Lithium Exploration Group, Inc.: Form 10K - Filed by newsfilecorp.com

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2013

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 the Securities Act.
Yes [ ] No [ x ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act
Yes [ ] No [ x ]

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 last 90 days.
Yes [ x ] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-K (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ x ] No[ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
[ ]

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 definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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

The aggregate market value of Common Stock held by non-affiliates of the Registrant on December 31, 2012 was $101,007.58 based on a $0.02384 average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

This annual 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, including the risks in the section entitled “Risk 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 financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this annual report, unless otherwise specified, all dollar amounts are expressed in United States Dollars and all references to “common shares” refer to the common shares in our capital stock.

As used in this annual report, the terms “we”, “us”, “our company”, mean Lithium Exploration Group, Inc. a Nevada corporation, and our wholly owned subsidiary, 1617437 Alberta Ltd., unless otherwise indicated.

We were incorporated on May 31, 2006 in the State of Nevada under the name “Mariposa Resources, Ltd.” 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. We also have an office at 840 6th Ave SW Suite 300, Calgary, Alberta T2P 3E5. The phone number for our Calgary office is 403-930-1925.

We have one wholly-owned subsidiary, 1617437 Alberta Ltd., an Alberta, Canada corporation. 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.

We are an exploration-stage company that engages principally in the acquisition, exploration, and development of resource properties. 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 February 14, 2011, we sent notice to Beeston to terminate the option agreement.

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. and we acquired a 60% interest on the Salta Aqua claims in Salta Province, Argentina. We had a further option to acquire the remaining 40% interest from Salta Water. On February 1, 2011, we issued 250,000 common shares 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 31, 2011.

On January 18, 2012, we elected not to pursue our option to purchase the property at our Salta Project in Argentina. The decision was made after reviewing the geological findings, evaluating both the short and long-term financial commitments of the option agreement, and the decision to focus our company’s attention on our Valleyview Project in Alberta, Canada.

On June 29, 2011, we entered into a securities purchase agreement with Hagen Investments Ltd., as modified on September 17, 2012. Pursuant to the terms of the agreement, Hagen 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 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 carried an interest rate of 12% per annum and was convertible at $0.83 per share subject to various prescribed conditions. Along with the debentures, we issued warrants to acquire a total of 1,204,819 shares of our common stock for a period of 5 years. Pursuant to a registration rights agreement entered into with Hagen on June 29, 2011, 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 incurred 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) 65% of the lowest reported sale price of our common stock for the 20 trading days immediately prior to the conversion date, or (ii) $0.83, the discounted conversion price became the lesser of (i) 55% of the lowest reported sale price of our common stock for the 20 trading days immediately prior to the conversion date, or (ii) $0.83.

On September 17, 2012, we entered into an agreement to modify the pricing mechanisms of the warrant and the convertible debenture such that the exercise price per share of the common stock under the warrant shall be $0.20. The conversion price of the debenture shall be the lesser of (i) 55% of the lowest reported sale price of the common stock for the 20 trading days immediately prior to the conversion date, or (ii) $0.20. The warrants also include cashless exercise provisions in the event that the registration statement is not effective. On December 31, 2012 the principal balance of debt remaining to Hagen had been converted to common shares. Subsequently, in January 2013, we issued a total of 240,964 shares of our company’s common stock upon exercise of the warrants in their entirety.

Also on June 29, 2011, our officer and director, Alexander Walsh, 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 September 24, 2012 this guaranty and pledge agreement was mutually terminated by Hagen and Alexander Walsh.

On November 8, 2011, we entered into a letter agreement with Glottech-USA. Pursuant to the terms of the agreement, we were granted an exclusive license to use and distribute the technology within the Swan Hills region of Alberta as well as a non-exclusive right to distribute the technology within Canada.

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

As part of the November 8, 2011 agreement, our officer and director, Alexander Walsh, agreed to provide Glottech-USA with the option, for a period of 12 months from delivery of the first unit, to acquire 2,000,000 shares of our common stock currently held by him, for a total price of $1.00. Additionally, if, for any reason, Mr. Walsh failed to deliver the 2,000,000 shares of our common stock to Glottech-USA, we agreed to issue the shares from treasury.

On June 12, 2012, we filed a complaint against Glottech-USA in the Court of Common Pleas of Chester County, Pennsylvania, alleging that Glottech-USA misused our funds and was in breach of our agreements that called for Glottech-USA to deliver one initial unit of the mechanical ultrasound technology. We further alleged that Glottech-USA was financially insolvent and unable to fulfill its promises to us.

On June 12, 2012, we filed a complaint with the Court of Common Pleas of Chester County, Pennsylvania against Glottech-USA, LLC, Eldredge, Inc., and the Eldredge Companies, Inc. The complaint sought an order of the Court granting possession of the unit to our company. As the unit is currently located on the property of Eldredge, Inc., and the Eldredge Companies, Inc., these companies were included as defendants in the complaint. The Eldredge defendants were subsequently dismissed from the lawsuit.

Effective August 14, 2012, we entered into an option agreement with GD Glottech International to protect our license and distribution rights in the event that Glottech-USA became unable to perform and honor its obligations to us.

Pursuant to the terms of the option agreement, we were required to provide an initial amount of $150,000 to be held in escrow for the option to obtain a license on the patent rights, as set forth in the option agreement. On September 1, 2012, Glottech-USA’s license to the technology expired and also on September 1, 2012, we exercised this option agreement and released the funds to GD Glottech International.

On October 1, 2012, we entered into a license agreement and a sales agency agreement with GD Glottech, regarding GD Glottech International’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. The license agreement and sales agency agreement expands and replaces all prior agreements among our company, GD Glottech International and Glottech-USA, LLC regarding our rights to use and sell the mechanical ultrasound technology, included in our letter of intent dated November 18, 2011, and our option agreement dated August 14, 2012.

Pursuant to the sales agency agreement we have been appointed as sales agent for the patented mechanical ultrasound technology within Canada. Our appointment will be exclusive within the field of non petro-chemical mining and non-exclusive in all other fields of use. In consideration of the sales agency rights, we agreed to issue to GD Glottech International 2,000,000 common shares in our capital stock, which obligation has been satisfied through the transfer to GD Glottech International of 2,000,000 shares held by our officer and director, Alexander Walsh. It was the explicit intention of the parties that this share transfer fulfills the prior obligations of Alexander Walsh and our company with respect to the option contemplated in the March and November 2011 agreements with Glottech-USA. We will receive a royalty in respect of sales of the technology secured by us. The term of the initial agreement will be for 5 years with the possibility of extension if sales targets are achieved.

Pursuant to the license agreement, we have obtained the exclusive right to use the mechanical ultrasound technology within the field of non-petro-chemical mining within the territory of Canada. We may also sublicense our rights under the license in respect of one or more units of the technology to any entity operating within the field of use in which we own or beneficially own at least a 20% equity interest. GD Glottech International has agreed to supply us with up to 5 technology units per 12-month period from the effective date of the license term, which will start from the month of delivery of the unit of the technology. The first unit of the technology provided under the license will be provided at no additional cost to us and subsequent units shall be subject to a fee based on the then current retail price of the units. If we sublicense any of our rights, the term of the applicable license will be for 5 years from the date the applicable unit is delivered. Pursuant to the license agreement, GD Glottech International shall provide ongoing technical assistance and training in respect of our use of the technology at our cost.

In consideration of the license, we will pay to GD Glottech International a royalty based on the tonnage of water produced by our use of the technology in accordance with the agreement. A minimum annual royalty will be applicable. The term of the license agreement shall be for an initial period of 5 years and shall be renewable for additional terms of 5 years provided that we satisfy the minimum royalty requirements during each period.

GD Glottech International’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 GD Glottech International'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 use 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 (Metals and Industrial Minerals) 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 GD Glottech International’s technology to distill 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. GD Glottech International’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 5,000 degrees Centigrade.

On October 19, 2012, GD Glottech International moved to intervene as an interested party in the litigation pending against Glottech-USA. GD Glottech International cited its role as owner of the patents as a basis for intervening in the litigation against Glottech-USA. We believe GD Glottech International’s entry into the litigation against Glottech-USA is favorable to our cause in the litigation.

On October 22, 2012 the Court of Common Pleas in Chester County, Pennsylvania, granted our motion to amend our complaint against Glottech-USA to add claims for fraud and damages reflective of the malfeasance which we allege against Glottech-USA and its officers.

On December 12, 2012, GD Glottech International removed the management of Glottech-USA and appointed itself as the manager of Glottech-USA. On the same day, Larry Nesbit, Mark Siegel and Ron Fender filed a motion to dissolve Glottech-USA in Mississippi on the basis that Glottech-USA was unable to meet its financial obligations and could not finish or deliver the unit to us.

On December 19, 2012, an attorney purportedly acting on behalf of Glottech-USA filed a motion in the lawsuit pending in Chester County, Pennsylvania, seeking possession of the unit.

GD Glottech International immediately filed a motion to quash Glottech-USA’s motion and for sanctions against the law firm that filed the motion. We also filed a motion, seeking disqualification of the law firm that purported to represent Glottech-USA on the basis that the new management for Glottech-USA had fired the law firm and, as such, the law firm no longer had authority to represent Glottech-USA.

On April 25, 2013, we attended a hearing on the motions pending in the lawsuit filed in Chester County, Pennsylvania. The Court did not rule on any of the motions and, instead, stayed the case as to Glottech-USA until December of 2013 pending the outcome of the lawsuit seeking dissolution of Glottech-USA.

Given pending litigation against Glottech-USA, and the uncertainties naturally inherent of any litigation (particularly as to outcome and timing thereof), we have moved to assure continuity of our licensing rights through entering into, and exercising, the option to contract directly with the technology inventor and patents owner, GD Glottech International. Thus, regardless of the outcome of the litigation, or indeed any action or inaction of Glottech-USA, our interest in the technology is assured.

On March 28, 2012, we entered into a securities purchase agreement with Hagen, as modified on May 15, 2012 and September 17, 2012. Pursuant to the terms of the agreement, within 45 days Hagen 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.

On May 15, 2012, we received $1,500,000 from Hagen and closed the securities purchase agreement. In conjunction with this closing we issued the convertible debenture in the amount of $1,680,000. The debenture is due on May 15, 2013, carries no interest, and is convertible at the lower of $0.45 per share or 65% of the lowest reported price of our common stock over the 20 trading days immediately prior to the date of conversion. Additionally, we issued Hagen a warrant to acquire 3,333,333 shares of our common stock for a period of five years. On September 17, 2012, we entered into an agreement to modify pricing mechanisms of the warrant and the convertible debenture in the original securities purchase agreement such that the exercise price per share of the common stock under the warrant shall be $0.20, subject to adjustment, and the conversion price of the debenture shall be the lesser of (i) 65% of the lowest reported sale price of the common stock for the 20 trading days immediately prior to the conversion date, or (ii) $0.20. Excluding the modifications to the exercise price of the warrant and to reduce the conversion price of the debenture, the original securities purchase agreement dated March 28, 2012, will remain un-amended and in full force and effect.

On February 13, 2013 we entered into a securities purchase agreement with JMJ Financial. Pursuant to the terms of the agreement, our company will also enter into a convertible promissory note in the principal amount of $1,100,000 (for consideration of up to $1,000,000), of which $100,000 shall be paid to our company upon closing of the convertible promissory note and a common stock purchase warrant for the purchase of up to 540,540 shares of our common stock at an exercise price of $0.185 for a period of five years. The convertible promissory note shall have a maturity date of February 13, 2016. The remainder of the convertible debenture can be drawn down on by mutual agreement from JMJ Financial and our company.

On February 19, 2013, we entered into a securities purchase agreement, with an effective date of March 1, 2013, with JDF Capital Inc. Pursuant to the terms of the agreement, our company has issued a secured convertible promissory note in an aggregate principal amount of $672,000 and a warrant to purchase 3,632,433 shares of our company’s common stock with an exercise price of $0.185 per share for an aggregate exercise price of $672,000 for a period of five years, for consideration of $600,000 (original issue discount of $72,000 in lieu of interest), of which $150,000 shall be paid to our company upon closing on March 1, 2013. The note shall have a maturity date of 12 months from each tranche of consideration, as set out in the note. Additional payments of $150,000 are due on April 1, 2013, $100,000 on May 1, 2013, $100,000 on June 1, 2013, and $100,000 on July 1, 2013 to satisfy the aggregate amount of $600,000 as part of the February 19, 2013 agreement. The March, April, May, June and July payments have been received by our company.

Effective October 1, 2012, Alexander Walsh, our company's president and director, established a 10b5-1 Sales Plan in connection with an overall asset diversification strategy. The plan was made effective on October 1, 2012. Under his 10b5-1 Plan, Mr. Walsh may sell shares of our common stock, not to exceed 270,000 shares over the term of the plan. The plan expired on November 30, 2012. The authorized sale price of the shares shall be a limit price, such that sales should only be effected if the market price on the sale day is greater than or equal to eighteen cents $.18 per share. The sale of our company’s common stock owned by Mr. Walsh pursuant to his 10b5-1 Plan was scheduled to occur at regular intervals during the months of October and November 2012, provided that a designated minimum share price is met. Between the effective date of the plan on October 1, 2012 and its expiration on November 30, 2013, Mr. Walsh sold an aggregate of 270,000 shares of our common stock under the plan. Sales transactions occurring under Mr. Walsh’s 10b5-1 Plan were disclosed publicly through Form 4 filings with the SEC and are subject to the restrictions and filing requirements of Rule 144.

Effective February 27, 2013, Alexander Walsh, our company's president and director, established a 10b5-1 Sales Plan in connection with an overall asset diversification strategy. The plan was made effective on March 7, 2013. Under his 10b5-1 Plan, Mr. Walsh may sell a number of shares of our company's common stock not to exceed 10% of the daily volume on any trading day during the term of the plan. The plan expired on May 27, 2013. The authorized sale price of the shares shall be a limit price, such that sales may only be made if the market price on the day of sale is greater than or equal to $0.20 per share, subject to adjustment for capital alterations. The sale of our company’s common stock owned by Mr. Walsh pursuant to his 10b5-1 Plan was scheduled to occur at regular intervals until May 27, 2013, provided that a designated minimum share price is met. Between the effective date of the plan on March 7, 2013 and its expiration on May 27, 2013, Mr. Walsh sold an aggregate of 90,000 shares of our common stock under the plan. Sales transactions occurring under Mr. Walsh’s 10b5-1 Plan were disclosed publicly through Form 4 filings with the SEC and are subject to the restrictions and filing requirements of Rule 144.

Effective June 4, 2013, Alexander Walsh, our company's president and director, established a 10b5-1 Sales Plan in connection with an overall asset diversification strategy. The plan was made effective on June 4, 2013. Under his 10b5-1 Plan, Mr. Walsh may sell a number of shares of our company's common stock not to exceed 10% of the daily volume on any trading day during the term of the plan. The plan expired on September 1, 2013. The authorized sale price of the shares shall be limited to not trading more than 10% of the daily volume on any trading day during the plan. The sale of our company’s common stock owned by Mr. Walsh pursuant to his 10b5-1 Plan was scheduled to occur at regular intervals until August 27, 2013, provided that a designated minimum share price is met. Between the effective date of the plan on June 4, 2013 and August 27, 2013, Mr. Walsh sold an aggregate of 320,000 shares of our common stock under the plan. Sales transactions occurring under Mr. Walsh’s 10b5-1 Plan were disclosed publicly through Form 4 filings with the SEC and are subject to the restrictions and filing requirements of Rule 144.

Effective March 15, 2013, we entered into a consulting agreement with International Compass, LLC for the services of Bryan Kleinlein as chief financial officer of our company. The term of the agreement is six months. As compensation, our company has agreed to pay to International Compass $12,000 per month during the term payable in cash or common shares registered on Form S-8. The value of the shares of our company issued as compensation, if any, shall be based on the weighted average trading price of the shares of our company in the five trading days immediately preceding the dates when the shares are due. Mr. Kleinlein was first appointed as our chief financial officer on May 15, 2012. The agreement with International Compass replaces and supersedes our agreement with Mr. Kleinlein dated May 15, 2012.

In February 2013, we explored the acquisition of a machine shop in Arizona to assist in the future development of the GD Glottech International technology. This acquisition was explored to provide existing cash flow to our company from the machine shop’s ongoing business and provide a place where work could be performed on the technology. GD Glottech International subsequently entered into a partnership with a machine shop in Houston, Texas to provide those services and given that development we ceased pursuing the acquisition.

Effective April 22, 2013, we entered into a non-binding letter of intent to purchase the mining concessions held by another lithium exploration company. The letter of intent prohibits the lithium exploration company from soliciting or accepting offers for those assets while we perform due diligence and negotiate the terms of the acquisition. This acquisition was being contemplated to increase our lithium bearing asset holdings and diversify the geographic location of our lithium holdings. However, we were unable to obtain sufficient due diligence on the holdings and the letter of intent expired in June 2013.

Effective May 1, 2013, we entered into a non-binding letter of intent to purchase Golden Spike Energy, a Calgary, Alberta, Canada based oil and gas operator. The letter of intent prohibited Golden Spike from soliciting or accepting offers for their company or any of their assets while we perform due diligence and negotiate terms of the acquisition. If successfully completed, this acquisition would provide immediate cash flow to our company and will give us operations in Canada where we can perform future work on our lithium exploration efforts. However, we were unable to finalize terms with the management of Golden Spike due to valuation differences stemming from liabilities associated with a few of their existing gas wells.

On May 1, 2013, we entered into a consulting agreement with Alexander Koretsky whereby, Mr. Koretsky has agreed to provide certain consulting duties and services as request by our company. The agreement is effective May 1, 2013 and will continue for a period of eight months. As compensation, our company has agreed to pay to Mr. Koretsky a salary of $8,333.33 per month in cash, common shares of our company, or in both cash and common shares of our company, at the sole discretion of our company. Where Mr. Koretsky is paid in common shares of our company, such shares have been previously registered on a Form S-8 registration statement, filed with the United States Securities and Exchange Commission on January 30, 2013.

On June 11, 2013, we entered into a letter of intent with Blue Tap Resources pursuant to which we agreed to acquire not less than 51% of the outstanding securities of Blue Tap in consideration of an aggregate investment of $450,000 in Blue Tap’s waste water disposal facility located in Morinville, Alberta. The closing of the transaction is subject to a number of conditions precedent, including but not limited to completion of due diligence and the negotiation of a definitive long form agreement.

On December 16, 2010, we entered into an assignment agreement with Lithium Exploration VIII Ltd. (not related to our company) to acquire an undivided 100% right, title and interest in and to certain mineral permits located in the Province of Alberta, Canada. Lithium Exploration VIII and Golden Virtue Resources Inc. (formerly First Lithium Resources Inc.) (not related to our company) had entered into an underlying option agreement dated October 6, 2010, which option agreement and interest have been assigned to our company.

On December 31, 2012, our company entered into an amending agreement to amend an original payment requirement of the assignment agreement of CAD$100,000 due on January 1, 2013 to the following payments:

The note was interest free until March 31, 2013. After March 31, 2013, interest accrued on the principal balance then in arrears at the rate of 15% per annum. No payments are due and payable until December 31, 2013. Further, at any time, Lithium Exploration VIII and Golden Virtue may have elected to convert the remaining balance of the note and accrued interest into common shares of our company at 75% of the closing market price of our company’s common shares on the election day.

On July 3, 2013, Lithium Exploration VIII and Golden Virtue elected to convert the note and accrued interest in the combined aggregate amount of CAD$83,057.53 (USD$78,743) into common shares of our company. Pursuant to this election, we issued an aggregate of 954,461 shares of our common stock pursuant to the note and election referred to above at the price of USD$0.0825.

On July 29, 2013, in anticipation of the completion of a formal agreement with Blue Tap embodying the terms of the letter of intent, we entered into a convertible debenture agreement with Blue Tap pursuant to which we have agreed to deliver to Blue Tap up to CDN$300,000 (approximately USD$291,000) payable in two installments of CDN$150,000 deliverable respectively upon execution of the convertible debenture, and within 5 business days following receipt of regulatory approval for the re-activation of Blue Tap’s waste water disposal facility. Delivery of the first installment of CDN$150,000 has been satisfied. The funds advanced shall be secured against all present and future assets and undertakings of Blue Tap and shall be convertible at our option into a number of common shares of Blue Tap equal to 51% of its issued and outstanding voting stock. In the event that we do not acquire a 51% interest in Blue Tap, the principal amount of the convertible debenture shall be payable in full by July 30, 2014. The principal amount will bear no interest until maturity, whereafter it will bear interest of 8% per annum.

Effective August 1, 2013, we entered into a joint venture agreement with Blue Tap pursuant to which our company and Blue Tap will operate certain lands and facilities including a disposal well in the Morinville Area of Alberta.

On August 21, 2013, we entered into a letter of intent with Tero Oilfield Services Ltd. Pursuant to the letter of intent, Tero agreed to sell and we agreed to purchase 75% of the issued and outstanding common shares of Tero in exchange for an aggregate of $1,500,000, comprised of:

As further consideration for the acquisition, we will loan $500,000 to Tero for the settlement of debt owed to Smith Group Holdings Ltd.

Effective September 15, 2013, we entered into a consulting agreement with International Compass, LLC for the services of Bryan Kleinlein as chief financial officer of our company for the term of the agreement is four months. As compensation, our company agreed to pay to International Compass $12,000 per month during the term payable in cash and/or common shares registered on Form S-8. The value of the shares of our company issued as compensation, if any, shall be based on the weighted average trading price of the shares of our company in the five trading days immediately preceding the date(s) which the shares are due.

Mr. Kleinlein was first appointed as our company’s chief financial officer on May 15, 2012. The agreement with International Compass replaces and supersedes our agreement with Mr. Kleinlein dated March 15, 2013.

On September 13, 2013, we entered into a securities purchase agreement with JDF Capital Inc., pursuant to which JDF Capital has agreed to provide our company with an aggregate investment of $500,000 in consideration of our issuance of convertible promissory notes and common share purchase warrants.

On September 16, 2013 JDF Capital funded a first installment of $250,000 in consideration of a secured convertible promissory note in the amount of $306,250, being $250,000 and 18 months prepaid interest at 15%. The note has a maturity date of 18 months from September 16, 2013. As additional consideration, we have also issued to JDF Capital 3,125,500 warrants with each warrant exercisable for the purchase of one common share for a period of five years. The exercise price will be $0.07 per share, subject to anti-dilution adjustment. JDF Capital may, in the alternative, exercise the warrants on a cashless basis in the event the shares underlying the warrants are not registered in a registration statement within six months of the securities purchase agreement. The cashless exercise price will be the quotient obtained by dividing [(A-B) (X)] by (A), where:

We issued the warrants in reliance on the exemption from registration for accredited investors contained in Rule 506 of Regulation D of the Securities Act of 1933.

The second $250,000 installment of the financing is payable by October 15, 2013, whereupon we will issue a second convertible promissory note upon the same terms. Additional warrants with an aggregate exercise price of $250,000 will also be issued with the number of underlying shares to be based on the lowest closing price of our common shares in the 20 trading days preceding the October 15, 2013 closing.

Once issued, each convertible promissory note will be convertible in whole or in part at JDF Capital’s option before or after maturity into shares of our common stock at a conversion price equal to a 50% discount to the lowest closing price of our common shares in the 20 trading days preceding (i) the date of the purchase agreement; or (ii) the conversion date. Notwithstanding the conversion right, JDF will not be entitled to hold in excess of 9.99 percent of our issued and outstanding common shares at any time.

JDF Capital will have the option during the 18 month period following September 13, 2013 to purchase additional convertible notes upon the same terms and conditions for up $1,500,000 in additional financing.

The mineral exploration industry is highly competitive. We are a new exploration-stage company and have a weak competitive position in the industry. We compete with junior and senior mineral exploration companies, independent producers and institutional and individual investors who are actively seeking to acquire mineral exploration properties throughout the world together with the equipment, labor and materials required to operate on those properties. Competition for the acquisition of mineral exploration interests is intense with many mineral exploration leases or concessions available in a competitive bidding process in which we may lack the technological information or expertise available to other bidders.

Many of the mineral exploration companies with which we compete for financing and for the acquisition of mineral exploration properties have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquiring mineral exploration interests of merit or on exploring or developing their mineral exploration properties. This advantage could enable our competitors to acquire mineral exploration properties of greater quality and interest to prospective investors who may choose to finance their additional exploration and development. Such competition could adversely impact our ability to attain the financing necessary for us to acquire further mineral exploration interests or explore and develop our current or future mineral exploration properties.

We also compete with other junior mineral exploration companies for financing from a limited number of investors that are prepared to invest in such companies. The presence of competing junior mineral exploration companies may impact our ability to raise additional capital in order to fund our acquisition or exploration programs if investors perceive that investments in our competitors are more attractive based on the merit of their mineral exploration properties or the price of the investment opportunity. In addition, we compete with both junior and senior mineral exploration companies for available resources, including, but not limited to, professional geologists, land specialists, engineers, camp staff, helicopters, float planes, mineral exploration supplies and drill rigs.

General competitive conditions may be substantially affected by various forms of energy legislation and/or regulation introduced from time to time by the governments of the United States and other countries, as well as factors beyond our control, including international political conditions, overall levels of supply and demand for mineral exploration.

In the face of competition, we may not be successful in acquiring, exploring or developing profitable mineral properties or interests, and we cannot give any assurance that suitable oil and gas properties or interests will be available for our acquisition, exploration or development. Despite this, we hope to compete successfully in the mineral exploration industry by:

We have the trademark “Lithium Exploration Group” for the use of mining exploration, namely, lithium exploration services, in class 42 (U.S. CLS. 100 and 101). The registration number is 4,075,565 and was registered on December 20, 2011. We do not have any other intellectual property.

Any operations at our Lithium properties will be subject to various federal and state laws and regulations in Canada which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. We will be required to obtain those licenses, permits or other authorizations currently required to conduct exploration and other programs. There are no current orders or directions relating to us or to our lithium properties with respect to the foregoing laws and regulations. Such compliance may include feasibility studies on the surface impact of our proposed operations, costs associated with minimizing surface impact, water treatment and protection, reclamation activities, including rehabilitation of various sites, on-going efforts at alleviating the mining impact on wildlife and permits or bonds as may be required to ensure our compliance with applicable regulations. It is possible that the costs and delays associated with such compliance could become so prohibitive that we may decide to not proceed with exploration, development, or mining operations on any of our mineral properties. We are not presently aware of any specific material environmental constraints affecting our properties that would preclude the economic development or operation of property in Canada.

We are not aware of any material violations of environmental permits, licenses or approvals that have been issued with respect to our operations. We expect to comply with all applicable laws, rules and regulations relating to our business, and at this time, we do not anticipate incurring any material capital expenditures to comply with any environmental regulations or other requirements.

While our intended projects and business activities do not currently violate any laws, any regulatory changes that impose additional restrictions or requirements on us or on our potential customers could adversely affect us by increasing our operating costs or decreasing demand for our products or services, which could have a material adverse effect on our results of operations.

We currently employ three individuals: Alexander Walsh as chief executive officer, Alex Koretsky as chief operating officer, and Shanon Chilson as an administrative assistant and controller. Bryan Kleinlein, a consultant, is serving as our chief financial officer. Outside consultants have been engaged for administrative duties and industry specialties. We also have two other directors, Jonathan Jazwinski and Brandon Colker, who spend approximately 15 hours per month on various company activities. Mr. Jazwinski’s primary role is to review the geological findings and exploration strategies taken by management at the direction of consultants. Mr. Colker’s primary role is to work with management on research and networking with global industry contacts and capital sources. Mr. Jazwinski and Mr. Colker are both responsible for shaping the direction of our company and assist with the submission of corporate filings.

We have not spent any amounts which have been classified as research and development activities in our financial statements during the last two fiscal years.

We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to exit the exploration phase of our company and reach development and revenue. We do not have enough cash on hand to meet our obligations over the next twelve months. We do not have any arrangements in place for any future equity financing.

We have one wholly-owned subsidiary, 1617437 Alberta Ltd., a company incorporated in the province of Alberta, Canada on July 8, 2011. This subsidiary was formed to stake MAIM (Metallic and Industrial Mineral) rights in Alberta directly from the government. 1617437 Alberta Ltd. presently holds approximately 550,000 acres of MAIM rights in Alberta that were staked between July and December of 2011.

We are not required to deliver an annual report to our stockholders but will voluntarily send an annual report, together with our annual audited financial statements upon request. We are required to file annual, quarterly and current reports, proxy statements, and other information with the Securities and Exchange Commission. Our Securities and Exchange Commission filings are available to the public over the Internet at the SEC's website at http://www.sec.gov.

The public may read and copy any materials filed by us with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We are an electronic filer. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The Internet address of the site is http://www.sec.gov.

Much of the information included in this annual report includes or is based upon estimates, projections or other “forward-looking statements.” Such forward-looking statements include any projections and estimates made by us and by our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other “forward-looking statements” involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other “forward-looking statements.”

We have a limited operating history and as a result there is no assurance we can operate on a profitable basis.

We have a limited operating history. Our company's operations will be subject to all the uncertainties arising from the absence of a significant operating history. Potential investors should be aware of the difficulties normally encountered by resource exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us in the exploration of our properties may not result in the discovery of reserves. Problems such as unusual or unexpected formations of rock or land and other conditions are involved in resource exploration and often result in unsuccessful exploration efforts. If the results of our exploration do not reveal viable commercial reserves, we may decide to abandon our claims and acquire new claims for new exploration or cease operations. The acquisition of additional claims will be dependent upon us possessing capital resources at the time in order to purchase such claims. If no funding is available, we may be forced to abandon our operations. There can be no assurance that we will be able to operate on a profitable basis.

If we do not obtain additional financing, our business will fail and our investors could lose their investment.

We had cash in the amount of $248,624 and working capital deficiency of $1,476,024 as of the period ended June 30, 2013. We currently do not generate any revenues from our operations. Any direct acquisition of a claim under lease or option is subject to our ability to obtain the financing necessary for us to fund and carry out exploration programs on potential properties. The requirements are substantial. Obtaining additional financing would be subject to a number of factors, including market prices for resources, investor acceptance of our properties and investor sentiment. These factors may negatively affect the timing, amount, terms or conditions of any additional financing available to us. The most likely source of future funds presently available to us is through the sale of equity capital and loans. Any sale of share capital will result in dilution to existing shareholders.

Because of the speculative nature of exploration of mineral properties, we may never discover a commercially exploitable quantity of minerals, our business may fail and investors may lose their entire investment.

We are in the very early exploration stage and cannot guarantee that our exploration work will be successful, or that any minerals will be found, or that any production of minerals will be realized. The search for valuable minerals as a business is extremely risky. Substantial investment will be required to move our company toward the production of minerals. This may require bringing in a partner to make the necessary investment, but there are no plans at this time for any form of partnership or merger. We can provide investors with no assurance that exploration on our properties will establish that commercially exploitable reserves of minerals exist on our property. Additional potential problems that may prevent us from discovering any reserves of minerals on our property include, but are not limited to, unanticipated problems relating to exploration and additional costs and expenses that may exceed current estimates. If we are unable to establish the presence of commercially exploitable reserves of minerals on our property, our ability to fund future exploration activities will be impeded, we will not be able to operate profitably and investors may lose all of their investment in our company.

We have no known mineral reserves and we may not find any lithium and, even if we find lithium, it may not be in economic quantities. If we fail to find any lithium or if we are unable to find lithium in economic quantities, we will have to suspend operations.

We have no known mineral reserves. Additionally, even if we find lithium in sufficient quantity to warrant recovery, it ultimately may not be recoverable. Finally, even if any lithium is recoverable, we do not know that this can be done at a profit. Failure to locate lithium in economically recoverable quantities will cause us to suspend operations.

Supplies needed for exploration may not always be available. If we are unable to secure exploration supplies we may have to delay our anticipated business operations.

Competition and unforeseen limited sources of supplies needed for our proposed exploration work could result in occasional spot shortages of supplies of certain products, equipment or materials. There is no guarantee we will be able to obtain certain products, equipment and/or materials as and when needed, without interruption, or on favorable terms. Such delays could affect our anticipated business operations and increase our expenses.

Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure.

Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us in the exploration of the mineral claim may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of our exploration do not reveal viable commercial mineralization, we may decide to abandon our claims. If this happens, our business will likely fail.

The marketability of natural resources will be affected by numerous factors beyond our control, which may result in us not receiving an adequate return on invested capital to be profitable or viable.

The marketability of natural resources, which may be acquired or discovered by us, will be affected by numerous factors beyond our control. These factors include market fluctuations in lithium pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of mineral resources and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Exploration and production activities are subject to certain environmental regulations, which may prevent or delay the commencement or continuation of our operations.

In general, our exploration and production activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuation of a given operation. Specifically, we may be subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry.

Any change to government regulation/administrative practices may have a negative impact on our ability to operate and our profitability.

The business of mineral exploration and development is subject to substantial regulation under various countries’ laws relating to the exploration for, and the development, upgrading, marketing, pricing, taxation, and transportation of mineral resources and related products and other matters. Amendments to current laws and regulations governing operations and activities of mineral exploration and development operations could have a material adverse impact on our business. In addition, there can be no assurance that income tax laws, royalty regulations and government incentive programs related to the properties and the mineral exploration industry generally will not be changed in a manner which may adversely affect our progress and cause delays, inability to explore and develop or abandonment of these interests.

Permits, leases, licenses, and approvals are required from a variety of regulatory authorities at various stages of exploration and development. There can be no assurance that the various government permits, leases, licenses and approvals sought will be granted in respect of our activities or, if granted, will not be cancelled or will be renewed upon expiry. There is no assurance that such permits, leases, licenses, and approvals will not contain terms and provisions, which may adversely affect our exploration and development activities.

If we are unable to hire and retain key personnel, we may not be able to implement our business plan.

Our success is largely dependent on our ability to hire highly qualified personnel. This is particularly true in highly technical businesses such as resource exploration. These individuals are in high demand and we may not be able to attract the personnel we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees after they are hired. Failure to hire key personnel when needed, or on acceptable terms, would have a significant negative effect on our business.

Our independent certified public accounting firm, in their report on the audited financial statements for the year ended June 30, 2013, states that there is a substantial doubt that we will be able to continue as a going concern.

As of June 30, 2013, we have experienced significant losses since inception. Failure to arrange adequate financing on acceptable terms and to achieve profitability would have an adverse effect on our financial position, results of operations, cash flows and prospects. Accordingly, there is substantial doubt that we will be able to continue as a going concern.

Planned exploration, and if warranted, development and mining activities involve a high degree of risk.

We cannot assure you of the success of our planned operations. Exploration costs are not fixed, and resources cannot be reliably identified until substantial development has taken place, which entails high exploration and development costs. The costs of mining, processing, development and exploitation activities are subject to numerous variables, which could result in substantial cost overruns. Mining for base or precious metals may involve unprofitable efforts, not only from dry properties, but from properties that are productive but do not produce sufficient net revenues to return a profit after accounting for mining, operating and other costs.

Our operations may be curtailed, delayed or cancelled as a result of numerous factors, many of which are beyond our control, including economic conditions, mechanical problems, title problems, weather conditions, compliance with governmental requirements and shortages or delays of equipment and services.

We do not insure against all risks associated with our business because insurance is either unavailable or its cost of coverage is prohibitive. The occurrence of an event that is not covered by insurance could have a material adverse effect on our financial condition.

Our business is subject to applicable domestic and foreign laws and regulations, including laws and regulations on taxation, exploration, and environmental and safety matters. Many laws and regulations govern the spacing of mines, rates of production, prevention of waste and other matters. These laws and regulations may increase the costs and timing of planning, designing, drilling, installing, operating and abandoning our mines and other facilities. In addition, our operations are subject to complex environmental laws and regulations adopted by domestic and foreign jurisdictions where we operate. We could incur liability to governments or third parties for any unlawful discharge of pollutants into the air, soil or water, including responsibility for remedial costs.

The submission and approval of environmental impact assessments may be required.

Environmental legislation is evolving in a manner which means stricter standards; enforcement, fines and penalties for noncompliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of operations.

Because the requirements imposed by these laws and regulations frequently change, we cannot assure you that laws and regulations enacted in the future, including changes to existing laws and regulations, will not adversely affect our business.

Decline in mineral prices may make it commercially infeasible for us to develop our property and may cause our stock price to decline.

The value and price of your investment in our common shares, our financial results, and our exploration, development and mining activities may be significantly adversely affected by declines in the price of minerals and other precious metals. Mineral prices fluctuate widely and are affected by numerous factors beyond our control, such as interest rates, exchange rates, inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of mineral-producing countries throughout the world. The price of minerals fluctuates in response to many factors, which are beyond anyone’s prediction abilities. The prices used in making the estimates in our plans differ from daily prices quoted in the news media. Because mining occurs over a number of years, it may be prudent to continue mining for some periods during which cash flows are temporarily negative for a variety of reasons. Such reasons include a belief that the low price is temporary, and/or the expense incurred is greater when permanently closing a mine.

We may not have access to all of the supplies and materials we need to begin exploration, which could cause us to delay or suspend operations.

Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies such as dynamite as well as certain equipment like bulldozers and excavators that we might need to conduct exploration. If we cannot obtain the necessary supplies, we will have to suspend our exploration plans until we do obtain such supplies.

Trading on the OTC Bulletin Board may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.

Our common stock is quoted on the OTC Bulletin Board service of the Financial Industry Regulatory Authority. Trading in stock quoted on the OTC Bulletin Board is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board is not a stock exchange, and trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a quotation system like NASDAQ or a stock exchange like NYSE or Amex. Accordingly, shareholders may have difficulty reselling any of the shares.

Penny stock rules will limit the ability of our stockholders to sell their stock.

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors.” The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a shareholder's ability to buy and sell our stock.

In addition to the penny stock rules described above, FINRA has adopted rules that require that, in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative, low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for its shares.

We do not intend to pay dividends and there will thus be fewer ways in which you are able to make a gain on your investment.

We have never paid dividends and do not intend to pay any dividends for the foreseeable future. To the extent that we may require additional funding currently not provided for in our financing plan, our funding sources may prohibit the declaration of dividends. Because we do not intend to pay dividends, any gain on your investment will need to result from an appreciation in the price of our common stock. There will therefore be fewer ways in which you are able to make a gain on your investment.

Because the SEC imposes additional sales practice requirements on brokers who deal in shares of penny stocks, some brokers may be unwilling to trade our securities. This means that you may have difficulty reselling your shares, which may cause the value of your investment to decline.

Our shares are classified as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) which imposes additional sales practice requirements on brokers-dealers who sell our securities in this offering or in the aftermarket. For sales of our securities, broker-dealers must make a special suitability determination and receive a written agreement from you prior to making a sale on your behalf. Because of the imposition of the foregoing additional sales practices, it is possible that broker-dealers will not want to make a market in our common stock. This could prevent you from reselling your shares and may cause the value of your investment to decline.

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.

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

We currently rent an office totaling approximately 1400 square feet located at 3200 N. Hayden Road, Suite 235, Scottsdale, AZ, 85251 for $1,930.64 a month. We also currently rent an office at a business center at 840 6th Avenue SW, Suite 300, Calgary, AB T2P 3E5 for $998.00 a month. Our telephone number in Scottsdale is (480) 641-4790. Our telephone number in Calgary is (403) 930-1925.

There are more than a hundred active oil or gas wells on our property. Oil and/or gas coexist within the same aquifers as our lithium- and potassium-bearing brines. In recovering the oil and gas, brine is also drawn to the surface, but generally in much larger quantities. The energy operator must process the brine and then separate it from the oil and/or gas. When this process is completed, the brine is returned to the aquifer. Given these circumstances, potential exists for a symbiotic relationship between us and other energy companies, with a result being that we may never have to drill to extract our own resource. Barrick Energy Inc., Paramount Resources, Signalta Resources Ltd, Penn West Petroleum Ltd and Canadian Natural Resources Ltd are among the companies actively operating wells on property for oil and gas deposits. We have rights to any minerals produced from their activity. In addition to lithium and potassium, other rare metals and minerals on the property include calcium, magnesium, iodine, and bromine. There can be no assurance that we will be able to locate and extract commercially viable amounts of lithium or any other minerals. This property is without known reserves and the proposed program is exploratory in nature to comply with the guidance in paragraph (b)(4)(i) of Industry Guide 7. There is significant infrastructure here, including power from a local utility and 12-month road access. At this point we have no intention of doing any drilling or traditional exploration of any kind. We will be sampling and taking the produced water from oil companies that is already coming to the surface and being separated from the oil and gas as part of their operation. Taking possession and processing the minerals and water will require certain permits and royalty agreements with the local and provincial governments.

The property covers approximately 650,000 acres through two contiguous land holdings. Our northern land holdings are approximately 517,000 acres surrounding Valleyview, Alberta and our southern land holdings are approximately 133,000 acres and are located just south and west of Fox Creek, Alberta. The north and south properties are approximately 20 miles apart. Almost all of the property has paved roads and year-round access. Alberta Provincial Highway 43 runs north to south and is the major access road for both properties. The properties are 1.5 hours driving distance from Grand Prairie, Alberta and 3.5 hours driving distance from Edmonton, Alberta.

On December 16, 2010, we entered into an assignment agreement with Lithium Exploration VIII Ltd. to acquire an undivided 100% right, title and interest in the Valleyview Property. Lithium Exploration VIII Ltd. and Golden Virtue Resources Inc. (formerly First Lithium Resources Inc.) had entered into an underlying option agreement dated October 6, 2010, which option agreement and interest have been assigned to our company.

The note was interest free until March 31, 2013. After March 31, 2013, interest accrued on the principal balance then in arrears at the rate of 15% per annum. No payments were due and payable until December 31, 2013. Further, at any time, Lithium Exploration VIII and Golden Virtue may have elected to convert the remaining balance of the Note and accrued interest into common shares of our company at 75% of the closing market price of our company’s common shares on the election day.

A 1995 report authored by S. Bachu, M. Brulotte and L.P. Yuan of the Alberta Research Council, "Resource Estimates of Industrial Minerals in Alberta Formation Waters," discusses the area in which the Valleyview Property is located as having potential for resources of lithium within formation waters.

Of the more than 1,511 records in the 1995 AGS study, the well with the highest concentration of lithium (140mg/L or ppm) is located nearly in the center of the Valleyview Property, based on longitude and latitude coordinates. In addition, a second well in the top 50 is located approximately a mile from that well.

More recently, in January 2010, D.R. Eccles and G.M. Jean of the Alberta Geological Survey (AGS) published "Lithium Ground and Formation Water Geochemical Data," with the intention of enabling present and future companies to better evaluate their targets and characterize their resource estimates by being able to distinguish between background and anomalous concentrations of lithium throughout Alberta. The report, researched during 2009, is a compilation of ground- and formation-water geochemical lithium data from government sources and from AGS data holdings, resulting in 1,511 records.

We completed a 12-week sample-testing program on May 31, 2011. The next step is to complete the resource estimate for the Valleyview Project. We also need to conclude bulk sampling to be utilized in the design of a separation process to produce battery-grade lithium carbonate, potash (KCl), and magnesium hydroxide. This process was expected to begin in October of 2012, but has been put on hold as we are waiting for the ultrasonic technology to be ready for field testing. The ultrasonic technology is important in the separation of the suspended solids from their liquid state and knowing the exact make-up of the salt discharge from the technology is critical in planning the further separation and processing techniques. Once the bulk sampling and separation process has been completed and tested we will raise capital to build a pilot scale plant in Valleyview to begin the production of the outlined minerals.

The substantive steps that have taken place for our Valleyview Project for the recent past are as follows:

Our total budget for above phase of studies is $150,000 and all of it has been deployed to vendors.

In 1993, a data set comprising nearly 130,000 formation water analyses from the Alberta Basin was reviewed for potential economic industrial mineral interest (Hitchon, B., Underschultz, J.R. and Bachu, S. 1993: Industrial mineral potential of Alberta formation waters. Alberta Research Council, Alberta Geological Survey, Open File Report 1993-15, 85 p). The study identified anomalous values of certain elements in Devonian formation waters associated with producing oil and gas wells in the Valleyview and Swan Hills areas of west-central Alberta including brines with up to 140 mg/L lithium. This value is significant considering the median values of lithium in Alberta formation waters is 0.2 mg/L (based on 1,511 analyses; Eccles, D.R. and Berhane, H. (2011): Geological introduction to lithium-rich formation water in Alberta, west-central Alberta; Energy Resources Conservation Board, ERCB/AGS Open FileReport, 36 p.). Further modeling in 1995 (Bachu, S. Yuan, L.P. and Brulotte, M. (1995): Resource estimates of industrial minerals in Alberta formation waters. The Li-rich formation waters appear to be associated with carbonate build-ups of the Leduc Formation (both Leduc north and south) in the Woodbend Group and the Swan Hills Formation of the Beaverhill Lake Group. The Woodbend Group carbonates, including the Leduc and Cooking Lake formations, reach thicknesses of >300 m in places, while the Beaverhill Lake carbonate platform varies in thickness from >150 m in the southern reef portion to around 50 m in the northwest. However, in the Swan Hills area the carbonate platform of the Cooking Lake Formation and the reefs of the Leduc Formation (both of Woodbend Group) directly overlie the Beaverhill Lake Group carbonates, such that it is likely difficult to differentiate between the various formation waters. The source of lithium in oil field waters remains subject to debate. Explanations generally conform with those for Li-rich brine solutions and include recycling of earlier deposits/salars, mixing with pre-existing subsurface brines, weathering of volcanic and/or basement rocks, and transport from hydrothermal volcanic activity, but none of these hypotheses has clearly pointed to the ultimate source for the anomalous values of lithium. However, in a recent isotopic study, Eccles and Berhane (2011) suggested that any viable lithium source model in northwestern Alberta should invoke direct contact between Devonian formation water and the crystalline basement or with immature siliciclastics deposited above the basement (basal Cambrian sandstone, Granite Wash or the Gilwood Member), and mobilization of silicate-bearing fluids to the aquifer.

Other than as set out below, we know of no material, existing or pending legal proceedings against us, 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 or beneficial shareholder, is an adverse party or has a material interest adverse to our company.

On June 12, 2012, we filed suit against Glottech-USA in the Court of Common Pleas of Chester County, Pennsylvania, alleging that Glottech-USA misused our funds and was in breach of our agreements that called for Glottech-USA to deliver one initial unit of the mechanical ultrasound technology. We further alleged that Glottech-USA was financially insolvent and unable to fulfill its promises to us.

On June 12, 2012, we filed a complaint with the Court of Common Pleas of Chester County, Pennsylvania against Glottech-USA, LLC, Eldredge, Inc., and the Eldredge Companies, Inc. The complaint seeks an order of the Court granting possession of the unit, in its current state, to our company. As the unit is currently located on the property of Eldredge, Inc., and the Eldredge Companies, Inc., these companies were included as defendants in the complaint.

On August 27, 2012, we filed a motion to amend our complaint to include claims of breach of trust and fiduciary duty, breach of good faith and fair dealing, breach of contract, conversion of funds, fraud, and the imposition of a constructive trust. We believe that this action is necessary to protect our interest against possible misuse of funds by Glottech-USA, LLC and its principals. We will also seek damages as appropriate.

On October 22, 2012, the Court of Common Pleas in Chester County, Pennsylvania, granted our motion to amend our complaint against Glottech-USA to add claims for fraud and damages reflective of the malfeasance which we allege against Glottech-USA and its officers.

On December 19, 2012, an attorney purportedly acting on behalf of Glottech-USA filed a motion in the lawsuit pending in Chester County, Pennsylvania, seeking possession of the unit.

Certain members of Glottech-USA continue to pursue dissolution of the company in Mississippi and its actions clearly establish that Glottech-USA is incapable of fulfilling any obligations under the contracts with us.

We do not believe that Glottech-USA has sufficient capital to complete the technology unit and the former managers of Glottech-USA have admitted these facts in their lawsuit to dissolve Glottech-USA. We have provided full consideration to Glottech-USA and complied with all other agreed upon conditions for the delivery of the unit by Glottech-USA.

The high and low bid prices of our common stock for the periods indicated below are as follows:

Our common shares are issued in registered form. VStock Transfer, 77 Spruce St, Suite 201, Cedarhurst, New York 11516 (Telephone: (212)-828-8436; Facsimile: (646) 536-3179) is the registrar and transfer agent for our common shares.

On September 25, 2013, the list of stockholders for our shares of common stock showed 18 registered stockholders and 63,071,639 shares of common stock outstanding.

We have not declared any dividends on our common stock since the inception of our company on March 8, 2006. There is no restriction in our Articles of Incorporation and Bylaws that will limit our ability to pay dividends on our common stock. However, we do not anticipate declaring and paying dividends to our shareholders in the near future.

As of June 30, 2013, we have not adopted an equity compensation plan under which our common stock is authorized for issuance.

We did not purchase any of our shares of common stock or other securities during the year ended June 30, 2013.

On January 25, 2013, we issued 1,028,113 common shares at a deemed price of $0.25 per share for warrants exercise of $257,028. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On February 1, 2013, we issued 78,947 common shares at a market price of $0.19 per share for mining expenses. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On February 14, 2013, we issued 41,667 common shares at a market price of $0.24 per share for investor relation expenses. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On February 19, 2013, we issued 2,000,000 common shares at a deemed price of $0.077 per share for debenture conversion of $154,000. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On March 1, 2013, we issued 48,387 common shares at a market price of $0.31 per share for mining expenses. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On March 8, 2013, we issued 2,000,000 common shares at a deemed price of $0.077 per share for debenture conversion of $154,000. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On March 14, 2013, we issued 47,619 common shares at a market price of $0.21 per share for investor relation expenses. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On March 15, 2013, we issued 2,000,000 common shares at a deemed price of $0.095 per share for debenture conversion of $190,000. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On March 27, 2013, we issued 389,189 common shares at a market price of $0.185 per share for investor relation expenses. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On April 1, 2013, we issued 71,429 common shares at a market price of $0.21 per share for mining expenses. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On April 15, 2013, we issued 50,000 common shares at a market price of $0.20 per share for investor relation expenses. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On April 23, 2013, we issued 2,000,000 common shares at a deemed price of $0.0805 per share for debenture conversion of $161,000. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On April 29, 2013, we issued 300,000 common shares at a market price of $0.18 per share for director fees. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On May 13, 2013, we issued 2,000,000 common shares at a deemed price of $0.075 per share for debenture conversion of $150,000. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On May 30, 2013, we issued 2,400,000 common shares at a deemed price of $0.075 per share for debenture conversion of $180,000. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On July 3, 2013, pursuant to the terms of a promissory note under the amended assignment agreement, we issued 954,461 common shares for a combined aggregate amount of CAD$83,057.53 (USD$78,743). All of these shares were issued to one non-US persons (as that term is defined in Regulation S of the Securities Act of 1933), in an offshore transaction relying on Regulation S of the Securities Act of 1933, as amended.

On July 9, 2013, we issued 2,000,000 common shares at a deemed price of $0.045 per share for debt conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On August 13, 2013, we issued 1,585,714 common shares at a market price of $0.0735000 per share for debt conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On August 14, 2013, we issued 844,300 common shares at a market price of $0.0525 per share for debt conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On September 6, 2013, we issued 2,375,052 common shares at a market price of $0.045 per share for debt conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

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

The following discussion should be read in conjunction with our audited financial statements and the related notes for the years ended June 30, 2013 and June 30, 2012 that appear elsewhere in this annual 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 annual report, particularly in the section entitled "Risk Factors" beginning on page 15 of this annual report.

Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

We do not intend to invest in capital expenditures during the twelve-month period ending June 30, 2014.

We expect to spend $500,000 during the twelve-month period ending June 30, 2014 on general and administrative expenses including legal and auditing fees, rent, office equipment and other administrative related expenses.

We do not anticipate expending any funds on research and development, manufacturing and engineering over the twelve months ending June 30, 2014.

We do not intend to purchase any significant equipment over the twelve months ending June 30, 2014.

The following summary of our results of operations should be read in conjunction with our audited financial statements for the years ended June 30, 2013 and 2012.

Our operating results for the years ended June 30, 2013 and 2012 are summarized as follows:

Our operating expenses for the years ended June 30, 2013 and June 30, 2012 are outlined in the table below:

The decrease in operating expenses for the year ended June 30, 2013, compared to the same period in fiscal 2012, was mainly due to decreases in advertising, director fees and investor relations expenses.

As of June 30, 2013, our total current assets were $292,646 and our total current liabilities were $1,768,670 and we had a working capital deficit of $1,476,024. Our financial statements report a net loss of $5,038,309 for the year ended June 30, 2013 and a net loss of $33,457,240 for the period from May 31, 2006 (date of inception) to June 30, 2013.

We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. In this regard we have raised additional capital through equity offerings and loan transactions.

We had cash in the amount of $248,624 as of June 30, 2013 as compared to $1,239,603 as of June 30, 2012. We had a working capital deficit of $1,476,024 as of June 30, 2013 compared to working capital deficit of $1,155,133 as of June 30, 2012.

Our principal sources of funds have been from sales of our common stock and convertible debentures.

We estimate that our expenses over the next 12 months will be approximately $700,000 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.

We intend to meet our cash requirements for the next 12 months through the use of the cash we have on hand and through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. We currently do not have any other 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.

As a “smaller reporting company,” we are not required to provide tabular disclosure obligations.

The audited financial statements included with this annual report have been prepared on the going concern basis which assumes that adequate sources of financing will be obtained as required and that our assets will be realized and liabilities settled in the ordinary course of business. Accordingly, the audited financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern.

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.

Our audited financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

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 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 $248,624 and $1,239,603 in cash and cash equivalents at June 30, 2013 and June 30, 2012, respectively.

Our company maintains cash balances at a financial institution which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for banks located in the US. As of June 30, 2013 and 2012, our company had $25,935 and $1,016,716, respectively, in deposits in excess of federally insured limits in our US bank. Our company has not experienced any losses with regard to its bank accounts and we believe we are not exposed to any risk of loss on its cash in bank accounts.

Prepaid expenses mainly consist of legal retainers, deposit for mineral property exploration, and shares issued for investor relations. Legal retainers and deposit 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.

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.

Our company has been in the exploration stage since its formation on May 31, 2006 and has not yet realized any revenue from our planned operations. We are 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.

Our company’s financial instruments that are exposed to concentrations of credit risk primarily consist of our cash and cash equivalents and related party payables we will likely incur in the near future. Our company places our cash and cash equivalents with financial institutions of high credit worthiness. At times, our 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 we extend funds, and as such, we believe that any associated credit risk exposures are limited.

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.

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 June 30, 2013.

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 June 30 2013, our company had no items of other comprehensive income. Therefore, net loss equals comprehensive loss from inception (May 31, 2006) to June 30, 2013.

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.

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.

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.

We value our warrants with provisions resulting in derivative liabilities at fair value using the lattice model according to ASC-815-10-55. We revalue our warrants at the end of every period at fair value and record the difference in other income (expense) in the consolidated statement of operations.

We value our convertible debentures and convertible promissory notes with provisions resulting in beneficial conversion features from the embedded derivative at fair value according to ASC-840-10-25-14, rather than have its conversion feature bifurcated and reported separately due to ASC-815-15-25-1b. Because the value of the derivative related to the warrant exceeds the proceeds of the loan, our company allocated 100% of the proceeds to the warrant derivative and took a day one loss for the difference between the proceeds and the fair value of the warrants, resulting in a debt discount on the full fair value of the debenture because no proceeds were available to be allocated to the debt or its beneficial conversion feature. That debt discount is accreted to interest expense over the stated life of the note using the interest method in accordance with ASC 470-20-35-7a and 835-30-35-2. Unaccreted debt discount on the date of conversion is accreted to interest expense on that date.

ASC 820, “Fair Value Measurements and Disclosures” requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and

Level 3 - Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

The carrying amounts of our company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, deposit, accounts payable and accrued liabilities, and due to a related party approximate their fair values because of the short maturity of these instruments.

Our company’s Level 3 financial liabilities consist of the derivative liability of our company’s secured convertible promissory notes and debentures issued to investors, and the derivative warrants issued in connection with these convertible promissory notes and debentures. There is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Our company used a lattice model which incorporates transaction details such as company stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of the date of issuance and each balance sheet date.

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

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.

Accounting Standards Updates ("ASUs") through ASU No. 2013-11 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 our company or their effect on the financial statements would not have been significant.

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

Our audited financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

	Year Ended June 30, 2013	Year Ended June 30, 2012 (Restated)	Cumulative from Inception (May 31, 2006) to June 30, 2013
Cash Flows from Operating Activities
Net loss for the year	$ (5,038,309)	$ (2,390,439)	$ (33,457,240)
Items not affecting cash:
Common shares issued for mining expenses and related finder’s fees	90,000	-	880,000
Common shares issued for director fees	54,000	318,000	17,967,000
Non-cash mining expenses	304,060	-	304,060
Unrealized foreign exchange gain on note payable	(4,315)	-	(4,315)
Common shares issued for investor relations	132,000	-	834,000
Common shares issued for consulting fees	157,000	50,000	207,000
Options issued for mining expenses	-	-	4,940,000
Interest expense	3,792,131	1,860,980	6,839,967
Gain on derivative liability	(1,123,384)	(1,901,205)	(3,133,023)
Changes in operating assets and liabilities:
Prepaid expenses	(44,022)	647,168	(44,022)
Accounts payable and accrued liabilities	(49,970)	(130,296)	2,928
Net cash used in operations	(1,730,809)	(1,545,792)	(4,663,645)
Cash Flows from Investing Activities
Investment	-	(197,393)	(197,393)
Deposit	(10,170)	-	(10,170)
Net cash used in investing activities	(10,170)	(197,393)	(207,563)
Cash Flows from Financing Activities
Advance from related party	-	-	47,537
Repayment to related party	-	(2,205)	(2,205)
Issuance of common shares for cash	-	-	1,349,500
Issuance of convertible debentures	-	2,000,000	3,000,000
Issuance cost of convertible debentures	-	(25,000)	(25,000)
Issuance of convertible promissory notes	750,000	-	750,000
Net cash provided by financing activities	750,000	1,972,795	5,119,832
Increase (decrease) in cash and cash equivalents	(990,979)	229,610	248,624
Cash and cash equivalents - beginning of year	1,239,603	1,009,993	-
Cash and cash equivalents - end of year	$ 248,624	$ 1,239,603	$ 248,624
Supplementary Cash Flow Information
Non-cash investing and financing activities:
Common stock issued for debt	$ 2,824,920	$ 1,716,691	$ 4,541,611
Cash paid for:
Interest	$ -	$ -	$ -
Income taxes	$ -	$ -	$ -

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 November 8, 2011, the Company entered into a letter agreement with Glottech-USA. Pursuant to the terms of the agreement, the Company was granted an exclusive license to use and distribute the technology within the Swan Hills region of Alberta as well as a non-exclusive right to distribute the technology within Canada.

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.

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.

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 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 $248,624 and $1,239,603 in cash and cash equivalents at June 30, 2013 and June 30, 2012, respectively.

The Company maintains cash balances at a financial institution which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for banks located in the US. As of June 30, 2013 and 2012, the Company had $25,935 and $1,016,716, respectively, in deposits in excess of federally insured limits in its US bank. The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash in bank accounts.

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.

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.

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.

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.

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 June 30, 2013.

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 June 30 2013, the Company had no items of other comprehensive income. Therefore, net loss equals comprehensive loss from inception (May 31, 2006) to June 30, 2013.

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.

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.

We value our convertible debentures and convertible promissory notes with provisions resulting in beneficial conversion features from the embedded derivative at fair value according to ASC-840-10-25-14, rather than have its conversion feature bifurcated and reported separately due to ASC-815-15-25-1b. Because the value of the derivative related to the warrant exceeds the proceeds of the loan, the company allocated 100% of the proceeds to the warrant derivative and took a day one loss for the difference between the proceeds and the fair value of the warrants, resulting in a debt discount on the full fair value of the debenture because no proceeds were available to be allocated to the debt or its beneficial conversion feature. That debt discount is accreted to interest expense over the stated life of the note using the interest method in accordance with ASC 470-20-35-7a and 835-30-35-2. Unaccreted debt discount on the date of conversion is accreted to interest expense on that date.

Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and

The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, deposit, accounts payable and accrued liabilities, and due to a related party approximate their fair values because of the short maturity of these instruments.

The Company’s Level 3 financial liabilities consist of the derivative liability of the Company’s secured convertible promissory notes and debentures issued to investors, and the derivative warrants issued in connection with these convertible promissory notes and debentures. There is no current market for these securities such that the determination of fair value requires significant judgment or estimation. The Company used a lattice model which incorporates transaction details such as Company stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of the date of issuance and each balance sheet date.

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.

Accounting Standards Updates ("ASUs") through ASU No. 2013-11 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.

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.

On July 10, 2012, the Company issued 1,504,415 common shares at a deemed price of $0.1925 per share for debenture conversion and accrued interest of $289,600 (Note 6).

On August 21, 2012, the Company issued 815,047 common shares at a deemed price of $0.1595 per share for debenture conversion of $130,000 (Note 6).

On September 17, 2012, the Company issued 1,581,028 common shares at a deemed price of $0.1265 per share for debenture conversion of $200,000 (Note 6).

On October 25, 2012, the Company cancelled 20,000,000 common shares and in exchange, 20,000,000 preferred shares were issued.

On November 1, 2012, the Company issued 62,500 common shares at a market price of $0.24 per share for mining expenses.

On November 13, 2012, the Company issued 41,667 common shares at a market price of $0.24 per share for investor relation expenses.

On November 22, 2012, the Company issued 949,171 common shares at a deemed price of $0.1170 per share for debenture conversion and accrued interest of $111,053 (Note 6).

On December 1, 2012, the Company issued 55,556 common shares at a market price of $0.27 per share for mining expenses.

On December 13, 2012, the Company issued 38,462 common shares at a market price of $0.26 per share for investor relation expenses.

On January 2, 2013, the Company issued 55,556 common shares at a market price of $0.27 per share for mining expenses.

On January 14, 2013, the Company issued 40,000 common shares at a market price of $0.25 per share for investor relation expenses.

On January 25, 2013, the Company issued 1,028,113 common shares at a deemed price of $0.25 per share for warrants exercise of $257,028 (Note 6).

On February 1, 2013, the Company issued 78,947 common shares at a market price of $0.19 per share for mining expenses.

On February 14, 2013, the Company issued 41,667 common shares at a market price of $0.24 per share for investor relation expenses.

On February 19, 2013, the Company issued 2,000,000 common shares at a deemed price of $0.077 per share for debenture conversion of $154,000 (Note 6).

On March 1, 2013, the Company issued 48,387 common shares at a market price of $0.31 per share for mining expenses.

On March 1, 2013, the Company issued 25,806 common shares at a market price of $0.31 per share for consulting fees.

On March 8, 2013, the Company issued 2,000,000 common shares at a deemed price of $0.077 per share for debenture conversion of $154,000 (Note 6).

On March 14, 2013, the Company issued 47,619 common shares at a market price of $0.21 per share for investor relation expenses.

On March 15, 2013, the Company issued 2,000,000 common shares at a deemed price of $0.095 per share for debenture conversion of $190,000 (Note 6).

On March 15, 2013, the Company issued 38,876 common shares at a market price of $0.2315 per share for consulting fees.

On March 15, 2013, the Company issued 95,238 common shares at a market price of $0.21 per share for consulting fees.

On March 27, 2013, the Company issued 389,189 common shares at a market price of $0.185 per share for investor relation expenses.

On April 1, 2013, the Company issued 71,429 common shares at a market price of $0.21 per share for mining expenses.

On April 1, 2013, the Company issued 38,095 common shares at a market price of $0.21 per share for consulting fees.

On April 15, 2013, the Company issued 100,000 common shares at a market price of $0.20 per share for consulting fees.

On April 15, 2013, the Company issued 57,007 common shares at a market price of $0.2105 per share for consulting fees.

On April 15, 2013, the Company issued 50,000 common shares at a market price of $0.20 per share for investor relation expenses.

On April 23, 2013, the Company issued 2,000,000 common shares at a deemed price of $0.0805 per share for debenture conversion of $161,000 (Note 6).

On April 29, 2013, the Company issued 300,000 common shares at a market price of $0.18 per share for director fees.

On May 1, 2013, the Company issued 47,059 common shares at a market price of $0.17 per share for consulting fees.

On May 13, 2013, the Company issued 2,000,000 common shares at a deemed price of $0.075 per share for debenture conversion of $150,000 (Note 6).

On May 15, 2013, the Company issued 113,636 common shares at a market price of $0.1760 per share for consulting fees.

On May 15, 2013, the Company issued 70,588 common shares at a market price of $0.17 per share for consulting fees.

On May 30, 2013, the Company issued 2,400,000 common shares at a deemed price of $0.075 per share for debenture conversion of $180,000 (Note 6).

On June 1, 2013, the Company issued 50,000 common shares at a market price of $0.16 per share for consulting fees.

On June 14, 2013, the Company issued 142,857 common shares at a market price of $0.14 per share for consulting fees.

On June 15, 2013, the Company issued 88,235 common shares at a market price of $0.136 per share for consulting fees.

On November 22, 2011, the Company issued 2,000,000 common shares at a deemed price of $0.2925 per share for debenture conversion of $585,000 (Note 6).

On April 18, 2012, the Company issued 610,795 common shares at a deemed price of $0.352 per share for debenture conversion of $215,000 (Note 6).

On April 18, 2012, the Company issued 323,637 common shares at a market price of $0.81 for conversion of interest payable and interest expense of $262,146 (Note 6).

On April 27, 2012, the Company issued 300,000 common shares at a market price of $1.06 per share for director fees (Note 11).

On May 1, 2012, the Company issued 26,041 common shares at a market price of $0.96 per share for consulting fees (Note 11).

On May 15, 2012, the Company issued 40,323 common shares at a market price of $0.62 per share for consulting fees (Note 11).

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:

Of these shares, 11,133,200 were issued to directors and officers of the Company. 18,516,037 were issued to independent investors. 872,375 were issued for mining expenses (Note 5). 948,604 were issued for investor relation expenses. 200,000 were issued for debt settlement. 20,184,093 were issued for debenture and interest conversion (Note 6). 1,028,113 were issued for exercise of warrants attached to convertible debentures (Note 6). 2,000,000 were issued for a mining option settlement (Note 5). As of June 30, 2013, the Company has issued 20,000,000 preferred shares to a director of the Company. The preferred shares have a par value of $0.001 per share and are convertible on a one for one basis into common shares subject to a one year hold period expiring on October 24, 2013. There are no other preferential rights attached to the preferred shares. The Company has no stock option plan, warrants or other dilutive securities, other than warrants issued to acquire 4,172,973 shares of the Company regarding convertible promissory notes (Note 7).

As per management agreements, the Company is obligated to issue 300,000 common shares to two directors by April 27, 2014 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, April 27, 2012 and April 29, 2013 respectively.

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 June 30, 2013 of $9,777,033 will begin to expire in 2026. Accordingly, deferred tax assets were offset by the valuation allowance that increased by approximately $1,283,428 and $721,933 during the years ended June 30, 2013 and 2012, respectively.

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 June 30, 2013 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 June 30, 2013. 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, 2013, June 30, 2012, June 30, 2011, June 30, 2010 and June 30, 2009 are still open for examination by the Internal Revenue Service (IRS).

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.

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

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 full $90,000 (consisting of option payments ‘i’ and ‘vi’ below) was expensed and included in the December 31, 2011 accounts payable balance. 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:

On December 31, 2012, the Company entered into an agreement to amend the original payment requirement of CDN$100,000 due on January 1, 2013 to the following payments: CDN $20,000 (paid) cash payment due on January 1, 2013 and CDN $80,000 by a 15% one year promissory note starting January 1, 2013. The promissory note is interest free until March 31, 2013. After then, interest will accrue on the principal balance then in arrears at the rate of 15% per annum. No payments shall be payable until December 31, 2013. At any time, the Optionor may elect to convert the remaining balance of CDN $80,000 plus accrued interest into common shares of the Company at 75% of the closing market price of the Company’s common shares on the election day. The full $100,000 (consisting of cash payment of $20,000 and note payable of $80,000) was expensed. The note is subject to be measured at its fair value in accordance with ASC 480-10-25-14. The fair value at issuance was $106,667. An additional $26,667 was charged to mining expense. An interest expense of CDN$3,058 (US$2,899) was accrued as at June 30, 2013. On July 3, 2013, the Optionor elected to convert the promissory note of CDN $80,000 (US $75,844) plus accrued interest of CDN $3,058 (US $2,899) for the total amount of CDN $83,058 (US $78,743) into 954,461 common shares of the Company at a price of US $0.0825 per share. As a result, a foreign exchange gain of $4,315 was recognized as at June 30, 2013.

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.

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 in an amount equal to $2.00 per physical ton of water processed pursuant to the usage of the technology.

On June 12, 2012, the Company filed a complaint with the court of common pleas of Chester County, Pennsylvania against Glottech – USA, LLC, Eldredge, Inc., and the Eldredge Companies, Inc. The complaint seeks an order of the court granting possession of the unit, in its current state, to the Company.

Effective August 14, 2012, the Company entered into an option agreement with GD Glottech-International, Limited (“GD International”) to protect our license and distribution rights in the event that GD-Glottech-USA, LLC (“GD USA”) is unable to perform and honor the obligations contingent to a letter agreement dated November 8, 2011.

Pursuant to the terms of the option agreement, we are required to provide an initial deposit of $150,000 to be held in escrow for the option to obtain a license on the patent rights, as set forth in the option agreement. A further $15,000 was required for exercising the option agreement and it will be credited to future fees when patents rights are exercised. We exerised this option agreement on September 1, 2012 and released the funds to GD International.

On October 1, 2012, the Company entered into a sales agency agreement with GD International. The agreement shall replace all agreements entered previously. Pursuant to the agreement, the Company is appointed as GD International’s sales agent for the technology within the territory. As a consideration, 2,000,000 common shares of the Company shall be issued to GD International (issued: see d) above). GD International retains all right, title and interest in the technology. The term of this agreement will be an initial period of five years. The term shall be automatically renewable thereafter for successive five year periods provided that the Company has sold not less than 25 or more technology units during each applicable five year period.

On May 2, 2013, the Company entered into an agreement to retain the future use of the unit. Pursuant to the agreement, the Company must make the following payments:

On June 29, 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 face amount of $1,500,000. The debenture is due on December 28, 2012 and carries an interest rate of 12% per annum, with an effective interest rate of 680.71% . The debenture is convertible at the lower of $0.83 and 55% of the lowest reported sales price of the common stock for the 20 days immediately prior to conversion date subject to various prescribed conditions. The convertible loan has a fixed stated principal amount but is not convertible into a fixed number of shares, so the conversion feature is considered an imbedded derivative. However, the convertible debenture as a standalone instrument is to be measure at its fair value in accordance with ASC 480-10-25-14, rather than have its conversion feature bifurcated and reported separately. The fair value at issuance was $2,727,273. On November 22, 2011, $585,000 in face value of the debenture was converted to 2,000,000 common shares at a price of $0.2925 per share in accordance with the terms of the agreement. On April 18, 2012, $215,000 in face value of the debenture was converted to 610,795 common shares at a price of $0.352 per share in accordance with the terms of the agreement. On July 10, 2012, $270,000 in face value of the debenture was converted to 1,402,597 common shares at a price of $0.1925 per share in accordance with the terms of the agreement. On August 21, 2012, $130,000 in face value of the debenture was converted to 815,047 common shares at a price of $0.1595 per share in accordance with the terms of the agreement. On September 17, 2012, $200,000 in face value of the debenture was converted to 1,581,028 common shares at a price of $0.1265 per share in accordance with the terms of the agreement. On November 22, 2012, $100,000 in face value of the debenture was converted to 854,701 common shares at a price of $0.117 per share in accordance with the terms of the agreement. During the period ended December 31, 2012, an interest expense of $12,380 was accrued. On July 10, 2012, accrued interest of $19,600 on the debenture was converted to 101,818 common shares at the same rate used for conversion of principal. On November 22, 2012, accrued interest of $11,053 on the debenture was converted to 94,470 common share at the same rate used for conversion of principal. All principal has been converted as of June 30, 2013.

On May 15, 2012, the Company entered into another securities purchase agreement with the same investor. Pursuant to the terms of the agreement, the investor acquired convertible debentures with an aggregate face value of $1,680,000, at an original issuance discount of $180,000; resulting in $1,500,000 net proceeds to the Company. The debenture is due on May 15, 2013 and carries no interest, with an effective interest rate of 561.35% . The debenture is convertible at the lower of $0.45 and 65% of the lowest reported sales price of the common stock for the 20 days immediately prior to conversion date subject to various prescribed conditions. The debenture is also subject to be measured at its fair value in accordance with ASC 480-10-25-14, rather than have its conversion feature bifurcated and reported separately. The fair value at issuance was $2,584,615. On February 19, 2013, $154,000 in face value of the debenture was converted to 2,000,000 common shares at a price of $0.077 per share in accordance with the terms of the agreement. On March 8, 2013, $154,000 in face value of the debenture was converted to 2,000,000 common shares at a price of $0.077 per share in accordance with the terms of the agreement. On March 15, 2013, $190,000 in face value of the debenture was converted to 2,000,000 common shares at a price of $0.095 per share in accordance with the terms of the agreement. On April 23, 2013, $161,000 in face value of the debenture was converted to 2,000,000 common shares at a price of $0.0805 per share in accordance with the terms of the agreement. On May 13, 2013, $150,000 in face value of the debenture was converted to 2,000,000 common shares at a price of $0.075 per share in accordance with the terms of the agreement. On May 30, 2013, $180,000 in face value of the debenture was converted to 2,400,000 common shares at a price of $0.075 per share in accordance with the terms of the agreement. The debenture was extended for 12 months and will expire on May 15, 2014. As of June 30, 2013, the debenture has a remaining balance of $1,063,077 in fair value ($691,000 in face value).

On September 17, 2012, the Company entered into an amended agreement to revise the conversion price of the debentures entered into on June 29, 2011 and May 15, 2012. The debentures are now convertible at the lower of $0.20 and 65% of the lowest reported sales price of the common stock for the 20 days immediately prior to conversion date subject to various prescribed conditions.

Along with the debenture issued on June 29, 2011, the Company issued warrants to acquire a total of 1,807,229 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. Along with the debenture entered into on May 15, 2012, the Company issued warrants to acquire a total of 3,333,333 shares of the Company for a period of five years at an exercise price of $0.45. Effective September 17, 2012, the excise price of warrants granted on June 29, 2011, July 12, 2011 and May 15, 2012 is revised to $0.20 per amended agreement.

The warrants bear a cashless exercise provision. The warrants also include anti-dilution protection with respect to lower priced issuances of common stock or securities convertible or exchangeable into common stock, which provision resulted in derivative liability treatment under ASC topic 815-10-55. Fair values at issuance totaled $2,168,674, $1,006,025 and $2,066,666 for warrants issued on June 29, 2011, July 12, 2011 and May 15, 2012 respectively.

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

On January 25, 2013, 5,140,562 warrants were exercised for 1,028,113 common shares of the Company at a deemed price of $0.25 in accordance with the terms of the agreement. A gain of $886,759 was recorded when the warrants were valued prior to the warrants exercise. As of June 30, 2013, all the warrants issued prior to June 30, 2012 have been exercised.

The corresponding debt discount of the debentures were accreted to interest expense over the terms of debentures of 18 months and 12 months respectively. During the year ended June 30, 2013, an accretion of $1,103,487 was recognized as interest expense.

On February 13, 2013, the Company entered into a securities purchase agreement with one investor. Pursuant to the terms of the agreement, the investor acquired a convertible promissory note with an aggregate face value of $1,100,000, at an issuance discount of $100,000; resulting in $1,000,000 net proceeds to the Company. On February 13, 2013, $100,000 net proceeds were received with an issuance discount of $10,000 for an aggregate face value of $110,000. On April 24, 2013, $50,000 net proceeds were received with an issuance discount of $5,000 for an aggregate face value of $55,000. On June 4, 2013, $50,000 net proceeds were received with an issuance discount of $5,000 for an aggregate face value of $55,000. On June 27, 2013, $50,000 net proceeds were received with an issuance discount of $5,000 for an aggregate face value of $55,000. As of June 30, 2013, total net proceeds of $250,000 were received with an issuance discount of $25,000 for an aggregate face value of $275,000. There is no guarantee the investor will make additional payments. The note of $275,000 is due on February 13, 2016 and carries a one time interest rate of 5% over the term of note, with an effective interest rate of 171.61% . The note is convertible at the lower of $0.25 and 70% of the lowest reported sales price of the common stock for the 20 days immediately prior to conversion date subject to various prescribed conditions. The convertible note has a fixed stated principal amount but is not convertible into a fixed number of shares, so the conversion feature is considered an imbedded derivative. However, the convertible note as a standalone instrument is to be measured at its fair value in accordance with ASC 480-10-25-14, rather than have its conversion feature bifurcated and reported separately. The fair value at issuance was $392,857. During the year ended June 30, 2013, an interest expense of $938 was accrued.

Effective March 1, 2013, the Company entered into another securities purchase agreement with another investor. Pursuant to the terms of the agreement, the investor acquired a convertible promissory note with an aggregate face value of $672,000, at an issuance discount of $72,000; resulting in $600,000 net proceeds to the Company.

On March 1, 2013, $150,000 net proceeds were received with an issuance discount of $18,000 for an aggregate face value of $168,000. The note of $168,000 is due on March 1, 2014 and carries no interest, with an effective interest rate of 561.36% . The note is convertible at the lower of 50% of the lowest reported sale price of the common stock for the 20 trading days immediately prior to (i) the closing date on March 1, 2013 or (ii) 50 % of the lowest reported sale price for the 20 days prior the conversion date of the Note. The convertible note has a fixed stated principal amount but is not convertible into a fixed number of shares, so the conversion feature is considered an imbedded derivative. However, the convertible note as a standalone instrument is to be measured at its fair value in accordance with ASC 480-10-25-14, rather than have its conversion feature bifurcated and reported separately. The fair value at issuance was $336,000.

On April 1, 2013, an additional $150,000 of net proceeds were received with an issuance discount of $18,000 for an aggregate face value of $168,000. The note of $168,000 is due on April 1, 2014 and carries no interest, with an effective interest rate of 561.36% . The note is convertible at the lower of 50% of the lowest reported sale price of the common stock for the 20 trading days immediately prior to (i) the closing date on March 1, 2013 or (ii) 50 % of the lowest reported sale price for the 20 days prior the conversion date of the Note. The convertible note has a fixed stated principal amount but is not convertible into a fixed number of shares, so the conversion feature is considered an imbedded derivative. However, the convertible note as a standalone instrument is to be measured at its fair value in accordance with ASC 480-10-25-14, rather than have its conversion feature bifurcated and reported separately. The fair value at issuance was $336,000.

On May 1, 2013, an additional $100,000 of net proceeds were received with an issuance discount of $12,000 for an aggregate face value of $112,000. The note of $112,000 is due on May 1, 2014 and carries no interest, with an effective interest rate of 561.36% . The note is convertible at the lower of 50% of the lowest reported sale price of the common stock for the 20 trading days immediately prior to (i) the closing date on March 1, 2013 or (ii) 50 % of the lowest reported sale price for the 20 days prior the conversion date of the Note. The convertible note has a fixed stated principal amount but is not convertible into a fixed number of shares, so the conversion feature is considered an imbedded derivative. However, the convertible note as a standalone instrument is to be measured at its fair value in accordance with ASC 480-10-25-14, rather than have its conversion feature bifurcated and reported separately. The fair value at issuance was $224,000.

On June 1, 2013, an additional $100,000 of net proceeds were received with an issuance discount of $12,000 for an aggregate face value of $112,000. The note of $112,000 is due on June 1, 2014 and carries no interest, with an effective interest rate of 561.36% . The note is convertible at the lower of 50% of the lowest reported sale price of the common stock for the 20 trading days immediately prior to (i) the closing date on March 1, 2013 or (ii) 50 % of the lowest reported sale price for the 20 days prior the conversion date of the Note. The convertible note has a fixed stated principal amount but is not convertible into a fixed number of shares, so the conversion feature is considered an imbedded derivative. However, the convertible note as a standalone instrument is to be measured at its fair value in accordance with ASC 480-10-25-14, rather than have its conversion feature bifurcated and reported separately. The fair value at issuance was $224,000.

Pursuant to the agreement, the final tranche of $100,000 net proceeds was received in July 2013.

The Company issued warrants to acquire a 540,540 shares of the Company at an exercise price of $0.185 expiring February 13, 2018, 263,158 shares of the Company at an exercise price of $0.190 expiring April 24, 2018, 297,619 shares of the Company at an exercise price of $0.168 expiring June 4, 2018, and 400,000 shares of the Company at an exercise price of $0.125 expiring June 27, 2018 respectively. Along with the promissory note issued on March 1, 2013, the Company issued warrants to acquire a total of 3,632,433 shares of the Company for a period of five years at an exercise price of $0.185.

The warrants bear a cashless exercise provision. The warrants also include anti-dilution protection with respect to lower priced issuances of common stock or securities convertible or exchangeable into common stock, which provision resulted in derivative liability treatment under ASC topic 815-10-55. Fair values at issuance totaled $94,594, $1,126,054, $50,000, $50,595 and $48,000 for warrants issued on February 13, 2013, March 1, 2013, April 24, 2013, June 4, 2013 and June 27, 2013 respectively.

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

At June 30, 2013, the warrants were valued at $513,375 resulting in a loss of $855,868 in the year ended June 30, 2013. The corresponding debt discount of the promissory notes was accreted to interest expenses over the terms of notes of 3 years and 1 year respectively. During the year ended June 30, 2013, an accretion of $37,610 was recognized as interest expense.

During the year ended June 30, 2013, the Company incurred consulting fees of $88,667 (2012 - $81,000) with directors and officers.

During the year ended June 30, 2013, the Company incurred director fees of $54,000 (2012 - $318,000) with directors.

As of June 30, 2013, the Company was obligated to a director for a non-interest bearing demand loan with a balance of $45,332 (2012 - $45,332). The Company plans to pay the loan back as cash flows become available.

These transactions are in the normal course of operations and are measured at the exchange amount of consideration established and agreed to by the related parties.

During the year ended June 30, 2012, the Company paid US$197,393 (CDN $200,000) in consideration for 800,000 shares of First Reef Energy Inc. These shares were classified as available-for-sale securities and are valued using Level 3 inputs in the fair value hierarchy.

During the year ended June 30, 2013 the Company received beneficial geological information related to its own property and charged the $197,393 to mining expense.

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 June 30, 2013, the Company had a working capital deficiency of $1,465,854 and an accumulated deficit of $33,457,240. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months.

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.

On January 12, 2012, the Company entered into an employment agreement with a director and officer. Commencing on January 12, 2012, the director and officer 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.

On May 1, 2012, the Company entered into an employment agreement with an officer. Commencing on May 1, 2012, the officer will be employed for 12 months ending on May 1, 2013. Pursuant to the agreement, annual salary of US$100,000 is payable monthly or in more frequent installments in cash. On May 1, 2012, the officer received 26,041 common shares of the Company at a market price of $0.96 per share for a total of $25,000 as a signing bonus (Note 3). The agreement expired on May 1, 2013.

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 each of their first, second and third years of service (Note 3).

On May 15, 2012, the Company entered into a consulting agreement with a contractor to provide services in regards to the Company’s management and operations. Resulting from the consulting agreement the contractor became an officer of the Company. Commencing on May 15, 2012, the officer will be employed for 12 months ending on May 15, 2013. Pursuant to the agreement, a monthly salary of US$3,000 is payable in cash. On May 15, 2012, the officer received 40,323 common shares of the Company at a market price of $0.62 per share for a total of $25,000 as a signing bonus (Note 3). The agreement was terminated and replaced by a new agreement on March 15, 2013. Pursuant to the new agreement, a monthly salary of US$12,000 is payable in cash and/or common shares of the Company at the discretion of the Company for six months starting March 15, 2013.

On March 1, 2013, the Company entered into an agreement with a contractor to provide the services regarding the Company’s management and operation. Pursuant to the agreement, the contractor will receive a number of common shares of the Company valued at $8,000 and $8,000 in cash per month for five months starting March 1, 2013.

On May 1, 2013, the Company entered into an agreement with a consultant to provide consulting services in regards to the Company’s operation. Pursuant to the agreement, the consultant will receive $8,333.33 per month in cash and/or common shares of the Company starting from May 1, 2013 and will continue for a period of eight months.

On June 3, 2013, the Company entered into an agreement with a consultant to provide consulting services of internship-market research and financial modeling. Pursuant to the agreement, the consultant will receive $2,000 per month in cash for two months starting June 3, 2013.

On June 11, 2013, the Company entered into a letter of intent for the acquisition of Blue Tap Resources (“Blue Tap”).

Pursuant to the agreement, the Company will purchase not less than 51% of the issued and outstanding securities of Blue Tap. This purchase will be undertaken initially by the making available of $150,000 CDN to be used by Blue Tap, under the Company’s fund control and supervision, for the purposes of carrying out the required step to obtain approval for, and the return of, the facility to active operation as a water disposal facility. The Company will agree to make available an additional $150,000 CDN to be applied toward liability security deposits required under the Alberta Regulatory Framework at the time which it is required. The first two payments of $150,000 to Blue Tap for the aggregate of $300,000 shall be considered a bridge loan, with such terms and repayment provisions to be specified in the Transaction Agreement, until and unless the following conditions are satisfied for the funding of the additional $150,000. Provided that initial efforts to return the facility to revenue producing status are successful and efforts toward obtaining approvals to move the facility to Class 1A waste designation are ongoing with progress satisfactory to the Company, an additional $150,000 CDN will be made available for purposes of continued facility development. Upon funding of $450,000 CDN under the preceding terms, the Company shall be considered to have purchased a 51% equity interest in Blue Tap. At that point the Company has an option to purchase an additional 9% of Blue Tap for $100,000 CDN (in shares and/or cash) and shall be considered to have purchased 60% of the fully diluted equity interests of Blue Tap.

Closing of the transaction was subject to a number of conditions. The parties negotiated the definitive terms of the Transaction Agreement, acting reasonably and in good faith, with a view to executing the agreement on or before September 1, 2013, whereafter the letter agreement shall terminate and be of no further force or effect.

In the event that the transaction was completed as a result of any failure or breach by the Company, the Company agreed to pay Blue Tap an amount of $25,000 CDN in consideration of its efforts.

As of June 30, 2013, CDN $10,000 (US $10,170) was paid by the Company as a deposit.

On July 29, 2013, in anticipation of the completion of a formal agreement with Blue Tap embodying the terms of the LOI, the Company entered into a Convertible Debenture Agreement (the “Debenture”) with Blue Tap pursuant to which the Company has agreed to deliver to Blue Tap up to CDN$300,000 (approximately USD$291,000) payable in two installments of CDN$150,000 deliverable respectively upon execution of the Debenture, and within 5 business days following receipt of regulatory approval for the reactivation of Blue Tap’s waste water disposal facility. Delivery of the first installment of CDN$150,000 has been satisfied. The funds advanced shall be secured against all present and future assets and undertakings of Blue Tap and shall be convertible at the Company’s option into a number of common shares of Blue Tap equal to 51% of its issued and outstanding voting stock. In the event that the Company does not acquire a 51% interest in Blue Tap, the principal amount of the Debenture shall be payable in full by July 30, 2014. The principal amount will bear no interest until maturity, whereafter it will bear interest of 8% per annum.

On July 1, 2013, the Company issued 80,000 common shares at the closing market price of $0.10 per share for consulting fees.

On July 1, 2013, the Company issued 37,594 common shares at the weighted average price of $0.133 per share for consulting fees.

On July 3, 2013, the Company issued 954,461 common shares at a deemed price of $0.0825 per share for debt conversion.

On July 9, 2013, the Company issued 2,000,000 common shares at a deemed price of $0.045 per share for debt conversion.

On July 15, 2013, the Company issued 181,818 common shares at a market price of $0.11 per share for consulting fees.

On July 15, 2013, the Company issued 54,545 common shares at a market price of $0.11 per share for consulting fees.

On August 2, 2013, the Company issued 46,997 common shares at a market price of $0.1454 per share for consulting fees.

On August 13, 2013, the Company issued 1,585,714 common shares at a market price of $0.073500 per share for debt conversion.

On August 14, 2013, the Company issued 844,300 common shares at a market price of $0.0525 per share for debt conversion.

On August 15, 2013, the Company issued 28,736 common shares at a market price of $0.2088 per share for consulting fees.

On September 6, 2013, the Company issued 2,375,052 common shares at a market price of $0.045 per share for debt conversion.

On July 23, 2013, the Company entered into an agreement to amend the terms of the debenture that was originally issued at May 15, 2012. The maturity date of the debenture was extended for 12 months until May 15, 2014.

The Company issued the warrants in reliance on the exemption from registration for accredited investors contained in Rule 506 of Regulation D of the Securities Act of 1933.

The second $250,000 installment of the financing is payable by October 15, 2013, whereupon the Company will issue a second convertible promissory note upon the same terms. Additional warrants with an aggregate exercise price of $250,000 will also be issued with the number of underlying shares to be based on the lowest closing price of the Company’s common shares in the 20 trading days preceding the October 15, 2013 closing.

Once issued, each convertible promissory note will be convertible in whole or in part at JDF’s option before or after maturity into shares of the Company’s common stock at a conversion price equal to a 50% discount to the lowest closing price of the Company’s common shares in the 20 trading days preceding (i) the date of the purchase agreement; or (ii) the conversion date. Notwithstanding the conversion right, JDF will not be entitled to hold in excess of 9.99 percent of the Company’s issued and outstanding common shares at any time.

JDF will have the option during the 18 month period following September 13, 2013 to purchase additional convertible notes upon the same terms and conditions for up $1,500,000 in additional financing.

The Company has evaluated subsequent events from July 1, 2013 through the date of this report, and determined there are no other items to disclose.

Subsequent to the issuance of the June 30, 2012 financial statements, management determined that convertible debentures had not been properly valued. The financial statements have been revised to accurately record the transaction. Accordingly, the balance sheet as of June 30, 2012 and the statement of changes in stockholders’ equity (deficit) have been revised as follows:

Certain items on the 2012 financial statements have been reclassified to conform to the 2013 presentation.

On or about August 1, 2012, Child, Van Wagoner & Bradshaw, PLLC (“CVB”), the principal accountant for our company ceased its accounting practice for SEC reporting companies. At or about the same time Anderson Bradshaw PLLC was established as a successor firm to CVB to continue performing audits for SEC reporting companies. As Anderson Bradshaw is viewed as a separate legal entity, our company dismissed CVB as our principal accountant and engaged Anderson Bradshaw, as our principal accountant for our fiscal year ending June 30, 2012 and the interim periods for 2012 and 2013. The decision to change principal accountants was approved by our board of directors.

None of the reports of CVB, on our company's financial statements for either of the past two years or subsequent interim period contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles except to indicate that there was substantial doubt about our company’s ability to continue as a going concern.

There were no disagreements between our company and CVB, for the two most recent fiscal years and any subsequent interim period through August 1, 2012 (date of dismissal) on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of CVB, would have caused them to make reference to the subject matter of the disagreement in connection with its report. Further, CVB has not advised our company that:

On or about August 1, 2012, we engaged Anderson Bradshaw as our principal accountant to audit our financial statements as successor to CVB. During our two most recent fiscal years or subsequent interim period, we have not consulted with the entity of Anderson Bradshaw regarding the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, nor did the entity of Anderson Bradshaw provide advice to our company, either written or oral, that was an important factor considered by our company in reaching a decision as to the accounting, auditing or financial reporting issue.

Further, during our two most recent fiscal years or subsequent interim period, we have not consulted the entity of Anderson Bradshaw on any matter that was the subject of a disagreement or a reportable event.

As required by Rule 13a-15 under the Exchange Act, our management evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2013.

Our management, with the participation of our president (our principal executive officer) and our chief financial officer (our principal accounting officer and principal financial officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, our president (our principal executive officer) and our chief financial officer (principal accounting officer and principal financial officer) have concluded that, as of the end of such period, our disclosure controls and procedures were not effective to ensure that information that is required to be disclosed by us in the reports we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our president (our principal executive officer and our principal accounting officer and principal financial officer), as appropriate, to allow timely decisions regarding required disclosure.

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial reporting is a process designed by, or under the supervision of, our president (our principal executive officer) and our chief financial officer (our principal accounting officer and principal financial officer), to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of management and directors of our company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

Further, the evaluation of the effectiveness of internal control over financial reporting was made as of a specific date, and continued effectiveness in future periods is subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has conducted, with the participation of our president (our principal executive officer) and our chief financial officer (our principal accounting officer and principal financial officer), an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2013 in accordance with the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control — Integrated Framework. Based on this assessment, management concluded that as of June 30, 2013, our company’s internal control over financial reporting was not effective based on present company activity. Our company is in the process of adopting specific internal control mechanisms with our board and officers’ collaboration to ensure effectiveness as we grow. We are presently engaging an outside consultant to assist in adopting new measures to improve upon our internal controls. Future controls, among other things, will include more checks and balances and communication strategies between the management and the board to ensure efficient and effective oversight over company activities as well as more stringent accounting policies to track and update our financial reporting.

This annual report does not include an attestation report from our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only the management’s report in this annual report.

There were no changes in our internal control over financial reporting that occurred during our last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

All of the directors of our company hold office until the next annual meeting of the stockholders or until their successors have been elected and qualified. Our officers are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows:

The following is a brief account of the education and business experience of each director and executive officer during at least the past five years, indicating each person's principal occupation during the period, and the name and principal business of the organization by which he was employed.

Alexander Walsh, President, Chief Executive Officer, Secretary, Treasurer and Director

Mr. Walsh was appointed president, chief executive officer, secretary, treasurer, and director of our company in November 2010. From May 2008 to November of 2010, Alex Walsh was a management consultant at AW Enterprises, LLC. AW Enterprises was established as a management consulting firm assisting small and middle market businesses in expanding their revenue and profits through strategic partnerships. Mr. Walsh’s efforts included strategic planning for companies looking to raise capital and assisting clients with forming strategic partnerships that could increase their revenue and profits. From May 2006 to May 2008, Mr. Walsh was a small business consultant and managing partner for Business Strategies Group. Business Strategies Group is a highly specialized team focusing on providing employee benefits, retirement programs, and insurance products to small and middle market companies.

Mr.Walsh attended DePauw University in Greencastle, Indiana where he majored in economics and management.

Mr. Walsh was chosen as one of our directors due to his background in venture capital, investor relations and corporate development.

Bryan Kleinlein was appointed chief financial officer on May 15, 2012. Mr. Kleinlein is a consultant to our company who is serving as our chief financial officer. Mr. Kleinlein has over 15 years of finance and treasury experience with a specialty in global business. Mr. Kleinlein has been responsible for managing $1 billion of global capital expenditures as well as leading strategic financial planning, analysis and international expansion efforts of other multi-national companies. From 2006 to 2011, Mr. Kleinlein was director of International Finance and Treasury for FreeLife International, Inc in Phoenix, Arizona.

Mr. Kleinlein holds an MBA from Thunderbird – School of Global Management. He acquired his Bachelors in Finance from Illinois State University, where he received scholastic and athletic honors.

Alexander Koretsky was appointed our chief operating officer on May 1, 2012. Mr. Koretsky is a business executive with experience in planning and launching various ventures. His expertise includes business development, strategic alliances, multi-disciplinary team management and project delivery. From January 2005 to November 2008, Mr. Koretsky was director of strategy for TCS Bank (Moscow, Russia). From March 2009 to November 2009, Mr. Koretsky was marketing director at StreamLogic in Los Altos, California. From November of 2009 to April of 2011, Mr. Koretsky was a managing director at Sustainable Venture Capital in Walnut Creek, CA. Mr. Koretsky was also a consultant to our company from July of 2011 to December of 2011 assisting management in various strategic matters.

Mr. Koretsky is a graduate of USC's Marshall School of Business with a Bachelor's Degree in Business Administration. He was born in California and is fluent in Russian having lived for many years in both St. Petersburg and Moscow.

Mr. Jazwinski was appointed a director in January 2011. Mr. Jazwinski has a Bachelor of Science in Mining Engineering from the University of Arizona (graduated in 2004) and an MBA from the University of Phoenix (graduated in 2009). He began his career with SRK Consulting (from August 2004 to May 2005) working as a field engineer on BHP Billiton’s San Manuel Mine Closure Project. This project remains one of the largest, most comprehensive mine closures and environmental remediations to date. He managed environmental QA/QC testing and construction/demolition documentation.

From May 2005 to present, Mr. Jazwinski has been employed with Freeport-McMoRan. From May 2005 to June 2011, Mr. Jazwinski worked at Freeport-McMoRan Sierrita leading the short-range planning department. From July 2011 to today, Mr. Jazwinski has been the lead mining engineer at Freeport-McMoRan Baghdad.

Mr. Jazwinski is a member of the Society for Mining, Metallurgy and Exploration and has current MSHA (Mine Safety and Health Administration) certification for surface metal mining. Mr. Jazwinski was chosen as one of our directors due to his experience in the mining industry.

Mr. Jazwinski is an independent director based on the definition of independence in the listing standards of the NYSE Corporate Governance Rules.

Mr. Colker became a director in January 2011. Brandon Colker is the chief executive officer of Sustainable Venture Capital, a company involved in private financial funding. Mr. Colker has been involved in real estate and corporate finance throughout his career. In 2002, Mr. Colker founded Meridian Capital and ran that operation until 2008. In 2008 he formed CFT Capital as a real estate and project financing entity and in 2009 he formed Sustainable Venture Capital focusing efforts on capital financing for sustainable technologies.

In May 1997, Mr. Colker graduated from the University of California at Santa Barbara with a degree in Economics.

Mr. Colker is an independent director based on the definition of independence in the listing standards of the NYSE Corporate Governance Rules.

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during the year ended June 30, 2013, all filing requirements applicable to its officers, directors and greater than 10% percent beneficial owners were complied with, with the exception of the following:

Our board of directors has determined that it does not have a member of its audit committee that qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.

We believe that the members of our board of directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any material revenues to date. In addition, we currently do not have nominating, compensation or audit committees or committees performing similar functions nor do we have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes the functions of such committees can be adequately performed by our board of directors.

We have adopted a Code of Ethics that applies to, among other persons, our company’s principal executive officers and senior financial executives, as well as persons performing similar functions. As adopted, our Code of Ethics sets forth written policies to promote:

Our Code of Ethics and Business Conduct was filed with the Securities and Exchange Commission as Exhibit 14.1 to our annual report on Form 10-KSB on September 28, 2007. We will provide a copy of the Code of Ethics and Business Conduct to any person without charge, upon request. Requests can be sent to: Lithium Exploration Group, Inc. 3200 N. Hayden Road, Suite 235, Scottsdale, AZ 85251.

who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:

SUMMARY COMPENSATION TABLE
Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Alexander Walsh⁽¹⁾ President, Chief Executive Officer and Director	2013 2012	120,000 120,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	120,000 120,000
Bryan A. Kleinlein⁽²⁾ Chief Financial Officer	2013 2012	81,000 6,000	Nil 25,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	81,000 31,000
Alexander Koretsky⁽³⁾ Chief Operating Officer	2013 2012	83,333.40 20,000	Nil 25,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	83,333.40 45,000

During the period from inception to June 30, 2013, we did not grant any stock options to our executive officers

There were no options exercised during our fiscal year ended June 30, 2013 or June 30, 2012 by any officer or director of our company.

We reimburse our directors for expenses incurred in connection with attending board meetings. We paid $54,000 in directors fees in our fiscal year ending June 30, 2013 and $318,000 in directors fees in our fiscal year ending June 30, 2012.

We have no formal plan for compensating our directors for their service in their capacity as directors. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. Our board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director.

Employment Contracts and Termination of Employment and Change in Control Arrangements

Effective January 12, 2012, we entered into an employment agreement with Alexander Walsh for provision of services as our president and chief executive officer. The employment agreement will terminate on January 12, 2014. Pursuant to the terms of the employment agreement, Mr. Walsh will receive 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 any travel and out-of-pocket expenses incurred and approved by our company.

Also on January 12, 2012, we entered into consulting agreements, effective April 27, 2011, with Brandon Colker and Jonathan Jazwinski, both directors of our company, to provide services on behalf of our company. Pursuant to the terms of the consulting agreements, Mr. Colker and Mr. Jazwinski will 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. The consulting agreements will terminate on April 27, 2014.

Effective March 15, 2013, we entered into a consulting agreement with International Compass, LLC for the services of Bryan Kleinlein as chief financial officer of our company. The term of the agreement is six months. As compensation, our company has agreed to pay to International Compass $12,000 per month during the term payable in cash or common shares registered on Form S-8. The value of the shares of our company issued as compensation, if any, shall be based on the weighted average trading price of the shares of our company in the five trading days immediately preceding the date(s) which the shares are due. Mr. Kleinlein was first appointed as our chief financial officer on May 15, 2012. The March 15, 2013 consulting agreement with International Compass replaces and supersedes our agreement with Mr. Kleinlein dated May 15, 2012 which was disclosed in our report on Form 8-K filed on June 8, 2012.

On May 1, 2013, we entered into a consulting agreement with Alexander Koretsky whereby, Mr. Koretsky has agreed to provide consulting duties and services in the capacity as chief operating officer of our company and any other consulting duties and services as may be requested by our company. As compensation, our company has agreed to pay to Mr. Koretsky a salary of $8,333.33 per month in cash, common shares of our company, or in both cash and common shares of our company, at the sole discretion of our company.

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive stock options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors.

The following table sets forth, as of September 25, 2013, certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock and by each of our current directors and executive officers. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.

We are unaware of any contract or other arrangement or provisions of our Articles or Bylaws the operation of which may at a subsequent date result in a change of control of our company. There are not any provisions in our Articles or Bylaws, the operation of which would delay, defer, or prevent a change in control of our company.

Except as disclosed herein, there have been no transactions or proposed transactions in which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last three completed fiscal years in which any of our directors, executive officers or beneficial holders of more than 5% of the outstanding shares of our common stock, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest.

We currently act with three directors, consisting of Alexander Walsh, Jonathan Jazwinski and Brandon Colker. We have determined that Jonathan Jazwinski and Brandon Colker are “independent directors” as defined in NASDAQ Marketplace Rule 4200(a)(15).

We do not have a standing audit, compensation or nominating committee, but our entire board of directors act in such capacity. We believe that our directors are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. Our directors do not believe that it is necessary to have an audit committee because we believe that the functions of an audit committee can be adequately performed by the board of directors. In addition, we believe that retaining additional independent directors who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development.

The aggregate fees billed for the most recently completed fiscal year ended June 30, 2013 and for fiscal year ended June 30, 2012 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.

Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditor’s independence.

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Nevada	06-1781911
(State or other jurisdiction of incorporation or	(I.R.S. Employer Identification No.)
organization)


3200 N. Hayden Road, Suite 235, Scottsdale, AZ	85251
(Address of principal executive offices)	(Zip Code)

Title of Each Class	Name of Each Exchange On Which Registered
N/A	N/A

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [ x ]

Item 1.	Business	4
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	20
Item 2.	Properties	20
Item 3.	Legal Proceedings	25
Item 4.	Mine Safety Disclosures	26
Item 5.	Market for Registrant's Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6.	Selected Financial Data	29
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 8.	Financial Statements and Supplementary Data	36
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	70
Item 9A.	Controls and Procedures	70
Item 9B.	Other Information	72
Item 10.	Directors, Executive Officers and Corporate Governance	72
Item 11.	Executive Compensation	76
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	78
Item 13.	Certain Relationships and Related Transactions, and Director Independence	79
Item 14.	Principal Accountants Fees and Services	80
Item 15.	Exhibits, Financial Statement Schedules	81

	(A)	= the volume weighted average price on the trading day immediately preceding the date on which JDF Capital elects to exercise the warrant by means of a cashless exercise;

	(B)	= the cash exercise price ($0.07), as adjusted for anti-dilution; and

	(X)	= the number of warrant shares that would be issuable upon exercise of the warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

	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 in consideration for continuance of the March 17, 2011 agreement; and
	C.	$700,000 on May 27, 2011 in consideration for a licensing and technology payment.

1.	CAD$20,000 (USD$20,000) cash payment due on January 1, 2013; and
2.	CAD$80,000 (USD$80,000) by a 15% one year promissory note starting January 1, 2013.

	1.	a non-refundable cash deposit of $50,000 to the shareholder of Tero within 10 days entering the letter of intent (paid);

	2.	a payment of $950,000 in cash at the earlier of closing or December 1, 2013 to the shareholder of Tero;

	3.	a secured convertible debenture to the shareholder of Tero in the amount of $500,000 payable on December 1, 2014. The debenture shall be convertible into our common shares at a price to be determined by us and Tero prior to the close of the acquisition; and

		January 2012: Receive and integrate aquifer data into APEX technical report and Micromine. Commence block modeling and in-situ resource estimate.
		January 2012: Complete resource estimation and create preliminary draft of Resource Technical Report, and, upon review, complete Resource Technical Report. Review of draft of Resource Technical Report and complete final draft of Resource Technical Report. This portion of the project has been completed.
		April 1 to August 31, 2012: The following studies were commissioned to expand upon the results of the initial Resource Technical Report. All of the following studies were completed in August 2012.
			A QA/QC study was commissioned to define the parameters used for the initial testing program by Maxxam Analytics to ensure accuracy of those tests and future results using the same program. This study will also include duplicate sampling of wells that were tested in 2011 to ensure consistency and accuracy of the 2011 results. We completed this study in July of 2012 and intend to utilize it as the standard for future sampling efforts.
			A five-phase study from Niven Fischer in Calgary, Alberta was commissioned to identify the ideal location for a pilot plant including pricing of land leases and environmental considerations for building the plant to process the brine, which we are targeting for mineral production. As part of the five phases, they also provided data on water disposal in the region (volume and pricing), background on oil and gas production in the region, and data on what it would take to license an injection well of our own for water disposal in the region. All five phases of the Niven Fischer study were completed by the end of July 2012.
			A study was commissioned with the assistance of a former government official with the minerals and mining branch of the Alberta Government to outline the required steps and timelines to obtain the proper approvals for moving the Valleyview Project to a pilot scale project and eventually to full commercial production. This study was completed in June of 2012 and will be utilized in our development plans.

OTC Bulletin Board
Quarter Ended ⁽¹⁾	High	Low
June 30, 2013	$0.2275	$0.12
March 31, 2013	$0.406	$0.155
December 31, 2012	$0.38	$0.18
September 30, 2012	$0.625	$0.23
June 30, 2012	$1.18	$0.38
March 31, 2012	$0.96	$0.54
December 31, 2011	$1.95	$0.45
September 30, 2011	$1.87	$0.86
June 30, 2011	$10.68	$1.20

		Year Ended
		June 30,
		2013			2012

Revenue	$	Nil		$	Nil
Operating Expenses	$	2,369,562		$	2,430,664
Net Loss	$	(5,038,309	)	$	(2,390,439	)

		As at			As at
		June 30,			June 30,
		2013			2012
Total current assets	$	292,646		$	1,239,603
Total current liabilities	$	1,768,670		$	2,394,736
Working capital (deficit)	$	(1,476,024	)	$	(1,155,133	)

Description	Estimated		Estimated
	Completion		Expenses
	Date		($)
General and administrative	12 months		500,000
Mining expenses	12 months		50,000
Professional fees	12 months		150,000
Total		$	700,000

		*2013*			2012
					(Restated)
ASSETS


Current
Cash and cash equivalents	$	248,624		$	1,239,603
Prepaid expenses		44,022			-
Total current assets		292,646			1,239,603

Deposit on Blue Tap		10,170			-
Investment (Note 9)		-			197,393

Total Assets	$	302,816		$	1,436,996


LIABILITIES

Current
Accounts payable and accrued liabilities	$	2,928		$	52,898
Note payable convertible (Note 5)		105,410			-
Derivative liability – convertible debentures (Note 6)		-			2,159,035
Derivative liability – convertible promissory notes (Note 7)		513,375			-
Due to related party (Note 8)		45,332			45,332
Convertible debentures (net of discount of $nil and $3,738,145) (Note 6)		1,063,077			119,198
Convertible promissory notes (net of discount of $1,475,247 and nil) (Note 7)		37,610			-
Accrued interest – convertible debenture (Note 6)		-			18,273
Accrued interest – convertible promissory notes (Note 7)		938			-

Total Current Liabilities		1,768,670			2,394,736

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: 20,000,000 preferred shares (June 30, 2012 – nil) 54,882,422 common shares (June 30, 2012 – 54,416,272)		20,000 54,885			- 54,417
Additional paid-in capital		31,916,501			27,406,774
Deficit accumulated during the exploration stage		(33,457,240	)		(28,418,931	)
Total Stockholders’ Deficit		(1,465,854	)		(957,740	)

Total Liabilities and Stockholders’ Deficit	$	302,816		$	1,436,996

								Cumulative from
		Year Ended June 30,						Inception
		2013			2012			(May 31, 2006) to
					(Restated)			June 30, 2013

Revenue	$	-		$	-		$	-

Operating Expenses:
Advertising		74,872			113,132			215,099
Consulting fees (Notes 3 & 8)		420,274			274,423			806,597
Director fees (Notes 3 and 8)		54,000			318,000			17,967,000
General and administrative		66,122			49,235			138,625
Investor relations (Note 3)		176,000			637,600			964,000
Management fees		-			-			45,000
Mining expenses (Notes 3 & 5)		922,658			465,153			8,210,194
Professional fees		296,700			313,911			770,638
Travel		64,865			45,329			125,191
Wages		294,071			213,881			507,952

Loss from operations		(2,369,562	)		(2,430,664	)		(29,750,296	)

Other income (expenses)
Interest expense (Notes 6 & 7)		(3,792,131	)		(1,860,980	)		(6,839,967	)
Gain on derivative liability (Notes 6 & 7)		1,123,384			1,901,205			3,133,023

Loss before income taxes		(5,038,309	)		(2,390,439	)		(33,457,240	)

Provision for Income Taxes (Note 4)		-			-			-

Net loss for the Year		(5,038,309	)		(2,390,439	)		(33,457,240	)

Basic and Diluted Loss per Common Share	$	(0.10	)	$	(0.04	)

Weighted Average Number of Common Shares Outstanding		48,566,900			54,375,949

	Preferred Shares			Common Shares
										Deficit
										Accumulated
										During the
	Number of			Number of				Additional		Exploration			Stockholders’
	Shares		Amount	Shares		Amount		Paid-in 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

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 relation	300,000			2.340		702,000
11/22/11	Shares issued for debenture conversion	2,000,000			0.2925		585,000
4/18/12	Shares issued for debenture conversion	610,795			0.352		215,000
4/18/12	Shares issued for interest	323,637			0.810		262,146
4/27/12	Shares issued for director fees	300,000			1.060		318,000
5/1/12	Shares issued for consulting fees	26,041			0.960		25,000
5/15/12	Shares issued for consulting fees	40,323			0.620		25,000
7/10/12	Shares issued for debenture conversion	1,504,415			0.1925		289,600
8/21/12	Shares issued for debenture conversion	815,047			0.1595		130,000
9/17/12	Shares issued for debenture conversion	1,581,028			0.1265		200,000
10/25/12	Shares cancelled in exchange for preferred shares	(20,000,000	)		0.0010		(20,000	)
11/1/12	Shares issued for mining expenses	62,500			0.2400		15,000
11/13/12	Shares issued for investor relation	41,667			0.2400		10,000
11/22/12	Shares issued for debenture conversion	949,171			0.1170		111,053
12/1/12	Shares issued for mining expenses	55,556			0.2700		15,000
12/13/12	Shares issued for investor relation	38,462			0.2600		10,000
1/2/13	Shares issued for mining expenses	55,556			0.2700		15,000
1/14/13	Shares issued for investor relation	40,000			0.2500		10,000
1/25/13	Shares issued for warrants exercise	1,028,113			0.2500		257,028
2/1/13	Shares issued for mining expenses	78,947			0.1900		15,000
2/14/13	Shares issued for investor relation	41,667			0.2400		10,000
2/29/13	Shares issued for debenture conversion	2,000,000			0.0770		154,000
3/1/13	Shares issued for mining expenses	48,387			0.3100		15,000
3/1/13	Shares issued for consulting fees	25,806			0.3100		8,000
3/8/13	Shares issued for debenture conversion	2,000,000			0.0770		154,000
3/14/13	Shares issued for investor relation	47,619			0.2100		10,000
3/15/13	Shares issued for consulting fees	38,876			0.2315		9,000
3/15/13	Shares issued for consulting fees	95,238			0.2100		20,000
3/15/13	Shares issued for debenture conversion	2,000,000			0.0950		190,000
3/27/13	Shares issued for investor relation	389,189			0.185		72,000
4/1/13	Shares issued for mining expenses	71,429			0.2100		15,000
4/1/13	Shares issued for consulting fees	38,095			0.2100		8,000
4/15/13	Shares issued for investor relation	50,000			0.2000		10,000
4/15/13	Shares issued for consulting fees	100,000			0.2000		20,000
4/15/13	Shares issued for consulting fees	57,007			0.2105		12,000
4/23/13	Shares issued for debenture conversion	2,000,000			0.0805		161,000
4/29/13	Shares issued for director fees	300,000			0.1800		54,000

5/1/13	Shares issued for consulting fees	47,059	0.1700		8,000
5/13/13	Shares issued for debenture conversion	2,000,000	0.0750		150,000
5/15/13	Shares issued for consulting fees	113,636	0.1760		20,000
5/15/13	Shares issued for consulting fees	70,588	0.1700		12,000
5/30/13	Shares issued for debenture conversion	2,400,000	0.0750		180,000
6/1/13	Shares issued for consulting fees	50,000	0.1600		8,000
6/14/13	Shares issued for consulting fees	142,857	0.1400		20,000
6/15/13	Shares issued for consulting fees	88,235	0.1360		12,000
	Cumulative Totals	54,882,422		$	24,256,327

		2013
		Amount			Tax Effect (35%)

Net operating losses	$	5,038,309		$	1,763,408

Shares issued for consulting fees, mining expenses, investor relation and director fees		(433,000	)		(151,550	)
Accretion of beneficial conversion feature		(2,061,755	)		(721,614	)
Gain on derivative liability		1,123,384			393,184

Total		3,666,938			1,283,428

Valuation allowance		(3,666,938	)		(1,283,428	)

Net deferred tax asset (liability)	$	-		$	-

	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.

	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 (amended);

	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.

	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 for $1.00 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. During the year ended June 30, 2011, the option resulting in additional mining expenses of $4,940,000 was valued using the fair market value of the shares to be issued. On October 1, 2012, Alex Walsh and GD International entered into an agreement to transfer 2,000,000 common shares owned by Alex Walsh to GD International. The shares were received by GD International on October 29, 2012.

	a)	US$20,000 within three days of execution of the agreement (paid);
	b)	US$30,000 within three days upon the testing of the unit has been successfully completed.


	Warrants			Weighted	Weighted
	Outstanding			Average	Average
				Exercise	Remaining
				Price	life
Balance, June 30, 2011	1,204,819		$	0.913	5 years
Warrants issued	3,935,743		$	0.521	4.75 years
Exercised	-		$	-	-
Cancelled	-		$	-	-
Expired	-		$	-	-
Balance, June 30, 2012	5,140,562		$	0.613	4.57 years
Warrants issued (Note 7)	5,133,750		$	0.180	4.71 years
Exercised	(5,140,562	)	$	0.250	-
Cancelled	-		$	-	-
Expired	-		$	-	-
Exercise price revised	-		$	0.200	-
Balance, June 30, 2013	5,133,750		$	0.180	4.71 years

8/21/2013	The Company entered into a letter of intent with Tero Oilfield Services Ltd. (“Tero”), a private company, pursuant to which Tero agreed to sell to the Company 75% of the issued and outstanding common shares of Tero (“Acquisition”) in exchange for an aggregate of $1,500,000, comprised of:

	º	a non-refundable cash deposit of $50,000 to the shareholder of Tero within 10 days of entering the LOI.

	º	a payment of $950,000 in cash at the earlier of closing or December 1, 2013 to the shareholder of Tero

	º	a secured convertible debenture to the shareholder of Tero in the amount of $500,000 payable on December 1, 2014 (the “Debenture”). The Debenture shall be convertible into common shares at a price determined by the Company and Tero prior to close of the Acquisition.

	In connection with the LOI and the Acquisition, the Company shall loan $500,000 to Tero for the settlement of debt owed to Smith Group Holdings Inc.

9/13/2013	The Company entered into a securities purchase agreement with JDF pursuant to which JDF has agreed to provide the Company with an aggregate investment of $500,000 in consideration of the Company’s issuance of convertible promissory notes and common share purchase warrants.

		As Previously
Effect of corrections		Reported			As Restated			Adjustment

BALANCE SHEET
At June 30, 2012
LIABILITIES
Convertible debentures		1,573,743			119,198			(1,454,545	)

STOCKHOLDERS’ EQUITY
Additional paid-in capital		26,752,229			27,406,774			654,545
Deficit accumulated during the exploration stage		(29,218,931	)		(28,418,931	)		800,000

STATEMENT OF OPERATIONS
Year ended June 30, 2012
Interest expense		(3,733,671	)		(1,860,980	)		1,872,691
Gain on derivative liability		2,973,896			1,901,205			(1,072,691	)
Net loss for the year		(3,190,439	)		(2,390,439	)		800,000
Basic and diluted loss per share	$	(0.06	)	$	(0.04	)	$	0.02

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
At June 30, 2012
Additional paid-in capital		26,752,229			27,406,774			654,545
Net loss for the year		(3,190,439	)		(2,390,439	)		800,000
Deficit accumulated during the exploration stage		(29,218,931	)		(28,418,931	)		800,000

STATEMENT OF CASH FLOWS
Year ended June 30, 2012
Net loss for the year		(3,190,439	)		(2,390,439	)		800,000
Interest expense		3,733,671			1,860,980			(1,872,691	)
Gain on derivative liability		(2,973,896	)		(1,901,205	)		1,072,691

	1)	internal controls necessary to develop reliable financial statements did not exist; or

	2)	information has come to the attention of CVB which made it unwilling to rely upon management's representations, or made it unwilling to be associated with the financial statements prepared by management; or

	3)	the scope of the audit should be expanded significantly, or information has come to the attention of CVB that they have concluded will, or if further investigated, might materially impact the fairness or reliability of a previously issued audit report or the underlying financial statements, or the financial statements issued or to be issued covering the fiscal year ended June 30, 2012.

			Date First Elected
Name	Position Held with the Company	Age	or Appointed
Alexander Walsh	President, Chief Executive Officer and Director	33	November 4, 2010
Jonathan Jazwinski	Director	32	January 21, 2011
Brandon Colker	Director	41	January 21, 2011
Alexander Koretsky	Chief Operating Officer	42	May 1, 2012
Bryan A. Kleinlein	Chief Financial Officer	40	May 15, 2012

1.	been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

2.	had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

3.	been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

4.	been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

5.	been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

6.	been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Name	Number of Late Reports	Number of Transactions Not Reported on a Timely Basis	Failure to File Requested Forms
Alexander Walsh⁽¹⁾	3	11	Nil
Brian Kleinlein⁽¹⁾⁽²⁾	5	15	Nil
Jonathan Jazwinski⁽¹⁾	1	1	Nil
Alexander Koretsky⁽¹⁾⁽²⁾	2	2	2
Brandon Colker⁽¹⁾	1	1	Nil

	(1)	The named officer, director or greater than 10% stockholder, as applicable, filed a late Form 4 – Statement of Changes of Beneficial Ownership of Securities.
	(2)	The named officer, director or greater than 10% stockholder, as applicable, filed a late Form 3 – Initial Statement of Beneficial Ownership of Securities.

	(a)	our principal executive officer;

	(b)	each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended June 30, 2013 and 2012; and

	(c)	up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended June 30, 2013 and 2012,

	(1)	Alexander Walsh was appointed president, chief executive officer, chief financial officer and director on November 4, 2010.
	(2)	Bryan A. Kleinlein was appointed Chief Financial Officer on May 15, 2012.
	(3)	Alexander Koretsky was appointed Chief Operating Officer on May 1, 2012.

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner⁽¹⁾	Percentage of Class
Alexander Walsh 320 E. Fairmont Dr., Tempe, AZ, 85282	23,000,000 common⁽²⁾	36.47%
Jonathan Jazwinski 3200 North Hayden Road, Suite 235 Scottsdale, AZ, 85251	450,000 common	*
Brandon Colker 3200 North Hayden Road, Suite 235 Scottsdale, AZ, 85251	150,000 common	*
Alexander Koretsky 3200 North Hayden Road, Suite 235 Scottsdale, AZ, 85251	Nil	*
Bryan A. Kleinlein 3200 North Hayden Road, Suite 235 Scottsdale, AZ, 85251	28,736 common	*
*All Officers and Directors* *As a Group*	23,628,736 common⁽²⁾	37.46%
*represents an amount less than 1%

(1)	Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on September 25, 2013. As of September 25, 2013, there were 63,071,639 shares of our company’s common stock issued and outstanding.

(2)	Includes 20,000,000 shares of preferred stock convertible to common shares, beginning October 24, 2013.