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:  March 31, 2007  Commission File Number:  0-28031  PACIFIC FUEL CELL CORP. (Exact name of small business issuer as specified in its charter)  Nevada (State or other jurisdiction of incorporation or organization)  80-0043875 (IRS Employer Identification No.)  131 N. Tustin Ave. Suite 100 Tustin, CA (Address of principal place of business)  92780 (Zip Code)  (714) 564-1693 (Issuers Telephone Number)  Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:   YesXNo.  The number of shares of the registrants only class of common stock issued and outstanding as of May 18, 2007, was 73,170,248 shares.  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)YesXNo  1       PART I  ITEM 1.
        FINANCIAL STATEMENTS.  PACIFIC FUEL CELL CORP. (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED BALANCE SHEET March 31, 2007 (UNAUDITED) ASSETSCURRENT ASSETSCash
        
        $
        510,145Prepaid expenses
        
        
        3,998Total current assets
        
        
        514,143Property and equipment, net
        
        
        271,649Other AssetsRent security deposit
        
        
        9,054Utility deposit
        
        
        1,93310,987$
        796,779LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
        
        $
        302,914Total current liabilities
        
        
        302,914STOCKHOLDERS EQUITYPreferred stock, $0.01 par value,1,000,000 shares authorized, none outstanding
        
        
        Common stock, $0.001 par value, 200,000,000shares authorized, 73,170,248 shares issued and outstanding
        
        
        73,170Additional paid in capital
        
        
        3,846,042Deferred stock compensation
        
        
        (30,000
        )(Deficit) accumulated during the development stage
        
        
        (3,395,347
        )493,865$
        796,779 The accompanying notes are an integral part of the financial statements.  2       PACIFIC FUEL CELL CORP. (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)  QUARTER ENDED
MARCH 31, 2007
        
        
        
        QUARTER ENDED
MARCH 31, 2006
        
        
        
        MAY 5, 1998
(INCEPTION) TO
MARCH 31, 2007REVENUESales
        
        $
        
        
        
        
        $
        
        
        
        
        $
        71,988Grants
        
        
        
        
        
        
        
        
        
        
        
        
        99,901
        
        
        
        
        
        
        
        
        
        171,889COSTS AND EXPENSESOperating expenses
        
        
        118,327
        
        
        
        
        456
        
        
        
        
        200,614General and administrative
        
        
        187,650
        
        
        
        
        35,185
        
        
        
        
        1,583,261Research and development
        
        
        98,352
        
        
        
        
        8,377
        
        
        
        
        398,908General and administrative,  stock compensation
        
        
        15,000
        
        
        
        
        
        
        
        
        
        327,800Depreciation and amortization
        
        
        6,816
        
        
        
        
        
        
        
        
        
        40,640Change in value of derivative
instruments, net
        
        
        
        
        
        
        
        
        
        
        
        
        460,498Loss on extinguishment of  debentures
        
        
        
        
        
        
        
        
        
        
        
        
        16,706Loss on asset impairment
        
        
        
        
        
        
        
        
        
        
        
        
        510,667Loss on disposal of property and  equipment
        
        
        
        
        
        
        
        
        
        
        
        
        3,391426,145
        
        
        
        
        44,018
        
        
        
        
        3,542,485OPERATING (LOSS)
        
        
        (426,145
        )
        
        
        
        (44,018
        )
        
        
        
        (3,370,596
        )OTHER INCOME (EXPENSE)Interest income
        
        
        200
        
        
        
        
        199
        
        
        
        
        7,801Interest expense
        
        
        
        
        
        
        
        (232
        )
        
        
        
        (66,709
        )Foreign currency transaction gain (loss)
        
        
        
        
        
        
        
        
        
        
        
        
        (168
        )Other
        
        
        
        
        
        
        
        
        
        
        
        
        (1,175
        )200
        
        
        
        
        (33
        )
        
        
        
        (60,251
        )NET (LOSS) BEFORE EXTRAORDINARY ITEM
        
        
        (425,945
        )
        
        
        
        (44,051
        )
        
        
        
        (3,430,847
        )EXTRAORDINARY ITEM, Gain on forgiveness
of debt, net of income taxes of $12,070
        
        
        
        
        
        
        
        
        
        
        
        
        23,430NET (LOSS) BEFORE INCOME TAX EXPENSE
(BENEFIT)
        
        
        (425,945
        )
        
        
        
        (44,051
        )
        
        
        
        (3,407,417
        )INCOME TAX EXPENSE (BENEFIT)
        
        
        
        
        
        
        
        
        
        
        
        
        (12,070
        )NET (LOSS)
        
        $
        (425,945
        )
        
        
        $
        (44,051
        )
        
        
        $
        (3,395,347
        )PER SHARE INFORMATION:WEIGHTED AVERAGE SHARES OUTSTANDING -BASIC AND DILUTED
        
        
        72,280,470
        
        
        
        
        66,677,538
        
        
        
        
        72,280,470NET (LOSS) PER COMMON SHARE (BASIC & DILUTED)
        
        $
        (0.01
        )
        
        
        $
        (0.00
        )   The accompanying notes are an integral part of the financial statements.  3       PACIFIC FUEL CELL CORP. (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDEDMARCH 31, 2007
        
        
        
        MARCH 31, 2006
        
        
        
        FOR THE PERIODMAY 5, 1998(INCEPTION) TOMARCH 31, 2007OPERATING ACTIVITIESNet (loss)
        
        
        
        $
        (425,945
        )
        
        
        $
        (44,051
        )
        
        
        $
        (3,395,347
        )Adjustments to reconcile net (loss) to  net cash (used in) operating activities:Stock compensation
        
        
        
        
        15,000
        
        
        
        
        20,000
        
        
        
        
        480,800Amortization of discount on loan payable
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        5,239Contributed services to capital
        
        
        
        
        1,500
        
        
        
        
        4,500
        
        
        
        
        13,500Reserve for uncollectible accounts receivable
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        36,298Extraordinary item
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        35,500Loss on disposal of property and equipment
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        3,391Non cash derivative debenture costs
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        657,465Amortization and depreciation
        
        
        
        
        6,816
        
        
        
        
        771
        
        
        
        
        40,640Interest expense converted to loan payable
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        12,684Loss on impairment of assets
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        510,167Changes in:Prepaid research and development
        
        
        
        
        
        
        
        
        
        18,752
        
        
        
        
        Inventory held by vendor
        
        
        
        
        
        
        
        
        
        9,621
        
        
        
        
        Discount on loan
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        3,061Prepaid expense
        
        
        
        
        (939
        )
        
        
        
        1,787
        
        
        
        
        (3,498
        )Rent security deposit
        
        
        
        
        (5,995
        )
        
        
        
        
        
        
        
        
        (9,054
        )Utility security deposit
        
        
        
        
        (1,933
        )
        
        
        
        
        
        
        
        
        (1,933
        )Accounts payable - related party
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        Accounts payable
        
        
        
        
        157,034
        
        
        
        
        (13,648
        )
        
        
        
        215,884Net cash (used in) operating activities
        
        
        
        
        (254,462
        )
        
        
        
        (56,681
        )
        
        
        
        (1,395,203
        )INVESTING ACTIVITIESPurchase of fixed assets
        
        
        
        
        (27,120
        )
        
        
        
        
        
        
        
        
        (186,719
        )Cash received in purchase of Cellfoods
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        16,898Refund (deposit) on equipment
        
        
        
        
        70,000
        
        
        
        
        
        
        
        
        
        Investment in mineral claims
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (5,000
        )Net cash provided by (used in) investing activities
        
        
        
        
        42,880
        
        
        
        
        
        
        
        
        
        (174,821
        )FINANCING ACTIVITIESProceeds from loans payable  shareholders
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        285,462Payments on loans payable  shareholders
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (11,083
        )Deferred debenture costs
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (136,000
        )(Payments) proceeds of convertible redeemable debentures
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        776,855Payments on loan payable  related parties
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        (60,000
        )Proceeds from stock sales, net of issuance costs
        
        
        
        
        608,000
        
        
        
        
        
        
        
        
        
        1,224,935Net cash provided by financing activities
        
        
        
        
        608,000
        
        
        
        
        
        
        
        
        
        2,080,169Net increase (decrease) in cash
        
        
        
        
        396,418
        
        
        
        
        (56,681
        )
        
        
        
        510,145CASH AT BEGINNING OF PERIOD
        
        
        
        
        113,727
        
        
        
        
        166,130
        
        
        
        
        CASH AT END OF PERIOD
        
        
        
        $
        510,145
        
        
        
        $
        109,449
        
        
        
        $
        510,145SUPPLEMENTAL CASH FLOW INFORMATIONCash paid for interest
        
        
        
        $
        
        
        
        
        $
        
        
        
        
        $
        375Cash paid for income taxes
        
        
        
        $
        
        
        
        
        $
        
        
        
        
        $
        2,400SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT NON-
CASH FINANCING AND INVESTING ACTIVITIES:Discount on loan payable - related party
        
        
        
        $
        
        
        
        
        $
        
        
        
        
        $
        8,300Issuance of stock for purchase of license agreement
        
        
        
        $
        
        
        
        
        $
        
        
        
        
        $
        451,500Accrued interest
        
        
        
        $
        
        
        
        
        $
        (129
        )
        
        
        $
        (1,679
        )Convertible redeemable debentures
        
        
        
        $
        
        
        
        
        $
        (15,000
        )
        
        
        $
        (808,728
        )Conversion of accrued interest into contributed capital
        
        
        
        $
        
        
        
        
        $
        
        
        
        
        $
        179,610Cancellation of 2,000,000 shares at par value
        
        
        
        $
        
        
        
        
        $
        
        
        
        
        $
        2,000Issuance of stock for repayment of advances
        
        
        
        $
        
        
        
        
        $
        
        
        
        
        $
        116,050Conversion of accrued interest into promissory notes
        
        
        
        $
        
        
        
        
        $
        
        
        
        
        $
        12,684Issuance of stock for purchase of domain asset
        
        
        
        $
        
        
        
        
        $
        
        
        
        
        $
        65,000Deposit applied to purchase of fixed assets
        
        
        
        $
        100,000
        
        
        
        $
        
        
        
        
        $
        100,000  The accompanying notes are an integral part of the financial statements.  4       PACIFIC FUEL CELL CORP. (A DEVELOPMENT STAGE COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS March 31, 2007 (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 thereto, included in the Companys Form 10-KSB as of December 31, 2006, and for the years ended December
31, 2006 and 2005.  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 $3,395,347 and is reliant on raising capital to initiate its business plan.  The Company has purchased equipment and has obtained licensing rights to produce bipolar plates with the intent of selling these plates to generate revenue. (See Note 6).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  5      share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During the periods presented, common stock equivalents were not considered, as their effect would be anti-dilutive.  Note 4.  Research and Development  On August 21, 2002 the Company entered into a one-year agreement with the University of California (the University) to develop a commercially viable fuel cell.  The Company and the University entered into an agreement to extend the completion date to February 29, 2004.  On May 4, 2004, the agreement was further extended through April 30, 2007.  This agreement is being negotiated at the present time.  On October 13, 2006, an amendment was executed requiring payments of $135,876, of which $50,229 was paid in the prior period.  The payments come due as follows:  $50,252 on or before January 31, 2007; and $35,395 on or before February 28, 2007.  The total of these two payments is recorded in accounts payable at March 31, 2007.  Note 5.  Common Stock  During the three months ended March 31, 2007, the Company sold 2,142,852 shares of its restricted stock at a price of $.14 per share, for cash proceeds of $300,000; and 1,232,000 shares of its restricted stock at a price of $.25 per share, for cash proceeds of $308,000.  In October 2006, the Company's Board of Directors issued 200,000 shares of its restricted common stock in exchange for consulting services relating to manufacturing, financial public relations and business development services, valued at $60,000, which was recorded as deferred stock compensation and is being recognized ratably over twelve months at the rate of $15,000 per quarter.  Note 6.COMMITMENTS AND CONTINGENCIES  Effective December 18, 2006, pursuant to an Assignment and Assumption of Equipment Purchase Agreement, the Company was assigned all rights of TDM, LLC relating to an Agreement dated August 22, 2006, as amended December 20, 2006, between SGL Technic Inc., a wholly owned subsidiary of SGL Technologies GmbH, a German company (SGL), and TDM, LLC (TDM) wherein the Company acquired certain equipment on an as is basis. This equipment consists of two press machine sets (200 and 800 ton) plus auxiliary equipment, which is used for manufacturing of bi-polar  6      plates. The purchase price of the equipment is $200,000. To date, the Company has paid $100,000. The balance of $100,000 is due on or before June 30, 2007.  On January 24, 2007 the Company entered into a new lease agreement for 23,886 square feet of commercial space located at 4413 Hamann Parkway, Willoughby, Ohio. The lease is for two years starting on March 1, 2007 and ending February 28, 2009. The future minimum payments required under the lease are $53,952, $96,644 and $16,931 for 2007, 2008 and 2009 respectively.  On February 28, 2007 the Company was named as a defendant in a lawsuit pending in the Court of Common Pleas for Lake County, Ohio, captioned SKRL Tool & Die, Inc., et al. v. William Berwald, et al., Case No. 07-CV-000567. In their complaint, Plaintiffs allege that two of their former employees  current employees of the Company in Willoughby, Ohio, manufacturing facility  possess confidential and proprietary trade secrets of SKRL pertaining to the manufacturing of bipolar plates for fuel cells.  Plaintiffs have asserted against these employees and us claims for, among other things, unfair competition, misappropriation of trade secrets and tortuous interference with business relationships and seek compensatory and punitive damages, as well as injunctive relief that would preclude the two former
SKRL employees from continuing to be employed by the Company. The Company believes these claims are without merit, in that the employees possess no trade secrets of SKRL, and moreover, the Company would have no use for such trade secrets, as its current employees (other than the two defendants) possess far more technological and marketing information in the industry than the SKRL employees would ever have been privy to.  The Company is, therefore, vigorously defending the Companys interests, and believes the defense will ultimately be successful.  The Company has filed counterclaims against the Plaintiffs in this matter, alleging unfair competition, tortuous interference with business expectancy and tortuous interference with employment relationships and has requested that the court award damages as a result.  The Plaintiffs Notice of Withdrawal of Motion for Temporary Restraining Order and Preliminary Injunction was filed on April 26, 2007, with the Court.    7        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.  RESULTS OF OPERATIONS  Comparison of Results of Operations for the three-month periods ended March 31, 2007 and 2006  During the three-month periods ended March 31, 2007 and 2006, we did not generate any revenues.  During the three month period ended March 31, 2007, we incurred costs and expenses totaling $426,145, compared to costs and expenses of $44,018 during the similar period in 2006, an increase of $382,127.  This significant increase in costs and expenses is primarily attributable to the development of our new business of manufacturing bipolar plates more fully described under Plan of Operation below.  The costs and expenses incurred during the three month period ended March 31, 2007, included $118,327 in operating expense relating to our new business of manufacturing bipolar plates, $98,352 in research and development costs that were attributable to our continued efforts to improve our proprietary MEA (membrane electrode assembly) and $187,650 in general and administrative expense.  During the three month period ended March 31, 2006, we incurred costs and expenses of $44,018,
including $8,377 in research and development costs and $35,185 in general and administrative expense.  The increase in general and administrative expense during the three month period ended March 31, 2007, compared to the similar period in 2006, arose as a result of our hiring of additional employees relevant to our factory for the purpose of manufacturing bipolar plates, as we have added an aggregate of 10 employees to work at our factory since the three month period ended March 31, 2006.  We expect to begin generating revenues from this factory in the second quarter of 2007.   8       As a result, we incurred a net loss of ($425,945) during the three month period ended March 31, 2007, compared to a net loss of ($44,051) for the similar period ended March 31, 2006.  Because we did not generate revenues during the three month period ended March 31, 2007, following is our Plan of Operation.  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 have 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, we are focused on improving the production capability of our nanoMEA, enhancing product performance, reducing product costs, designing market-ready products, developing volume-manufacturing capability, and building customer and supplier relationships and
marketing it to potential customers.  We are also continuing research to refine and improve our current nanoMEA.  On August 21, 2002, we entered into an agreement with the University of California (UCR), to develop a commercially viable fuel cell, exploiting our proprietary technology.  On May 4, 2004, this agreement was extended through April 30, 2006, so long as we continued to make payments.  In order to allow us to make the aforesaid payments, we borrowed funds from Fullerene, our largest shareholder and a company owned by certain of our officers and directors, which were subsequently repaid in full.  UCR, through its SMART program, provides matching funds for all direct costs applicable to development of the project.  We applied for additional matching funds through this SMART program and have obtained a favorable decision.  These funds are being provided directly to UCR for our research projects.  This also provides a multi-year relationship with UCR.  All information we provide to
UCR has been deemed confidential for a period of one (1) year after expiration or termination of the agreement.  On October 13, 2006, an amendment was executed with UCR requiring aggregate payments of $135,876, of which $50,252 has been paid as of the date of this Report.  As of March 31, 2007, $85,647 is included in research and development expense and accounts payable.  As a result of our relationship with UCR, on November 10, 2003, we announced that a research team headed by Professor Yushan Yan of UCR had successfully developed a fuel cell using carbon nanotube-based electrodes.  As a result of our research and development activities with UCR, we expect that the use of multi-walled carbon nanotubes as a platinum support for proton exchange membrane fuel cells will reduce the manufacturing cost of fuel cells through a decreased use of platinum.  Current technology uses platinum, a precious metal, as the catalyst for hydrogen to separate into a proton and electron.  Since platinum is a high cost metal in very limited production, it is cost prohibitive, preventing fuel cells from being economically viable even at high volume production.  Our proposed method of producing fuel cells is expected to  9      minimize or eliminate the use of platinum.  We expect to produce low cost fuel cells at high volume production levels.  Acquisition of New Business  Effective December 18, 2006, pursuant to an Assignment and Assumption of Equipment Purchase Agreement, we were assigned all rights of TDM, L.L.C. relating to an Agreement dated August 22, 2006, as amended December 20, 2006, between SGL Technic Inc., a wholly owned subsidiary of SGL Technologies GmbH, a German company (SGL), and TDM, L.L.C. (TDM), wherein we acquired certain equipment on an as is basis.  This equipment consists of two press machine sets (200 and 800 ton) plus auxiliary equipment, which is used for manufacturing of bi-polar plates.  We have been developing the MEA business segment of the fuel cell industry and have nanoMEA technology to enhance performance and durability.  A fuel cell stack (essentially an electricity generator) consists of an MEA, GDL (gas diffusion layer) and bipolar plates.  As such, management believes that this
acquisition of equipment fits in with our proprietary technology.  The purchase price of the equipment was $200,000.  As of the date of this Report, we have paid an aggregate of $100,000; $5,000 was previously paid by TDM.  The balance of $95,000 shall become due on or before June 30, 2007.  We intend to utilize the proceeds received from our recent private offerings described below to pay this obligation.  This equipment acquisition allows us to expand our current business plan to begin to manufacture bipolar plates, which will provide us with the capability of marketing our own fuel cell components for the industry.  We have moved the equipment to a new location approximately 5 miles from the equipments previous location in Willoughby, Ohio, and have retained manufacturing personnel.  We have retained the services of two new employees, a director of sales and a director of manufacturing, both of whom have direct experience in the fuel cell business and manufacturing of bi-polar plate components.  We are also engaged in discussions with various parties who have expressed an interest in providing us with additional equity capital to allow us to move forward.  As of the date of this Report, we have manufactured and shipped products and have acquired 10 customers.  SGL discontinued its bi-polar plate manufacturing business.  Current customers of SGL for the bipolar plates consist of many of the top fuel cell companies in the world, almost all of whom are potential customers for our MEA.  In the event we are able to transfer sales and begin manufacturing, of which there can be no assurance, we expect to supply many of these customers.   10       LIQUIDITY AND CAPITAL RESOURCES  At March 31, 2007, we had $510,145 in cash.  We had $302,914 in accounts payable reflecting equipment, materials and supplies we have purchased for the production of bi-polar plates.  In January 2007, we issued an aggregate of 2,142,852 restricted shares of our Common Stock (the Shares).  We received proceeds of $300,000 from the sale thereof ($0.14 per share).  The Shares were sold to a total of 10 investors, all of whom were accredited investors as that term is defined under Rule 501(a) of Regulation D as promulgated under the Securities Act of 1933, as amended.  We relied upon the exemption from registration afforded by Regulation D and Section 4/2, promulgated under the Securities Act of 1933, as amended, to issue the Shares.  The proceeds from this offering have been used for our new operations described above under Plan of Operation.  We are currently engaged in a private offering of our Common Stock whereby we intend to raise up to $3 million in subscriptions therefrom.  As of the date of this Report we have sold an aggregate of 1,232,000 restricted shares of our Common Stock (the Shares).  We received proceeds of $308,000 from the sale thereof ($0.25 per share).  Thus far the Shares have been sold to a total of 13 investors, of which 6 are accredited and 7 non-accredited as those terms are defined under Rule 501(a) of Regulation D as promulgated under the Securities Act of 1933, as amended.  We relied upon the exemption from registration afforded by Regulation D and Section 4/2, promulgated under the Securities Act of 1933, as amended, to issue the Shares.  The proceeds from this offering will be used for our new operations described in above, as well as for continued development of our fuel
cell technology, provided that we raise the full $3 million, of which there can be no assurance.  The initial funds received in this offering shall be utilized for our new business, described elsewhere herein.  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, this amount may decrease if we can generate profits from our new business described herein.  While there are no definitive agreements in place as of the date of this Report, we are currently engaged in various discussions with interested parties to provide these funds or otherwise enter into a strategic alliance to provide such funding.  As of the date of this Report we have commenced a private offering of our Common Stock on a self-underwritten basis.  See Part II, Item 2, Changes in Securities,
below.  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.  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  11      attention from the investment community.  Stock volume has increased and we have received indications of interest from investors.  There have also been significant hits on our web site from investment firms.  In this regard, while there are no assurances, we are hopeful that we will be able to raise approximately $2.5 million in additional funding in order to allow us to produce and demonstrate to fuel cell manufacturers a commercially viable prototype.  However, if we can begin generating profits from the operation of our new business, we intend to allocate these profits to our other business of developing fuel cells.  See Plan of Operation and Liquidity and Capital Resources, above.  We are currently in preliminary discussions with entities that have told us they can raise funds for our company.  However, there can be no assurance that any investment will materialize.  We also expect that our new laboratory will continue 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 that 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.  In order to help jump-start the market for fuel cells and increase our manufacturing capability, in late 2006 we decided to begin manufacturing fuel cell components.  Fuel cell manufacturers have incurred unwarranted expense and diversion of management time in trying to manufacture each of the several components needed for their fuel cells.  We believe that we can create a viable, profitable business by utilizing proven manufacturing techniques in a dedicated environment.  To this end we have started manufacturing bipolar plates in our plant in Willoughby, Ohio.  We expect that our customers will include many prominent industrial firms, as well as leading independent fuel cell companies.  We believe that the reason that the fuel cell market is not rapidly expanding at this time is due to high manufacturing costs and lack of successful applications.  We believe that a robust fuel cell market is inevitable, due to the advantages of low pollution and independence from fossil fuels.  Major automobile, industrial and power supply companies are heavily involved in research and development activities of fuel cell technology and many have announced prototypes and commercial models.  However, there has not been a major commercial breakthrough, which we attribute to the high cost of the products and the lack of consumer proven reliability.  While no assurances can be provided, once the problem of high costs is resolved, we expect the micro fuel cell market to increase significantly.   12       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 three-month period ended March 31, 2007.  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.   13       PART II. OTHER INFORMATION  ITEM 1.
        LEGAL PROCEEDINGS  We have been named as a defendant in a lawsuit pending in the Court of Common Pleas for Lake County, Ohio, captioned SKRL Tool & Die, Inc., et al. v. William Berwald, et al., Case No. 07-CV-000567.  The case was filed on February 28, 2007.  In their complaint, Plaintiffs allege that two of their former employees  current employees of ours in our Willoughby, Ohio, manufacturing facility  possess confidential and proprietary trade secrets of SKRL pertaining to the manufacturing of bipolar plates for fuel cells. Plaintiffs have asserted against these employees and us claims for, among other things, unfair competition, misappropriation of trade secrets and tortious interference with business relationships and seek compensatory and punitive damages, as well as injunctive relief that would preclude the two former SKRL employees from continuing to be employed by us.  As indicated below, a motion for temporary restraining order and preliminary injunctive relief has been withdrawn.  We believe these claims are without merit, in that the employees possess no trade secrets of SKRL, and moreover, we would have no use for such trade secrets, as our current employees (other than the two defendants) possess far more technological and marketing information in the industry than the SKRL employees would ever have been privy to.  We are therefore vigorously defending the Companys interests, and believe the defense will ultimately be successful.  We have filed counterclaims against the Plaintiffs in this matter, alleging unfair competition, tortuous interference with business expectancy and tortuous interference with employment relationships and have requested that the court award us damages as a result.  The Plaintiffs Notice of Withdrawal of Motion for Temporary Restraining Order and Preliminary Injunction was filed on April 26, 2007 with the Court.  We are not a party to any other pending legal proceedings, nor are we aware of any other pending or threatened claims.  ITEM 2.
        CHANGES IN SECURITIES.  In January 2007, we issued an aggregate of 2,142,852 restricted shares of our Common Stock (the Shares).  We received proceeds of $300,000 from the sale thereof ($0.14 per share). The Shares were sold to a total of 10 investors, all of whom were accredited investors as that term is defined under Rule 501(a) of Regulation D as promulgated under the Securities Act of 1933, as amended.  We relied upon the exemption from registration afforded by Regulation D and Section 4/2, promulgated under the Securities Act of 1933, as amended, to issue the Shares.  The proceeds from this offering have been used for our new operations described above under Part I, Item 2, Managements Discussion and Analysis of Financial Condition and Results of Operations  Plan of Operation.   14       We are in the process of issuing an aggregate of 1,232,000 restricted shares of our Common Stock (the Shares).  We received proceeds of $308,000 from the sale thereof ($0.25 per share).  The number of our issued and outstanding common shares referenced on the cover page of this Report include these Shares.  The Shares were sold to a total of 13 investors, of which 6 are accredited and 7 are non accredited investors as those terms are defined under Rule 501(a) of Regulation D as promulgated under the Securities Act of 1933, as amended.  We relied upon the exemption from registration afforded by Regulation D and Section 4/2, promulgated under the Securities Act of 1933, as amended, to issue the Shares.  The proceeds from this offering will be used for our new operations described in Part I, Item 2, Managements Discussion and Analysis of Financial
Condition and Results of Operations  Plan of Operation above.  ITEM 3.
        DEFAULTS UPON SENIOR SECURITIES- None  ITEM 4.
        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  None  ITEM 5.
        OTHER INFORMATION -None  ITEM 6.
        EXHIBITS AND REPORTS ON FORM 8-K -  (a)
        Exhibits  31.1Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  31.2Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  32.1Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  32.2Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  (b)
        Reports on Form 8-K.  On February 26, 2007 we filed a report on Form 8-K, advising we issued an aggregate of 2,142,852 restricted shares of our Common Stock.  We received proceeds of $300,000 from the sale thereof ($0.14 per share).  On January 24, 2007 we filed a report on Form 8-K, advising that effective December 18, 2006, pursuant to an Assignment and Assumption of Equipment Purchase Agreement, we were assigned all rights of TDM, L.L.C. relating to an Agreement dated August 22, 2006, as  15      amended December 20, 2006, between SGL Technic Inc., a wholly owned subsidiary of SGL Technologies GmbH, a German company (SGL), and TDM, L.L.C. (TDM) wherein we acquired certain equipment on an as is basis.  This equipment consists of two press machine sets (200 and 800 ton) plus auxiliary equipment, which is used for manufacturing of bi-polar plates.  We have been developing the MEA business segment of the fuel cell industry and have nanoMEA technology to enhance performance and durability.  A fuel cell stack (essentially an electricity generator) consists of an MEA, GDL (gas diffusion layer) and bipolar plates.  As such, management believes that this acquisition of equipment fits in with our proprietary technology.  The purchase price of the equipment was $200,000 (US).  As of the date of this Report, we have paid an aggregate of $100,000; $5,000 was previously paid by TDM.  The balance of $95,000 shall become due on or before June 30, 2007.  For a more detailed description of what we intend to do with this equipment, see Part I, Item 2, Managements Discussion and Analysis of Financial Condition and Results of Operations  Plan of Operation, above.  We did not file any other reports on Form 8-K during the three-month period ended March 31, 2007.   16       SIGNATURES  Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.   Dated:  May 18 2007
        PACIFIC FUEL CELL CORP.
(Registrant)


By:s/Ken Inouye
Ken Inouye, Secretary and Treasurer    17