U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





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




For the
quarterly period ended September 30, 2009


OR


 ̈
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                EXCHANGE
      ACT OF 1934




For the
transition period from ______ to ________





Commission
File Number 333-127703





LI3
ENERGY, INC.


(Exact
Name of Small Business Issuer as Specified in its Charter)





Nevada
              
              3990
              
              20-3061907(State
      of incorporation)
              
              (Primary
      SIC Number)
              
              (IRS
      Employer ID Number)





Av. Pardo
y Aliaga 699 Of. 802


San
Isidro, Lima, Peru


+ (51)
1-212-1880


(Address
and telephone number of principal executive offices)





1640
Terrace Way


Walnut
Creek, CA


(925)930-0100


(Former
address of principal executive offices)





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





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).


Yes ̈No ̈





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





Large accelerated filer  ̈
            
            Accelerated filer  ̈
            
            Non-accelerated filer  ̈
            
            Smaller reporting company þ(Do not check if a smaller
              Reporting company)





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




There
were 7,747,374 shares of Common Stock outstanding as of November 10,
2009.





LI3
ENERGY, INC.




TABLE
OF CONTENTS




PagePart
      I Financial InformationItem 1
                            Financial
      StatementsBalance
      Sheet
                            
                            1Statements
      of Operations (unaudited)
                            
                            2Statements
      of Changes in Shareholders’ Equity
                            3Statements
      of Cash Flows (unaudited)
                            
                            4Notes
      to the Unaudited Financial Statements
                            
                            5Item 2
                            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                            
                            15Item 4T
                            Controls
      and Procedures
                            
                            17Part
      II Other Information
                            
                            18Item 6
                            Exhibits
                            
                            18SignaturesExhibits


-ii-


PART
I – FINANCIAL INFORMATION





Item
1.  Financial Statements





LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Balance
Sheets






ASSETS


As
      of
                                              
                                              
                                              As
      ofSeptember
      30,
                                              
                                              
                                              June 30,2009
                                              
                                              
                                              2009(Unaudited)
                                              
                                              
                                              (Audited)Current
      AssetsCash
                                              
                                              $
                                              2,065
                                              
                                              
                                              $
                                              9,703Total
      Current Assets
                                              
                                              
                                              2,065
                                              
                                              
                                              
                                              9,703Net
      fixed Assets
                                              
                                              
                                              6,870
                                              
                                              
                                              
                                              7,845Total
      Assets
                                              
                                              $
                                              8,935
                                              
                                              
                                              $
                                              17,548LIABILITIES
      & STOCKHOLDERS' EQUITY (DEFICIT)Current
      LiabilitiesAccounts
      Payable
                                              
                                              $
                                              10,072
                                              
                                              
                                              $
                                              3,921Loan
      Payable
                                              
                                              
                                              95,000
                                              
                                              
                                              
                                              95,000Accrued
      Expenses
                                              
                                              
                                              6,795
                                              
                                              
                                              
                                              4,837Total
      Current Liabilities
                                              
                                              
                                              111,867
                                              
                                              
                                              
                                              103,758Total
      Liabilities
                                              
                                              
                                              111,867
                                              
                                              
                                              
                                              103,758Stockholders'
      Equity (Deficit)Common
      stock, ($0.001 par value, 290,000,000 authorized; 7,747,374 shares issued
      and outstanding as of September 30, 2009 and June 30, 2009
      respectively
                                              
                                              
                                              7,747
                                              
                                              
                                              
                                              7,747Preferred
      stock, ($0.001 par value,10,000,000 authorized; none issued as of
      September 30, 2009 and June 30, 2009 respectively Additional paid-in
      capital
                                              
                                              
                                              99,753
                                              
                                              
                                              
                                              99,753Deficit
      accumulated during development stage
                                              
                                              
                                              (210,432
                                              )
                                              
                                              
                                              (193,710
                                              )Total
      Stockholders' Equity (Deficit)
                                              
                                              
                                              (102,932
                                              )
                                              
                                              
                                              (86,210
                                              )TOTAL
      LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
                                              
                                              $
                                              8,935
                                              
                                              
                                              $
                                              17,548





See notes
to financial statements.


-1-


LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Statement
of Operations (Unaudited)





June
      24, 2005Three
      Months
                                                                          
                                                                          
                                                                          Three
      Months
                                                                          
                                                                          
                                                                          (Inception)Ended
                                                                          
                                                                          
                                                                          Ended
                                                                          
                                                                          
                                                                          ThroughSeptember
      30, 2009
                                                                          
                                                                          
                                                                          September
      30, 2008
                                                                          
                                                                          
                                                                          September
      30, 2009RevenuesRevenues
                                                                          
                                                                          $
                                                                          -
                                                                          
                                                                          
                                                                          $
                                                                          -
                                                                          
                                                                          
                                                                          $
                                                                          2,278Total
      Revenues
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          2,278Cost
      of Goods SoldPurchases
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          1,182Total
      Costs Goods Sold
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          1,182Gross
      Profit
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          1,096Operating
      ExpensesWrite
      off inventory
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          1,469Administrative
      Expenses
                                                                          
                                                                          
                                                                          4,054
                                                                          
                                                                          
                                                                          
                                                                          3,883
                                                                          
                                                                          
                                                                          
                                                                          74,477Professional
      fees
                                                                          
                                                                          
                                                                          10,711
                                                                          
                                                                          
                                                                          
                                                                          12,277
                                                                          
                                                                          
                                                                          
                                                                          128,799Total
      Operating Expenses
                                                                          
                                                                          
                                                                          14,765
                                                                          
                                                                          
                                                                          
                                                                          16,160
                                                                          
                                                                          
                                                                          
                                                                          204,745Other
      income (expenses)Interest
      Income
                                                                          
                                                                          
                                                                          1
                                                                          
                                                                          
                                                                          
                                                                          2
                                                                          
                                                                          
                                                                          
                                                                          12Interest
      expense
                                                                          
                                                                          
                                                                          (1,958
                                                                          )
                                                                          
                                                                          
                                                                          (1,000
                                                                          )
                                                                          
                                                                          
                                                                          (6,795
                                                                          )Total
      other expenses
                                                                          
                                                                          
                                                                          (1,957
                                                                          )
                                                                          
                                                                          
                                                                          (998
                                                                          )
                                                                          
                                                                          
                                                                          (6,783
                                                                          )Net
      Income (Loss)
                                                                          
                                                                          $
                                                                          (16,722
                                                                          )
                                                                          
                                                                          $
                                                                          (17,158
                                                                          )
                                                                          
                                                                          $
                                                                          (210,432
                                                                          )Basic
      and diluted earnings (loss) per share
                                                                          
                                                                          $
                                                                          (0.00
                                                                          )
                                                                          
                                                                          $
                                                                          (0.00
                                                                          )Weighted
      average number ofcommon
      shares outstanding
                                                                          
                                                                          
                                                                          7,747,374
                                                                          
                                                                          
                                                                          
                                                                          7,747,374




See notes
to financial statements.


-2-


LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Statement
of Changes in Stockholders’ Equity


From
June 24, 2005 (Inception) through September 30, 2009




DeficitCommon
                                        
                                        
                                        Additional
                                        
                                        
                                        AccumulatedCommon
                                        
                                        
                                        Stock
                                        
                                        
                                        Paid-in
                                        
                                        
                                        DuringStock
                                        
                                        
                                        Amount
                                        
                                        
                                        Capital
                                        
                                        
                                        Development
                                        
                                        
                                        TotalBalance,
      June 24, 2005
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        -Stock
      issued for cash on June 24, 2005 @ $0.001649 per share
                                        
                                        
                                        2,273,685
                                        
                                        
                                        
                                        2,274
                                        
                                        
                                        
                                        1,476
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        3,750Stock
      issued for cash on June 24, 2005 @ $0.001649 per share
                                        
                                        
                                        2,273,685
                                        
                                        
                                        
                                        2,274
                                        
                                        
                                        
                                        1,476
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        3,750Net
      loss,  June 30, 2005
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -Balance,
      June 30, 2005
                                        
                                        
                                        4,547,371
                                        
                                        
                                        
                                        4,548
                                        
                                        
                                        
                                        2,952
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        7,500Stock
      issued for cash on March 14, 2006 @ $0.001649 per share
                                        
                                        
                                        3,031,581
                                        
                                        
                                        
                                        3,031
                                        
                                        
                                        
                                        46,969
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        50,000Net
      loss,  June 30, 2006
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (14,068
                                        )
                                        
                                        
                                        (14,068
                                        )Balance,
      June 30, 2006
                                        
                                        
                                        7,578,952
                                        
                                        
                                        
                                        7,579
                                        
                                        
                                        
                                        49,921
                                        
                                        
                                        
                                        (14,068
                                        )
                                        
                                        
                                        43,432Net
      loss,  June 30, 2007
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (16,081
                                        )
                                        
                                        
                                        (16,081
                                        )Balance,
      June 30, 2007
                                        
                                        
                                        7,578,952
                                        
                                        
                                        
                                        7,579
                                        
                                        
                                        
                                        49,921
                                        
                                        
                                        
                                        (30,149
                                        )
                                        
                                        
                                        27,351Stock
      issued for cash on February 7, 2008 @ $.296873 per share
                                        
                                        
                                        168,422
                                        
                                        
                                        
                                        168
                                        
                                        
                                        
                                        49,832
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        50,000Net
      loss, June 30, 2008
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (95,656
                                        )
                                        
                                        
                                        (95,656
                                        )Balance,
      June 30, 2008
                                        
                                        
                                        7,747,374
                                        
                                        
                                        
                                        7,747
                                        
                                        
                                        
                                        99,753
                                        
                                        
                                        
                                        (125,805
                                        )
                                        
                                        
                                        (18,305
                                        )Net
      loss, June 30, 2009
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (67,905
                                        )
                                        
                                        
                                        (67,905
                                        )Balance,
      June 30, 2009
                                        
                                        
                                        7,747,374
                                        
                                        
                                        
                                        7,747
                                        
                                        
                                        
                                        99,753
                                        
                                        
                                        
                                        (193,710
                                        )
                                        
                                        
                                        (86,210
                                        )Net
      loss September 30, 2009
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (16,722
                                        )
                                        
                                        
                                        (16,722
                                        )Balance
      September 30 , 2009 (Unaudited)
                                        
                                        
                                        7,747,374
                                        
                                        
                                        
                                        7,747
                                        
                                        
                                        
                                        99,753
                                        
                                        
                                        
                                        (210,432
                                        )
                                        
                                        
                                        (102,932
                                        )*
      All outstanding share amounts have been retroactively restated to reflect
      the Company's 3.031578 stock split


See notes
to financial
statements.


-3-


LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Statement
of Cash Flows (Unaudited)





June
      24, 2005Three
      Months
                                                          
                                                          
                                                          Three
      Months
                                                          
                                                          
                                                          (Inception)Ended
                                                          
                                                          
                                                          Ended
                                                          
                                                          
                                                          ThroughSeptember
      30, 2009
                                                          
                                                          
                                                          September
      30, 2008
                                                          
                                                          
                                                          September
      30, 2009CASH FLOWS FROM OPERATING
      ACTIVITIESNet
      income (loss)
                                                          
                                                          $
                                                          (16,722
                                                          )
                                                          
                                                          $
                                                          (17,158
                                                          )
                                                          
                                                          $
                                                          (210,432
                                                          )Adjustments
      to reconcile net loss to net cashprovided
      by (used in) operating activities:Depreciation
                                                          
                                                          
                                                          975
                                                          
                                                          
                                                          
                                                          975
                                                          
                                                          
                                                          
                                                          12,630Write
      off inventory
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          1,469Changes
      in operating assets and liabilities:Decrease
      (increase) in inventory
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (1,469
                                                          )Increase
      in (decrease) in accounts payable
                                                          
                                                          
                                                          6,151
                                                          
                                                          
                                                          
                                                          (3,157
                                                          )
                                                          
                                                          
                                                          10,072Increase
      in accrued expenses
                                                          
                                                          
                                                          1,958
                                                          
                                                          
                                                          
                                                          1,000
                                                          
                                                          
                                                          
                                                          6,795Net
      cash provided by (used in) operating activities
                                                          
                                                          
                                                          (7,638
                                                          )
                                                          
                                                          
                                                          (18,340
                                                          )
                                                          
                                                          
                                                          (180,935
                                                          )CASH FLOWS FROM INVESTING
      ACTIVITIESAcquisition
      of equipment
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (9,500
                                                          )Increase
      in leasehold improvement
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (10,000
                                                          )Net
      cash provided by (used in) investing activities
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (19,500
                                                          )CASH FLOWS FROM FINANCING
      ACTIVITIESIncrease
      in loan payable
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          95,000Proceeds
      from issuance of common stock
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          107,500Net
      cash provided by (used in) financing activities
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          202,500RoundingNet
      increase (decrease) in cash
                                                          
                                                          
                                                          (7,638
                                                          )
                                                          
                                                          
                                                          (18,340
                                                          )
                                                          
                                                          
                                                          2,065Cash
      at beginning of period
                                                          
                                                          
                                                          9,703
                                                          
                                                          
                                                          
                                                          24,800
                                                          
                                                          
                                                          
                                                          -Cash
      at end of period
                                                          
                                                          $
                                                          2,065
                                                          
                                                          
                                                          $
                                                          6,460
                                                          
                                                          
                                                          $
                                                          2,065SUPPLEMENTAL DISCLOSURES OF CASH FLOW
      INFORMATIONCash
      paid during period for :Interest
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -Income
      Taxes
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -


See notes
to financial statements.


-4-





LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Notes
to Financial Statements (Unaudited)


September
30, 2009





NOTE
1.   ORGANIZATION AND DESCRIPTION OF BUSINESS




NanoDynamics
Holdings, Inc. (the “Company”) was incorporated under the laws of the State of
Nevada on June 24, 2005.  The Company’s principal products have been
soy-blend wax candles. The Company’s primary retail outlets were art markets,
gift shops and outdoor markets.  The Company tried to compete largely by
offering vegetable based products, rather than those produced from petroleum
by-products.




The
Company is in the development stage. Its activities to date have been limited to
capital formation, organization, and development of its business plan and a
target customer market.




The
Company determined that it could not continue with its business operations as
outlined in its original business plan because of a lack of financial results
and resources; therefore, although the Company may return to its intended
business operations at a later date, it has redirected its focus towards
identifying and pursuing options regarding the development of a new business
plan and direction.  The Company intends to explore various business
opportunities that have the potential to generate positive revenue, profits and
cash flow in order to financially accommodate the costs of being a publicly held
company.





The
Company has decided to change the name of the Corporation from NanoDynamics
Holdings, Inc. to Li3 Energy, Inc. and on October 19, 2009 filed an amendment
with the Secretary of State of the State of Nevada. The name change is to
reflect the Company’s plans to focus its business strategy on the energy sector
and related lithium mining opportunities in North America.




NOTE
2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




a.   Basis of
Accounting




The
Company’s financial statements are prepared using the accrual method of
accounting.  The Company has elected a year end of June 30th.




b.   Cash
Equivalents




The
Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.




c.  Property and
Equipment




Property
and equipment are stated at cost. Equipment and fixtures are being depreciated
using the straight-line method over the estimated asset lives ranging from 3 to
7 years.


-5-


LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Notes
to Financial Statements (Unaudited)


September
30, 2009




NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)




d.
Revenue
Recognition





The
Company recognizes revenue in accordance with SEC Staff Accounting Bulletin
No. 104, “Revenue Recognition” (“SAB 104”). The Company generates revenue
from the sale of candles. SAB 104 requires that four basic criteria must be
met before revenue can be recognized: (1) persuasive evidence of an
arrangement exists; (2) delivery has occurred or services rendered;
(3) the seller’s price to the buyer is fixed and determinable; and
(4) collectability is reasonably assured. Amounts billed or received from
customers in advance of performance are recorded as deferred
revenue.




e.   Income
Taxes




Income
taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes.  A deferred
tax asset or liability is recorded for all temporary differences between
financial and tax reporting and net operating loss
carry-forwards.  Deferred tax expense (benefit) results from the net
change during the year of deferred tax assets and liabilities.




Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized.  Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of
enactment.




f.   Basic Earnings per
Share




In
February 1997, the FASB issued SFAS No. 128, “Earnings Per Share”, which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock.  SFAS
No. 128 supersedes the provisions of APB No. 15, and requires the presentation
of basic earnings (loss) per share and diluted earnings (loss) per
share.  The Company has adopted the provisions of SFAS No. 128
effective June 24, 2005 (inception).




Basic net
loss per share amounts is computed by dividing the net loss by the weighted
average number of common shares outstanding.  Diluted earnings per
share are the same as basic earnings per share due to the lack of dilutive items
in the Company.




g.  Use of Estimates and
Assumptions




The
preparation of financial statements in conformity with 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 amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. In accordance with FASB 16 all
adjustments are normal and recurring.


-6-


LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Notes
to Financial Statements (Unaudited)


September
30, 2009




NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)




h.  Recent
Accounting Pronouncements




In June
2009, FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles – a replacement of
FASB Statement No. 162” (“SFAS No. 168”).  SFAS No. 168 establishes
the FASB Accounting Standards Codification (the “Codification”) as the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with US GAAP.  Rules and interpretive releases of the SEC
under authority of federal securities laws are also sources of authoritative US
GAAP for SEC registrants.  SFAS No. 168 will be effective for
financial statements issued for fiscal periods (interim and annual) ending after
September 15, 2009.  On the effective date of SFAS No. 168, all
then-existing non-SEC accounting and reporting standards are superseded, with
the exception of certain promulgations listed in SFAS No. 168.  The
Company currently does not expect adoption of this statement to have a material
effect on its financial statements as the purpose of the Codification is not to
create new accounting and reporting guidance.  Rather, the
Codification is meant to simplify user access to all authoritative US
GAAP.  References to US GAAP in our published financial statements
will be updated, as appropriate, to cite the Codification following the
effective date of SFAS No. 168.





In June
2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial
Assets — an amendment of FASB Statement No. 140” (SFAS No. 166).  SFAS
No. 166 clarifies the information that an entity must provide in its financial
statements surrounding a transfer of financial assets and the effect of the
transfer on its financial position, financial performance, and cash
flows.  The statement eliminates the concept of a qualifying
special-purpose entity and changes the requirements for the recognition of
financial assets.  SFAS No. 166 is effective for fiscal years
beginning after November 15, 2009.





The
Company is currently evaluating the impact adoption of this statement could have
in its financial statements.




In April
2009, the FASB issued FASB Staff Position (“FSP”) No. SFAS 157-4, “Determining
Fair Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP
SFAS 157-4”).  FSP SFAS 157-4 provides guidance on estimating fair
value when market activity has decreased and on identifying transactions that
are not orderly.  Additionally, entities are required to disclose in
interim and annual periods the inputs and valuation techniques used to measure
fair value.  This FSP is effective for all periods ending after June
15, 2009.  The Company is currently evaluating the impact adoption of
this statement could have on its financial statements.


-7-


LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Notes
to Financial Statements (Unaudited)


September
30, 2009





NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)




In
November 2008, the FASB ratified EITF No. 08-7 “Accounting for Defensive
Intangible Assets” (“EITF 08-7”).  EITF 08-7 clarifies the definition
and accounting for defensive intangible assets acquired in a business
combination or an asset acquisition and states that, upon acquisition, an
intangible asset must be recognized at fair value in accordance with SFAS No.
157, regardless of how the acquiring entity intends to use the
asset.  The intangible asset should be amortized over a useful life
approximated by the period over which it is expected to provide direct and
indirect cash flows benefits resulting from the limitation against others to use
the intangible asset.  EITF 08-7 is effective for financial statements
issued for fiscal years beginning on or after December 15, 2008.  The
Company is currently evaluating the impact adoption of this statement could have
on its financial statements.





In
October, 2008, the FASB issued FSP No. FAS 157-3, “Determining the Fair Value of
a Financial Asset When the Market for That Asset Is Not Active” (“FSP FAS
157-3”).  FSP FAS 157-3 clarifies the application of SFAS No. 157 in a
market that is not active and addresses application issues such as the use of
internal assumptions when relevant observable data does not exist, the use of
observable market information when the market is not active, and the use of
market quotes when assessing the relevance of observable and unobservable
data.  FSP 157-3 was effective upon issue for all periods presented in
accordance with SFAS No. 157.  The adoption of FSP 157-3 did not have
any material effect on the Company’s financial statements.





In June
2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities” (“FSP
EITF 03-6-1”).  FSP EITF 03-6-1 provides that unvested share-based
payment awards that contain non-forfeitable rights to dividends or dividend
equivalents (whether paid or unpaid) are participating securities and shall be
included in the computation of earnings per share pursuant to the two-class
method.  FSP EITF 03-6-1 is effective for financial statements issued
for fiscal years beginning after December 15, 2008, and interim periods within
those years.  Upon adoption, a company is required to retrospectively
adjust its earnings per share data (including any amounts related to interim
periods, summaries of earnings and selected financial data) to conform to the
provisions of FSP EITF 03-6-1.  The Company is currently evaluating
the impact adoption of this statement could have on its financial
statements.





In June
2008, the FASB ratified EITF No. 08-4, “Transition Guidance for Conforming
changes to Issue No. 98-5” (“EITF 08-4”).  EITF 08-4 specifically
identifies the portions of EITF No. 98-5 that were nullified by EITF No. 00-27
and clarifies that instruments within the scope of SFAS No. 150 are no longer
within the scope of EITF No. 98-5.  EITF 08-4 is effective for
financial statements issued for fiscal years ending after December 15, 2008,
earlier application is permitted.  The effect, if any, of applying the
conforming changes shall be presented retrospectively with the cumulative-effect
of the change being reported in retained earnings in the statement of financial
position as of the beginning of the first period presented.  The
adoption of EITF 08-4 did not have any material effect on the Company’s
financial statements.


-8-


LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Notes
to Financial Statements (Unaudited)


September
30, 2009





NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)




In June
2008, the FASB ratified EITF No. 07-5, “Determining Whether an Instrument (or an
Embedded Feature) Is Indexed to an Entity’s Own Stock” (“EITF
07-5”).  EITF 07-5 provides that an entity should use a two step
approach to evaluate whether an equity-linked financial instrument (or embedded
feature) is indexed to its own stock, including evaluating the instrument’s
contingent exercise and settlement provisions.  It also clarifies the
impact that foreign currency denominated strike prices and market-based employee
stock option valuation instruments have on the evaluation.  EITF 07-5
is effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those years.  The
Company is currently evaluating the impact adoption of this statement could have
on its financial statements.





In
May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,
“Accounting for Financial
Guarantee Insurance Contracts – An interpretation of FASB Statement No.
60”.  SFAS 163 requires that an insurance enterprise recognize
a claim liability prior to an event of default when there is evidence that
credit deterioration has occurred in an insured financial obligation. It also
clarifies how Statement 60 applies to financial guarantee insurance contracts,
including the recognition and measurement to be used to account for premium
revenue and claim liabilities, and requires expanded disclosures about financial
guarantee insurance contracts. It is effective for financial statements issued
for fiscal years beginning after December 15, 2008, except for some disclosures
about the insurance enterprise’s risk-management activities. SFAS 163 requires
that disclosures about the risk-management activities of the insurance
enterprise be effective for the first period beginning after
issuance.





Except
for those disclosures, earlier application is not permitted.  The
adoption of this statement is not expected to have a material effect on the
Company’s financial statements.





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”. SFAS 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States.  It is effective 60 days following the SEC’s approval
of the Public Company Accounting Oversight Board amendments to AU Section 411,
“The Meaning of Present Fairly
in Conformity With Generally Accepted Accounting Principles”. The
adoption of this statement is not expected to have a material effect on the
Company’s financial statements.





In March 2008, FASB issued
SFAS No. 161, “Disclosures
about Derivative Instruments and Hedging Activities – an amendment to FASB
Statement No. 133”. SFAS No. 161 is intended to improve financial
standards for derivative instruments and hedging activities by requiring
enhanced disclosures to enable investors to better understand their effects on
an entity's financial position, financial performance, and cash flows. Entities
are required to provide enhanced disclosures about: (a) how and why an entity
uses derivative instruments; (b) how derivative instruments and related hedged
items are accounted for under Statement 133 and its related interpretations;
and (c) how derivative instruments and related hedged items affect an entity’s
financial position, financial performance, and cash flows.  It is
effective for financial statements issued for fiscal years beginning after
November 15, 2008, with early adoption
encouraged.


-9-


LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Notes
to Financial Statements (Unaudited)


September
30, 2009





NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)




The
Company is currently evaluating the impact of SFAS No. 161 on its financial
statements, and the adoption of this statement is not expected to have a
material effect on the Company’s financial statements.




In
December 2007, the FASB issued SFAS No. 141R, “Business
Combinations”.  This statement replaces SFAS 141 and defines
the acquirer in a business combination as the entity that obtains control of one
or more businesses in a business combination and establishes the acquisition
date as the date that the acquirer achieves control. SFAS 141R requires an
acquirer to recognize the assets acquired, the liabilities assumed, and any
non-controlling interest in the acquired at the acquisition date, measured at
their fair values as of that date. SFAS 141R also requires the acquirer to
recognize contingent consideration at the acquisition date, measured at its fair
value at that date. This statement is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008.
Earlier adoption is prohibited. The adoption of this statement is not expected
to have a material effect on the Company's financial statements.




In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements Liabilities –an Amendment of ARB No.
51”.  This statement amends ARB 51 to establish accounting and
reporting standards for the Non-controlling interest in a subsidiary and for the
deconsolidation of a subsidiary. This statement is effective for fiscal years,
and interim periods within those fiscal years, beginning on or after December
15, 2008. Earlier adoption is prohibited. The adoption of this statement is not
expected to have a material effect on the Company's financial
statements.




NOTE
3.   GOING CONCERN





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  The Company generated net losses of
$210,432 during the period from June 24, 2005 (inception) through September 30,
2009.





This
condition raises substantial doubt about the Company’s ability to continue as a
going concern. The Company’s continuation as a going concern is dependent on its
ability to meet its obligations, to obtain additional financing as may be
required and ultimately to attain profitability.  The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.




NOTE
4.   WARRANTS AND OPTIONS




There are
no warrants or options outstanding to acquire any additional shares of
common.


-10-


LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Notes
to Financial Statements (Unaudited)


September
30, 2009




NOTE
5.  PROPERTY AND EQUIPMENT




Property
and equipment consists of the following:




September
      30, 2009
                      
                      
                      June
      30, 2009Equipment
                      
                      $
                      19,195
                      
                      
                      $
                      19,195Total
      Fixed Assets
                      
                      
                      19,195
                      
                      
                      
                      19,195Less:
      Accumulated Depreciation
                      
                      
                      (12,325
                      )
                      
                      
                      (11,350
                      )Net
      Fixed Assets
                      
                      $
                      6,870
                      
                      
                      $
                      7,845




Depreciation
expenses for the period ending September 30, 2009 and the year ended June 30,
2009 were $995 and $3,900, respectively.




NOTE
6.   RELATED PARTY TRANSACTION




The
Company neither owns nor leases any real or personal
property.  Beginning August 1, 2005 the Company has paid Jon Suk, a
director, $100 per month for use of office space and services.  This
rent agreement was terminated in August, 2007. The officers and directors of the
Company are involved in other business activities and may, in the future, become
involved in other business opportunities as they become available, such persons
may face a conflict in selecting between the Company and their other business
interests.  The Company has not formulated a policy for the resolution
of such conflicts.





NOTE
7.  NET OPERATING LOSSES





As of
September 30, 2009 the Company has a net operating loss carry-forward
of approximately $210,432. Net operating loss carry-forward, expires twenty
years from the date the loss was incurred.


-11-


LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Notes
to Financial Statements (Unaudited)


September
30, 2009





NOTE
8.  INCOME TAXES





As
      of September 30,
                        2009
                      
                      
                      As
      of June 30,
                        2009Deferred
      tax assets:Net
      operating tax carry-forwards
                      
                      $
                      31,564
                      
                      
                      $
                      29,059Other
                      
                      
                      -0-
                      
                      
                      
                      -0-Gross
      deferred tax assets
                      
                      
                      31,564
                      
                      
                      
                      (29,059
                      )Valuation
      allowance
                      
                      
                      (31,564
                      )
                      
                      
                      (29,059
                      )Net
      deferred tax assets
                      
                      $
                      -0-
                      
                      
                      $
                      -0-





Realization
of deferred tax assets is dependent upon sufficient future taxable income during
the period that deductible temporary differences and carry-forwards are expected
to be available to reduce taxable income.  As the achievement of
required future taxable income is uncertain, the Company recorded a valuation
allowance.





NOTE
9.  STOCK TRANSACTIONS




Transactions,
other than employees’ stock issuance, are in accordance with paragraph 8 of SFAS
123. Thus issuances shall be accounted for based on the fair value of the
consideration received.  Transactions with employees’ stock issuance
are in accordance with paragraphs (16-44) of SFAS 123. These issuances shall be
accounted for based on the fair value of the consideration received or the fair
value of the equity instruments issued, or whichever is more readily
determinable.




On June
4, 2005 the Company issued 2,273,685 shares of common stock to a director for
cash valued at $0.001649 per share.





On June
24, 2005 the Company issued 2,273,685 shares of common stock to a director for
cash valued at $0.001649 per share.





On March
14, 2006 the Company issued 3,031,581 shares of common stock for cash valued at
$0.01649 per share.





On
February 7, 2008 the Company issued 168,422 shares of common stock for cash
valued at $0.296873 per share for a total consideration of $50,000.




On July
11, 2008, the Company declared a 3.031578 for 1 forward stock split on each
share of its common stock issued and outstanding at the close of business on
July 21, 2008, in the form of a stock dividend. After stock split, total issued
and outstanding shares are 7,747,374. All share amounts have been retroactively
adjusted for all periods presented.


-12-


LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Notes
to Financial Statements (Unaudited)


September
30, 2009





NOTE
9.  STOCK TRANSACTIONS (Continued)





As of
September 30, 2009 the Company had 7,747,374 shares of common stock issued and
outstanding.





NOTE
10.  STOCKHOLDERS’ EQUITY




The
stockholders’ equity section of the Company contains the following classes of
capital stock as of September 30, 2009.




Common
stock, $ 0.001 par value: 290,000,000 shares authorized; 7,747,374 shares issued
and outstanding.





Preferred
stock, $ 0.001 par value: 10,000,000 shares authorized; none
issued.





NOTE
11.  LOANS PAYABLE





The
Company issued a $50,000 Promissory Note dated June 5, 2008 (the”Note”) to
Milestone Enhanced Fund Ltd. (“Milestone”) in connection with Milestone’s
$50,000 working capital loan to the Company, and the terms and conditions of
such Note allow for prepayment of the principal and accrued interest anytime
without penalty. Interest rate is 8% per annum and maturity date is May, 2010.
The total interest accrued at September 30, 2009   is $
5,320





The
Company issued a Convertible Promissory Note dated April 30, 2009, bearing an
interest rate of 8.25% per annum, in aggregate amount of $45,000, payable on
November 8, 2010 (the Maturity Date) to Milestone Enhanced Fund,
Ltd.  The total interest accrued at September 30, 2009 is
$1,475.





NOTE
12.  SUBSEQUENT EVENTS





On
October 19, 2009, the Company filed a Certificate of Amendment with the Nevada
Secretary of State indicating a name change for the Company from NANODYNAMICS
HOLDINGS, INC. to Li3 ENERGY, INC.





On
October 19, 2009, Luis F.Saenz was appointed Chief Executive Officer in place of
David Rector, who remains Secretary, Treasurer and Director.





On
October 19, 2009, the Company approved a forward stock split of its common stock
in the ratio of 15.625:1 (in the form of a dividend) approved by the
Company.


-13-




LI3
ENERGY, INC.


(FORMERLY
NANODYNAMICS HOLDINGS, INC.)


(A
Development Stage Company)


Notes
to Financial Statements (Unaudited)


September
30, 2009





NOTE
12.  SUBSEQUENT EVENTS (continued)





On
November 10, 2009, the Company completed an initial closing (the “Initial
Closing”) of a private placement of units (the “Units”) of its securities at a
price of $0.25 per Unit.  Each Unit consisted of one share of the
Company’s common stock, a five-year warrant to purchase one-half of one share of
its common stock at $0.50 per whole share, and a five-year warrant to purchase
one-half of one share of its common stock at $1.00 per whole
share.  In the Initial Closing, the Company sold 6,400,000 Units for
an aggregate of $1,600,000.





Stockholders
representing approximately fifty-nine percent (59%) of our issued and
outstanding capital stock approved by written consent the creation of our 2009
Equity Incentive Plan (the “2009 Plan”).  The 2009 Plan provides for
the issuance of both non-statutory and incentive stock options and other awards
to acquire in the aggregate up to 5,000,000 shares (calculated on a post-forward
stock split basis) of our common stock.


-14-


Item
2.  Management’s Discussion and Analysis or Plan of
Operation





This
section of the report includes a number of forward-looking statements that
reflect our current views with respect to future events and financial
performance.  Forward-looking statements are often identified by words
like believe, expect, estimate, anticipate, intend, project and similar
expressions, or words which, by their nature, refer to future
events.  You should not place undue certainty on these forward-looking
statements, which apply only as of the date of this report.  These
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from historical results or our
predictions.





Background
and Recent Developments





We were
incorporated on June 24, 2005. We were originally in the business of
manufacturing, marketing and distributing soy-blend scented candles and
oils1, but we could
not continue with those business operations because of a lack of financial
results and resources.  We have redirected our focus, therefore,
towards identifying and pursuing options regarding the development of a new
business plan and direction.





We were
recently engaged in discussions with NanoDynamics, Inc., a Delaware corporation
(“Nanodynamics), regarding a possible business combination with NanoDynamics,
and with the permission of NanoDynamics, we changed our name to NanoDynamics
Holdings, Inc. to facilitate these discussions. We determined not to proceed
with that business combination, however.





On
October 19, 2009, we changed our name to Li3 Energy, Inc., to reflect our plans
to focus our business strategy on the energy sector and related lithium mining
opportunities in North and South America.  On that date, we took the
following additional steps in furtherance of our new business
pursuit:





·
            David
      Rector, resigned from his position as our Chief Executive Officer (“CEO”)
      and remains our President, Chief Financial Officer, Treasurer, Secretary
      and a director;





·
            We
      appointed Luis F. Saenz as our CEO and as a member of our Board of
      Directors (the “Board”). As compensation for services to be rendered to
      us, our Board approved the issuance, as of October 19, 2009, of 1,500,000
      shares of our common stock, on a post-forward stock split basis (discussed
      below), to Mr. Saenz;





·
            Our
      Board of Directors declared a 15.625 for 1 forward stock split in the form
      of a dividend.  The record date for this stock dividend is
      November 6, 2009, and the payment and effective date is November 16, 2009;
      and





·
            Stockholders
      representing approximately fifty-nine percent (59%) of our issued and
      outstanding capital stock approved by written consent the creation of our
      2009 Equity Incentive Plan (the “2009 Plan”).  The 2009 Plan
      provides for the issuance of both non-statutory and incentive stock
      options and other awards to acquire in the aggregate up to 5,000,000
      shares (calculated on a post-forward stock split basis) of our common
      stock.





1 For a
discussion of this legacy business, see our registration statement on Form SB-2
filed with the Securities and Exchange Commission on August 19,
2005.


-15-





To
develop our new business plan, we have also:





·
            Initiated
      activities to establish and organize an operating subsidiary in Peru and,
      to that end, opened and began staffing an office in Lima, Peru;
      and





·
            Have
      begun identifying and investigating lithium mining investment
      opportunities in South America.





Results
of Operations





We are a
development stage company and have generated minimal revenues from operations to
date.





We
incurred operating expenses of $14,765 for the three month period ended
September 30, 2009 and $16,160 for the three month period ended September,
2008.  These expenses consisted of administrative expenses and
professional fees incurred in connection with the preparation and filing of our
periodic reports.  We also incurred interest expense of $1,958 for the
three month period ended September 30, 2009 and $1,000 for the three month
period ended September, 2008, incurred in connection with interest bearing notes
that we sold to finance our short term working capital needs.





We
generated revenues of $nil for each of the three month period ended September
30, 2009 and 2008, respectively.  Our net loss for the three months
ended September 30, 2009 and 2008 was $16,722 and $17,158,
respectively.





Liquidity
and Capital Resources





At
September 30, 2009, we had cash and cash equivalents in the bank of $2,065 as
compared to $9,703 on June 30, 2009.





We have
minimal operating costs and expenses at the present time due to our limited
business activities, but we will need to raise additional funds to meet our
limited expenses for the next three months and thereafter. We will be required
to raise additional capital over the next twelve months to meet our current
administrative expenses, and we may do so additionally, in connection with or in
anticipation of possible acquisition transactions. This financing may take the
form of additional sales of debt or equity securities and/or loans from our
director or other sources. There is no assurance that additional financing, if
required, will be available, or available on terms favorable to
us.


-16-


Subsequent
Events





On
November 10, 2009, we completed an initial closing (the “Initial Closing”) of a
private placement (the “Private Placement”) of units (the “Units”) of our
securities at a price of $0.25 per Unit.  Each Unit consisted of one
share of our common stock, a five-year warrant to purchase one-half of one share
of our common stock at $0.50 per whole share, and a five-year warrant to
purchase one-half of one share of our common stock at $1.00 per whole
share.  In the Initial Closing, we sold 6,400,000 Units for an
aggregate of $1,600,000.  The Private Placement was conducted pursuant
to the exemption from the registration requirements of the federal securities
laws provided by Regulation D and Regulation S promulgated under the Securities
Act of 1933, as amended (the “Securities Act”), and Section 4(2) of the
Securities Act.





Off-Balance
Sheet Arrangements





We do not
have any 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 investors.





Item
4T.  Controls and Procedures





Evaluation
of Disclosure Controls and Procedures





Disclosure
controls and procedures (as defined in Rules  13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934) are designed to ensure that information
required to be disclosed in reports filed or submitted under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms. Disclosure and control procedures are also designed to
ensure that such information is accumulated and communicated to management,
including the chief executive officer and principal accounting officer, to allow
timely decisions regarding required disclosures.




As of the
end of the period covered by this quarterly report, we carried out an
evaluation, under the supervision and with the participation of management,
including our chief executive officer and principal accounting officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. In designing and evaluating the disclosure controls and procedures,
management recognizes that there are inherent limitations to the effectiveness
of any system of disclosure controls and procedures, including the possibility
of human error and the circumvention or overriding of the controls and
procedures. Accordingly, even effective disclosure controls and procedures can
only provide reasonable assurance of achieving their desired control objectives.
Additionally, in evaluating and implementing possible controls and procedures,
management is required to apply its reasonable judgment. Based on the evaluation
described above as a result, in part, of not having an audit committee and
having one individual serve as our sole officer and director, our management,
including our principal executive and accounting officer, has concluded that, as
of September 30, 2009, our disclosure controls and procedures are not operating
effectively.


-17-


Changes
in internal controls over financial reporting





There was
no change in our internal controls over financial reporting that occurred during
the period covered by this report, which has materially affected, or is
reasonably likely to materially affect, our internal controls over financial
reporting.





PART
II – OTHER INFORMATION




Item
6.  Exhibits





Exhibit No.
                                
                                Description3.1
                                
                                Certificate
      of Amendment to Articles of Incorporation of the Registrant dated October
      19, 20094.1
                                
                                Form
      of Investor A Warrant of the Registrant, issued in connection with the
      initial closing of a private placement unit offering by the
      Registrant4.2
                                
                                Form
      of Investor B Warrant of the Registrant, issued in connection with the
      initial closing of a private placement unit offering by the Registrant
      completed in September 200810.1
                                
                                Registrant’s
      2009 Stock Incentive Plan adopted October 19, 200910.2
                                
                                Form
      of Stock Option Agreement under the Registrant’s 2009 Equity Incentive
      Plan10.3
                                
                                Form
      of unit offering Subscription Agreement31.1
                                
                                Certification
      of Principal Executive Officer, pursuant to SEC Rules 13a-14(a) and
      15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      200231.2
                                
                                Certification
      of Principal Financial Officer, pursuant to SEC Rules 13a-14(a) and
      15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      200232.1
                                
                                Certification
      of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002*32.2
                                
                                Certification
      of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002*





* This
certification is being furnished and shall not be deemed “filed” with the SEC
for purposes of Section 18 of the Exchange Act, or otherwise subject to the
liability of that section, and shall not be deemed to be incorporated by
reference into any filing under the Securities Act or the Exchange Act, except
to the extent that the Registrant specifically incorporates it by
reference.




In
reviewing the agreements included as exhibits to this Form 10-Q, please remember
that they are included to provide you with information regarding their terms and
are not intended to provide any other factual or disclosure information about
the Company or the other parties to the agreements. The agreements may contain
representations and warranties by each of the parties to the applicable
agreement. These representations and warranties have been made solely for the
benefit of the parties to the applicable agreement and:
  ·
              should
      not in all instances be treated as categorical statements of fact, but
      rather as a way of allocating the risk to one of the parties if those
      statements prove to be inaccurate;
 
 ·
              have
      been qualified by disclosures that were made to the other party in
      connection with the negotiation of the applicable agreement, which
      disclosures are not necessarily reflected in the
  agreement;
 
 ·
              may
      apply standards of materiality in a way that is different from what may be
      viewed as material to you or other investors;
  and
 
 ·
              were
      made only as of the date of the applicable agreement or such other date or
      dates as may be specified in the agreement and are subject to more recent
      developments.
  Accordingly,
these representations and warranties may not describe the actual state of
affairs as of the date they were made or at any other time. Additional
information about the Company may be found elsewhere in this Form 10-Q and the
Company’s other public filings, which are available without charge through the
SEC’s website at http://www.sec.gov.
See “Available Information.”


-18-


SIGNATURES





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





Date:  November
      16, 2009
                LI3
      ENERGY, INC.By:
                /s/ Luis F. SaenzName: Luis
      F. SaenzTitle:  
      Principal Executive
Officer





By:
              /s/ David RectorName:  David
      RectorTitle:  Principal
      Financial Officer