UNITED STATES SECURITIES AND EXCHANGE
COMMISSIONWashington, D.C. 20549   FORM 10-Q   [X]  Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period ended September
30, 2008 [  ]  Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 for the transition period from _____ to
_____ Commission File Number: 000-52238 CELLCYTE GENETICS CORPORATION (Exact
name of registrant as specified in its charter)  Nevada

86-1127046(State or other jurisdiction of incorporation or
organization)

(I.R.S. Employer Identification No.)1725 200th Street S.E., Suite 103Bothell,
Washington

98021(Address of principal executive offices)

(Zip Code)(425) 483-6101(Registrants telephone number, including are code) Indicate by checkmark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  [X]  Yes
    [  ]  No Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.  See the definitions of large accelerated filer,
accelerated filer, and smaller reporting company in Rule 12b-2 of the
Exchange Act. Large
accelerated filer [  ] Accelerated
filer [  ]Non-accelerated filer  [  ]  (Do not check if
a smaller reporting company)   Smaller reporting company [X] Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).  [  ]  Yes
    [X]  No Indicate the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date.
  62,809,845 shares of common stock outstanding as of September
30, 2008.       CELLCYTE GENETICS CORPORATION  Quarterly Report On Form 10-Q For
The Quarterly Period Ended September 30, 2008 FORWARD-LOOKING STATEMENTS This Form 10-Q for the quarterly period ended September 30, 2008
contains forward-looking statements that involve risks and uncertainties.
 Forward-looking statements in this document include, among others,
statements regarding our capital needs, business plans and expectations.
 Such forward-looking statements involve assumptions, risks and
uncertainties regarding, among others, the success of our business plan,
availability of funds, government regulations, operating costs, our ability to
achieve significant revenues, our business model and other factors.  Any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements.  In some cases, you can identify
forward-looking statements by terminology such as may, will, should,
expect, plan, intend, anticipate, believe, estimate, predict,
potential or continue, the negative of such terms or other comparable
terminology.  In evaluating these statements, you should consider various
factors, including the assumptions, risks and uncertainties set forth in our
Annual Report on Form 10-KSB for the year ended December 31, 2007 and other
reports and documents we have filed with or furnished to the Securities and
Exchange Commission.  These factors or any of them may cause our actual
results to differ materially from any forward-looking statement made in this
document.  While these forward-looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our current judgment
regarding future events, our actual results will likely vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein.  The forward-looking statements in
this document are made as of the date of this document and we do not intend or
undertake to update any of the forward-looking statements to conform these
statements to actual results, except as required by applicable law, including
the securities laws of the United States. __________     - 2 -      PART I  FINANCIAL INFORMATION  Item
1. Financial
Statements The following unaudited interim consolidated financial statements
of CellCyte Genetics Corporation are included in this Quarterly Report on Form
10-Q: Description
PageInterim Consolidated Balance Sheets as at September 30, 2008
and December 31, 2007:
3Interim Consolidated Statements of Operations for the Nine
Months ended September 30, 2008 and 2007 and for the period from
January 14, 2005 (Date of Inception) to September 30, 2008:
4Interim Consolidated Statements of Cash Flows for the Nine
Months ended September 30, 2008 and 2007 and for the period from
January 14, 2005 (Date of Inception) to September 30, 2008:
5Notes to Interim Consolidated Financial Statements:
6 __________   - 3 -       CELLCYTE
GENETICS CORPORATION(A
DEVELOPMENT STAGE ENTERPRISE)CONSOLIDATED
BALANCE SHEETSSeptember 30,

December 31,2008

2007(Unaudited)ASSETSCURRENT
ASSETSCash and cash
equivalents
$
5,734

$
2,291,457Amounts
receivable

7,500


-Prepaid
expenses and deposits

113,539


181,140Total Current
Assets

126,773


2,472,597OTHER
ASSETSFurniture and
Equipment, net of depreciation of $240,576 (2007 - $42,347)

1,025,539


1,036,456Intellectual
property, net of amortization of $96,105 (2007 - $63,642)and accumulated
impairment of $568,913 (2007 - $Nil)

48,112


575,894Total Other
Assets

1,073,651


1,612,350TOTAL
ASSETS
$
1,200,424

$
4,084,947LIABILITIES
AND STOCKHOLDERS' DEFICITCURRENT
LIABILITIESAccounts
payable
$
916,225

$
412,837Accrued
expenses

-


51,619Due to related
parties

107,949


107,949Total Current
Liabilities

1,024,174


572,405COMMITMENTS AND
CONTINGENCIES

-


-STOCKHOLDERS'
EQUITY (DEFICIT)Common stock,
$0.001 par value; 525,000,000 shares authorized,62,809,845 and
59,854,225 shares issued and outstanding, respectively

62,810


59,854Additional paid
in Capital

9,889,720


7,276,553Common stock
purchase warrants

114,702


1,398,000Accumulated
deficit during development stage

(9,890,982)


(5,221,865)Total
Stockholders' Equity (Deficit)

176,250


3,512,542TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,200,424

$
4,084,947The accompanying condensed notes are an integral part of
these interim consolidated financial statements    - 4 -       CELLCYTE
GENETICS CORPORATION(A
DEVELOPMENT STAGE ENTERPRISE)INTERIM
CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)From InceptionNine Month Period Ended
Three Month Period Ended

(January 4, 2005)September 30,
September 30,

to
September 30,2008

2007

2008

2007


2008REVENUES

$
-

$
-

$
-

$
-


$
-OPERATING
EXPENSES:Consulting


692,989


432,827


43,630


79,701



1,586,814General and
administrative


850,262


430,309


276,814


159,523



1,603,652Professional
fees


1,057,852


200,963


247,135


87,846



1,306,854Research,
development and laboratory


606,864


304,476


78,031


280,200



1,281,372Salaries and
benefits


655,381


563,675


27,048


220,687



1,456,998Stock based
compensation


176,286


1,780,000


26,898


-



1,956,286Total operating
expenses


4,039,634


3,712,250


699,556


827,957



9,191,976-LOSS FROM
OPERATIONS


(4,039,634)


(3,712,250)


(699,556)


(827,957)



(9,191,976)OTHER INCOME
(EXPENSE)Interest
income


19,890


-


302


-



32,512Interest and
finance charges


(14,270)


(8,527)


(13,955)


(207)



(96,415)Impairment of
intellectual property


(568,913)


-


(568,913)


-



(568,913)Loss on disposal
of furniture and equipment

(66,190)


-


(10,652)


-



(66,190)Total Other
Income (Expense)


(629,483)


(8,527)


(593,218)


(207)



(699,006)LOSS BEFORE
TAXES


(4,669,117)


(3,720,777)


(1,292,774)


(828,164)



(9,890,982)INCOME
TAXES


-


-


-


-



-NET LOSS

$
(4,669,117)

$
(3,720,777)

$
(1,292,774)

$
(828,164)


$
(9,890,982)BASIC AND
DILUTED NET LOSSPER COMMON
SHARE

$
(0.08)

$
(0.07)

$
(0.02)

$
(0.01)WEIGHTED AVERAGE
NUMBER OFSHARES
OUTSTANDING FOR BASICAND
DILUTED CALCULATION


61,360,126


53,524,789


62,832,345


59,854,225The
accompanying condensed notes are an integral part of these interim
consolidated financial statements      - 5 -       CELLCYTE
GENETICS CORPORATION(A
DEVELOPMENT STAGE ENTERPRISE)CONSOLIDATED
STATEMENTS OF CASH FLOWS(Unaudited)







From Inception(January 4, 2005)For the Nine
Months Ended September 30,
to
September 30,2008

2007

2008CASH FLOWS FROM
OPERATING ACTIVITIES:Net loss

$
(4,669,117)

$
(3,720,777)

$
(9,890,982)Adjustments to
reconcile net loss to net cash used byoperating
activitiesAmortization of
intellectual property


32,463


23,828


98,503Depreciation of
furniture and equipment


227,087


16,288


269,434Stock based
compensation


176,286


1,780,000


1,956,286Non-cash
services


472,601


-


472,601Non-cash
impairment of intellectual property


568,913


-


568,913Loss on disposal
of furniture and equipment


66,190


-


66,190Decrease
(increase) in assetsAmounts
receivable


(7,500)


-


(7,500)Inventory


-


(19,150)


-Prepaid expenses
and deposits


67,601


(240,473)


(113,539)Increase
(decrease) in liabilitiesAccounts
payable


503,388


(262,837)


884,164Accrued
interest


-


8,066


82,088Accrued
expenses


(51,619)


(20,689)


-Net cash used by
operating activities


(2,613,707)


(2,435,744)


(5,613,842)CASH FLOWS FROM
INVESTING ACTIVITIES:Intellectual
property acquisition


(73,594)


(169,012)


(715,528)Furniture and
Equipment acquisiton, net


(282,360)


(275,180)


(1,361,163)Cash acquired on
reverse acquisition


-


1,429


1,429Net cash used by
investing activities


(355,954)


(442,763)


(2,075,262)CASH FLOWS FROM
FINANCING ACTIVITIES:Proceeds from
issuance of convertible notes


-


-


935,000Advances from
related party


-


103,949


103,949Proceeds from
sale of common stock


683,938


5,971,751


6,655,889Net cash
provided by financing activities


683,938


6,075,700


7,694,838Net increase in
cash and cash equivalents


(2,285,723)


3,197,193


5,734Cash and cash
equivalents, beginning of period


2,291,457


287,750


-Cash and cash
equivalents, end of period

$
5,734

$
3,484,943

$
5,734SUPPLEMENTAL
CASH FLOW DISCLOSURES:Income taxes
paid

$
-

$
-

$
-Interest
paid

$
-

$
-

$
-The
accompanying condensed notes are an integral part of these interim
consolidated financial statements    - 6 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)   NOTE
1  DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION The Company was incorporated as Shepard Inc. March 9, 2004 in the
state of Nevada and changed its name to CellCyte Genetics Corporation (CGN)
effective February 16, 2007. Effective January 19, 2007, CGN entered into an Agreement in
Principle to acquire 100% of the issued and outstanding shares of CellCyte
Genetics Corporation (a development stage enterprise) (CGW), a private
Washington State corporation incorporated January 14, 2005, in exchange for
16,000,000 restricted shares of CGNs common stock, and the transfer of a
further 18,750,000 shares of CGNs restricted common stock and 2,500,000 shares
of CGNs non-restricted common stock from certain shareholders of CGN to the
shareholders of CGW.  Effective March 14, 2007, the acquisition of CGW was
completed by the execution of a Share Exchange Agreement (the Agreement),
which, in addition to the share issuances and transfers described above,
finalized certain other terms of the acquisition. As a result of the completion of this acquisition and the related
transactions, the former shareholders of CGW owned approximately 62% of the then
outstanding shares of common stock of CGN representing 37,250,000 of the then
59,854,224 total issued and outstanding shares of common stock of CGN. This acquisition was in essence a recapitalization of the Company
and has been accounted for in accordance with the principles applicable to
accounting for reverse acquisitions with CGW, the legal subsidiary, being
treated as the accounting parent and CGN, the legal parent, being treated as the
accounting subsidiary.  Accordingly, the consolidated results of operations
and cash flows of the Company include those of CGW for all periods presented and
those of CGN subsequent to the date of the reverse acquisition. CGW is an emerging biotechnology company engaged in the discovery
and development of stem cell therapeutic and cell-related products. The Company
has completed preliminary testing of possible therapeutic compounds which it
licensed from the United States Department of Veteran Affairs. Further
development of these licensed compositions is expected to be through
collaborations with other research and or development organizations. The
Companys therapeutic and cell-related products, if successful, could lead to
treatments in oncology, diabetes, heart, liver, lung and kidney diseases as well
as for stem cell bone marrow and organ transplants. The Companys discoveries
involve stem cell regimens without using embryonic stem cells. As the Company is
in the development stage, it has not realized any revenues from its planned
operations. As shown in the accompanying financial statements, the Company has
incurred significant losses since inception, has not generated any revenues to
date, and is involved in certain legal matters as more fully discussed in Note
9. In addition, effective July 1, 2008, the Company suspended significantly all
of its operations and placed all of its employees on unpaid leave.  The
future of the Company is dependent upon its ability to obtain sufficient
financing and upon achieving  - 7 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)    future profitable operations.  These factors, among others,
raise substantial doubt about the Company's ability to continue as a going
concern.  The accompanying interim consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty. The accompanying unaudited interim consolidated financial
statements have been prepared in accordance with generally accepted principles
for interim financial information and with the instruction to Form 10-Q of
Regulation S-K.  They may not include all information and footnotes
required by United States generally accepted accounting principles for complete
financial statements.  However, except as disclosed herein, there has been
no material changes in the information disclosed in the notes to the financial
statements for the year ended December 31, 2007 included in the Companys Annual
Report on Form 10-KSB filed with the Securities and Exchange Commission.
 The interim unaudited financial statements should be read in conjunction
with those financial statements included in the Form 10-KSB.  In the
opinion of Management, all adjustments considered necessary for a fair
presentation, which unless otherwise disclosed herein, consisting primarily of
normal recurring adjustments, have been made. Operating results for the nine
months ended September 30, 2008 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2008. NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies is presented to
assist in understanding the Companys financial statements.  The financial
statements and notes are representations of the Companys management, which is
responsible for their integrity and objectivity.  These accounting policies
conform to accounting principles generally accepted in the United States of
America and have been consistently applied in the preparation of the financial
statements. Basis of Consolidation These consolidated financial statements include the accounts of
CGW since its incorporation on January 14, 2005 and CGN since the reverse
acquisition on March 14, 2007.  All inter-company balances and transactions
have been eliminated. Cash and Cash Equivalents The Company considers all highly liquid investments and short-term
debt instruments with maturities of three months or less from date of purchase
to be cash equivalents. Concentration of Risks The Company maintains its cash and cash equivalents in commercial
accounts at a major financial institution and has not experienced any losses on
its deposits as of September 30, 2008.  - 8 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)    As of September 30, 2008, the Company has no amounts on deposit in
excess of the amount insured by the FDIC. Earnings per Share The Company computes net income (loss) per common share in
accordance with Statement of Financial Accounting Standards No. 128, Earnings
per Share (SFAS No. 128).  Net income (loss) per share is based upon
the weighted average number of outstanding common shares and the dilutive effect
of common share equivalents, such as options and warrants to purchase common
stock, convertible preferred stock and convertible notes, if applicable, that
are outstanding each year.  Basic and diluted earnings per share were the
same at the reporting dates of the accompanying financial statements, as
including common stock equivalents in the calculation of diluted earnings per
share would have been anti-dilutive.  For all periods prior to the reverse
acquisition, the number of shares outstanding is deemed to be the number of
shares issued and transferred to the shareholders of CBW to effect the reverse
acquisition, being 37,250,000. Fair Value of Financial Instruments The Company's financial instruments may consist of cash and cash
equivalents and other current liabilities.  All instruments are accounted
for on an historical cost basis, which, due to the short maturity of these
financial instruments, approximates the fair value at the reporting dates of
these financial statements. Statement of Financial Accounting Standards No. 157, Fair Value
Measurements (SFAS No. 157), defines fair value, establishes a framework
for measuring fair value in accordance with generally accepted accounting
principles, and expands disclosures about fair value measurements. The Company does not have any assets or liabilities measured at
fair value on a recurring basis at September 30, 2008.  The Company did not
have any fair value adjustments for assets and liabilities measured at fair
value on a nonrecurring basis during the nine months ended September 30,
2008. Intangible
Assets The
Companys intangible assets primarily consist of patents and intellectual
property, which are carried at the purchase price and/or the legal cost to
obtain them less accumulated amortization.  Patents and licenses are being
amortized over their estimated useful lives, which range from seven to seventeen
years.   - 9 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)    Going Concern As shown in the accompanying financial statements, the Company had
a working capital deficit of $897,402, and an accumulated deficit of $9,890,982
incurred through September 30, 2008.  The Company has no revenues.
Management forecasts operations during the coming year will need approximately
$2,500,000 in additional working capital, which is expected to come from
issuance of convertible notes and private placements of stock. The financial
statements do not include any adjustments relating to the recoverability and
classification of recorded assets, or the amounts and classification of
liabilities that might be necessary in the event the Company cannot continue in
existence. Income Taxes The Company follows the provisions of Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes (SFAS No.
109), under which deferred tax assets and liabilities are determined based on
differences between financial reporting and tax basis of assets and liabilities.
Deferred tax assets and liabilities are measured using the enacted tax rates and
laws that are expected to be in effect when the differences are expected to
reverse.  The provisions of SFAS No. 109 also require the recognition of
future tax benefits such as net operating loss carry-forwards, to the extent
that the realization of such benefits is more likely than not.  To the
extent that it is more likely than not that such benefits will not be received,
the Company records a valuation allowance against the related deferred tax
asset. Long-Lived
Assets and Intangibles In accordance with Statement of Financial Accounting Standards No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets
(SFAS No. 144), the Company examines on a periodic basis the carrying value of
its tangible and intangible assets to determine whether there are any impairment
losses.  This standard establishes a single accounting model for long-lived
assets to be disposed of by sale, including discontinued operations, and
requires that these long-lived assets be measured at the lower of carrying
amount or fair value less cost to sell, whether reported in continuing
operations or discontinued operations. The determination of any impairment would
include a comparison of estimated future cash flows anticipated to be generated
during the remaining life of the assets to the net carrying value of the assets.
 Effective July 1, 2008, the Company recorded an impairment of $568,913 on
its intellectual property (Note 3). Property
and Equipment Property and equipment are stated at cost.  Depreciation is
computed using the straight-line method over the estimated useful lives of the
assets.  Expenditures for repairs and maintenance are expensed as
incurred.  - 10 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)    Research and Development Costs Research and development costs are expensed as incurred. The cost
of intellectual property purchased from others that is immediately marketable or
that has an alternative future use is capitalized and amortized as intangible
assets. Capitalized costs are amortized using the straight-line method over the
estimated economic life of the related asset. The Company periodically reviews
its capitalized intangible assets to assess recoverability based on the
projected undiscounted cash flows from operations, and impairments are
recognized in operating results when a permanent diminution in value occurs. Recent Accounting Pronouncements On March 19, 2008, the Financial Accounting Standards Board (FASB)
announced the issuance of Statement of Financial Accounting Standards No. 161,
Disclosures about Derivative Instruments and Hedging Activities (SFAS
No. 161). SFAS No. 161 amends Statement of Financial Accounting Standards No.
133, Accounting for Derivative Instruments and Hedging Activities (SFAS
No. 133) and was issued in response to concerns and criticisms about the lack
of adequate disclosure of derivative instruments and hedging activities. SFAS
No. 161 is focused on requiring enhanced disclosure on 1) how and why an entity
uses derivative instruments and hedging activities; 2) how derivative
instruments and related hedging activities are accounted for under SFAS No. 133;
and 3) how derivative instruments and related hedging activities affect an
entitys cash flows, financial position and performance. To accomplish the three objectives listed above, SFAS No. 161
requires: 1) qualitative disclosures regarding the objectives and strategies for
using derivative instruments and engaging in hedging activities in the context
of an entitys overall risk exposure; 2) quantitative disclosures in tabular
format of the fair values of derivative instruments and their gains and losses;
and 3) disclosures about credit-risk related contingent features in derivative
instruments. SFAS No. 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008.
 Management has not determined the effect that adopting this statement
would have on the Companys financial position or results of operations. Stock-Based Compensation The Company accounts for its stock option plan under the
recognition and measurement principles of the revised statement to Statement of
Financial Accounting Standards No. 123, Share-Based Payments (SFAS No.
123 (R)). Accordingly, compensation cost has been recognized using the fair
value method and expected term accrual requirements as prescribed in SFAS No.
123 (R). The Company has recorded $1,956,289 in stock-based compensation expense
through September 30, 2008 in connection with the acquisition of CGW and other
stock options granted as described further in Note 7 below.  - 11 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)    Use of Estimates The accompanying financial statements are prepared in conformity
with accounting principles generally accepted in the United States of America
and include certain estimates and assumptions which affect the reported amounts
of assets and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting period.
 Accordingly, actual results may differ from those estimates. NOTE 3  INTELLECTUAL PROPERTY In 2006 and 2007, the Company paid a total of $25,000 and $90,000,
respectively, on the execution of an intellectual property licensing agreement
with U.S. Department of Veterans Affairs (VA).  The license agreement
relates to certain patents pending and contains royalty payment arrangements as
well as funding guarantees.  Because of certain internal VA intellectual
property timeline problems regarding technology transfer to CGW, the VA has not
required CGW to meet any funding requirements as of December 31, 2006.
 Because the VA was unable to transfer research notebooks, it precluded CGW
from beginning technology development and securing related funding and/or
grants. With the completion of the 2007 financing transaction, CGW has now met
the funding guarantee requirements included in the VA license. As of December 31, 2007, the Company had $70,002 of capitalized
patents and $454,534 of capitalized patents pending. Through September 30, 2008
the Company incurred an additional $73,594 of capitalized patents pending. These
amounts consist of the legal fees expended to pursue and prosecute a range of
patent claims related to stem cell delivery and purification. Effective July 1, 2008, the Company evaluated the recoverability
of its intangible assets and recorded an impairment of $568,913 on its licenses
and patents pending related to the VA intellectual property. The Companys
initial research and testing of the VA technology did not yield the anticipated
results nor support the VAs claims regarding the technology and will require
further testing to prove otherwise. The Company determined that recovery of
these costs through future net cash flows was uncertain and that it was
appropriate for financial statement purposes to record an impairment loss on its
licenses and patents pending.       - 12 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)    The Company amortizes patents (and licenses for the use of
patents) over the remaining life of the patents, which ranges from 7 to 17
years. September 30,

December 31,2008

2007Licenses
(VA)

$
115,000

$
115,000Patents


70,002


70,002Patents
pending (costs to pursue patents on VA license)


528,128


454,534Accumulated
amortization


(96,105)


(63,642)Impairment
loss


(568,913)Licenses
and patents, net

$
48,112

$
575,894  NOTE 4  PROPERTY AND EQUIPMENT As of December 31, 2007, the Company had capitalized a total of
$1,078,803 in computer equipment, laboratory equipment and tenant improvements.
During the nine months ended September 30, 2008 the Company acquired an
additional $102,615 of computer equipment, $90,319 of laboratory equipment and
$197,281 of tenant improvements. In addition, during the same period the Company
disposed of laboratory and office equipment with an original cost of $202,903
for proceeds of $126,599 resulting in a loss on disposal of $66,190.
 Property and equipment are stated at cost. The Company depreciates computer and office equipment over a three
year useful life, laboratory equipment over a five year useful life and tenant
improvements over the shorter of the lease term or their useful life. September 30,

December 31,2008

2007Laboratory
equipment

$
413,017

$
505,568Computer
and office equipment


383,198


300,616Tenant
improvements


469,900


272,620Accumulated
depreciation


(240,576)


(42,347)Property
and equipment, net

$
1,025,539

$
1,036,456  - 13 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)      NOTE 5  COMMITMENTS AND CONTINGENCIES Operating Leases On April 1, 2007 the Company entered into a 63 month lease in a
new facility in Bothell Washington. Rent expense relating to the operating lease
was $364,914 for the nine month period ended September 30, 2008. Total commitment in lease cost for the term of the lease is
approximately $1,817,858. Year

Lease Expense2008
$
344,7662009

370,6442010

383,7362011

396,8642012

307,521Thereafter

14,237Total
$
1,817,858 During the three months ended September 30, 2008, the Company was
not able to make its scheduled payments on its facility lease. Accordingly, as
of September 30, 2008, it is in default of the terms of the lease, and the
landlord has used the Companys security deposit of $44,093 to apply against the
outstanding lease payable. The Company is actively working with the landlord to
renegotiate the lease, and to find qualified subtenants to take over portions of
the facility. Executive Employment Contracts As more fully disclosed in the Companys 2007 annual report on
Form 10KSB filed with the Securities and Exchange Commission, the Company has
entered into employment agreements with certain of its executive and management
employees. Effective as of July 1, 2008, the Company suspended these agreements.
Each of the agreements will be re-evaluated upon the successful completion of
the Companys fund raising efforts.  - 14 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)     NOTE 6  CAPITAL STOCK Common Stock The Company has authorized 525,000,000 shares of its common stock,
$0.001 par value. The Company had issued and outstanding 62,809,845 and
59,854,225 shares of its common stock at September 30, 2008 and December 31,
2007, respectively. During the nine month period ended September 30, 2008, the Company
issued common shares as follows: · 67,146 shares of common stock were issued on the exercise of
common stock purchase warrants at a price of $3.00 per share for total proceeds
of $201,438. · 333,862 shares of common stock were issued on the exercise of
common stock purchase warrants at a price of $0.30 per share for total proceeds
of $100,159. · 1,025,247 shares of common stock were issued in exchange for
services with an estimated fair value of $472,601. · 1,529,365 units were issued at a price of $0.25 per unit for total
proceeds of $382,341.  Each unit consists of one common share of CGN and
one warrant to acquire an additional common share of CGN at a price of $0.75 per
share, exercisable for a period ending 18 months from the date of issuance of
the Units. The estimated fair value of the warrants issued in connection with
the financing of $114,702 has been recorded as a separate component of
stockholders equity and was determined on a relative fair value basis using the
Black-Scholes option pricing model using the following weighted average
assumptions: expected option life of 1.50 years, risk-free interest rate of
1.60%, dividend yield of 0% and expected volatility of 135%. During the nine month period ended September 30, 2008, the Company
repriced a total of 4,592,079 warrants previously issued at an exercise price of
$3.00 per warrant, to a new exercise price of $0.30 per warrant.  The
company recorded a charge to additional paid in capital of $367,366 representing
the estimated fair value of the warrant repricing.  Also during the period,
a shareholder of the Company rescinded a portion of their prior investment
totalling $100,158.60 in gross proceeds to the Company and applied the proceeds
to exercise a total of 333,862 of the repriced warrants. The remainder of the
repriced warrants expired unexercised.    - 15 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)    The Companys common stock purchase warrant activity for the nine
month period ended September 30, 2008 is as follows: WarrantsOutstanding

Weighted AverageExercise Price

Weighted AverageRemaining LifeBalance,
December 31, 2006
-
$
-

-Warrants
issued
4,659,225

3.00Warrants
exercised
-

-Warrants
expired
-

-Balance,
December 31, 2007
4,659,225

3.00

0.75 yearsWarrants
issued
1,529,365

0.75Warrants
exercised
(401,008)

0.75Warrants
expired
(4,258,217)

0.30Balance,
September 30, 2008
1,529,365
$
0.75

0.33 years  NOTE 7  COMMON STOCK OPTIONS During the nine month period ended September 30, 2008, the Company
granted a total of 1,427,000 stock options to certain employees, officers,
directors and consultants of the Company to acquire shares of the Companys
common stock at prices ranging from $0.32 per share to $0.52 per share for
periods ranging from 5 to 10 years.  The fair value of the stock options
granted during the period was estimated to be $393,380 and was determined using
the Black-Scholes option pricing model using the following weighted average
assumptions: expected option life of 5.35 years; risk-free interest rate of
3.08%; dividend yield of 0%; and expected volatility of 112%.  Certain of
these options are subject to vesting conditions and, as of September 30, 2008,
the Company had recorded stock based compensation of $176,286 in connection with
the vesting of these options, leaving $217,094 to be expensed on future
vesting.  - 16 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)      The Companys stock option activity for the nine month period
ended September 30, 2008 is as follows: OptionsOutstanding

Weighted AverageExercise Price

Weighted AverageRemaining LifeBalance,
December 31, 2006
-
$
-

-Options
granted
2,000,000

1.50Options
exercised
-

-Options
cancelled and expired
-

-Balance,
December 31, 2007
2,000,000

1.50

7.31 yearsOptions
granted
1,427,000

0.34Options
exercised
-

-Options
cancelled and expired
-

-Balance,
September 30, 2008
3,427,000
$
1.02

0.10 years NOTE 8  RELATED PARTY TRANSACTIONS Two officers, Gary Reys and Dr, Ronald Berninger, who are also
members of the Companys board of directors served as employees of the Company
on various business, strategic, and technical issues. The Company paid and
expensed a total of $516,250 for these services in 2007 and $254,375 during the
nine month period ended September 30, 2008. In addition to the fees,
reimbursable expenses were also paid under these contracts. The total amount
paid for these expenses was $113,517 in 2007 and $30,080 during the nine month
period ended September 30, 2008. At period end December 31, 2007, the Company
also carried a payable to Sheryl Reys, wife of Gary Reys, in the amount of $852
and during the six month period ended September 30, 2008, $20,401 was paid as
reimbursable expenses to Sheryl Reys for supplies and furniture purchased for
the new facility. Shareholder Advances During the year ended December 31, 2007, a shareholder of the
Company paid various outstanding payables on behalf of the Company. As of
December 31, 2007 and September 30, 2008, the Company owed this shareholder
$107,949.  - 17 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)    NOTE
9  LEGAL DISPUTES During the nine month period ended September 30, 2008, three
shareholder lawsuits were filed against the Company in the United States federal
court for the Western District of Washington: Armbruster v. Cellcyte Genetics
Corporation, et. al,No. C08-0047, Tolerico v. Cellcyte Genetics
Corporation, et. al., No. C08-0163 and Pruitt v. Cellcyte Genetics
Corporation, et. al., No. C08-0178.  Gary Reys and Ronald Berninger
were named as individual defendants in all three lawsuits, and John Fluke was
named as an individual defendant in the Tolericolawsuit. An
amended complaint, consolidating the 3 lawsuits has been filed, and John Fluke
is no longer named as a defendant. The amended consolidated complaint alleges,
inter alia, that the Company, and its officers and directors filed
misleading statements with the Securities and Exchange Commission regarding the
Companys products, and that the Company posted misleading information regarding
an officer on its website.  The lawsuits claim that investors purchased the
Companys stock based on the alleged misleading statements and seek monetary
relief. The lawsuit has not been certified for class action status as of the
date of this report. The Company is disputing the basis for the lawsuit and
intends to vigorously defend against it.  While the Company does not
believe the lawsuit has merit, an adverse outcome could have a material adverse
effect on the Companys financial position and results. The Company is also currently engaged in a dispute with a former
employee, who resigned in 2007.  The employee is asserting claims
for monetary damages based upon a constructive discharge theory and other
claims.  The employee has been ordered to arbitrate her
claims pursuant to the terms of a contract between the employee and
CellCyte. The Company does not believe that the employee's claims have
merit, nor does it believe that an adverse outcome will have a material adverse
effect on the companys financial position.   The
employee is on notice regarding that which CellCyte deems proprietary
information.  At this time, the Company does not believe that its
intellectual property is imminently threatened.   Should the
Company determine that the employee is trying to operate a new endeavour with
intellectual property that belongs to CellCyte, it will take appropriate
action. Although management currently believes that resolving claims
against the Company, individually or in aggregate, may not have a material
adverse impact on its financial position, its results of operations, or its cash
flows, these matters are subject to inherent uncertainties and managements view
of these matters may change in the future. In January 2008, the Securities and Exchange Commission (SEC)
notified the Company that it was commencing an informal non-public inquiry
regarding certain matters related to the Companys filings. The SEC requested
that the Company voluntarily produce documents relating to its investigation. On
May 12, 2008, the Company learned that the informal inquiry commenced by the SEC
had become a formal investigation. The Company believes that the focus of the
formal investigation is substantially the same as the informal inquiry and
intends to  - 18 -    CELLCYTE
GENETICS CORPORATION (A DEVELOPMENT
STAGE ENTERPRISE) NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS September
30, 2008 (unaudited)    continue to fully cooperate with the SEC regarding this matter.
The Company is committed to resolving the issues raised in connection with the
investigation. NOTE 10  SUBSEQUENT EVENTS Stock Option Expiration Subsequent to the reporting period ended September 30, 2008,
substantially all of the Companys employee stock options expired
unexercised.    - 19 -      Item
2. Managements
Discussion and Analysis As used in this Quarterly Report: (i) the terms the Company,
our company, we, us and our refer to CellCyte Genetics Corporation, a
Nevada corporation, and its subsidiaries, unless the context requires otherwise;
(ii) references to CellCyte mean CellCyte Genetics Corporation, a Washington
corporation; and (iii) all dollar amounts refer to United States dollars unless
otherwise indicated. The following discussion of our plan of operations, results of
operations and financial condition as at and for the nine months ended September
30, 2008 should be read in conjunction with (i) our unaudited interim
consolidated financial statements and related notes for the nine months ended
September 30, 2008 included in this Quarterly Report, and (ii) our Annual Report
on Form 10-KSB for the year ended December 31, 2007, including our annual
audited financial statements set forth therein. Overview On March 30, 2007, we completed the acquisition of all of the
issued and outstanding shares of CellCyte pursuant to a Share Exchange Agreement
among CellCyte, the shareholders of CellCyte and the Company, dated March 14,
2007. For more information regarding the terms of the acquisition and related
private placement of our common stock, see our Annual Report on Form 10-KSB for
the year ended December 31, 2007 filed with the SEC on April 14, 2008. As a consequence of our Companys acquisition of CellCyte, our
business has been focused on the discovery and development of stem cell enabling
therapeutic products.  See our Annual Report on Form 10-KSB for the year
ended December 31, 2007 for more information. The Company received new data from
the Veterans Administration (VA) regarding its stem cell enabling therapeutic
products. Unless the Company receives additional data from the VA that confirms
the VAs claims regarding the technology licensed from the VA by the Company,
the Company believes that it will be necessary to determine if stem cells
injected into animals along with CCG-TH30 or CCG-TH35 will localize in a target
organ. The Company intends to continue internal research and external
collaborations to investigate stem cell targeting. The Company must receive
additional funding in order to conduct such internal testing and external
collaborations. The CellCyte acquisition constitutes a recapitalization of the
Company and has been accounted for in accordance with principles applicable to
accounting for reverse acquisitions with CellCyte, the legal subsidiary, being
treated as the accounting parent and the Company, the legal parent, being
treated as the accounting subsidiary.  Accordingly, the consolidated
results of operations and cash flows of the Company set forth in this Quarterly
Report include those of CellCyte for all periods presented and those of the
Company subsequent to the date of the CellCyte acquisition. The comparative
balance sheet as at December 31, 2007 is that of CellCyte. Plan of Operations Our plan of operations for the next 12 months is to:  - 20 -      (a) conduct pre-clinical lab research at our biotechnology research
and development facility in Bothell, WA.; (b) complete the design and sourcing of components to begin small
scale manufacturing of our cell expansion device technology for use in
collaborative research with academic and institutional research
organization. (c) initiate collaborative research studies for the expansion of cord
blood stem cells, maintenance of islet cells and production of other cell lines
and proteins. (d) renegotiate master space lease with our landlord and identify
qualified subtenants to take over a portion of our facilities. We anticipate that we will incur an aggregate of $2,500,000 in
expenses for the next 12 months as follows: (a) $590,000 for facility and equipment related expenses; (b) $515,000 for pre-clinical work, quality assurance, manufacturing
of biologic material, academic collaborations and further research
collaborations; (c) $375,000 for design and device manufacturing; (d) $350,000 for legal expenses related to intellectual property
prosecution and accounting expenses related to quarterly reviews and annual
audits; (e) $550,000 for salaries and consulting; and (f) $120,000 for general and administrative, travel, conferences and
public relations. During the next 12 months we anticipate that we will generate
minimal non-recoverable engineering (NRE) service revenue and revenue from the
sale and licensing of our incubator and bioreactor device technology.  We
had cash of $5,734 and a working capital deficit of $897,402 at September 30,
2008.  We presently do not have sufficient cash to fund our operations, and
have curtailed substantially all activities.  Accordingly, we anticipate
that we will require additional financing to enable us to pay our planned
expenses for the next 12 months and pursue our plan of operations. Subsequent to the 12 month period following the date of this
Quarterly Report, we will be required to obtain additional financing in order to
continue to pursue our business plan.  We believe that debt financing will
not be an alternative for funding as we do not have tangible assets to secure
any debt financing.  We anticipate that additional funding will be in the
form of equity financing from the sale of our common stock. We anticipate retaining the services of independent contractors,
and expect to pay such independent contractors by way of the issuance of stock
compensation, in lieu of cash.  - 21 -      We cannot provide investors with any assurance that we will be
able to raise sufficient funding from the sale of our common stock to fund our
business plan going forward.  In the absence of such financing, our
business plan will fail.  Even if we are successful in obtaining equity
financing to fund our business plan, there is no assurance that we will obtain
the funding necessary to pursue our plan over the long-term. Results
of Operations Nine
Months Ended September 30, 2008 Compared to Nine Months Ended September 30,
2007. The following table sets out our consolidated loss for the periods
indicated: Nine Months
EndedSeptember 30, 2008
Nine Months
Ended September 30, 2007(Unaudited)
(Unaudited)Revenues
$

$ Operating ExpensesConsulting
692,989
432,827General
and administrative
850,262
430,309Professional
fees
1,057,852
200,963Research,
development and laboratory
606,864
304,476Salaries
and benefits
655,381
563,675Stock
based compensation
176,286
1,780,000Other Income
(Expense)
(629,483)
(8,527)Net Loss
(4,669,117)
(3,720,777) Revenues We have had no operating revenues since our inception on
January 14, 2005 to September 30, 2008.  We anticipate that we will
not generate any revenues for so long as we are a development stage company. Consulting
Fees In the nine months ended September 30, 2008, consulting fees
increased to $692,989, compared to $432,827 for the same period of 2007,
primarily due to the increased use of contract research organizations and
independent consultants for research and testing of the acquired intellectual
property. General
and Administrative Expenses Our general and administrative expenses in the nine months ended
September 30, 2008 increased to $850,262 from $430,309 for the same period of
2007, primarily as a result of increased operations during the first six months
of 2008 due to the acquisition of additional intellectual  - 22 -      property, rent of additional research facilities and overhead
costs associated with our growing organization. Professional
Fees In the nine months ended September 30, 2008, we incurred
professional fees of $1,057,852, compared to $200,963 for the same period of
2007, primarily related to the increase in costs relating to completing our
year-end audit and litigation matters. Research,
Development and Laboratory Expenses In the nine months ended September 30, 2008, we incurred research,
development and laboratory expenses of $606,864, compared to $304,476 for the
same period of 2007, due to the change in our plan of operations and
commencement of research and development of our products. Salaries
and Benefits In the nine months ended September 30, 2008, we paid salaries and
benefits of $655,381 to our directors, officers and employees, compared to
$563,675 for the same period of 2007, due to the increased hiring of research
staff. Stock-Based
Compensation In the nine months ended September 30, 2008, we incurred
stock-based compensation expenses of $176,286 in connection with the
compensation of our officers and employees.  In the nine months ended
September 30, 2007, we incurred stock-based compensation expenses of $1,780,000
related to the issuance of options to acquire up to 2,000,000 of our shares of
common stock, in connection with the acquisition of CellCyte. Other Income (Expense) Net other expense for the nine months ended September 30, 2008 was
$629,483, compared to $8,527 for the same period of 2007. This increase is
primarily related to the write down of intellectual property during 2008 in the
amount of $568,913, and a loss on disposal of fixed assets in 2008 of
$66,100. Net
Loss As a result of the above, our net loss for the nine months ended
September 30, 2008 was $4,669,117, compared to $3,720,777 for the same period of
2007. Liquidity and Capital Resources As of September 30, 2008, we had cash in the amount of $5,734 and
a working capital deficit of $897,402.  Our planned expenditures over the
next 12 months are expected to amount to approximately $2,500,000 and will
exceed our cash reserves and working capital.  We presently do not have
sufficient cash to fund our operations and have curtailed significantly all
activities.  We anticipate that we will require additional financing in
order to pursue our plan of operations  - 23 -      for the next 12 months.  There can be no assurance that we
will obtain any additional financing in the amounts required or on terms
favorable to us.  If we are unable to obtain additional financing, we may
have to abandon our business activities and plan of operations. We believe that debt financing will not be an alternative for
funding as we do not have tangible assets to secure any debt financing.  We
anticipate that additional funding will be in the form of equity financing from
the sale of our common stock.  However, we cannot provide investors with
any assurance that we will be able to raise sufficient funding from the sale of
our common stock to fund our plan of operations going forward.  In the
absence of such financing, our business plan will fail.  Even if we are
successful in obtaining equity financing, there is no assurance that we will
obtain the funding necessary to pursue our business plan.  If we do not
continue to obtain additional financing going forward, we will be forced to
abandon our plan of operations. Cash
Used in Operating Activities Cash used in operating activities in the nine months ended
September 30, 2008 was $2,613,706, compared to $2,435,744 for the same period of
2007.  Operating activities used cash primarily relating to the
commencement of our new plan of operations subsequent to the acquisition of
CellCyte.  We anticipate that cash used in operating activities will
decrease over the balance of 2008 as we curtail operations and respond to
certain lawsuits.  We have funded our operations primarily from the
issuance of our common stock, and expect to continue efforts to raise additional
capital through the sale of stock. Cash
Used In Investing Activities In the nine months ended September 30, 2008, investing activities
used cash of $355,954, compared to $442,763 for the same period of 2007
primarily to fund the acquisition of intellectual property and the purchase of
furniture and lab and office equipment for our facility. Cash
Provided By Financing Activities We have funded our business to date primarily from sales of our
common stock.  In the nine months ended September 30, 2008, we raised
proceeds of $683,938, compared to $6,075,700 for the same period of 2007, from
the sale of our common stock. Going
Concern As shown in the accompanying financial statements, we have
incurred significant losses since inception and have not generated any revenues
to date.  The future of our Company is dependent upon our ability to obtain
sufficient financing and upon achieving future profitable operations.
 These factors, among others, raise substantial doubt about our Companys
ability to continue as a going concern.  The accompanying interim
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty. Future
Financings We anticipate continuing to rely on equity sales of our common
shares in order to continue to fund our business operations.  Issuances of
additional shares will result in dilution to our existing  - 24 -      shareholders.  There is no assurance that we will achieve any
additional sales of our equity securities or arrange for debt or other financing
to fund our business plan. 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 are
material to shareholders. Critical Accounting Policies Our financial statements are impacted by the accounting policies
used and the estimates and assumptions made by management during their
preparation.  A complete summary of these policies is included in
Note 2 of the notes to our historical financial statements.  We have
identified below the accounting policies that are of particular importance in
the presentation of our financial position, results of operations and cash flows
and which require the application of significant judgment by management. Use
of Estimates The accompanying financial statements are prepared in conformity
with accounting principles generally accepted in the United States of America
and include certain estimates and assumptions which affect the reported amounts
of assets and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting period.
 Accordingly, actual results may differ from those estimates. Income Taxes The Company follows the provisions of Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes (SFAS No.
109), under which deferred tax assets and liabilities are determined based on
differences between financial reporting and tax basis of assets and liabilities.
Deferred tax assets and liabilities are measured using the enacted tax rates and
laws that are expected to be in effect when the differences are expected to
reverse.  The provisions of SFAS No. 109 also require the recognition of
future tax benefits such as net operating loss carry-forwards, to the extent
that the realization of such benefits is more likely than not.  To the
extent that it is more likely than not that such benefits will not be received,
the Company records a valuation allowance against the related deferred tax
asset. Intangible Assets The Companys intangible assets primarily consist of patents and
intellectual property, which are carried at the purchase price and/or the legal
cost to obtain them less accumulated amortization.  Patents and licenses
are being amortized over their estimated useful lives, which range from seven to
seventeen years. Annually these assets are reviewed for recoverability to
determine if the carrying amount on the balance sheet is appropriate.  - 25 -      Research and Development Costs Research and development costs are expensed as incurred. The cost
of intellectual property purchased from others that is immediately marketable or
that has an alternative future use is capitalized and amortized as intangible
assets. Capitalized costs are amortized using the straight-line method over the
estimated economic life of the related asset. The Company periodically reviews
its capitalized intangible assets to assess recoverability based on the
projected undiscounted cash flows from operations, and impairments are
recognized in operating results when a permanent diminution in value occurs. Stock-Based Compensation The Company accounts for its stock option plan under the
recognition and measurement principles of the revised statement to Statement of
Financial Accounting Standards No. 123 (R), Share-Based Payments (SFAS
No. 123 (R)). Accordingly, compensation cost has been recognized using the fair
value method and expected term accrual requirements as prescribed in SFAS No.
123 (R). The Company has recorded $1,956,286 in stock-based compensation expense
through September 30, 2008 in connection with the acquisition of CGW and other
stock options granted as described further in Note 6 of the financial statements
included herein. Recent Accounting Pronouncements On March 19, 2008, the Financial Accounting Standards Board (FASB)
announced the issuance of Statement of Financial Accounting Standards No. 161,
Disclosures about Derivative Instruments and Hedging Activities (SFAS
No. 161). SFAS No. 161 amends Statement of Financial Accounting Standards No.
133, Accounting for Derivative Instruments and Hedging Activities (SFAS
No. 133) and was issued in response to concerns and criticisms about the lack
of adequate disclosure of derivative instruments and hedging activities. SFAS
No. 161 is focused on requiring enhanced disclosure on 1) how and why an entity
uses derivative instruments and hedging activities; 2) how derivative
instruments and related hedging activities are accounted for under SFAS No. 133;
and 3) how derivative instruments and related hedging activities affect an
entitys cash flows, financial position and performance. To accomplish the three objectives listed above, SFAS No. 161
requires: 1) qualitative disclosures regarding the objectives and strategies for
using derivative instruments and engaging in hedging activities in the context
of an entitys overall risk exposure; 2) quantitative disclosures in tabular
format of the fair values of derivative instruments and their gains and losses;
and 3) disclosures about credit-risk related contingent features in derivative
instruments. SFAS No. 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008.
 Management has not determined the effect that adopting this statement
would have on the Companys financial position or results of operations. Item
3. Quantitative
and Qualitative Disclosures About Market Risk. Not
Applicable.  - 26 -      Item
4. Controls
And Procedures Evaluation
of Disclosure Controls and Procedures In connection with the preparation of this Quarterly Report on
Form 10-Q, an evaluation was carried out by our management, with the
participation of the Principal Executive Officer and Principal Accounting
Officer, of the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934 (Exchange Act)) as of September 30, 2008.  Disclosure controls and
procedures are designed to ensure that information required to be disclosed in
reports filed or submitted under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the SEC rules and
forms and that such information is accumulated and communicated to management,
including the Principal Executive Officer and the Principal Accounting Officer,
to allow timely decisions regarding required disclosures. Based on its
evaluation, our management concluded, as of the end of the period covered by
this report, that our disclosure controls and procedures were not effective. There were certain changes in our internal control over financial
reporting (as defined in Rule 13a-15(d) under the Exchange Act) during the
quarter ended September 30, 2008 that may  materially affect, or is
reasonably likely to materially affect, our internal control over financial
reporting. These changes included the resignation of the Companys Principal
Accounting Officer and the appointment of a new Principal Accounting Officer,
the suspension of most of the Companys operations, and the appointment of the
Audit Committee Chairman, previously an independent director, as the Interim
Principal Executive Officer.  __________   - 27 -      PART II  OTHER INFORMATION  Item
1. Legal
Proceedings In January 2008, three shareholder lawsuits were filed against us
in the United States federal court for the Western District of Washington:
Armbruster v. Cellcyte Genetics Corporation, et. al,No. C08-0047,
Tolerico v. Cellcyte Genetics Corporation, et. al., No. C08-0163 and
Pruitt v. Cellcyte Genetics Corporation, et. al., No. C08-0178. 
Gary Reys and Ronald Berninger were named as individual defendants in all three
lawsuits, and John Fluke was named as an individual defendant in the Tolericolawsuit. An amended complaint, consolidating the 3 lawsuits has been
filed, and John Fluke is no longer named as a defendant. The amended
consolidated complaint alleges, inter alia, that the Company, and its
officers and directors filed misleading statements with the Securities and
Exchange Commission regarding the Companys products, and that the Company
posted misleading information regarding an officer on its website.  The
lawsuits claim that investors purchased our stock based on the alleged
misleading statements and seek monetary relief. The lawsuit has not been
certified for class action status as of the date of this report. We are
disputing the basis for the lawsuit and intend to vigorously defend against
it.  While we do not believe the lawsuit has merit, an adverse outcome
could have a material adverse effect on our financial position and results. We are also currently engaged in a dispute with a former employee,
who resigned in 2007.  The employee is asserting claims for
monetary damages based upon a constructive discharge theory and other
claims.  The employee has been ordered to arbitrate her
claims pursuant to the terms of a contract between the employee and
CellCyte.   We do not believe that the employee's claims have merit,
nor do we believe that an adverse outcome will have a material adverse effect on
our financial position.   The employee is on notice
regarding that which CellCyte deems proprietary information.  At this
time, we do not believe that CellCyte's intellectual property is imminently
threatened.   Should we determine that the employee is trying to
operate a new endeavour with intellectual property that belongs to CellCyte, we
will take appropriate action. Although management currently believes that resolving claims
against us, individually or in aggregate, may not have a material adverse impact
on our financial position, our results of operations, or our cash flows, these
matters are subject to inherent uncertainties and managements view of these
matters may change in the future. In January 2008, the Securities and Exchange Commission (SEC)
notified us that it was commencing an informal non-public inquiry regarding
certain matters related to our filings. The SEC requested that we voluntarily
produce documents relating to its investigation. On May 12, 2008, we learned
that the informal inquiry commenced by the SEC had become a formal
investigation. We believe that the focus of the formal investigation is
substantially the same as the informal inquiry and intend to continue to fully
cooperate with the SEC regarding this matter. We are committed to resolving the
issues raised in connection with the investigation. Item 1A. Risk Factors Not Applicable.   - 28 -      Item
2. Unregistered
Sales of Equity Securities  During the period ended September 30, 2008, the Company issued
securities as follows: · 67,146 shares of common stock were issued on the exercise of
common stock purchase warrants at a price of $3.00 per share for total proceeds
of $201,438. · 333,862 shares of common stock were issued on the exercise of
common stock purchase warrants at a price of $0.30 per share for total proceeds
of $100,159. · 1,025,247 shares of common stock were issued in exchange for
services with an estimated fair value of $472,601. · 1,529,365 units were issued at a price of $0.25 per unit for total
proceeds of $382,341.  Each unit consists of one common share of CGN and
one warrant to acquire an additional common share of CGN at a price of $0.75 per
share, exercisable for a period ending 18 months from the date of issuance of
the Units. Item
3. Defaults
Upon Senior Securities None.  Item
4. Submission
of Matters to a Vote of Security Holders None.  Item
5. Other
Information None.  Item
6. Exhibits The
following exhibits are included with this Quarterly Report on Form 10-Q: ExhibitNumber
Description of Exhibit3.1
Articles of Incorporation, as amended.  Incorporated by
reference to our Registration Statement on Form SB-2 filed on May 4,
2005.3.2
Bylaws.  Incorporated by reference to our Current
Report on Form 8-K filed May 14, 2004.10.1
Agreement in Principle between Shepard Inc. and CellCyte
Genetics Corporation and the Principal Vendor of CellCyte Genetics
Corporation dated January 26, 2007.  Incorporated by reference
to our Current Report on Form 8-K filed February 2,
2007.  - 29 -       10.2
Share Exchange Agreement among CellCyte Genetics Corporation
(Nevada), CellCyte Genetics Corporation (Washington) and the Vendors of
CellCyte Genetics Corporation (Washington) dated March 14, 2007.
 Incorporated by reference to our Current Report on Form 8-K
filed March 15, 2007.10.3
Employment Agreement between the Company and Gary A. Reys.
 Incorporated by reference to our Current Report on Form 8-K
filed June 5, 2007.10.4
Employment Agreement between the Company and Dr. Ronald W.
Berninger.  Incorporated by reference to our Current Report on
Form 8-K filed June 5, 2007.10.5
Consulting Agreement between the Company and Jack Wynn &
Co., Inc.  Incorporated by reference to our Registration Statement on
Form SB-2 filed June 29, 2007.10.6
CEO Award Agreement between the Company and Gary A. Reys.
 Incorporated by reference to our Current Report on Form 8-K
filed June 5, 2007.10.7
Sublease Agreement between the Company and Icogenex
Corporation.  Incorporated by reference to our Registration Statement
on Form SB-2 filed June 29, 2007.10.8
Lease Agreement between the Company and Teachers Insurance
and Annuity Association of America, Inc.  Incorporated by reference
to our Registration Statement on Form SB-2 filed June 29, 2007.10.9
2007 Stock Option/Restricted Stock Plan.  Incorporated
by reference to our Registration Statement on Form SB-2 filed June 29,
2007.31.1
Rule 13a-14(a)/15(d)-14(a) Certification of Principal
Executive Officer.31.2
Rule 13a-14(a)/15(d)-14(a) Certification of Principal
Accounting Officer.32.1
18 U.S.C. Section 1350 Certification of Principal Executive
Officer.32.2
18 U.S.C. Section 1350 Certification of Principal Accounting
Officer. __________      - 30 -      SIGNATURES Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.  CELLCYTE
GENETICS CORPORATIONDated:
 December 22, 2008.
Per:
/s/
John M. Fluke, Jr.
John
M. Fluke, Jr.
Interim
Principal Executive Officer __________