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: June 30, 2004

                         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 August 19, 2004, was 65,443,971 shares.


<PAGE>

                                     PART I

ITEM 1. FINANCIAL STATEMENTS.

     Our  unaudited  financial  statements  for the  three  month  and six month
periods ended June 30, 2004, are attached hereto.

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.

     In April 2004, we, along with a then newly created wholly owned  subsidiary
of our company,  PFCE Acquisition  Corp, a Nevada  corporation,  entered into an
Agreement and Plan of Merger with Cellfoods  Corporation,  a Nevada  corporation
("Cellfoods"),  whereby  our  wholly  owned  subsidiary  merged  with  and  into
Cellfoods,  which  survived  this  transaction  and is  currently a wholly owned
subsidiary.  Effective  on or about May 17, 2004,  this merger was  consummated.
Cellfoods is a development  stage  corporation that was organized on November 1,
2001,  and is engaged in the  business  of  developing  a new,  more  nutritious
soybean  powder for use in food  preparation.  This product has a greater  shelf
life than current soybean powders.  The principal product,  Soycell Powder, is a
uniquely  processed soybean powder whereby each cell of the soybean is separated
by an exzymatic process.  Because the powder remains in cellular  formation,  it
does not smell or taste like  conventional  soybean powder or flour. It has very
little taste or smell, which makes it easier to be used as an additive or filler
in recipes and food products. The product and be produced and stored for up to 6
months or more without  degradation,  compared to  conventional  soybean powder,
which is good for only 3 months before degradation occurs.

     As of the date of this Report, we are considering  "spinning off" Cellfoods
as a separate public company in the future, but no definitive  decision has been
reached in this regard.

     We did not generate any revenues during the six month period ended June 30,
2004.  During the six month period ended June 30,  2004,  we incurred  costs and
expenses totaling  $59,682,  including $17,462 in research and development costs
and $31,574 in selling,  general and  administrative  expense.  As a result,  we
incurred  a net loss of  $(59,682)  during the six month  period  ended June 30,
2004. Because we did not generate any revenues during the six month period ended
June 30, 2004,  following is our Plan of Operation,  rather than a comparison of
results of operations.


                                        2

<PAGE>

Plan of Operation

     Our  initial  business  plan was 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  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.  As of the date of
this  Report,  in order to bring  about  commercialization,  we are  focused  on
building a commercial prototype, enhancing product performance, reducing product
costs,  designing  market-  ready  products,   developing   volume-manufacturing
capability, and building customer and supplier relationships.

     On November 21, 2002, we entered into an agreement  with the  University of
California at Riverside to develop a  commercially  viable fuel cell  prototype.
The initial term of this agreement ran through  February 2003. In February 2003,
we entered into an amendment  which extended the term of this agreement  through
February 29, 2004. On May 4, 2004,  this agreement was extended  again,  through
April 30, 2007.  Pursuant to the terms of this  agreement,  as amended,  we have
agreed to reimburse the  University  for all costs and expenses  incurred,  both
direct and indirect,  in an amount not to exceed $181,271,  pursuant to a budget
agreed to by the parties.  The University,  through its SMART program,  provides
matching funds for all direct costs applicable to development of our project. We
tendered an initial payment of $70,000 upon execution of the initial  agreement,
and a second advance payment of $61,266 was tendered in March 2003,  pursuant to
our  exercise  of our  option  to  extend  this  agreement.  As a result  of the
amendment  extending  this  agreement  which was executed in April 2004,  we are
required to make additional payments totaling $150,486, including $50,005, which
was paid in May 2004,  $50,229,  which is due on or before May 1, 2005, with the
balance of  $50,252  due May 1, 2006.  All  information  which we provide to the
University  has been  deemed  confidential  for a period  of one (1) year  after
expiration or termination of the agreement.

     As  previously  reported,  we have applied for  additional  matching  funds
through the SMART program.  We recently obtained a favorable decision and expect
a grant of approximately $120,000 to be provided over the next three years. This
also  provides a multi-year  relationship  with the  University of California at
Riverside.

     As a result of the above  described  relationship  with the  University  of
California at Riverside, on November 10, 2003, we announced that a research team
headed by Professor  Yushan Yan of the University has  successfully  developed a
fuel cell using carbon  nanotube-based  electrodes.  As a result of our research
and development activities with the University, 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 minimize or eliminate the
use of platinum.  If successful,  the result will be low cost fuel cells at high
volume  production  levels.  We  believe  that  a fuel  cell  unit  can  replace
conventional  batteries  because a fuel cell unit should provide longer usage at
lower consumer cost.  While no assurances can be provided that this  development
will result in our  generating  revenues,  this  development  is  considered  by
management to be a significant  step forward in the use of fuel cell technology.
We expect to have additional  information  concerning this development available
in the near future.


                                        3

<PAGE>

     We intend to use our proprietary technology to severely reduce or eliminate
the  need  for  platinum  as a  catalyst.  We  believe  our  next  step  in  the
implementation  of our  business  plan  is to  develop  a  viable  manufacturing
prototype  which,  if it  meets  expectations,  will be ready  to be  placed  in
production.  In order to  accomplish  this  objective,  we have  opened  our own
laboratory to develop this additional  prototype.  We were able to open this new
lab as a result of receipt of funding more fully described under  "Liquidity and
Capital Resources," below.

     We have also entered into preliminary  discussions with potential strategic
partners to utilize our current technology  position in order to assume a market
leadership position in our target market of micro fuel cells. However, as of the
date of this  Report,  no  agreements  have been  entered  into and there are no
assurances  that  such  discussions  or any  such  agreement  will  occur in the
foreseeable future.

     We have also  investigated  the possibility of using our  proprietary  fuel
cell technology to provide  electricity for small commercial  establishments and
households.  Although  we do not  currently  have the rights to utilize our fuel
cell  technology  in this market,  we believe  that, if we decide to pursue this
market,  we can acquire  such  rights  from  Fullerene  on  advantageous  terms.
However,  there can be no assurances that we will be able to acquire such rights
in the future.

     Fuel  cell  acceptance   appears  to  be  accelerating.   Large  and  small
corporations,  as well as the United States government,  all appear convinced of
the value of fuel cell technology.  Despite all this activity, we have still not
seen a commercial  product that, in our opinion,  is  competitively  priced with
other forms of energy.  We believe that,  while fuel cell products will begin to
proliferate,  market  acceptance  will come only when prices fall to competitive
levels.

     There are currently  several  different  technologies  in use for fuel cell
power generation. Each of these processes differs in methodology, suitable scale
and efficiency. Our interest (and patent applications) is in the Proton Exchange
Membrane (PEM) method which is very suitable for low temperature operation.

Liquidity and Capital Resources

     At June 30,  2004,  we had  $739,849  in cash.  We had  $1,292 in  accounts
payable, plus $917 in accrued interest payable.

     In May 2004,  we  entered  into a  financing  arrangement  with HEM  Mutual
Assurance LLC, Minneapolis,  Minnesota,  an accredited investor (as that term is
defined under Rule 501,  Regulation D,  promulgated  under the Securities Act of
1933,  as amended) to issue up to $1,000,000  in aggregate  principal  amount of
convertible debentures pursuant to Rule 504 of Regulation D under the Securities
Act of 1933, as amended. These Debentures were originally issued by Cellfoods in
two  separate  convertible  debentures  of  $997,000  and  $3,000,  respectively
(hereinafter  referred to in the aggregate as the "Debentures").  As of the date
of this Report, an aggregate of approximately $541,716 has been converted by the
Debenture  Holder into shares of our common stock. See "Part II, Item 2, Changes
in Securities," below.

     We believe our next step in the  implementation  of our business plan is to
develop a viable manufacturing  prototype which, if it meets expectations,  will
be ready to be placed in  production.  We hope to accomplish  this  objective by
opening our own laboratory to develop this  additional  prototype,  which is now
open as a result of the financing described above.

     We also had  outstanding  loans in the  principal  amount  of  $60,000  and
$10,000, due to Fullerene, USA, Inc., our majority stockholder. In regard to the
$60,000 loan, we originally received an unsecured, non-interest bearing loan for
$60,000 which was due September 14, 2002. On

                                        4

<PAGE>

December 5, 2002,  this note was  cancelled  with the consent of  Fullerene  and
replaced with a note  extending  the due date to August 14, 2004.  Both of these
notes have been paid in full, during the period ended June 30, 2004.

     We believe that we currently  have  sufficient  funds  available  for us to
continue to implement  our  business  plan for the next 12 months.  However,  we
estimate that we will require an additional  $2.5 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,
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.  The inability to obtain  sufficient  funds from external  sources when
needed  will have a material  adverse  affect on our results of  operations  and
financial condition.

Subsequent Event

     In July 2004,  we received  notice that we had been  selected by the United
States  Department  of  Energy  for a Phase I STTR  (Small  Business  Technology
Transfer) grant. We expect to receive an initial grant in the amount of $100,000
beginning in September 2004. We intend to apply for additional  grant money from
the US government,  as well as other potential sources, in the future. There are
no assurances that our applications will be approved.

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.  In this regard,
while  there are no  assurances,  we are  hopeful  that we will be able to raise
approximately $2.5 million in additional funding in order to allow us to produce
and demonstrate to fuel cell manufacturers a commercially viable prototype.  See
"Liquidity and Capital Resources," above.

     Our new  laboratory  is  also  expected  to  function  as a hub to  attract
additional researchers from the University of California at Riverside,  which is
on the path to become a leader in the nano-  technology  field.  We believe that
there are many potential  useful  applications of  nano-technology  which can be
expected in the immediate future,  including fuel cells and flat panel displays.
Also at this laboratory,  functional  prototypes will be made before bringing in
manufacturers.  Our plan is to have the manufacturers inspect the prototype once
completed in order to generate  their own test  production  unit. If successful,
manufacturing  can  commence  producing  products  in  quantity  in less than 12
months. We foresee the initial  application to be a battery replacement for cell
phones,  mobile notebook  computers/laptops  and other applicable  applications.
This segment is known as the micro fuel cell  market.  We expect that these fuel
cells will eventually be produced like modular computer chips and components.

We believe that the reason that the fuel cell market is not rapidly expanding at
this time is due to high  manufacturing  costs. We believe that this development
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. While no assurances can be
provided,  once the problem of high costs is resolved,  we expect the micro fuel
cell market to increase significantly.


                                        5

<PAGE>

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 six month period ended June 30, 2004.

ITEM 3. CONTROLS AND PROCEDURES

     Within 90 days prior to the date of filing of this quarterly report on Form
10-QSB,   we  carried  out  an  evaluation,   under  supervision  and  with  the
participation of our management, including our CEO and CFO, of the effectiveness
of the design and operation of our disclosure  controls and procedures  pursuant
to  Exchange  Act Rule  13a-14.  Based  upon  that  evaluation,  our CEO and CFO
concluded  that our  disclosure  controls and procedures are effective in timely
alerting them to material  information relating to us required to be included in
our periodic SEC filings. Subsequent to the date of that evaluation,  there have
been  no  changes  in  internal   controls  or  in  other   factors  that  could
significantly affect internal controls, nor were any corrective actions required
with regard to significant deficiencies and material weaknesses.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS - None

ITEM 2. CHANGES IN SECURITIES

     In May 2004,  we issued  30,000,000  shares of our common stock into escrow
pursuant to the terms and  conditions  contained  in the  definitive  agreements
relating to the  convertible  debenture more fully described in "Part I, Item 2,
Liquidity  and Capital  Resources,"  above.  As of June 30,  2004,  we issued an
aggregate of 1,203,969 of these escrowed shares for aggregate  consideration  of
approximately  $324,115  (approximately  $.25 per share). In the event we either
repay the  outstanding  Debenture  or no other  shares  are issued  pursuant  to
conversion  of the same,  the  balance of the  shares  will be  returned  to our
treasury.

Subsequent Events

     In July 2004, the holder of our Convertible Debentures elected to convert a
portion of this outstanding  Debenture into an additional  800,002 shares of our
common stock at a conversion price of approximately $.27 per share.

     In addition, in August 2004, we entered into a consulting agreement with an
individual  to assist us in the  development  and  implementation  of strategies
relating to our fuel cell  prototype,  as well as merger,  acquisition  or joint
venture opportunities.  In consideration  therefore, we issued this individual a
three (3) year option to purchase up to 250,000 shares of our common stock at an
exercise price of $.035 per share, the market price of our common stock when the
agreement was reached.  If certain goals are met, this  individual  will also be
entitled to receive options to purchase up to an additional  2,250,000 shares of
our common stock at a price to be determined in the future,  based upon our then
current market price of our common stock. The aforesaid  options to purchase the
2,250,000 shares have not yet vested as of the date of this Report.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None


                                        6

<PAGE>

ITEM 5. OTHER INFORMATION - None

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

     (a) Exhibits

         31.      Certification of Financial Statements in accordance
                  with Section 302 of the Sarbanes-Oxley Act of 2002

         32.      Certification of Financial Statements in accordance
                  with Section 906 of the Sarbanes-Oxley Act of 2002

     (b) Reports on Form 8-K.

     In May 2004,  we filed a report on Form 8-K,  advising that a newly created
wholly owned subsidiary of ours and Cellfoods Corporation,  a Nevada corporation
("Cellfoods"),  entered into an Agreement and Plan of Merger whereby, subject to
the  conditions  stated  therein,  at the  effective  time of the  merger,  this
subsidiary company would merge with and into Cellfoods,  which will survive as a
wholly owned subsidiary of our company. Effective on or about May 17, 2004, this
merger was consummated and we acquired Cellfoods.

     Cellfoods is a development stage corporation that was organized on November
1, 2001,  engaged in the business of developing  soybean  powder for use in food
preparation.  Cellfoods had  immaterial  assets and  liabilities  as of June 30,
2004.  The balance of the  information  contained in the  aforesaid  Form 8-K is
incorporated herein as if set forth.


                                        7

<PAGE>

                            PACIFIC FUEL CELL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2004
                                   (UNAUDITED)


                                     ASSETS

CURRENT ASSETS

   Cash                                                             $   739,849
   Accounts receivable                                                   36,297
   Prepaid expense                                                       43,755
                                                                    -----------
          Total current assets                                          819,901
                                                                    -----------

OTHER ASSETS
   License                                                                1,685
   Deferred debenture costs                                             133,374
                                                                    -----------
                                                                        135,059
                                                                    -----------

                                                                    $   954,960
                                                                    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                                  $     1,292
  Accrued interest payable                                                  917
                                                                    -----------
          Total current liabilities                                       2,209
                                                                    -----------

CONVERTIBLE REDEEMABLE DEBENTURES PAYABLE                               697,000
                                                                    -----------
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, 64,650,069 shares issued and outstanding                64,650
  Additional paid in capital                                          1,619,620
  (Deficit) accumulated during the development stage                 (1,428,519)
                                                                    -----------
                                                                        255,751
                                                                    -----------

                                                                    $   954,960
                                                                    ===========

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

                                       8

<PAGE>

<TABLE>
                            PACIFIC FUEL CELL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                                                                               For the Period
                                                                                                                May 5, 1998
                                                Three months ended June 30,     Six months ended June 30,      (inception) to
                                                   2004             2003           2004            2003        June 30, 2004
                                               ------------    ------------    ------------    ------------    -------------
<S>                                            <C>             <C>             <C>             <C>             <C>
REVENUE                                        $         --    $         --    $         --    $         --    $       6,172
                                               ------------    ------------    ------------    ------------    -------------

COSTS AND EXPENSES
  Research and development                            7,251          15,317          17,462          40,422          138,517
  Purchased research and development                  2,562              --           2,562              --            2,562
  Selling, general and administrative                21,766           6,343          31,574          16,008          535,381
  Stock compensation                                     --              --              --              --          240,000
  Amortization                                           --              --              --              --           11,645
  Financing cost                                      3,526              --           3,526              --            3,526
  Loss on asset impairment                               --              --              --              --          510,667
  Loss on disposal of property and equipment             --              --              --              --            3,391
                                               ------------    ------------    ------------    ------------    -------------
       Total operating expenses                      35,105          21,660          55,124          56,430        1,445,689
                                               ------------    ------------    ------------    ------------    -------------

OPERATING (LOSS)                                    (35,105)        (21,660)        (55,124)        (56,430)      (1,439,517)
                                               ------------    ------------    ------------    ------------    -------------

OTHER INCOME (EXPENSE)
  Interest expense                                   (4,092)           (951)         (5,095)         (1,886)         (23,695)
  Foreign currency transaction (loss)                    --              --              --              --             (168)
  Gain on forgiveness of debt                            --              --              --              --           35,500
  Other                                                 534               3             537               7             (639)
                                                               ------------    ------------    ------------    -------------
                                                     (3,558)           (948)         (4,558)         (1,879)          10,998
                                               ------------    ------------    ------------    ------------    -------------

NET (LOSS)                                     $    (38,663)   $    (22,608)   $    (59,682)   $    (58,309)   $  (1,428,519)
                                               ============    ============    ============    ============    =============

PER SHARE INFORMATION

WEIGHTED AVERAGE SHARES OUTSTANDING -
  BASIC AND DILUTED                              63,935,843      63,440,000      63,689,472      63,440,000       38,118,077
                                               ============    ============    ============    ============    =============

NET (LOSS) PER COMMON SHARE                    $      (0.00)   $      (0.00)   $      (0.00)   $      (0.00)   $       (0.04)
                                               ============    ============    ============    ============    =============
</TABLE>

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

                                       9

<PAGE>

<TABLE>
                            PACIFIC FUEL CELL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<CAPTION>
                                                                               For the Period
                                                                                May 5, 1998
                                                   Six months ended June 30,   (inception) to
                                                      2004           2003       June 30, 2004
                                                  -----------    -----------    -------------
<S>                                               <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net cash flows (used in) operating activities   $   (92,237)   $   (78,928)   $    (611,574)
                                                  -----------    -----------    -------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Net cash flows (used in) investing activities        16,898             --            7,007
                                                  -----------    -----------    -------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from loans payable - shareholders           10,000             --          295,462
  Payments on loans payable - shareholders            (70,000)            --          (81,083)
  Proceeds of debenture issue                       1,000,000             --        1,000,000
  Deferred debenture costs                           (136,900)            --         (136,900)
  Proceeds from stock issuances                            --             --          266,937
                                                  -----------    -----------    -------------
Net cash provided by financing activities             803,100             --        1,344,416
                                                  -----------    -----------    -------------
              Net increase (decrease) in cash         727,761        (78,928)         739,849

CASH AT BEGINNING OF PERIOD                            12,088        100,822               --
                                                  -----------    -----------    -------------
CASH AT END OF PERIOD                             $   739,849    $    21,894    $     739,849
                                                  ===========    ===========    =============

NON-CASH FINANCING ACTIVITIES
   Conversion of debentures to common stock       $   303,121    $        --    $     303,121
                                                  ===========    ===========    =============
   Issuance of stock in Cellfoods acquisition     $     2,562    $        --    $       2,562
                                                  ===========    ===========    =============
</TABLE>

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

                                       10

<PAGE>

                            PACIFIC FUEL CELL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (UNAUDITED)

Note 1.  Basis of Presentation

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for  interim  financial  information.  They do not include all of the
information and footnotes required by accounting  principles  generally accepted
in the United  States of  America  for  complete  financial  statements.  In the
opinion of management,  all  adjustments,  consisting  only of normal  recurring
adjustments, considered necessary for a fair presentation, have been included in
the  accompanying  unaudited  financial  statements.  Operating  results for the
periods  presented  are not  necessarily  indicative  of the results that may be
expected  for the full year.  For further  information,  refer to the  financial
statements and notes therto, included in the Company's Form 10-KSB as of and for
the year ended December 31, 2003.


Note 2.  Going Concern

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States of America,  which
contemplates  continuation  of the Company as a going  concern.  The Company has
incurred losses since inception of $1,428,519, and is reliant on raising capital
to initiate its business plan,  and has no revenue  generating  operations.  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.

The financial  statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.


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.

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<PAGE>

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 has advanced the University $131,266 to fund the project,
which had an original  completion  date of August 26, 2003.  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.  Pursuant to this  extension,  the Company had made an initial  payment of
$50,005 and will be required to make additional payments in the aggregate amount
of  $100,481.  A payment  of  $50,229  is due on or  before  May 1, 2005 and the
balance of $50,252 is due on May 1, 2006. Research and development costs for the
three  months  and six  months  ended  June  30,  2004 of  $7,251  and  $17,462,
respectively, were charged to expenses when incurred.


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.  Cellfoods had no operations for the period
from May 14, 2004 through June 30, 2004.

Note 6.  Convertible Debentures

In May 2004, Cellfoods completed a private placement with an accredited investor
(as defined under Rule 501,  Regulation D, promulgated  under the Securities Act
of 1933, as amended) to issue up to $1,000,000 in the aggregate principal amount
of  convertible  debentures,  pursuant  to Rule 504 of  Regulation  D under  the
Securities Act of 1933, as amended.  The debentures were initially issued as two
separate  debentures  in the amount of $997,000 and $3,000,  respectively,  bear
interest at 1% per annum and mature in five years.  Pursuant to the terms of the
merger  discussed  above (Note 5), the Company has assumed the  obligations  and
benefits of Cellfoods,  including the obligation under the Debenture  agreement.
The  Company  received  net  proceeds  of  $863,100  after  payment of  deferred
debenture  costs of $136,900.  The deferred  debenture costs are being amortized
over the five year term of the  debentures.  As of June 30, 2004,  the remaining
principal  under  the  debentures,  after  giving  effect to the  conversion  of
$303,000 plus accrued  interest of $115 (Note 7), is $697,000.  Accrued interest
thereon is $917 at June 30, 2004.

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<PAGE>

Note 7.  Stock Issuance

In May 2004, the Company caused  30,000,000  shares of its  unrestricted  common
stock to be issued in connection  with the issuance of the debentures  discussed
above in Note 5. The  shares  are held in  escrow  and will be  returned  to the
Company's treasury to the extent the debentures are not converted.

During the  quarter  ended June 30,  2004,  a total of  1,203,969  shares of the
Company's common stock were issued upon conversion of the convertible redeemable
debentures  discussed  above, in the amount of $303,000 plus accrued interest of
$115  (approximately $.25 per share). An additional 6,100 shares of common stock
were issued in connection with the merger with Cellfoods.


Note 8.  Subsequent Events

Issuance of common stock

In  July  2004,  the  debenture  holder  elected  to  convert  $217,202  of  the
outstanding  debenture  plus interest of $399 to 800,002 shares of the Company's
common stock.  During August of 2004 an  additional  $21,514 of debentures  were
converted into 6,300 shares.

Consulting agreement

Effective  August 1, 2004, The Company entered into a consulting  agreement with
an individual for services to be rendered in connection with the development and
implementation  of strategies  regarding the Company's fuel cell  prototype,  as
well as merger,  joint venture or acquisition  opportunities.  As consideration,
the Company has agreed to pay the consultant  $1,500 per month for 36 months and
issued the  individual  a three year option to purchase up to 250,000  shares of
the Company's  common stock,  at an exercise  price of $.35 per share,  the fair
market value of the stock on the date the agreement was consummated. The initial
options vested fully upon execution of the  agreement.  In addition,  if certain
performance goals are met, the individual will be entitled to receive options to
purchase up to an additional  2,250,000 shares of the Company's common stock, at
prices to be  determined  in the future,  based on the then fair market value of
the stock.

Operating lease

In August 2004, the Company  entered into a three year operating lease agreement
with an unrelated entity, for laboratory space effective  September 1, 2004. The
lease calls for thirty six monthly payments of $3,059, continuing through August
31, 2007.

Grant

                                       13
<PAGE>

In July,  2004, the Company was selected by the U.S.  Department of Energy for a
Phase  I STTR  (Small  Business  Technology  Transfer)  grant,  and  anticipates
receiving an initial grant of $100,000, beginning in September, 2004.


                                       14

<PAGE>

                                   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.

                                      PACIFIC FUEL CELL CORP.
                                      (Registrant)

                                      Dated: August 19, 2004



                                      By:s/ Ken Inouye
                                         --------------------------------------
                                         Ken Inouye, Secretary & Treasurer




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