also appointed as our President and Chief Executive Officer. Mr. Hogendoorn has been the President and owner of 499375 BC Limited since 1993, a consulting firm for numerous start-ups and junior public companies, including: International Wayside Goldmines (IWA:TSX), Integral Technologies (ITKG:OTCBB), Cryopak Industries Inc. (CYPKF:OTCBB), LML Payment Systems (LMLP:NASDAQ) and

17

NS8 Corporation (NSEO:OTCBB). Mr. Hogendoorn acted as the Chief Executive Officer and a director of NS8 Corporation, a public company, from January 2003 to July 2004. NS8 Corporation developed two primary patent pending technologies that changed the way digital content is delivered and secured over IP based systems. Mr. Hogendoorn was responsible for expanding NS8 Corporation from 9 employees to 45, leading it from R&D to commercial deployment, developing its business plan from a subscriber based direct to consumer model to a middleware and licensing model and raising all operating capital (approximately $9 million). Mr. Hogendoorn continues to consult for NS8 Corporation in its capital markets objectives and financing activities. From 1997 to 2002, Mr. Hogendoorn was employed by LML Payment Systems Inc. to initiate and maintain a comprehensive investor relations program and assist in financing initiatives. LML developed and market patented payment processing systems in the U.S. for converting checking account based transactions into electronic check conversions, eliminating the actual paper in the process.

Logan B. Anderson was a director and the President of TSI from January 2002 until May 2003. In addition to his current positions, Mr. Anderson held the positions of Chief Executive Officer and President from September 13, 2004 to December 10, 2004. Mr. Anderson is a graduate of Otago University, New Zealand, with a Bachelor's Degree of Commerce in Accounting and Economics (1977) and is an Associated Chartered Accountant (New Zealand). Mr. Anderson is the Chief Executive Officer and a director of Worldbid Corporation (WBID:OTCBB), a business to business Internet company. Mr. Anderson was appointed as a director of Worldbid Corporation on August 10, 1998 and was appointed as the Chief Executive Officer of Worldbid Corporation on July 31, 2001.

Significant Employees

We do not have any significant employees other than our officers and directors. The following are the key employees and consultants of EMC:

Leonard Reiffel, Ph.D.

Dr. Len Reiffel is the Chairman and a director of EMC. Exelar was founded by Dr. Reiffel and he is the Chairman and Chief Technical Officer of Exelar.

Dr. Reiffel has founded several high-tech companies. He currently heads two Chicago-based start-ups: EMC and Luxelar Corporation. His previous entrepreneurial activities included founding the Chicago based Interand Corporation. That company's technology was ultimately bought by LG Electronics of Korea and presently provides key functionality for image handling on the Internet. During his time as CEO of Interand, Dr. Reiffel successfully led an effort to win the first major video terminal equipment procurement contract ever awarded competitively to an American firm by the giant NTT Corporation of Japan. Dr. Reiffel is the inventor of several interactive graphics communications systems, including the well-known Telestrator (also sometimes called the TV Chalkboard) which today is used by broadcasters and television producers around the world.

Dr. Reiffel is a widely-recognized scientist, educator and technical administrator as well as an inventor and entrepreneur. He has served as a consultant to numerous high-tech companies in the U.S. and abroad as well as the U.S. Department of Defense, the U.S. Department of Energy and NASA. As Deputy Director of NASA's Apollo Program Office from 1965 to 1969, Dr. Reiffel was the NASA Headquarters executive responsible for all manned lunar experiments and support equipment. While at NASA, he was also responsible for overseeing the lunar landing-site selection process, scientific aspects of in-flight and lunar surface astronaut activities and matters of astronaut safety, including solar-flare hazards, bio-contamination and lunar surface reactivity. Dr. Reiffel also served for several years as the Technical Director of the Interagency Manned Space Flight Experiments Board. In a then unprecedented arrangement with NASA, Dr. Reiffel also acted as a science consultant and on-air commentator for the CBS Network.

Prior to joining NASA, Dr. Reiffel was Group Vice President of the IIT Research Institute where he was a member of the Management Committee in addition to supervising a wide range of technical projects. He headed the Institute's activities in physics, fluid dynamics, space science and geophysics while directing a staff of several hundred research scientists, engineers and support staff.

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Dr. Reiffel has also worked extensively with the Walt Disney organization in conceptualizing and implementing electronic entertainment systems at Disney World's EPCOT Center, including the “ImageWorks” attraction at the $75 million Kodak Pavilion.

Earlier in his career, Dr. Reiffel led a successful effort to create the world's first industrial nuclear reactor at the Armour Research Foundation in Chicago. For many years, he was a member of the U.S. Atomic Energy Commission's Advisory Committee on Isotopes and Radiation. He was also in charge of major multi-year projects sponsored by the United States Air Force and other agencies concerned with nuclear weapons testing and effects. Dr. Reiffel was also the Senior Consultant to the Republic of Korea regarding the establishment of that country's nuclear energy research facilities and programs. In 1990, at the invitation of the governments of Belarus and Ukraine, Dr. Reiffel spent about a month evaluating the post-Chernobyl situation in those countries.

Dr. Reiffel began his professional career at the Institute for Nuclear Studies, University of Chicago, where he worked in association with Professors H. L. Anderson and Enrico Fermi on the design of the 450 inch cyclotron which was constructed there. A Fellow of the American Physical Society and a member of numerous other professional organizations, Dr. Reiffel has received a Distinguished Alumni Award from his alma mater, the Illinois Institute of Technology. Dr. Reiffel has received a variety of technical and entrepreneurial awards from various other organizations, including four IR-100 Awards granted by Industrial Research Magazine to developers of the top 100 technical products of each year. He was inducted into the IIT Hall of Fame in 1984 and is currently a member of IIT’s Board of Overseers.

Dr. Reiffel has published many scientific papers in the fields of nuclear physics, fiber optics, electronics, video systems and space sciences and is the holder of approximately 50 patents.

William B. Houston

William B. Houston is the President and a director of EMC. Mr. Houston is also the President of Exelar.

Prior to joining Exelar, Mr. Houston founded Elsworth & Associates to invest in middle-market manufacturing businesses and technology start-ups. One early stage investment, Lange Medical Products Inc., was formed to bring to market Multidex, a treatment for pressure sores. The company's products are now used in hospitals like the Mayo Clinic, the University of Chicago Hospitals and the University Clinic in Cleveland, Ohio.

Prior to founding Elsworth & Associates, Mr. Houston was a Partner at LaSalle Capital Group, an investment management group that focuses on manufacturing and distribution businesses with revenues between $3 million and $40 million.

A cum laude graduate of Amherst College, Mr. Houston was a Sloan Scholar at the Stanford School of Business. In the early eighties, he co-authored a book published by E.P. Dutton. The book described fellowships and internships providing professional experience before graduate school. He serves as Trustee for the Chicago School of Professional Psychology and is a volunteer for projects like Habitat for Humanity and “Discovery”, a mentor program for sixth graders on the southwest side of Chicago.

Robert J. Morton, Jr., M.S.

Robert J. Morton, Jr., M.S. is EMC's senior consultant on regulatory and quality assurance matters. A board-certified medical physicist with nearly 30 years of relevant experience, Mr. Morton is the President of Quality and Regulatory Services, Inc. (“QRS”). Mr. Morton provides EMC with guidance concerning 510K device clearance and other U.S. Food and Drug Administration (“FDA”) requirements and brings with him a wealth of medical device commercialization experience.

Prior to founding QRS in 1994, Mr. Morton was the Director of Quality Systems and Regulatory Affairs for the Oncology Care Systems division of Siemens Medical Solutions. He was responsible for advising senior executives on compliance with FDA regulations for all medical devices and devices producing electronic product radiation.

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From February 1985 to February 1989, Mr. Morton was a Program Director and Project Officer for the Radiotherapy Development Branch of the Radiation Research Program at the National Cancer Institute’s Division of Cancer Treatment in Bethesda, Maryland.

From September 1978 to May 1983, Mr. Morton was head of the Radiation Therapy Branch of the Office of Training and Assistance at the Center for Devices and Radiological Health. Mr. Morton was the FDA’s acting Deputy Director of the Division of Professional Practices at the Office of Training and Assistance before joining the National Cancer Institute in 1985.

Roger W. Wheatley

Roger W. Wheatley is a consultant to EMC. Mr. Wheatley has over 25 years of experience in product development and marketing.

Mr. Wheatley has acted as a development manager, consultant, director and/or officer assisting with the research and development of superconducting magnet systems for numerous companies. Prior to his involvement with EMC, Mr. Wheatley was Manager of the Magnet Division at American Magnetics Corp. in Oak Ridge, TN. From 1997 to 1999, Mr. Wheatley was a consultant in the fields of superconductivity and magnet systems for Superconductivity Associates in New York. From 1996 to 1999, Mr. Wheatley was a non-executive director of Infrared Components Corp., a manufacturer of cryo-cooled infrared cameras and electronics. Between 1992 and 1997, Mr. Wheatley was the Manager of High Field Magnet Programs at Intermagnetic General Corp., a manufacturer of superconducting products. Between 1990 and 1992, Mr. Wheatley was a partner in the consulting firm, Technology International.

From 1982 to 1990, Mr. Wheatley was the President and CEO of Otsuka Electronics Inc. While with Otsuka Electronics, Mr. Wheatley helped the company to identify new magnetic resonance products and technologies, apply for grants from the National Institutes of Health and develop, prepare and submit pre-market approval applications to the FDA. Mr. Wheatley also assembled a research and development team, completed development of Otsuka Electronics magnetic resonance products and placed the first of these products in the U.S., European and Japanese marketplaces.

From 1976 to 1982, Mr. Wheatley was the President and CEO of Oxford Instruments Inc., a manufacturer of scientific and medical instruments. While at Oxford Instruments, Mr. Wheatley set up local distribution in the U.S. and Canada for a range of products, including NMR magnets, MRI magnets and ambulatory medical monitoring instruments. While with Oxford Instruments, Mr. Wheatley was also responsible for the design of the world’s first 500 MHz magnet using a filamentary Nb3Sn superconductor and various magnetic and cryomagnetic systems incorporating the 500 MHz magnet. Mr. Wheatley also worked on the design of magnetic and cryogenic systems for proton synchrotrons.

Mr. Wheatley is a Member of the Institution of Mechanical Engineers PE 296190, a Member of the European Federation of National Engineering Associations, a Member of the Society of Magnetic Resonance in Medicine and a consultant to the National Institutes of Health for the review of grants through peer review Special Study Sections.

Mr. Wheatley has a B.Sc. in Mechanical Engineering from the Oxford Institute of Technology and has completed pre-and post graduate studies in electrical engineering, accounting marketing and business administration.

Audit Committee

We are not a listed issuer and, under the rules of the OTCBB, our Board of Directors is not required to maintain a separately-designated standing audit committee. As such, pursuant to Section 3(a)(58)(B) of the Exchange Act, our entire Board of Directors acts as our audit committee.

Our Board of Directors has determined that Mr. Anderson, a member of our Board of Directors and, consequently, our audit committee, qualifies as an “audit committee financial expert”, as defined under Item 401 of Regulation S-B, by virtue of his professional experience and his qualification as an Associated Chartered Accountant in New Zealand. In addition to being a member of our Board of Directors, Mr. Anderson is also one of our officers and is not independent.

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Terms of Office

Our directors are appointed for one-year terms to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our By-laws. Our officers are appointed by our Board of Directors and hold office until removed by our Board of Directors.

Code of Ethics

We adopted a Code of Ethics applicable to all of our employees, including our principal executive officer and principal financial officer, which is a "code of ethics" as defined under Item 406 of Regulation S-B. If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our principal executive officer, principal financial officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a current report on Form 8-K and file it with the SEC.

Compliance With Section 16(A) of the Securities Exchange Act

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of a registered class of our securities (“Reporting Persons”) to file reports of ownership and changes in ownership with the SEC. Reporting Persons are required by SEC regulations to furnish us with copies of all forms they file pursuant to Section 16(a). Based solely on our review of such reports received by the Company, and written representations from certain Reporting Persons that no other reports were required for those persons, we believe that except for the following persons, during the year ended January 31, 2005, all Reporting Persons complied with all Section 16(a) filing requirements applicable to them:

Name and Relationship  to Company	Number of Late  Reports	Transactions Not  Timely Reported	Known Failures to  File a Required Form
Douglas P. Boyd, Ph.D.  Chairman of the Board  and a Director	One	One	None

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ITEM 10. EXECUTIVE COMPENSATION.

Summary Compensation Table

No stock options, stock awards or other compensation was awarded, earned by, paid to or granted to any of our executive officers or directors during the last three completed fiscal years and we do not have any stock options, retirement, pension, profit-sharing or long-term incentive plans for any of our executive officers or directors.

The table below summarizes all compensation awarded to, earned by, or paid to our executive officers for all services rendered to us in all capacities for the fiscal periods ended January 31, 2003, January 31, 2004 and January 31, 2005.

		Annual Compensation(1)				Long Term Compensation(1)
					Other
					Annual	Restricted		LTIP	All Other
					Compen-	Stock	Options/	payouts	Compen-
Name	Title	Year	Salary	Bonus	sation	Awarded	Compen-	($)	sation
Douglas P. Boyd,	Chairman of the	2005	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Ph.D.(2)	Board & Director	2004	N/A	N/A	N/A	N/A	N/A	N/A	N/A
		2003	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Peter A.	Chief Executive	2005	$15,000	NIL	NIL	NIL	NIL	NIL	NIL
Hogendoorn(2)	Officer, President	2004	N/A	N/A	N/A	N/A	N/A	N/A	N/A
	& Director	2003	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Logan B.	Chief Financial	2005	$69,000	NIL	NIL	NIL	275,000	NIL	NIL
Anderson(2)	Officer, Treasurer,	2004	$16,000	NIL	NIL	NIL	NIL	NIL	NIL
	Secretary & Director	2003	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Chet Kurzawski	Vice-President,	2005	$23,300	NIL	NIL	NIL	275,000	NIL	NIL
	Investor Relations	2004	$7,550	NIL	NIL	NIL	NIL	NIL	NIL
		2003	$12,500	NIL	NIL	NIL	NIL	NIL	NIL
Derek R. Van	Former Secretary	2005	$80,512	NIL	NIL	NIL	375,000	NIL	N/A
Laare(2)		2004	$54,000	NIL	NIL	NIL	NIL	NIL	N/A
		2003	$24,000	N/A	N/A	N/A	N/A	N/A	N/A
Harold C. Moll(2)	Former Director	2005	$299,210	NIL	NIL	NIL	500,000	NIL	NIL
		2004	$90,000	NIL	NIL	NIL	NIL	NIL	NIL
		2003	$60,000	N/A	N/A	N/A	N/A	N/A	N/A

(1)	TSI has been treated as the acquiring entity for accounting purposes. As such, for the periods prior to September 13, 2004, the amounts presented represent compensation paid/awarded by TSI.
(2)	Mr. Anderson, Mr. Van Laare, Mr. Moll and Mr. Hogendoorn were appointed as directors and/or officers of the Company effective on September 13, 2004. Mr. Moll and Mr. Van Laare resigned as directors and officers of the Company effective December 10, 2004. Mr. Boyd was appointed as a director and officer of the Company effective on April 5, 2005.

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STOCK OPTION GRANTS

During our most recent fiscal year ended January 31, 2005, the following stock options were granted to our directors and officers.

Name	Number of  Securities  Underlying  Options Granted	Percentage of Total Options Granted to Employees in Fiscal Year	Exercise  Price  (per  Share)	Expiration  Date
Douglas P. Boyd, Ph.D., Chairman of the Board and Director	NIL	NIL	N/A	N/A
Peter A. Hogendoorn, President, Chief Executive Officer, and Director	NIL	NIL	N/A	N/A
Logan B. Anderson, Chief Financial Officer, Treasurer, Secretary and Director	275,000  Company Shares	22.0%	$0.50	May 31, 2009
Chet Kurzawski, Vice-President, Investor Relations	100,000  Company Shares	0.08%		May 31, 2009
Derek R. Van Laare, Former Secretary	375,000  Company Shares	30.0%	$0.50	May 31, 2009
Harold C. Moll,  Former Director	500,000  Company Shares	40.0%	$0.50	May 31, 2009

EXERCISES OF STOCK OPTIONS AND YEAR-END OPTION VALUES

The following is a summary of the share purchase options exercised by our chief executive officer and our named executive officers during the financial year ended January 31, 2005:

AGGREGATED OPTION/SAR EXERCISES DURING THE LAST FINANCIAL YEAR END AND FINANCIAL YEAR-END OPTION/SAR VALUES
Name	Number of  Common  Shares  Acquired on  Exercise	Value  Realized ($)	Unexercised  Options at Fiscal  Year-End (#)  exercisable /  unexercisable	Value of Unexercised In-The-Money Options/SARs at Fiscal Year-End ($) exercisable /  unexercisable(1)
Douglas P. Boyd, Ph.D.,  Chairman of the Board and Director	N/A	N/A	N/A	N/A
Peter A. Hogendoorn,  President, Chief Executive Officer,  and Director	NIL	NIL	N/A	N/A
Logan B. Anderson,  Chief Financial Officer, Treasurer,  Secretary and Director	NIL	NIL	275,000 Exercisable	NIL Exercisable
Chet Kurzawski,  Vice-President, Investor Relations	NIL	NIL	100,000 Exercisable	NIL Exercisable
Derek R. Van Laare,  Former Secretary	NIL	NIL	375,000 Exercisable	NIL Exercisable
Harold C. Moll,  Former Director	NIL	NIL	500,000 Exercisable	NIL Exercisable

(1)        Based on a closing price for our common stock on January 31, 2005 of $0.50 per share.

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EMPLOYMENT CONTRACTS

We have no employment contracts, termination of employment or change-in-control arrangements with any of our executive officers or directors.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information concerning the number of Company Shares owned beneficially as of May 27, 2005 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our officers and directors, and (iii) officers and directors as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.

Title of Class	Name of Beneficial  Owner	Position with Company	Amount and Nature of Ownership(1)	Percent of Class(5)
DIRECTORS AND OFFICERS
Common Stock	Douglas P. Boyd, Ph.D.	Chairman of the Board &  Director	1,000,000(2)   Direct and Indirect	2.4%
Common Stock	Peter A. Hogendoorn	Chief Executive Officer,  President & Director	2,250,000 Direct	8.7%
Common Stock	Logan B. Anderson	Chief Financial Officer, Treasurer, Secretary & Director	625,000(2) Direct	2.4%
All Officers and Directors as a Group (3 Persons)			3,875,000	14.5%
5% SHAREHOLDERS
Common Stock	Exelar Corporation		24,788,120(4)  Direct	49%

(1)	Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of Company Shares actually outstanding on May 27, 2005. As of May 27, 2005, there were 25,799,880 Company Shares issued and outstanding.
(2)	Includes options to purchase 700,000 Company Shares exercisable at $0.70 per share and 300,000 Company shares issued to ITV, a company controlled by Mr. Boyd.
(3)	Includes 350,000 Company Shares and options to purchase 275,000 Company Shares exercisable at $0.50 per share.
(4)	Pursuant to the Funding Agreement, Exelar has the option to convert its shares of EMC into that number of Company Shares equal to 49% of the issued and outstanding shares after conversion. Based on the number of issued and outstanding shares on May 27, 2005, Exelar would be entitled to 24,788,120 Company Shares.
(5)	In the case of each individual, the percentage has been calculated assuming exercise of the options, warrants or conversion rights held by that individual. In the case of the group, the percentage has been calculated assuming exercise of all options, warrants and conversion rights held by the group.

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Changes in Control

Pursuant to the terms of the Funding Agreement, Exelar has the option to convert its shares of EMC into that number of Company Shares equal to 49% of the Company Shares that will be outstanding after the conversion option has been exercised. This option is exercisable upon the earliest of the following events:

(a)	completion of our funding obligations under the Funding Agreement;
(b)	default by us of our funding obligations under the Funding Agreement;
(c)	March 1, 2005; or
(d)	the initial public offering of our stock.

As we are now past March 1, 2005, Exelar may exercise their conversion option at this time.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth certain information concerning all equity compensation plans previously approved by stockholders and all previous equity compensation plans not previously approved by stockholders, as of the most recently completed fiscal year.

EQUITY COMPENSATION PLAN INFORMATION AS AT JANUARY 31, 2005
Plan Category	Number of securities  to be issued upon  exercise of  outstanding options,  warrants and rights  (a)	Weighted-average  exercise price of  outstanding options,  warrants and rights  (b)	Number of securities  remaining available for  issuance under equity  compensation plans  (excluding securities  reflected in column (a))   (c)
Equity Compensation Plans  approved by security holders	Nil	N/A	Nil
Equity Compensation Plans not  approved by security holders	1,450,000	$0.50	2,419,982  Company Shares
Total	1,450,000	$0.50	2,419,982  Company Shares

2004 Stock Option Plan

On September 13, 2004, our Board of Directors approved the 2004 Stock Option Plan (the “Plan”). On adoption, the number of shares allowed to be optioned and sold under the Plan was 1,450,000 shares. This number is increased every fiscal quarter by an amount equal to the lesser of:

(1)	15% of the outstanding Company Shares on the first day of the applicable fiscal quarter, less the number of shares previously authorized to be optioned and sold under the Plan and the number of options that may be granted under any other stock option plan in effect on the date of the increase; or
(2)	a lesser number of Company Shares as may be determined by our Board of Directors.

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The minimum exercise price for any option granted under the Plan is 85% of the fair market value of our Company Shares, determined as of the day immediately preceding the grant date. Incentive stock options intended to meet the definition of an “incentive stock option” under the Internal Revenue Code must be issued with an exercise price greater than or equal to fair market value, unless the grantee owns more than 10% of the total combined voting power of all classes of our stock, in which case the minimum exercise price is 110% of fair market value.

Options granted under the Plan may not be exercised more than five years after the date the options were granted. If the grantee ceases to be an employee of the Company or ceases to provide services to the Company as a director, officer, or consultant for a reason other than death or disability, the option will expire three months after the date of termination. If the grantee ceases to be an employee or provide services to the Company as a result of death or disability, the option will expire one year after the date of termination.

Options may be granted to our employees, officers, directors and consultants as determined by the Board of Directors.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Except as disclosed below, none of the following parties has, during the last two years, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:

• Any of our directors or officers;
• Any person proposed as a nominee for election as a director;
• Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; and
• Any immediate family member of any of the foregoing persons.

Management Contracts

See Item 10. “Executive Compensation.”

Issuance of Shares to Imaging Technology Ventures, Inc. (“ITV”)

In satisfaction of our obligations as the successor to TSI, we issued 300,000 Company Shares to ITV as a finders fee for introducing TSI to Exelar and the opportunities presented by the EMC Technology. ITV is a private company controlled by Douglas P. Boyd, our Chairman of the Board and one of our directors.

ITEM 13. EXHIBITS.

The following exhibits are either provided with this Annual Report or are incorporated herein by reference:

Exhibit Number	Description of Exhibit
2.1	Agreement and Plan of Merger between Relay Mines Limited and TSI Med Acquisition Corp., dated as of September 13, 2004.(4)
3.1	Articles of Merger for Relay Mines Limited and TSI Med Acquisition Corp. (4)
3.2	Articles of Incorporation for Relay Mines Limited. (1)
3.3	Bylaws, As Amended, for Relay Mines Limited. (4)
10.1	Technology Acquisition and Funding Agreement between TSI Medical Corp., Exelar Corporation and Exelar Medical Corporation dated for reference March 22, 2004. (4)

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Exhibit Number	Description of Exhibit
10.2	Agreement and Plan of Merger between Carlo Civelli, Bruno Mosimann, TSI Medical  Corp., Relay Mines Limited and TSI Med Acquisition Corp., dated effective as of August  12, 2004. (3)
10.3	Letter Agreement, dated October 13, 2004, between XLR Medical Corp., Exelar  Corporation and Exelar Medical Corporation amending the terms of the Technology  Acquisition and Funding Agreement dated March 22, 2004.(5)
10.4	Loan Agreement dated as of the 8th day of March, 2004 between 689158 B.C. Ltd. and  The Charles F. White Corporation.(6)
10.5	Guarantee dated as of March 8, 2004 made by TSI Medical Corp. to and in favor of The  Charles F. White Corporation.(6)
10.6	Forbearance and Amendment Agreement dated as of February 28, 2005 between  689158 B.C. Ltd., The Charles F. White Corporation and XLR Medical Corp.(6)
10.7	Non-Binding Letter of Intent dated March 16, 2005 from Avi Faliks.(7)
14.1	Code of Ethics(2)
31.1	Certification of Chief Executive Officer as adopted pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer as adopted pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002.
99.1	Press Release

(1)	Previously filed with the SEC as an exhibit to our registration statement on Form SB-2 originally filed on May 1, 2001, as amended.
(2)	Previously filed with the SEC on September 12, 2003 as an exhibit to our Annual Report on Form 10-KSB for the year ended June 30, 2003.
(3)	Previously filed with the SEC on August 20, 2004 as an exhibit to our current report on Form 8-K.
(4)	Previously filed with the SEC on September 17, 2004 as an exhibit to our current report on Form 8-K.
(5)	Previously filed with the SEC on October 29, 2004 as an exhibit to our Annual Report on Form 10-KSB for the year ended June 30, 2004.
(6)	Previously filed with the SEC on March 3, 2005 as an exhibit to our current report on Form 8-K.
(7)	Previously filed with the SEC on March 22, 2005 as an exhibit to our current report on Form 8-K.

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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

The aggregate fees billed for the two most recently completed fiscal years ended January 31, 2005 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included our Quarterly Reports on Form 10-QSB and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

	Year Ended January 31, 2005	Year Ended January 31, 2004
Audit Fees	$12,175	$3,400
Audit Related Fees	Nil.	Nil.
Tax Fees	Nil.	Nil.
All Other Fees	Nil.	Nil.
Total	$12,175	$3,400

In addition to the fees described above, we were billed audit fees of $4,877 and $8,125 during the fiscal years ended January 31, 2005 and January 31, 2004 respectively by the former principal accountants of TSI.

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SIGNATURES

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

XLR MEDICAL CORP.

By:	/s/ Peter A. Hogendoorn
	_________________________________
	PETER A. HOGENDOORN,
	Chief Executive Officer, President
	Director
	Date:  June 3, 2005

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Peter A. Hogendoorn
	_________________________________
	PETER A. HOGENDOORN,
	Chief Executive Officer, President
	Director
	Date:  June 3, 2005

By:	/s/ Logan B. Anderson
	_________________________________
	LOGAN B. ANDERSON,
	Chief Financial Officer, Secretary, Treasurer
	Director
	Date:  June 3, 2005

By:	/s/ Douglas P. Boyd
	_________________________________
	DOUGLAS P. BOYD, PH.D.
	Chairman of the Board
	Director
	Date:  June 3, 2005