U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



(Mark One)



|  |                                                                                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------
|R | QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2008.



|  |                                                                                                                                              
|- | ---------------------------------------------------------------------------------------------------------------------------------------------
|£ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD OF _________ TO _________



Commission File Number: 000-19846



Current Technology Corporation

(Exact name of registrant as specified in its charter)



|                               |                    
|------------------------------ | -------------------
|Canada                         | __N/A_____         
|State or other jurisdiction of | (I.R.S. Employer   
|incorporation or organization  | Identification No.)



800 West Pender Street, Suite 1430

Vancouver, B.C., Canada V6C 2V6

(Address of principal executive offices, including zip code)



Registrants telephone number: (604) 684-2727





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

Yes oNo R



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company:



Large accelerated filer o

Accelerated filer o

Non-accelerated filer o    Smaller Reporting company R



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes oNo R



As of August 14, 2008, there were 135,936,253 shares of the Registrants no par value Common Stock (Common Stock), Registrants only outstanding class of voting securities, outstanding









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CURRENT TECHNOLOGY CORPORATION

QUARTERLY REPORTON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED June 30, 2008





PART I  FINANCIAL INFORMATION







ITEM 1. Financial Statements (unaudited)





INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



PAGE



Consolidated Financial Statements:

4

Consolidated Balance Sheets as of December 31, 2007 and June 30, 2008

5



Consolidated Statements of Operations for the three and six month period ended

June 30, 2008 and June 30, 2007

6



Consolidated Statements of Cash Flow for the six month period ended

June 30, 2008 and June 30, 2007

7



Condensed Notes to Consolidated Financial Statements

8





















[The balance of this page has been intentionally left blank.]









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CURRENT TECHNOLOGY CORPORATION

(CORPORATION TECHNOLOGIE AU COURANT)



Vancouver, BC





INTERIM CONSOLIDATED FINANCIAL STATEMENTS



For the Six Months Period Ended June 30, 2008















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CURRENT TECHNOLOGY CORPORATION

(CORPORATION TECHNOLOGIE AU COURANT)

INDEX TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS





Interim Consolidated Balance Sheet

Interim Consolidated Statement of Operations and Deficit

Interim Consolidated Statement of Stockholders Equity and Accumulated Deficit

Interim Consolidated Statement of Cash Flows

Notes to Interim Consolidated Financial Statements







_________________________________







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CURRENT TECHNOLOGY CORPORATION

(Incorporated under the Canada Business Corporations Act)

Interim Consolidated Balance Sheet

June 30, 2008 and December 31, 2007

(United States Dollars)





|                                                            |                         |                   | 
|----------------------------------------------------------- | ----------------------- | ----------------- | 
|Assets                                                      | Unaudited June 30, 2008 | December 31, 2007
|Current Assets:                                             |                         |                  
|Cash and cash equivalents                                   | $623,512                | $33,498          
|Accounts receivable                                         | 214,580                 | 27,617           
|Inventory                                                   | 363,007                 | 61,920           
|Prepaid expenses                                            | 18,579                  | 17,926           
|Subscription receivable                                     | 36,250                  | 49,412           
|Total Current Assets                                        | 1,255,928               | 190,373          
|                                                            |                         |                  
|Equipment, Furniture, & Capital Lease (Note 8)              | 458,915                 | -                
|Less accumulated depreciation                               | (78,774)                | -                
|Total Equipment, Furniture & Capital Lease                  | 380,141                 | -                
|                                                            |                         |                  
|Intangible Assets                                           | 2,454,768               | -                
|Total Assets                                                | $4,090,837              | $190,373         
|                                                            |                         |                  
|Liabilities and Stockholders Equity and (Deficiency)       |                         |                  
|Current Liabilities:                                        |                         |                  
|Accounts payable and accrued liabilities                    | $795,619                | $346,943         
|Total current liabilities                                   | 795,619                 | 346,943          
|                                                            |                         |                  
|Convertible promissory note (Note 9)                        | 1,191,426               | 1,121,489        
|Total liabilities                                           | 1,987,045               | 468,432          
|Minority interests in subsidiary companies                  | 386,260                 | -                
|                                                            |                         |                  
|Stockholders Equity and (Deficiency):                      |                         |                  
|Subscription liability (Note 10)                            | 65,730                  | 27,898           
|Common shares without par value (Note 10)                   | 28,912,437              | 25,787,959       
|Additional paid-in capital (Note 11)                        | 3,216,578               | 1,865,581        
|Accumulated deficit                                         | (30,495,963)            | (28,660,295)     
|Accumulated other comprehensive income                      | 18,750                  | (299,202)        
|Total stockholders equity and (deficiency)                 | 1,717,532               | (1,278,059)      
|Total Liabilities and Stockholders Equity and (Deficiency) | $4,090,837              | $190,373         
|                                                            |                         |                  
|Going Concern (Note 3 )                                     |                         |                  
|Commitments (Note17)                                        |                         |                  
|Subsequent Events (Note18)                                  |                         |                  



|                                                                                |  |  | 
|------------------------------------------------------------------------------- |  |  | 
|Approved by Directors:

__ Robert Kramer  ________

__ George Chen_________ |  | 
|                                                                                |  | 
|                                                                                |  | 





See accompanying notes -



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CURRENT TECHNOLOGY CORPORATION

Interim Consolidated Statement of Operations and Deficit

For the six months ended June 30

(Unaudited- prepared by management)

(United States Dollars)

|                                                                                                                                |                             |                          |                             |                         
|------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------------------------ | --------------------------- | ------------------------
|                                                                                                                                | Three months ended June 30, | Six months ended June 30 | Three months ended June 30, | Six months ended June 30
|                                                                                                                                | 2008                        | 2008                     | 2007                        | 2007                    
|Revenue                                                                                                                         | $224,931                    | $354,728                 | $110,224                    | $203,124                
|Cost of sales                                                                                                                   | 191,861                     | 328,643                  | 118,767                     | 200,401                 
|                                                                                                                                | 33,070                      | 26,085                   | (8,543)                     | 2,723                   
|                                                                                                                                |                             |                          |                             |                         
|Selling, General and Administrative Costs and Expenses                                                                          |                             |                          |                             |                         
|General & Administrative                                                                                                        | 221,353                     | 370,878                  | 72,598                      | 110,352                 
|Salaries & wages                                                                                                                | 298,636                     | 891,088                  | 75,007                      | 170,283                 
|Legal, auditing and filing fees                                                                                                 | 147,769                     | 214,104                  | 60,781                      | 107,778                 
|Consulting                                                                                                                      | 37,288                      | 219,558                  | 27,900                      | 45,120                  
|Corporate Communications                                                                                                        | 50,190                      | 160,175                  | 21,610                      | 42,660                  
|Business development                                                                                                            | 288,608                     | 488,608                  | -                           | -                       
|Foreign Exchange (Recovery)                                                                                                     | 7,403                       | 1,603                    | (91,571)                    | (105,534)               
|Total Selling, General and Administrative Costs and Expenses                                                                    | 1,051,247                   | 2,346,014                | 166,325                     | 370,659                 
|Loss before other items                                                                                                         | 1,018,177                   | 2,319,929                | 174,868                     | 367,936                 
|                                                                                                                                |                             |                          |                             |                         
|Other Items:                                                                                                                    |                             |                          |                             |                         
|Interest on convertible promissory note                                                                                         | 28,293                      | 56,587                   | 24,782                      | 49,682                  
|                                                                                                                                |                             |                          |                             |                         
|Income (Loss) from operations before income taxes, minority interests and equity in net loss (income) from associated companies | $(1,046,470)                | $(2,376,516)             | $(199,650)                  | $(417,618)              
|Income taxes                                                                                                                    | -                           | -                        | -                           | -                       
|Minority interest                                                                                                               | 127,160                     | 430,466                  | -                           | -                       
|Equity in net loss (income) from associated companies                                                                           | 203,967                     | 261,590                  | -                           | -                       
|Net loss                                                                                                                        | $(1,123,277)                | $(2,207,640)             | $(199,650)                  | $(417,618)              
|Deficit, beginning                                                                                                              | $(29,372,686)               | (28,288,323)             | $(27,330,111)               | (27,112,143)            
|Deficit, ending,                                                                                                                | $(30,495,963)               | $(30,495,963)            | $(27,529,761)               | $(27,529,761)           
|                                                                                                                                |                             |                          |                             |                         
|Basic and fully diluted net loss per share                                                                                      | $(0.0087)                   | $(0.0175)                | $(0.0021)                   | $(0.0047)               
|Weighted average shares outstanding                                                                                             | 128,411,776                 | 126,351,900              | 93,818,690                  | 89,362,023              
|                                                                                                                                |                             |                          |                             |                         
|The per share effect in the change in accounting policy                                                                         | $(0.0087)                   | $(0.0175)                | $(0.0021)                   | $(0.0047)               
|                                                                                                                                |                             |                          |                             |                         
|                                                                                                                                |                             |                          |                             |                         
|                                                                                                                                |                             |                          |                             |                         
|                                                                                                                                |                             |                          |                             |                         





See accompanying notes -



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CURRENT TECHNOLOGY CORPORATION

Interim Consolidated Statement of Stockholders Equity and (Deficiency)

For the Six Months Period Ended June 30, 2008and Year ended December 31, 2007

(United States Dollars)





CommonSharesAdditional Paid in CapitalAccumulated deficitSubscription LiabilitiesAccumulated other comprehensive lossTotal stockholders equity (deficiency)NumberAmount(Restatement)Balance December 31, 200680,872,023$24,649,659$1,235,712$(27,112,143)$84,140$(136,989)$(1,279,621)Issue of common shares23,020,0001,138,300----1,138,300Subscription Liabilities----(56,242)-(56,242)Foreign currency translation adjustment-----(162,213)(162,213)Issue of warrants--209,011---209,011Stock based compensation--420,858---420,858Net loss for the year---(1,548,152)-(1,548,152)(1,548,152)Comprehensive Loss-----(1,710,365)-Balance December 31, 2007103,892,023$25,787,959$1,865,581$(28,660,295)$27,898$(299,202)$(1,278,059)Issue of common shares26,479,6303,124,478----3,124,478Subscription Liabilities----37,832-37,832Foreign currency translation adjustment-----317,952317,952Stock based compensation--1,350,997---1,350,997Net loss for the year---(2,207,640)-(2,207,640)(2,207,640)Comprehensive Loss---371,972-(1,889,688)371,972Balance  June 30, 2008 (unaudited)130,371,653$28,912,437$3,216,578$(30,495,963)$65,730$18,750$1,717,532














See accompanying notes -



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CURRENT TECHNOLOGY CORPORATION

Interim Consolidated Statement of Cash Flows

For the six months ended June 30

(Unaudited- prepared by management)

(United States Dollars)







Three months ended June 30,Six months ended June 30Three months ended June 30,Six months 
 ended June 302008200820072007Operating Activities:Net Loss$(1,123,277)$(2,207,640)$(199,650)$(417,618)Adjustments to reconcile net loss to net cash provided by (used in) operating activities-Amortization and Depreciation16,89736,274--Professional Fees accrual111,000136,000--Bad debt expense-10,250--Stock based compensation-314,027-15,205Additional paid in capital-1,350,997--Shares issued for services provided43,750103,750--Interest on promissory note28,29456,587(62,030)(52,334)Minority interest127,160430,466--Loss from Equity investment203,967261,590--Exchange adjustment(47,045)(19,967)14,8293,300Changes in operating assets and liabilities-(Increase) Decrease in accounts receivable(211,890)(186,963)(37,514)(37,514)(Increase) Decrease in inventory(301,087)(301,087)(12,097)(28,773)(Increase) Decrease in prepaid expenses(3,216)(653)(67,167)8,120(Increase) Decrease in subscription receivable13,16213,162--Increase (Decrease) in accounts payable397,735448,676(72,770)(160,169)Increase (Decrease) in unearned revenue--61,38661,605Net cash used in operating activities(744,550)445,469(375,013)(608,718)Cash flows from investing activitiesInvestment in Celevoke54,068(2,454,768)--Fixed assets purchase(157,802)(458,915)Net cash used in investing activities(103,734)(2,913,683)--Cash flows from financing activities:Issuance of new shares1,520,7383,020,728215,412664,872Subscription advances(112,500)37,500(58,968)(58,968)Net cash provided by financing activities1,408,2383,058,228156,444605,904Net Increase in Cash and Cash Equivalents559,954590,014(218,569)(2,814)Cash and Cash Equivalents, beginning63,55833,498260,840$45,085Cash and Cash Equivalents, ending$623,512$623,512$42,271$42,271






See accompanying notes -



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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





1.

Basis of Presentation:



The accompanying unaudited interim consolidated financial statements have been prepared in accordance with US generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all the information and notes required by US generally accepted accounting principles for complete financial statements of Current Technology Corporation and its subsidiaries (the Company).  In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation have been included.  Interim results are not necessarily indicative of the results that may be expected for the year.  The unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2007 included in the Companys Form 20-F filed with the Securities and Exchange Commission (the SEC) on July 11, 2008.



The consolidated balance sheet at December 31, 2007 has been derived from the audited financial statements at that date but does not include all the information and notes required by US generally accepted accounting principles for complete financial statements.



The acquisitions described in Note 7 below significantly affects the comparability of the financial information as of June 30, 2008 and for the three and six month periods then ended.



2.

Nature of Operations:



On January 31, 2008, the Company entered into a securities purchase agreement with Celevoke, Inc (Celevoke).  On May 23, 2008, the Company completed the purchase of 102 shares of Celevoke common stock for an aggregate purchase price of $2.5 million.



The Company has a 51% interest in Celevoke as at June 30, 2008. Management believes Celevoke has a number of attributes which should lead to success in the market place. These include a suite of fully developed GPS-based asset tracking devices, a non-exclusive worldwide license with the patent holder, a fully functioning network operations center and established relationships with a number of channels of distribution. (See Note 7)



The Company has developed an electrotherapeutic medical device designed to stimulate hair regrowth  (ElectroTrichoGenesis or ETG) and a cosmetic unit designed to improve the appearance of thinning hair (CosmeticTrichoGenesis or CTG).  ETG and CTG are marketed as TrichoGenesis platform products. The Company has entered into an exclusive distribution agreement with an entity based in the United States for the placement on a revenue sharing basis of its TrichoGenesis platform products in the United States, Canada, South America (excluding Brazil), Europe and Russia. The Company is working in concert with its United States based distributor to attempt to lower the cost of ETG devices and CTG units by having non-proprietary components of the chair and hood manufactured in China. During the last year, the Company established a security products division

The Company was incorporated on June 3, 1986 and commenced operations on April 21, 1987. The Company currently does not generate sufficient funds from operations to support continuing activities and has financed expenditures through private and public offerings of equity securities and the private placement of debt instruments. The common shares of the Company trade on the OTCBB in the United States under symbol "CRTCF".











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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





3.

Going Concern:



These unaudited consolidated financial statements have been prepared on the going concern assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business.



A net loss of $2,207,640 was incurred during the six months (2007: $417,618).  Recurring losses have been reported since inception, which have resulted in an accumulated deficit of $30,495,963 (2007: $27,529,761). The Company may attempt to obtain additional debt or equity financing which could result in receipt of additional financing but there can be no assurance that such capital will be available in sufficient amounts or on acceptable terms and there is no certainty that these discussions will be concluded successfully.



The ability of the Company to continue as a going concern is dependent on the successful conclusion of these discussions, the receipt of additional financing, and/or proceeds on the sale of assets and ultimately its ability to generate sufficient cash from operations and financing sources to meet its obligations as they come due.



If the Company is unable to continue as a going concern, material adjustments may be required to the carrying value of assets and liabilities and to the classifications used on the balance sheet.



Any inability to obtain additional financing when needed would have a material adverse affect on the Company including possibly requiring the Company to significantly reduce or cease its operations.



4.

Accounting changes:



a)

Change in Functional Currency





Effective January 1, 2008, the Company changed its functional currency to the U.S. dollar from the Canadian dollar. With the acquisition of Celevoke, Inc (Note 7), the Companys primary economic environment has now changed from Canada to United States.  This has resulted in significant changes in economic facts and circumstances that clearly indicate that the functional currency has changed.  The Company accounted for the change in functional currency prospectively.



The financial statements of the Company for the year ended December 31, 2007 which is based on the Canadian functional currency, has been translated into the U.S. reporting currency using the current rate method as allowed by Statement of Financial Accounting Standards No.52 ("SFAS 52") as follows:  assets and liabilities using the rate of exchange prevailing at the balance sheet date; stockholders' deficiency using the applicable historic rate; and revenue and expenses using the monthly average rate of exchange. Translation adjustments have been included as part of the accumulated other comprehensive income.



b)

Changes in Accounting Policies Relating to the Adoption of U.S. Generally Accepted Accounting Principles (U.S. GAAP)



Effective December 31, 2007, the Company elected to report its consolidated financial statements in conformity with U.S. GAAP.  Prior to December 31, 2007, the Companys financial statements were prepared in accordance with Canadian GAAP and filed with the appropriate Securities Commissions.  All accounting policies are the same under Canadian GAAP and U.S. GAAP, except for the following







Page9

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





4.

Accounting changes (continued):



which have been retroactively adopted to comply with U.S. GAAP:



Stock-based compensation



The Company grants stock options to employees, officers, directors, and persons providing management or consulting services to the Company.



Prior to January 1, 2002, the Company accounted for its employees stock options with the intrinsic value method under Accounting Principles Board Opinion 25, Accounting for Stock Issued to Employees (APB 25) as allowed by Statement of Financial Accounting Standard 123, Accounting for Share-Based Payments, (SFAS 123).  APB 25 requires compensation cost for stock-based

employee compensation plans to be recognized over the vesting period based on the difference, if any,

between the quoted market price of the Companys stock as of the grant date and the amount the

employee must pay to acquire the stock.  Because the Company accounted for its employees stock options under APB 25, the Company separately disclosed pro forma information relating to the total compensation expense as required by SFAS 123.



Effective January 1, 2002, the Company adopted the provisions of SFAS 123 and related interpretations to account for options granted to employees and non-employees.  Under this method, compensation cost is measured at the grant date based on fair value of the options granted using the Black-Scholes options price model.



Convertible promissory note



Under Canadian GAAP, there is a value attributed to the conversion feature which is calculated as the difference between the amount issued and the liability component.  The liability component is calculated as the present value of the scheduled cash payments of interest and principal due under the terms of the note discounted at the rate of interest applicable to a debt only instrument of comparable terms.  Canadian GAAP requires the separate presentation of the liability and the equity component of the convertible promissory note.

Under US GAAP, in accordance with APB 14, Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants, no portion of the proceeds from the issuance of convertible debt securities should be accounted for as attributable to the conversion feature.  Emerging Issue Task Force 98-5 (EITF 98-5) requires the conversion feature to be separately valued only if the convertible debt securities with non-detachable conversion feature is issued in-the-money at the commitment date (beneficial conversion feature).  As a result of applying APB 14, there is no impact on the income statement because no accretion of interest had been recorded.



Derivative financial instrument



Under Canadian GAAP, there is a requirement for derivatives outside of hedging relationships to be recognized on the balance sheet at fair market value.  Warrants issued together with capital stock as part of a unit had been separately valued and recorded as contributed surplus.  When the warrants are exercised, the proceeds received by the Company, together with the amount in contributed surplus will be credited to common share capital.



Under US GAAP SFAS 133 Accounting for Derivative Instruments and Hedging Activities, warrants contracts issued or held by the reporting entity that are both (1) indexed to its own stock and (2)





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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





4.

Accounting changes (continued):



classified as stockholders equity in the statement of financial position are classified as an equity instrument and are not accounted for as a derivative instrument.  EITF 07-5 and EITF 01-6 further define indexed to its own stock as derivative instruments where (1) the contingency provisions are not based on (a) an observable market other than the market for the Companys stock, (b) an observable index, other than those measured solely by reference to the Companys own operation, (2) once the contingent events have occurred, the instruments settlement amount is based solely on the Companys stock.



The Company has determined that the warrants issued with common share as a unit are within the scope of the exception in SFAS 133, Accounting for Derivative Instrument and Hedging Activities and therefore have not been separately valued.



The pro forma amounts from the change in the above accounting policies cannot be computed or

reasonably estimated for individual prior periods, although the cumulative effect on deficit at the beginning of the period of the change can be determined.



5.

Recent Accounting Pronouncements:



In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which provides a single definition of fair value, a framework for measuring fair value, and expanded disclosures concerning fair value. Previously, different definitions of fair value were contained in various accounting pronouncements creating inconsistencies in measurement and disclosures. SFAS No. 157 applies under those previously issued pronouncements that prescribe fair value as the relevant measure of value, except Statement No. 123(R) and related interpretations and pronouncements that require or permit measurement similar to fair value but are not intended to measure fair value. This pronouncement is effective for fiscal years beginning after November 15, 2007. The Company does not expect the adoption of SFAS No. 157 to have a material impact on its consolidated financial statements.



In February 2008, the FASB issued FASB Staff Position (FSP) FAS 157-2, which delays the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years, for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).  Examples of items to which the deferral would apply include, but are not limited to:

·

Non-financial assets and non-financial liabilities initially measured at fair value in a business combination or other new basis event, but not measured at fair value in subsequent periods (non-recurring fair value measurements)

·

Reporting units measured at fair value in the first step of a goodwill impairment test and non-financial assets and non-financial liabilities measured at fair value in the second step of a goodwill impairment test (measured at fair value on a recurring basis, but not necessarily recognized or disclosed in the financial statements at fair value)

·

Indefinite-lived intangible assets measured at fair value for impairment assessment (measured at fair value on a recurring basis, but not necessarily recognized or disclosed in the financial statements at fair value)

·

Long-lived assets (asset groups) measured at fair value for an impairment assessment (non-recurring fair value measurements); and

·

Liabilities for exit or disposal activities initially measured at fair value (non-recurring fair value measurements)





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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





5.

Recent Accounting Pronouncements (continued):



In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans (SFAS No. 158). SFAS No. 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit pension plan and other postretirement plans as an asset or liability on its balance sheet and recognize changes in its funded status in the year in which the change occurs through accumulated other non owner changes in equity. We do not expect the adoption of SFAS 158 to have an impact on our results of operations or financial condition.



In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Assets and Liabilities  Including an Amendment of FASB Statement No. 115. This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. Most of the provisions in SFAS No. 159 are elective; however, the amendment to SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities,applies to all entities with available-for-sale and trading securities. The fair value option established by SFAS No. 159 permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity will report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments. SFAS No. 159 is effective as of the beginning of an entitys first fiscal year that begins after November 15, 2007. The Company does not expect the adoption of SFAS No. 159 to have a material impact on its consolidated financial statements.



In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations (SFAS 141(R)). The objective of SFAS 141 (R) is to improve reporting by creating greater consistency in the accounting and financial reporting of business combinations, resulting in more complete, comparable and relevant information for investors and other users of financial statements. SFAS 141 (R) requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS 141 (R) includes both core principles and pertinent application guidance, eliminating

the need for numerous EITF issues and other interpretative guidance, thereby reducing the complexity of existing GAAP. SFAS 141 (R) is effective as of the start of fiscal years beginning after December 15,

2008. Early adoption is not allowed. We are in the process of evaluating this standard and have not yet

determined the impact that the adoption of SFAS 141 (R) will have on our financial position, results of

operations or cash flows.



In December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements (SFAS 160). SFAS 160 improves the relevance, comparability, and transparency of financial information provided to investors by requiring all entities to report non-controlling (minority) interests in subsidiaries in the same wayas equity in the consolidated financial statements. Moreover, SFAS 160 eliminates the diversity that currently exists in accounting for transactions between an entity and non-controlling interests by requiring they be treated as equity transactions. SFAS 160 is effective as of the start of fiscal years beginning after December 15, 2008. Early adoption is not allowed. We are in the process of evaluating this standard and have not yet determined the impact that the adoption of SFAS 160 will have on our financial position, results of operations or cash flows.







Page12

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)







5.

Recent Accounting Pronouncements (continued):



In March 2008, the FASB issued Statement No. 161, Disclosure about Derivative Instruments and Hedging Activities  an amendment of FASB Statement No. 133 (SFAS 161).  SFAS 161 requires companies to provide enhance disclosures regarding derivative instruments and hedging activities.  It requires companies to better convey the purpose of derivative use in terms of the risks that such company is intending to manage.  Disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect a companys financial position, financial performance, and cash flows are required.  SFAS 161 contains the same scope as SFAS 133 and is effective for fiscal years and interim periods beginning after November 15, 2008.  The Company will adopt SFAS 161 on January 1, 2009, as required, and management does not believe adoption of SFAS 161 will have any impact on the Companys financial position, results of operations or cash flows.



In February 2008, the FASB issued a FASB Staff Position (FSP) on Accounting for Transfers of Financial Assets and Repurchase Financing Transactions (FSP FAS 140-3).  FSP FAS 140-3 addresses the issue of whether or not these transactions should be viewed as two separate transactions or as one linked transaction.  The FSP includes a rebuttable presumption that presumes linkage of the two transactions unless the presumption can be overcome by meeting certain criteria.  The FSP will be effective for fiscal years beginning after November 15, 2008 and will apply only to original transfers made after that date.  We do not expect the adoption of FSP FAS 140-3 to have significant impact on our financial position, results of operation or cash flows.





In April 2008, the FASB issued FASB Staff Position (FSP) No. SFAS 142-3, Determination of the Useful Life of Intangible Assets (FSP SFAS 142-3).  FSP SFAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142).  The intent of FSP SFAS 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141R (revised 2007), Business Combination (SFAS 141R) and other applicable accounting literature.  FSP SFAS 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and must be applied prospectively to intangible assets acquired after the effective date.  The Company is currently evaluating the potential impact, if any, of FSP SFAS 142-3 on its financial position, results of operations or cash flows.



In May 2008, the FASB issued SFAS No. 162, Hierarchy of Generally Accepted Accounting Principles (SFAS 162).  This statement is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements of nongovernmental entities that are presented in conformity with GAAP.  This statement will be effective 60 days following the US Securities and Exchange Commissions approval of the Public Company Accounting Oversight Board amendment to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.  The Company is currently evaluating the potential impact, if any, of the adoption of SFAT 162 on its financial position, results of operations or cash flows.













Page13

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





5.

Recent Accounting Pronouncements (continued):



In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (FSP EITF 03-6-1).  FSP EITF 03-6-1 affects entities that accrue cash dividends on share-based payment awards during the awards service period when dividends do not need to be returned if the employees forfeit the awards.  FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008 and earnings-per-unit calculations would need to be adjusted retroactively.  We do not expect the adoption of FSP EITF 03-6-1 to have significant impact on our financial position, results of operation or cash flows.





6.

Summary of Significant Accounting Policies:



a)

Principles of Consolidation



The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company and its domestic and international controlled subsidiaries that are not considered variable interest entities.  Intercompany balances and transactions have been eliminated in consolidation.



b)

Foreign currency translation



The Companys functional currency is the U.S. dollar.  In accordance with the Statement of Financial Accounting Standards (SFAS) No. 52, Foreign Currency Translation, monetary assets and liabilities

denominated in foreign currencies are translated into U.S. dollars using exchange rates in effect at the

balance sheet date.  All other assets and liabilities are translated at the exchange rates prevailing at the dates the assets were acquired or liabilities incurred.  Revenue and expense items are translated at the average exchange rate for the period.  Foreign exchange gains and losses are included in the determination of the income for the period.



The Company prospectively adopted the U.S. dollar functional currency per 4(a) above.  The financial statements are translated into U.S. dollars as follows:  Assets and liabilities using the rate of exchange prevailing at the balance sheet date; stockholders' deficiency using the applicable historic rate; and revenue and expenses using the monthly average rate of exchange. Translation adjustments have been included as part of the accumulated other comprehensive income.



c)

Use of estimates



The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses for the years reported. Actual results could differ from these estimates.  Significant estimates made by management in the current quarter involve valuation of options and warrants, valuation of investment in joint venture, valuation of inventory, allowance for doubtful accounts, deferred income taxes and fair values of net assets acquired in an acquisition made enduring the quarter.













Page14

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





6.

Summary of Significant Accounting Policies (continued):



d)

Cash and Cash Equivalents



Cash and cash equivalents consist of cash and deposit instruments with an initial maturity of three months or less.



e)

Accounts receivable and Allowance for doubtful accounts



Accounts receivable are stated at outstanding balances, less an allowance for doubtful accounts.  The Company maintains an allowance for doubtful accounts against its accounts receivable for estimated losses that may arise if any of its customers are unable to make required payments. Management specifically analyzes the age of outstanding customer balances, historical bad debts, customer credit-worthiness and changes in customer payment terms when making estimates of the uncollectability of the Companys accounts receivable. If the Company determines that the financial condition of any of its customers deteriorates, increases in the allowance may be made.



f)

Inventory and Cost of sales



Materials and components are stated at the lower of cost and replacement value.  Cost is determined using the first-in first-out method. Work-in-process and manufactured parts are stated at the cost of materials and direct labour applied to the product and the applicable share of overhead. Finished goods are stated at the lower of cost and net realizable value.



The Company assesses the need for inventory write-downs based on its assessment of estimated replacement or net realizable value using assumptions about future demand and market conditions. If market conditions differ from those originally estimated by the Company, an additional inventory write-down may be required.



g)

Equipment, Furniture and Capital Lease



Leasehold, equipment and furniture are stated at cost.  Maintenance and repairs are charged to expense as incurred.  Expenditures, which extend the physical or economic life of the assets are capitalized and depreciated.  Depreciation is provided using the straight-line method over the estimated useful life as follows:



Equipment

1-5 years

Furniture

3 years

Leasehold improvement

1.5 years

Capital Lease

5 years



h)

Impairment of Long-Lived Assets



In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, long lived assets, such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimate undiscounted future cash flow expected to be generated by the asset.  If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeded the fair value of the asset.  Assets to be disposed of





Page15

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





6.

Summary of Significant Accounting Policies (continued):



would be separately presented in the balance sheet and reported at the lower of the carrying amount or the fair value less costs to sell, and are no longer depreciated.  The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.  As at June 30, 2008 and December 31, 2007, there was no impairment of the Companys long lived assets.



i)

Income taxes



The Company provides for income taxes in accordance with Statements of Financial Accounting Standards No. 109, Accounting for Income Taxes.  SFAS 109 requires a company to use the asset and liability method of accounting for income taxes.



Under the liability method, deferred income taxes are recognized for the tax consequences of temporary difference by applying statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities.  A valuation allowance is provided when management cannot determine whether it is more likely than not the deferred tax asset will be realized.  Under SFAS 109, the effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date.



On July 13, 2006, the FASB issued Interpretation No, 48, Accounting for Uncertainty in Income Taxes  an Interpretation of FASB Statement 109.  FIN 48 prescribes how the Company should recognize, measure and present in the Companys financial statements uncertain tax positions that have been taken or are expected to be taken in a tax return.  Pursuant to FIN 48, the Company can recognize a tax benefit only if it is more likely than not that the particular tax position will be sustained upon examination or audit.  To the extent the more likely than not standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that is greater than fifty percent likely of being realized upon settlement.



The Company adopted FIN 48 on January 1, 2007.  The adoption of FIN 48 did not require any restatement of the Companys financial statements.



j)

Investment in joint venture



The Company entered into a joint venture agreement for a non-controlling 50% equity interest in SpyTell Security GP Corp.  which is accounted for under the equity method of accounting.  The joint venture was formed to market a consumer home security product. The product has not to date achieved market acceptance.  Therefore, the Company has written off its investment for the year ended December 31, 2007.







Page16

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





6.

Summary of Significant Accounting Policies (continued):



k)

Revenue recognition



The Company recognizes revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, Revenue Recognition in Financial Statements ("SAB 104").



i)

The following policies have been established with respect to revenue recognition on the sale of ETG devices and CTG units:



1)

Purchase/sale negotiations conclude with an agreement to purchase and are also secured by a deposit;



2)

Goods are shipped when collection of the balance of the purchase price is reasonably assured.  This is indicated by:

a)

actual receipt of funds from distributors or customers; or

b)

secured lease or term financing by distributors or customers which would result in immediate payment of the balance upon delivery; or



c)

distributors or customers exceptional credit and operating history, and an agreement in writing to specific terms of payment;



3)

Revenue is recognized only after goods are shipped.  At this point collection is reasonably assured and risks and rewards of ownership have been transferred.



4)

Revenue from royalty agreements is recognized when earned, which is generally the period in which the services to which the royalty relates are provided to third parties and collection of the balance owing is reasonably assured.



Customer deposits, as required by the Companys revenue recognition policy above, received in advance are treated as deferred revenue until goods are shipped.  Only then revenue is recognized.



Revenue recognition relating to the Companys subsidiary, Celevoke Incs wireless asset tracking or control systems and internet hosting operation is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectibility is probable.  The Companys subsidiary enters into certain arrangements, where it is obligated to deliver multiple products and / or services (multiple elements).  In these arrangements, the Companys subsidiary generally allocates the total revenue among the elements based on the sales price of each element when sold separately (vendor-specific objective evidence).



l)

Deferred Revenues



Deferred revenue is attributable to deposits made by customers for goods and services not yet rendered.  Unearned revenue from certain licensing programs represents customer billings, paid either upfront or at the beginning of each billing coverage period, that are accounted for as subscriptions with revenue recognized ratably over the billing coverage period.  For certain other licensing arrangements, revenue attributable to undelivered elements is based on the sales price of those elements when sold separately and is recognized ratably on a straight-line basis over the related products life cycle.  Deferred revenues include subscription services where we have been paid upfront and earn the revenue when we provide the service or otherwise meet the revenue recognition criteria.





Page17

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





6.

Summary of Significant Accounting Policies (continued):



m)

Cost of Sales



Cost of revenue includes direct costs to produce and distribute products / or services and the direct costs associated with the delivery of online services, professional services, product support and resold hardware



n)

Convertible Promissory Note with Detachable Warrants



The convertible promissory note and detachable warrants issuance were accounted for in accordance with Accounting Principles Board Opinion 14, Accounting for Convertible Debt and Debt issued with Stock Purchase Warrants.  The Company determined the fair values to be ascribed to detachable warrants issued with the convertible promissory note utilizing the Black-Scholes option pricing model.  Any discount derived from determining the fair value of the warrants is amortized over the remaining life of the convertible promissory note.  The unamortized discount upon the conversion of the convertible promissory note is expensed using the effective interest basis.



o)

Fair Value of Financial Instruments



In accordance with the reporting requirements of SFAS No. 107, Disclosures About Fair Value of Financial Instruments (SFAS 107), the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this statement and includes this additional information in the notes to consolidated financial statements when the fair value is different than the carrying value of those financial instruments.



The estimated fair value of cash equivalents, accounts receivable, and accounts payable approximates their carrying amounts due to the relatively short maturity of these instruments.  The carrying value of long-term debt approximates market value due to the use of market interest rates.



p)

Comprehensive Loss



The Company has adopted SFAS No. 130, Reporting Comprehensive Income.  Comprehensive loss represents the change in stockholders deficit resulting from transactions other than stockholders investments and distributions.  Included in accumulated other comprehensive loss are changes in stockholders deficit that are excluded from net loss, specifically foreign current translation adjustments..



q)

Equity Investment



Purchased equity interests that are not publicly traded and / or do not have a readily determinable fair value are accounted for pursuant to the equity method of accounting if the Companys ownership position is large enough to significantly influence the operating and financial policies of an investee.  This is generally presumed to exist when we own between 20% - 50% of a corporation.  The Companys share of earnings and losses in equity method investees is included in loss from equity method investments on the Consolidated Statement of Operations.

For investments accounted for using the equity method of accounting, management evaluates information such as budgets, business plans, financial statements of the investee in determining







Page18

---

CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





6.

Summary of Significant Accounting Policies (continued):



whether an other-than-temporary decline in value exists.  Factors indicative of an other-than-temporary decline in value include, but not limited to, recurring operating losses and credit defaults.  For any of the Companys investments in which the estimated fair value is less than its carrying value, the Company considers whether the impairment of that investment is other-than-temporary.



r)

Stock-based compensation



Effective January 1, 2006 the Company adopted the provisions of Statement of Financial Accounting Standards No. 123(R) (SFAS 123(R)), Share-Based Payment, which establishes accounting for equity instruments exchanged for services.  Under the provisions of SFAS 123(R), share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employees requisite service period (generally the vesting period of the equity grant).  The Company elected to adopt the modified prospective transition method as provided by FAS 123(R) effective January 1, 2006 and, accordingly, financial statement amounts for the prior periods presented have not been restated to reflect the fair value based method of expensing share-based compensation.



Prior to January 1, 2006, the Company accounted for stock-based compensation in accordance with the provision of SFAS 123 for options granted to employees and non-employees.  Under this method, compensation cost is measured at the grant date based on fair value of the options granted using the Black-Scholes options price model.



s)

Net loss per share



In accordance with SFAS No. 128, Earnings per Share, basic loss per share is computed using the weighted average number of common stock outstanding during the year. Diluted loss per share reflects the basic loss per share, while giving effect to all dilutive potential common shares that were outstanding during the period, such as common shares that could result from the potential exercise or conversion of securities (options or warrants) into common stock.  The computation of diluted loss per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect on loss per share (i.e.  reducing loss per share).  The dilutive effect of outstanding options and warrants and their equivalents are reflected in dilutive earnings per share by the application of the treasury stock method which recognizes the use of proceeds that could be obtained upon the exercise of options and warrants in computing diluted earnings per share.  It assumes that any proceeds would be used to purchase common stock at the average market price of the common stock during the period.





7.

Acquisitions:



Celevoke Inc



On January 31, 2008, the Company entered into a securities purchase agreement with Celevoke, Inc (Celevoke).  Under the agreement the Company is committed to purchase 102 shares of Celevoke common stock for an aggregate purchase price of $2,500,000.  The 102 shares are to be purchased in four installments of 20 shares and a fifth installment of 22 shares.









Page19

---

CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





7.

Acquisitions (continued):



As at March 31, 2008, the Company completed the purchase of 60 shares out of the 102 shares of Celevoke common stock for total consideration of $1,500,000.  The 60 shares gave the Company 37.5% equity interest in Celevoke.  Consequently, the Company has accounted for this 37.5% interest in Celevoke as an equity investment.



On May 23, 2008, the Company completed the purchase of the remaining 42 shares of Celevoke and increased its ownership interest in the voting equity of Celevoke from 37.5% to 51%.  Effective with the close of this transaction on May 23, 2008, the Company began consolidating Celevokes financial results into the Companys interim consolidated financial statements.



The total purchase price consideration consists of the following:



The acquisition was recorded under the purchase method of accounting and the purchase price was allocated based on the fair value of the assets acquired and the liabilities assumed to the extent of the 51% ownership interest acquired as of the various date the payments were made under step acquisition accounting.   The remaining 49% portion of the acquired net assets represents the minority interest ownership in Celevoke.  The following unaudited condensed balance sheet presents assets and liabilities of Celevoke, consolidated on May 23, 2008, resulting from our step acquisition of Celevoke.



Assets acquired:Cash and cash equivalents294,002Accounts receivable82,505Inventory199,403Prepaid expenses2,340Leasehold, equipment and intangibles329,375907,625Liabilities assumed:Accounts payable and accrued liabilities228,254Deferred revenue12,586$         666,786




Star One Telematica S/A



On May 5, 2008, the Companys 51% owned subsidiary, Celevoke, acquired 521 common shares of Star One Telematica S/A, a company incorporated under the laws of Brazil, for a 51% interest.









Page20

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





8.

Equipment, Furniture and Capital Lease



CostAccumulated Amortization2008 Net2007 NetCapital Lease$   212,500$   63,750$  148,750$   -Furniture  and fixtures10,9001,0769,824-Equipment216,3129,251207,061-Leasehold improvement19,2034,69714,506-$ 
    458,915$  
    78,774$   380,141$   -






9.

Convertible Promissory Note:



On September 10, 2007, the Company extended the maturity date of its convertible promissory note from January 9, 2008 to January 16, 2009.  The extension of the maturity date has been accounted for as a modification to the original convertible promissory note.



As additional consideration for restructuring, the Company issued the holder of the convertible promissory note 5,000,000 share purchase warrants exercisable for common shares at $0.10 per share.  The expiry date of these warrants is the later of December 31, 2012 or the date which is one year and five business days after the note is fully repaid.



The note bears interest at 10% per annum and the holder of the convertible promissory note has the right to convert all or part of the note to common shares of the Company at a conversion price of $0.10 per share.



The note is secured by a security agreement under which the Company agreed to grant the lender security interest over all the Companys property and assets, including all intellectual property.



At June 30, 2008At December 31, 2007Interest payable$90,372$33,785Convertible promissory note1,101,0541,087,704$1,191,426$1,121,489






10.   Share Capital:



a)

Authorized 

Unlimited Common shares without par value



Unlimited Class A Preference shares without par value













Page21

---

CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





10.   Share Capital (continued):



b)

Issued and fully paid -

|                                      | At
    June 30, 2008 | At
    December 31, 2007
|------------------------------------- | -------------------- | ------------------------
|                                      | Number
    of Shares | Amount                  
|Balance, beginning                    | 103,892,023          | $25,787,959             
|Common Shares Issued -                |                      |                         
|- For cash                            | 24,000,000           | 2,800,000               
|- For settlement of services
provided | 875,000              | 103,750                 
|- Exercise of options                 | -                    | -                       
|- Exercise of warrants                | 1,604,630            | 220,728                 
|Balance, ending                       | 130,371,653          | $28,912,437             

No Class "A" Preference shares have been issued.



c)

Subscription Liability -



The Company received $28,230 for the exercise of warrants in which the underlying shares were issued on July 4, 2008.



d)

Loss per share -

For the six
      months ended June 30,Loss per share20082007Net loss$(2,207,640)$(417,618)Loss available to common shareholders$(2,207,640)$(417,618)Weighted average number of shares outstanding126,351,90089,362,023Basic and fully diluted loss per share$(0.0175)$(0.0047)




Options, warrants and convertible debt will have an anti-dilutive effect on loss per share





11.  Additional Paid-In Capital:



The Company accounts for its stock-based compensation under the fair value based method using the Black-Scholes Option Pricing Model.  $1,363,327 of compensation expense relating to vested stock options has been charged to the additional paid-in capital account.  Options granted during the period were valued using the following assumptions:



Volatility factor of the market54.58%Price of the Company shares$0.085- $0.216Dividend yield0%Weighted average expiry date of options5 yearsRisk free interest rate3.35%-3.45%














Page22

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





12.

Stock Options:



From time to time, the Company grants incentive stock options to directors, officers, employees and promoters of the Company.  On September 2, 2004, the Company adopted the 2004 Stock Option and Stock Bonus Plan. Options outstanding on June 30, 2008 are as follows:





|            |                  |              |            |  |      
|----------- | ---------------- | ------------ | ---------- |  | -----
|Expiry Date | Number of Shares | Option Price
|            |                  |              |            |  |      
|September   | 30,              | 2009 *       | 200,000    |  | $0.30
|December    | 22,              | 2009         | 175,000    |  | $0.25
|December    | 23,              | 2009 *       | 100,000    |  | $0.25
|January     | 2                | 2011         | 375,000    |  | $0.31
|August      | 22               | 2011 *       | 200,000    |  | $0.19
|August      | 29               | 2012         | 1,000,000  |  | $0.08
|September   | 16               | 2012         | 7,495,000  |  | $0.09
|January     | 7                | 2013         | 5,000,000  |  | $0.15
|January     | 10               | 2013 **      | 12,500,000 |  | $0.14
|February    | 21               | 2013         | 1,050,000  |  | $0.20
|February    | 24               | 2013 ***     | 1,100,000  |  | $0.21



*

2004 Stock Option and Stock Bonus Plan



**

2004 Stock Option and Stock Bonus Plan

12.5 million vested on January 31, 2008, remainder vesting based on performance of Celevoke, Inc.



|                                                                            |                                
|--------------------------------------------------------------------------- | -------------------------------
|Cumulative Net Pre-Tax Profit of Celevoke up to and including June 30, 2010 | Cumulative Options to be Vested
|$1,000,000                                                                  | 3,750,000                      
|$2,000,000                                                                  | 7,500,000                      
|$3,000,000                                                                  | 11,250,000                     
|$4,000,000                                                                  | 15,000,000                     
|$5,000,000                                                                  | 18,750,000                     
|$6,000,000                                                                  | 22,500,000                     
|$7,000,000                                                                  | 26,250,000                     
|$8,000,000                                                                  | 30,000,000                     
|$9,000,000                                                                  | 33,750,000                     
|$10,000,000                                                                 | 37,500,000                     





***

2004 Stock Option and Stock Bonus Plan

33% vested December 31, 2008

33% vested December 31, 2009

34% vested December 31, 2010











Page23

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





12.

Stock Options (continued):





The following table summarizes information about stock options to purchase common shares outstanding and exercisable at June 30, 2008:



|                       |            |                             |           |                                 
|---------------------- | ---------- | --------------------------- | --------- | --------------------------------
|                       |            | As at June 30,2008
Weighted |           | As at December 31, 2007
Weighted
|                       | Common     | Average                     | Common    | Average                         
|                       | Shares     | Exercise Price              | Shares    | Exercise Price                  
|Outstanding, beginning | 9,545,000  | $0.12                       | 8,065,000 | $0.16                           
|- Granted              | 57,150,000 | 0.14                        | 8,675,000 | 0.31                            
|- Exercised            | -          | -                           | -         | -                               
|- Cancelled            | -          | -                           | 7,195,000 | -                               
|Outstanding, ending    | 66,695,000 | $0.14                       | 9,545,000 | $0.12                           
|Exercisable, ending    | 28,242,068 | $0.13                       | 9,545,000 | $0.12                           







The following table summarizes information about stock options outstanding and exercisable at June 30, 2008:

|               |       |                  |           |                 |          
|-------------- | ----- | ---------------- | --------- | --------------- | ---------
|               |       | Weighted Number  | Average   | Weighted Number
|               |       | Outstanding at   | Remaining | Outstanding    
|Exercise Price | 2008  | Contractual Life | 2007     
|               | $0.08 | 1,000,000        | 4.17      | years           | 1,000,000
|               | $0.09 | 7,495,000        | 4.22      | years           | 7,495,000
|               | $0.14 | 12,500,000       | 7.00      | years           | -        
|               | $0.15 | 5,000,000        | 4.78      | years           | -        
|               | $0.19 | 200,000          | 3.15      | years           | 200,000  
|               | $0.20 | 1,050,000        | 4.65      | years           | -        
|               | $0.21 | 147,068          | 4.75      | years           |          
|               | $0.30 | 200,000          | 1.25      | years           | 200,000  
|               | $0.25 | 275,000          | 1.48      | years           | 275,000  
|               | $0.31 | 375,000          | 2.51      | years           | 375,000  
|               |       | 28,242,068       |           |                 | 9,545,000







Page24

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





13.  Warrants:



The following table summarizes information about warrants outstanding on June 30, 2008:

|                   |                  |                |        |    
|------------------ | ---------------- | -------------- | ------ | ---
|Expiry Date        | Number of Shares | Exercise Price |       
|January 9, 2007    | 2,000,000        |                | $0.25  | 1,3
|January 9, 2007    | 2,980,000        |                | $0.10  | 1,3
|January 9, 2007    | 6,949,766        |                | $0.05  | 1,3
|January 9, 2007    | 179,167          |                | $0.15  | 1,3
|January 9, 2007    | 1,600,000        |                | $0.50  | 1,3
|June 30, 2009      | 2,500,000        |                | $0.05  | 3  
|June 15, 2009      | 1,000,000        |                | $0.15  | 3  
|June 15, 2009      | 1,517,696        |                | $0.20  | 5  
|July 15, 2009      | 200,000          |                | $0.20  | 5  
|January 2, 2010    | 3,200,000        |                | $0.25  | 2,3
|March 25, 2010     | 1,200,000        |                | $0.25  | 5  
|May 31, 2010       | 1,120,000        |                | $0.25  | 5  
|July 25, 2010      | 200,000          |                | $0.15  |    
|September 21, 2010 | 300,000          |                | $0.25  | 5  
|September 21, 2010 | 3,052,000        |                | $0.25  | 5  
|December 30, 2010  | 600,000          |                | $0.25  | 5  
|March 2, 2011      | 144,000          |                | $0.25  | 5  
|December 31, 2011  | 4,000,000        |                | $0.10  | 3,4
|February 12, 2012  | 2,350,000        |                | $0.125 | 6  
|March 30, 2012     | 11,850,000       |                | $0.10  | 5  
|April 30, 2012     | 5,000,000        |                | $0.12  | 3,7
|August 9, 2012     | 5,650,000        |                | $0.10  |    
|December 26, 2012  | 4,000,000        |                | $0.10  |    
|December 31, 2012  | 5,000,000        |                | $0.10  | 3,8
|January 10, 2013   | 20,000,000       |                | $0.15  | 3  
|February 26, 2013  | 1,000,000        |                | $0.20  | 5  
|April 3, 2013      | 1,000,000        |                | $0.20  |    
|May 19, 2013       | 2,000,000        |                | $0.50  | 3  



1

The expiry date for each set of warrants shall be the later of:

a)

January 9, 2007; and

b)

the date that is one year and five business days after the date on which the convertible promissory note (see Note 6) is paid in full.



2

The expiry date shall be the later of:

a)

January 2, 2010; and

b)

the date that is one year and five business days after the date on which the convertible promissory note (see Note 6) is paid in full.



3

These warrants have a cashless exercise provision.



4.

The expiry date shall be the later of:

a)

December 31, 2011; and

b)

the date that is one year and five business days after the date on which the convertible promissory note (see Note 6) is paid in full.



5.

The Company may accelerate the expiration date of the warrants if the average closing price equals or exceeds US$0.50 for 20 consecutive days.









Page25

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)







13.

Warrants (continued):



6.

750,000 warrants are vested; 750,000 vest on sale of the 10th unit to Hair Envy, LLC; and 1,000,000 vest on the ordering of the 200th unit.





7.

The warrants vest in increment of 500,000 based on the Companys portion of profit derived from the sale of Spy-N-TellTM units.  The Company must earn $11,500,000 from the joint venture in order for the 5 million warrants to be fully vested.



8.

The expiry date shall be the later of:

a)

December 31, 2012; and

b)

the date that is one year and five business days after the date on which the convertible promissory note (see Note 6) is paid in full.



The following table summarizes information about warrants to purchase common shares outstanding and exercisable at June 30:

|                       |             |                     |             |                        
|---------------------- | ----------- | ------------------- | ----------- | -----------------------
|                       |             | As at June 30,
2008 |             | As at December 31, 2007
|                       | Common      | Average             | Common      | Average                
|                       | Shares      | Exercise Price      | Shares      | Exercise Price         
|Outstanding, beginning | 68,248,629  | $0.14               | 35,675,758  | $0.18                  
|Issued                 | 24,000,000  | $0.18               | 34,250,000  | $0.11                  
|Exercised              | (1,656,000) | 0.13                | -           | -                      
|Expired                | -           | -                   | (1,677,129) | $0.49                  
|Outstanding, ending    | 90,592,629  | $0.14               | 68,248,629  | $0.14                  
|Exercisable, ending    | 83,842,629  | $0.14               | 61,498,629  | $0.14                  







14.

Related Party Transactions:



|     |                                                                                                                                                                                                                                         |          |          |  | 
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | -------- |  | 
|2008 | 2007                                                                                                                                                                                                                                   
|     | Transactions During the six months ended June 30 -                                                                                                                                                                                      |          |         
|     | Salaries and consulting fees accrued or paid to directors and                                                                                                                                                                           | $160,182 | $147,051
|     | companies controlled by directors of the Company

These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by related parties. |          |         
|     | Balance at June 30,2008 and December 31, 2007 -                                                                                                                                                                                         | 2008     | 2007    
|     | Salaries, consulting fees payable to directors and                                                                                                                                                                                      |          |         
|     | companies controlled by directors of the Company                                                                                                                                                                                        | $ 3,000  | $39,992 
|     |                                                                                                                                                                                                                                         |          |         



















Page26

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)







15.

Foreign Currency Risk:



The company has cash, accounts receivable, inventory, prepaid expenses and accounts payable and accrued liabilities denominated in foreign currency.  The carrying value of these balances may change due to the volatility of foreign exchange rates.  The Company does not enter into hedging transactions.





16.

Segmented Information:



The major operations relate to the sales of GPS Telematics devices and services as well as sales and royalties charged on trichogenesis machines.



The revenue by region is as follows:

|             |                                   |                                 
|------------ | --------------------------------- | --------------------------------
|             | For the six months ended June 30, | For the six months ended June 30
|             | 2008                              | 2007                            
|Asia Pacific | $5,000                            | $19,934                         
|Europe       | 13,792                            | 117,767                         
|The Americas | 335,936                           | 65,423                          
|             | $354,728                          | $203,124                        



The majority of the Companys assets are located in the United States.





17.

Commitments:



An agreement was entered into to lease office space from May 1, 2005 to April 30, 2011.  The future minimum lease payments for this commitment are as follows:



|     |        
|---- | -------
|2008 | $24,599
|2009 | 32,798 
|2010 | 35,922 
|2011 | 12,494 
|     |        



Lease agreements were entered into with respect to automotive and office equipment. The future minimum lease payments for these commitments are as follows:



|     |        
|---- | -------
|2008 | $12,831
|2009 | 21,364 
|2010 | 9,964  
|2011 | 6,075  
|2012 | 3,297  
|2013 | 1,923  

















Page27

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CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





18.

Subsequent Events:



a)

Acquisition



Subsequent to June 30, 2008, the Company purchased an additional 25 shares for a total of 127 shares for $750,000.  After the purchase of the 127 shares the Company owns 56% of the voting stock of Celevoke.



In addition to the $3,250,000 cash consideration, the Company issued the principals of Celevoke performance based options to purchase up to 50 million of the Companys shares at $0.14 per share, subject to the vesting provisions (12.5 million have been vested for period ended June 30, 2008) described in Note 12.



b)

Share Capital



On August 11, 2008, the Company issued 5,000,000 units at $0.20 per unit for total gross proceeds of $1,000,000.  Each unit consists of one common share and one warrant.  One warrant is exercisable into an additional common share for $0.45 expiring August 5, 2013.



The Company issued 564,600 shares for exercise of warrants on July 4, 2008.







19.

Differences between Canadian and United States Generally Accepted Accounting Principles:



The Company prepares its unaudited interim consolidated financial statements in accordance with US generally accepted accounting principles (US GAAP) which, as applied in these unaudited interim consolidated financial statements, conform in all material respects to Canadian generally accounting principles (Canadian GAAP), except for the differences below as follows:



(a)

Convertible Promissory Note 



(i)

Equity component of convertible promissory note



Under Canadian GAAP, the liability component of the convertible promissory note is calculated as the present value of the scheduled cash payments of interest and principal due under the terms of the note discounted at the rate of interest applicable to a debt only instrument of comparable terms. The equity component which represents the value ascribed to the holder's option to convert the principal balance into equity, and is calculated as the difference between the amount issued and the liability component.  Interest on the convertible promissory note, calculated as the amount required to accrete the liability component back to the amount payable on maturity, is charged to interest expense.



Under US GAAP, in accordance with APB Opinion No. 14 (APB 14), Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants, no portion of the proceeds from the issuance of convertible debt securities should be accounted for as attributable to the conversion feature.  Emerging Issue Task Force  98 (EITF 98-5), Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, requires the conversion feature to be separately valued only if the convertible debt securities with non-detachable conversion feature is issued in-the-money at





Page28

---

CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





19.

Differences between Canadian and United States Generally Accepted Accounting Principles: (Continued)



the commitment date (beneficial conversion feature).  As a result of applying APB 14, there is no impact on the income statement because no accretion of interest had been recorded.



(ii)

Fair valuation of warrants



Under Canadian GAAP Section 3855,
when the Company issues warrants in connection with a debt instrument, the estimated fair market value of the warrants is credited to shareholders equity/(deficiency). The reduced liability component of the debt is accreted by a charge to interest expense.



Under US GAAP, underwriting, legal and other direct costs incurred in connection with the issuance of debt measured under the fair value option should be recognized in earnings and not deferred.  Underwriting, legal and other direct costs incurred in connection with the issuance of debt not measured under the fair value option should be presented as a deferred charge and not as a reduction in the carrying amount of the debt.



(b)

Stock Based Compensation 



On January 1, 2002, the Company adopted Canadian GAAP Handbook Section 3870 Stock-based Compensation and Other Stock-based Payments.  Under this section, the Company adopted the fair value based method for all employees and non-employees stock options.  The value is recognized over the applicable vesting period as an increase to compensation expense and contributed surplus.  When the options are exercised, the proceeds received by the Company, together with the amount in contributed surplus, will be credited to common share capital.  For options granted prior to January 1, 2002, the Company continues to follow the accounting policy under which no expense is recognized for these stock options.  When these options are exercised, the proceeds received by the Company are recorded as common share capital.



Under US GAAP, prior to January 1, 2002, the Company accounted for its employees stock options with the intrinsic value method under Accounting Principles Board Opinion 25, Accounting for Stock Issued to Employees (APB 25) as allowed by Statement of Financial Accounting Standard 123, Accounting for Share-Based Payments, (FAS 123).  APB 25 requires compensation cost for stock-based employee compensation plans to be recognized over the vesting period based on the difference, if any, between the quoted market price of the Companys stock as of the grant date and the amount employee must pay to acquire the stock.  Because the Company accounted for its employees stock options under APB 25, the Company separately disclosed pro forma information relating to the total compensation expense as required by FAS 123.



FAS 123 also establishes fair value as the measurement basis for transactions in which the Company acquires goods or services from non-employees in exchange for equity instruments.  All transactions in which goods or services are the consideration received for the issuance of equity instruments shall be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.  For all non-employees stock options issued prior to January 1, 2002 the Company accounted for fair value of these stock options using an option pricing model, as allowed by FAS 123.











Page29

---

CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





19.

Differences between Canadian and United States Generally Accepted Accounting Principles: (Continued)



Reconciliation of Net Loss -



The application of Canadian GAAP would have the following effects on the net income as reported:

|                                                                                |                                     |          |                                        |                                        |  |  |  | 
|------------------------------------------------------------------------------- | ----------------------------------- | -------- | -------------------------------------- | -------------------------------------- |  |  |  | 
|                                                                                |                                     |          | For the six months ended June 30,
2008 | For the six months ended June 30, 2007
|                                                                                | Loss for the period - US GAAP       |          | $(2,207,640)                           | $(417,618)                            
|Adjustment for accretion interest  equity component of convertible debt (a(i)) |                                     | (36,978) | (93,339)                              
|Adjustment for accretion interest  fair valuation of warrants (a(ii))          |                                     | (65,248) | (51,149)                              
|                                                                                |                                     |          |                                       
|                                                                                | Loss for the period - Canadian GAAP |          | $(2,309,866)                           | $(562,106)                            





Net Loss per Share -



The net loss per share computed under US GAAP is different from the net loss per share computed under Canadian GAAP due to differences noted in the accounting for convertible debt.  The adjusted basis loss per share under Canadian GAAP is as follows:



|                                    |                                               |                                          |               |               |          |  |  |  | 
|----------------------------------- | --------------------------------------------- | ---------------------------------------- | ------------- | ------------- | -------- |  |  |  | 
|                                    |                                               |                                          | June 30, 2008 | June 30, 2007
|                                    | Weighted Average Number of Shares Outstanding |                                          | 126,351,900   | 89,362,023   
|US GAAP and Canadian GAAP           |                                               |                                          |              
|                                    |                                               |                                          |              
|Loss for the period - Canadian GAAP |                                               | $(2,309,866)                             | $(562,106)   
|                                    |                                               | Basic loss per share under Canadian GAAP |               | (0.0183)      | (0.0063)





The application of Canadian GAAP would have the following effects on the consolidated balance sheet items as reported under US GAAP:



|                                                                             |               |                 
|---------------------------------------------------------------------------- | ------------- | ----------------
|                                                                             | June 30, 2008 | December 31,2007
|Liabilities - US GAAP                                                        | $1,987,045    | $1,468,432      
|Adjustment for unamortized portion of equity component of convertible        |               |                 
|promissory note (a(i))                                                       | (41,858)      | (77,538)        
|Adjustment for unamortized portion of the fair valuation of warrants (a(ii)) | (75,085)      | (140,332)       
|                                                                             |               |                 
|Liabilities - Canadian GAAP                                                  | $1,870,102    | $1,250,562      













Page30

---

CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





19.

Differences between Canadian and United States Generally Accepted Accounting Principles: (Continued)

|                                                           |               |                  
|---------------------------------------------------------- | ------------- | -----------------
|                                                           | June 30, 2008 | December 31, 2007
|Shareholders Equity (Deficiency)- US GAAP                 | $1,717,532    | $(1,278,059)     
|Effect of equity component  of convertible promissory note | 438,275       | 430,719          
|Cumulative effect of prior year adjustments to net loss    | (463,849)     | (201,304)        
|Cumulative effect of current year adjustments to net loss  | (102,226)     | (262,545)        
|Effect of fair valuation of warrants                       | 251,000       | 251,000          
|                                                           |               |                  
|Shareholdersequity / (deficiency) - Canadian GAAP         | $1,840,732    | $(1,060,189)     



The following presents the conversion of the Companys comparative financial information from Canadian dollars and Canadian GAAP to US dollars and US GAAP:



a)

Balance sheet at December 31, 2007



|                                         |  |                 |                
|---------------------------------------- |  | --------------- | ---------------
|                                         |  | As previously   | As restated    
|                                         |  | reported        |                
|                                         |  | Canadian        | US GAAP        
|                                         |  | GAAP            |                
|                                         |  | CDN$            | US$            
|                                         |  |                 |                
|Assets                                   |  |                 |                
|Current:                                 |  |                 |                
|Cash                                     |  | $        33,601 | $        33,498
|Accounts receivable                      |  | 27,701          | 27,617         
|Inventory                                |  | 62,112          | 61,920         
|Prepaid expenses                         |  | 17,984          | 17,926         
|Subscription receivable                  |  | 49,565          | 49,412         
|                                         |  |                 |                
|Total assets                             |  | $      190,963  | $      190,373 
|                                         |  |                 |                
|Liabilities and Shareholders' Deficiency |  |                 |                
|Current:                                 |  |                 |                
|Accounts payable and accrued liabilities |  | $      348,019  | $      346,943 
|Subscription liability                   |  | 27,984          | -              
|                                         |  |                 |                
|Total current liabilities                |  | 376,003         | 346,943        
|Convertible promissory note              |  | 888,710         | 1,121,489      
|                                         |  |                 |                
|                                         |  | 1,264,713       | 1,468,432      





Page31

---

CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)





19.

Differences between Canadian and United States Generally Accepted Accounting Principles: (Continued)



|                                                |  |                |                | 
|----------------------------------------------- |  | -------------- | -------------- | 
|Shareholders' Deficiency                       
|Subscription liability                          |  | -              | 27,898        
|Equity component of convertible promissory note |  | 501,562        | -             
|Share capital                                   |  | 35,525,626     | 25,787,959    
|Contributed surplus                             |  | 2,697,682      | 1,865,581     
|Deficit                                         |  | 39,798,620     | 28,660,295    
|Accumulated other comprehensive loss            |  | -              | 299,202       
|Total shareholders' deficiency                  |  | (1,073,750)    | (1,278,059)   
|                                                |  |                |               
|                                                |  | $      190,963 | $      190,373



b)

Statement of operations and deficit for the six months ended June 30, 2007

|                                                             |  |                       |                       
|------------------------------------------------------------ |  | --------------------- | ----------------------
|                                                             |  | As previously         | As restated           
|                                                             |  | reported              |                       
|                                                             |  | Canadian              | US GAAP               
|                                                             |  | GAAP                  |                       
|                                                             |  | CDN$                  | US$                   
|                                                             |  |                       |                       
|Revenue                                                      |  | $            230,517  | $              203,124
|Cost of Sales                                                |  | 227,426               | 200,401               
|                                                             |  |                       |                       
|                                                             |  | 3,091                 | 2,724                 
|Selling, General and Administrative Costs and Expenses       |  |                       |                       
|                                                             |  |                       |                       
|General & Administrative                                     |  | 94,997                | 110,352               
|Salaries & Wages                                             |  | 223,483               | 170,283               
|Legal, auditing and filing fees                              |  | 122,312               | 107,778               
|Consulting                                                   |  | 51,205                | 45,120                
|Corporate communications                                     |  | 48,413                | 42,660                
|Foreign exchange (recovery)                                  |  | (119,766)             | (105,534)             
|Total Selling, General and Administrative Costs and Expenses |  | 420,644               | 370,658               
|Loss before other items                                      |  | (417,553)             | (367,935)             
|Other Items:                                                 |  |                       |                       
|Interest on convertible promissory note                      |  | 56,383                | 49,683                
|Accretion interest expense                                   |  | 181,006               | -                     
|                                                             |  | 237,389               | 49,683                
|Net loss                                                     |  | $           (654,942) | $           (417,618) 
|Deficit, beginning                                           |  | 37,998,964            | (27,112,143)          
|Deficit, ending                                              |  | $        38,653,906   | $       (27,529,761)  

|                                        |  |                        |                       
|--------------------------------------- |  | ---------------------- | ----------------------
|Basic and diluted loss per common share |  | $             (0.0073) | $             (0.0047)





Page32

---

CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2008 and 2007

(United States Dollars)



19.

Differences between Canadian and United States Generally Accepted Accounting Principles: (Continued)



c)

Statement of cash flows for the six months ended June 30, 2007

|                                                  |  |                       |             | 
|------------------------------------------------- |  | --------------------- | ----------- | 
|                                                  |  | As previously         | As restated
|                                                  |  | reported              |            
|                                                  |  | Canadian              | US GAAP    
|                                                  |  | GAAP                  |            
|                                                  |  | CDN$                  | US$        
|                                                  |  |                       |            
|                                                  |  |                       |            
|Operating Activities:                             |  |                       |            
|Net loss                                          |  | $           (654,942) | (417,618)  
|Adjustments for -                                 |  |                       |            
|Accretion interest of convertible debt            |  | 181,006               | -          
|Interest expense                                  |  | 56,383                | -          
|Stock-based compensation                          |  | 17,256                | 15,205     
|Exchange adjustment                               |  |                       | 63         
|                                                  |  |                       |            
|Changes in non-cash working capital -             |  |                       |            
|(Increase) Decrease in accounts receivable        |  | (42,573)              | (37,514)   
|(Increase) Decrease in inventory                  |  | (32,653)              | (28,773)   
|(Increase) Decrease in deferred financing cost    |  | -                     | -          
|(Increase) Decrease in prepaid expenses           |  | 9,215                 | 8,120      
|(Increase) Decrease in subscription receivable    |  | -                     | -          
|Increase (Decrease) in accounts payable           |  | (182,383)             | (160,710)  
|Increase (Decrease) in unearned revenue           |  | 69,913                | 61,605     
|Cash flows (used in) Operating activities         |  | (578,770)             | (559,621)  
|                                                  |  |                       |            
|Financing Activities:                             |  |                       |            
|Convertible promissory note                       |  | (115,782)             | (49,683)   
|Issuance of new shares                            |  | 754,534               | 664,872    
|Subscription liabilities                          |  | (66,920)              | (58,968)   
|Cash flows from financing activities              |  | 571,832               | 556,221    
|                                                  |  |                       |            
|Net Increase (Decrease) in Cash during the period |  | (6,938)               | (3,400)    
|Cash, beginning of the period                     |  | 51,973                | 45,797     
|Cash, ending of the period                        |  | $45,035               | 42,397     











Page33

---



ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.



Cautionary Statement about Forward-Looking Statements



Certain statements contained in this 10-Q that are not historical facts constitute forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbors created by that Act.  Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which may cause actual results, performance, or achievements to differ materially from those expressed or implied.  All statements, other than statements of historical facts, included in this report that address activities, events, or developments that our management expects, believes, hopes or anticipates will or may occur in the future are forward looking statements.  Any forward-looking statements speak only as of the date made.  We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which they are made.



Plan of Operation



On January 31, 2008, we entered into a securities purchase agreement with Celevoke, Inc (Celevoke).  Under the agreement we were obligated to purchase 102 shares of Celevoke common stock in five installments for an aggregate purchase price of $2.5 million.We completed the acquisition on May 23, 2008 by making the final installment payment.  On August 14, 2008 we purchased an additional 25 shares of Celevoke for $750,000, and now own 127 of the 227 outstanding shares of Celevoke, or approximately 56%.



Celevoke is a distributor of proprietary global positioning system (GPS) based Telematics products developed by LunarEYE.  The technology utilizes the integrated use of telecommunications and informatics to enable users to remotely monitor, track, control and protect a wide variety of asset classes such as, automobiles, and other motorized vehicles, shipping containers, covert vehicles used for law enforcement, and even people.  This technology is referred to as Telematics.  We believe that Celevoke has a number of attributes that may lead to success in the marketplace, including its technology and products, its non-exclusive worldwide license with the patent holder, a functioning network operations center and established relationships with a number of channels of distributions.  We are hopeful that Celevokeis poised to become a market leader in the global market for Telematics, which some third parties project to be a $38.3 billion industry by 2011.



To facilitate the Celevoke transaction, on January 10, 2008 we entered into a securities purchase agreement with MSGI Securities Solutions Inc. ("MSGI") whereby MSGI agreed to purchase 25 million Company units at a price of $0.10 per unit for a total of $2.5 million, payable in accordance with a prescribed installment time-line.  Each unit consisted of one share of Company common stock and one warrant to acquire one share of Company common stock.  As partial consideration for the $2.5 million investment which was to be paid on a pre-determined time line, we agreed to negotiate additional agreements to outsource 25% of the GPS asset-tracking business to MSGI for a period of three years and for Celevoke to grant MSGI a non-exclusive worldwide license.  None of these ancillary agreements were finalized and the last $500,000 payment was not made by MSGI.  However, we continue to explore our business relationship with MSGI, and at MSGIs request on August 15, 2008 the Company agreed to issue the warrants due to MSGI (as described in a current report on Form 8-K dated April 23, 2008 and filed on April 25, 2008) to Enable Capital Partners LP.    On May 23, 2008, the Company raised $500,000 through a separate third party and used the funds to make the final $500,000 payment to complete the Companys acquisition of its 51% interest in Celevoke.







Page34

---





During the quarter ended June 30, 2008 and through the period to the date of this report the Company, through Celevoke, continued to focus on the acquisition and promotion of Celevokes GPS-based asset tracking technology.  These activities included:



·

On April 2, 2008 the Travelers Inland unit of the Travelers Companies, Inc. announced an innovative risk control initiative with Celevoke that will allow Travelers customers the ability to purchase Celevokes Wireless Asset Tracking and Control systems at a discount.  Celevoke will develop a secure Website that will allow Travelers insureds to track, monitor and manage the equipment outfitted with Celevokes proprietary GPS devices on a daily basis.  In the event of a theft, the ability to track equipment can lead to quick recovery.



·

On May 5, 2008, Celevoke, acquired 521 common shares of Star One Telematica S/A (Star One), a company incorporated under the laws of Brazil to immediately market and sell Celevoke's proprietary Telematics solutions to the dynamic automotive market in Brazil. Star One is 51% owned by Celevoke and 49% owned by Templar Investment & Acquisitions B.V. (Templar).



·

Celevoke appointed 20th Century Fox Federal Credit Union through DMC a distribution channel partner for its proprietary Telematics solutions.  20th Century Fox Federal Credit Union confirmed they will be marketing Celevoke's GPS tracking systems not only to its thousands of members, but to the hundreds of credit unions which are members of the National Association of Federal Credit Unions.



·

On May 30, 2008 the Company announced Celevoke has completed a definitive distribution agreement with the Real Security Company Ltd. and shipped 700 units.



·

As an ongoing part of its sales and marketing initiative, Celevoke is participating in trade shows and industry events designed to broaden awareness of its proprietary technology.  In addition, Celevoke plans to join industry associations which should provide the opportunity to educate owners of various assets classes about the benefits of using its proprietary technology.



·

On August 12, 2008 the Company announced that Star One had signed a Memorandum of Understanding (the MOU) with the division of a leading multi-national group specializing in the design, manufacture and marketing of advanced systems and components for motor vehicles, which generates several billion dollars in sales per year. The MOU contemplates the integration of Celevokes proprietary technology with the multi-national groups hardware.



Historically our operations have focused on hair restoration and re-growth related products.  We have developed an electrotherapeutic medical device designed to stimulate hair regrowth (ElectroTrichoGenesis or ETG) and a cosmetic unit designed to improve the appearance of thinning hair (CosmeticTrichoGenesis or CTG).  ETG and CTG are marketed as TrichoGenesis platform products.  We own patents to the technology, methodology and design of these products.  ETG Treatment, the regrowth of hair by means of electrical stimulation, is believed to promote the healing of hair follicles that are dormant, but not dead. Research has been conducted to expand the indications for ETG. The CTG Mark 5 is a product for improving the appearance of thinning hair.  Using the TrichoGenesis technology platform, this product was developed specifically for the United States marketplace.







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The Company has entered into an exclusive distribution agreement with an entity based in the United States for the placement on a revenue sharing basis of its TrichoGenesis platform products in the United States, Canada, South America (excluding Brazil), Europe and Russia. The Company is working in concert with its United States based distributor to attempt to lower the cost of ETG devices and CTG units by having non-proprietary components of the chair and hood manufactured in China. The second round of prototype manufacturing is complete, and in June 2008 the Company inspected and approved the prototype.  The next step prior to commencement of ongoing manufacturing in China is a factory inspection to be conducted by Canadian Standards Association International as part of its certification process.



Going forward we expect that the Company will primarily focus on developing and promoting the GPS based asset-tracking technology and products through Celevoke.  However, the Company has no immediate plans to discontinue its efforts to develop and promote our TrichoGenesis products and technologies.



Results of Operation



As noted above, on May 23, 2008 we completed the acquisition of 51% of the voting equity of Celevoke.  On that day the Company began consolidating Celevokes financial results in the Companys interim consolidated financial statements.  Accordingly, the financial statements included with this quarterly report present for the three and six month periods ending June 30, 2008 are presented on a consolidated basis.  Prior to the filing of this Form 10-Q our financial statements were not presented on a consolidated basis with Celevoke (including our most recent Form 20-F and Form 10-Q).   As such, the information presented in our financial statements included with this quarterly report may not provide a meaningful comparison when compared against the financial statements for three and six month periods ending on June 30, 2007.



As of June 30, 2008 we had working capital of $460,309, as compared to a working capital deficit of $156,570 at December 31, 2007. The increase in our working capital is primarily the result of the assets we acquired through our acquisition of Celevoke, which included $294,002 in cash and cash equivalents, $82,505 in accounts receivable, and $199,403 in inventory.  However, the Company also assumed certain of Celevokes liabilities including $228,254 in accounts payable and accrued liabilities, which contributed significantly to the increase in the Companys current liabilities.



As of June 30, 2008 we had a shareholders equity of $1,717,532, as compared to a shareholders deficiency of ($1,278,059) from December 31, 2007.  This increase was primarily caused by the additional paid in capital and the increase in common shares. The additional paid in capital was primarily the result of the private placements of equity securities that have occurred since December 31, 2007 to help fund our acquisition of our equity interest in Celevoke, and as a result of stock options issued to directors and employees of the Company as well as to the principals of Celevoke.



Revenue for the six months ended June 30, 2008 was $354,728 as compared to $203,124 for the comparable period in 2007.  Approximately 90% of our revenues during the period ended June 30, 2008 were generated through Celevoke whereas in the comparable period in 2007 all of our revenues were generated through the sale and distribution of our TrichoGenesis products.  With our focus now primarily on Celevokes business operations, we do not expect our TrichoGenesis products to generate significant revenues for the Company (if any) during the balance of 2008.







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For the six months ended June 30, 2008, the Company experienced a net loss of $2,207,640, or $(0.0175) per share, compared to a net loss of $(417,618) or $(0.0047) per share during the comparable period in the previous year.  For the quarter ended June 30, 2008 the Company experienced a loss of $(1,123,277) as compared to $(199,650) for the comparable quarter in fiscal 2007.  The significant increases in our loss for the three and six month periods ending June 30, 2008 were a result of our increased costs on a consolidated basis.  During the six months ended June 30, 2008 we, through Celevoke, incurred significantly higher expenses on a consolidated basis than we did during the comparable period in 2007.  For example, we incurred a total of $370,878 in general and administrative expenses for the six month period ended June 30, 2008 as compared to $110,352 in 2007.  We incurred $488,608 in business development expenses in the six months ended June 30, 2008 as compared to no such business development costs in 2007.  These business development expenses were incurred by Celevokes subsidiary Star One.  Most of these increased costs were incurred by Celevoke (and its subsidiary Star One) to continue to develop and promote its business operations and its GPS-based technology, but are now presented on a consolidated basis in our financial statements.



We are optimistic that through our acquisition of 56% of Celevoke we will increase the amounts of revenues generated by the Company.  However, we cannot guarantee that the business activities conducted through Celevoke will ultimately be successful in generating the revenues.



Liquidity and Capital Resources



Since inception the Company has primarily financed its operations through the sale of equity and debt securities.  However, we have generated limited amounts of revenues from sales of our TrichoGenesis products.  Further, during the quarter ended June 30, 2008 we began to recognize revenues generated through Celevoke.



Since January 1, 2008 the Company has raised $4,124,478 through the sale of equity securities and upon the exercise of warrants.  However, of these funds an aggregate of $3,250,000 was used to fund the acquisition of our interest in Celevoke.



We expect that with our current resources on-hand and the proceeds from the offerings conducted by the Company to be sufficient to cover our costs through the remainder of our fiscal year. However, estimates for expenses may change in which case our capital would not be sufficient for this time period. Further, we may determine it is appropriate to raise additional capital for working capital and general corporate purposes. If we need, or elect, to obtain additional debt or equity financing, but there can be no assurance that additional financing will be available on reasonable terms, if at all.   We believe that the the ability of the Company to continue as a going concern is dependent on the successful conclusion of these discussions and/or negotiations, the receipt of additional financing and/or proceeds on the sale of assets and ultimately its ability to generate sufficient cash from operations and financing sources to meet obligations as they come due.



Critical Accounting Policies



A more detailed summary of accounting changes and the Company's significant accountings policies is included in Notes Four thru Six to the Financial Statements in this Form 10-Q.







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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk



Not applicable



ITEM 4. CONTROLS AND PROCEDURES



The Company's principal executive officer and principal financial officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our principal executive officer and our principal financial officer have concluded that because it is likely that material weaknesses will be identified during the assessment of our internal control over financial reporting that is being conducted under the supervision of our principal executive officer and principal financial officer (the results of which will be disclosed in an amendment to our annual report on Form 20-F for the year ended December 31, 2007), that, our disclosure controls and procedures were not effective as of June 30, 2008.  Depending on our financial resources we hope to take appropriate actions to remediate any such material weaknesses identified.



Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.



There was no change in the Company's internal control over financial reporting that occurred during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.















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PART II  OTHER INFORMATION





ITEM 1. Legal Proceedings



None.



Item 1A. Risk Factors



Except as described below there have been no material changes to the information included in risk factors set forth in our Annual Report on Form 20-F for the year ended December 31, 2007.



We have not yet completed the assessment of our internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act, accordingly we identified a material weakness in our disclosure controls and procedures.



Section 404 of the Sarbanes-Oxley Act of 2002 requires management on an annual basis to assess our internal control over financial reporting (ICFR) pursuant to a defined framework.  Because of our size and limited financial resources, we did not complete the assessment in accordance with a defined framework by the time the Company filed its annual report on Form 20-F.  The Company plans to conduct the required assessment and expects to identify material weaknesses during that assessment.  In turn, the Company concluded that because it is likely material weaknesses in our ICFR will be identified during managements assessment that there are also material weaknesses in our disclosure controls and procedures.    There are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective ICFR can provide only reasonable assurance with respect of financial statement preparation and may not prevent or detect misstatements.  Material weaknesses make it more likely that a material misstatement of annual or interim financial statements will not be prevented or detected.  In addition, effective ICFR at any point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.



As a result of our failure to assess our ICFR as of December 31, 2007 pursuant to an approved framework as required by Section 404 and SEC regulations, until we are able to conduct the assessment and provide the required managements report, the SEC may deem our annual report, and any subsequent reports we file pursuant to the 1934 Act, to be materially deficient or incomplete.



Item 2.  Unregistered Sales of Equity Securities



The following sets forth the information required by Item 701 of Regulation S-K with respect to the unregistered sale of equity securities that occurred during the quarter ended June 30, 2008 and subsequently and were not reported in our quarterly report on Form 10-Q for the quarter ended March 31, 2008, our annual report on Form 20-F filed on July 11, 2008 or in a current report on Form 8-K.



On July 4, 2008 the Company issued an accredited investor 564,600 shares of common stock at a price of $0.05 per share upon the exercise of warrants.  The Company received cash proceeds of $28,230  upon the exercise of the warrants.   We relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 promulgated thereunder for this issuance.  No commissions or other remuneration were paid in connection with this issuance.





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Item 3.  Default Upon Senior Securities



None.



Item 4.  Submission of Matters to a Vote of Security Holders



Not applicable



Item 6.  Exhibits

|     |  |                                                                                                                                                             
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                             
|3.1  |  | Articles of Continuance(1).                                                                                                                                 
|     |  |                                                                                                                                                             
|3.2  |  | Bylaws (2).                                                                                                                                                 
|     |  |                                                                                                                                                             
|10.1 |  | Form of Subscription Agreement and Investment Letter (3)                                                                                                    
|     |  |                                                                                                                                                             
|31.1 |  | Certification of CEO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
|     |  |                                                                                                                                                             
|31.2 |  | Certification of CFO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

____________





(1)

Incorporated by reference from the Companys annual report on Form 20-F dated December 31, 2003 and filed with the Securities and Exchange Commission on July 8, 2004.



(2)

Incorporated by reference to the Companys Form 20-F, dated December 31, 2004 and filed July 7, 2005.



(3)

Incorporated by reference from Form 8-K dated May 22, 2008 and filed on May 29, 2008.



SIGNATURES



In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





Date: August 20, 2008

By: /s/ Robert Kramer

Robert Kramer,

Principal Executive Officer



Date: August 20, 2008

By:/s/ George Chen

George Chen,

Principal Financial Officer and

Principal Accounting Officer





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EXHIBIT 31.1

CERTIFICATION

I, Robert Kramer, certify that:



1.

I have reviewed this quarterly report on Form 10-Q of Current Technology Corporation:



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.

The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant: and have:



a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles



c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



d) disclosed in this report any changes in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting.



5.

The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):



a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and



b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls over financial reporting.



|                       |                                            |                  
|---------------------- | ------------------------------------------ | -----------------
|Dated: August 21, 2008 | By                                         | /s/ Robert Kramer
|                       | Robert Kramer, Principal Executive Officer







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EXHIBIT 31.2

CERTIFICATION

I, George Chen, certify that:



1.

I have reviewed this quarterly report on Form 10-Q of Current Technology Corporation:



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.

The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant: and have:



a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles



c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



d) disclosed in this report any changes in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting.



5.

The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):



a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and



b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls over financial reporting.



|                       |                                      |                
|---------------------- | ------------------------------------ | ---------------
|Dated: August 21, 2008 | By                                   | /s/ George Chen
|                       | George Chen, Chief Financial Officer













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