# UNITED STATES
                                    SECURITIES AND EXCHANGE COMMISSION
                                           Washington, DC 20549

# FORM 10-Q

||X| | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|--- | -----------------------------------------------------------------------------------------

For the quarterly period ended June
30, 2008

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

For the transition period from
___________ to ___________

# Commission File
Number: 0-028031

|PACIFIC FUEL CELL CORP.                               
|------------------------------------------------------
|(Exact name of registrant as specified in its charter)

|Nevada                                                         | 80-004875                           
|-------------------------------------------------------------- | ------------------------------------
|(State or Other Jurisdiction of
Incorporation or Organization) | (I.R.S. Employer
Identification No.)

|131 N. Tustin Ave., Suite 100, Tustin, CA 92780
|-----------------------------------------------
|(Address of Principal Executive Office)        

|714-564-1693                                        
|----------------------------------------------------
|(Registrant's telephone number, including area code)

Indicate by check mark whether the
registrant: (1) has filed all reports required to be filed by Section 13 or 15
(d) of the Securities Exchange Act of 1934 (the Exchange Act) during the
preceding twelve (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 |_|

Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or
a smaller reporting company. See definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2
of the Exchange Act.

|                            |                       |                           |                              
|--------------------------- | --------------------- | ------------------------- | -----------------------------
|Large accelerated filer
|_| | Accelerated filer
|_| | Non-accelerated filer
|_| | Smaller reporting company
|X|

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

YES |_|
    NO |X|

Indicate the number of shares
outstanding of each of the issuers classes of common stock: As of August 15, 2008,
79,210,248 shares of common stock, par value $0.001were issued and outstanding.

---



|TABLE OF CONTENTS
                       
                       
PART I
FINANCIAL INFORMATION | Page
|---------------------------------------------------------------------------------------------- | ----
|Item 1. Financial Statements                                                                   |     
|                                                                                               |     
|Consolidated Balance Sheets, June 30, 2008 (Unaudited) and December 31, 2007                   |     
|                                                                                               |     
|Consolidated Statements of Operations for the Three months and Six Months Ended June           |     
|30, 2008, and 2007 and from May 5, 1998 (Inception) to June 30, 2008 (Unaudited)               |     
|                                                                                               |     
|Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008 and               |     
|2007 and from May 5, 1998 (Inception) to June 30, 2008 (Unaudited)                             |     
|                                                                                               |     
|Notes to the Unaudited Consolidated Financial Statements                                       |     
|                                                                                               |     
|Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations  |     
|                                                                                               |     
|Item 3. Quantitative and Qualitative Disclosures About Market Risks                            |     
|                                                                                               |     
|Item 4T. Controls and Procedures                                                               |     
|                                                                                               |     
|PART II                                                                                        |     
|OTHER INFORMATION                                                                              |     
|                                                                                               |     
|Item 1. Legal Proceedings                                                                      |     
|                                                                                               |     
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                            |     
|                                                                                               |     
|Item 3. Defaults Upon Senior Securities                                                        |     
|                                                                                               |     
|Item 4. Submission of Matters to a Vote of Security Holders                                    |     
|                                                                                               |     
|Item 5. Other Information                                                                      |     
|                                                                                               |     
|Item 6. Exhibits                                                                               |     
|                                                                                               |     
|SIGNATURES                                                                                     |     
|                                                                                               |     
|EXHIBIT INDEX                                                                                  |     
|                                                                                               |     
|Exhibit 31.1                                                                                   |     
|Exhibit 32.1                                                                                   |     

---



# PART I-- FINANCIAL
INFORMATION

ITEM 1. FINANCIAL
STATEMENTS.

# PACIFIC FUEL CELL
CORP.                                                (A Development Stage Company)
                                                CONSOLIDATED BALANCE SHEETS

|                                                                      | June 30,
2008
(Unaudited) |  | December 31,
2007 |           
|--------------------------------------------------------------------- | ------------------------- |  | ----------------- | ----------
|ASSETS                                                                |                           |  |                   |           
|CURRENT ASSETS:                                                       |                           | 
|Cash                                                                  |                           |  | $                 | 49,489    
|Accounts receivable, net                                              |                           |  |                   | 48,408    
|Inventories                                                           |                           |  |                   | 13,655    
|Prepaid expenses                                                      |                           |  |                   |          
|                                                                      |                           |  |                   |           
|Total current assets                                                  |                           |  |                   | 111,552   
|                                                                      |                          
|PROPERTY, PLANT AND EQUIPMENT, net at cost                            |                           |  |                   | 563,046   
|                                                                      |                          
|OTHER ASSETS:                                                         |                           | 
|Security deposits                                                     |                           |  |                   | 9,054     
|                                                                      |                           |  |                   |           
|                                                                      |                           |  | $                 | 683,652   
|                                                                      |                           |  |                   |           
|LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY                        |                           | 
|CURRENT LIABILITIES:                                                  |                           | 
|Accounts payable and accrued expenses                                 |                           |  | $                 | 380,184   
|Convertible notes payable, related party                              |                           |  |                   | 436,000   
|Convertible notes payable, other                                      |                           |  |                   | 66,460    
|Current portion of capital lease obligations                          |                           |  |                   | 66,210    
|Accrued interest - related party                                      |                           |  |                   | 10,636    
|Accrued interest - other                                              |                           |  |                   | 1,089     
|Deferred rent                                                         |                           |  |                   | 9,883     
|                                                                      |                           |  |                   |           
|Total current liabilities                                             |                           |  |                   | 970,462   
|                                                                      |                          
|CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION                     |                           |  |                   | 278,562   
|                                                                      |                           |  |                   |           
|                                                                      |                           |  |                   | 1,249,024 
|                                                                      |                           |  |                   |           
|STOCKHOLDERS' (DEFICIT) EQUITY:                                       |                           | 
|Preferred stock; $0.01 par value, 1,000,000 shares authorized,        |                           | 
|none issued and outstanding                                           |                           |  |                   |          
|Common stock; $0.001 par value, 200,000,000 shares authorized,        |                           | 
|77,210,248 and 75,210,248 shares issued and outstanding, respectively |                           |  |                   | 77,210    
|Additional paid-in capital                                            |                           |  |                   | 4,709,967 
|Common stock subscribed                                               |                           |  |                   | 2,000     
|Deferred stock compensation                                           |                           |  |                   | (155,750  
|(Deficit) accumulated during the development stage                    |                           |  |                   | (5,198,799
|                                                                      |                           |  |                   |           
|                                                                      |                           |  |                   | (565,372  
|                                                                      |                           |  |                   |           
|                                                                      |                           |  | $                 | 683,652   
|                                                                      |                           |  |                   |           

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

3

---



# PACIFIC FUEL CELL
CORP.  (A Development Stage Company) CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)

|                                                 | For the Three Months
June 30, |  | For the Six Months
June 30, |            | For the Period
May 5, 1998
(Inception) Through
June 30, |  
|------------------------------------------------ | ----------------------------- |  | --------------------------- | ---------- | ------------------------------------------------------- | -
|
|REVENUES:                                        |                               |  |                             |            |                                                         |  
|Product sales                                    |                               |  | $                           | 122,146    |                                                         | $
|Grants                                           |                               |  |                             |           |                                                         |  
|                                                 |                               |  |                             |            |                                                         |  
|                                                 |                               |  |                             | 122,146    |                                                         |  
|COST OF SALES                                    |                               |  |                             | 152,804    |                                                         |  
|                                                 |                               |  |                             |            |                                                         |  
|GROSS (LOSS)                                     |                               |  |                             | (30,658    | )                                                       |  
|                                                 |                               |  |                             |            |                                                         |  
|OPERATING EXPENSES:                              |                               | 
|General and administrative                       |                               |  |                             | 228,999    |                                                         |  
|Research and development                         |                               |  |                             |           |                                                         |  
|Stock compensation                               |                               |  |                             | 33,099     |                                                         |  
|Depreciation and amortization                    |                               |  |                             | 22,548     |                                                         |  
|Change in value of derivative instruments, net   |                               |  |                             |           |                                                         |  
|Loss on extinguishment of debentures             |                               |  |                             |           |                                                         |  
|Loss on asset impairment                         |                               |  |                             |           |                                                         |  
|Loss on disposal of property and equipment       |                               |  |                             |           |                                                         |  
|                                                 |                               |  |                             |            |                                                         |  
|                                                 |                               |  |                             | 284,646    |                                                         |  
|                                                 |                               |  |                             |            |                                                         |  
|(LOSS) FROM OPERATIONS                           |                               |  |                             | (315,304   | )                                                       |  
|                                                 |                               |  |                             |            |                                                         |  
|OTHER INCOME (EXPENSE):                          |                               | 
|Interest income                                  |                               |  |                             |           |                                                         |  
|Interest expense -other                          |                               |  |                             | (9,075     | )                                                       |  
|Interest expense - related party                 |                               |  |                             | (7,577     | )                                                       |  
|Interest expense, noncash financing cost         |                               |  |                             | (16,000    | )                                                       |  
|Foreign currency transaction gain (loss)         |                               |  |                             |           |                                                         |  
|Other                                            |                               |  |                             |           |                                                         |  
|                                                 |                               |  |                             |            |                                                         |  
|                                                 |                               |  |                             | (32,652    | )                                                       |  
|                                                 |                               |  |                             |            |                                                         |  
|(LOSS) BEFORE INCOME TAX EXPENSE                 |                               |  |                             | (347,956   | )                                                       |  
|(BENEFIT)                                        |                               | 
|INCOME TAX EXPENSE (BENEFIT)                     |                               |  |                             |           |                                                         |  
|                                                 |                               |  |                             |            |                                                         |  
|(LOSS) BEFORE EXTRAORDINARY ITEM                 |                               |  |                             | (347,956   | )                                                       |  
|                                                 |                              
|EXTRAORDINARY ITEM, Gain on forgiveness          |                               | 
|of debt, net of income taxes of $12,070          |                               |  |                             |           |                                                         |  
|                                                 |                               |  |                             |            |                                                         |  
|NET (LOSS)                                       |                               |  | $                           | (347,956   | )                                                       | $
|                                                 |                               |  |                             |            |                                                         |  
|Per Share Information:                           |                               | 
|Weighted average shares outstanding -            |                               | 
|basic and diluted                                |                               |  |                             | 76,199,259 |                                                         |  
|                                                 |                               |  |                             |            |                                                         |  
|                                                 |                               |  |                             |            |                                                        
|Net (loss) per common share - basic and diluted: |                               | 
|(Loss) before extraordinary item                 |                               |  | $                           | (0.00      | )                                                       | $
|Extraordinary item                               |                               |  |                             |           |                                                         |  
|                                                 |                               |  |                             |            |                                                         |  
|                                                 |                               |  | $                           | (0.00      | )                                                       | $
|                                                 |                               |  |                             |            |                                                         |  
|                                                 |                               |  |                             |            |                                                        

The accompanying notes
are an integral part of these consolidated financial statements.  4

---



# PACIFIC FUEL CELL
CORP.                                                       (A Development Stage Company)
                                                         CONSOLIDATED STATEMENTS OF CASH
FLOWS                                                       (Unaudited)

|                                                         | For the Six Months
Ended June 30, |  | For the Period
May 5, 1998
(Inception) Through
June 30, |         
|-------------------------------------------------------- | --------------------------------- |  | ------------------------------------------------------- | --------
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                    |                                   |  |                                                         |         
|Net (loss)                                               |                                   |  | $                                                       | (822,052
|Adjustments to reconcile net (loss) to net cash          |                                   | 
|(used in) operating activities:                          |                                   | 
|Depreciation and amortization                            |                                   |  |                                                         | 45,094  
|Stock compensation                                       |                                   |  |                                                         | 36,715  
|Interest expense, noncash financing cost                 |                                   |  |                                                         | 109,000 
|Contributed services to capital                          |                                   |  |                                                         |        
|Reserve for uncollectible accounts receivable            |                                   |  |                                                         |        
|Extraordinary item                                       |                                   |  |                                                         |        
|Loss on disposal of property and equipment               |                                   |  |                                                         |        
|Non-cash derivative expenses                             |                                   |  |                                                         |        
|Accrued expenses converted to notes payable              |                                   |  |                                                         | 66,460  
|Deposit - restocking fee                                 |                                   |  |                                                         |        
|Loss on impairment of property and equipment             |                                   |  |                                                         |        
|Changes in operating assets and liabilities:             |                                   | 
|Accounts receivable                                      |                                   |  |                                                         | 84,315  
|Inventories                                              |                                   |  |                                                         | 6,241   
|Prepaid expenses                                         |                                   |  |                                                         | 4,007   
|Security deposits                                        |                                   |  |                                                         |        
|Accounts payable and accrued expenses                    |                                   |  |                                                         | 115,145 
|Accrued interest - related party                         |                                   |  |                                                         | 10,363  
|Accrued interest - other                                 |                                   |  |                                                         | 1,089   
|Deferred rent                                            |                                   |  |                                                         | (2,471  
|                                                         |                                   |  |                                                         |         
|Net cash (used in) operating activities                  |                                   |  |                                                         | (346,094
|                                                         |                                   |  |                                                         |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                    |                                   | 
|Purchase of fixed assets                                 |                                   |  |                                                         |        
|Net cash received in purchase of Cellfoods               |                                   |  |                                                         |        
|Refund deposit on equipment                              |                                   |  |                                                         |        
|Investment in mineral claims                             |                                   |  |                                                         |        
|                                                         |                                   |  |                                                         |         
|Net cash (used in) investing activities                  |                                   |  |                                                         |        
|                                                         |                                   |  |                                                         |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                    |                                   | 
|Proceeds from issuance of notes payable, related party   |                                   |  |                                                         | 386,000 
|Payments on notes payable, related parties               |                                   |  |                                                         |        
|Deferred debenture costs                                 |                                   |  |                                                         |        
|(Payments) proceeds of convertible redeemable debentures |                                   |  |                                                         |        
|Payments on capital lease obligations                    |                                   |  |                                                         | (20,172 
|Cash received for common stock subscription              |                                   |  |                                                         | 2,000   
|Net proceeds from issuance of common stock               |                                   |  |                                                         | 2,000   
|                                                         |                                   |  |                                                         |         
|Net cash provided by financing activities                |                                   |  |                                                         | 369,828 
|                                                         |                                   |  |                                                         |         
|NET INCREASE IN CASH                                     |                                   |  |                                                         | 23,734  
|                                                         |                                   | 
|CASH AT BEGINNING OF PERIOD                              |                                   |  |                                                         | 25,755  
|                                                         |                                   |  |                                                         |         
|CASH AT END OF PERIOD                                    |                                   |  | $                                                       | 49,489  
|                                                         |                                   |  |                                                         |         

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

5

---



# PACIFIC FUEL CELL
CORP.                               NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                              June 30, 2008
                                               (Unaudited)

# NOTE 1  BASIS OF
PRESENTATION AND ACCOUNTING POLICIES

# Basis of Presentation

The
accompanying unaudited interim consolidated financial statements of Pacific Fuel Cell
Corp. (Pacific Fuel or the Company) have been prepared in
accordance with the accounting principles generally accepted in the United States of
America pursuant to the rules and regulations of the U.S. Securities and Exchange
Commission (the SEC) for interim financial information under Rule 8.03 of
Regulation S-X. Accordingly, the financial statements do not include all the
information and notes required by generally accepted accounting principles in the United
States (GAAP) for complete annual financial statements. In the opinion of
management, the accompanying unaudited interim 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
June 30, 2008, and the results of its operations and cash flows for the reporting periods,
and for the period from May 8, 1998 (inception) to June 30, 2008. Interim
operating results are not necessarily indicative of results that may be expected for the
year ending December 31, 2008, or for any subsequent period. These unaudited interim
consolidated financial statements 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, 2007, as filed with the SEC.

Certain
prior year amounts have been reclassified to conform to the current period presentation.

# Net (Loss) per Common
Share

The
Company computes net (loss) per common share in accordance with SFAS No. 128,
Earnings per Share. Under the provisions of SFAS No. 128, basic
(loss) per share is computed by dividing the net (loss) available to common
stockholders for the period by the weighted-average number of shares of common stock
outstanding during the period. The calculation of diluted net (loss) per share gives
effect to common stock equivalents; however, potential common shares are excluded if their
effect is anti-dilutive.

# NOTE 2  GOING
CONCERN

The
accompanying consolidated interim financial statements have been prepared assuming the
Company will continue as a going concern. The Company has suffered recurring losses,
generated no significant revenues, and as of June 30, 2008, has an accumulated
(deficit) since inception of ($5,198,799). The Company cannot provide assurance that
it can achieve or sustain profitability on a quarterly or annual basis in the future. The
Company anticipates it will continue to incur losses until it is able to establish
significant levels of revenue while controlling its expenses. The Companys success
is dependent upon the successful development and marketing of its products, as to which
there is no assurance. Any future success that the Company might enjoy will depend upon
many factors, including factors out of its control or which cannot be predicted at this
time. These factors may include changes in or increased levels of competition, including
the entry of additional competitors and increased success by existing competitors, changes
in general economic conditions, increases in operating costs, including costs of supplies,
personnel and equipment, reduced margins caused by competitive pressures and other
factors. These conditions may have a materially adverse effect upon the Company or may
force it to reduce or curtail operations. In addition, the Company will require additional
funds to sustain and expand its sales and marketing activities, particularly if a
well-financed competitor emerges. There is no assurance that the Company will be able to
obtain debt or equity financing on terms acceptable to the Company, if at all. The
inability to obtain sufficient funds from operations or external sources would require the
Company to curtail or cease operations. Any additional equity financing may involve
substantial dilution to then existing stockholders. The financial statements do not
include any adjustments relating to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should the Company
be unable to continue as a going concern.

4

---



# NOTE 3 
CONVERTIBLE NOTE PAYABLE, RELATED PARTY

During
the six months ended June 30, 2008, the Company entered into convertible notes
payable with a related party aggregating $386,000. At June 30, 2008, the Company has an
aggregate convertible notes payable to the related party of $436,000. The related party is
an officer, director, and shareholder of the Company. The convertible notes payable bear
interest at 10% per annum, have a term of one year from the date entered into and are
convertible into shares of the Companys common stock at a rate of $0.10 and $0.06
per share. The notes are secured by substantially all assets of the Company, except for
the property and equipment encumbered by the terms of the capital lease obligations. As
the notes are immediately convertible at inception of the note, any beneficial conversion
feature was recorded as interest expense and additional paid-in capital during the period.
As such, for the three and six months ended June 30, 2008, the Company recognized $16,000
and $109,000 as interest expense, non cash financing cost. Interest expense on the
convertible notes to related party for the three months and six ended June 30, 2008, was
$7,577 and $10,363, respectively, and $-0- for the comparative periods ended June 30,
2007.

# NOTE 4 
CONVERTIBLE NOTE PAYABLE, OTHER

During
the quarter ended June 30, 2008, the Company entered into three (3) convertible notes
payable with a creditor aggregating $66,460. The convertible notes payable bear interest
at 10% per annum, have a term of one year from the date entered into and are convertible
into shares of the Companys common stock at a rate of $0.195 and $0.10 per share.
The notes are unsecured. As the notes are immediately convertible at inception of the
note, any beneficial conversion feature was recorded as interest expense and additional
paid-in capital during the quarter ended June 30, 2008. There was no beneficial conversion
for any of these three notes. Interest expense on these convertible notes for the three
and six months ended June 30, 2008, was $1,089 and $1,089, respectively, and $-0- for the
comparative periods ended June 30, 2007.

# NOTE 5  CAPITAL
LEASE OBLIGATIONS

In
April 2008, the Company entered into a capital lease for $43,000 secured by equipment. The
lease has an effective interest rate approximating 13.0%, requires monthly payments of
$1,141, and has a five year term. At the end of the lease term, the Company has the option
to purchase the equipment for a $1.

Future
minimum rental payments under capital leases are as follows as of June 30, 2008:

|                                   | 
|---------------------------------- | 
|2008                               | 
|2009                               | 
|2010                               | 
|2011                               | 
|2012                               | 
|Thereafter                         | 
|                                   | 
|                                   | 
|                                   | 
|Less: amount representing interest | 
|                                   | 
|                                   | 
|                                   | 
|Less: current portion              | 
|                                   | 
|                                   | 
|Long-term portion                  | 
|                                   | 
|                                   | 

Interest
expense on the capital leases for the three months and six ended June 30, 2008, was $7,225
and $9,861, respectively, and $-0- for the comparative periods ended June 30, 2007.

5

---



# NOTE 6 
COMMITMENTS AND CONTINGENCIES

On
April 2, 2008, the Board of Directors approved the terms of a resolution to enter
into an employment compensation agreement with the Companys president, chief
executive officer, and director. The resolution authorizes the Company to accrue salary of
$20,000 per month for his continued full-time employment. At such time that the Company
has positive cash flow from operations, the salary will be paid in cash and the amount
accrued shall also be paid at the rate of $10,000 per month or so much thereof that the
Companys cash flow permits. All accrued but unpaid amounts shall bear interest at
the rate of 5% per annum, compounded annually. The Board of Directors approved the initial
resolution for the compensation accrual on February 29, 2008, and the Company accrued
$20,000 per month of compensation beginning March 2008.

# NOTE 7 
STOCKHOLDERS (DEFICIT)

# 2008 Stock Incentive Plan

On
February 29, 2008, the Company adopted the 2008 Stock Incentive Plan (the 2008
Plan) to enhance the Companys ability to attract and retain the services of
qualified employees, officers, directors and consultants. On April 2, 2008, the
Company amended the 2008 Plan to increase the number of shares reserved under the plan
from 6,000,000 to 16,000,000. The Company may grant options or restricted stock awards
under the terms of the 2008 Plan. The exercise price of options granted under the 2008
Plan shall not be less than 100% of the fair market value of the stock on the grant date
for incentive stock options and non-qualified options granted to a 10% holder, as defined
in the 2008 Plan. The exercise price of other non-qualified stock options shall not be
less than 90% of the fair market value of the stock on the date of grant. The exercise
price of options or purchase price of restricted shares of common stock may be paid in
cash, net share settlement, or other methods as provided by the terms of the 2008 Plan.
Options vest over terms as decided upon by the Board of Directors. However, options issued
to employees who are not officers or directors will vest at a minimum rate of
20 percent per year. All options expire no later than 10 years after the grant
date. The 2008 Plan is administered by the Companys Board of Directors or a
designated committee thereof.

# Options

On
February 29, 2008, the Company granted two (2) five-year options to purchase 200,000
shares of the Companys $0.001 par value common stock to each of its two directors,
at an exercise price of $0.17 per share, the market price on the date of the grant.
One-half of the options vest one year from the date of grant and thereafter at a rate of
4.17% per month. The 400,000 options were valued at $57,859 using the Black-Scholes option
pricing model and will be expensed over the vesting period. The options were valued using
a volatility of 126.040%, a risk free interest rate of 2.5%, an expected life of
5.0 years and zero quarterly dividends. During the three and six months ended June
30, 2008, $10,849 and $14,765 respectively were recognized as stock compensation expense.

# Stock Grant

On
April 2, 2008, the Company approved a grant of up to 8,000,000 million shares of
restricted stock to the Companys president, chief executive officer, and director.
The restricted shares will be issued, at the rate of 2,000,000 shares per quarter, on the
first day of each calendar quarter, effective beginning April 2008 and continuing to
January 2009, provided the grant recipient continues to be a full-time employee of the
Company to the respective issuance date. Each issuance of 2,000,000 million shares will
vest in full two years from the date of issuance or upon the grant recipients death.
On May 17, 2008, the grant recipient exercised the April 1, 2008, stock grant for $2,000
and $178,000 of stock compensation was recognized based on the market price on the date of
the grant, less the consideration received from the grant recipient. The stock
compensation will be amortized over the vesting period of the stock grant and for the
quarter ended June 30, 2008, $22,250 of stock compensation was recognized.

# NOTE 8  SUBSEQUENT
EVENTS

Subsequent
to June 30, 2008, the Company issued one (1) convertible note payable to a creditor
in the amount of $2,129. The note bears interest at 10% per annum, has a term of one year,
and is convertible into shares of the Companys common stock at $0.10 per share.

6

---



Prior
to June 30, 2008, the grant recipient paid $2,000 to exercise the July 1, 2008, stock
grant and $78,000 of stock compensation was recognized based on the market price on the
date of the grant, less the consideration received from the grant recipient. The stock
compensation will be amortized over the vesting period of the stock grant. The proceeds
are reported as common stock subscribed in the accompanying financial statements.

|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 consolidated
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 us, or on our behalf, whether or not in future filings with the
Securities and Exchange Commission. Forward-looking statements are statements not
constituting 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 us, or on our behalf. We disclaim any obligation to update forward-looking
statements except as required by law.

Pacific
Fuel Cell Corp. (we, us, our, or the
Company) is a Nevada corporation that, since 1998 initially pursued the
development and production of low cost fuel cells for transportation. We revised our
original business plan as a result of the 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.

# Plan of Operations

We
plan to continue operating our bipolar plate, end plate and flow plate manufacturing plant
in Willoughby, Ohio. We also plan to expend approximately $550,000 to purchase additional
equipment for that plant during the next nine months, so long as we are able to raise
sufficient additional funds. Raising additional funds is essential for us to be able to
attain a sufficient level of operating profits to become self-sustaining.

During
the next twelve months, we intend to hire additional employees. In order to be able to do
so, we must receive additional funds, either from operations, which requires that we
increase sales and control costs, or from investment.

Our
research and development expenses are expected to be approximately $50,000 during the next
twelve months. Those expenses relate to our production of plates. We currently have no
active initiatives to exploit our marketing rights in nanoMEA technology or to conduct
other technology development.

We
require additional funds in order to continue and expand our operations. In the three
month period ended June 30, 2008, we received loans in the total amount of $236,000 from
George Suzuki. To secure these loans, we have granted Mr. Suzuki a security interest
in substantially all of our assets. Prior to accepting these loans, the Company privately
sought investments from others, and the Company has had difficulty obtaining investment
funds.

# Liquidity and Capital
Resources

Since
May 1988 we have financed our operations through the issuance of debt and equity
securities and loans from stockholders. As of June 30, 2008, we had $111,552 of total
current assets of which $49,489 was cash, and a working capital deficit of $858,910. Our
practice is to invest excess cash, where available, in short-term money market investment
instruments.

7

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We
are continuing to seek additional working capital necessary to fund our current operations
through the remainder of 2008. We need financing immediately to cover administrative
expenses and on-going expenses of operations, including manufacturing costs to produce
product. Management is seeking additional sources of equity and/or debt financing.

We
also will require 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 capital when
needed. Our inability to obtain sufficient working capital from external sources when
needed will have a material adverse affect on our plan of operations, results of
operations and financial condition.

Cash
used in operating activities during the six months ended June 30, 2008 was $346,094,
compared to $597,749 used for the comparable period of the prior year. The decrease
primarily consists of a reduction in accounts receivable aggregating $84,315, and an
increase in accounts payable of $115,145 in the current-year period. Operating activities
consisted primarily of product production and the general operation of our corporate
office.

We
did not utilize any cash in investing activities during the six months ended June 30, 2008
as compared to $109,056 utilized by investing activities for the comparable period of the
prior year that was attributable to the purchase of fixed assets, net of a deposit refund
on equipment.

Cash
provided by financing activities during the six months ended June 30, 2008, was $369,828,
compared to cash provided by financing activities of $893,000 for the comparable period of
the prior year. Cash provided by financing activities in the period ended June 30, 2008,
consists primarily of proceeds from convertible notes to a related party and for the
comparable prior year period consisted of proceeds from the sale of common stock. As
discussed above in this report, we are attempting to raise additional working capital
funds that may take the form of equity, debt or a combination of such financing
facilities.

# Trends

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, profitable business by utilizing proven manufacturing
techniques in a dedicated environment. To this end we have started manufacturing bipolar
plates, end plates and flow plates in our plant in Willoughby, Ohio. We anticipate 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 likely to occur at some future time, 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, we know of
no major commercial breakthrough, which we attribute to the high cost of the products and
the lack of consumer acceptance in the automobile industry.

Management
believes that a viable use of fuel cells, as currently developed, is as a power source for
forklifts in warehouse operations. 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 warehouse operations. Fuel cell powered forklifts 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 sales with bipolar plates, end plates and flow plates for fuel cells used
in warehouses, or if we do attempt to expand in this manner, that our efforts will be
successful.

8

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# RESULTS OF OPERATIONS

# Three Months Ended June
30, 2008 and 2007

During
the three months ended June 30, 2008, we generated revenues of $122,146 as compared with
revenues of $135,923 revenues during the three months ended June 30, 2007, or a decrease
of $13,777. The revenues were generated from the development of our business of
manufacturing bipolar plates as is more fully described above under Plan of
Operations.

During
the three months ended June 30, 2008, we incurred costs and expenses totaling $437,450 as
compared to costs and expenses of $396,555 for the three months ended June 30, 2007. The
costs incurred in the three months ended June 30, 2008, included $152,804 related to our
bipolar plates manufacturing, and $228,999 in general and administrative expenses as
compared to $160,906 related to our bipolar plates manufacturing, and $194,658 in general
and administrative expenses for the prior year period. General and administrative expenses
increased $34,341 during the three months ended June 30, 2008 and the increase was mainly
comprised of increased executive compensation. Expenses for depreciation and amortization
were $22,548 for the period ended June 30, 2008, as compared to the prior year period of
$15,631. Stock compensation expense was $33,099 and $15,000, respectively, for the three
months ended June 30, 2008 and 2007. During the current-years three month period, we
devoted a substantial amount of our time and resources to the operations of our new
business described herein under Plan of Operations, and incurred no time and
expenses relating to research and development efforts. During the three months ended June
30, 2008, we incurred a non-cash charge of $16,000 related to the beneficial conversion
feature of convertible notes issued.

As
a result, during the three months ended June 30, 2008, we incurred a net loss of
$(347,956) as compared to a net loss of $(260,406) for the three months ended June 30,
2007, or an increased loss of $(87,550).

# Inflation

Although
our operations are influenced by general economic conditions, we do not believe that
inflation had a material effect on our results of operations during the three-month
periods ended June 30, 2008 and 2007.

# Six Months Ended June
30, 2008 and 2007

During
the six months ended June 30, 2008, we generated revenues of $208,451 as compared with
revenues of $135,923 revenues during the six months ended June 30, 2007, or an increase of
$72,528. The increase is due to no revenues generated in the first quarter of the prior
year. The revenues were generated from the development of our business of manufacturing
bipolar plates as is more fully described above under Plan of Operations.

During
the six months ended June 30, 2008, we incurred costs and expenses totaling $897,386 as
compared to costs and expenses of $822,700 for the six months ended June 30, 2007. The
costs incurred in the six months ended June 30, 2008, included $348,738 related to our
bipolar plates manufacturing, and $466,839 in general and administrative expenses as
compared to $313,861 related to our bipolar plates manufacturing, and $347,849 in general
and administrative expenses for the prior year period.. General and administrative
expenses increased $118,990 during the three months ended June 30, 2008, and was mainly
comprised of increased executive compensation, increased professional fees and increased
salaries for sales and production personnel and medical insurance coverage for employees.
Expenses for depreciation and amortization were $45,094 and $22,448 for the six months
ended June 30, 2008 and 2007, respectively. Stock compensation expense was $36,715 as
compared to the prior year period of $30,000. During the current-years six month
period, we devoted a substantial amount of our time and resources to the operations of our
new business described herein under Plan of Operations, and incurred no time
and expenses relating to research and development efforts as compared to the prior period
ended June 30, 2007, where we incurred $108,542 for research and development. During the
six months ended June 30, 2008, we incurred a non-cash charge of $109,000 related to the
beneficial conversion feature of convertible notes, related party.

9

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As
a result, for the six months ended June 30, 2008, we incurred a net loss of $(822,052) as
compared to a net loss of $(686,351) for the six months ended June 30, 2007, or an
increased loss of $(135,701).

# Inflation

Although
our operations are influenced by general economic conditions, we do not believe that
inflation had a material effect on our results of operations during the three-month
periods ended June 30, 2008 and 2007.

# ITEM 3.     QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There
have been no significant changes in our primary market risk exposures or in how these
exposures are managed during the three month period ended June 30, 2008.

# ITEM 4T.     CONTROLS AND
PROCEDURES.

# Evaluation of Disclosure
Controls and Procedures

We
maintain disclosure controls and procedures (as defined in Rule 13a-15(f) and Rule
15d-15(f) of the Securities Exchange Act of 1934 (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. It should be noted that any system of controls, however well designed and
operated, can provide only reasonable and not absolute assurance that the objectives of
the system will are met. As of June 30, 2008, our Chief Executive Officer/Chief Financial
Officer has concluded, based upon his evaluation of these disclosure controls and
procedures as of the end of the period covered by this Report, that, as of that date,
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.

# Changes in Internal
Controls

In
connection with the evaluation of the of the Companys internal controls over
financial reporting during the three months ended June 30, 2008, the Companys
Principal Executive Officer/Chief Financial Officer has determined that there were no
changes to the Companys internal controls over financial reporting during the
quarter that have materially affected or are reasonably likely to affect the
Companys internal controls over financial reporting.

# PART II  OTHER
INFORMATION

# ITEM 1.   LEGAL PROCEEDINGS

From
time to time, we may become involved in litigation arising in the normal course of
business.

# ITEM 2.   UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Since
April 1, 2008, the Company has borrowed an additional $236,000 from George Suzuki.
These loans are evidenced by secured convertible promissory notes. The notes bear interest
at a rate of 10% per annum and are secured by substantially all of the assets of the
Company. The amounts due under the notes are convertible, in whole or in part, at the
option of the holder into our Common Stock. The dates, original principal amounts, per
share conversion prices and maturity dates of the notes are as follows:

|Date       |  | Principal Amt. |   | Conversion Price |  | Maturity |     
|---------- |  | -------------- | - | ---------------- |  | -------- | ----
|04/08/2008 |  |                | $ | 50,000           |  | $        | 0.10
|04/22/2008 |  |                | $ | 50,000           |  | $        | 0.10
|05/06/2008 |  |                | $ | 50,000           |  | $        | 0.10
|05/17/2008 |  |                | $ | 48,000           |  | $        | 0.10
|06/30/2008 |  |                | $ | 38,000           |  | $        | 0.10

10

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The
Company is relying upon the exemption from registration under Section 4(2) of the
Securities Act of 1933 for the issuance of the convertible promissory notes and any
related issuance of Common Stock.

On
April 2, 2008, as compensation for George Suzuki's eight years of service to the
Corporation, as president and CEO, the Corporation entered into a Restricted Stock
Purchase Agreement with George Suzuki for 2,000,000 shares of Common Stock vesting on the
second anniversary of the date of the agreement or his termination of employment during
such period by reason of death.  The Company is relying upon the exemption from
registration under Section 4(2) of the Securities Act of 1933 for the issuance of the
Common Stock.

On
April 10, 2008, as payment for legal services, the Corporation issued a one-year
convertible promissory note to The Yocca Law Firm LLP in the amount of $20,978.55.  This
note bears interest at the rate of 10% per annum and is convertible, in whole or in part,
at the option of the holder into our Common Stock at the average closing price for the
period of billing covered by the note but not less than ten cents ($0.10) per share.  On
May 6, 2008, as payment for legal services, the Corporation issued a one-year convertible
promissory note to The Yocca Law Firm LLP in the amount of $40,186.78.  This note bears
interest at the rate of 10% per annum and is convertible, in whole or in part, at the
option of the holder into our Common Stock at the average closing price for the period of
billing covered by the note but not less than ten cents ($0.10) per share.  On June 30,
2008, as payment for legal services, the Corporation issued a convertible promissory note
to The Yocca Law Firm LLP in the amount of $5,294.56 with a maturity date of May 6, 2009.
 This note bears interest at the rate of 10% per annum and is convertible, in whole or in
part, at the option of the holder into our Common Stock at the average closing price for
the period of billing covered by the note but not less than ten cents ($0.10) per share.
 On August 1, 2008, as payment for legal services, the Corporation issued a convertible
promissory note to The Yocca Law Firm LLP in the amount of $2,129.41 with a maturity date
of May 6, 2009.  This note bears interest at the rate of 10% per annum and is
convertible, in whole or in part, at the option of the holder into our Common Stock at
the average closing price for the period of billing covered by the note but not less than
ten cents ($0.10) per share.  The Company is relying upon the exemption from registration
under Section 4(2) of the Securities Act of 1933 for the issuance of the convertible
promissory notes and any related issuance of Common Stock.

ITEM 3.   DEFAULTS UPON SENIOR
SECURITIES

None.

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

None.

ITEM 5.   OTHER INFORMATION

In
the second quarter 2008, we have replaced a significant number of our key employees
employed at our plant located in Willoughby, Ohio.  In the course of doing so, we believe
that we have reestablished and improved our manufacturing processes.

Nonetheless
we have suffered a slowdown in manufacturing output for second quarter of 2008.  The
former employees took with them valuable know how and information, and their actions
could result in the loss of client relationships or new business opportunities.  As such,
we are reviewing all legal recourse we may have against these former employees and the
newly-formed competitor.

ITEM 6.   EXHIBITS

Please
see Exhibit Index located behind the signature page.

11

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SIGNATUREPursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.

|                |                                                                                                                                                                
|--------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|August 18, 2008 | PACIFIC FUEL CELL CORP.
                                         /s/ George Suzuki
George Suzuki
President, Chief Executive Officer and
Chief Financial Officer

---



# EXHIBIT INDEX

|Exhibit No. | Description
|----------- | -----------

|10.1(1) | Form
of one-year Secured Convertible Promissory Notes.
|------- | ------------------------------------------------------

| | No. 1 | Issued to George Suzuki in the original principal amount of $50,000,
                       dated December 12, 2007.
| | ----- | --------------------------------------------------------------------------------------------------------------------

| | No. 2 | Issued to George Suzuki in the original principal amount of $20,000,
                         dated January 7, 2008.
| | ----- | --------------------------------------------------------------------------------------------------------------------

| | No. 3 | Issued to George Suzuki in the original principal amount of $30,000,
                         dated February 1, 2008.
| | ----- | ---------------------------------------------------------------------------------------------------------------------

| | No. 4 | Issued to George Suzuki in the original principal amount of $50,000,
                         dated February 25, 2008.
| | ----- | ----------------------------------------------------------------------------------------------------------------------

| | No. 5 | Issued to George Suzuki in the original principal amount of $50,000,
                         dated March 19, 2008.
| | ----- | -------------------------------------------------------------------------------------------------------------------

| | No. 6 | Issued to George Suzuki in the original principal amount of $50,000,
                         dated April 8, 2008.
| | ----- | ------------------------------------------------------------------------------------------------------------------

| | No. 7 | Issued to George Suzuki in the original principal amount of $50,000,
                        dated April 22, 2008.
| | ----- | ------------------------------------------------------------------------------------------------------------------

| | No. 8 | Issued to George Suzuki in the original principal amount of $50,000,
                         dated May 6, 2008
| | ----- | ---------------------------------------------------------------------------------------------------------------

| | No. 9 | Issued to George Suzuki in the original principal amount of $48,000 dated
                         May 17, 2008
| | ----- | ---------------------------------------------------------------------------------------------------------------

| | No. 10 | Issued to George Suzuki in the original principal amount of $38,000 dated
                         June 30, 2008
| | ------ | ----------------------------------------------------------------------------------------------------------------

|10.3(1) | Terms
and Conditions of Salary Accrual for George Suzuki
|------- | --------------------------------------------------------

|10.4(1) | Form
of Restricted Stock Purchase Agreement
|------- | -------------------------------------------

| | No. 1 | Issued to George Suzuki for 2,000,000 shares of Common Stock dated
              April 2, 2008
| | ----- | ----------------------------------------------------------------------------------------------

| | No. 2 | Issued to George Suzuki for 2,000,000 shares of Common Stock dated
              July 1, 2008
| | ----- | ---------------------------------------------------------------------------------------------

|10.5(1) | 2008
Stock Incentive Plan, as amended.
|------- | --------------------------------------

|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
Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906               of
the Sarbanes-Oxley Act of 2002.
|---- | -------------------------------------------------------------------------------------------------------------------------------------

---

|(1) | Filed
with the  Securities  and Exchange  Commission  in the Exhibits to Form 10-KSB filed on
           April 14, 2008 and is incorporate by reference herein.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

13

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