UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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

Commission File Number:

Chemokine Therapeutics Corp.

(Exact name of registrant as specified in its charter)


Delaware	33-0921251
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)

1727 West Broadway, Suite 400 Vancouver, British Columbia	V6J 4S5
(Address of principal executive offices)	(Zip Code)


Registrant’s telephone number, including area code:	(604) 738-6644

Former name or former address, if changed since last report:	6190 Agronomy Road, Suite 405 Vancouver, BC V6T 1Z3

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 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of August 1, 2008, there were 53,333,575 shares of the registrant’s common stock outstanding.

Documents incorporated by reference: None.

Chemokine Therapeutics Corp.

Index

Part I.	Financial Information
	Item 1.	Financial Statements
		Consolidated Balance Sheets
		June 30, 2008 (Unaudited) and December 31, 2007	4
		Consolidated Statements of Operations
		Three months and six months ended June 30, 2008 and June 30, 2007 (Unaudited)	5
		Consolidated Statements of Cash Flows
		Three months and six months ended June 30, 2008 and June 30, 2007 (Unaudited)	9
		Notes to Consolidated Financial Statements	10
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
	Item 4T.	Controls and Procedures	29

Part II.	Other Information
	Item 1.	Legal Proceedings	30
	Item 1A.	Risk Factors	30
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
	Item 3.	Defaults Upon Senior Securities	30
	Item 4.	Submission of Matters to a Vote of Security Holders	30
	Item 5.	Other Information	30
	Item 6.	Exhibits	31

	Signatures		32

PART I

ITEM 1.

FINANCIAL STATEMENTS

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

INDEX TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008


	Page

Interim Consolidated Balance Sheets	4

Interim Consolidated Statements of Operations	5

Interim Consolidated Statement of Stockholders' Equity	6

Interim Consolidated Statements of Cash Flow	9

Notes to the Interim Consolidated Financial Statements	10

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

INTERIM CONSOLIDATED BALANCE SHEETS

		June 30,			December 31,
		2008			2007
		(Unaudited)			(Audited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	774,779		$	688,388
Short-term investments		75,366			75,658
Amounts receivable		17,851			27,353
Prepaid expense and deposits		100,649			41,122

TOTAL CURRENT ASSETS		968,645			832,521

PROPERTY AND EQUIPMENT, net		212,932			337,751

LICENSE COSTS, net		4,758			8,605

AMOUNT DUE FROM AFFILIATE (Note 3)		-			50,439

	$	1,186,335		$	1,229,316

LIABILITIES

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	783,472		$	897,996
Current portion of capital lease obligation		2,659			10,254

TOTAL CURRENT LIABILITIES		786,131			908,250

COMMITMENTS (Note 7)

STOCKHOLDERS’ EQUITY

PREFERRED STOCK
Authorized – 6,000,000 shares; par
value $0.001 per share at June 30, 2008
Issued and outstanding: June 30, 2008 – Nil;
December 31, 2007 – Nil		-			-

COMMON STOCK (Note 4)
Authorized – 200,000,000 shares; par value $0.001 per share at June 30,
2008 and December 31, 2007
Issued and outstanding: June 30, 2008 – 53,333,575
December 31, 2007 – 42,183,748		53,334			42,184

ADDITIONAL PAID-IN CAPITAL		32,745,746			31,062,180

(DEFICIT) ACCUMULATED DURING THE DEVELOPMENT STAGE		(32,398,876	)		(30,783,298	)

		400,204			321,066

	$	1,186,335		$	1,229,316

See accompanying notes to the interim consolidated financial statements.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

														Cumulative from
														inception on
		Three months ended						Six months ended						July 15, 1998 to
		June 30,						June 30,						June 30,
		2008			2007			2008			2007			2008

REVENUE	$	-		$	-		$	-		$	-		$	275,000

EXPENSES
Research and development		348,027			(394,661	)		540,638			320,585			17,116,460
General and administrative		448,387			926,795			928,005			1,789,600			15,686,196
Stock-based compensation		13,122			27,739			30,291			62,574			693,231
Amortization of license		1,924			1,924			3,847			3,847			45,845
Depreciation & amortization of property and equipment		65,592			75,606			131,130			150,167			773,635

		877,052			637,403			1,633,911			2,326,773			34,315,367

OTHER INCOME
Interest income		2,904			42,812			8,781			99,384			747,067
Foreign exchange gain (loss)		9,189			288,513			7,546			303,374			913,547
Gain (loss) on sale of property and equipment		1,312			-			2,006			-			(19,123	)
		13,405			331,325			18,333			408,758			1,641,491



NET LOSS	$	(863,647	)	$	(306,078	)	$	(1,615,578	)	$	(1,918,015	)	$	(32,398,876	)

NET LOSS PER COMMON SHARE FOR THE PERIOD - BASIC AND DILUTED	$	(0.02	)	$	(0.01	)	$	(0.03	)	$	(0.05	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		48,600,747			42,183,748			46,949,940			42,183,748

See accompanying notes to the interim consolidated financial statements.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Period from inception on July 15, 1998 to December 31, 1998

and periods ended December 31, 1999 through 2007 and June 30, 2008

(Unaudited)

																			(Deficit)
																			accu-
																Deferred			mulated
										Additional			Share			stock			during the			Stock-
	Common stock			Preferred stock						paid-			subscrip-			compen-			develop-			holders’
	Shares		Amount	Shares			Amount			in capital			tions			sation			ment stage			equity

Inception, July 15, 1998	-	$	-	-		$	-		$	-		$	-		$	-		$	-		$	-
Issuance of common stock for cash	1		-	-			-			70,650			-			-			-			70,650
Issuance of preferred stock for cash	-		-	6,000,000			6,000			(4,800	)		-			-			-			1,200
Net loss	-		-	-			-			-			-			-			(6,212	)		(6,212	)

Balances at December 31, 1998	1		-	6,000,000			6,000			65,850			-			-			(6,212	)		65,638
Issuance of common stock and subscriptions on
private placement, net of offering costs of $58,794
	263,535		264	-			-			342,332			461,205			-			-			803,801
Issuance of warrants for consulting services	-		-	-			-			1,400			-			-			-			1,400
Net loss	-		-	-			-			-			-			-			(408,237	)		(408,237	)

Balances at December 31, 1999	263,536		264	6,000,000			6,000			409,582			461,205			-			(414,449	)		462,602
Issuance of common stock and subscriptions on
private placement, net of offering costs of $214,300
	783,228		783	-			-			1,116,790			(461,205	)		-			-			656,368
Conversion of preferred stock	6,000,000		6,000	(6,000,000	)		(6,000	)		-			-			-			-			-
Issuance of options for consulting services	-		-	-			-			87,968			-			-			-			87,968
Deferred stock compensation	-		-	-			-			83,500			-			(83,500	)		-			-
Amortization of deferred stock compensation	-		-	-			-			-			-			32,920			-			32,920
Net loss	-		-	-			-			-			-			-			(1,020,963	)		(1,020,963	)

Balances at December 31, 2000	7,046,764		7,047	-			-			1,697,840			-			(50,580	)		(1,435,412	)		218,895
Issuance of stock for cash	-		-	150,000			150			187,350			-			-			-			187,500
Issuance of common shares net of offering costs of
$64,585	1,280,496		1,280	-			-			1,362,532			-			-			-			1,363,812
Issuance of warrants for offering costs	-		-	-			-			17,850			-			-			-			17,850
Cancellation of stock options	-		-	-			-			(50,580	)		-			50,580			-			-
Net loss	-		-	-			-			-			-			-			(1,743,962	)		(1,743,962	)

Balances at December 31, 2001	8,327,260		8,327	150,000			150			3,214,992			-			-			(3,179,374	)		44,095

See next page

See accompanying notes to the interim consolidated financial statements

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Period from inception on July 15, 1998 to December 31, 1998

and periods ended December 31, 1999 through 2007 and June 30, 2008

(Unaudited)

																(Deficit)
																accu-
														Deferred		mulated
										Additional		Share		stock		during the			Stock-
	Common stock			Preferred stock						paid-		subscrip-		compen-		develop-			holders’
	Shares		Amount	Shares			Amount			in capital		tions		sation		ment stage			equity

Issuance of common stock net of offering costs
of $194,474	1,492,970	$	1,493	-		$	-		$	1,677,746	$	-	$	-	$	-		$	1,679,239
Issuance of warrants for consulting services	-		-	-			-			139,725		-		-		-			139,725
Issuance of warrants for offering costs	-		-	-			-			62,871		-		-		-			62,871
Capital distribution on sale of subsidiary to
related party	-		-	-			-			42,064		-		-		-			42,064
Net loss	-		-	-			-			-		-		-		(2,234,061	)		(2,234,061	)

Balances at December 31, 2002	9,820,230		9,820	150,000			150			5,137,398		-		-		(5,413,435	)		(266,067	)
Issuance of common stock net of offering costs
of $130,628	577,852		578	-			-			644,395		-		-		-			644,973
Issuance of preferred shares	-		-	2,000,000			2,000			2,698,000		-		-		-			2,700,000
Issuance of warrants for consulting services	-		-	-			-			21,835		-		-		-			21,835
Issuance of warrants for offering costs	-		-	-			-			22,454		-		-		-			22,454
Net loss	-		-	-			-			-		-		-		(2,506,705	)		(2,506,705	)

Balances at December 31, 2003	10,398,082		10,398	2,150,000			2,150			8,524,082		-		-		(7,920,140	)		616,490
Issuance of common stock net of offering costs
of $2,234,671	17,915,714		17,916	-			-			12,144,538		-		-		-			12,162,454
Issuance of common stock for agent’s fee	628,977		629	-			-			352,054		-		-		-			352,683
Issuance of common stock for settlement of
debt	247,100		247	-			-			199,753		-		-		-			200,000
Issuance of common stock for finder’s fees	3,333		3	-			-			4,497		-		-		-			4,500
Conversion of preferred stock to common stock	150,000		150	(150,000	)		(150	)		-		-		-		-			-
Issuance of warrants for consulting services	-		-	-			-			241,882		-		-		-			241,882
Issuance of warrants for offering costs	-		-	-			-			98,509		-		-		-			98,509
Issuance of warrants for finder’s fees	-		-	-			-			3,900		-		-		-			3,900
Stock-based compensation	-		-	-			-			51,581		-		-		-			51,581
Net loss	-		-	-			-			-		-		-		(3,095,240	)		(3,095,240	)

Balances at December 31, 2004	29,343,206		29,343	2,000,000			2,000			21,620,796		-		-		(11,015,380	)		10,636,759


See next page

See accompanying notes to the interim consolidated financial statements.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Period from inception on July 15, 1998 to December 31, 1998

and periods ended December 31, 1999 through 2007 and June 30, 2008

(Unaudited)

																	(Deficit)
																	accu-
															Deferred		mulated
										Additional			Share		stock		during the			Stock-
	Common stock			Preferred stock						paid-			subscrip-		compen-		develop-			holders’
	Shares		Amount	Shares			Amount			in capital			tions		sation		ment stage			equity

Issuance of common stock net of offering costs
of $278,023	2,400,000	$	2,400	-		$	-		$	1,658,297		$	-	$	-	$	-		$	1,660,697
Conversion of warrants to common shares	102,000		102	-			-			85,050			-		-		-			85,152
Issuance of common stock	52,000		52	-			-			(52	)		-		-		-			-
Issuance of warrants for agent’s fee	-		-	-			-			49,453			-		-		-			49,453
Issuance of warrants for offering costs	-		-	-			-			14,888			-		-		-			14,888
Stock-based compensation	-		-	-			-			289,533			-		-		-			289,533
Net loss	-		-	-			-			-			-		-		(6,020,166	)		(6,020,166	)

Balances at December 31, 2006	31,897,206		31,897	2,000,000			2,000			23,717,965			-		-		(17,035,546	)		6,716,316
Issuance of common stock net of offering costs
of $426,228	6,471,698		6,472	-			-			5,408,860			-		-		-			5,415,332
Conversion of preferred stock to common stock	2,000,000		2,000	(2,000,000	)		(2,000	)		-			-		-		-			-
Conversion of warrants to common shares	1,762,844		1,763	-			-			1,556,700			-		-		-			1,558,463
Issuance of common stock for options exercised
	52,000		52	-			-			44,413			-		-		-			44,465
Issuance of warrants for agent’s fee	-		-	-			-			45,336			-		-		-			45,336
Stock-based compensation	-		-	-			-			184,085			-		-		-			184,085
Net loss	-		-	-			-			-			-		-		(7,507,866	)		(7,507,866	)

Balances at December 31, 2006	42,183,748		42,184	-			-			30,957,359			-		-		(24,543,412	)		6,456,131

Stock-based compensation	-		-	-			-			104,821			-		-		-			104,821
Net loss	-		-	-			-			-			-		-		(6,239,886	)		(6,239,886	)

Balances at December 31, 2007	42,183,748		42,184	-			-			31,062,180			-		-		(30,783,298	)		321,066

Issuance of common stock and warrants net of
offering costs of $230,405	11,149,827		11,150	–			–			1,653,184			–		-		–			1,664,334

Stock-based compensation	-		-	-			-			30,291			-		-		-			30,291
Net loss	-		-	-			-			-			-		-		(1,615,578	)		(1,615,578	)

Balances at June 30, 2008	53,333,575	$	53,334	-		$	-		$	32,745,655		$	-	$	-	$	(32,398,876	)	$	400,113

See accompanying notes to the interim consolidated financial statements.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

														Cumulative
														from inception
		Three months ended						Six month ended						on July 15, 1998 to
		June 30,						June 30,						June 30,
		2008			2007			2008			2007			2008

CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$	(863,647	)	$	(306,078	)	$	(1,615,578	)	$	(1,918,015	)	$	(32,398,876	)
Adjustments to reconcile net cash
provided by operating activities
Depreciation and amortization		67,516			77,530			134,977			154,014			819,480
Patent application expensed		-			-			-			-			81,858
Loss (gain) on sale of property and equipment		(1,312	)		-			(2,006	)		-			19,123
Realized foreign exchange loss (gain)		(88	)		-			(280	)		-			(11,902	)
Common shares issued for consulting services		-			-			-			-			1,033,669
Warrants issued for consulting services		-			-			-			-			404,842
Options issued for consulting services		-			-			-			-			87,968
Stock-based compensation		13,122			27,739			30,291			62,574			693,231
Decrease (increase) in
Amounts receivable		19,599			2,338			9,502			(4,836	)		(17,851	)
Prepaid expense and deposits		(25,037	)		32,513			(59,527	)		48,893			(100,649	)
Increase (decrease) in
Accounts payable and accrued liabilities		72,040			422,459			(114,524	)		536,565			783,472

Cash provided (used) by operating activities		(717,807	)		256,501			(1,617,145	)		(1,120,805	)		(28,605,635	)

CASH FLOW FROM FINANCING ACTIVITIES
Stock issued for cash		852,728			-			1,894,832			-			33,542,308
Stock issued for settlement of debt		-			-			-			-			200,000
Offering costs		(81,936	)		-			(230,405	)		-			(3,205,001	)
Net advances (to) from affiliates		-			(474,689	)		50,435			(485,355	)		(35,044	)
Promissory note payable to affiliate		-			(219,778	)		-			-			-
Deferred financing costs		-			(713,655	)		-			(713,655	)		-
Capital lease payments		(3,700	)		(1,832	)		(7,595	)		(4,687	)		(31,991	)

Cash provided (used) by financing activities		767,092			(1,409,954	)		1,707,267			(1,203,697	)		30,470,272

CASH FLOW FROM INVESTING ACTIVITIES
Cash held by disposed subsidiary		-			-			-			-			(4,754	)
Purchase of investments		(955	)		(5,534	)		(955	)		(933,617	)		(17,310,207	)
Redemption of investments		-			926,340			1,247			2,504,295			17,234,842
Payment under license agreement (Note 7)		-			-			-			-			(50,603	)
Proceeds on sale of property and equipment		2,173			-			5,531			-			57,337
Purchase of property and equipment		(8,755	)		(5,358	)		(9,554	)		(359,874	)		(1,016,473	)

Cash provided (used) by investing activities		(7,537	)		915,448			(3,731	)		1,210,804			(1,089,858	)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS DURING THE
PERIOD		41,748			(238,005	)		86,391			(1,113,698	)		774,779

CASH AND CASH EQUIVALENTS, beginning of period		733,031			3,570,975			688,388			4,446,668			-

CASH AND CASH EQUIVALENTS, end of period	$	774,779		$	3,332,970		$	774,779		$	3,332,970		$	774,779

See accompanying notes to the interim consolidated financial statements.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008

(Unaudited)


1.	DESCRIPTION OF BUSINESS

Chemokine Therapeutics Corp. (the "Company") was incorporated in the State of Washington on July 15, 1998 as PTM Molecular Biosystems Inc. In 1999, the Company changed its name to Chemokine Therapeutics Corp. and in 2000 was reincorporated in the State of Delaware.

The Company is in the business of discovering and developing innovative therapeutic products for the treatment of a variety of human diseases. As of June 30, 2008, the Company is considered a development stage company as defined by Statement of Financial Accounting Standards No. 7 (“SFAS No. 7”). The Company commenced operations in July 1998 and has been devoting most of its efforts to date in raising capital and in research and development. At June 30, 2008, the Company had not commenced planned principal operations and, as shown in the accompanying financial statements, has incurred losses during the period from inception to June 30, 2008 of $32,398,876.

The Company is subject to all of the risks inherent in an early stage business operating in the biotechnology industry. These risks include, but are not limited to, a limited operating history, limited management resources, and the challenges of bringing a drug through development to approval for sale.

Management believes that current working capital will be sufficient to fund the Company’s operations through September 30, 2008. The Company also intends to seek additional financing from external sources through the sale of shares. If the Company is unable to raise additional capital in the future as required or on acceptable terms, the Company may have to significantly delay, scale back or discontinue one or more of its clinical trials or its operations.

The accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern. Unless the Company is able to generate revenues, decrease its expense substantially or raise additional financing, the Company will not have sufficient cash to support its operations beyond September 30, 2008. As noted above, the Company is currently in the process or raising additional financing from external sources through the offering of its securities. There can be no assurance that the Company will achieve this objective. The consolidated financial statements do not include any adjustment relating to the recoverability and classification or recorded asset amounts or the amounts and classifications of liabilities that might be necessary if the Company were not able to continue in existence as a going concern.


2.	BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with the United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These unaudited interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes of the Company in its Annual Report on Form 10-KSB for the year ended December 31, 2007 as filed with the SEC on April 7, 2008.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (continued)


2.	BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - continued

The unaudited interim consolidated financial statements reflect, in the opinion of management, all adjustments (including of normal recurring items) considered necessary for a fair presentation of the consolidated financial position, results of operations and cash flows. All significant intercompany accounts and transactions have been eliminated. Results of operations for the six months ended June 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008 or future operating periods. Significant accounting policies utilized in the preparation of the unaudited interim consolidated financial statements are summarized below:

Basis of consolidation

The consolidated financial statements include the accounts of the Company, its former wholly-owned Canadian subsidiary, Chemokine Therapeutics Inc., through to June 9, 2002, the date of disposal of the subsidiary and its wholly-owned Canadian subsidiary Chemokine Therapeutics (B.C.) Corp.

Revenue recognition

Revenue is not recognized until the product or service has been delivered or otherwise earned, all contractual obligations have been satisfied and collection of amounts due to the Company is reasonably assured. Amounts received by the Company prior to the recognition of associated revenue are reflected on the balance sheet as deferred revenue.

Research and development

Research and development expenses are expensed as incurred. Upfront and milestone payments made to third parties in connection with specific research and development projects are expensed as incurred up to the point of regulatory approval. Payments made to third parties subsequent to regulatory approval are capitalized and amortized over the remaining useful life of the related product.

Income taxes

Income taxes are accounted for under the asset and liability method prescribed by Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes.” Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax asset will not be realized

On January 1, 2007, the Company adopted Financial Accounting Standard Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN 48), which prescribes the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, and disclosure for uncertain tax positions.

The adoption of FIN 48 by the Company did not have a material impact on the Company’s financial condition or results of operation and resulted in no cumulative effect of accounting change being recorded as of January 1, 2007. The Company does not have any net liabilities recorded related to unrecognized tax benefits at June 30, 2008 and January 1, 2008. The Company will recognize potential interest and penalties related to income tax positions as a component of the provision for income taxes on the consolidated statements of income in any future periods in which the Company must record a liability. Since the Company has not recorded a liability at June 30, 2008, there would be no impact to the Company’s effective tax rate. The Company does not anticipate that total unrecognized tax benefits will significantly change during the next twelve months.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (continued)


2.	BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - continued

The Company conducts business in the U.S. and Canada and, as a result, the Company and its subsidiary file income tax returns in U.S. Federal, state, and Canadian jurisdictions. In the normal course of business the Company and its subsidiary are subject to examination by tax authorities in these jurisdictions. For U.S. Federal, state and Canadian tax returns, open tax years subject to examination generally include the years 2003 to present.

Stock-based compensation

Stock-based compensation represents the cost related to stock-based awards granted to employees. The Company measures stock-based compensation cost at grant date, based on the estimated fair value of the award, and recognizes the cost as expense on a straight-line basis (net of estimated forfeitures) over the employee requisite service period. The Company estimates the fair value of stock options using a Black-Scholes valuation model.

Foreign currency translation

The Company used the U.S. Dollar as its functional currency and presents the consolidated financial statements in U.S. dollars using the current rate method. Under the current rate method, the Company translates all assets and liabilities using the exchange rate at the balance sheet date and translates revenues, expenses, gains and losses at the weighted average rates of exchange for the respective periods. Before consolidation, the Company re-measures the financial statements of CTBCC from its local currency of Canadian dollars to its functional currency of U.S. dollars at the end of each reporting period. Monetary items of CTBCC’s financial statements are re-measured by applying the current exchange rate and non-monetary gain or loss in foreign currency upon re-measurement in the foreign exchange gain or loss account in the consolidated statement of operations.

Fluctuations in the relative values of the Canadian and U.S. dollar can affect the reported value of Canadian dollar denominated assets and liabilities on our balance sheet. A strengthening (weakening) Canadian dollar in relation to the U.S. dollar results in higher (lower) reported values for our Canadian dollar denominated assets and liabilities.

During the six months ended June 30, 2008, the Company recorded a foreign exchange gain of $7,546. This gain principally resulted from short-term investment and foreign currency transactions.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent accounting pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company adopted these new requirements on January 1, 2008, and determined there was no effect on the Company’s consolidated financial statements. See Note 8.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (continued)


2.	BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - continued

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”), which seeks to improve financial reporting by providing entities with an option to minimize volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company has adopted these new requirements on January 1, 2008 and determined there was no effect on the Company’s consolidated financial statements. See Note 8.

In June 2007, the FASB ratified the consensus reached by the Emerging Issues Task Force on Issue No. 07-3, “Accounting for Non-Refundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities” (“EITF 07-3”). Pursuant to EITF 07-3, non-refundable advance payments for goods or services that will be used or rendered for future research and development activities should be deferred and capitalized. Such amounts should be recognized as an expense as the related goods are delivered or services are performed, or when the goods or services are no longer expected to be received. EITF 07-3 is effective for contracts entered into in years beginning after December 15, 2007, and is to be applied prospectively for contracts entered into on or after the effective date. The Company adopted these new requirements on January 1, 2008 and determined there was no effect on the Company’s consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141R, “Business Combinations” (“SFAS No. 141R”), which seeks to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. SFAS No. 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008. Adoption is prospective and early adoption is not permitted. The Company will adopt these new requirements in fiscal 2009. The Company has not yet determined the effect on the Company’s consolidated financial statements, if any, upon adoption of SFAS No. 141R.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS No. 160”), which seeks to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements. SFAS No. 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Adoption is prospective and early adoption is not permitted. The Company will adopt these new requirements in its first fiscal quarter of 2009. The Company has not yet determined the effect on the Company’s consolidated financial statements, if any, upon adoption of SFAS No. 160.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”) an amendment of FASB Statement No. 133, which requires enhanced disclosures about an entity’s derivative and hedging activities. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. Early adoption is permitted. The Company has not yet determined the effect on the Company’s consolidated financial statements, if any, upon adoption of SFAS No. 161, or if it will adopt the requirements prior to the first fiscal quarter of 2009.

In May 2008, FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles. SFAS No. 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The Company has not yet determined the effect on the Company’s consolidated financial statements, if any, upon adoption of SFAS No. 162.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (continued)


3.	DUE TO AFFILIATE

The amount due from affiliate does not bear interest and has no fixed terms of repayment.

June 30,

2008

December 31,

2007

Globe Laboratories Inc., a Canadian corporation controlled by Dr. Hassan Salari, the Company’s former Chairman, President, and Chief Scientific Officer

50,439

On February 28, 2008, the full amount of $ 50,439 was received in cash by the Company from Globe Laboratories Inc.

In accordance with FASB Interpretation No. 46R, “Consolidation of Variable Interest Entities” (“FIN 46R”), the Company has determined that Globe Laboratories is a variable interest entity in which it holds an implicit variable interest, but is not the primary beneficiary, and therefore has not consolidated the financial position or operations of Globe Laboratories.

The Company previously used Globe Laboratories to perform research activities under a development agreement which began in 2003 and terminated on January 1, 2007. Globe Laboratories is a privately owned Canadian company established to perform research activities. As the books and records for Globe Laboratories are not available for 2008 and 2007, the Company is unable to determine the size and activities of Globe Laboratories for the six months ended June 30, 2008 and 2007.

The Company may be obligated to reimburse Globe Laboratories for any reassessment of scientific research and experimental development tax credits that may arise. No claim has been made by Globe Laboratories through June 30, 2008, and the Company is unable to estimate the likelihood of any claim that may be related to any reassessment of scientific research and experimental development tax credits.


4.	CAPITAL STOCK

Units

During the three months ended March 31, 2008, the Company issued 5,250,000 Units at $0.20 per unit, each Unit consisting of one share of common stock of the Company, par value of $0.001, and one common stock purchase warrant entitling the holder to purchase one share of common stock at an exercise price of $0.30 per warrant for a period of 60 months from the date of issue. Proceeds from the sale of the Units were $893,634 net of offering costs of $148,470.

During the three months ended June 30, 2008, the Company issued 5,899,827 Units at $0.15 per unit, each Unit consisting of one share of common stock of the Company, par value of $0.001, and one common stock purchase warrant entitling the holder to purchase one share of common stock at an exercise price of $0.25 per warrant for a period of 60 months from the date of issue. Proceeds from the sale of the Units were $770,793 net of issue costs of $81,935.

Common stock

During the three months ended March 31, 2008, the Company issued 5,250,000 shares of common stock through the sale of Units. These shares were estimated to have a relative fair value of $ 0.13 per share which represents a cash consideration of $ 682,500. The shares were recorded at par value of $5,250. The remaining balance was recorded in additional paid-in capital.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – (continued)


4.	CAPITAL STOCK - continued

During the three months ended June 30, 2008, the Company issued 5,899,827 shares of common stock through the sale of Units. These shares were estimated to have a relative fair value of $0.10 per share which represents a cash consideration of $589,983. The shares were recorded at par value of $5,900. The remaining balance was recorded in additional paid-in capital.

Warrants

During the three months ended March 31, 2008, the Company issued 5,250,000 stock purchase warrants through the sale of Units. The stock purchase warrants were accounted for at their relative fair value, as determined by the Black-Scholes valuation model, of $0.07 per warrant which represents a cash consideration of $359,604. This amount was recorded in additional paid-in capital.

During the three months ended June 30, 2008, the Company issued 5,899,827 stock purchase warrants through the sale of Units. The stock purchase warrants were accounted for at their relative fair value, as determined by the Black-Scholes valuation model, of $0.05 per warrant which represents a cash consideration of $262,745. This amount was recorded in additional paid-in capital.

The following table summarizes information regarding stock purchase warrants outstanding at June 30, 2008.


Exercise price	Number- outstanding and exercisable	Expiry dates

$0.30	5,250,000	February 2013
$0.25	5,899,827	June 2013
	11,149,827

Common stock reserved for future issuances

Common stock reserved for future issuances as of June 30, 2008 is as follows:


	Outstanding stock options	2,052,000
	Stock options available for grant	2,446,416
	Outstanding stock purchasewarrants	11,149,827

		15,648,243

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (continued)


5.	STOCK-BASED COMPENSATION

The Company has a stock option plan under which options to purchase common stock of the Company may be granted to employees, directors and consultants. Stock options entitle the holder to purchase common stock at an exercise price determined by the Board of Directors at the time of the grant. Options vest 4% at the time of grant and then at 4% per month for 24 months, at which time the options are fully vested. Options generally expire 5 years from the date of grant.

The maximum number of shares of common stock authorized by the stockholders, reserved, remaining and available for issuance by the Board of Directors is 4,498,416. The compensation cost that has been charged against income for the six month period ended June 30, 2008 for this plan was $30,291 (2007 - $62,574), which would be classified as research and development or general and administrative expense based on the classification of cash compensation paid to the same employees in the amounts of $4,441 (2007 - $6,662) and $25,854 (2007 - $55,912) respectively.

The fair value for stock awards was estimated at the date of grant using the Black-Scholes valuation model with the following weighted average assumptions for the six months ended June 30, 2007:


	Six months ended
	June 30, 2007

Expected term (in years)		5
Expected volatility		58%
Risk-free interest rate		4.6%
Expected dividend yield		0.0%
Estimated fair value per option granted		$0.34

There were no stock awards granted during the six months ended June 30, 2008.

The expected term of the options represents the estimated period of time until exercise and is based on historical experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. The expected volatility is based on historical volatility of the Company’s stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. The Company has not paid dividends in the past and does not plan to pay any dividends in the near future.

The Black-Scholes valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, particularly for the expected term and expected stock price volatility. The Company’s stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value estimate. Because the Company’s stock options do not trade on a secondary exchange, option holders do not derive a benefit from holding stock options unless there is an increase, above the grant price, in the market price of the Company’s stock. Such an increase in stock price would benefit all shareholders commensurately.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – (continued)


5.	STOCK-BASED COMPENSATION − continued

The fair value of each stock option granted is estimated on the date of grant using Black-Scholes valuation model. The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and the Company’s experience. Options granted are valued using the Black-Scholes valuation approach, and the resulting expense is recognized using the graded attribution

method. Compensation expense is recognized only for those options expected to vest, with forfeitures estimated at the date of grant based on the Company’s historical experience and future expectations. Prior to the adoption of SFAS No. 123R, the effect of forfeitures on the pro forma expense amounts was recognized as the forfeitures occurred.

A summary of the Company’s stock option activity for the six months ended June 30, 2008 is presented in the following table:

					Weighted
				Weighted	average
	Shares			average	remaining		Aggregate
	under			exercise	contractual		intrinsic
	options			price	term		value

Outstanding, January 1, 2008	2,797,000		$	1.00
Granted	-			-
Cancelled	(745,000	)		1.00

Outstanding, June 30, 2008	2,052,000		$	1.00	2.1	$	0.0


Exercisable, June 30, 2008	1,961,600		$	1.00	2.0	$	0.0

The aggregate intrinsic value in the table above is based on the Company’s closing stock price of $0.15 as of the last business day of the period ended June 30, 2008, which would have been received by the optionees had all options been exercised on that date. As of June 30, 2008, total unrecognized stock-based compensation expense related to nonvested stock options was $25,063 which is expected to be recognized over a weighted average period of 0.6 years. During the six months ended June 30, 2008, the total intrinsic value of stock options exercised was $Nil (2007 - $Nil) and the total fair value of options vested was $42,580 (2007 - $62,574).

A summary of the status of the Company’s nonvested shares as of June 30, 2008, and changes during the period ended June 30, 2008, is presented below:

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – (continued)


5.	STOCK-BASED COMPENSATION − continued


Nonvested Shares	Shares		Weighted average grant-date fair value

Nonvested at January 1, 2008	277,200	$	0.34
Granted	-		-
Vested	(132,400)		0.32
Forfeited	(54,400)		0.34

Nonvested at June 30, 2008	90,400	$	0.37

The Company issues shares of common stock upon exercise of stock options from authorized unissued stock.


6.	RELATED PARTY TRANSACTIONS

During the six month period ended June 30, 2008, the Company paid $Nil (2007 - $738,618) to Globe Laboratories Inc. (“Globe”), a corporation controlled by Dr. Hassan Salari, the Company’s former Chairman and Chief Scientific Officer, for research activities performed on behalf of the Company under the terms of a development agreement. Pursuant to the development agreement, which was terminated effective January 1, 2007, the Company engaged Globe to perform certain research activities on the basis of operating cost plus a 2% margin.

During the six month period ended June 30, 2008, the Company sold certain laboratory equipment for total proceeds of $1,611 (2007 − $Nil) to companies with a common director of the Company.

During the six month period ended June 30, 2008, the Company paid board compensation to its non-executive directors totaling $Nil (2007 - $73,625), which are included in general and administrative expense.

During the six month period ended June 30, 2008, the Company paid consulting fees of $Nil (2007 - $2,209) to a company controlled by a family member directly related to a director of the Company, for website administration. The Company ceased using these consulting services in January 2007.


7.	COMMITMENTS

Contractual agreements

The Company has entered into various research and development agreements with non-affiliated third parties to perform research and development services on its behalf. As at June 30, 2008, the Company is committed to pay $156,705 in the next six months, in respect of contractual agreements based on invoices submitted as services provided in accordance with the contractual agreements.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – (continued)


7.	COMMITMENTS - continued

Lease agreement

On April 23, 2008, the Company entered into an operating lease for new office premise beginning June 1, 2008, as the current office premise operating lease expires on July 31, 2008. The Company is obligated to make the following minimum lease payments under its new operating lease:


2008	$	20,100
2009		80,700
2010		80,700
2011		40,400

	$	221,900

During the six month period ended June 30, 2008, the Company incurred rent expense due to operating leases of $42,853 (2007 - $115,104), which is included in general and administrative expense in the consolidated statement of operations.

License agreement - PPDI

On April 12, 2006, the Company entered into an agreement with Pharmaceutical Product Development, Inc. (“PPDI”) to re-acquire licensing rights to its drug candidate CTCE-0214 that had previously been granted to PPDI in April 2003.

Under the agreement the Company is obligated to achieve various milestones and is committed to make milestone payments.

Milestone payments are to be made as follows:

- $250,000 cash upon the dosing of the first subject in a Phase III clinical trial of CTCE-0214,

- $250,000 cash upon filing a New Drug Application with the United States Food and Drug Administration (“FDA”) with respect to CTCE-0214 (or any equivalent filing in any foreign country),

- $1,000,000 cash upon approval by the FDA (or any equivalent regulatory body in a foreign country) of CTCE-0214 for any therapeutic use, and

- 50 percent of the first net sales of CTCE-0214 up to $1,000,000.

As at June 30, 2008, the Company had not achieved any milestones and had not paid or accrued any milestone payments with regards to the PPDI License Agreement.

License Agreement – UBC

On September 22, 1999 the Company entered into a license agreement with UBC. In addition, the license agreement was amended on May 17, 2007. The license grants the Company exclusive worldwide rights to research, develop and commercially exploit certain patented technologies, which remain the property of UBC. The licensed technology relates to therapeutics for a variety of human diseases.

Under the agreement the Company is obligated to achieve various milestones and is committed to make milestone payments and to pay royalties of 2% of any revenues or other consideration derived from the licensed technologies. Should the Company fail to satisfy any of its obligations, UBC has the right to terminate the license agreement.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – (continued)


7.	COMMITMENTS - continued

Milestone payments are to be made as follows:

- Cdn$50,000 upon filing an Investigational New Drug (“IND”) in any jurisdiction, which was paid by the Company in 2003,

- Cdn$25,000 upon the start of Phase II clinical trials and Cdn$75,000 at the time of completion of Phase II clinical trials,

- Cdn$75,000 upon the start of Phase III clinical trials and Cdn$175,000 at the time of completion of Phase III clinical trials, and

- Cdn$500,000 at the time of filing for New Drug Approval after completion of Phase III clinical trials.

Minimum annual royalty payments are to be made as follows:

- Cdn$25,000 one year from product approval

- Cdn$50,000 two years from product approval

- Cdn$75,000 three years from product approval

- Cdn$100,000 four years from product approval

- Cdn$150,000 five years from product approval

Other than the milestone payment of Cdn $50,000 in 2003, the Company had not achieved any further milestones and had not paid or accrued any other milestone or royalty payments as at June 30, 2008 with regard to the UBC License Agreement.


8.	FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and cash equivalents, short-term investments, amounts receivable, amount due from affiliate, accounts payable and accrued liabilities, and capital lease obligation.

Fair value

The fair value of cash and cash equivalents, amounts receivable, and accounts payable and accrued liabilities approximates their carrying values due to their short terms to maturity. The fair value of short-term investments is determined using quoted market prices for those securities or similar financial instruments.

The fair value of the capital lease obligation approximates the carrying amount as the capital lease obligation bears a fair market rate of interest.

The fair value of the amount due from affiliate is not readily determinable as the amount is due from a related party. The amount is carried at the amount of consideration required to discharge the obligation on a current basis.

Fair value hierarchy

SFAS No. 157 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. SFAS No. 157 establishes three levels of inputs that may be used to measure fair value:

Level 1 − Quoted prices in active markets for identical assets or liabilities.

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – (continued)


8.	FINANCIAL INSTRUMENTS - continued

Level 2 − Observable inputs other than the Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 − Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

Assets/Liabilities Measured at Fair Value

Assets and liabilities measured at fair value consisted of the following instruments as of June 30, 2008:

Financial Instrument		Fair Value	Fair Value Hierarchy

Cash and cash equivalents	$	774,779	Level 1
Short-term investments	$	75,366	Level 1
Amounts receivable	$	17,851	Level 2
Accounts payable and accrued liabilities	$	783,472	Level 3
Capital lease obligation	$	2,659	Level 3

Credit risk

Cash and cash equivalents, short-term investments and amounts receivable expose the Company to credit risk. The Company minimizes its exposure to credit risk by transacting with parties that are believed to be creditworthy. The maximum potential loss on these financial instruments is equal to the carrying amounts of those items.

The Company has cash in excess of the CDN $100,000 insured amount as established by the Canada Deposit Insurance Corporation.


9.	SUBSEQUENT EVENT

On July 18, 2008, a senior member of management resigned from his position within the Company as well as from the board of directors. Subsequent to his resignation, one million fully vested stock options will expire 90 days from the date of his resignation. Of the stock options held, 750,000 are at an exercise price of $1.00 and 250,000 are at an exercise price of $1.25. In management’s opinion, it is unlikely that any of the options will be exercised prior to their date of expiration given the current trading value of the Company’s shares on the stock market.


10.	DIFFERENCES BETWEEN UNITED STATES AND CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The consolidated financial statements are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). U.S. GAAP differs in certain material respects from Canadian generally accepted accounting principles (“Canadian GAAP”). The material differences between U.S. GAAP and Canadian GAAP are as follows:

CHEMOKINE THERAPEUTICS CORP.

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS – (continued)


10.	DIFFERENCES BETWEEN UNITED STATES AND CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES - continued

		Three months ended						Six months ended
		June 30,						June 30,
Consolidated statement of operations		2008			2007			2008			2007

Net loss under U.S. GAAP	$	(863,647	)	$	(306,078	)	$	(1,615,578	)	$	(1,918,015	)
Stock-based compensation fair value
basis under U.S. GAAP (i)		13,122			27,739			30,291			62,574
Stock-based compensation fair value
basis under Canadian GAAP (i)		(20,909	)		(40,101	)		(38,938	)		(91,766	)

Net loss under Canadian GAAP	$	(871,434	)	$	(318,440	)	$	(1,624,225	)	$	(1,947,207	)

Loss per share under Canadian GAAP	$	(0.02	)	$	(0.01	)	$	(0.03	)	$	(0.05	)


	(i)	Stock-based compensation

On January 1, 2004 the Company retroactively adopted the revised provisions of the Canadian Institute of Chartered Accountants’ Handbook Section 3870 “Stock-based Compensation and Other Stock-based Payments” (“Section 3870”). Section 3870, as revised, requires stock-based compensation be charged to expense based on estimated fair value. The fair value of stock-based compensation is determined, under 3870, the same way as under SFAS No. 123 before January 1, 2006. The adoption of this revised standard impacts net loss reported under Canadian GAAP and otherwise has no impact on stockholders’ equity or net cash used in operations before the adoption of SFAS No. 123R.

The Company adopted SFAS No. 123R on January 1, 2006. Generally, the approach under SFAS No. 123R is similar to the approach under Section 3870. However, SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values and requires a forfeiture assumption on the Company’s unvested awards. Section 3870 does not require the forfeiture estimates.


	(ii)	Contributed surplus

U.S. GAAP uses the phrase “Additional Paid-in Capital” to describe consideration received in excess of the par value of warrants and stock options. Canadian GAAP uses the phrase “Contributed Surplus”.


	(iii)	Development stage disclosure

The Company is considered a development stage Company as defined by SFAS No. 7. The Company is also considered a development stage Company under Accounting Guideline 11 “Enterprises in the development stage” of the Canadian Institute of Chartered Accountants’ Handbook


	(iv)	Foreign currency translation

Canadian GAAP does not expressly provide for the concept of a “functional currency” with respect to foreign currency translation. However, the method of translation used by the Company is equivalent to the method required under Canadian GAAP.


	(v)	Research and development

Under U.S. GAAP, costs to purchase rights to unproven technology, which may not have alternative future uses, are expensed as research and development. Under Canadian GAAP, the purchase costs of such rights are generally capitalized as an intangible asset.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Form 10-Q contains forward-looking statements. These statements relate to our expectations for future events and future financial performance. Generally, the words “anticipate,” “believe,” “expect,” “intend,” “plan” and similar expressions identify forward-looking statements. Forward-looking statements involve risks and uncertainties, and future events and circumstances could differ significantly from those anticipated in the forward-looking statements. These statements are only predictions. Actual events or results may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assume responsibility for the accuracy and completeness of the forward-looking statements. We undertake no duty to update any of the forward-looking statements after the date of this report to conform such statements to actual results or to changes in our expectations.

All references to “$” or “dollars” in this Form 10-Q are to U.S. dollars unless otherwise noted.

Overview

We are a development stage biotechnology company with a focus on the development of small protein, or peptide, based drugs for human diseases. In particular, we focus on the area of chemokines, which are small proteins that guide the migration of cells involved in cancer progression, the immune system, promote the growth of new blood vessels, and are critical for cellular maturation.

We are at various stages in research and development of five drug candidates. Two of our drug candidates are in human clinical trials. Our two lead drug candidates are CTCE-9908 and CTCE-0214. CTCE-9908 is being investigated for prevention of growth and the spread of cancer. CTCE-0214 is being investigated for the mobilization of stem cells and neutrophils into the circulation, for hematological support. Our other three drug candidates are in preclinical development in the areas of growth and development of blood vessels (CTCE-0324), wound healing (CTCE-0422), and stroke prevention (CTCE-0501).

Our objective is to develop drug candidates that target chemokine receptors and further develop them through Phase II clinical trials. Provided that we reach this stage with individual drug candidates, we intend to enter into agreements with larger biotechnology and pharmaceutical companies to license or co-develop our drug candidates through Phase III and Phase IV of clinical trials. In some circumstances, when appropriate, we may license a product to a partner at an earlier stage. We intend to license our product candidates to companies with existing infrastructure to conduct late stage drug development and market pharmaceuticals.

Chemokine Therapeutics Corp. was founded on July 15, 1998. We are incorporated under the laws of the State of Delaware. We have a wholly-owned subsidiary, Chemokine Therapeutics (B.C.) Corp., or CTBCC, a company incorporated under the laws of the Province of British Columbia.

Limited Operating History

We have incurred significant losses since our inception in July 1998. As of June 30, 2008, our accumulated deficit was approximately $32.4 million. We recognized net losses of approximately $6,239,886 and $7,507,866 in 2007 and 2006, respectively and $1,615,578 for the six months ended June 30, 2008. We expect to continue to incur net losses in the near term as we fund clinical trials and until such time as product sales or royalty payments, or both, generate sufficient revenues to fund continuing operations.

Research and Development

Our research and development expenses consist primarily of costs associated with the clinical trials of our drug candidates, compensation and other expenses for research and development personnel, manufacturing of compounds, facility costs, supplies and materials, costs for consultants and related contract research and depreciation. Until December 31, 2006, our research activities were centralized in Vancouver, British Columbia through Globe Laboratories Inc., or Globe Laboratories, in an incubator facility on the campus of University of British Columbia.

Globe Laboratories is a corporation beneficially owned by Dr. Hassan Salari and his family and that was engaged to carry out chemokine research for us on a contracted operating cost basis plus a 2% margin. Pursuant to the terms of our development agreement with Globe Laboratories, all proprietary interest, including all patent rights, trademarks, copyright, trade secrets and confidential information in the product candidates developed by Globe Laboratories for us is our exclusive property.

Effective January 1, 2007, we acquired certain assets of Globe Laboratories, consisting mainly of laboratory equipment and leasehold improvements, through our wholly-owned subsidiary Chemokine Therapeutics (B.C.) Corp., or CTBCC, for consideration of CDN$375,935 reflecting the fair market value of these assets as determined by an independent appraisal. We no longer use Globe Laboratories for research and development services. We did not incur any early termination obligations by terminating our agreement with Globe Laboratories. CTBCC and Globe Laboratories also entered into a definitive agreement which provided for the assignment to CTBCC of a partial sublease by Globe Laboratories in respect of approximately 5,400 square feet of laboratory space located at the University of British Columbia. In accordance with the terms of the agreement, the majority of the former employees of Globe Laboratories were hired by CTBCC.

On October 31, 2007, November 14, 2007, and December 31, 2007, we surrendered operating leases for approximately 5,400 square feet of our laboratory space. We have entered into a lease for 2791 square feet of office space on West Broadway in Vancouver as our current lease for 3,600 square feet of office space at the University of British Columbia expired on July 31, 2008.

Our research and development activities are primarily focused on the clinical trials of CTCE-9908, a drug candidate for cancer, and CTCE-0214, a drug candidate for hematological support. We are responsible for all costs incurred in the research and development program of these two lead drug candidates. Our research and development activities also include three other drug candidates that we intend to test in animal models of peripheral arterial disease, wound healing and stroke. We expect our research and development expenses to increase as we continue to work on our drug candidates and to expand our research and development programs.

Assuming we secure additional capital, our product research and development plan over the next twelve months is summarized as follows:

complete the study report for Phase I/II clinical trial of CTCE-9908 in Canada;

file regulatory documents in Hong Kong and other jurisdictions for a randomized Phase II clinical trial(s) for CTCE-9908;

commence a Phase II clinical trial using CTCE-9908 for liver cancer in the United States, Canada, Hong Kong and other countries;

develop a Phase II clinical trial using CTCE-9908 for ovarian cancer in Canada and the UK;

continue clinical development of CTCE-0214 for neutrophil and stem cell mobilization; and

complete supportive preclinical studies for the CTCE-9908 program.

Clinical development timelines, likelihood of success and total costs vary widely. We anticipate that we will make determinations as to which research and development projects to pursue and how much funding to direct to each of the five projects on an ongoing basis in response to the scientific and clinical success of each product candidate, as well as an ongoing assessment of its market potential.

Completion dates and completion costs to bring a drug candidate to market vary significantly for each drug candidate given the nature of the clinical trials and the fact that more clinical trials may be needed to advance a drug candidate based upon the results of each study. In addition, we anticipate partnering with larger pharmaceutical companies to conduct and finance later stage clinical trials and therefore the timing of completion of the approval of a drug will likely not be within our control. Based on these factors we cannot reasonably estimate the completion dates and completion costs required to gain regulatory approval for the marketing and sale of our compounds. The lengthy process of seeking regulatory approvals, and subsequent compliance with applicable regulations, require the expenditure of substantial resources. Delays in obtaining, regulatory approvals could cause our research and development expenditures to increase and, in turn, require additional funding.

Strategic Relationship and Partnering Strategy

We plan to enter into partnership agreements for our drug candidates by the end of Phase II clinical trials or earlier. Due to the significant costs involved in conducting Phase III or Phase IV clinical trials, we intend to enter into agreements with larger biotechnology and pharmaceutical companies to co-develop our products through Phase III and Phase IV of clinical trials, thereby sharing the costs. As our focus is on the discovery and development of drug candidates, we intend to license the marketing of the products to companies with existing infrastructure for the marketing of pharmaceutical drugs. In addition, we will rely on third-party manufacturers with the manufacturing capabilities to produce sufficient quantities of these products for clinical studies and large-scale commercialization upon their approval.

General and Administrative

General and administrative expenses consist primarily of salaries and other related costs for personnel in executive, finance, accounting and business development functions. Other costs include consulting, legal and accounting services fees, investor relations, patent fees, marketing and promotion and facility costs not otherwise included in research and development expenses.

Foreign Exchange

We use the U.S. dollar as our functional currency, and presents the consolidated financial statements in U.S. dollars using the current rate method. Under the current rate method, all assets and liabilities are translated using the exchange rate at the balance sheet date and translates revenues, expenses, gains and losses at the weighted average rates of exchange for the respective periods. Before consolidation the financial statements of CTBCC are remeasured from its local currency of Canadian dollars to its functional currency of U.S. dollars at the end of each reporting period. Monetary items of CTBCC’s financial statements are remeasured by applying the current exchange rate and non-monetary items are remeasured by applying historical exchange rates. We include the resulting exchange gain or loss in foreign currency upon remeasurement in the foreign exchange gain or loss account in the consolidated statement of operations.

Fluctuations in the relative values of the Canadian and U.S dollars can affect the reported value of Canadian dollar denominated assets and liabilities on our balance sheet. A strengthening (weakening) Canadian dollar in relation to the U.S. dollar results in higher (lower) reported values for our Canadian dollar denominated assets and liabilities.

Critical Accounting Policy

Our discussion and analysis of financial condition and results of operations are based on our financial statements, which have been prepared in accordance with United States generally accepted accounting principles. Differences between U.S. and Canadian GAAP are presented in Note 10 to our annual financial statements. The preparation of financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. We review our estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in Note 2 to our annual financial statements, we believe the following accounting policy to be critical.

Stock-Based Compensation

Stock-based compensation represents the cost related to stock-based awards granted to employees. We measure stock-based compensation cost at grant date, based on the estimated fair value of the award, and recognize the cost as expense on a straight-line basis (net of estimated forfeitures) over the employee requisite service period. We estimate the fair value of stock options using a Black-Scholes option valuation model.

As of June 30, 2008, total unrecognized stock-based compensation expense related to nonvested stock options was $25,063, which is expected to be recognized over a weighted average period of approximately 0.6 years.

Results of Operations

Three Months Ended June 30, 2008, and 2007

Revenues.

We had no revenues in the three months ended June 30, 2008 and in the three months ended June 30, 2007.

Research and development.

Research and development expenses include contract research, manufacturing, laboratory supplies, and staff salaries.

Research and development expenses for the three months ended June 30, 2008 were $348,027, compared to a net recovery of $394,661 for the three months ended June 30, 2007, being an increase of $742,688.

The variance of $742,688 in research and development expenses in the current three month period is primarily attributable to the recovery of costs of $506,911 (for fiscal 2005) and $571,000 (for fiscal 2006) from Globe Laboratories under the terms of the development agreement with Globe Laboratories which was terminated by us on January 1, 2007 as well as the terms of the settlement agreement with Globe Laboratories.

Our normalized research and development costs, excluding the above mentioned cost recoveries would have amounted to $683,250 for the three months ended June 30, 2007 compared to $348,027 for the corresponding period in 2008, a decrease of $335,223, which is attributed to the reduced expenses for research and development salaries amounting to approximately $149,000, lab expenses of approximately $151,000 and contract research expenses of approximately $35,000 following the surrender of the laboratory leases and reductions in laboratory personnel implemented in December 2007.

We recorded direct costs for CTCE-9908 of approximately $278,384 for the three months ended June 30, 2008. This compares to a net recovery of $562,428 for the three months ended June 30, 2007. The variance of $840,852 in direct costs for CTCE-9908 in the current period is a result of cost recoveries in 2007 referred to above.

Direct costs for CTCE-0214 were approximately $24,948 for the three months ended June 30, 2008 compared to $75,411 for the three months ended June 30, 2007. The decrease in CTCE-0214 of $50,463 in direct costs in the current period reflects a reduction of spending on clinical and preclinical studies.

Assuming that we are able to raise the required financing, we expect that research and development expenses will increase in the future as and when we incur costs for clinical trials. Completion dates and completion costs to bring a drug candidate to market vary significantly for each drug candidate given the nature of the clinical trials and the fact that more clinical trials may need to be conducted to advance a drug candidate based upon the results of each phase. In addition, we anticipate partnering with larger pharmaceutical companies to conduct and finance later stage clinical trials and therefore the timing of completion of the approval of a drug will likely not be within our control. Based on these factors we cannot reasonably estimate the completion dates and completion costs required to gain regulatory approval of our compounds for sale. Drug candidates are required to successfully complete Phase III clinical trials before gaining regulatory approval for sale which for our drug candidates is not expected to occur for several years.

General and administrative.

General and administrative expenses for the three months ended June 30, 2008 were $448,387, compared to $926,795 for the three months ended June 30, 2007. The decrease of $478,408 was in respect of reduced expenditures of approximately $194,000 in salaries and directors fees, approximately $225,000 in professional fees, and approximately $59,000 for travel and other expenses. Other general and administrative expenses included consulting, marketing and promotion expenses incurred for business development.

Interest income.

Interest income was $2,904 for the three months ended June 30, 2008 compared with $42,812 for the three months ended June 30, 2007. The decrease of interest income of $39,908 was due to decreases in short-term investments and cash equivalents.

Foreign exchange gain (loss).

Monetary items for financial statements are remeasured by applying the current exchange rate and non-monetary items are remeasured by applying historical exchange rates. The Company includes the resulting exchange gain or loss in foreign currency upon remeasurement in the foreign exchange gain or loss account in the consolidated statement of operations.

Foreign exchange gain was $9,189 for the three months ended June 30, 2008, compared to a gain of $288,513 for the three months ended June 30, 2007. The gain in 2007 principally resulted from short-term investments and foreign currency transactions and the strengthening of other currencies against the US currency.

Net loss.

We incurred a net loss of $863,647 ($0.02 per share) for the three months ended June 30, 2008 compared to $306,078 ($0.01 per share) for the three months ended June 30, 2007. The variance in our net loss was principally caused by cost recoveries in the three months ended June 30, 2007 as described above. Our normalized loss for the three months ended June 30, 2007 would have been $1,383,989 ($0.03 per share). The decrease in our net loss would have been $520,342, which is attributed to a reduction in research and development, and general and administrative expenditures as described above.

Six Months Ended June 30, 2008 and 2007

Revenues.

We had no revenues in the six months ended June 30, 2008 and in the six months ended June 30, 2007.

Research and development.

Research and development expenses were $540,638 for the six months ended June 30, 2008, an increase of $220,053 from the $320,585 for the six months ended June 30, 2007. The variance of $220,053 in research and development expenses in the current six month period is primarily attributable to the recovery of costs of $506,911 (for fiscal 2005) and $571,000 (for fiscal 2006) from Globe Laboratories under the terms of the development agreement with Globe Laboratories which was terminated by us on January 1, 2007 as well as the terms of the settlement agreement with Globe Laboratories.

Our normalized research and development costs, excluding the above mentioned cost recoveries would have amounted to $1,398,496 for the six months ended June 30, 2007 compared to $540,638 for the corresponding period in 2008, a decrease of $857,858, which is attributed to the reduced expenses for research and development salaries amounting to approximately $265,000, lab expenses of approximately $275,000 and contract research expenses of approximately $318,000 following the surrender of the laboratory leases and reductions in laboratory personnel implemented in December 2007.

Direct costs for CTCE-9908 were approximately $418,940 for the three months ended June 30, 2008. This compares to a net recovery of $166,862 for the three months ended June 30, 2007. The variance of $585,802 in direct costs for CTCE-9908 in the current period is a result of cost recoveries in 2007 referred to above.

Direct costs for CTCE-0214 were $34,676 for the six months ended June 30, 2008 compared to $257,848 for the six months ended June 30, 2007. The decrease of $223,172 in CTCE-0214 direct costs in the current period reflects a reduction of spending on preclinical studies in keeping with a progression to a clinical phase of development.

We expect that research and development expenses will increase in the future as and when we incur costs for clinical trials. Completion dates and completion costs to bring a drug candidate to market vary significantly for each drug candidate given the nature of the clinical trials and the fact that more clinical trials may need to be conducted to advance a drug candidate based upon the results of each phase. In addition, we anticipate partnering with larger pharmaceutical companies to conduct and finance later stage clinical trials and therefore the timing of completion of the approval of a drug will likely not be within our control. Based on these factors we cannot reasonably estimate the completion dates and completion costs required to gain regulatory approval of our compounds for sale. Drug candidates are required to successfully complete Phase III clinical trials before gaining regulatory approval for sale which for our drug candidates is not expected to occur for several years.

General and administrative.

General and administrative expenses for the six months ended June 30, 2008 were $928,005, compared to $1,789,600 for the six months ended June 30, 2007. The net decrease of $861,595 was in respect of decreases in expenses of approximately $401,000 for legal, audit, patent, consulting and professional fees, $325,000 for salaries, and approximately $135,000 for various other expenses.

Interest income.

Interest income was $8,781 for the six months ended June 30, 2008 compared with $99,384 for the six months ended June 30, 2007. The decrease of interest income of $90,603 was due to decreases in short-term investments and cash equivalents.

Foreign exchange gain (loss

Foreign exchange gain was $7,546 for the six months ended June 30, 2008, compared to $303,374 in the six months ended June 30, 2007. These gains principally resulted from short-term investments and foreign currency transactions.

Net loss.

We incurred a net loss of $1,615,578 ($0.03per share) for the six months ended June, 2008 compared to a net loss of $1,918,015 ($0.05 per share) for the six months ended June 30, 2007. Our normalized loss for the six months ended June 30, 2007 would have been $2,995,926 ($0.06 per share). The decrease in our net loss would have been $1,380,348 which is attributed to a reduction in research and development and general and administrative expenses as described above.

Liquidity and Capital Resources

Since our inception, we have financed substantially all of our operations through the private and public offerings of equity securities. We have received a total of $30.5 million from public and private offerings of our equity securities. In December 2004, we completed the initial public offering of shares of our common stock and raised approximately $13.3 million (CDN$16 million). In January 2005, the agents in our initial public offering exercised their over-allotment option which resulted in additional gross proceeds to us of approximately $1.9 million (CDN$2.4 million). In March 2006, we issued 6,471,698 shares of common stock in a private placement transaction for gross proceeds of approximately $5.9 million (CDN$6.9 million) and net proceeds after offering costs of approximately $5.4 million.

On February 7, 2008, the Company completed a private placement and issued 5,250,000 units at a price of $0.20 per unit for gross proceeds of approximately $1,050,000 and net proceeds after offering costs of approximately $890,000. Each unit is comprised of one share of common stock and one common share purchase warrant entitling the holder to purchase one share of common stock at an exercise price of $0.30 per share for a period of 60 months from the date of issue.

On June 13, 2008, the Company completed a private placement and issued 5,899,827 units at a price of $0.15 per unit for gross proceeds of approximately $885,000 and net proceeds after offering costs of approximately $770,000. Each unit is comprised of one share of common stock and one common share purchase warrant entitling the holder to purchase one share of common stock at an exercise price of $0.25per share for a period of 60 months from the date of issue.

At June 30, 2008, we had approximately $850,000 in cash and cash equivalents and short term investments on hand, compared to approximately $3.4 million as of June 30, 2007, a decrease of approximately $2.5 million. Our working capital at June 30, 2008 was approximately $180,000 compared to working capital of approximately $3.3 million at June 30, 2007, a decrease of $3.1 million.

For the six months ended June 30, 2008, we used net cash of $1,617,145 in operating activities consisting primarily of the net loss for the period of $1,615,578. Cash generated from financing activities for the six months ended June 30, 2008, was $1,707,267.

We believe that our current funds will be sufficient to fund our operations until September 30, 2008. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. If we are unable to raise additional capital when required or on acceptable terms, we may have to significantly delay, scale back or discontinue one or more of our clinical trials or our operations.

We will continue to incur substantial operating losses. We cannot accurately forecast our future capital requirements because such forecasts depend on many factors, including:

the rate of progress and cost of our planned or future clinical trials and other development activities;

the scope, prioritization and number of clinical development and research programs we pursue;

the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

the costs and timing of regulatory approval;

the costs of establishing or contracting for manufacturing, sales and marketing capabilities;

the costs of expanding our facilities to support our operations;

the effect of competing technological and market developments; and

the terms and timing of any collaborative, licensing and other arrangements that we may establish.

We intend to seek additional funding through licensing arrangements or through public or private financings. However, such additional financing may not be available to us on acceptable terms, or at all, and we may not be able to enter into licensing arrangements on terms that are favorable to us, if at all. If we are unable to raise additional capital in the near term, we will need to cease operations or reduce, cease or delay our research and development programs and significantly adjust our current business plan. Without additional funding, it is unlikely that we will be able to continue as a going concern.

Off-Balance Sheet Arrangement

We do not have, and do not have any present plans to implement, any off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company” as defined in Item 10 of Regulation S-K, the Company is not required to provide the information required by this item.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer (the “Certifying Officers”), to allow timely decisions regarding required financial disclosures.

Our Certifying Officers performed a review of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based upon that evaluation, our Certifying Officers concluded that as of such date, our disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in our reports is recorded, processed, summarized and reported within the time periods specified by the SEC.

As previously disclosed in our Annual Report on Form 10-KSB for the year ended December 31, 2007, management determined that the Company had a material weakness related to its control environment because it did not have sufficient personnel with financial and accounting skills commensurate with the Company’s financial reporting requirements as a public company.

The unanticipated voluntary turnover of key personnel in late 2007 combined with prior restructuring actions undertaken by the Company earlier in 2007 contributed to this material weakness. This material weakness resulted in the identification of changes in the disclosures in the financial statements that have been recorded in the consolidated financial statements.

Our Certifying Officers believe that the implementation of supplementing existing financial and accounting personnel with technically qualified third party consultants who assist the Company in performing additional procedures and analyses have remediated the deficiencies described above. The remediation also included effective results from testing the measures implemented.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. Other Information

Item 1.

Legal Proceedings

None.

Item 1A.

Risk Factors

As a “smaller reporting company” as defined in Item 10 of Regulation S-K, the Company is not required to provide the information required by this item.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

See information provided on Forms 8-K filed by the registrant on February 14, 2008 and June 17, 2008

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Submission of Matters to a Vote of Security Holders

At the Annual Meeting of Stockholders held on May 23, 2008, the following persons were nominated by the Board of Directors and duly elected by the stockholders to serve until the next annual meeting of stockholders and until the election and qualification of their successors: Reza Bahadori, Bernard Byrd, George M. Kowalchuk, Brian Kuhn and Hassan Salari. The results of the stockholder vote were as follows:

	FOR	AGAINST	WITHHELD
Reza Bahadori	18,324,245	0	24,334
Bernard Byrd	18,324,245	0	24,334
George M. Kowalchuk	18,322,745	0	25,834
Brian Kuhn	18,324,245	0	24,334
Hassan Salari	17,863,355	0	485,224

Item 5.

Other Information

On June 27, 2008, the Board of Directors adopted an amendment to Section 3.7 of Article III of the Bylaws of the Company relating to notice of meetings of the Board of Directors. The amendment updated the notice provisions to specifically provide for notice to be disseminated via electronic mail. A copy of the Bylaws, as amended, is attached hereto as Exhibit 3.1.

Item 6.

Exhibits

3.1

Bylaws, incorporating amendment to section 3.7 of Article III adopted in June 2008

31.1

Certification of Walter Korz, Chief Executive Officer of Chemokine Therapeutics Corp., pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Bashir Jaffer, Chief Financial Officer of Chemokine Therapeutics Corp., pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Walter Korz, Chief Executive Officer of Chemokine Therapeutics Corp. and Bashir Jaffer, Chief Financial Officer of Chemokine Therapeutics Corp., Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

CHEMOKINE THERAPEUTICS CORP.


	/s/ Walter Korz	August 11, 2008
	Signature	Date

By: Walter Korz, Chief Executive Officer and President


	/s/ Bashir Jaffer	August 11, 2008
	Signature	Date

By: Bashir Jaffer, Chief Financial Officer

CHEMOKINE THERAPEUTICS CORP 10-Q