PINX:LEXG Lithium Exploration Group Quarterly Report 10-Q Filing - 3/31/2012

Effective Date 3/31/2012

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2012 or

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ___________

Commission File Number 333-137481

LITHIUM EXPLORATION GROUP, INC.
(Exact name of registrant as specified in its charter)

Nevada 06-1781911
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
   
3200 N. Hayden Road, Suite 235, Scottsdale, Arizona 85251
(Address of principal executive offices) (Zip Code)

480-641-4790
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

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.
[X] YES [ ] NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[X] YES [ ] NO

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

Large accelerated filer [ ]   Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act
[ ] YES [X] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
[ ] YES [ ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
54,049,908 common shares issued and outstanding as of May 4, 2012.


FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2012

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION 3
  Item 1. Financial Statements 3
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 24
  Item 3. Quantitative and Qualitative Disclosures About Market Risk 34
  Item 4. Controls and Procedures 34
PART II – OTHER INFORMATION 34
  Item 1. Legal Proceedings 34
  Item 1A. Risk Factors 34
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 34
  Item 3. Defaults Upon Senior Securities 35
  Item 4. Mine Safety Disclosures 35
  Item 5. Other Information 35
  Item 6. Exhibits 35
SIGNATURES 37

2


PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited interim financial statements for the three and nine month periods ended March 31, 2012 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.

3


LITHIUM EXPLORATION GROUP, INC.
(formerly Mariposa Resources, Ltd.)

(An Exploration Stage Company)

CONSOLIDATED INTERIM FINANCIAL STATEMENTS

March 31, 2012

(Unaudited)

 

4



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Consolidated Balance Sheets

    March 31,     June 30,  
    2012     2011  
    (Unaudited)        
ASSETS            
             
Current            
       Cash and cash equivalents $  208,192   $  1,009,993  
       Prepaid expenses   210,568     647,168  
Total current assets   418,760     1,657,161  
             
Investment (Note 8)   197,393     -  
             
Total Assets $  616,153   $  1,657,161  
             
             
LIABILITIES            
             
Current            
       Accounts payable and accrued liabilities $  12,496   $  183,194  
       Derivative liability (Note 6)   1,463,855     2,060,240  
       Due to related party (Note 7)   45,332     47,537  
       Convertible debentures (Note 6)   1,533,133     -  
       Accrued interest (Note 6)   110,052     -  
             
Total Current Liabilities   3,164,868     2,290,971  
             
STOCKHOLDERS’ DEFICIT            
             
Capital stock (Note 3)            
      Authorized:
      100,000,000 preferred shares, $0.001 par value
      500,000,000 common shares, $0.001 par value
 

   

 
             
      Issued and outstanding:
      53,115,476 common shares (June 30, 2011 – 51,115,476 common shares)
 
53,116
   
51,116
 
             
Additional paid-in capital   26,639,907     24,781,907  
Deficit accumulated during the exploration stage   (29,241,738 )   (25,466,833 )
Total Stockholders’ Deficit   (2,548,715 )   (633,810 )
             
Total Liabilities and Stockholders’ Deficit $  616,153   $  1,657,161  

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

5



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Consolidated Statements of Operations
(Unaudited)

                            Cumulative from  
    Three Months     Nine Months     Inception  
    Ended March 31,     Ended March 31,     (May 31, 2006) to  
    2012     2011     2012     2011     March 31, 2012  
                               
Revenue $  -   $  -   $  -   $  -   $  -  
                               
Operating Expenses:                              
   Advertising   43,818     5,828     69,090     5,828     96,185  
   Consulting   13,071     9,000     154,746     9,000     266,646  
   Director fees   -     -     -     -     17,595,000  
   General and administrative   10,696     5,782     36,391     5,928     59,659  
   Investor relations (Note 3)   32,000     -     613,600     -     764,000  
   Management fees   -     22,500     -     22,500     45,000  
   Mining expenses (Note 5)   52,514     135,000     224,118     225,000     6,503,024  
   Professional fees   22,087     20,415     90,635     31,796     250,662  
   Travel   9,925     6,166     32,315     6,166     47,312  
   Wages   48,891     -     147,210     -     147,210  
                               
Loss from operations   233,002     204,691     1,368,105     306,218     25,774,698  
                               
Other income (expenses)                              
Accretion of beneficial conversion feature (Note 6)   (511,044 )   -     (1,533,133 )   -     (1,533,133 )
Interest on convertible debenture (Note 6)   (27,375 )   -     (110,052 )   -     (110,052 )
Gain (loss) on derivative liability (Note 6)   (487,951 )   -     1,602,410     -     1,710,844  
Loss on discharge of indebtedness (Note 6)   -     -     (1,275,000 )   -     (1,275,000 )
Financing expense (Note 6)   -     -     (1,091,025 )   -     (2,259,699 )
                               
Loss before income taxes   (1,259,372 )   (204,691 )   (3,774,905 )   (306,218 )   (29,241,738 )
                               
Provision for Income Taxes (Note 4)   -     -     -     -     -  
                               
Net loss for the Period   (1,259,372 )   (204,691 )   (3,774,905 )   (306,218 )   (29,241,738 )
                               
Basic and Diluted Loss per Common Share $  (0.02 ) $  (0.00 ) $  (0.07 ) $  (0.00 )    
                               
Weighted Average Number of Common Shares Outstanding   53,115,476     47,375,000     52,060,931     47,375,000      

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

6



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
For the Period of Inception (May 31, 2006) to March 31, 2012

    Common Stock           Deficit        
                      Accumulated        
    Number of           Additional Paid-in     During the Exploration     Stockholders’  
    Shares     Amount     Capital     Stage     Equity (Deficit)  
                               
Inception – May 31, 2006   -   $  -   $  -   $  -   $  -  
Common shares issued to a founder at $0.01 cash per share, June 6, 2006   20,000,000     20,000     -     -     20,000  
Loss for the period (Unaudited)   -     -     -     (2,687 )   (2,687 )
Balance – June 30, 2006 (Unaudited)   20,000,000     20,000     -     (2,687 )   17,313  
Common shares issued to founders at $0.01 per share, July 1, 2006   10,000,000     10,000     -     -     10,000  
Common shares issued for cash at $0.04 per share, December 11, 2006   17,375,000     17,375     52,125     -     69,500  
Loss for the year (Unaudited)   -     -     -     (59,320 )   (59,320 )
Balance – June 30, 2007 (Unaudited)   47,375,000     47,375     52,125     (62,007 )   37,493  
Loss for the year   -     -     -     (22,888 )   (22,888 )
Balance – June 30, 2008   47,375,000     47,375     52,125     (84,895 )   14,605  
Loss for the year   -     -     -     (31,624 )   (31,624 )
Balance – June 30, 2009   47,375,000     47,375     52,125     (116,519 )   (17,019 )
Loss for the year   -     -     -     (20,639 )   (20,639 )
Balance – June 30, 2010   47,375,000     47,375     52,125     (137,158 )   (37,658 )
Common shares issued for cash at $1.00 per share, January 27, 2011   250,000     250     249,750     -     250,000  
Common shares issued for cash at $5.25 per share, April 28, 2011   190,476     191     999,809     -     1,000,000  
Common shares issued for mining expenses and related finder’s fees   500,000     500     49,500     -     50,000  
Common shares issued for settlement of mining expenses   200,000     200     739,800     -     740,000  
Common shares issued for director fees   2,300,000     2,300     17,592,700     -     17,595,000  
Common shares issued for investor relations   300,000     300     701,700     -     702,000  
                               
Options issued for mining expenses               4,396,523           4,396,523  
Loss for the year   -     -     -     (25,329,675 )   (25,329,675 )
Balance – June 30, 2011   51,115,476     51,116     24,781,907     (25,466,833 )   (633,810 )
Common shares issued for debt conversion   2,000,000     2,000     1,858,000     -     1,860,000  
                               
Loss for the period (Unaudited)   -     -     -     (3,774,905 )   (3,774,905 )
Balance – March 31, 2012 (Unaudited)   53,115,476   $  53,116   $  26,639,907   $  (29,241,738 ) $  (2,548,715 )

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

7



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)

                Cumulative from  
    Nine Months     Nine Months     Inception (May 31,  
    Ended     Ended     2006) to March 31,  
    March 31, 2012     March 31, 2011     2012  
                   
Cash Flows from Operating Activities                  
       Net loss for the period $  (3,774,905 ) $  (306,218 ) $  (29,241,738 )
       Items not affecting cash:                  
               Common shares issued for mining expenses                  
               and related finder’s fees   -     25,000     790,000  
               Common shares issued for director fees   -     -     17,595,000  
               Common shares issued for investor relations   -     -     702,000  
               Options issued for mining expenses   -     -     4,396,523  
               Interest accrued on convertible debenture   110,052     -     110,052  
               Accretion of beneficial conversion feature   1,533,133     -     1,533,133  
               Financing expense   1,091,025     -     2,259,699  
               Loss on discharge of indebtedness   1,275,000     -     1,275,000  
               Gain on derivative liability - warrants   (1,602,410 )   -     (1,710,844 )
                   
       Changes in operating assets and liabilities:                  
               Prepaid expenses   436,600     (35,368 )   (210,568 )
               Accounts payable and accrued liabilities   (170,698 )   98,344     12,496  
Net cash used in operations   (1,102,203 )   (218,242 )   (2,489,247 )
                   
Cash Flows from Investing Activities                  
                   
     Investment   (197,393 )   -     (197,393 )
Net cash used in investing activities   (197,393 )   -     (197,393 )
                   
Cash Flows from Financing Activities                  
       Advance from related party   (2,205 )   10,738     45,332  
       Issuance of common shares for cash   -     250,000     1,349,500  
       Issuance of convertible debenture   500,000     -     1,500,000  
Net cash provided by financing activities   497,795     260,738     2,894,832  
                   
Increase (decrease) in cash and cash equivalents   (801,801 )   42,496     208,192  
Cash and cash equivalents - beginning of period   1,009,993     441     -  
Cash and cash equivalents - end of period $  208,192   $  42,937   $  208,192  
                   
Supplementary Cash Flow Information                  
       Non-cash investing and financing activities:                  
                 Common stock issued for debt $  1,860,000   $  -   $  1,860,000  
       Cash paid for:                  
                   Interest $  -   $  -   $  -  
                   Income taxes $  -   $  -   $  -  

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

8



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

1. Organization

Lithium Exploration Group, Inc (formerly Mariposa Resources, Ltd.) (the “Company”) was incorporated on May 31, 2006 in the State of Nevada, U.S.A. It is based in Scottsdale, Arizona, USA. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is June 30.

Effective November 30, 2010, the Company changed its name to “Lithium Exploration Group, Inc.,” by way of a merger with its wholly-owned subsidiary Lithium Exploration Group, Inc., which was formed solely for the change of name.

A wholly owned subsidiary, 1617437 Alberta Ltd was incorporated in the province of Alberta, Canada on July 8, 2011.

The Company is an exploration stage company that engages principally in the acquisition, exploration, and development of resource properties. Prior to June 25, 2009, the Company had the right to conduct exploration work on 20 mineral mining claims in Esmeralda County, Nevada, U.S.A. On July 31, 2009, the Company acquired an option to enter into a joint venture for the management and ownership of the Jack Creek Project, a mining project located in Elko County, Nevada. On September 25, 2009, the joint venture was terminated and the Company entered into an agreement with Beeston Enterprises Ltd., under which the Company was granted an option to acquire an undivided 50% interest in eight mineral claims located in the Clinton Mining District of British Columbia, Canada. On December 16, 2010, the Company entered into an Assignment Agreement to acquire an undivided 100% right, title and interest in and to certain mineral permits located in the Province of Alberta, Canada (see Note 5). On January 18, 2011, the Company entered into a Purchase Option Agreement to acquire an undivided 60% interest in certain mineral claims known as the Salta Aqua Claims located in Salta Province, Argentina (See Note 5). To date, the Company’s activities have been limited to its formation, the raising of equity capital and its mining exploration work program.

Exploration Stage Company

The Company is considered to be in the exploration stage as defined in FASC 915-10-05 “Development Stage Entities,” and interpreted by the Securities and Exchange Commission for mining companies in Industry Guide 7. The Company is devoting substantially all of its efforts to development of business plans and the acquisition of mineral properties.

9



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

2. Significant Accounting Policies

Basis of presentation and consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

The consolidated financial statements include the accounts of the Company and its subsidiary; 1617437 Alberta Ltd. Intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company. Significant estimates that may materially change in the near term include the valuation of derivative liabilities and the underlying warrants, as well as fair value of investments.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with original maturities of less than three months, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $208,192 and $1,009,993 in cash and cash equivalents at March 31, 2012 and June 30, 2011, respectively.

Prepaid expenses

Prepaid expenses mainly consist of legal retainers, deposits for mineral property exploration, and shares issued for investor relations. Legal retainers and deposits for mineral property exploration will be expensed in the period when services are completed. Shares issued for investor relations are amortized as investor relation expenses over the service term.

Start-Up Costs

In accordance with FASC 720-15-20 “Start-Up Costs,” the Company expenses all costs incurred in connection with the start-up and organization of the Company.

10



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

2. Significant Accounting Policies - Continued

Mineral Acquisition and Exploration Costs

The Company has been in the exploration stage since its formation on May 31, 2006 and has not yet realized any revenue from its planned operations. It is primarily engaged in the acquisition, exploration, and development of mining properties. Mineral property acquisition and exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserves.

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables it will likely incur in the near future. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

Net Income or (Loss) per Share of Common Stock

The Company has adopted FASC Topic No. 260, “Earnings Per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net income/loss by the weighted average number of shares of common stock outstanding during the period.

Potentially dilutive securities are not presented in the computation of EPS since their effects are anti-dilutive.

Foreign Currency Translations

The Company’s functional and reporting currency is the US dollar. All transactions initiated in other currencies are translated into US dollars using the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the US dollar at the rate of exchange in effect at the balance sheet date. Unrealized exchange gains and losses arising from such transactions are deferred until realization and are included as a separate component of stockholders’ equity (deficit) as a component of comprehensive income or loss. Upon realization, the amount deferred is recognized in income in the period when it is realized.

No significant realized exchange gain or losses were recorded from inception (May 31, 2006) to March 31, 2012.

11



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

2. Significant Accounting Policies - Continued

Comprehensive Income (Loss)

FASC Topic No. 220, “Comprehensive Income,” establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. From inception (May 31, 2006) to March 31 2012, the Company had no items of other comprehensive income. Therefore, net loss equals comprehensive loss from inception (May 31, 2006) to March 31, 2012.

Risks and Uncertainties

The Company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating a resource exploration business, including the potential risk of business failure.

Environmental Expenditures

The operations of the Company have been, and may in the future be, affected from time to time in varying degree by changes in environmental regulations, including those for future reclamation and site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company vary greatly and are not predictable. The Company's policy is to meet or, if possible, surpass standards set by relevant legislation by application of technically proven and economically feasible measures.

Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against earnings as incurred or capitalized and amortized depending on their future economic benefits. All of these types of expenditures incurred since inception have been charged against earnings due to the uncertainty of their future recoverability. Estimated future reclamation and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the related business operation, net of expected recoveries.

Recent Accounting Pronouncements

Recent accounting pronouncements that are listed below did not, and are not currently expected to, have a material effect on the Company’s financial statements, but will be implemented in the Company’s future financial reporting when applicable.

12



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

2. Significant Accounting Policies - Continued

FASB Statements:

In June 2009 the FASB established the Accounting Standards Codification ("Codification" or "ASC") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). Rules and interpretive releases of the Securities and Exchange Commission ("SEC") issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.

“FASB Interpretation No. 46(R)," and SFAS No. 168 (ASC Topic 105), "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162," were recently issued. SFAS No. 168 has no current applicability to the Company or its effect on the financial statements would not have been significant.

Accounting Standards Update ("ASU") ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU's No. 2009-2 through ASU No. 2011-12 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

13



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

3. Capital Stock

Authorized Stock

At inception, the Company authorized 100,000,000 common shares and 100,000,000 preferred shares, both with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

Effective April 8, 2009, the Company increased the number of authorized shares to 600,000,000 shares, of which 500,000,000 shares are designated as common stock par value $0.001 per share, and 100,000,000 shares are designated as preferred stock, par value $0.001 per share.

Share Issuances

On January 27, 2011, the Company issued 250,000 shares of common stock in a private placement to two unrelated off-shore investors at $1 per share for total cash proceeds of $250,000.

On April 27, 2011, the Company issued 2,300,000 common shares at a market price of $7.65 per share for director fees.

On January 18, 2011, the Company issued 250,000 common shares at a market price of $0.10 per share for mining expenses relating to the Salta Aqua Claims (Note 5)

On March 7, 2011, the Company issued 250,000 common shares at a market price of $0.10 per share for finder’s fees relating to the Salta Aqua Claims (Note 5)

On April 29, 2011, the Company issued 200,000 common shares at a market price of $3.70 per share for settlement of mineral claims in Clinton Mining District (Note 5)

On May 10, 2011, the Company issued 190,476 shares of common stock in a private placement to an unrelated off-shore investor at $5.25 per share for total cash proceeds of $1,000,000.

On June 11, 2011, the Company issued 300,000 common shares at a market price of $2.34 per share for investor relations.

On November 22, 2011, the Company issued 2,000,000 common shares at a deemed price of $0.93 per share for debenture conversion of $1,860,000 (Note 6).

Effective April 30, 2009, the Company effected a 10 for 1 forward split of its common stock, under which each stockholder of record on that date received ten (10) new shares of the Corporation’s $0.001 par value stock for every one (1) old share outstanding.

14



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

3. Capital Stock - Continued

Since its inception (May 31, 2006), the Company has issued shares of its common stock as follows, retroactively adjusted to give effect to the 10 for 1 forward split:

                Price Per        
Date   Description     Shares     Share     Amount  
                         
06/06/06   Shares issued for cash     20,000,000   $  0.001   $  20,000  
07/01/06   Shares issued for cash     10,000,000     0.001     10,000  
12/11/06   Shares issued for cash     17,375,000     0.004     69,500  
01/18/11   Shares issued for mining expenses     250,000     0.100     25,000  
01/27/11   Shares issued for cash     250,000     1.000     250,000  
03/07/11   Shares issued for mining expenses     250,000     0.100     25,000  
04/27/11   Shares issued for director fees     2,300,000     7.650     17,595,000  
04/29/11   Shares issued for settlement of mining expenses     200,000     3.700     740,000  
05/10/11   Shares issued for cash     190,476     5.250     1,000,000  
06/11/11   Shares issued for investor relations     300,000     2.340     702,000  
11/22/11   Shares issued for debenture conversion     2,000,000     0.930     1,860,000  
    Cumulative Totals     53,115,476         $ 22,296,500  

Of these shares, 32,300,000 were issued to directors and officers of the Company. 17,815,476 were issued to independent investors. 500,000 were issued for mining expenses (Note 5). 300,000 were issued for investor relations expenses. 200,000 were issued for debt settlement. 2,000,000 were issued for debenture conversion (Note 6). There are no preferred shares outstanding. The Company has no stock option plan, warrants or other dilutive securities, other than an option granted to Glottech for 2,000,000 shares (Note 5) and warrants issued to acquire 2,409,639 shares of the Company regarding a convertible debenture (Note 6).

As per management agreements, the Company is obligated to issue 300,000 common shares to two directors by April 27, 2012 and April 27, 2013 respectively provided that they continue to serve as members to the Company’s board of directors. 300,000 common shares were issued to the two directors on April 27, 2011.

15



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

4. Provision for Income Taxes

The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes. Deferred taxes are provided in the financial statements under FASC 718-740-20 to give effect to the resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs based on the income taxes expected to be payable in future years.

Exploration stage deferred tax assets arising as a result of net operating loss carryforwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Operating loss carryforwards generated during the period from May 31, 2006 (date of inception) through March 31, 2012 of $5,935,926 will begin to expire in 2026. Accordingly, deferred tax assets were offset by the valuation allowance that increased by approximately $1,345,000 during the period ended March 31, 2012.

The Company follows the provisions of uncertain tax positions as addressed in FASC 740-10-65-1. The Company recognized approximately no increase in the liability for unrecognized tax benefits.

The Company has no tax position at March 31, 2012 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at March 31, 2012. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its intended exploration stage activities. The tax years for June 30, 2011, June 30, 2010 and June 30, 2009 are still open for examination by the Internal Revenue Service (IRS).

16



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

5. Mineral Property Costs

Mineral Claims, Clinton Mining District

On September 25, 2009, and amended June 24, 2010, the Company entered into an Option Agreement under which the Company was granted an option to acquire an undivided 50% interest in eight mineral claims located in the Clinton Mining District, Province of British Columbia, Canada (the “Claims”), which Claims total in excess of 3,900 hectares, in consideration of the issuance of 1,500,000 common shares of the Company on or before December 31, 2010. The Claims were subject to a two percent net smelter royalty which can be paid out for the sum of $1,000,000 (CAD). The Company can earn an undivided 50% interest in the Claims by carrying out a $100,000 (CAD) exploration and development program on the Claims on or before December 31, 2010, plus an additional $200,000 (CAD) exploration and development program on the Claims on or before September 25, 2011.

In the event that the Company acquires an interest in the Claims, the Company and the Optionor have further agreed, at the request of either party, to negotiate a joint venture agreement for further exploration and development of the Claims.

On April 29, 2011, the Company entered into a mutual release agreement. The Company is released from any obligations related to the Claims for considerations of a cash payment of CDN $ 54,624 (US$57,901) and the issuance of 200,000 common shares of the Company. The shares have been valued at a market price of $3.70 for a total of $740,000. The total amount of $797,901 has been recorded as mining expenses.

Mineral Permit

On December 16, 2010, the Company entered into an Assignment Agreement to acquire the following:

  a. )

An undivided 100% right, title and interest in and to certain mineral permits located in the Province of Alberta, Canada.

  b. )

All of the assignor’s right, title and interest in and to the Option Agreement.

17



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

5. Mineral Property Costs - Continued

Mineral Permit - Continued

In consideration for the Assignment, the Company agreed to pay US$90,000 by way of cash or stock of equal value (consisting of amounts previously paid by the Assignor pursuant to the Option Agreement). The Option shall be in good standing and exercisable by the Company by paying the following amounts on or before the dates specified in the following schedule:

  i. )

CDN $40,000 (paid) upon execution of the agreement;

  ii. )

CDN $60,000 (paid) on or before January 1, 2012;

  iii. )

CDN $100,000 on or before January 1, 2013;

  iv. )

CDN $300,000 on or before January 1, 2014; and

  v. )

Paying all such property payments as may be required to maintain the mineral permits in good standing.

  vi. )

The Optionee shall provide a refundable amount of CDN$50,000 (paid) to the Optionor by November 2, 2010, which shall be applied by the Optionor towards work assessment expenses acceptable to the Government of Alberta, with any unused portion to be applied against payments required to maintain the permits underlying the property in good standing.

18



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

5. Mineral Property Costs - Continued

Mineral Claims, Salta Agua Claims

By agreement dated January 18, 2011, the Company entered into a Purchase Option Agreement to acquire an undivided 60% interest in certain mineral claims known as the Salta Agua Claims located in Salta Province, Argentina.

To earn an undivided 60% interest in the Property, the Company must:

  i)

pay to the Optionor a total of US$375,000 as follows:

  a)

US$25,000 (paid) upon execution of the agreement;

  b)

US$50,000 (paid) within thirty days after the effective date;

  c)

US$100,000 on or before January 18, 2012 (not paid);

  d)

US$100,000 on or before January 18, 2013;

  e)

US$100,000 on or before January 18, 2014;

       
  ii)

allot and issue to the Optionor, up to a total of 1,000,000 common shares as follows:

  a)

250,000 Shares within thirty days after the effective date (issued)(Note 3);

  b)

250,000 Shares on or before January 18, 2012 (not issued);

  c)

250,000 Shares on or before January 18, 2013;

  d)

250,000 Shares on or before January 18, 2014;

       
  iii)

incur Exploration Expenditures of not less than a cumulative total of US$4,000,000 as follows:

  a)

US$250,000 on or before January 18, 2013;

  b)

US$500,000 on or before January 18, 2014;

  c)

US$1,250,000 on or before January 18, 2015;

  d)

US$2,000,000 on or before January 18, 2016.

Upon completion of the above terms, the Company was to acquire the remaining 40% interest in the Property by paying the sum of $6,000,000, payable either in a lump sum due 180 days later, or by paying $3,000,000 at such time and $3,000,000 plus interest at the rate of LIBOR plus 5% interest 12 months later.

Upon the commencement of Commercial Production, the Company was to pay to the Optionor a Royalty of 3% Gross Returns.

During the year ended June 30, 2011, the Company paid a finder’s fee of $10,000 and issued 250,000 common shares of the Company to the finder. The shares are valued at a market price of $0.10 for a total of $25,000.

The agreement has been terminated on January 18, 2012 and no further payments are due on this option.

19



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

5. Mineral Property Costs - Continued

Glottech Technology

On March 17, 2011 and subsequently amended on November 18, 2011, the Company entered into a letter agreement to acquire one initial unit of proprietary and patented mechanical ultrasound technology for use in water purification, inclusive of its process of separating from water, as the primary fluid stock, the salt and other minerals and by –products contained therein, with Glottech – USA.

To acquire the unit, the Company must make the following payments:

  a)

US$25,000 upon execution of the agreement (paid);

  b)

US$75,000 within 180 days of execution of the agreement (paid);

  c)

US$700,000 within 10 days of receipt of invoice from Glottech –USA LLC if the payment in b) is made (paid).

  d)

The Company also granted an option to acquire 2,000,000 shares at $1.00 per share to Glottech – USA upon receipt of the operational ultrasonic generator that they are building for Lithium Exploration Group. The 2,000,000 shares are to be paid from outstanding shares owned by Alex Walsh, company CEO.

Commencing as of the end of an initial sixty day testing and training period following satisfactory delivery and physical setup of the technology, and continuing thereafter for as long as the technology remains in the possession of the Company, the Company shall pay continuing monthly royalties.

The option (resulting in additional mining expenses of $4,396,523) was valued using Black-Scholes method using the following assumptions:

  • Risk-free interest rate - 0.18%
  • Term – One Year
  • Dividend yield – 0%
  • Exercise price - $1.00
  • Underlying stock price - $2.47
  • Volatility – 257%

20



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

6. Convertible Debenture

Prior to June 30, 2011, the Company entered into a securities purchase agreement with one investor. Pursuant to the terms of the agreement, the investor acquired convertible debentures with an aggregate total of $1,500,000.The debenture is due on December 28, 2012 and carries an interest rate of 12% per annum. The debenture is convertible at $0.83 per share subject to various prescribed conditions. On November 22, 2011, the debenture was converted to 2,000,000 common shares at a discounted price of $.2925 per share, trading at $.93 per share on issuance date. During the period ended March 31, 2012, an interest expense of $110,052 was accrued.

The debentures include anti-dilution protection with respect to lower priced issuances of common stock or securities convertible or exchangeable into common stock.

Along with the debenture, the Company issued warrants to acquire a total of 2,409,639 shares of the Company for a period of five years at an exercise price of $0.913 of which 1,204,819 warrants were granted on June 29, 2011 and 602,410 warrants were granted on July 12, 2011.

The warrants include anti-dilution protection with respect to lower priced issuances of common stock or securities convertible or exchangeable into common stock.

The warrants bear a cashless exercise provision which resulted in derivative liability treatment under ASC topic 815-10-55 totaling $2,168,674 and $1,006,025 for warrants issued on June 29, 2011 and July 12, 2011 respectively. Because proceeds from the debenture as of June 30, 2011 were only $1,000,000, corresponding 1,204,819 warrants resulted in additional financing expenses of $1,168,674 in the year ended June 30, 2011. In July 2011, additional proceeds of $500,000 from the debenture were received. Corresponding 602,410 warrants resulted in additional financing expenses of $506,025 in the period ended March 31, 2012. In November, 2011, the debenture was converted to 2,000,000 common shares of the Company at a discounted price of $.2925 per share, trading at $.93 per share on issuance date. The corresponding reduction in conversion price, relative to the fair value on the issuance date, resulted in additional financing expenses of $585,000 in the period ended December 31, 2012.

The Company used the Lattice Model for valuing warrants using the following assumptions:

  • Risk-free interest rate – 1.04%
  • Term – 5 years
  • Dividend yield – 0%
  • Underlying stock price - $0.81
  • Volatility – 453%

At March 31, 2012, the warrants were valued at $1,463,855 resulting in a gain on derivative liability of $1,602,410 in the nine months period ended March 31, 2012. The corresponding beneficial conversion feature of the initial $1,500,000 was accreted to interest expense over the term of debenture of 18 months. During the nine month period ended March 31, 2012, an accretion of $1,533,133 was recognized.

21



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

7. Due to Related Party

As of March 31, 2012 and June 30, 2011, the Company was obligated to a director for a non-interest bearing demand loan with a balance of $45,332 and $47,537, respectively. The Company plans to pay the loan back as cash flows become available.

8. Investment

During the period ended March 31, 2012, the Company paid US$197,393 (CDN $200,000) in consideration for 800,000 shares of First Reef Energy Inc.

The Company intends to sell the securities purchased in the near term, and accordingly, has classified them as Available-for-Sale securities, wherein, unrealized gains or losses resulting from marking the securities to market are recorded in other comprehensive income. The securities are valued using in accordance with FASB ASC 870-10: Fair Value Measurements and Disclosure (FASB 157) resulting in estimated fair value of $197,393 at March 31, 2012. Resulting other comprehensive income is nominal.

9. Going Concern and Liquidity Considerations

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As at March 31, 2012, the Company had a working capital deficiency of $1,944,903 and an accumulated deficit of $29,241,738. The Company intends to fund operations for fiscal 2012 and 2013 with our cash on hand of $208,192 (as at March 31, 2012) and the debenture entered into on March 28, 2012, pursuant to which we are entitled to collect $1,500,000 in net proceeds.

The ability of the Company to emerge from the exploration stage is dependent upon, among other things, obtaining additional financing to continue operations, explore and develop the mineral properties and the discovery, development and sale of ore reserves.

In response to these problems, management intends to raise additional funds through public or private placement offerings.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

22



Lithium Exploration Group, Inc.
(formerly Mariposa Resources, Ltd.)
(An Exploration Stage Company)
Notes to Consolidated Interim Financial Statements
March 31, 2012
(Unaudited)

10. Commitments

Employment Agreement

On January 12, 2012, the Company entered into an employment agreement with a director. Commencing on January 12, 2012, the director will be employed for 24 months ending on January 12, 2014. Pursuant to the agreement, annual salary of US$120,000 is payable monthly in cash or if the Company does not have available cash, in shares of the Company’s common stock.

Consulting Agreements

On January 12, 2012, the Company entered into two consulting agreements with consultants to provide services as members of the Board of Directors in regards to the Company’s management and operations. The compensation for the services to be provided by each consultant will be 150,000 shares of the Company’s common stock issuable at the beginning of each year from an effective date of April 27, 2011 to April 27, 2014, of which 150,000 shares have already been issued to each consultant in their first year of service.

Convertible Debentures

On March 28, 2012, the Company entered into a securities purchase agreement with one investor. Pursuant to the terms of the agreement, within 45 days the investor will acquire convertible debentures with an aggregate total of $1,680,000, at an original issuance discount of $180,000; resulting in $1,500,000 net proceeds to the Company.

The debenture will be due within 12 months of receipt of funds, will carry no interest, and will be convertible at $0.45 per share subject to various prescribed conditions. Along with the debentures, the Company will issue warrants to acquire a total of 3,333,333 shares of common stock for a period of five year at a price of $0.69.

As of March 31, 2012, no funds have been received and no warrants have been issued.

11. Subsequent Events

On April 18, 2012, the Company issued an aggregate of 934,432 shares of its common stock, at $0.64 per share, upon receiving a notice of conversion from the convertible debenture investor to convert $45,836 in interest on the $500,000 debt and $215,000 in principal and $68,046 in interest on the $1,000,000 debt, pursuant to the securities purchase agreement. The balance of debt remaining to the investor is $500,000 in principal on the $500,000 debenture and $200,000 in principal on the $1,000,000 debenture.

On April 30, 2012, the Company issued 300,000 common shares to two directors as payment for the two consulting agreements referenced in Note 10.

The Company has evaluated subsequent events from March 31, 2012 through the date of this report, and determined there are no other items to disclose.

23


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. 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. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to shares of our common stock.

As used in this quarterly report, the terms “we”, “us”, “our”, and “our company” mean Lithium Exploration Group, Inc., unless otherwise indicated.

Corporate History

We were incorporated on May 31, 2006 in the State of Nevada under the name “Mariposa Resources, Ltd.”. Prior to June 25, 2009, we had the right to conduct exploration work on 20 mineral mining claims in Esmeralda County, Nevada. On July 31, 2009, we acquired an option to enter into a joint venture for the management and ownership of the Jack Creek Project, a mining project located in Elko County, Nevada. On September 25, 2009, the joint venture was terminated and we entered into an agreement with Beeston Enterprises Ltd., under which our company was granted an option to acquire an undivided 50% interest in eight mineral claims located in the Clinton Mining District of British Columbia, Canada. On March 17, 2011 we terminated the option agreement with Beeston. Effective November 30, 2010, we changed our name to “Lithium Exploration Group, Inc.” by way of a merger with our wholly-owned subsidiary Lithium Exploration Group, Inc., which was formed solely for the change of name.

Our executive offices are located at 3200 N. Hayden Road, Suite 235, Scottsdale, Arizona 85251, and our telephone number is (480) 641-4790.

Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.

Our Current Business

We are an exploration stage company that engages principally in the acquisition, exploration, and development of resource properties.

24


On December 16, 2010, we entered into an assignment agreement to acquire an undivided 100% right, title and interest in and to certain mineral permits located in the Province of Alberta, Canada. To date, our activities have been limited to our formation, the raising of equity capital and our mining exploration work program.

On January 18, 2011, we entered into a purchase option agreement with Salta Water Co. where we acquired a 60% interest on the Salta Aqua claims in Salta Province, Argentina with a further option to acquire the remaining 40% interest from Salta Water. On January 18, 2011, we issued 250,000 shares of common stock at a deemed price of $0.10 per share for mining expenses relating to the Salta Aqua Claims. The price of the issued shares was based on the market price of the shares on January 18, 2011. We contracted a firm to produce high resolution imaging of both sets of cateos to show road access to the properties and provide our exploration team the information they need to target the areas of the property that could produce the best early exploration results. We engaged Montgomery & Associates to send a team to both properties associated with our Salta Project to get on site photographs and hand auger testing of the ground water. The 15 samples taken from our property were sent to a local laboratory for testing. From these samples we determined that a commercially viable economic mineral deposit was not found on the property and accordingly, on January 18, 2012, our company abandoned the Salta Project.

On March 17, 2011, we entered into a letter agreement with Glottech-USA, LLC for an acquisition of one initial unit of certain proprietary and patented mechanical ultrasound technology for use in the water treatment in regards to our lithium operations in Alberta, Canada. Pursuant to the terms of the agreement, Glottech-USA will assemble and ship to our company one unit of the technology specifically designed for our water treatment purposes and will license the use of the technology. Furthermore, we have agreed that in the event that we have licensed a minimum of five technology units each year, Glottech-USA will neither license nor lease the technology to any third party for the purposes of mineral extraction in the country of Canada. If the initial unit is not tested and ready for delivery to us on or before May 31, 2012 the 5 unit requirement will be waived for the first year of the agreement. This agreement was updated and replaced with an agreement entered into on November 18, 2011. We applied for confidential treatment of some of the financial terms of this agreement. The acceptance of the confidential treatment was made effective in February of 2012 and will last until November 18, 2016.

On April 29, 2011, we entered into a settlement agreement with Beeston Enterprises Ltd., in regard to all of Beeston’s claims against our company arising under an option agreement for the option of various mining claims from Beeston by our company dated September 25, 2009 and terminated by our company on March 17, 2011. Under the terms of the settlement Beeston received the sum of CDN$54,623.65 and 200,000 restricted shares of common stock of our company in full and complete settlement of all claims against our company including, but without limitation, all claims for the payment of various amounts due and owing to Beeston by our company under the terms of the option agreement for past and future mining claim maintenance fees, the costs for re-claiming four of the eight mining claims optioned under the option agreement and damages for the loss of four mining claims.

At our Valleyview Project in the Swan Hills and Valleyview Region of west-central Alberta, we completed a 12 week sample testing program on May 31, 2011. Immediate plans include conducting bulk sampling to be utilized in the design of a separation process to produce battery-grade lithium carbonate, potash (KCl), and magnesium hydroxide. Once the bulk sampling and separation processes have been completed we will raise capital to build a pilot scale plant in Valleyview to begin the production of the outlined minerals. On July 28, 2011, we staked additional lands at our Valleyview Project bringing our contiguous claim holdings at the property to 517,960 acres. Additionally, on December 15, 2011, we staked an additional 135,000 acres approximately 50 miles south of the Valleyview Property. Our total MAIM (Metallic and Industrial Mineral) claim holdings in the Swan Hills region are now over 650,000 acres.

On June 29, 2011 we entered into a securities purchase agreement with one investor. Pursuant to the terms of the agreement, the investor acquired convertible debentures with an aggregate total of $1,500,000. $1,000,000 was paid on June 29, 2011 and $500,000 was paid on July 12, 2011. The initial debenture for $1,000,000 is due on December 28, 2012. The release of the full $1,500,000 to us is governed by the terms of an escrow agreement entered into on the same day. The debenture initially carries an interest rate of 12% per annum and is convertible at $0.83 per share subject to various prescribed conditions. Along with the debentures, we have issued warrants to acquire a total of 1,204,819 shares of our common stock for a period of five years at a price of $0.913. The warrants also include cashless exercise provisions in the event that the registration statement is not effective. On November 22, 2011, we issued 2,000,000 shares of our common stock, at $0.2925 per share, upon receiving a notice of conversion from the investor converting $585,000 of a total $1,000,000 debt owed, pursuant to the securities purchase agreement entered into on June 29, 2011. On March 31, 2012 the balance of debt remaining to the investor was $915,000.

25


Pursuant to a registration rights agreement entered into with the investor on the same day, we were required to file a registration statement for the shares underlying the convertible debentures, as well as the warrants, within 30 days of the closing of the initial $1,000,000 and ensure that the registration statement is declared effective by the Securities and Exchange Commission within 120 days of the closing. The registration was made effective on February 29, 2012, but because effectiveness was granted following 120 days from closing of the registration rights agreement, we will incur a 10% penalty on all convertible debentures registered pursuant to the agreement. Accordingly, whereas the conversion price of the debentures was previously the lesser of (i) sixty five percent (65%) of the lowest reported sale price of our common stock for the twenty trading days immediately prior to the conversion date, or (ii) $0.83, the discounted conversion price will be the lesser of (i) fifty five percent (55%) of the lowest reported sale price of our common stock for the twenty trading days immediately prior to the conversion date, or (ii) $0.83.

Also on June 29, 2011, Alexander Walsh, an officer and director of our company, entered into a guaranty and pledge agreement whereby he pledged 25,000,000 shares of our common stock currently held by him, as collateral and guaranty for our obligations under the securities purchase agreement and the debentures.

On July 12, 2011 we received the remaining $500,000 from the investor and entered into a $500,000 convertible debenture. The debenture is due on December 28, 2012 and carries an interest rate of 12% per annum. The debenture is also convertible at $0.83 per share, subject to various prescribed conditions. Along with the debentures, we have issued warrants to acquire a total of 602,410 shares of our common stock for a period of five years at a price of $0.913. The warrants also include cashless exercise provisions in the event that a registration statement covering it is not effective. The debenture and warrants were entered into on July 12, 2011.

In August 2011, pursuant to a consulting agreement, we engaged APEX Geoscience Ltd., to prepare a technical report and maiden resource estimate for our Valleyview mineral property. That report was prepared in compliance with Canadian National Instrument 43-101--Standards of Disclosure for Mineral Project in March, 2012, and is available on the homepage of our website at www.lithiumexplorationgroup.com.

Cautionary Note on Mineral Reserve and Resource Estimates

We are a reporting issuer in the United States and are required to disclose mineralization estimates in accordance with the reporting standards established by the SEC. However, the Valleyview Project 43-101 Report is prepared in accordance with Canadian National Instrument 43-101 -- Standards of Disclosure for Mineral Projects(NI 43-101) and includes terms such as “mineral resource”, “measured mineral resource”, “indicated mineral resource”, and “inferred mineral resource”, among others, which terms are defined in the Canadian Institute of Mining, Metallurgy and Petroleum Standards and are not defined in the Securities and Exchange Commission's Industry Guide 7. Accordingly, certain information or defined terms contained in the Valleyview Project Report are not comparable to similar information publicly reported by mining companies incorporated or operating in the United States, and are normally not permitted to be used in reports and registration statements filed with the SEC. For example, under Industry Guide 7, a mineral reserve is defined as a part of a mineral deposit, which could be economically and legally extracted or produced at the time the reserve determination is made, whereas NI 43-101 requires disclosure of mineral deposits that do not meet the criteria of Industry Guide 7. Investors are cautioned not to assume that any part or all of mineral deposits in the categories disclosed under NI 43-101will ever be converted into reserves. "Inferred mineral resources" as defined under NI 43-101 are subject to great uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable.

Our Valleyview Project is in the exploration stage and there is no assurance that we can establish the existence of any mineral resource on our property in commercially exploitable quantities. Until we do so, we cannot earn any revenues from operations and, if we fail to do so, we will lose all of the funds that we expend on exploration. Despite exploration work on our mineral property, we have not established that it contains any mineral reserve as defined under Industry Guide 7, and there can be no assurance that we will be able to do so. If we do not, our business could fail.

26


Even if we do eventually discover a mineral reserve on our property, there can be no assurance that we will be able to develop our property into a producing mine and extract those resources. Both mineral exploration and development involve a high degree of risk and few properties which are explored are ultimately developed into producing mines. The commercial viability of an established mineral deposit will depend on a number of factors including, by way of example, the size, grade and other attributes of the mineral deposit, the proximity of the resource to infrastructure such as a smelter, roads and a point for shipping, government regulation and market prices. Most of these factors will be beyond our control, and any of them could increase costs and make extraction of any identified mineral resource unprofitable.

On August 8, 2011 we retained a team of researchers from the University of Alberta to provide analysis of a separation process to target lithium, potassium, magnesium, and other mineral compounds in the Valleyview Project brine. The goal of working with the University of Alberta team is to develop novel and economical approaches/processes to separate the valuable minerals from the brine and develop a strategy to further refine the waste product to be utilized in various compounds of industrial salts. The first phase of the project has been completed and we have been provided with a “white paper” of three potential process flow candidates for further review in a pilot scale upon completion of the ultrasonic generator. We are in the process of engaging the University of Alberta for Phase II of this study where they will actually perform separation testing on the Valleyview Brine to extract the targeted minerals.

On September 30, 2011 we invested CAD$100,000 in an exploration well at our Valleyview Project. The well is to be drilled to a total depth of 3500 meters taking core samples from multiple zones that have been targeted for hydrocarbon production. We made this investment because of our interest in the potential mineral production from these targeted zones and will have access to all data associated with the project. In return for our investment we also received 400,000 shares of working interest in the well valued at CAD$0.25 and will financially benefit from any value derived from the project if they find economically viable levels of oil and gas production. Drilling began on October 9, 2011 and was completed in November 2011. The operator identified 4 potentially producible zones for oil and gas. Subsequent to identifying producible zones for oil and gas, on November 28, 2011 we invested an additional CAD$100,000 to fund the completion of the well. The operator has perforated the well and is in the process of initiating production of oil and gas from the well. Our geological team at Apex Geoscience is reviewing the core samples to analyze the aquifers of interest to our lithium production and from the initial tests of the well we were able to recover 3 water samples to test for mineral content. We will begin doing additional testing of the content of the water over the next few months to identify its viability as part of our future plans.

On November 18, 2011, we entered into another letter agreement with Glottech-USA, LLC, which will govern distribution rights, exclusivity and royalty provisions as they relate to Glottech’s proprietary and patented mechanical ultrasound technology for use in water purification in the process of separation of salt and other minerals from lithium bearing brine produced from oil and gas operations. This letter replaces all agreements previously entered into between our company and Glottech.

Pursuant to the terms of the letter agreement, we are granted an exclusive license to use and distribute the technology within the Swan Hills region of Alberta as well as the non-exclusive right to distribute the technology within Canada. Glottech has agreed not to distribute, or license, this product within Canada for the term of the agreement to any entities involved in the business of mineral exploration or production. Our distribution rights will be subject to a distribution agreement to be entered into by the two parties.

We will be subject to royalty payments on any revenue created by the use or distribution of the acquired technology. We applied to the Securities and Exchange Commission for confidential treatment pursuant to Rule 26b-2 of the Securities Exchange Act of 1934 regarding the particulars of the royalty payments and distribution contract. The request was accepted in February of 2012 and will remain in place until October 18, 2016. We believe that public disclosure of these terms could potentially damage the ability of Glottech and our company to distribute the technology to other users.

27


Pursuant to the terms of the agreement we will acquire one initial unit of Glottech’s technology for operations in the Swan Hills region of Alberta. The use of this unit will be subject to a license and lease agreement to be entered into by both parties.

We have previously made the following payments in association with the production of a working unit of Glottech’s technology:

  A.

$25,000 on March 21, 2011 in consideration for entering into the letter agreement dated March 17, 2011;

  B.

$75,000 on May 27, 2011; and

  C.

$700,000 on May 27, 2011.

The term of the letter agreement and consequently our ability to distribute the unit of Glottech’s technology shall be for an initial period of five years, automatically renewable thereafter for successive five year periods of time so long as we, directly or indirectly through third party purchasers, have licensed five technology units from Glottech per year. If the technology unit is not ready for delivery to us on or before May 31, 2012 our requirement of licensing 5 units per year will be waived for the first year of the contract.

Additionally, as part of the letter agreement, Alexander Walsh, an officer and director of our company, upon the delivery of an operational unit to us will also provide Glottech with the option, for a period of 12 months to acquire 2,000,000 shares of our common stock currently held by him, for a total price of $1 per share. If, for any reason, Mr. Walsh fails to deliver the 2,000,000 shares of our common stock to Glottech, it will be our responsibility to issue the shares from treasury.

Glottech-USA’s technology is designed to separate suspended solids from water (brine), which is one step in the process that we are taking to produce commercially viable minerals. The technology produces extremely high temperatures which destroy organic substances such as bacteria and other toxic agents. We believe that Glottech-USA's technology can provide lower costs of operation as well as reduced time for site clean-up than traditional methods of water treatment. We anticipate using this application to extract dissolved solids like lithium, potassium, and magnesium from oil field brine. The disposal of produced water (brine) from oil and gas production in Alberta is a significant environmental issue for the province and presents a considerable economic issue for producers. We intend to partner with the use of the technology on our Valleyview Property in Alberta, in cooperation with oil and gas producers, to treat and dispose of their produced water while monetizing the minerals that are contained within that produced water stream that is being brought to the surface during the oil and gas production process. As we own the MAIM (Metallic and Industrial Mineral) claims to the minerals on the Valleyview Property, the minerals contained in their produced water stream fall under our rights. While we have had discussions with oil and gas consultants and oil operators regarding their difficulties in treating the brine at some of their fields, we have no formal agreements in place.

The technical process is based on the use of mechanical ultrasound generated through the production of a series of cavitations. Mechanical ultrasound is a machine-produced sound of a frequency above the upper limit of the normal range of human hearing. Cavitations are the rapid formation and collapse of bubbles in liquids, caused by the movement of something such as a propeller or by waves of high-frequency sound. The production of mechanical ultrasound allows Glottech-USA’s technology to distil the fluid stock. Using mechanical ultrasound for distillation has been attempted before, but the external energy requirement needed to produce the mechanical ultrasound was far too expensive to make it commercially viable. Glottech-USA’s technology uses the energy released during the cavitations in order to make it commercially viable from an economic perspective. During these cavitations, a millisecond of energy is released. During this release temperatures can reach 5000 degrees centigrade. As this is a pilot unit, no other units are currently in production.

We began testing of the unit on April 12, 2012 by flooding it with water to ensure that the componentry operated properly and that there were no leaks in the piping, followed by starting up the generator and running the entire unit to build pressure and temperature inside the ultrasonic generator. This testing process is expected to continue on site in Pennsylvania for 3 to 4 months operating the unit with different consistencies of brine and recording performance variables before moving it to the Valleyview Project location.

28


On January 12, 2012 we entered into an employment agreement with Alexander Walsh, for services provided by Mr. Walsh as an officer and director of our company. The employment agreement is effective for a period of twenty four months from January 12, 2012 at an annual salary of $120,000 payable in monthly cash installments or, in the event cash is unavailable, in shares of our company’s common stock. The employment agreement also provides for liability insurance and reimbursement of any travel and out-of-pocket expenses incurred and approved by our company.

Also on January 12, 2012, we entered into consulting agreements with Brandon Colker and Jonathan Jazwinski for services provided by them as members of our board of directors in regards to its management and operations for a period of twenty four months from April 27, 2011. Pursuant to the terms of the consulting agreements, Mr. Colker and Mr. Jazwinski will each receive compensation payable in 150,000 shares of our company's common stock issuable at the beginning of every year served during the term of their agreements, with 150,000 for the first year having previously been issued.

On March 28, 2012 we entered into a securities purchase agreement with one investor. Pursuant to the terms of the agreement, within 45 days the investor will acquire convertible debentures with an aggregate total of $1,680,000, at an original issuance discount of $180,000; resulting in $1,500,000 net proceeds to us. The debentures will be due within 12 months of receipt of funds, will carry no interest, and will be convertible at $0.45 per share subject to various prescribed conditions. Along with the debentures, we will issue warrants to acquire a total of 3,333,333 shares of our common stock for a period of five years at a price of $0.69. The warrants will also include cashless exercise provisions.

Results of Operations

We have generated no revenues since inception and have incurred $233,002 and $1,368,105, respectively, in operating expenses for the three and nine month periods ended March 31, 2012.

The following provides selected financial data about our company for the three and nine month periods ended March 31, 2012 and 2011.

Three months ended March 31, 2012 and 2011.

      Three months     Three months  
      ended     ended  
      March 31,     March 31,  
      2012     2011  
  Revenue $  Nil   $  Nil  
  Operating Expenses $  233,002   $  204,691  
  Net Loss $  (1,259,372 ) $  (204,691 )

Operating expenses for the three months ended March 31, 2012 increased as a result of an increase in our operations and commencement of exploration and raising capital, including $43,818 in advertising expenses, $13,071 in consulting fees, $10,696 in general and administrative expenses, $32,000 in investor relations; $52,514 in mining expenses, $22,087 in professional fees, $9,925 in travel expenses and $48,891 in wages.

Nine months ended March 31, 2012 and 2011.

      Nine months     Nine months  
      ended     ended  
      March 31,     March 31,  
      2012     2011  
  Revenue $  Nil   $  Nil  
  Operating Expenses $  1,368,105   $  306,218  
  Net Loss $  (3,774,905 ) $  (306,218 )

29


Operating expenses for the nine months ended March 31, 2012 increased as a result of an increase in our operations and commencement of exploration and raising capital, including $69,090 in advertising expenses, $154,746 in consulting fees, $36,391 in general and administrative expenses, $613,600 in investor relations paid for with shares of company stock, $224,118 in mining expenses, $90,635 in professional fees, $32,315 in travel expenses and $147,210 in wages.

Liquidity and Capital Resources

The following table provides selected financial data about our company as of March 31, 2012, and June 30, 2011, respectively.

Working Capital

      As at     As at  
      March 31,     June 30,  
      2012     2011  
  Total assets $  418,760   $  1,657,161  
  Total liabilities   3,164,868     2,290,971  
  Working capital (deficit)   (2,746,108 )   (633,810 )

Cash Flows

      Nine Months     Nine Months  
      ended     ended  
      March 31,     March 31,  
      2012     2011  
  Net cash provided by (used in) operating activities $  (1,102,203 ) $  (218,242 )
  Net cash provided by (used in) investing activities   (197,393 )   Nil  
  Net cash provided by (used in) financing activities   497,795     260,738  
  Increase (Decrease) in cash   (801,801 )   42,496  

We had cash of $208,192 as of March 31, 2012 as compared to cash of $1,009,993 as of June 30, 2011. We had a working capital deficit of $2,746,108 as of March 31, 2012 compared to a working capital deficit of $633,810 at June 30, 2011.

The report of our auditors on our audited financial statements for the fiscal year ended June 30, 2011, contains a going concern qualification as we have suffered losses since our inception. We have minimal assets and have achieved no operating revenues since our inception. We have depended on loans and sales of equity securities to conduct operations. Unless and until we commence material operations and achieve material revenues, we will remain dependent on financings to continue our operations.

Anticipated Cash Requirements

You should read the following discussion of our financial condition and results of operations together with our unaudited financial statements and the notes thereto included elsewhere in this filing. Our unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those anticipated in these forward-looking statements.

On June 29, 2011 we entered into a debenture agreement which provided $1,500,000 to our company fulfilling our planned exploration expenditures as well as providing working capital to our company’s future planning. Our present plan of operations calls for up to $1,200,000 in planned exploration, operation, and administrative expenses for the year end June 30, 2012. We have used net cash of $1,102,203 in operations for the nine months ended March 31, 2012.

30


We received the initial $1,000,000 on June 29, 2011 and the remaining $500,000 on July 12, 2011. The debentures mature on December 28, 2012 and carry an interest rate of 12% per annum. The interest is payable on the maturity date in cash or, at our option, in duly authorized, validly issued, fully paid and non-assessable shares of our common stock, subject to certain prescribed conditions. The debentures are also convertible, in whole or in part, into shares of common stock at a price equal to (i) the lesser of 65% of the lowest reported sale price of the common stock for the twenty trading days immediately prior to the date of conversion, or (ii) $0.83 per share, subject to various prescribed conditions. The investor may not convert the debentures at any time if upon such conversion the investor would become the beneficial owner of more than 4.99% of the outstanding shares of our common stock. The debentures include anti-dilution protection with respect to lower priced issuances of common stock or securities convertible or exchangeable into common stock.

Along with the debentures, we also issued warrants to acquire a total of 1,807,229 shares of common stock for a period of five years at a price of $0.913 per share, subject to certain adjustments. The warrants also include cashless exercise provisions. The investor may not exercise the warrants at any time if upon such exercise the investor would become the beneficial owner of more than 4.99% of the outstanding shares of our common stock. The warrants include anti-dilution protection with respect to lower priced issuances of common stock or securities convertible or exchangeable into common stock.

We estimate that our expenses over the next 12 months (beginning July 1, 2012) will be approximately $500,000 as described in the table below. These estimates may change significantly depending on the nature of our future business activities and our ability to raise capital from shareholders or other sources.

Description   Estimated     Estimated  
    Completion     Expenses  
    Date        
General and administrative   12 months   $  300,000  
Mining expenses   12 months     150,000  
Professional fees   12 months     50,000  
Total       $  500,000  

We intend to meet our cash requirements for fiscal 2012 and 2013 with our cash on hand of $208,192 (as at March 31, 2012) and the debenture entered into on March 28, 2012, pursuant to which we are entitled to collect $1,500,000 in net proceeds.

We currently do not have any other definitive arrangements in place to complete any private placement financings and there is no assurance that we will be successful in completing any such financings on terms that will be acceptable to us.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

31


Critical Accounting Policies and Estimates

Basis of Presentation and Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

The consolidated financial statements include the accounts of our company and its subsidiary 1617437 Alberta Ltd. Intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of our company. Significant estimates that may materially change in the near term include the valuation of derivative liabilities and the underlying warrants, as well as fair value of investments.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with original maturities of less than three months, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. Our company had $208,192 and $1,009,993 in cash and cash equivalents at March 31, 2012 and June 30, 2011, respectively.

Prepaid expenses

Prepaid expenses mainly consist of legal retainers, deposits for mineral property exploration, and shares issued for investor relations. Legal retainers and deposits for mineral property exploration will be expensed in the period when services are completed. Shares issued for investor relations are amortized as investor relation expenses over service term.

Start-Up Costs

In accordance with FASC 720-15-20 “Start-Up Costs,” our company expenses all costs incurred in connection with the start-up and organization of our company.

Mineral Acquisition and Exploration Costs

Our company has been in the exploration stage since its formation on May 31, 2006 and has not yet realized any revenue from its planned operations. It is primarily engaged in the acquisition, exploration, and development of mining properties. Mineral property acquisition and exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserves.

32


Concentrations of Credit Risk

Our company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables it will likely incur in the near future. Our company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. Our company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

Net Income or (Loss) per Share of Common Stock

Our company has adopted FASC Topic No. 260, “Earnings Per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net income/loss by the weighted average number of shares of common stock outstanding during the period.

Potentially dilutive securities are not presented in the computation of EPS since their effects are anti-dilutive.

Foreign Currency Translations

Our company’s functional and reporting currency is the US dollar. All transactions initiated in other currencies are translated into US dollars using the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the US dollar at the rate of exchange in effect at the balance sheet date. Unrealized exchange gains and losses arising from such transactions are deferred until realization and are included as a separate component of stockholders’ equity (deficit) as a component of comprehensive income or loss. Upon realization, the amount deferred is recognized in income in the period when it is realized.

No significant realized exchange gain or losses were recorded from inception (May 31, 2006) to March 31, 2012.

Comprehensive Income (Loss)

FASC Topic No. 220, “Comprehensive Income,” establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. From inception (May 31, 2006) to March 31 2012, our company had no items of other comprehensive income. Therefore, net loss equals comprehensive loss from inception (May 31, 2006) to March 31, 2012.

Risks and Uncertainties

Our company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating a resource exploration business, including the potential risk of business failure.

Environmental Expenditures

The operations of our company have been, and may in the future be, affected from time to time in varying degree by changes in environmental regulations, including those for future reclamation and site restoration costs. Both the likelihood of new regulations and their overall effect upon our company vary greatly and are not predictable. Our company's policy is to meet or, if possible, surpass standards set by relevant legislation by application of technically proven and economically feasible measures.

33


Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against earnings as incurred or capitalized and amortized depending on their future economic benefits. All of these types of expenditures incurred since inception have been charged against earnings due to the uncertainty of their future recoverability. Estimated future reclamation and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the related business operation, net of expected recoveries.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

34


Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Description
No.  
(3)

(i) Articles of Incorporation; and (ii) Bylaws

3.1

Articles of Incorporations (incorporated by reference to our Registration Statement on Form SB-2 filed on September 20, 2006)

3.2

Bylaws (incorporated by reference to our Registration Statement on Form SB-2 filed on September 20, 2006)

3.3

Articles of Amendment dated May 31, 2006 (incorporated by reference to our Current Report on Form 8-K filed on April 21, 2009)

3.4

Certificate of Amendment dated April 8, 2009 (incorporated by reference to our Current Report on Form 8-K/A filed on April 23, 2009)

3.5

Articles of Merger dated November 17, 2010 (incorporated by reference to our Current Report on Form 8-K filed on December 7, 2010)

(10)

Material Contracts

10.1

Option to Enter Joint Venture Agreement between our company and USA Uranium Corp. dated July 31, 2009 (incorporated by reference to our Current Report on Form 8-K filed on August 5, 2009)

10.2

Assignment Agreement between our company and Lithium Exploration VIII Ltd. dated December 16, 2010 (incorporated by reference to our Current Report on Form 8-K filed on January 10, 2011)

10.3

Letter Agreement between our company and Glottech-USA, LLC dated March 17, 2011 (incorporated by reference to our Current Report on Form 8-K filed on May 4, 2011)

10.4

Mutual Release between our company and Beeston Enterprises Ltd. dated May 3, 2011 (incorporated by reference to our Current Report on Form 8-K filed on May 20, 2011)

10.5

Securities Purchase Agreement between our company and an investor dated June 29, 2011 (incorporated by reference to our Current Report on Form 8-K filed on July 1, 2011)

10.6

Registration Rights Agreement between our company and an investor dated June 29, 2011 (incorporated by reference to our Current Report on Form 8-K filed on July 1, 2011)

10.7

12% Senior Convertible Debenture between our company and Hagen Investments Ltd. dated June 29, 2011 (incorporated by reference to our Current Report on Form 8-K filed on July 1, 2011)

10.8

Escrow Agreement between our company and Hagen Investments Ltd. dated June 29, 2011 (incorporated by reference to our Current Report on Form 8-K filed on July 1, 2011)

10.9

Guaranty and Pledge Agreement between our company and Hagen Investments Ltd. dated June 29, 2011 (incorporated by reference to our Current Report on Form 8-K filed on July 1, 2011)

10.10

Common Stock Purchase Warrant between our company and Hagen Investments Ltd. dated June 29, 2011 (incorporated by reference to our Current Report on Form 8-K filed on July 1, 2011)

10.11

12% Senior Convertible Debenture between our company and Hagen Investments Ltd. dated July 12, 2011 (incorporated by reference to our Current Report on Form 8-K filed on July 13, 2011)

35



Exhibit Description
No.  
10.12

Common Stock Purchase Warrant between our company and Hagen Investments Ltd. dated July 12, 2011 (incorporated by reference to our Current Report on Form 8-K filed on July 13, 2011)

10.13

Letter Agreement between our company and Glottech-USA, LLC dated November 18, 2011 (incorporated by reference to our Current Report on Form 8-K filed on November 21, 2011)

10.14

Securities Purchase Agreement between our company and Hagen Investments Ltd. dated March 28, 2012 (incorporated by reference to our Current Report on Form 8-K filed on April 3, 2012)

10.15

Debenture dated March 28, 2012 (incorporated by reference to our Current Report on Form 8-K filed on April 3, 2012)

10.16

Common Stock Purchase Warrant between our company and Hagen Investments Ltd. dated June 29, 2011 (incorporated by reference to our Current Report on Form 8-K filed on April 3, 2012)

(31)

Rule 13a-14(a)/15d-14(a) Certification

31.1*

Section 302 Certification under Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer

(32)

Section 1350 Certification

32.1*

Section 906 Certification under Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer

101* Interactive Data Files
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

*

Filed herewith.

   
**

Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

36


SIGNATURES

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

  LITHIUM EXPLORATION GROUP, INC.
  (Registrant)
   
Date: May 9, 2012 /s/ Alexander Walsh
  Alexander Walsh
  President, Secretary, Treasurer and Director
  (Principal Executive Officer, Principal Financial Officer,
  Principal Accounting Officer)

37


PINX:LEXG Lithium Exploration Group Quarterly Report 10-Q Filling

Lithium Exploration Group PINX:LEXG Stock - Get Quarterly Report SEC Filing of Lithium Exploration Group PINX:LEXG stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

PINX:LEXG Lithium Exploration Group Quarterly Report 10-Q Filing - 3/31/2012
Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol |  Title Star Rating |  Category |  Total Assets |  Top Holdings |  Top Sectors |  Symbol |  Name Title |  Date |  Author |  Collection |  Interest |  Popularity Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol / Ticker |  Title Star Rating |  Category |  Total Assets |  Symbol / Ticker |  Name Title |  Date |  Author |  Collection |  Popularity |  Interest Title |  Date |  Company |  Symbol |  Interest |  Popularity Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Title |  Date |  Company |  Symbol |  Interest |  Popularity

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