**U.S. SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 

**FORM 10-QSB**

 

Quarterly Report Under

the            Securities Exchange Act of 1934

 

For            Quarter Ended: September 30, 2007

 

Commission File Number: 0-28031

 

**PACIFIC FUEL CELL CORP.**

(Exact name of small business issuer as specified in its            charter)

 

**Nevada**

(State or other jurisdiction of incorporation or            organization)

 

**80-0043875**

(IRS            Employer Identification No.)

 

**131 N. Tustin Ave.**

**Suite 100**

**Tustin, CA**

(Address of principal place of business)

 

**92780**

(Zip            Code)

 

**(714) 564-1693**

(Issuer’s Telephone Number)

 

Check            whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of            the Securities Exchange Act of 1934 during the past 12 months (or for such shorter            period that the registrant was required to file such reports), and (2) has been subject            to such filing requirements for the past 90 days: Yes            __X__ No ____.

 

The            number of shares of the registrant’s only class of common stock issued and            outstanding as of November 19, 2007, was 75,010,248 shares.

 

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

 

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**PART I**

 

| **ITEM 1.** | **FINANCIAL STATEMENTS.** |
|-------------|---------------------------|

 

PACIFIC FUEL CELL CORP.

(A            DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEET

September 30, 2007

(UNAUDITED)

 

| ASSETS                                                                                 |
|----------------------------------------------------------------------------------------|
|                                                                                   |   |   |   |   |   |   |
| CURRENT ASSETS                                                                         |   |   |   |   |   |   |
| Cash                                                                                   |   |   |   | $ | 169,563 |   |
| Accounts receivable                                                                    |   |   |   |   | 30,796 |   |
| Inventory                                                                              |   |   |   |   | 10,220 |   |
| Prepaid expenses                                                                       |   |   |   |   | 1,897 |   |
| Total current assets                                                                   |   |   |   |   | 212,476 |   |
|                                                                                   |   |   |   |   |   |   |
| Property and equipment, net                                                            |   |   |   |   | 388,038 |   |
|                                                                                   |   |   |   |   |   |   |
| Deposits                                                                               |   |   |   |   | 10,987 |   |
|                                                                                   |   |   |   |   |   |   |
|                                                                                   |   |   |   | $ | 611,501 |   |
|                                                                                   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                             |
|                                                                                   |   |   |   |   |   |   |
| CURRENT LIABILITIES                                                                    |   |   |   |   |   |   |
| Accounts payable                                                                       |   |   |   | $ | 194,459 |   |
| Current portion of capitalized leases                                                  |   |   |   |   | 22,191 |   |
| Total current liabilities                                                              |   |   |   |   | 216,650 |   |
|                                                                                   |   |   |   |   |   |   |
| LONG TERM LIABILITES                                                                   |   |   |   |   |   |   |
| Capitalized leases, net of current portion                                             |   |   |   |   | 105,471 |   |
|                                                                                   |   |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY                                                             |   |   |   |   |   |   |
| Preferred stock, $0.01 par value,                                                      |   |   |   |   |   |   |
| 1,000,000 shares authorized, none outstanding                                          |   |   |   |   | — |   |
| Common stock, $0.001 par value, 200,000,000                                            |   |   |   |   |   |   |
| shares authorized, 74,910,248 shares issued and                            outstanding |   |   |   |   | 74,910 |   |
| Additional paid in capital                                                             |   |   |   |   | 4,282,301 |   |
| (Deficit) accumulated during the development                            stage          |   |   |   |   | (4,067,831 | ) |
|                                                                                   |   |   |   |   | 289,380 |   |
|                                                                                   |   |   |   |   |   |   |
|                                                                                   |   |   |   | $ | 611,501 |   |

 

The            accompanying notes are an integral part of the consolidated financial            statements.

 

2

 

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PACIFIC FUEL CELLC CORP.

(A            DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

|                                                                              |   |                   |       |                  |   |              |   |               |   |   |       |              |   |   |   | **FOR THE PERIOD** |   |
|-----------------------------------------------------------------------------------|--------|------------------------|------------|-----------------------|--------|-------------------|--------|--------------------|--------|--------|------------|-------------------|--------|--------|--------|--------------------|--------|
|                                                                              |   |                   |       |                  |   |              |   |               |   |   |       |              |   |   |   | **MAY 5, 1998**    |   |
|                                                                              |   | **THREE MONTHS ENDED** |       | **NINE MONTHS ENDED** |   |              |   | **(INCEPTION) TO** |   |
|                                                                              |   | **SEPTEMBER 30,**      |       |                  |   | **SEPTEMBER 30,** |   | **SEPTEMBER 30,**  |   |   |       | **SEPTEMBER 30,** |   |   |   | **SEPTEMBER 30,**  |   |
|                                                                              |   | **2007**               |       |                  |   | **2006**          |   | **2007**           |   |   |       | **2006**          |   |   |   | **2007**           |   |
| REVENUE                                                                           |   |                   |       |                  |   |              |   |               |   |   |       |              |   |   |   |               |   |   |   |   |   |   |
| Sales                                                                             |   | $                      | 140,158    |                  |   |              | $      | —            |   | $      | 276,081    |              |   |   | $      | —            |   |   |   | $ | 348,069 |   |
| Grants                                                                            |   |                   | —    |                  |   |              |   | —            |   |   | —    |              |   |   |   | —            |   |   |   |   | 99,901 |   |
|                                                                              |   |                   | 140,158    |                  |   |              |   | —            |   |   | 276,081    |              |   |   |   | —            |   |   |   |   | 447,970 |   |
| COSTS AND EXPENSES                                                                |   |                   |       |                  |   |              |   |               |   |   |       |              |   |   |   |               |   |   |   |   |   |   |
| Operating expenses                                                                |   |                   | 230,886    |                  |   |              |   | 930                |   |   | 544,745    |              |   |   |   | 1,411              |   |   |   |   | 592,406 |   |
| General and administrative                                                        |   |                   | 281,861    |                  |   |              |   | 207,925            |   |   | 631,373    |              |   |   |   | 317,821            |   |   |   |   | 2,059,781 |   |
| Research and development                                                          |   |                   | 146        |                  |   |              |   | (35,395            | )      |   | 108,689    |              |   |   |   | 50,229             |   |   |   |   | 409,414 |   |
| Stock compensation                                                                |   |                   | 15,000     |                  |   |              |   | 1,500              |   |   | 45,000     |              |   |   |   | 4,500              |   |   |   |   | 357,800 |   |
| Depreciation and amortization                                                     |   |                   | 20,812     |                  |   |              |   | —            |   |   | 43,260     |              |   |   |   | —            |   |   |   |   | 77,083 |   |
| Change in value of derivative instruments,                            net         |   |                   | —    |                  |   |              |   | —            |   |   | —    |              |   |   |   | —            |   |   |   |   | 460,498 |   |
| Loss on extinguishment of debentures                                              |   |                   | —    |                  |   |              |   | —            |   |   | —    |              |   |   |   | —            |   |   |   |   | 16,706 |   |
| Loss on asset impairment                                                          |   |                   | —    |                  |   |              |   | —            |   |   | —    |              |   |   |   | —            |   |   |   |   | 510,667 |   |
| Loss on disposal of property and equipment                                        |   |                   | —    |                  |   |              |   | —            |   |   | —    |              |   |   |   | —            |   |   |   |   | 3,391 |   |
|                                                                              |   |                   | 548,705    |                  |   |              |   | 174,960            |   |   | 1,373,067  |              |   |   |   | 373,961            |   |   |   |   | 4,487,746 |   |
| OPERATING (LOSS)                                                                  |   |                   | (408,547   | )                     |   |              |   | (174,960           | )      |   | (1,096,986 | )                 |   |   |   | (373,961           | )      |   |   |   | (4,039,776 | ) |
|                                                                              |   |                   |       |                  |   |              |   |               |   |   |       |              |   |   |   |               |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE)                                                            |   |                   |       |                  |   |              |   |               |   |   |       |              |   |   |   |               |   |   |   |   |   |   |
| Interest income                                                                   |   |                   | 122        |                  |   |              |   | 513                |   |   | 610        |              |   |   |   | 811                |   |   |   |   | 8,149 |   |
| Interest expense                                                                  |   |                   | (2,052     | )                     |   |              |   | (143               | )      |   | (2,052     | )                 |   |   |   | (375               | )      |   |   |   | (68,761 | ) |
| Foreign currency transaction gain (loss)                                          |   |                   | —    |                  |   |              |   | —            |   |   | —    |              |   |   |   | —            |   |   |   |   | (168 | ) |
| Other                                                                             |   |                   | —    |                  |   |              |   | —            |   |   | —    |              |   |   |   | —            |   |   |   |   | (1,175 | ) |
|                                                                              |   |                   | (1,930     | )                     |   |              |   | 370                |   |   | (1,442     | )                 |   | #      |   | 436                |   |   |   |   | (61,955 | ) |
| NET (LOSS) BEFORE EXTRAORDINARY ITEM                                              |   |                   | (410,477   | )                     |   |              |   | (174,590           | )      |   | (1,098,428 | )                 |   |   |   | (373,525           | )      |   |   |   | (4,101,731 | ) |
| EXTRAORDINARY ITEM (Gain

on forgiveness of debt, net of

income taxes of $12,070 |   |                   | —    |                  |   |              |   | —            |   |   |       |              |   |   |   | —            |   |   |   |   | 23,430 |   |
| NET (LOSS) BEFORE INCOME TAX EXPENSE                            (BENEFIT)         |   |                   | (410,477   | )                     |   |              |   | (174,590           | )      |   | (1,098,428 | )                 |   |   |   | (373,525           | )      |   |   |   | (4,078,301 | ) |
| INCOME TAX EXPENSE (BENEFIT)                                                      |   |                   | 1,600      |                  |   |              |   | 2,400              |   |   | —    |              |   |   |   | 2,400              |   |   |   |   | (10,470 | ) |
|                                                                              |   |                   |       |                  |   |              |   |               |   |   |       |              |   |   |   |               |   |   |   |   |   |   |
| NET (LOSS)                                                                        |   | $                      | (412,077   | )                     |   |              | $      | (176,990           | )      | $      | (1,098,428 | )                 |   |   | $      | (375,925           | )      |   |   | $ | (4,067,831 | ) |
|                                                                              |   |                   |       |                  |   |              |   |               |   |   |       |              |   |   |   |               |   |   |   |   |   |   |
| PER SHARE INFORMATION:                                                            |   |                   |       |                  |   |              |   |               |   |   |       |              |   |   |   |               |   |   |   |   |   |   |
| WEIGHTED AVERAGE SHARES OUTSTANDING -                                             |   |                   |       |                  |   |              |   |               |   |   |       |              |   |   |   |               |   |   |   |   |   |   |
| BASIC AND DILUTED                                                                 |   |                   | 74,442,857 |                  |   |              |   | 68,175,559         |   |   | 73,209,587 |              |   |   |   | 67,182,365         |   |   |   |   |   |   |
| NET (LOSS) PER COMMON SHARE (BASIC &                            DILUTED)      |   | $                      | (0.01      | )                     |   |              | $      | (0.00              | )      | $      | (0.02      | )                 |   |   | $      | (0.01              | )      |   |   |   |   |   |

 

The            accompanying notes are an integral part of the consolidated financial            statements.

 

3

 

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PACIFIC FUEL CELL CORP.

(A            DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

|                                                                                 |   |   |   | **NINE MONTHS ENDED** |      |   |   | **FOR THE PERIOD**

**MAY 5, 1998** |   |
|--------------------------------------------------------------------------------------|--------|--------|--------|-----------------------|-----------|--------|--------|-------------------------------------|--------|
|                                                                                 |   |   |   | **SEPTEMBER 30,**     |      |   |   | **SEPTEMBER 30,**                   |   |   |   | **(INCEPTION) TO** |   |
|                                                                                 |   |   |   | **2007**              |      |   |   | **2006**                            |   |   |   | **SEPTEMBER 30, 2007** |   |
| OPERATING ACTIVITIES                                                                 |   |   |   |                  |      |   |   |                                |   |   |   |   |   |   |   |   |
| Net cash (used in) operating activities                                              |   |   |   | $                     | (888,496  | )      |   |                                | $      | (186,558 | ) |   |   | $ | (2,029,237 | ) |
| INVESTING ACTIVITIES                                                                 |   |   |   |                  |      |   |   |                                |   |   |   |   |   |   |   |   |
| Purchase of fixed assets                                                             |   |   |   |                  | (165,155  | )      |   |                                |   | — |   |   |   |   | (324,754 | ) |
| Cash received in purchase of Cellfoods                                               |   |   |   |                  | —   |   |   |                                |   | — |   |   |   |   | 16,898 |   |
| Deposit on equipment                                                                 |   |   |   |                  | 70,000    |   |   |                                |   | — |   |   |   |   | — |   |
| Investment in mineral claims                                                         |   |   |   |                  | —   |   |   |                                |   | — |   |   |   |   | (5,000 | ) |
| Net cash (used in) investing activities                                              |   |   |   |                  | (95,155   | )      |   |                                |   | — |   |   |   |   | (312,856 | ) |
| FINANCING ACTIVITIES                                                                 |   |   |   |                  |      |   |   |                                |   |   |   |   |   |   |   |   |
| Payments on capital leases                                                           |   |   |   |                  | (3,513    | )      |   |                                |   | — |   |   |   |   | (3,513 | ) |
| Proceeds from loans payable –                            shareholders          |   |   |   |                  | —   |   |   |                                |   | — |   |   |   |   | 285,462 |   |
| Payments on loans payable –                            shareholders            |   |   |   |                  | —   |   |   |                                |   | — |   |   |   |   | (11,083 | ) |
| Deferred debenture costs                                                             |   |   |   |                  | —   |   |   |                                |   | — |   |   |   |   | (136,000 | ) |
| (Payments) proceeds of convertible redeemable                            debentures  |   |   |   |                  | —   |   |   |                                |   | — |   |   |   |   | 776,855 |   |
| Payments on loan payable – related                            parties          |   |   |   |                  | —   |   |   |                                |   | — |   |   |   |   | (60,000 | ) |
| Proceeds from stock sales, net of issuance                            costs          |   |   |   |                  | 1,043,000 |   |   |                                |   | 338,500 |   |   |   |   | 1,659,935 |   |
| Net cash provided by financing activities                                            |   |   |   |                  | 1,039,487 |   |   |                                |   | 338,500 |   |   |   |   | 2,511,656 |   |
| Net increase in cash                                                                 |   |   |   |                  | 55,836    |   |   |                                |   | 151,942 |   |   |   |   | 169,563 |   |
|                                                                                 |   |   |   |                  |      |   |   |                                |   |   |   |   |   |   |   |   |
| CASH AT BEGINNING OF PERIOD                                                          |   |   |   |                  | 113,727   |   |   |                                |   | 166,130 |   |   |   |   | — |   |
|                                                                                 |   |   |   |                  |      |   |   |                                |   |   |   |   |   |   |   |   |
| CASH AT END OF PERIOD                                                                |   |   |   | $                     | 169,563   |   |   |                                | $      | 318,072 |   |   |   | $ | 169,563 |   |
|                                                                                 |   |   |   |                  | —   |   |   |                                |   |   |   |   |   |   | — |   |
| SUPPLEMENTAL CASH FLOW INFORMATION                                                   |   |   |   |                  |      |   |   |                                |   |   |   |   |   |   |   |   |
| Cash paid for interest                                                               |   |   |   | $                     | —   |   |   |                                | $      | — |   |   |   | $ | 375 |   |
| Cash paid for income taxes                                                           |   |   |   | $                     | —   |   |   |                                | $      | — |   |   |   | $ | 2,400 |   |
|                                                                                 |   |   |   |                  |      |   |   |                                |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT NON-

CASH FINANCIAL AND INVESTING ACTIVITIES |   |   |   |                  |      |   |   |                                |   |   |   |   |   |   |   |   |
| Discount on loan payable - related party                                             |   |   |   | $                     | —   |   |   |                                | $      | — |   |   |   | $ | 8,300 |   |
| Issuance of stock for purchase of license                            agreement       |   |   |   | $                     | —   |   |   |                                | $      | — |   |   |   | $ | 451,500 |   |
| Accrued interest                                                                     |   |   |   | $                     | —   |   |   |                                | $      | — |   |   |   | $ | (1,679 | ) |
| Convertible redeemable debentures                                                    |   |   |   | $                     | —   |   |   |                                | $      | — |   |   |   | $ | (808,728 | ) |
| Conversion of accrued interest into contributed                            capital   |   |   |   | $                     | —   |   |   |                                | $      | — |   |   |   | $ | 179,610 |   |
| Cancellation of 2,000,000 shares at par value                                        |   |   |   | $                     | —   |   |   |                                | $      | — |   |   |   | $ | 2,000 |   |
| Issuance of stock for repayment of advances                                          |   |   |   | $                     | —   |   |   |                                | $      | — |   |   |   | $ | 116,050 |   |
| Conversion of accrued interest into promissory                            notes      |   |   |   | $                     | —   |   |   |                                | $      | — |   |   |   | $ | 12,684 |   |
| Issuance of stock for purchase of domain                            asset            |   |   |   | $                     | —   |   |   |                                | $      | — |   |   |   | $ | 65,000 |   |
| Equipment purchased with capital leases                                              |   |   |   | $                     | 131,175   |   |   |                                | $      | — |   |   |   | $ | 131,175 |   |

 

The            accompanying notes are an integral part of the consolidated financial            statements.

 

4

 

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**PACIFIC FUEL CELL CORP.**

**(A            DEVELOPMENT STAGE COMPANY)**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2007**

**(UNAUDITED)**

 

**Note 1. Basis of Presentation and Accounting Policies**

 

The            accompanying unaudited financial statements contain all adjustments (consisting only of            normal recurring adjustments) which, in the opinion of management, are necessary to            present fairly the financial position of the Company as of September 30, 2007, and the            results of its operations for the three and nine months ended September 30, 2007 and            2006, and for the period from May 8, 1998 (inception) to September 30, 2007, and            its cash flows for the nine months ended September 30, 2007 and 2006, and for the            period from May 8, 1998 (inception) to September 30, 2007. Certain information and            footnote disclosures normally included in financial statements have been condensed or            omitted pursuant to rules and regulations of the U.S. Securities and Exchange            Commission (the “Commission”). The Company believes that the disclosures in            the financial statements are adequate to make the information presented not misleading.            However, the financial statements included herein should be read in conjunction with            the financial statements and notes thereto included in the Company’s Annual            Report on Form 10-KSB for the year ended December 31, 2006 filed with the Commission on            April 2, 2007.

 

Inventories

Inventories consist of raw materials and are carried at the lower of            cost or market, with cost determined using the first in, first out (FIFO)            method.

 

Accounts receivable

The            Company evaluates trade receivables that are past due to determine the appropriate            allowance for doubtful accounts. The receivables are charged off in the period in which            they are deemed uncollectible. The allowance for doubtful accounts at September 30,            2007 was $1,000.

 

**Note 2. Going Concern**

 

The            accompanying financial statements have been prepared on a going concern basis, which            contemplates the realization of assets and the satisfaction of liabilities in the            normal course of business. As shown in the accompanying financial statements, the            Company is in the development stage and, at September 30, 2007, has an accumulated            deficit of $4,067,831, continues to sustain operating losses on a monthly basis, and            expects to incur operating losses for the foreseeable future. The Company’s            continuation as a going concern is dependent on its ability to obtain additional            financing sufficient to fund the required additional development and to meet its            obligations on a timely basis. The Company is exploring options to expand operations            and raise additional funds through equity and debt financing, However, the Company has            no commitment from any party to provide additional capital and there is no assurance            that such funding will be available when needed, or if available, that its terms will            be favorable or acceptable to the Company. These factors, among others, raise            substantial doubt about the Company’s ability to continue as a going concern. The            financial statements do not include any adjustments relating to the recoverability and            classification of recorded asset amounts or the amounts and classification of            liabilities that might be necessary should the Company be unable to continue as a going            concern for a reasonable period of time.

 

5

 

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**Note 3. Earnings Per Share**

 

The            Company calculates net income (loss) per share as required by Statement of Financial            Accounting Standard 128, “Earnings per Share.” Basic earnings (loss) per            share is calculated by dividing net income (loss) by the weighted average number of            common shares outstanding for the period. Diluted earnings (loss) per share is            calculated by dividing net income (loss) by the weighted average number of common            shares and dilutive common stock equivalents outstanding. During the periods presented,            common stock equivalents were not considered, as their effect would be            anti-dilutive.

 

**Note 4. Research and Development**

 

On            August 21, 2002 the Company entered into a one-year agreement with the University of            California (the “University”) to develop a commercially viable fuel cell.            The Company and the University entered into an agreement to extend the completion date            to February 29, 2004. On May 4, 2004, the agreement was further extended through April            30, 2007. A new amendment to further extend the completion date to May 10, 2008 was            completed on June 26, 2007. The payments come due as follows: $35,395 is currently due            and $50,252 to be paid on or before December 31, 2007. This amount is included in            accounts payable.

 

**Note 5. Merger Agreement**

 

Effective May 14, 2004, the Company, Cellfoods Corporation            (“Cellfoods”) and a wholly-owned subsidiary of the Company, PFCE            Acquisition Corp. (“Sub”), consummated an Agreement and Plan of Merger,            whereby Sub was merged with and into Cellfoods. All of the Cellfoods’ issued and            outstanding common shares were exchanged for 6,100 shares of the Company’s $.001            par value common stock, at a conversion ratio of .01 to 1, as a tax-free reorganization            pursuant to Section 365(a) of the Internal Revenue Code. The shares were issued at            their fair market value of $2,562, which has been charged to operations as purchased            research and development during 2004. Cellfoods has had minimal activity to date. On            May 25, 2005 the Company’s Board of Directors approved the spin-off of Cellfoods,            but the applicable registration statement has been placed on hold as of the date of            this filing.

 

**Note 6. Common Stock**

 

During the three months ended March 31, 2007, the Company sold 2,142,852            shares of its restricted stock at a price of $0.14 per share, for cash proceeds of            $300,000; and, 1,232,000 shares of its restricted stock at a price of $.25 per share,            for cash proceeds of $308,000.

 

During the three months ended June 30, 2007, the Company sold 1,140,000            shares of its restricted stock at a price of $0.25 per share, for cash proceeds of            $285,000.

 

During the three months ended September 30, 2007, the Company sold            600,000 shares of its restricted stock at a price of $0.25 per share, for cash proceeds            of $150,000.

 

**Note 7**.**Commitments and Contingencies**

 

On            January 24, 2007 the Company entered into a new lease agreement for 23,886 square feet            of commercial space located in Willoughby, Ohio. The lease is for two years starting on            March 1, 2007 and ending February 28, 2009. The future minimum payments required under            the lease are $53,952, $96,644 and $16,931 for 2007, 2008 and 2009,            respectively.

 

6

 

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On            February 28, 2007 the Company was named as a defendant in a lawsuit pending in the            Court of Common Pleas for Lake County, Ohio, captioned            “*SKRL Tool & Die, Inc., et al. v. William Berwald,            et al.*, Case No. 07-CV-000567.” In their complaint,            Plaintiffs allege that two of their former employees – current employees of the            Company in Willoughby, Ohio, manufacturing facility – possess confidential and            proprietary trade secrets of SKRL pertaining to the manufacturing of bipolar plates for            fuel cells. Plaintiffs have asserted against these employees and the Company claims            for, among other things, unfair competition, misappropriation of trade secrets and            tortuous interference with business relationships and seek compensatory and punitive            damages, as well as injunctive relief that would preclude the two former SKRL employees            from continuing to be employed by the Company . The Company believes these claims are            without merit, in that the employees possess no trade secrets of SKRL, and moreover,            the Company would have no use for such trade secrets, as its current employees (other            than the two defendants) possess far more technological and marketing information in            the industry than the SKRL employees would ever have been privy to. The Company is,            therefore, vigorously defending the Company’s interests, and believes the defense            will ultimately be successful. The Company has filed counterclaims against the            Plaintiffs in this matter, alleging unfair competition, tortuous interference with            business expectancy and tortuous interference with employment relationships and has            requested that the court award the Company damages as a result. The Plaintiff’s            Notice of Withdrawal of Motion for Temporary Restraining Order and Preliminary            Injunction was filed on April 26, 2007 with the Court. The parties are currently in            discovery proceedings.

 

In            July 2007, the Company entered into two (2) five year capital leases in the in the            aggregate amount of $131,175 secured by two press machines and the personal guarantees            of the President and Director and the former Chief Financial Officer and Director. The            leases require monthly payments of $2,707. The related equipment is included in            Property, plant and equipment at the total cost of $145,750. The future minimum annual            payments, less the initial equipment deposit of $14,575, are $32,485 for years 2008            through 2011 and $18,950 for 2012. Inclusive of the monthly payments, through the term            of the leases, is interest of $31,250.

 

As            of and for the quarter ended September 30, 2007, one customer accounted for 61.5% of            revenue and 62.5% of accounts receivable and one customer accounted for 24.4% of            revenue.

 

**Note 8. Subsequent Events**

 

In            October, 2007, the Company received $25,000 for the purchase of 100,000 shares of            common stock at a price of $0.25 per share.

 

 

7

 

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|   | **ITEM 2.** | **MANAGEMENT’S DISCUSSION AND ANALYSIS                            OF** |
|--------|-------------|------------------------------------------------------------------------------|

|   | **FINANCIAL CONDITION AND RESULTS OF                            OPERATIONS** |
|--------|------------------------------------------------------------------------------|

 

The            following discussion should be read in conjunction with our unaudited financial            statements and notes thereto included herein. In connection with, and because we desire            to take advantage of, the “safe harbor” provisions of the Private            Securities Litigation Reform Act of 1995, we caution readers regarding certain forward            looking statements in the following discussion and elsewhere in this report and in any            other statement made by, or on our behalf, whether or not in future filings with the            Securities and Exchange Commission. Forward-looking statements are statements not based            on historical information and which relate to future operations, strategies, financial            results or other developments. Forward looking statements are necessarily based upon            estimates and assumptions that are inherently subject to significant business, economic            and competitive uncertainties and contingencies, many of which are beyond our control            and many of which, with respect to future business decisions, are subject to change.            These uncertainties and contingencies can affect actual results and could cause actual            results to differ materially from those expressed in any forward-looking statements            made by, or on, our behalf. We disclaim any obligation to update forward-looking            statements.

 

**OVERVIEW**

 

Pacific Fuel Cell Corp. ("we, "us," "our," or the "Company") was            incorporated under the laws of the State of Nevada on May 5, 1998, under the original            name "Magnum Ventures Inc." We changed our name on May 18, 1999 to "RadioTower.com,            Inc." Thereafter, in August 2001, we changed our name to our current name.

 

On            July 2, 2001, we entered into a definitive agreement with Fullerene USA, Inc.            ("Fullerene"), a privately held Nevada corporation, which contained various conditions            subsequent prior to effectiveness, including completion of due diligence activities and            other matters (the "Fullerene Agreement"). These conditions were subsequently            satisfied. Effective August 28, 2001, we closed an acquisition of certain assets            previously owned by Fullerene. The terms of the Fullerene Agreement provide for us to            acquire an exclusive worldwide license (except for Japan) in Fullerene's proprietary            fuel cell technology, including certain future acquired intellectual property, for use            in transportation applications (the "Assets"). The licensing agreement expires upon the            expiration of the underlying patent application, which is 17 years following the            approval of the patent by the US Patent and Trademark Office. Relevant thereto, on            March 16, 2004, the United States Patent and Trademark Office issued Patent No.            6,706,431 to Fullerene.

 

In            exchange for the Assets, we issued 30,100,000 shares of our "restricted" Common Stock,            equal to ownership of approximately 51% of our then outstanding stock. The number of            our authorized common shares was increased to 200,000,000 in July 2001 in conjunction            with the Fullerene transaction.

 

Following this transaction, we adopted a new business plan to develop            and produce low cost fuel cells for transportation. During 2002, we revised our            business plan to emphasize the development and production of low cost fuel cells for            personal electronics or other applications requiring small size and longevity of use.            We revised our original business plan as a result of the

 

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costs associated with developing transportation related fuel cells,            which exceeded our available capital. We may reinstate the elements of the original            business plan if our current business plan proves successful, of which there can be no            assurance. Our initial business plan was to develop and produce low cost fuel cells for            transportation. As of the date of this Report, we are focused on improving the            production capability of our nanoMEA, enhancing product performance, reducing product            costs, designing market-ready products, developing volume-manufacturing capability, and            building customer and supplier relationships and marketing it to potential customers.            We are also continuing research to refine and improve our current nanoMEA.

 

**RESULTSOFOPERATIONS**

 

*Comparison of Results of Operations for the Three-Month periods            ended September 30, 2007 and 2006*

 

During the three months ended September 30, 2007, we generated revenues            of $140,158 compared with no revenues during the three months ended September 30, 2006.            The revenues were generated from the development of our business of manufacturing            bipolar plates as is more fully described below under “Plan of            Operation.”

 

During the three months ended September 30, 2007 we incurred costs and            expenses totaling $548,705 compared to costs and expenses of $174,960 for the three            months ended September 30, 2006. The costs incurred in the three months ended September            30, 2007 included $230,886 related to our bipolar plates manufacturing, $281,861 in            general and administrative expenses. Expenses for research and development,            depreciation and amortization and stock compensation expense amounted to $35,958.            During this thee month period, we devoted a substantial amount of our time to the            operations of our new business described herein under “Plan of Operation,”            below and reduced the time and expenses relating to our research and development            efforts. We expect that we will again devote our time and resources to our research and            development activities commencing in February, 2008.

 

As a            result, during the three months ended September 30, 2007, we incurred a net loss after            taxes of $(412,077) (approximately $.01 per share), compared to a loss of $(176,990)            (approximately $.01 per share), for the three months ended September 30,            2006.

 

*Comparison of Results of Operations for the Nine-Month Periods            Ended September 30, 2007 and 2006*

 

During the nine months ended September 30, 2007, we generated revenues            of $276,081, compared with no revenues during the nine months ended September 30, 2006.            The revenues were generated from the development of our business of prove our            manufacturing bipolar plates as is more fully described below under “Plan of            Operation.”

 

During the nine months ended September 30, 2007 we incurred costs and            expenses totaling $1,373,067, compared to costs and expenses of $373,961 during the            same period in 2006, an increase of $991,106. The significant increase in costs and            expenses is primarily attributable to

 

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the            development of our bipolar plates. The costs and expenses incurred during the nine            months ended September 30, 2007 included $544,745 related to our bipolar plates            manufacturing, $108,689 in research and development costs that were attributable to our            continued efforts to improve our proprietary MEA (membrane electrode assembly) and            $631,373 in general and administrative expenses. During the nine months ended September            30, 2006, we incurred $50,229 in research and development expense and $317,821 in            general and administrative expenses.

 

As a            result, we incurred a net loss of $(1,098,428) during the nine months ended September            30, 2007, (approximately $.01 per share), compared to a net loss of $(375,925) for the            nine months ended September 30, 2006 (approximately $.01 per share).

 

**PLANOFOPERATION**

 

Research and Development of Fuel Cell Technology

 

On            August 21, 2002, we entered into an agreement with the University of California            (“UCR”), to develop a commercially viable fuel cell, exploiting our            proprietary technology. On May 4, 2004, this agreement was extended through April 30,            2006, so long as we continued to make payments. In order to allow us to make the            aforesaid payments, we borrowed funds from Fullerene, our largest shareholder and a            company owned by certain of our officers and directors, which were subsequently have            repaid in full. UCR, through its SMART program, provides matching funds for all direct            costs applicable to development of the project. We applied for additional matching            funds through this SMART program and have obtained a favorable decision. These funds            are being provided directly to UCR for our research projects. This also provides a            multi-year relationship with UCR. All information we provide to UCR has been deemed            confidential for a period of one (1) year after expiration or termination of the            agreement.

 

On            October 13, 2006, an amendment was executed with UCR requiring aggregate payments of            $135,876, of which $50,252 has been paid as of the date of this report. On June 26,            2007 we executed another new amendment which provides for two payments totaling $85,647            to be paid as follows: $35,395 to be paid upon execution of this Amendment and $50,252            to be paid on or before December 31, 2007. We expect to make the $35,395 payment in the            foreseeable future. Due to our cash flow problems described elsewhere herein, based            upon conversations with UCR we expect to execute an extension for this payment with            UCR. Our working relationship with UCR is the same as it has been in the            past.

 

As a            result of our relationship with UCR, on November 10, 2003, we announced that a research            team headed by Professor Yushan Yan of UCR had successfully developed a fuel cell using            carbon nanotube-based electrodes. As a result of our research and development            activities with UCR, we expect that the use of multi-walled carbon nanotubes as a            platinum support for proton exchange membrane fuel cells will reduce the manufacturing            cost of fuel cells through a decreased use of platinum. Current technology uses            platinum, a precious metal, as the catalyst for hydrogen to separate into a proton and            electron. Since platinum is a high cost metal in very limited production, it is cost            prohibitive, preventing fuel cells from being economically viable even at high volume            production. Our proposed method of producing fuel cells is expected to

 

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minimize or eliminate the use of platinum. We expect to produce low cost            fuel cells at high volume production levels.

 

**Manufacture of Bipolar Plates**

 

Effective December 18, 2006, pursuant to an Assignment and Assumption of            Equipment Purchase Agreement, we were assigned all rights of TDM, L.L.C. relating to an            Agreement dated August 22, 2006, as amended December 20, 2006, between SGL Technic            Inc., a wholly owned subsidiary of SGL Technologies GmbH, a German company            (“SGL’), and TDM, L.L.C. (“TDM”), wherein we acquired certain            equipment on an “as is” basis. This equipment consists of two press machine            sets (200 and 800 ton) plus auxiliary equipment, which is used for manufacturing of            bi-polar plates. We have been developing the MEA business segment of the fuel cell            industry and have nanoMEA technology to enhance performance and durability. A fuel cell            stack (essentially an electricity generator) consists of an MEA, GDL (gas diffusion            layer) and bipolar plates. As such, management believes that this acquisition of            equipment fits in with our proprietary technology.

 

The            purchase price of the equipment was $200,000, which has been paid in full as of            September 30, 2007. We utilized the proceeds received from our recent private offerings            described below to pay this obligation.

 

This            equipment acquisition allows us to expand our current business plan to begin to            manufacture bipolar plates, which will provide us with the capability of marketing our            own fuel cell components for the industry. We have moved the equipment to a new            location approximately 5 miles from the equipment’s previous location in            Eastlake, Ohio, and have retained manufacturing personnel. We have            retained the services of two new employees, a director of sales and a director of            manufacturing, both of whom have direct experience in the fuel cell business and            manufacturing of bi-polar plate components. We are also engaged in discussions with            various parties who have expressed an interest in providing us with additional equity            capital to allow us to move forward. As of the date of this report, we have            manufactured and shipped product and have increased our number of customers from 10 to            15 customers.

             

SGL            discontinued its bi-polar plate manufacturing business. Current customers of SGL for            the bipolar plates consist of many of the top fuel cell companies in the world, almost            all of who are potential customers for our MEA. In the event we are able to transfer            sales and begin manufacturing, of which there can be no assurance, we expect to supply            many of these customers.

 

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**LIQUIDITYANDCAPITALRESOURCES**

 

At            September 30, 2007, we had $169,563 in cash, $30,796 in accounts receivable and            $194,459 in accounts payable reflecting equipment, materials and supplies we have            purchased for the production of bi-polar plates.

 

Since May 1988 we have financed our operations through the issuance of            debt and equity securities and loans from stockholders. As of September 30, 2007, we            had $212,476 of total current assets of which $169,563 was cash and a working capital            deficit of $4,174. Our practice is to invest excess cash, where available, in            short-term money market investment instruments.

 

We            are looking for additional working capital necessary to fund our current operations            through the remainder of 2007. We need financing immediately to cover administrative            expenses and on-going expenses of the further development of bi-polar plates and            manufacturing costs to produce product. Management is actively seeking additional            sources of equity and/or debt financing.

 

As a            result of the foregoing circumstances our independent registered public accounting firm            has, and is likely in the future to, include an explanatory paragraph in their audit            opinions expressing substantial doubt regarding our ability to continue as a going            concern.

 

We            are currently engaged in a private offering of our Common Stock whereby we intend to            raise up to $3 million in subscriptions. As of the date of this report we have sold an            aggregate of 2,972,000 “restricted” shares of our Common Stock (the            “Shares”). We received proceeds of $743,000 from the sale thereof ($0.25            per share). We relied upon the exemption from registration afforded by Regulation D and            Section 4/2, promulgated under the Securities Act of 1933, as amended, to issue the            Shares. The proceeds from this offering will be used for our new operations described            above, as well as for continued development of our fuel cell technology, provided that            we raise the full $3 million, of which there can be no assurance. The initial funds            received in this offering shall be utilized for our new business, described elsewhere            herein. In October, 2007 we received proceeds of $25,000 from the sale of common stock            ($0.25 per share) and issued 100,000 shares of Common Stock.

 

In            January 2007, we issued an aggregate of 2,142,852 “restricted” shares of            our Common Stock (the “January Shares”). We received proceeds of $300,000            from the sale thereof ($0.14 per share). The Shares were sold to a total of 10            investors, all of whom were “accredited investors” as that term is defined            under Rule 501(a) of Regulation D as promulgated under the Securities Act of 1933, as            amended. The proceeds from this offering have been used for our new operations            described above under “Plan of Operation.”

 

In            August 2006, we closed a private offering of restricted shares of our Common Stock (the            “August Shares”). We received proceeds of $338,500 from the sale of            2,417,858 Shares ($0.14 per share). The August Shares were sold to a total of 17            investors, including 2 “accredited investors” as that term is defined under            Rule 501(a) of Regulation D as promulgated under the Securities Act of 1933, as            amended.

 

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We            believe that we currently have sufficient funds available for us to continue to            implement our business plan for the next 3 months. To remedy this situation, we are            engaged in a private offering of our Common Stock, described above.

 

We            estimate that we will require an additional $3 million in additional debt or equity            capital to fully implement our business plan in the future and there are no assurances            that we will be able to raise this capital when needed. However, this amount may            decrease if we can generate profits from our new business described herein. While there            are no definitive agreements in place as of the date of this Report, we are currently            engaged in various discussions with interested parties to provide these funds or            otherwise enter into a strategic alliance to provide such funding. Our inability to            obtain sufficient funds from external sources when needed will have a material adverse            affect on our plan of operation, results of operations and financial            condition.

 

Cash            used in operating activities during the nine months ended September 30, 2007 was            $888,496, compared to $186,558 used for the comparable period of the prior year. The            increase is due to the setting up and running of the Ohio plant to manufacture bi-polar            plates. This operation started in February, 2007. Operating activities consisted            primarily of product research and development and the general operation of our            corporate office. Cash used in operating activities is primarily dependent on the            timing and extent of our research and development activities and our available            liquidity.

 

Cash            used in investing activities during the nine months ended September 30, 2007 was            $95,155 compared to $-0- for the comparable period of the prior year. Investing            activities consisted primarily of expenditures related to our purchase of equipment to            be used in the manufacture of our products.

 

Cash            provided by financing activities during the nine months ended September 30, 2007            was $1,039,487, compared to cash provided by financing activities of $338,500 for the            comparable period of the prior year. Cash provided by financing activities consists            primarily of the proceeds from the sale of common stock. As discussed above in this            report, we are attempting to raise additional funds that may take the form of equity or            debt or a combination of such securities.

 

**TRENDS**

 

Since our announcement of the successful development of a carbon            nanotube support base fuel cell electrode in November 2003, we have been receiving a            significant amount of attention from the investment community. Stock volume has            increased and we have received indications of interest from investors. There have also            been significant hits on our web site from investment firms. In this regard, while            there are no assurances, we are hopeful that we will be able to raise approximately $3            million in additional funding in order to allow us to produce and demonstrate to fuel            cell manufacturers a commercially viable component.

 

In            order to help jump-start the market for fuel cells and increase our manufacturing            capability, in late 2006 we decided to begin manufacturing fuel cell components.            Fuel cell manufacturers have incurred unwarranted expense and diversion of            management time in trying to manufacture each of the several components            needed for their fuel cells. We believe that we can create a viable,

 

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profitable business by utilizing proven manufacturing techniques in a            dedicated environment. To this end we have started manufacturing bipolar plates in our            plant in Willoughby, Ohio. We expect that our customers will include many prominent            industrial firms, as well as leading independent fuel cell companies. 

 

We            believe that the reason that the fuel cell market is not rapidly expanding at this time            is due to high manufacturing costs and lack of successful applications. We believe that            a robust fuel cell market is inevitable, due to the advantages of low pollution and            independence from fossil fuels. Major automobile, industrial and power supply companies            are heavily involved in research and development activities of fuel cell technology and            many have announced prototypes and commercial models. However, there has not been a            major commercial breakthrough, which we attribute to the high cost of the products and            the lack of consumer proven reliability in the automobile industry.

 

Management believes that the use of fuel cells as currently developed as            a power source for forklifts in warehouse operations. This belief is based, in part,            upon the fact that it believes that transportation company hubs are currently            experiencing significant growth due to the expansion of Internet merchandise sales.            Each hub utilizes a large numbers of forklifts. We believe that fuel cells may be more            suitable as a power source for these forklifts, which currently are battery powered.            The battery lasts only 4 to 6 hours in many cases and must be brought to the recharging            center. That is creating inefficiency in the transportation hub operation. Fuel cell            powered forklift can operate for a few days before refueling and maintenance. As of the            date of this report we are exploring the economic viability of this market and there            can be no assurances that we will expand our business plan to sell fuel cells to            warehouses, or if we do attempt to expand in this manner, that our efforts will be            successful. However, if so successful, management believes that this may be the first            commercially viable use of fuel cells on a large scale.

 

**INFLATION**

 

Although our operations are influenced by general economic conditions,            we do not believe that inflation had a material affect on our results of operations            during the nine-month period ended September 30, 2007.

 

| **ITEM 3.** | **CONTROLS AND PROCEDURES** |
|-------------|-----------------------------|

             

**Evaluation of Disclosure Controls and            Procedures**

 

We            maintain disclosure controls and procedures (as defined in Rule 13a-14(c) and Rule            15d-14(c) of the Exchange Act) designed to ensure that information required to be            disclosed in our reports filed under the Exchange Act is recorded, processed,            summarized, and reported within the required time periods. Our Chief Executive            Officer/Chief Financial Officer has concluded, based upon his evaluation of these            disclosure controls and procedures as of the date of this report, that, as of the date            of their evaluation, these disclosure controls and procedures were effective at            ensuring that the required information will be disclosed on a timely basis in our            reports filed under the Exchange Act. 

 

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**Changes in Internal Controls**

 

We            maintain a system of internal controls that is designed to provide reasonable assurance            that our books and records accurately reflect our transactions and that our established            policies and procedures are followed. There were no significant changes to our internal            controls or in other factors that could significantly affect such internal controls            subsequent to the date of the evaluation of such internal controls by our Chief            Executive Officer/Chief Financial Officer, including any corrective actions with regard            to significant deficiencies and material weaknesses. There has been no change in our            internal controls over financial reporting during our most recent fiscal quarter that            has materially affected, or is reasonably likely to materially affect our internal            controls over financial reporting, except that on September 15, 2007 our Chief            Financial Officer resigned his positions with us, including his position as a director.            We are currently performing a search to replace the Chief Financial Officer.

 

**PART II. OTHER INFORMATION**

 

| **ITEM 1.** | **LEGAL PROCEEDINGS** |
|-------------|-----------------------|

 

We            have been named as a defendant in a lawsuit pending in the Court of Common Pleas for            Lake County, Ohio, captioned “*SKRL Tool & Die, Inc.,            et al. v. William Berwald, et al.*, Case No.            07-CV-000567.” The case was filed on February 28, 2007.

 

In            their complaint, Plaintiffs allege that two of their former employees – current            employees of ours in our Willoughby, Ohio, manufacturing facility – possess            confidential and proprietary trade secrets of SKRL pertaining to the manufacturing of            bipolar plates for fuel cells. Plaintiffs have asserted against these employees and us            claims for, among other things, unfair competition, misappropriation of trade secrets            and tortious interference with business relationships and seek compensatory and            punitive damages, as well as injunctive relief that would preclude the two former SKRL            employees from continuing to be employed by us. As indicated below, the claim for            preliminary injunctive relief has been withdrawn.

 

We            believe these claims are without merit, in that the employees possess no trade secrets            of SKRL, and moreover, we would have no use for such trade secrets, as our current            employees (other than the two defendants) possess far more technological and marketing            information in the industry than the SKRL employees would ever have been privy to. We            are therefore vigorously defending our interests, and believe our defense will            ultimately be successful. We have filed counterclaims against the Plaintiffs in this            matter, alleging unfair competition, tortious interference with business expectancy and            tortuous interference with employment relationships and have requested that the court            award us damages as a result. The Plaintiff’s Notice of Withdrawal of Motion for            Temporary Restraining Order and Preliminary Injunction was filed on April 26, 2007 with            the Court.

 

This            matter is currently in the discovery stage. A pretrial date of January 10, 2008 has            been set, with a trial date set for February 11, 2008.

 

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We            are not a party to any other pending legal proceedings, nor are we aware of any other            pending or threatened claims.

 

| **ITEM 2.** | **UNREGISTERED SALES OF EQUITY SECURITIES AND USE                            OF** |
|-------------|-----------------------------------------------------------------------------------|

**PROCEEDS**

 

In            August 2006, we closed a private offering of restricted shares of our Common Stock (the            “August Shares”). We received proceeds of $338,500 from the sale of            2,417,858 Shares ($0.14 per share). The August Shares were sold to a total of 17            investors, including 2 “accredited investors” as that term is defined under            Rule 501(a) of Regulation D as promulgated under the Securities Act of 1933, as            amended. The proceeds from this offering were used for research and development            activities relating to our fuel cell research, as well as general and administrative            expenses.

 

In            January 2007, we issued an aggregate of 2,142,852 “restricted” shares of            our Common Stock (the “January Shares”). We received proceeds of $300,000            from the sale thereof ($0.14 per share). The Shares were sold to a total of 10            investors, all of whom were “accredited investors” as that term is defined            under Rule 501(a) of Regulation D as promulgated under the Securities Act of 1933, as            amended. We relied upon the exemption from registration afforded by Regulation D and            Section 4/2, promulgated under the Securities Act of 1933, as amended, to issue the            Shares. The proceeds from this offering have been used for our new operations described            above under “Plan of Operation.”

 

We            are currently engaged in a private offering of our common stock whereby we intend to            raise up to $3 million in subscriptions. As of the date of this report we have sold an            aggregate of 2,972,000 “restricted” shares of our Common Stock (the            “Shares”). We received proceeds of $743,000 from the sale thereof ($0.25            per share). We relied upon the exemption from registration afforded by Regulation D and            Section 4/2, promulgated under the Securities Act of 1933, as amended, to issue the            Shares. The proceeds from this offering will be used for our new operations described            above, as well as for continued development of our fuel cell technology, provided that            we raise the full $3 million, of which there can be no assurance. The initial funds            received in this offering shall be utilized for our new business, described elsewhere            herein.

 

**Subsequent Event**

 

In            October, 2007 we received proceeds of $25,000 from the sale of common stock ($0.25 per            share) and issued 100,000 shares of Common Stock. We relied upon the exemption from            registration afforded by Regulation D and/or Section 4/2, promulgated under the            Securities Act of 1933, as amended, to issue these shares.

 

| **ITEM 3.** | **DEFAULTS UPON SENIOR SECURITIES**- None |
|-------------|-------------------------------------------|

 

| **ITEM 4.** | **SUBMISSION OF MATTERS TO A VOTE OF SECURITY                            HOLDERS**– |
|-------------|-------------------------------------------------------------------------------------------|

 

None

 

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| **ITEM 5.** | **OTHER INFORMATION –**None |
|-------------|-----------------------------------|

 

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

 

|   | (a) | Exhibits |
|--------|-----|----------|

 

|   | 10.9 | Lease Rental Agreement Between the Company and CNC                            Associates, Inc. |
|--------|------|------------------------------------------------------------------------------------------------|

|   | Dated July 27, 2007 |
|--------|---------------------|

 

|   | 10.10 | Lease Rental Agreement Between the Company and CNC                            Associates, Inc. |
|--------|-------|------------------------------------------------------------------------------------------------|

|   | Dated July 27, 2007 |
|--------|---------------------|

 

|   | 31.1 | Certification of Chief Executive Officer and Chief                            Financial Officer Pursuant to |
|--------|------|-------------------------------------------------------------------------------------------------------------|

Section 302 of the Sarbanes-Oxley Act of 2002

 

|   | 32.1 | Certification of Chief Executive Officer and Chief                            Financial Officer Pursuant to |
|--------|------|-------------------------------------------------------------------------------------------------------------|

Section 906 of the Sarbanes-Oxley Act of 2002

|   | (b) | Reports on Form 8-K. |
|--------|-----|----------------------|

 

On            September 21, 2007, we filed a report on Form 8-K, advising that Ken Inouye, our            Secretary, Treasurer and a Director, resigned his positions with our Company for            personal reasons. There were no disagreements between Mr. Inouye and our Company            relating to our operations, policies or practices that were the reason for his            resignation.

 

As            of the date of this report we are reviewing candidates to appoint to the positions            vacated by Mr. Inouye, but no definitive decision has been made on his            replacement(s).

             

No            other reports on Form 8-K were filed during the three month period ended September 30,            2007, or subsequent thereto.

 

 

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**SIGNATURES**

 

Pursuant to the requirements of Section 12 of the Securities and            Exchange Act of 1934, the Registrant has duly caused this report to be signed on its            behalf by the undersigned, thereunto duly authorized.

 

| Dated: November 19, 2007 | **PACIFIC FUEL CELL CORP.**

(Registrant)

                             

                             

By:_s/George                            Suzuki________________

George Suzuki, Chief Executive Officer

and Chief Financial Officer |
|--------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

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