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

Form 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 29, 2012

or

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

For the transition period from _____________ to ____________

Commission File Number 000-53461

MANTRA VENTURE GROUP LTD.
(Exact name of registrant as specified in its charter)

British Columbia 26-0592672
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
   
#562 – 800 15355 24th Avenue, Surrey, British Columbia, Canada V4A 2H9
(Address of principal executive offices) (Zip Code)

(604) 560-1503
(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X] YES [ ] NO

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

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

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

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
45,123,806 common shares issued and outstanding as of April 20, 2012.


Table of Contents

PART I – FINANCIAL INFORMATION 3
  Item 1. Financial Statements 3
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 4
  Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
  Item 4. Controls and Procedures 14
PART II – OTHER INFORMATION 14
  Item 1. Legal Proceedings 14
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14
  Item 3. Defaults Upon Senior Securities 14
  Item 4. Mine Safety Disclosures 14
  Item 5. Other Information 15
  Item 6. Exhibits 15
SIGNATURES 17

2


PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The unaudited interim consolidated financial statements of Mantra Venture Group Ltd. (“we”, “us”, “our” and “our company”) follow. All currency references in this report are in US dollars unless otherwise noted.

3


MANTRA VENTURE GROUP LTD.
(A development stage company)
Consolidated financial statements
February 29, 2012
(Expressed in U.S. dollars)
(unaudited)

 

 

  Index
   
Consolidated balance sheets F–1
   
Consolidated statements of operations F–2
   
Consolidated statements of cash flows F–3
   
Notes to the consolidated financial statements F–4


MANTRA VENTURE GROUP LTD.
(A development stage company)
Consolidated balance sheets
(Expressed in U.S. dollars)

    February 29,     May 31,  
    2012     2011  
    $     $  
    (unaudited)        
             
ASSETS            
             
Current assets            
             
   Cash   11,590     39,101  
   Amounts receivable   37,353     25,549  
   Inventory   14,955     15,979  
   Prepaid expenses and deposits   18,584     21,349  
             
Total current assets   82,482     101,978  
             
Property and equipment (Note 3)   26,368     63,656  
             
Total assets   108,850     165,634  
             
LIABILITIES AND STOCKHOLDERS’ DEFICIT            
             
Current liabilities            
             
   Accounts payable and accrued liabilities   710,210     676,675  
   Due to related parties (Note 4)   256,770     205,695  
   Loans payable (Note 5)   198,638     112,903  
   Convertible debentures (Note 6)   250,000     250,000  
             
Total liabilities   1,415,618     1,245,273  
             
Nature of operations and continuance of business (Note 1)            
Commitment (Note 10)            
Subsequent events (Note 11)            
             
Stockholders’ deficit            
             
   Mantra Venture Group Ltd. stockholders’ deficit            
             
   Preferred stock             
       Authorized: 20,000,000 shares, par value $0.00001 
              Issued and outstanding: Nil shares
       
             
       Common stock            
       Authorized: 100,000,000 shares, par value $0.00001 
       Issued and outstanding: 44,003,256 shares (May 31, 2011 – 40,540,756 shares)
  440     405  
             
       Additional paid-in capital   5,106,908     4,827,439  
             
       Common stock subscribed   144,644     163,000  
             
       Deficit accumulated during the development stage   (6,548,418 )   (6,080,808 )
             
Total Mantra Venture Group Ltd. stockholders’ deficit   (1,296,426 )   (1,089,964 )
             
   Non-controlling interest   (10,342 )   10,325  
             
Total stockholders’ deficit   (1,306,768 )   (1,079,639 )
             
Total liabilities and stockholders’ deficit   108,850     165,634  

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

F-1


MANTRA VENTURE GROUP LTD.
(A development stage company)
Consolidated statements of operations
(Expressed in U.S. dollars)
(unaudited)

                            Accumulated from  
    Three     Three     Nine     Nine     January 22,  
    Months     Months     Months     Months     2007 (Date of
    Ended     Ended     Ended     Ended     inception) to  
    February 29,     February 28,     February 29,       February 28,     February 29,  
    2012     2011     2012     2011     2012  
    $     $     $     $     $  
                               
Revenue   2,371     288     12,561     2,258     35,065  
                               
Cost of goods sold   1,886         9,598         11,833  
                               
Gross profit   485     288     2,963     2,258     23,232  
                               
Operating expenses                              
                               
   Business development   657         1,248     24,843     315,202  
   Consulting and advisory   15,625     88,290     144,085     196,438     822,907  
   Depreciation and amortization   7,003     6,191     21,389     22,974     145,530  
   Foreign exchange loss (gain)   14,693     26,233     (8,564 )   31,123     51,708  
   General and administrative   6,727     22,619     17,131     87,038     389,478  
   License fees           19,614         53,052  
   Management fees (Note 4)   40,957     34,458     121,957     109,481     1,080,416  
   Professional fees   15,412     12,033     105,599     49,275     841,561  
   Public listing costs   1,525     2,425     10,122     5,655     221,034  
   Rent   5,916     2,656     23,896     19,336     211,961  
   Research and development                   418,206  
   Shareholder communications and awareness       (6,722 )   797     22,487     639,482  
   Travel and promotion   3,555     16,918     11,305     57,701     402,191  
   Wages and benefits       37,822         90,380     739,509  
   Website development/corporate branding                   195,451  
   Write down of intangible assets                   37,815  
                               
Total operating expenses   112,070     242,923     468,579     716,731     6,565,503  
                               
Loss before other income (expense)   (111,585 )   (242,635 )   (465,616 )   (714,473 )   (6,542,271 )
                               
Other income (expense)                              
                               
   Accretion of discounts on convertible 
   debentures
                  (45,930 )
   Gain (loss) on settlement of debt           3,250     (61,895 )   (56,378 )
   Government grant income                   118,324  
   Interest expense   (6,357 )   (6,096 )   (18,999 )   (18,425 )   (88,933 )
   Loss on disposal of property and equipment   (14,999 )       (14,999 )       (14,999 )
                               
Total other income (expense)   (21,356 )   (6,096 )   (30,748 )   (80,320 )   (87,916 )
                               
Net loss for the period   (132,941 )   (248,731 )   (496,364 )   (794,793 )   (6,630,187 )
                               
Less: net loss attributable to the non- 
   controlling interest
  3,753         28,754         81,769  
                               
Net loss attributable to Mantra Venture Group Ltd.   (129,188 )   (248,731 )   (467,610 )   (794,793 )   (6,548,418 )
                               
Net loss per share attributable to Mantra Venture Group Ltd. common shareholders, basic and diluted       (0.01 )   (0.01 )   (0.02 )    
                               
Weighted average number of shares outstanding used in the calculation of net loss attributable to Mantra Venture Group Ltd. per common share   44,003,256     37,615,649     42,961,468     34,991,373      

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

F-2


MANTRA VENTURE GROUP LTD.
(A development stage company)
Consolidated statements of cash flows
(Expressed in U.S. dollars)
(unaudited)

                Accumulated from  
    Nine months     Nine months     January 22, 2007  
    Ended     Ended     (date of inception)  
    February 29,     February 28,     to February 29,  
    2012     2011     2012  
    $     $     $  
                   
Operating activities                  
   Net loss for the period   (496,364 )   (794,793 )   (6,630,187 )
  Adjustments to reconcile net loss to net cash used in operating activities:            
       Accretion of discounts on convertible debentures           45,930  
       Depreciation and amortization   21,389     22,974     145,530  
       Foreign exchange (gain) loss   (1,138 )   4,181     3,329  
       Loss (gain) on settlement of debt   (3,250 )   61,895     56,378  
       Loss on disposal of property and equipment   14,999         14,999  
       Stock-based compensation   92,457     130,790     1,561,540  
       Write-down of intangible assets           37,815  
   Changes in operating assets and liabilities:                  
       Amounts receivable   (11,804 )   (4,576 )   (37,353 )
       Inventory   1,024         (14,955 )
       Prepaid expenses and deposits   2,765     (22,920 )   (18,584 )
       Other assets           (12,000 )
       Accounts payable and accrued liabilities   59,535     51,129     1,063,204  
       Due to related parties   51,075     87,318     256,770  
                   
Net cash used in operating activities   (269,312 )   (464,002 )   (3,527,584 )
Investing activities                  
   Purchase of property and equipment           (175,797 )
   Proceeds from sale of property and equipment   900         900  
Net cash used in investing activities   900         (174,897 )
Financing activities                  
   Proceeds from loans payable   86,873     15,165     195,309  
   Proceeds from issuance of convertible debentures           250,000  
   Proceeds from issuance of common stock and subscriptions received   154,028     447,450     3,268,762  
Net cash provided by financing activities   240,901     462,615     3,714,071  
Change in cash   (27,511 )   (1,387 )   11,590  
                   
Cash, beginning of period   39,101     4,325      
Cash, end of period   11,590     2,938     11,590  
Non-cash investing and financing activities:                  
   Shares issued to settle debt   22,750     90,895     409,372  
   Shares issued and stock options granted for acquisition of intangible assets           37,815  
                   
Supplemental disclosures:                  
   Interest paid            
   Income taxes paid            

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

F-3


MANTRA VENTURE GROUP LTD.
(A development stage company)
Notes to the consolidated financial statements
Nine months ended February 29, 2012
(Expressed in U.S. dollars)
(unaudited)

1.

Nature of Operations and Continuance of Business

   

The Company was incorporated in the State of Nevada on January 22, 2007 to acquire and commercially exploit various new energy related technologies through licenses and purchases. On December 8, 2008, the Company continued its corporate jurisdiction out of the State of Nevada and into the province of British Columbia, Canada. The Company is a development stage company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, “Development Stage Entities,” in the business of developing and providing energy alternatives. The Company also provides marketing and graphic design services to help companies optimize their environmental awareness presence through the eyes of government, industry and the general public.

   

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has yet to acquire commercially exploitable energy related technology, has not generated significant revenues since inception, and is unlikely to generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of management to raise additional equity capital through private and public offerings of its common stock, and the attainment of profitable operations. As at February 29, 2012, the Company has a working capital deficit of $1,333,136, has not generated significant revenues, and has accumulated losses of $6,548,418 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

   

Management requires additional funds over the next twelve months to fully implement its business plan. Management is currently seeking additional financing through the sale of equity and from borrowings from private lenders to cover its operating expenditures. There can be no certainty that these sources will provide the additional funds required for the next twelve months.

   
2.

Recent Accounting Pronouncements

   

In January 2010, the FASB issued an amendment to ASC 820, “Fair Value Measurements and Disclosure”, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The adoption of the applicable standard on June 1, 2011 did not have a material effect on the Company’s consolidated financial statements.

   

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

F-4


MANTRA VENTURE GROUP LTD.
(A development stage company)
Notes to the consolidated financial statements
Nine months ended February 29, 2012
(Expressed in U.S. dollars)
(unaudited)

3.

Property and Equipment


                  February 29,     May 31,  
                  2012     2011  
            Accumulated     Net carrying     Net carrying  
      Cost     depreciation     value     value  
      $     $     $     $  
  Automobile   11,938     11,938         1,684  
  Leasehold improvements               19,340  
  Office furniture and equipment   48,847     38,487     10,360     18,673  
  Research equipment   53,793     37,785     16,008     23,959  
      114,578     88,210     26,368     63,656  

4.

Related Party Transactions

     
(a)

During the nine months ended February 29, 2012, the Company incurred management fees of $54,000 (February 28, 2011 - $44,481) to the President of the Company.

     
(b)

During the nine months ended February 29, 2012, the Company incurred management fees of $39,000 (February 28, 2011 - $26,903) to the spouse of the President of the Company.

     
(c)

During the nine months ended February 29, 2012, the Company incurred management fees of $15,000 (February 28, 2011 - $50,000) to directors of the Company.

     
(d)

During the nine months ended February 29, 2012, the Company incurred management fees of $nil (February 28, 2011 - $18,000) to an accounting firm where the former Chief Financial Officer of the Company is a partner.

     
(e)

During the nine months ended February 29, 2012, the Company incurred management fees of $nil (February 28, 2011 - $39,000) to the former Vice President of the Company.

     
(f)

On February 20, 2012, the Company granted 500,000 stock options with an exercise price of $0.01 per share expiring on February 20, 2014 to a director of the Company.

     
(g)

As at February 29, 2012, the Company owes $37,305 (May 31, 2011 - $25,184) to the spouse of the President of the Company which is non-interest bearing, unsecured, and due on demand.

     
(h)

As at February 29, 2012, the Company owes $23,786 (May 31, 2011 - $13,207) to a director of the Company, which is non-interest bearing, unsecured, and due on demand.

     
(i)

As at February 29, 2012, the Company owes a total of $195,679 (May 31, 2011 - $167,304) to the President of the Company and a company controlled by the President of the Company which is non-interest bearing, unsecured, and due on demand.

     
5.

Loans Payable

     
(a)

As at February 29, 2012, the amount of $93,173 (Cdn$92,195) (May 31, 2011 - $70,403 (Cdn$68,250)) is owed to non-related parties which is non-interest bearing, unsecured, and due on demand.

     
(b)

As at February 29, 2012, the amount of $30,318 (Cdn$30,000) (May 31, 2011 – $nil) is owed to a non-related party, which bears a one-time interest charge of $202 (Cdn$200), is unsecured, and due on demand.

     
(c)

As at February 29, 2012, the amount of $32,500 (May 31, 2011 - $42,500) is owed to a non- related party which is non-interest bearing, unsecured, and due on demand.

F-5


MANTRA VENTURE GROUP LTD.
(A development stage company)
Notes to the consolidated financial statements
Nine months ended February 29, 2012
(Expressed in U.S. dollars)
(unaudited)

5.

Loans Payable (continued)

     
(d)

As at February 29, 2012, the amount of $42,445 (Cdn$42,000) (May 31, 2011 - $nil) is owed to a non-related party which is non-interest bearing, unsecured, and due on demand.

     
6.

Convertible Debentures

     

In October 2008, the Company issued three convertible debentures for total proceeds of $250,000 which bear interest at 10% per annum, are unsecured, and due one year from date of issuance. The unpaid amount of principal and accrued interest can be converted at any time at the holder’s option into 625,000 shares of the Company’s common stock at a price of $0.40 per share. The Company also issued 250,000 detachable, non-transferable share purchase warrants. Each share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock for a period of two years from the date of issuance at an exercise price of $0.50 per share.

     

In accordance with ASC 470-20, “Debt with Conversion and Other Options”, the Company determined that the convertible debentures contained no embedded beneficial conversion feature as the convertible debentures were issued with a conversion price higher than the fair market value of the Company’s common shares at the time of issuance.

     

In accordance with ASC 470-20, “Debt with Conversion and Other Options”, the Company allocated the proceeds of issuance between the convertible debt and the detachable share purchase warrants based on their relative fair values. Accordingly, the Company recognized the fair value of the share purchase warrants of $45,930 as additional paid-in capital and an equivalent discount against the convertible debentures. The Company has recorded accretion expense of $45,930, increasing the carrying value of the convertible debentures to $250,000.

     
7.

Common Stock

     
(a)

As at February 29, 2012, the Company’s subsidiary, Climate ESCO Ltd., had received subscriptions for 210,000 shares of common stock at $0.10 per share for proceeds of $21,000 which is included in common stock subscribed.

     
(b)

As at February 29, 2012, the Company’s subsidiary, Mantra Energy Alternatives Ltd., had received subscriptions for 75,000 shares of common stock at Cdn$1.00 per share for proceeds of $75,000 (Cdn$75,000) which is included in common stock subscribed.

     
(c)

On August 31, 2011, the Company issued 2,037,500 units at $0.08 per unit for proceeds $163,000, which was recorded as common stock subscribed as at May 31, 2011. Each unit consisted of one common share and one-half non-transferrable warrant to purchase one additional share of common stock at an exercise price of $0.20 per share expiring on the earlier of two years or five business days after the Company’s common stock trades at least one time per day on the FINRA Over the Counter Bulletin Board at a price at or above $0.40 per share for seven consecutive trading days.

     
(d)

On August 10, 2011, the Company issued 300,000 shares of common stock and 25,000 units with an aggregate fair value of $22,750 to the former Vice President of corporate development for $26,000 to settle amounts owing. The Company recorded a gain on settlement of debt of $3,250. Each unit consisted of one common share and one-half non-transferrable warrant to purchase one additional share of common stock at an exercise price of $0.20 per share expiring on the earlier of two years or five business days after the Company’s common stock trades at least one time per day on the FINRA Over the Counter Bulletin Board at a price at or above $0.40 per share for seven consecutive trading days.

     
(e)

On August 8, 2011, the Company issued 700,000 shares of common stock with a fair value of $49,000 to a consultant for services.

F-6


MANTRA VENTURE GROUP LTD.
(A development stage company)
Notes to the consolidated financial statements
Nine months ended February 29, 2012
(Expressed in U.S. dollars)
(unaudited)

7.

Common Stock (continued)

     
(f)

On July 27, 2011, the Company issued 250,000 shares of common stock with a fair value of $17,500 pursuant to an investor relations agreement.

     
(g)

On July 27, 2011, the Company issued 150,000 shares of common stock with a fair value of $12,000 to a consultant for financial public relations services.

     
(h)

On June 23, 2011, the Company’s subsidiary, Climate ESCO Ltd., issued 20,000 shares of common stock at $0.10 per share for proceeds of $2,000.

     
(i)

During the nine months ended February 29, 2012, the Company received share subscriptions for 1,120,550 units at $0.05 per unit for proceeds of $56,028. Each unit will consist of one common share and one-half non-transferrable warrant to purchase one additional share of common stock at an exercise price of $0.20 per share expiring on the earlier of two years or five business days after the Company’s common stock trades at least one time per day on the FINRA Over the Counter Bulletin Board at a price at or above $0.40 per share for seven consecutive trading days.

     
8.

Share Purchase Warrants

     

The following table summarizes the continuity of share purchase warrants:


            Weighted  
            average  
            exercise  
      Number of     price  
      warrants     $  
               
  Balance, May 31, 2011   7,736,497     0.22  
     Issued   2,062,500     0.20  
     Expired   (1,835,999 )   0.30  
  Balance, February 29, 2012   7,962,998     0.20  

As at February 29, 2012, the following share purchase warrants were outstanding:

    Exercise        
Number of   price        
warrants   $     Expiry date  
1,337,556   0.20     April 5, 2012  
573,567   0.20     June 3, 2012  
518,750   0.20     August 9, 2012  
1,562,500   0.20     October 22, 2012  
275,000   0.20     December 10, 2012  
400,000   0.20     December 25, 2012  
1,048,125   0.20     January 27, 2013  
185,000   0.20     March 28, 2013  
25,000   0.20     August 11, 2013  
2,037,500   0.20     August 31, 2013  
             
7,962,998            

F-7


MANTRA VENTURE GROUP LTD.
(A development stage company)
Notes to the consolidated financial statements
Nine months ended February 29, 2012
(Expressed in U.S. dollars)
(unaudited)

9.

Stock Options

   

On February 20, 2012, the Company granted 500,000 stock options with an exercise price of $0.01 per share expiring on February 20, 2014. The fair value of these stock options was estimated at the date of grant using the Black-Scholes option-pricing model assuming a weighted average expected life of 2 years, a risk-free rate of 0.29%, an expected volatility of 260%, and a 0% dividend yield. The weighted average fair value of stock options granted was $0.028 per share. During the nine months ended February 29, 2012, the Company recorded stock-based compensation of $13,957 as management fees.

   

The following table summarizes the continuity of the Company’s stock options:


            Weighted     Weighted        
            average     average     Aggregate  
            exercise     remaining     intrinsic  
      Number     price     contractual     value  
      of options     $     life (years)     $  
                           
  Outstanding, May 31, 2011   1,575,000     0.17              
     Granted   500,000     0.01              
     Expired   (325,000 )   0.15              
  Outstanding and exercisable, February 29, 2012   1,750,000     0.10     1.0     11,000  

Additional information regarding stock options as of February 29, 2012, is as follows:

    Exercise        
Number of   price        
   options   $     Expiry date  
250,000   0.25     November 1, 2012  
500,000   0.10     March 31, 2013  
500,000   0.01     February 20, 2014  
500,000   0.10     May 17, 2014  
1,750,000            

10.

Commitment

   

On September 2, 2009, the Company entered into an agreement with a company to acquire a worldwide, exclusive license for the Mixed Reactant Flow-By Fuel Cell technology. The term of the agreement is for twenty years or the expiry of the last patent licensed under the agreement, whichever is later. The Company agreed to pay the licensor the following license fees:


 
  • an initial license fee of Cdn$10,000 payable in two installments: Cdn$5,000 upon execution of the agreement (paid) and Cdn$5,000 within thirty days of September 2, 2009 (accrued);

     
  • a further license fee of Cdn$15,000 (accrued) to be paid within ninety days of September 2, 2009; and

     
  • an annual license fee, payable annually on the anniversary of the date of the agreement as follows:


    September 1, 2010 Cdn$10,000 (accrued)
    September 1, 2011 Cdn$20,000 (accrued)
    September 1, 2012 Cdn$30,000
    September 1, 2013 Cdn$40,000
    September 1, 2014 and each successive anniversary Cdn$50,000

    F-8


    MANTRA VENTURE GROUP LTD.
    (A development stage company)
    Notes to the consolidated financial statements
    Nine months ended February 29, 2012
    (Expressed in U.S. dollars)
    (unaudited)

    10.

    Commitment (continued)

         

    The Company is to pay the licensor a royalty calculated as 2% of the gross revenue and 15% of any and all consideration directly or indirectly received by the Company from the grant of any sublicense rights. The Company will pay interest at a rate of 1% per month on any amounts past due. In addition, the Company is responsible for the timely payment of all future costs relating to patent expenses and any new or useful art, process, machine, manufacture or composition of matter arising out of any licensor improvements or joint improvements licensed under this agreement and identified by the licensor as potentially patentable. The Company must also invest a minimum of Cdn$250,000 in research and development directly associated with the technology.

         
    11.

    Subsequent Events

         
    (a)

    Subsequent to February 29, 2012, the Company’s subsidiary, Mantra Energy Alternatives Ltd., received subscription proceeds of $307,000 for 307,000 shares of common stock at Cdn$1.00 per share.

         
    (b)

    On March 9, 2012, the Company issued 1,120,550 units at $0.05 per unit for proceeds of $56,028, which was included in common stock subscribed as at February 29, 2012. Each unit consisted of one common share and one-half non-transferrable warrant to purchase one additional share of common stock at an exercise price of $0.20 per share expiring on the earlier of two years or five business days after the Company’s common stock trades at least one time per day on the FINRA Over the Counter Bulletin Board at a price at or above $0.40 per share for seven consecutive trading days.

    F-9


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

    FORWARD LOOKING STATEMENTS

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

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

    In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "US$" refer to United States dollars and all references to "common stock" refer to the common shares in our capital stock.

    As used in this quarterly report, the terms "we", "us", "our" and "our company" mean Mantra Venture Group Ltd. and our wholly owned subsidiaries Carbon Commodity Corporation, Mantra Energy Alternatives Ltd., Mantra China Inc., Mantra China Limited, Mantra Media Corp., Mantra NextGen Power Inc., and Mantra Wind Inc., as well as our majority owned subsidiary Climate ESCO Ltd., unless otherwise indicated.

    Business Overview

    We were incorporated in Nevada on January 22, 2007. On December 8, 2008 we continued our corporate jurisdiction out of the state of Nevada and into the Province of British Columbia, Canada. Our principal offices are located at #562 – 800 15355 24th Avenue, Surrey, British Columbia, Canada, V4A 2H9. Our telephone number is (604) 560-1503. Our fiscal year end is May 31.

    We are building a portfolio of companies and technologies that mitigate negative environmental and health consequences that arise from the production of energy and the consumption of resources.

    Our mission is to develop and commercialize alternative energy technologies and services to enable the sustainable consumption, production and management of resources on residential, commercial and industrial scales. We plan to develop or acquire technologies and services which include electrical power system monitoring technology, wind farm electricity generation, online retail of environmental sustainability solutions through a carbon reduction marketplace, and media solutions to promote awareness of corporate actions that support the environment. To carry out our business strategy we intend to acquire or license from third parties technologies that require further development before they can be brought to market. We also intend to develop such technologies ourselves, and we anticipate that to complete commercialization of some technologies we will enter into joint ventures, partnerships, or other strategic relationships with third parties who have expertise that we may require. We also plan to enter into formal relationships with consultants, contractors, retailers and manufacturers who specialize in the areas of environmental sustainability in order to carry out our online retail strategy.

    4


    We are a development stage company that has only recently begun operations. We have generated only nominal revenues from our intended business activities, and we do not expect to generate significant revenues in the next 12 months. Other than our invention for the electro-reduction of carbon dioxide, we have not yet developed or acquired any commercially exploitable technology. Since our inception, we have incurred operational losses and we have completed several rounds of financing to fund our operations.

    We carry on our business through our subsidiaries as follows:

    • Mantra Energy Alternatives Ltd., through which we identify, acquire, develop and market technologies related to alternative energy production, greenhouse gas emissions reduction and resource consumption reduction;
    • Mantra Media Corp., through which we offer promotional and marketing services to companies in the sustainability sector or those seeking to adopt sustainable practices; and
    • Climate ESCO Ltd, majority owned, through which we distribute and install LED lighting solutions.

    We also have a number of inactive subsidiaries which we plan to engage in various business activities in the future.

    On August 16, 2011, we entered into a technology development cooperation agreement with KC Cottrell Co., Ltd. and Korea Southern Power Co., Ltd. pursuant to which KC will provide our company with the basic framework and support for the successful execution of tasks for our company’s electrochemical reduction of carbon dioxide technology development as planned at Ha-dong Power Plant in the Republic of Korea. KC has also agreed to equally share the cost of the project, which is not to exceed US $1,000,000 with our company.

    On August 25, 2011, we entered into a consulting agreement with Richard Malcolm Smith, whereby Mr. Smith has agreed to provide certain management consulting services to our company for a period of six months regarding our ongoing corporate development and acquisitions. In consideration for the services, we issued to Mr. Smith 700,000 shares of our common stock, previously registered on a Form S-8 registration statement.

    On February 20, 2012, we entered into a director agreement with Tommy David Unger. As compensation, under the director agreement, we granted stock options to Mr. Unger to purchase up to 500,000 shares of our common stock at a price of $0.01 per share.

    On February 29, 2012, our wholly owned subsidiary, Mantra Energy Alternatives Ltd. entered into subscription agreements with a number of non-US investors for the sale of 3,200,000 shares of Mantra Energy at a price of CAD $1.00 per share, for total proceeds of CAD $3,200,000. Upon the closing of this financing, our company will hold 6,000,000 shares of Mantra Energy out of a total of 9,200,000 issued and outstanding.

    Electro Reduction of Carbon Dioxide (“ERC”)

    On November 2, 2007, through our wholly owned subsidiary, Mantra Energy Alternatives Ltd., we entered into a technology assignment agreement with 0798465 BC Ltd. whereby we acquired 100% ownership in and to a certain chemical process for the electro-reduction of carbon dioxide as embodied by and described in the following patent cooperation treaty application:

    Country
    Application
    Number
    File Date
    Status
    Patent Cooperation
    Treaty (PCT)
    W02207
    10/13/2006
    PCT

    The reactor at the core of the chemical process, referred to as the electrochemical reduction of carbon dioxide, or ERC, has been proven functional through small scale prototype trials. ERC offers a possible solution to reduce the impact of carbon dioxide (CO2) on Earth’s environment by converting CO2 into chemicals with a broad range of commercial applications, including a fuel for a next generation of fuel cells. Powered by electricity, the ERC process combines captured carbon dioxide with water to produce materials, such as formic acid, formate salts, oxalic acid and methanol, that are conventionally obtained from the thermo-chemical processing of fossil fuels. However, while thermo-chemical reactions must be driven at relatively high temperatures that are normally obtained by burning fossil fuels, ERC operates at near ambient conditions and is driven by electric energy that can be taken from an electric power grid supplied by hydro, wind, solar or nuclear energy.

    5


    In fuel cells liquid fuels are indirectly burned with air to form carbon dioxide and water, while generating electricity. This process is known as electrochemical combustion or electrooxidation. The complementary nature of ERC and electrooxidation makes it possible to use ERC in a regenerative fuel cell cycle, where carbon dioxide is converted to a fuel that is consumed in a fuel cell to regenerate carbon dioxide. As shown in the figure, the net energy input required in this cycle could be supplied from a renewable or non-fossil fuel source.

    6


    ERC has been shown to produce a range of compounds, including formic acid, formate salts, oxalic acid, and methanol. The efficiency for generation of each compound depends on the experimental conditions, most importantly the material of the cathode, which catalyses the electrochemical reactions.

    Until appropriate cathodes are found some products of CO2 reduction (methanol, for instance) are obtained at efficiencies too low for practical use. Other products can be generated on known cathodes with high current yields that could support valuable practical processes. For example, formic acid has been obtained on tin cathodes with current yields above 80%. Formate salts and sodium bicarbonate are obtained at similarly high yields.

    ERC Development to Date

    We have retained one of the creators of the technology, Professor Colin Oloman, as a member of our scientific advisory board, to further develop the carbon dioxide reduction process to achieve optimal results on a consistent basis. On June 1, 2008, we entered into a technology development and support agreement with Kemetco Research Inc., an integrated science, technology and innovation company. Pursuant to that agreement, we have established a research and development facility for the ERC in Vancouver, British Columbia, staffed by a dedicated research team provided by Kemetco.

    In October of 2008, we completed our first ERC prototype reactor capable of processing 1 kilogram of CO2 per day. In order to facilitate the testing and development of this reactor, we entered into an agreement with Kemetco on January 29, 2010. The agreement was intended to govern the development and testing of our prototype reactor for a period of 10 months and contemplated costs of approximately $250,000 including labor and materials purchases. On March 18, 2010 we entered into another agreement with Kemetco which amended and replaced the January 29, 2010 agreement. Under the terms of the latest agreement, we have agreed to proceed with the testing and development of our ERC prototype reactor for a period of 5 months at an estimated cost of approximately $125,000.

    7


    Pictured Above, Design for Bench Scale ERC Reactor

    We anticipate that commercialization of ERC will require us to develop reactors capable of processing not less than 100 tons of CO2 per day; however, there is no guarantee that we will successfully produce reactors of that size. Production of commercially viable ERC reactors will depend on continued research and development, successful testing of small scale ERC reactors, and securing of additional financing. At the conclusion of our current agreement and development program with Kemetco, an assessment will be made of the project’s progress and the next phase to be conducted.

    Established and Emerging Market for ERC and By-Products:

    The technology behind ERC can be applied to any scale commercial venture which outputs CO2 into the atmosphere. We anticipate that, once fully commercialized, we will be able to offer ERC as a CO2 management system to various industry including steel, power generation and lumber.

    8


    The existing applications of ERC by-products include use as feedstock preservatives, de-icing solutions, and baking soda, among others. Sodium Formate and Formic Acid, two of the main by-products of ERC, currently have an average market value of $1,200/ton, with more than 600,000 tons of formic acid produced annually (Li, 2006). Their applications are diverse, including feedstock preservatives, de-icing solutions, cleaning solutions and baking soda to name a few. The market for formic acid has experienced continual growth and demand over the past several years, mainly attributed to the following: European and developing country demand for formic acid in silage, rising raw materials, energy and logistics costs; and animal feed preservative and Asian demand for formic acid in leather, rubber, food and pharmaceutical industries. The average market price of formic acid is expected to increase by as much as 20% in 2012. (Dunia Frontier Consultants, 2008).

    However, if the ERC process reaches market acceptance as a way to deal with CO2 emissions from industry facilities, it will likely lead to supply of formic acid in excess of current market demand. We have identified several potential future applications for formic acid, which may lead to an expansion in current market demand. The application we have identified and are currently focusing on is steel pickling.

    Steel Pickling

    Steel Pickling is part of the finishing process in the production of certain steel products in which oxide and scale are removed from the surface of strip steel, steel wire, and other forms of steel, by dissolution in acid. A solution of either Hydrochloric Acid (HCl) or Sulfuric Acid is generally used to treat carbon steel products, while a combination of Hydrofluoric and Nitric Acids is often used for stainless steel. Approximately ¼ of the HCI produced in the U.S. is used for pickling steel (American Chemistry, 2003), consuming an estimated 5Mt/year. As an organic acid, Formic Acid would be a very attractive replacement for Hydrochloric Acid (HCI) in the steel pickling process. Formic Acid has many potential advantages over HCI in this application, including: less iron lost from the steel surface, improvement in final surface quality, and the elimination of corrosion inhibiting and neutralizing rinse processes to prevent rust development. In addition, Formic Acid is both bio-degradable and reusable which would allow water used in the picking process to be recycled more easily.

    Results of Operations for the Three Month Periods Ended February 29, 2012 and February 28, 2011.

    Revenues

    The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended February 29, 2012 which are included herein.

    Our operating results for three month periods ended February 29, 2012 and February 28, 2011 are summarized as follows:

                    Difference Between  
                    Three Month Period  
                    Ended  
        Three Months     Three Months     February 29, 2012  
        Ended     Ended     and  
        February 29, 2012     February 28, 2011     February 28, 2011  
        ($)     ($)     ($)  
    Revenue   2,371     288     2,083  
    Operating expenses   112,070     242,923     (130,853 )
    Net Loss   (129,188 )   (248,731 )   (119,543 )

    9


    We have had limited operational history since our inception on January 22, 2007. From our inception on January 22, 2007 to February 29, 2012 we have generated $35,065 in revenues. For the three months ended February 29, 2012 we generated $2,371 in revenues compared to revenues of $288 generated during the same period in 2011. Since our inception on January 22, 2007 to February 29, 2012, we have an accumulated deficit of $6,548,418. We anticipate that we will incur substantial losses over the next year and our ability to generate additional revenues in the next 12 months remains uncertain.

    Expenses

    Our operating expenses for the three month periods ended February 29, 2012 and February 28, 2011 are summarized as follows:

        Three Months Ended  
        February 29,     February 28,  
        2012     2011  
        ($)     ($)  
    Business development   657     Nil  
    Consulting and advisory   15,625     88,290  
    Depreciation and amortization   7,003     6,191  
    Foreign exchange loss (gain)   14,693     26,233  
    General and administrative   6,727     22,619  
    License fees   Nil     Nil  
    Management fees   40,957     34,458  
    Professional fees   15,412     12,033  
    Public listing costs   1,525     2,425  
    Rent   5,916     2,656  
    Shareholder communications and awareness   Nil     (6,722 )
    Travel and promotion   3,555     16,918  
    Wages and benefits   Nil     37,822  

    For the three months ended February 29, 2012, we incurred total expenses of $112,070 compared to total operating expenses for the three months ended February 28, 2011 of $242,923. The $130,853 decrease is primarily due to decreases in consulting and advisory fees, foreign exchange loss, general and administrative expenses, public listing costs, travel and promotion expenses and wages and benefit expenses.

    Net Loss

    Since our inception on January 22, 2007 to February 29, 2012, we have incurred a net loss of $6,548,418. For the three months ended February 29, 2012 we have incurred a net loss of $129,188 compared to a net loss of $248,731 for the same period in 2011. Our net loss per share for the three months ended February 29, 2012 was $Nil, compared to $0.01 for the same period in 2011.

    Results of Operations for the Nine Month Periods Ended February 29, 2012 and February 28, 2011.

    Our operating results for nine month periods ended February 29, 2012 and February 28, 2011 are summarized as follows:

    10



                    Difference Between  
                    Nine Month Period  
                    Ended  
        Nine Months     Nine Months     February 29, 2012  
        Ended     Ended     and  
        February 29, 2012     February 28, 2011     February 28, 2011  
        ($)     ($)     ($)  
    Revenue   12,561     2,258     10,303  
    Operating expenses   468,579     716,731     (248,152 )
    Net Loss   (467,610 )   (794,793 )   (327,183 )

    For the nine months ended February 29, 2012 we generated $12,561 in revenues compared to revenues of $2,258 generated during the same period in 2011.

    Expenses

    Our operating expenses for the nine month periods ended February 29, 2012 and February 28, 2011 are summarized as follows:

        Nine Months Ended  
        February 29,     February 28,  
        2012     2011  
        ($)     ($)  
    Business development   1,248     24,843  
    Consulting and advisory   144,085     196,438  
    Depreciation and amortization   21,389     22,974  
    Foreign exchange loss (gain)   (8,564 )   31,123  
    General and administrative   17,131     87,038  
    License fees   19,614     Nil  
    Management fees   121,957     109,481  
    Professional fees   105,599     49,275  
    Public listing costs   10,122     5,655  
    Rent   23,896     19,336  
    Shareholder communications and awareness   797     22,487  
    Travel and promotion   11,305     57,701  
    Wages and benefits   Nil     90,380  

    For the nine months ended February 29, 2012, we incurred total expenses of $468,579 compared to total operating expenses for the nine months ended February 28, 2011 of $716,731. The $248,152 decrease is primarily due to decreases in business development costs, consulting and advisory fees, depreciation and amortization, general and administrative expenses, shareholder communication and awareness expenses, travel and promotion expenses and wages and benefit expenses.

    Net Loss

    For the nine months ended February 29, 2012 we have incurred a net loss of $467,610 compared to a net loss of $794,793 for the same period in 2011. Our net loss per share for the nine months ended February 29, 2012 was $0.01 compared to $0.02 for the same period in 2011.

    11


    Liquidity and Capital Resources

    Working Capital            
        At        
        February 29,     May 31,  
        2012     2011  
    Current Assets $  82,482   $ 101,978  
    Current Liabilities $  1,415,618   $  1,245,273  
    Working Capital Deficit $  (1,333,136 ) $  (1,143,295 )

    Cash Flows               January 22,  
        Nine Months     Nine Months     2007  
        Ended     Ended     (Inception) to  
        February 29,     February 28,     February 29,  
        2012     2011     2012  
    Net Cash Used in Operating Activities $  (269,312 ) $  (464,002 ) $  (3,527,584 )
    Net Cash Used In Investing Activities $  900   $  Nil   $  (174,897 )
    Net Cash Provided by Financing Activities $  240,901   $  462,615   $  3,714,071  
    Change In Cash $  (27,511 ) $  (1,387 ) $  11,590  

    As of February 29, 2012, we had $11,590 cash in our bank accounts and a working capital deficit of $1,333,136. As of February 29, 2012 we had total assets of $108,850 and total liabilities of $1,415,618.

    From January 22, 2007 (date of inception) to February 29, 2012, we raised net proceeds of $3,268,762 in cash from the issuance of common stock and share subscriptions received, $195,309 from loans payable and $250,000 from proceeds from the issuance of convertible debentures for a total of $3,714,071 of cash provided by financing activities for the period.

    We received net cash of $240,901 from financing activities for the nine months ended February 29, 2012 compared to $462,615 for the same period in 2011. During the period in 2012 we raised cash from the issuance of our common stock and share subscriptions received and proceeds from loans payable. In the comparable period, we also raised cash in the same manner.

    We used net cash of $269,312 in operating activities for the nine months ended February 29, 2012 compared to $464,002 for the same period in 2011. We used net cash of $3,527,584 in operating activities for the period from January 22, 2007 (date of inception) to February 29, 2012.

    We did not use any cash in investing activities for the nine months ended February 29, 2012 and February 28, 2011.

    During the nine months ended February 29, 2012 we had a net decrease of $27,511 in our cash position compared to a net decrease of $1,387 for the same period in 2011. Our monthly cash requirements for the nine month period ended February 29, 2012 was approximately $29,924 compared to $51,556 for the same period in 2011. At our current cash position and if this cash requirement continues, we do not have sufficient cash to cover our expenses for one month.

    We expect that our total expenses will increase over the next year as we increase our business operations. We have not been able to reach the break-even point since our inception and have had to rely on outside capital resources. We do not anticipate making significant revenues for the next year. Over the next 12 months, we plan to primarily concentrate on commercializing our ERC technology and associated projects.

    12



    Description

    Estimated
    expenses
    ($)
    Research and Development 275,000
    Consulting Fees 100,000
    Commercialization of ERC 1,300,000
    Shareholder communication and awareness 250,000
    Professional Fees 200,000
    Wages and Benefits 150,000
    Management Fees 300,000
    Total 2,575,000

    In order to fully carry out our business plan, we need additional financing of approximately $2,575,000 for the next 12 months. In order to improve our liquidity, we intend to pursue additional equity financing from private placement sales of our equity securities or shareholders’ loans. We do not presently have sufficient financing to undertake our planned business activities. Issuances of additional shares will result in dilution to our existing shareholders.

    We currently do not have any arrangements in place for the completion of any further private placement financings and there is no assurance that we will be successful in completing any further private placement financings. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts that we spend on our business activities and administrative expenses in order to be within the amount of capital resources that are available to us.

    Off-Balance Sheet Arrangements

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

    Inflation

    The effect of inflation on our revenue and operating results has not been significant.

    Critical Accounting Policies

    Our consolidated financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in note 2 of the notes to our consolidated financial statements for the year ended May 31, 2011 filed in an annual report on Form 10-K. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by management.

    Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

    13


    Item 4. Controls and Procedures

    Evaluation of Disclosure Controls and Procedures

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

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

    Changes in Internal Controls

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

    PART II – OTHER INFORMATION

    Item 1. Legal Proceedings

    On December 21, 2010, one of our convertible debenture holders filed suit in the Supreme Court of British Columbia for re-payment of a $150,000 convertible debenture, including 10% annual interest from October 28, 2008, the date the loan was provided. Our company does not dispute the amount owing and has properly recorded the principal and interest as per the terms of the convertible debt agreement.

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

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

    On February 20, 2012, we issued 500,000 stock options with an exercise price of $0.01 per share expiring on February 14, 2014 to one non-U.S. person in an offshore transaction relying on Regulation S of the Securities Act of 1933.

    Item 3. Defaults Upon Senior Securities

    None.

    Item 4. Mine Safety Disclosures

    Not applicable.

    14


    Item 5. Other Information

    On February 20, 2012, we accepted the resignation of Elden Schorn as director of our company. Mr. Schorn’s resignation was not the result of any disagreement with our company regarding its operations, policies, practices or otherwise. Concurrently with Mr. Schorn’s resignation, we appointed Tommy David Unger as director of our company to fill the ensuing vacancy.

    Item 6. Exhibits

    Exhibit
    Number
    Description
       
    (2)

    Plan of acquisition, reorganization, arrangement, liquidation or succession

     

    2.1

    Plan of Conversion of Mantra Venture Group Ltd. from a Nevada Corporation into a British Columbia Corporation dated October 29, 2008. (incorporated by reference to our Current Report on Form 8-K filed on November 4, 2008)

     

    (3)

    Articles of Incorporation, Bylaws

     

    3.1

    Articles of Conversion of Mantra Venture Group Ltd. dated October 28, 2008 (incorporated by reference to our Current Report on Form 8-K filed on November 4, 2008)

     

    3.2

    British Columbia Table 1 Articles adopted on December 4, 2008 (incorporated by reference to our Current Report on Form 8-K filed on December 12, 2008)

     

    3.3

    British Columbia Notice of Articles (incorporated by reference to our Current Report on Form 8-K filed on December 12, 2008)

     

    (10)

    Material Contracts

     

    10.1

    Revolving Line of Credit Agreement with Larry Kristof dated October 15, 2008 (incorporated by reference to our Quarterly Report on Form 10-Q filed on January 14, 2009)

     

    10.2

    Sponsorship and Proposed Equity Capital Raise Agreement with M Partners Inc. dated December 4, 2008. (incorporated by reference to our Current Report on Form 8-K filed on December 11, 2008)

     

    10.3

    Contractor Proposal Agreement entered into with Kemetco Research Inc. on January 29, 2009. (incorporated by reference to our Current Report on Form 8-K filed on February 4, 2009)

     

    10.4

    Option Agreement entered into with Synergy BioMetals Recovery Systems Inc. on February 27, 2009. (incorporated by reference to our Current Report on Form 8-K filed on March 2, 2009)

     

    10.5

    Extension of Option Agreement entered into with Synergy BioMetals Recovery Systems Inc. on May 1, 2009. (incorporated by reference to our Annual Report on Form 18-K filed on September 15, 2009)

     

    10.6

    Contractor Proposal Agreement entered into with Kemetco Research Inc. on March 18, 2009. (incorporated by reference to our Current Report on Form 8-K filed on March 26, 2009)

     

    10.7

    Development Agreement with 3M dated October 28, 2009. (incorporated by reference to our Current Report on Form 8-K filed on November 6, 2009)

     

    10.8

    Technology Development Cooperation Agreement entered into with KC Cottrell Co., Ltd. and Korea Southern Power Co., Ltd. on August 16, 2010. (incorporated by reference to our Current Report on Form 8-K filed on August 17, 2010)

    15



    Exhibit Description
    Number  
       
    10.9 Consulting Agreement with Richard Malcolm Smith dated August 25, 2011. (incorporated by reference to our Current Report on Form 8-K filed on September 1, 2011)
       
    10.10 Director Agreement with Tommy David Unger dated February 20, 2012 (incorporated by reference to our Current Report on Form 8-K filed on February 28, 2012)
       
    10.11 Form of Mantra Energy Alternatives Ltd. Subscription Agreement (incorporated by reference to our Current Report on Form 8-K filed on March 9, 2012)
       
    (21) List of Subsidiaries
       
    21.1






    Carbon Commodity Corporation
    Climate ESCO Ltd.
    Mantra Energy Alternatives Ltd.
    Mantra China Inc.
    Mantra China Limited
    Mantra Media Corp.
    Mantra NextGen Power Inc.
    Mantra Wind Inc.
       
    (31) Rule 13a-14 / 15d-14 Certifications
       
    31.1* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
       
    (32) Section 1350 Certifications
       
    32.1* Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
       
    101** Interactive Data File
       
    101.INS XBRL Instance Document
    101.SCH XBRL Taxonomy Extension Schema Document
    101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
    101.DEF XBRL Taxonomy Extension Definition Linkbase Document
    101.LAB XBRL Taxonomy Extension Label Linkbase Document
    101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

    *

    Filed herewith.

       
    **

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

    16


    SIGNATURES

    In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

      Mantra Venture Group Ltd.
      (Registrant)
       
    Date: April 23, 2012 /s/ Larry Kristof
      Larry Kristof
      President, Chief Executive Officer, Chief Financial
      Officer, Secretary, Treasurer and Director
      (Principal Executive Officer, Principal Financial Officer
      and Principal Accounting Officer)

    17