UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





x
            Quarterly
      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934
              For
      the quarterly period ended: June 30,
2008





o
            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: 000-28335














PLATINA
ENERGY GROUP INC.


(Exact
name of registrant as specified in its charter)





Delaware
            
            84-1080043(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)








14850
      Montfort Dr. Suite 131, Dallas, Texas
            
            75254-6750(Address
      of principal executive offices)
            
            (Zip
      Code)




(972)
458-9600


(Registrant’s
telephone number, including area code)





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





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





Large
accelerated filer o                                                                                     Accelerated
filer o





Non-accelerated
filer o                                                                           Smaller
Reporting Company x


(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 o No x





The
number of shares of common stock, $.001 par value, outstanding as of August 19,
2008: 150,646,402 shares













PLATINA ENERGY GROUP INC.


PERIOD
ENDED JUNE 30, 2008





INDEX





PART
      I.  FINANCIAL INFORMATION
            PageITEM
      1.
            CONSOLIDATED
      FINANCIAL STATEMENTS
            F-1Consolidated
      financial statements of Platina Energy Group Inc.
    (unaudited):Consolidated
      balance sheets as of June 30, 2008 and March 31, 2008
            F-1,
      F-2Consolidated
      statements of operations for the three months ended June 30, 2008 and 2007
      and period from January 9, 2007 through June 30, 2007
            F-3Consolidated
      statements of cash flows for the three months ended June 30, 2008 and 2007
      and period from January 9, 2007 through June 30, 2007
            F-4
      thru F-7Notes
      to consolidated financial statements
            F-8
      thru F-17ITEM
      2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
            1ITEM
      4T.
            CONTROLS
      AND PROCEDURES
            6PART
      II.   OTHER INFORMATIONITEM
      1.
            LEGAL
      PROCEEDINGS
            7ITEM
      2.
            UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
            7ITEM
      6.
            EXHIBITS
            8SIGNATURES
            8







Table of Contents





PART
I.   FINANCIAL INFORMATION





ITEM
1.    FINANCIAL STATEMENTS




PLATINA
      ENERGY GROUP, INC. & SUBSIDIARIES(An
      Exploratory Stage Company)CONSOLIDATED
      BALANCE SHEET(Unaudited)June
      30,2008ASSETSCurrent
      assetsCash
              
              $
              71,571Accounts
      receivable, trade
              
              
              -Accounts
      receivable, other
              
              
              92,066Prepaid
      expenses
              
              
              1,708,546Total
      current assets
              
              
              1,872,183Property
      & equipmentOil
      and gas properties, full cost method of accounting:Unproven
              
              
              6,262,775Other
      property and equipment
              
              
              712,362Other
      assetsIntangible
      asset subject to amortizationLicensing
      rights
              
              
              1,368,231Loan
      fees, net
              
              
              945,819Deposit
              
              
              4,005$
              11,165,375The
      accompanying notes are an integral part of these financial
      statements






F-1
 Table of Contents






PLATINA
      ENERGY GROUP, INC. & SUBSIDIARIES(An
      Exploratory Stage Company)CONSOLIDATED
      BALANCE SHEET(Unaudited)June
      30,2008LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      liabilitiesAccounts
      payable and accrued expenses
            
            $
            405,983Accrued
      compensation due officers
            
            
            383,000Derivative
      liabilities
            
            
            1,017,361Convertible
      notes payable and accrued interest payable, net of discount of $79,793,
      current portion
            1,657,751Note
      payable to related party
            
            
            235,620Notes
      payable - other, current portion
            
            
            1,562,887Total
      current liabilities
            
            
            5,262,602Long-term
      liabilitiesConvertible
      notes payable and accrued interest payable, net of discount of
      $79,793,net
      of current portion
            
            
            1,922,661Notes
      payable - other, net of current portion
            
            
            2,081,986Total
      current liabilities
            
            
            4,004,647Commitments
      and Contingencies
            
            
            -Stockholders'
      deficitPreferred
      stock, par value $.001, 20,000,000 shares authorized 70,000
      sharesdesignated
      Series A, 61,091 shares issued and
      outstanding.  Aggregateliquidation
      preference of $0. One share of Series A preferred is convertible
      into10
      shares of common stock.
            
            
            61Preferred
      stock, 100,000 shares designated Series B, 68,840 shares
      issuedand
      outstanding.  Aggregate liquidation preference of
      $9,896.  One shareof
      Series B preferred is convertible into 100 shares of common
      stock.
            
            
            69Preferred
      stock, 10,000 shares designated Series C, 2,000 shares
    issuedand
      outstanding.  Aggregate liquidation preference of
      $360.  One share ofSeries
      C preferred is convertible into 100 shares of common
stock.
            
            
            2Preferred
      stock, 10,000,000 shares designated Series D, 328,000 shares
      issuedand
      outstanding.  Aggregate liquidation preference of
      $13,750.  Oneshare
      of Series D preferred is convertible into 100 shares of common
      stock.
            
            
            328Preferred
      stock, 100,000 shares designated Series F, 100,000 shares
      issuedand
      outstanding.  Aggregate liquidation preference of
      $1,440,000.  100,000shares
      of Series F preferred is convertible into 11,076,923 shares of common
      stock.
            
            
            100Common
      stock; $0.001 par value; 500,000,000 sharesauthorized;
      141,746,582 shares issued and 121,446,582 shares
    outstanding.
            
            
            121,447Additional
      paid in capital
            
            
            31,568,119Accumulated
      deficit
            
            
            (6,913,820)Deficit
      accumulated during the exploratory stage
            
            
            (22,878,180)Total
      stockholders' deficit
            
            
            1,898,126$
            11,165,375The
      accompanying notes are an integral part of these financial
      statements








F-2
 Table of Contents




PLATINA
      ENERGY GROUP, INC. & SUBSIDIARIES(An
      Exploratory Stage Company)CONSOLIDATED
      STATEMENTS OF OPERATIONS(Unaudited)FromThree
      Months Ended
              
              January
      9, 2007June
      30,
              
              through2008
              
              2007
              
              June
      30, 2008RevenuesRevenue
      from equipment lease
              $
              -
              $
              7,200
              $
              18,000Income
      earned during the exploratory stage
              
              49,180
              
              -
              
              158,84349,180
              
              7,200
              
              176,843Operating
      ExpensesTesting
      costs associated with Thermal Pump
              
              -
              
              7,200
              
              7,200Depreciation,
      depletion, and amortization
              
              53,886
              
              -
              
              98,591General
      and administrative expenses
              
              1,950,516
              
              473,721
              
              4,976,0552,004,402
              
              480,921
              
              5,081,846Loss
      from Operations
              
              (1,955,222)
              
              (473,721)
              
              (4,905,003)Other
      Income (Expense)Interest
      income
              
              1,495
              
              -
              
              7,316Gain
      on sale of asset
              
              -
              
              -
              
              134,786Interest
      expense
              
              (585,150)
              
              (21,391)
              
              (1,306,613)Changes
      in fair value of derivative liability
              
              2,470,673
              
              -
              
              (717,360)Loss
      on settlement of debt
              
              (5,924,397)
              
              (3,230,166)
              
              (16,091,306)(4,037,379)
              
              (3,251,557)
              
              (17,973,177)Net
      Loss
              $
              (5,992,601)
              $
              (3,725,278)
              $
              (22,878,180)Per
      Share DataBasic
      loss per share
              $
              (0.07)
              $
              (0.05)Weighted
      average commonshares
      outstanding
              
              88,699,611
              
              68,490,187The
      accompanying notes are an integral part of these financial
      statements





F-3
 Table of Contents




PLATINA
      ENERGY GROUP, INC. & SUBSIDIARIES(An
      Exploratory Stage Company)CONSOLIDATED
      STATEMENTS OF CASH FLOWS(Unaudited)FromThree
      Months Ended
              
              
              January
      9, 2007June
      30,
              
              
              through2008
              
              
              2007
              
              
              June
      30, 2008Cash
      Flows from Operating ActivitiesNet
      Loss
              
              $
              (5,992,601
              )
              
              $
              (3,725,278
              )
              
              $
              (22,878,180
              )Adjustments
      to reconcile net loss to net cashused
      in operating activities:Amortization
              
              
              56,190
              
              
              
              12,410
              
              
              
              118,244Depreciation
      expense
              
              
              10,657
              
              
              
              2,353
              
              
              
              31,326Depletion
      expense
              
              
              -
              
              
              
              -
              
              
              
              979Loss
      on settlement of debt
              
              
              5,924,397
              
              
              
              3,230,167
              
              
              
              16,091,306Gain
      on sale of assets
              
              
              -
              
              
              
              -
              
              
              
              (134,786
              )Change
      in fair value of derivative liability
              
              
              (2,470,673
              )
              
              
              -
              
              
              
              852,136Stock
      issued for services
              
              
              487,794
              
              
              
              266,327
              
              
              
              1,268,286Stock
      issued for interest
              
              
              66,500
              
              
              
              -
              
              
              
              66,500Amortization
      of debt discount
              
              
              161,874
              
              
              
              -
              
              
              
              470,207Amortization
      of prepaid loan fees
              
              
              131,481
              
              
              
              -
              
              
              
              193,565Compensation
      recognized on stock option and warrant grants
              
              
              233,645
              
              
              
              63,642
              
              
              
              595,730Changes
      in assets:(Increase)
      decrease in prepaid expenses
              
              
              832,645
              
              
              
              5,058
              
              
              
              1,689,525(Increase)
      in accounts receivable, trade
              
              
              28,944
              
              
              
              -
              
              
              
              -(Increase)
      in accounts receivable, other
              
              
              366,885
              
              
              
              -
              
              
              
              351,316(Increase)
      decrease in deposits and other assets
              
              
              (4,005
              )
              
              
              -
              
              
              
              (7,128
              )Changes
      in liabilities:Increase
      (decrease) in accounts payable and accrued expenses
              
              
              (12,226
              )
              
              
              2,672
              
              
              
              45,840Increase
      in accrued compensation due related parties
              
              
              -
              
              
              
              60,000
              
              
              
              115,000Accrued
      interest expense added to principal
              
              
              (3,625
              )
              
              
              16,333
              
              
              
              59,198Net
      cash used in operating activities
              
              
              (182,118
              )
              
              
              (66,316
              )
              
              
              (1,070,936
              )Cash
      Flows from Investing ActivitiesProceeds
      from sale of interest in oil and gas properties
              
              
              -
              
              
              
              35,500
              
              
              
              295,250Acquisition
      of oil and gas properties
              
              
              (1,017,089
              )
              
              
              (2,062
              )
              
              
              (2,849,433
              )Purchase
      of equipment
              
              
              -
              
              
              
              -
              
              
              
              (11,000
              )Proceeds
      from sale of assets
              
              
              -
              
              
              
              -
              
              
              
              100,000Net
      cash (used in) provided by investing activities
              
              
              (1,017,089
              )
              
              
              33,438
              
              
              
              (2,465,183
              )Cash
      Flows from Financing ActivitiesBank
      overdraft
              
              
              -
              
              
              
              611
              
              
              
              -Proceeds
      from sale of common stock
              
              
              100,000
              
              
              
              25,000
              
              
              
              379,750Proceeds
      from issuance of debt
              
              
              2,625,000
              
              
              
              -
              
              
              
              5,275,000Loan
      fees paid on financing
              
              
              (339,500
              )
              
              
              -
              
              
              
              (827,500
              )Repayment
      of debt
              
              
              (1,125,866
              )
              
              
              -
              
              
              
              (1,233,450
              )Advances
      from related party
              
              
              -
              
              
              
              7,000
              
              
              
              60,050Repayment
      of related party advances
              
              
              (46,160
              )
              
              
              -
              
              
              
              (46,160
              )Net
      cash provided by financing activities
              
              
              1,213,474
              
              
              
              32,611
              
              
              
              3,607,690Net
      Increase (Decrease) in Cash and Cash Equivalents
              
              
              14,267
              
              
              
              (267
              )
              
              
              71,571Cash
      and Cash Equivalents - Beginning of Period
              
              
              57,304
              
              
              
              267
              
              
              
              -Cash
      and Cash Equivalents - End of Period
              
              $
              71,571
              
              
              $
              -
              
              
              $
              71,571The
      accompanying notes are an integral part of these financial
      statements






F-4
 Table of Contents




PLATINA
      ENERGY GROUP, INC. & SUBSIDIARIES(An
      Exploratory Stage Company)CONSOLIDATED
      STATEMENTS OF CASH FLOWS(Unaudited)FromThree
      Months Ended
              
              January
      9, 2007June
      30,
              
              through2008
              
              2007
              
              June
      30, 2008Supplemental
      Disclosures of Cash Flow InformationCash
      Paid For:Interest
      Expense
              $
              250,195
              $
              -
              $
              308,495Income
      Taxes
              $
              -
              $
              -
              $
              -
  Non-Cash
      Financing and Investing Information:Three
      Months Ended June 30, 2007In
      April 2007, the Company issued 12,464 shares of its Series B preferred
      stock in exchangefor
      the extension of an option to acquire certain oil and gas leases. The
      shares were valued at $149,568 based uponthe
      market price of the underlying common shares at date of
      issuance.In
      April 2007, the Company issued 2,200,000 shares of its common stock in
      exchange for the cancellation of$4,800
      of indebtedness due on certain convertible debentures. The company
      recognized a loss of $237,200on
      the conversion.In
      April 2007, the Company issued 1,266,667 shares of its common stock in
      exchange for the cancellation of$3,800
      of indebtedness due on certain convertible debentures. The company
      recognized a loss of $135,533on
      the conversion.In
      June 2007, the Company issued 1,400,000 shares of its common stock in
      consideration for consultingservices.
      The services were valued at $182,000, which was based on the market value
      of the shares ondate
      of issuance.In
      June 2007, the Company issued 50,000 shares of its common stock in
      consideration for extendingthe
      due date of a note payable.  The shares were valued at $9,500,
      which was based on the market value ofthe
      shares on date of issuance.In
      June 2007, the Company issued 1,833,333 shares of its common stock in
      exchange for the cancellation of$5,500
      of indebtedness due on certain convertible debentures. The company
      recognized a loss of $397,833on
      the conversion.In
      June 2007, the Company issued 61,091 shares of its Series A preferred
      stock in exchangefor
      the acquisition of certain oil and gas leases. The shares were valued at
      $171,055 based uponthe
      market price of the underlying common shares at date of
      issuance.In
      June 2007, the Company issued 6,500 shares of its Series B preferred stock
      in exchangefor
      the acquisition of certain oil and gas leases. The shares were valued at
      $182,000 based uponthe
      market price of the underlying common shares at date of
      issuance.The
      accompanying notes are an integral part of these financial
      statements






F-5
 Table of Contents




PLATINA
      ENERGY GROUP, INC. & SUBSIDIARIES(An
      Exploratory Stage Company)CONSOLIDATED
      STATEMENTS OF CASH FLOWS(Unaudited)Three
      Months Ended June 30, 2007 (Continued)In
      June 2007, the Company issued 8,800,000 shares of its common stock in
      exchange for the cancellation of$4,400
      of indebtedness due on certain convertible debentures. The company
      recognized a loss of $2,481,600on
      the conversion.In
      June 2007, the Company issued 1,000,000 shares of its common stock in
      consideration for consultingservices.
      The services were valued at $190,000, which was based on the market value
      of the shares ondate
      of issuance.Three
      Months Ended June 30, 2008In
      April 2008, the Company issed 12,500 shares of its Series D Preferred
      Stock for services rendered by consultants.The
      shares were issued at $112,500, based upon the market price of the
      underlying common shares at the date of issuance.In
      April 2008, the Company issued 2,000 shares of its Series C Preferred
      Stock for a loan fee.  The shares were valued
  at$20,000,
      based upon the market price of the underlying common shares at date of
      issuance.In
      April 2008, the Company issued 10,000 shares of its Series D Preferred
      Stock for a loan fee.  The shares were valued
  at$120,000,
      based upon the market price of the underlying commmon shares at date of
      issuance.In
      May 2008, the Company issued 5,000 shares of its Series D Preferred Stock
      for services rendered.  The shares were valued
  at$50,000,
      based upon the market price of the underlying commmon shares at date of
      issuance.In
      May 2008, the Company issued 3,500 shares of its Series D Preferred Stock
      for interest expense.  The shares were valued
  at$31,500,
      based upon the market price of the underlying commmon shares at date of
      issuance.In
      June 2008, the Company issued 3,500 shares of its Series D Preferred Stock
      for interest expense.  The shares were valued
  at$35,000,
      based upon the market price of the underlying commmon shares at date of
      issuance.In
      June 2008, the Company issued 1,000 shares of its Series D Preferred Stock
      for a loan fee.  The shares were valued at$9,000,
      based upon the market price of the underlying common shares at date of
      issuance.In
      June 2008, the Company issued 4,500 shares of its Series D Preferred Stock
      for accrued compensation. The shareswere
      valued at $45,000, based upon the underlying common shares at date of
      issuance.  Accordingly, the Companyrecognized
      a $21,000 loss on the settlement of debt.In
      June 2008, the Company issued 3,000 shares of its Series D Preferred Stock
      for a loan fee.  The shares were valued at$30,000,
      based upon the market price of the underlying common shares at date of
      issuance.In
      June 2008, the Company issued 7,500 shares of its Series D Preferred Stock
      for directors' fees.  The shares were valued
  at$75,000,
      based upon the market price of the underlying common shares at date of
      issuance.In
      June 2008, the Company issued 1,000 shares of its Series D Preferred Stock
      for a loan fee.  The shares were valued at$10,000,
      based upon the market price of the underlying common shares at date of
      issuance.In
      June 2008, the Company issued 200,000 shares of its Series D Preferred
      Stock to its President for $20,000 debt. The shareswere
      valued at $2,200,000, based upon the underlying common shares at date of
      issuance.  Accordingly, the Companyrecognized
      a $2,180,000 loss on the settlement of debt.The
      accompanying notes are an integral part of these financial
      statements






F-6
 Table of Contents




PLATINA
      ENERGY GROUP, INC. & SUBSIDIARIES(An
      Exploratory Stage Company)CONSOLIDATED
      STATEMENTS OF CASH FLOWS(Unaudited)Three
      Months Ended June 30, 2008 (Continued)In
      June 2008, the Company issued 10,000 shares of its Series D Preferred
      Stock for services rendered.  The shareswere
      valued at $100,000, based upon the market price of the underlying commmon
      shares at date of issuance.In
      June 2008, the Company issued 11,500 shares of its Series D Preferred
      Stock to certain employees for safety rewards.The
      shares were valued at $115,000, based upon the market price of the
      underlying commmon shares at date of issuance.In
      June 2008, the Company issued 352,942 shares of its Common Stock for
      services rendered.  The shares were valued at$35,294,
      based upon the market price of the underlying commmon shares at date of
      issuance.The
      accompanying notes are an integral part of these financial
      statements






F-7
 Table of Contents










Note
1.  Basis of Presentation and Organization
 
 Organization, History and
Business
 
 Platina
Energy Group, Inc. ("the Company"), a Delaware Corporation, was originally
incorporated on January 19, 1988.  The Company went through several
previous unrelated transactions involving other businesses that have
subsequently been divested.  A further subsequent restructure of the
Company on June 25, 2005 resulted in the name change to Platina Energy Group,
Inc.
 
 The
Company commenced its oil and gas operations on January 9, 2007, and is in the
exploration stage, as defined in Statement of Financial Accounting Standards
(“SFAS”) No. 7, “ Accounting and Reporting by Development Stage Enterprises ,”
with its principal activity being the exploration and development of oil and gas
properties.
 
 On March
30, 2005, the Company formed a wholly owned subsidiary, Permian Energy
International, Inc., a Nevada Corporation to acquire certain rights for enhanced
oil recovery and reduction of paraffin build up through a thermal pulsing pump
device. On April 6, 2005, the Company completed its acquisitions of rights and
licenses from Permian Energy Services, LP in connection with certain rights
including the representation and marketing of a proprietary thermal pulsing pump
in the oil and gas industry.  The assets acquired from the LP were
transferred into Permian Energy International.  The thermal pulse
unit, (“TPU”), was engineered to create a new recovery pump for oil particularly
in fields with heavy paraffin problems.  As a by-product of the
process for specific field applications, the need for down-hole or pump jacks
can be eliminated.  Also, flow rates of oil from viscosity changes due
to heat and pressure changes can be substantially increased. Through May 2007,
the Company leased its sole TPU for $3,600 per month.
 
 On
January 5, 2007, the Company formed Appalachian Energy Corp. a Nevada
Corporation (“Appalachian”). Appalachian is headquartered in London,
Kentucky.  Appalachian acquired prospects in Tennessee. (See Note
6).
 
 In June
of 2007, the Company formed Platina Exploration Corp., a Nevada Corporation
(“PEC”).  PEC is headquartered in Dallas, Texas. PEC has acquired
producing interests on multiple leases in Seminole County, Oklahoma and
prospects in Young County, Texas (See Note 6).
 
 On
October 5, 2007, the Company formed Applegate Petroleum Management LLC,
(“Applegate”). Applegate is headquartered in Cheyenne, Wyoming, and its primary
function is to coordinate private equity raising activities for
Platina.
 
 On
January 10, 2008, the Company formed Wildcat Energy Corp., (“Wildcat”) a Nevada
Corporation.  Wildcat is headquartered in London, Kentucky. Wildcat
acquired 11 properties located in Laurel County, Kentucky and 10 properties in
Whitley County, Kentucky. (See Note 6).
 
 The
accompanying financial statements include the activities of the Company and its
subsidiaries.  All material intercompany transactions have been
eliminated.
 
 Basis of
Presentation
 
 The
accompanying interim financial statements have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange Commission
(the "SEC") for interim financial reporting.  These interim financial
statements are unaudited and, in the opinion of management, include all
adjustments (consisting of normal recurring adjustments and accruals) necessary
to present fairly the balance sheet, operating results and cash flows for the
periods presented in accordance with accounting principles generally accepted in
the United States of America ("GAAP").  Operating results for the
three months ended June 30, 2008 are not necessarily indicative of the results
that may be expected for the year ending March 31, 2009 or for any other interim
period during such year.  Certain information and footnote disclosures
normally included in financial statements prepared in accordance with GAAP have
been omitted in accordance with the rules and regulations of the
SEC.  These interim financial statements should be read in conjunction
with the audited financial statements and notes thereto contained in the
Company's Form 10-KSB for the year ended March 31, 2008.
 
 The
Company's financial statements are prepared using the accrual method of
accounting in accordance with accounting principles generally accepted in the
United States of America and have been prepared on a going concern basis, which
contemplates the realization of assets and the settlement of liabilities in the
normal course of business. The Company has accumulated operating losses since
its inception (January 19, 1988).  In addition, the Company has used
ongoing working capital in its operations.  At June 30, 2008 the
Company’s current liabilities exceeded its current assets by approximately
$7,400,000 and it has an accumulated deficit of approximately
$25,000,000.
 
 In view
of current matters, the continuation of the Company’s operations is dependent on
revenue from its oil and gas production, funds generated by provided by its
management, advancements made by expenditures from certain joint venture
arrangements, the raising of capital through the sale of its equity instruments
or issuance of debt. Management has purchased certain rights and licenses which
it plans to exploit (see Note 5). Further, the Company has entered into various
drilling programs with third parties (See Note 6). Management believes that
these sources of funds will allow the Company to continue as a going concern
through 2009. However, no assurances can be made that current or anticipated
future sources of funds will enable the Company to finance future periods’
operations.  In light of these circumstances, substantial doubt exists
about the Company’s ability to continue as a going concern.  These
consolidated financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets or liabilities that might
be necessary should the Company be unable to continue as a going
concern.
  F-8
 Table of Contents
 
 Note
2.  Summary of Significant Accounting Policies
 
 Principles of
Consolidation
 
 The
accompanying consolidated financial statements include the accounts of the
Platina Energy Group Inc. and its wholly owned subsidiaries, Appalachian Energy
Corporation and Permian Energy International, Inc. Intercompany transactions and
balances have been eliminated in consolidation.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, 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. Accordingly,
actual results could differ from those estimates.
 
 
 Cash
Equivalents
 
 For
purposes of the statements of cash flows, the Company considers cash equivalents
to include highly liquid investments with original maturities of three months or
less.
 
 
 Accounts
Receivable
 
 Accounts
receivable are reported at the customers’ outstanding balances less any
allowance for doubtful accounts.  The Company does not accrue interest
on overdue accounts receivable.
 
 The
allowance for doubtful accounts is charged to income in amounts sufficient to
maintain the allowance for uncollectible accounts at a level management believes
is adequate to cover any probable losses.  Management determines the
adequacy of the allowance based on historical write-off percentages and
information collected from individual customers.  As of June 30, 2008,
management believes all accounts receivable are
collectible.  Accordingly, no allowance for doubtful accounts is
included in the accompanying consolidated balance sheet.
 
 
 Property and
Equipment
 
 Property
and equipment are stated at cost.  Major renewals and improvements are
charged to the asset accounts while replacements, maintenance, and repairs that
do not improve or extend the lives of the respective assets are
expensed.  At the time property and equipment are retired or otherwise
disposed of, the asset and related accumulated depreciation accounts are
relieved of the applicable amounts.  Gains or losses from retirements
or sales are credited or charged to income.
 
 The
Company’s equipment consists of a vehicle which is being depreciated over its
estimated useful life of 5 years on the straight-line method
 
 
 Oil and Gas
Properties
 
 The
Company follows the full cost method of accounting for crude oil and natural gas
properties. Under this method, all direct costs and certain indirect costs
associated with acquisition of properties and successful as well as
unsuccessful   exploration   and   development   activities   are   capitalized.
Depreciation, depletion, and amortization of capitalized crude oil and natural
gas properties and estimated future development costs, excluding unproved
properties, are based on the unit-of-production method based on proved
reserves.
 
 Long-Lived
Assets
 
 The
Company accounts for its long-lived assets in accordance with SFAS No. 144,
“Accounting for the Impairment
or Disposal of Long-Lived Assets.”  SFAS No. 144 requires that
long-lived assets be reviewed for impairment whenever events or changes in
circumstances indicate that the historical cost carrying value of an asset may
no longer be appropriate.  The Company assesses recoverability of the
carrying value of an asset by estimating the future net cash flows expected to
result from the asset, including eventual disposition.  If the future
net cash flows are less than the carrying value of the asset, an impairment loss
is recorded equal to the difference between the asset’s carrying value and fair
value or disposable value. As of March 31, 2008, the Company did not deem any of
its long-term assets to be impaired.
 
 F-9
 Table of Contents
 
 Convertible
Debentures
 
 If the
conversion feature of conventional convertible debt provides for a rate of
conversion that is below market value, this feature is characterized as a
beneficial conversion feature (“BCF”).  A BCF is recorded by the
Company as a debt discount pursuant to EITF Issue No. 98-5 (“EITF 98-05”),
Accounting for Convertible Securities with Beneficial Conversion Features or
Contingency Adjustable Conversion Ratio, and EITF Issue No. 00-27, Application
of EITF Issue No. 98-5 to Certain Convertible Instruments.  In those
circumstances, the convertible debt will be recorded net of the discount related
to the BCF.  The Company amortizes the discount to interest expense
over the life of the debt using the effective interest method.
 
 Derivative Financial
Instruments
 
 As of
ended June 30, 2008, the Company recognized a derivative liability of $1,017,361
pursuant to EITF 00-19 “Accounting for Derivative Financial Instruments Indexed
to, and Potentially Settled in, a Company's Own Stock”.  The Company
recognized a derivative gain during the three-months ended June 30, 2008 in the
amount of $2,470,673 due to the increase in the number of its authorized common
shares which eliminated the prior year’s liability on the number of committed
shares in excess of authorized shares.
 
 
 Revenue
recognition
 
 The
Company recognizes revenue in accordance with Staff Accounting Bulletin (“SAB”)
No. 101, “Revenue Recognition in Financial Statements,” as revised by SAB
No. 104.  As such, the Company recognizes revenue when persuasive
evidence of an arrangement exists, title transfer has occurred, the price is
fixed or readily determinable and collectibility is probable.  Sales
are recorded net of sales discounts.
 
 
 Income
Taxes
 
 The
Company accounts for income taxes under the provisions of SFAS No. 109, “Accounting for Income
Taxes.”  Under SFAS No. 109, deferred tax assets and
liabilities are recognized for future tax benefits or consequences attributable
to temporary differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.  A
valuation allowance is provided for significant deferred tax assets when it is
more likely than not that the asset will not be realized through future
operations.
 
 The
Company has total net operating tax loss carry forwards at June 30, 2008 of
approximately $25,000,000 for federal income tax purposes.  These net
operating losses have generated a deferred tax asset of approximately $8,500,000
on which a valuation allowance equaling the total tax benefit has been provided
due to the uncertain nature of it being realized. Net operating loss
carryforwards expire in various years through March 31, 2028 for federal tax
purposes.
 
 
  Stock Based
Compensation
   The
Company accounts for stock-based compensation under SFAS No. 123R, "Share- based
Payment” " and SFAS No. 148, "Accounting for Stock-Based
Compensation--Transition and Disclosure--An amendment to SFAS No. 123." These
standards define a fair value based method of accounting for stock-based
compensation. In accordance with SFAS Nos. 123R and 148, the cost of stock-based
employee compensation is measured at the grant date based on the value of the
award and is recognized over the vesting period. The value of the stock-based
award is determined using the Black-Scholes option-pricing model, whereby
compensation cost is the excess of the fair value of the award as determined by
the pricing model at the grant date or other measurement date over the amount an
employee must pay to acquire the stock. The resulting amount is charged to
expense on the straight-line basis over the period in which the Company expects
to receive the benefit, which is generally the vesting period.
   The
Company recognized stock-based compensation expense of $487,794 and $-0- for the
three months ending June 30, 2008 and 2007, respectively. Stock based
compensation is included in general and administrative expense.
  
 
 Issuance of Stock for
Non-Cash Consideration
 
 All
issuances of the Company's stock for non-cash consideration have been assigned a
per share amount equaling either the market value of the shares issued or the
value of consideration received, whichever is more readily determinable. The
majority of the non-cash consideration received pertains to services rendered by
consultants and others and has been valued at the market value of the shares on
the dates issued.
 
 Net Loss per
Share
 
 The
Company adopted the provisions of SFAS No. 128, “Earnings Per Share”
(“EPS”).  SFAS No. 128 provides for the calculation of basic and
diluted earnings per share.   Basic EPS includes no dilution and
is computed by dividing income or loss available to common shareholders by the
weighted average number of common shares outstanding for the
period.  Diluted EPS reflects the potential dilution of securities
that could share in the earnings or losses of the entity, arising from the
exercise of options and warrants and the conversion of convertible
debt.  If such shares were included in diluted EPS, they would have
resulted in weighted-average common shares of 131,688,463 and 73,115,187 for the
three months ended June 30, 2008 and 2007, respectively.
 
 Fair Value of Financial
Instruments
 
 The
Company’s financial instruments consist of cash and cash equivalents, accounts
payable, and notes payable.  Pursuant to SFAS No. 107, “Disclosures About Fair Value of
Financial Instruments,” the Company is required to estimate the fair
value of all financial instruments at the balance sheet date.  The
Company considers the carrying values of its financial instruments in the
financial statements to approximate their fair values due to the short term
nature of the instruments.
 
  F-10
 Table of Contents
  Reclassification
   Certain
reclassifications have been made to the 2007 balances to conform to the 2008
presentation.
  
 Recent Accounting
Pronouncements
 
 In
December 2007, the FASB issued Statement of Financial Accounting Standards No.
141(R), “Business Combinations” (“SFAS 141(R)”.  SFAS 141(R) requires
the acquiring entity in a business combination to recognize all assets acquired
and liabilities assumed in the transaction, establishes the acquisition-date
fair value as the measurement objective for all assets acquired and liabilities
assumed, and requires the acquirer to disclose the nature and financial effect
of the business combination.  SFAS 141(R) is effective for fiscal
years beginning on or after December 31, 2008.  If and when the
Company acquires one or more entities in the future, it will apply SFAS 141(R)
for the purposes of accounting for such acquisitions.
 
 In
December 2007, the FASB issued Statement of Financial Accounting Standards No.
160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS
160”).  SFAS 160 amends Accounting Research Bulletin No. 51,
“Consolidated Financial Statements,” to establish accounting and reporting
standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary.  SFAS 160 is effective for fiscal
years beginning on or after December 15, 2008.  The Company presently
has no such noncontrolling interests.  If and at such time as such an
interest exists, it will apply SFAS 160.
 
 In March
2008, the FASB issued Statement of Financial Accounting Standards No. 161,
“Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”).
SFAS 161 amends and expands the disclosure requirements of SFAS 133, ‘Accounting
for Derivative Instruments and Hedging.”  SFAS 161 is effective for
fiscal years beginning after November 15, 2008.  The Company will
adopt SFAS 161 in the first quarter of 2009 and currently expects such adoption
to have no impact on its results of operations, financial position, or cash
flows.
 
 In April
2008, the FASB issued Staff Position No. 142-3, “Determination of the Useful
Life of Intangible Assets” (“FSP 142-3”).  FSP 142-3 amends the
factors that should be considered in developing renewal or extension assumptions
used to determine the useful life of a recognized intangible asset under FASB
Statement of Financial Accounting Standards No. 142, “Goodwill and Other
Intangible Assts”.  FSP 142-3 is effective for the Company in the
first quarter of 2009.  The Company presently has no such intangible
assets.  If and at such time as such assets are acquired, the Company
will apply FSP 142-3.
 
 In May
2008, the FASB issued Statement of Financial Accounting Standards No. 162, “The
Hierarchy of Generally Accepted Accounting Principles” (“SFAS
162”).  SFAS 1692 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.
SFAS 162 will become effective 60 days following Securities and Exchange
Commission (“SEC”) approval of the Public Company Accounting Oversight Board
(PCOB) amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.”  The
Company does not anticipate the adoption of SFAS 162 to have a material impact
on its results of operations, financial position, or cash flows.
 
 In June
2008, the FASB issued Staff Position 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 address whether
instruments granted in share-based payment transactions are participating
securities prior to vesting, and therefore, need to be included in
the  earnings allocation in calculating earnings per share under the
two-class method described in FASB Statement of Financial Accounting Standards
No. 128, “Earnings Per Share.”  FSP EITF 03-6-1 requires companies to
treat unvested share-based payment awards that have non-forfeitable rights to
dividend or dividend equivalents as a separate class of securities in
calculating earnings per shared.  FSP EITF 03-6-1 is effective for
fiscal years beginning after December 15, 2008.  FSP EITF 03-6-1 is
effective for the Company in the first quarter of 2009.  The Company
is currently assessing the impact of FSP EITF 03-6-1, but does not expect that
such adoption will have a material effect on its results of operations,
financial position, or cash flows.
 
 
 Note
3. Accounts Receivable, Trade
 
  Accounts
receivable, trade, consisted of $0 at June 30, 2008.  Allowance for
doubtful accounts was $0 at June 30, 2008.
  
 Note
4. Accounts Receivable, Other
  Accounts
receivable, other, consisted of $79,066 due from Wyoming Energy Corp, a
corporation previously owned by the Company’s President, for the sale of the TPU
unit and $12,000 due from a third party.
   F-11
 Table of Contents
 
 Note
5. Acquisition of Licensing Rights
 
 1)
              On
      April 6, 2005, the Company completed its purchase of rights and licenses
      from Permian Energy Services LP, a related party, in connection with
      certain technological representation and marketing rights of a proprietary
      thermal pulse pump in the oil and gas industry.  In
      consideration for the assets purchased, the Company originally agreed to
      issue 2,250,000 shares of its common stock and pay $250,000 as evidenced
      by a promissory note with interest accruing at an annual rate of
      6%.  Under the terms of the note, accrued interest would have
      been due one year from the date of the Note and all principal and
      additional accrued interest would have been due two years from the date of
      the note. Throughout the first portion of fiscal 2006, Permian Energy
      International was in dispute with the prior President of Permian
      International, Inc. relative to certain amounts allegedly due to
      him.  The Company valued the intangible assets purchased at
      $347,500, which consisted of the $250,000 obligation plus the fair value
      of the 750,000 shares issued to a consultant in connection with the
      acquisition.  The Company valued the shares issued as of April
      6, 2005.
 
 In April
2006, the Company entered into a satisfactory settlement agreement with Permian
Energy Services L.P. and Robert Clark ("Clark"), the former president of Permian
Energy International Inc. Under the terms of the settlement agreement, the
Company agreed to dismiss its lawsuit against Clark. The Company has also agreed
to pay Clark $53,823 in exchange for Clark returning the 2,025,000 shares it
received under the April 6, 2005 asset purchase agreement and cancelling the
$214,963 obligation due it.
 
 In order
to bring the negotiations with Clark to a successful conclusion, Wyoming Energy
Corp. had to return to Permian Energy Services LP, its 10% ownership interest in
the LP. In consideration for the loss of Wyoming's interest in the LP, the
Company transferred its obligation in favor of the LP to Wyoming under the same
terms and conditions. At the time of the transaction, Wyoming Energy Corp. was
wholly-owned by the Company's president, but was subsequently sold to an
unrelated third party in March 2007.
 
 Clark
also agreed not to engage in the business of providing downhole oil or gas well
stimulation as referenced and defined in the PES-BI-Comp agreement, which was
assigned to the Company by Clark in April 2005 pursuant to the Asset Purchase
Agreement for a period of three years.
 
 The
Company is amortizing the licensing rights over its expected useful life of
seven years. Amortization expense charged to operations amounted to $12,410 and
$12,410 in the three months ended June 30, 2008 and 2007,
respectively.
 
 Estimated
amortization expense is as follows:
 
 Year ending June
30,
 
 2008                                $   49,643
 2009                                     49,643
 2010                                     49,643
 2011                                     49,643
 2012                                12,410
 $
210,982
 
 
 2)
              In
      the Company’s acquisition of Enhanced, it received a license from the
      University of Texas Systems (“Systems”) to patented technology on an
      exclusive basis pertaining to offshore deep-water oil and gas
      exploration.  The technology allows for the separation of gas
      from other fluids without the need of installing a gas-vent line, thus
      significantly reducing the cost of abstracting gas from these types of
      wells.  The effective date of the license is March 31, 2008 with
      a term of 20 years, unless terminated sooner as provided in the
      license.
 
 The
license agreement requires 1) an annual maintenance fee of $1,000, 2) royalties
of 4% of all consideration received by the Company and its affiliate from all
consideration received including installation services, production license,
maintenance services, and from the net sales of products developed from the
licensed technology, and 3) a user fee equal to the greater of $1,000 or 4% of
Average Sales Price of the Licensed Product (ASPLP”) on each production well
which is owned or managed by the Company on which the licensed product is
installed.
 
 The
license also requires minimum royalties of:
 
 $5,000 for the 12 months ended December
31, 2008
 $10,000 for the 12 months ended
December 31, 2009
 $15,000 for the 12-months period
thereafter
 
 The
Company is responsible for all costs associated the underlying patent including
fees incurred in filing, prosecuting, and maintenance.  For
sublicenses initiated by the Company, it is required to pay Systems 30% of all
Sublicense consideration.  For sublicenses initiated by Systems, the
Company is required to pay Systems 65% of all Sublicense
consideration.  Systems can terminate the license as provided for in
the license agreement that includes failure for the Company to make any required
payment within 30 days of its due date or failure to make its first sale of
licensed product by June 30, 2009.  The Company can terminate the
license by 1) ceasing or not making any sales of licensed product, 2) by giving
180 days written notice and paying all accrued amounts due, or 3) failure to
cure a breach of any provision of the license within 30 days of receiving
written notice of such breach by Systems.
 
 The
Company valued the license at $1,225,850 and is amortizing it over its expected
useful life of seven years.  Amortization expense charged to
operations amounted to $43,780 and $0 in the three months and six months ended
June 30, 2008 and 2007, respectively.
 
 Estimated amortization expense is as
follows:
 
 Year ending June
30,
 
 2009
              $  175,121
 2010
              175,121
 2011
              175,121
 2012
              175,121
 2013
              175,121
 Thereafter                                          306,465
 $ 1,182,070
 
 
 F-12
 Table of Contents
   Note
6. Property and equipment
 
 Oil and gas
properties
 
 In
October 2006, the Company issued 3,600 shares of its Class C convertible
preferred stock in exchange for an option to acquire certain oil and gas leases
situated on 3,600 acres in Floyd County, Texas. The option was to expire in
January 2007, but the Company paid $54,000 to extend the option period. The
3,600 shares of Class C preferred stock were valued at $32,400 based on the
market price of the underlying common shares on which the preferred shares can
be converted into on the date of issuance.
 
 In
January 2007, the company issued 22,500 shares of its Series B Preferred Stock
to Tri Global Holdings, LLC for the purchase of oil and gas leases to thirty to
thirty five drilling locations on approximately 1,600 acres in the Devonian
Black Shale formation located in the Appalachian Basin in East
Tennessee.  The 22,500 shares were valued at $213,773, based on the
market price of the Company’s underlying common stock on the date of
acquisition. Each share of Series B Preferred is convertible into 100 shares of
the Company’s common stock.
 
 In
February 2007, the Company issued 25,000 shares of its Series B Preferred Stock
in exchange for the acquisition of oil and gas leases and options comprising of
approximately 20,000 acres located in Palo Duro Basin, Texas and oil and gas
leases located on 372 acres in Young Texas. The 25,000 shares were valued at
$237,525, based on the market price of the Company’s underlying common stock on
the date of acquisition.
 
 Further
in April 2007, the Company issued 12,464 shares of its Series B Preferred Stock
to extend the option through August 1, 2007. The 12,464 shares of Class B
preferred stock were valued at $149,568 based on the market price of the
underlying common shares on which the preferred shares can be converted into on
the date of issuance.
 
 In June
2007, the Company issued 61,091 of its Class A convertible preferred stock in
exchange for the oil and gas leases referenced above.  The 61,091
shares of Class A convertible preferred stock were valued at $171,055 based on
the market price of the underlying common shares on which the preferred shares
can be converted into on the date of issuance.
 
 In June
2007, the Company issued 6,500 of its Class B convertible preferred stock and
paid $10,000 to West Texas Royalties, Inc. in consideration for the remaining
25% of the working interest in the oil and gas leases located in Young County,
Texas. The 6,500 shares of Class B convertible preferred stock were valued at
$182,000 based on the market price of the underlying common shares on which the
preferred shares can be converted into on the date of issuance.
 
 On May
14, 2007 the Company signed a memorandum agreement (Agreement) with Zone
Petroleum, LLC (Zone), a Wyoming corporation to fund the development of its
Young County prospect. Pursuant to the agreement, Zone is granted an exclusive
for the Young County prospect as long as Zone is able to fund the development of
35 wells over an 18 month period based an turnkey agreement of $50,000 per well.
As discussed below, in June, 2007. The Company acquired the remaining balance of
the working interest in its Young County, Texas prospect in order to facilitate
its agreement with Zone Petroleum LLC. Under the agreement with Zone Petroleum,
it will receive a 75% working interest with Platina retaining the remaining 25%
working interest. Under the agreement, the Company will receive an
operating fee of 10% to 15%, subject to negotiation. During the year ended March
31, 2008, the Company received $175,500 from Zone and received an additional
$25,000 last year relating to this agreement. On December 30, 2007, the Company
acquired the remaining 75% working interest from Zone in exchange for a note
payable in the amount of $210,000 (See Note 9).
  On August
7th 2007 the Company signed an agreement with Homestead Oil and Gas LLC to fund
the development of its Appalachian prospect. Under the agreement, the
development of 55 well sites are to be funded by Homestead, who will receive a
75% working interest in the wells, with Appalachian, a wholly owned subsidiary
of Platina retaining a 25% working interest. As part of the agreement,
Appalachian will have the right to purchase 100% or any fraction thereof, of any
Homestead-owned well interest on this property. Drilling activities began in
August of 2007. No assurance can be given as to the expected progress or
performance of the development of the wells or that the production there from
will prove profitable.  On December 30, 2007, the Company acquired the
remaining 75% working interest from Homestead in exchange for a note payable in
the amount of $320,000 (See Note 9).
  
 On
October 29, 2007 the Company, through its wholly owned subsidiary, Platina
Exploration Corporation, entered into a Property Sale and Joint Venture
Agreement (the "Rick Newell Agreement") with Buccaneer Energy Corporation
("Buccaneer"). The Rick Newell Agreement provides for a Joint Venture by the
Company with Buccaneer for a one half (1/2) interest in the Rick Newell Salt
Water Disposal Project located in Oklahoma that consists of one (1) producing
oil well (Rick #1) currently producing approximately four (4) barrels of oil per
day, one (1) salt water disposal well (the Newell #2) and a number of wells
which are to be recompleted and dispose of the salt water on the lease in the
Newell #2 well. Pursuant to the Rick Newell Agreement, the Company is to pay to
Buccaneer a total consideration of $455,138. In connection with this purchase,
the Company is offering to qualified investors units at a price of $50,000 each.
Each unit consist of 100,000 restricted shares of the Company’s common stock, a
4% working interest in the Rick #1 and the Newell #2 and a 1 1⁄2 % working
interest in the 10 non-operating wells. As of January 10, 2008, the Company has
received $525,000 through the issuance of 10.5 units.
 
 On
October 31, 2007, the Company, through its wholly owned subsidiary, Platina
Exploration Corporation, also entered into a Property Sale and Joint Venture
Agreement (the "Oklahoma Agreement") with Buccaneer. The Oklahoma Agreement
provides for a Joint Venture by the Company with Buccaneer for a one half (1/2)
interest in (i) the approximate forty percent (40%) interest of Buccaneer in the
Oklahoma PUD Prospects comprised of several undeveloped prospects to be drilled
and (ii) a one half (1/2) interest in the East Texas Projects consisting of the
Gaywood acquisition comprised of approximately fifty (50) locations in Rusk
County. The Oklahoma Agreement further provides that Buccaneer will show the
Company other opportunities or projects and if the Company elects to
participate, it will receive a one half (1/2) interest in such project or
projects upon reimbursement to Buccaneer for its costs in such project(s). The
Oklahoma Agreement also provides that the Company will pay Buccaneer $199,873
comprised of $60,000 cash and a $139,873 promissory note at six percent (6%)
interest due on or before January 31, 2008. The Company paid the amounts due in
January 2008, when the purchase was completed.
 
 Both the
Rick Newell Agreement and the Oklahoma Agreement further provide that Buccaneer
and the Company will be equal partners in future operations with Buccaneer's
wholly owned subsidiary, Buccaneer Energy L.L.C. being the operator of projects
located in Oklahoma, Bowie Operating Company ("Bowie Operating"), a newly formed
Texas LLC being the operator of all other projects except that pursuant to an
oral agreement, Bowie Operating will also be the Operator of the Newell #2 upon
completion of bonding in Oklahoma, with all operations to be at cost, plus
normal Model 610 Operating Agreement COPUS drilling, completion and operating
overhead reimbursement fees. Buccaneer has a 50% membership interest in Bowie.
In January 2008, the Company agreed to convert the $250,000 promissory note from
Buccaneer Energy Corporation into 50% ownership in Bowie Energy,
LLC.
 
 On
January 10, 2008, entered into an Agreement of Sale and Purchase (the
"Agreement") with Energas Resources, Inc. ("Energas"), TGC, Inc., a wholly-owned
subsidiary of Energas, ("TGC") and AT Gas Gathering Systems, Inc., a
wholly-owned subsidiary of Energas ("ATG")( Energas, TGC and ATG collectively,
"Energas Resources") with the transactions set forth in the Agreement also
closing on January 17, 2008 effective as of January 1, 2008. Pursuant to the
Agreement, Energas Resources sold to the Company (i) all of the Energas
Resources properties and interests, producing and non-producing, owned by
Energas Resources as listed in the Agreement (ii) all right title and interest
of Energas Resources in oil, gas and mineral leases, subleases, easements,
farmout agreements, royalty agreements, overriding royalty agreements, and/or
net profit interest agreements in 11 properties located in Laurel County,
Kentucky and 10 properties in Whitley County, Kentucky as described in the
Agreement, (iii) the interests of Energas Resources in certain property located
in Laurel and Whitley Counties, Kentucky including but not limited to wells,
approximately 9 miles of natural gas transmission line and gathering system
facilities, compressor station and De-Hy Unit and other personal property as
further described in the Agreement and (iv) all regulatory permits, licenses and
authorizations relating to the purchased assets. The purchase price for the
foregoing assets is $2,300,000 of which $100,000 was paid at the closing and
$2,200,000 was paid by the Company executing a 7 1/2 % interest non recourse
promissory note (the "Note") secured by the assets transferred to the Company.
The Note further provides that the Company pay Energas Resources $100,000 on
April 1, 2008, $100,000 on July 1, 2008 and commencing October 1, 2008,
quarterly payments of interest only until January 1, 2010 when all outstanding
principal and accrued but unpaid interest is due in full.
 
 On
January 17, 2008, the Company entered into an Agreement for Sale and Purchase of
Oil and Gas Properties (the "Wyoming Agreement") with Energas with the
transactions set forth in the Wyoming Agreement also closing on January 17,
2008. Pursuant to the Wyoming Agreement, Platina purchased a 26% working
interest in the Rusty Creek Prospect in Niobrara County, Wyoming, which includes
the Finley #1 and Finley #2 producing wells and Finley #4, TA with existing
production of approximately 11 barrels of oil per day, plus leases of oil and
gas rights on 1,760.11 acres and various personal property for a purchase price
,all of which was paid at closing, of (i) $233,379 (ii) warrants to purchase
2,500,000 shares of Platina's common stock at $.25 per share which expire on
January 17, 2010, (iii) $10,593 for its participation in the workover of the
Finley #1 and (iv) $111,896 for its participation in the deepening of the Finley
#2.
 
 On
January 8, 2008, the Company acquired a 44% working interest in the Golf #1
Well, and the assignment of the Jack Goff and Cumberland College leases which
comprises approximately 838 acres for a total purchase price of
$10,000.
 
 On March
31, 2008, Platina Energy Group, Inc. (the “Company”) entered into an Agreement
and Plan of Acquisition (the “Exchange Agreement”) with UTEK Corporation, a
Delaware corporation (“UTEK”), and UTEK’s wholly-owned subsidiary Enhanced Oil
Recovery Technologies, Inc., a Nevada corporation (“Enhanced
Oil”).  Pursuant to the Exchange Agreement, the Company acquired from
UTEK effective March 31, 2008 all of the issued and outstanding shares of common
stock of Enhanced Oil in exchange for (i) 100,000 shares of the Company’s Series
F Convertible Preferred Stock that is convertible, no earlier than six months
and no later than twelve months from the date of the Exchange Agreement, into
$1,440,000 worth of shares of the Company’s common stock based on the average of
the five day closing price of the Company’s common stock prior to the conversion
date, (ii) two year warrants to purchase 500,000 shares of the Company’s common
stock at an exercise price of $.25 per share and (iii) two year warrants to
purchase 500,000 shares of the Company’s common stock at an exercise price of
$.50 per share.
 
 The
principal assets of Enhanced Oil at the time of closing consisted of a Patent
License Agreement with the University of Texas System and approximately $300,000
in cash.  Pursuant to such Patent License Agreement, Enhanced Oil has
the exclusive worldwide license rights for the use of Patent No. 6,705,403
described as a production system and method for producing fluids from a well
that includes a technology that utilizes a combination of an electrical
submersible pump and a jet pump to separate liquid and gas streams. The
potential benefit of this system is that it enables a submersible pump and a jet
pump to be used in combination in a high gas-to-liquid ratio oil well without
installing a gas vent line. The License Agreement also provides for (i) an
upfront $60,000 fee that is to be paid by UTEK, (ii) an annual $1,000
maintenance fee, (iii) a royalty of 4% of all consideration received by the
Licensee from license customers for the licensed product, (iv) a royalty of 4%
of the net sales of the licensed product and (v) a use fee for each production
well which is owned or managed by the Licensee or its affiliates at which the
licensed product is installed.
 
 On May
16, 2008, the Company entered into an agreement with Homestead Oil whereby
Homestead Oil agreed to cancel its 4% override royalty interest in the Young
County, Texas property in exchange for $500,000.  (See Note
9.)
 
 F-13
 Table of Contents
 
 Note
7.  Loan Fees
 
 In
connection with the Company’s financing as discussed in Notes 8 and 9, the
Company incurred fees totaling $913,884.  In addition, the Company
issued shares of its convertible preferred stock to certain individuals as part
consideration for the amounts borrowed.  During the three months ended
June 30, 2008, the Company issued 2,000 shares of Preferred Class C and 15,000
shares of Preferred Class D.  The 17,000 shares were valued on the
date of the respective loan based upon the trading price of the Company’s
underlying common shares totaling $189,000.  Loan fees are deferred
and charged to interest expense over the term of the respective
loan.  As of June 30, 2008, the unamortized balance of loan fees
amounted to $945,819.  The  amount of fees charged to
interest expense during the three months ended June 30, 2008 and 2007 were
$184,066 and $0,
 
 
 Note
8.  Convertible Debt
 
 Agreement
#1
 
 On March
14, 2007, convertible debentures totaling $137,556 were sold by four Noteholders
(“Assignors”) of the Company to third party assignee(s) represented by counsel
(“Assignee”).  Under the terms of the sale, the Company agreed to
modify the conversion feature of the notes. Under the modified terms, The
Assignee shall have the right, upon three (3) days written notice to the
Company, to convert the unpaid principal and accrued interest of each Note into
the Company’s common stock at a rate of $0.002 per share for the first 4,000,000
shares and thereafter $0.003 per share, except the last 4,000,000 shares will be
at the rate of $0.004 per share; provided, however, the Assignee can only
convert after the respective Assignor has been fully paid for that portion of
the Note that the Assignee is looking to convert. The terms further provide that
no Note shall be converted at any time by the Assignee if it would result in the
Assignee beneficially owning more than 9.99% of the common stock of the Company
at the time of such conversion and that no Note can be converted at any time
that the Fair Market Value of the common stock of the Company is less than nine
cents ($0.09) per share without the prior written consent of the Board of
Directors of the Company. In addition, the converted shares cannot be sold by
the Assignee(s) represented by legal counsel into the US Market for a period of
five (5) years from the date of the Assignment.  In March 2007, the
Company issued 2,200,000 shares of its common stock in exchange for canceling
$4,400 of indebtedness. The Company recognized a loss of $281,600 on the
conversion. The Company determined that the modification of the conversion
features created a beneficial conversion feature (“BCF”) totaling $134,775 which
was charged to interest expense during the year ended March 31,
2007.
 
 During
the three months ended June 30, 2008, the Company issued 34,484,870 shares of
its common stock in exchange for canceling $44,485 of
indebtedness.  These shares cannot be sold in the U.S. market for five
years. The Company recognized a loss of $3,723,397 on the conversions, which is
the difference between the prevailing market price of the shares on the date of
conversion and the conversion price. The balance of the convertible debenture at
June 30, 2008 totaled $0.
 
 Agreement
#2
 
 On August
30, 2007 the Company entered into a Securities Purchase Agreement with La Jolla
Cove Investors, Inc. (“La Jolla”), to (i) sell to La Jolla a 7 1⁄4 % Convertible
Debenture for $300,000 with a maturity date of August 30, 2010 if not earlier
converted by La Jolla into shares of the Company’s Common Stock and (ii) issue
to La Jolla a Warrant to Purchase up to 3,000,000 shares of the Company’s common
stock at price of $1 per share with an expiration date of August 30,
2010.
 
 Under the
terms of the convertible debenture, La Jolla can convert the debt or any portion
thereof.  The number of common shares into which the debenture may be
converted is equal to the dollar amount of the Debenture being converted
multiplied by eleven, minus the product of the Conversion Price multiplied by
ten times the dollar amount of debenture being converted, the entire result
being divided by the Conversion Price. The Conversion Price equals the lesser of
(i) $1.00 or (ii) 80% of the average of the 3 lowest prices of the Common Shares
during the twenty days prior to conversion. If La Jolla elects to convert, the
Company has the right to pay off the amount of debt to be converted including
accrued interest, however, if the trading price of the Company’s common shares
is less than $.25 at the time of La Jolla elects to convert, the Company may pay
off the amount of debt and accrued interest to be converted with a 20% penalty
thereon. The Company has the right to prepay any or all of the outstanding
principal balance and accrued interest due at anytime in an amount equal to 120%
of such outstanding balance and accrued interest.
 
 The
Company has valued the convertible debenture (imputing an interest rate of
4.87%) and the related beneficial conversion option to convert the principal
balance into shares using the “Relative Fair Value”
approach.  Accordingly, the Company recognized a $300,000 discount on
the $300,000 principal amount of the convertible debenture. The discount is
being amortized over the life of the 3 year life of the debenture. Interest
charged to operation on the debenture for the three months ending June 30, 2008
and 2007 amounted to $43,375 and $0, respectively. Interest charged to operation
on the discount for the years ending June, 2008 and 2007 amounted to $161,874
and $0, respectively.
 
 Agreement
#3
 
 The
Company completed a $1,500,000 financing pursuant to a Securities Purchase
Agreement dated effective December 31, 2007 with Trafalgar Capital Specialized
Fund, Luxembourg ("Trafalgar") for Trafalgar to loan $1,500,000 to the Company
(the "Loan") pursuant to a secured Promissory Note (the "Note") dated December
31, 2007 with an annual interest rate of 10% due in monthly payments of interest
only for the first two months and then commencing three (3) months from the date
of the Note, principal and interest amortized over the remaining twenty five
months of the Loan and a monthly redemption premium of 15% of the payment is
payable in monthly installments with all principal and accrued but unpaid
interest due on or before March 30, 2010.
 
 Trafalgar
is entitled, at its option, to convert until the Note is fully paid all or any
part of the principal amount of the Note, plus accrued interest, into shares of
the Company’s common stock, at the price per share equal to $0.17 when the
Common Stock is trading at or above $0.40 per share.  If the Company
fails to make a monthly payment within 5 days of its due date, then Trafalgar
can convert its debt into shares of the Company’s common stock at a price per
share equal to eighty-five percent (85%) of the lowest daily closing bid
price of the Company’s Common Stock, as quoted by Bloomberg, LP, for the ten
trading days immediately preceding the Conversion Date.
 
 The
Company issued 18,000,000 shares of its common stock and a third party
non-affiliate issued an additional 6,000,000 shares into escrow as additional
security for the loan.
 
 As long
as the Note is not in default and the trading price of the Company’s common
stock is $.40 per share or higher, the Company has the right to pay down all or
a portion of the principal balance and accrued interest plus a 15% redemption
fee. The funds from the loan will be used in conjunction with the Company's
Tennessee prospect and specific corporate overhead.
 
 In the
event that the Company authorizes a stock split or a stock dividend, the
conversion price in effect immediately prior to such split or dividend will be
proportionately decreased, and in the event that the Company shall at any time
combine the outstanding shares of common stock, the conversion price in effect
immediately prior to such combination shall be proportionately increased,
effective at the close of business on the date of split, dividend or combination
as the case may be.
  The
Company is required to prepare and file, no later than thirty days from the date
of failing to make any cash payment, including the applicable cure period
(“Scheduled Filing Deadline”), a registration statement with the SEC under the
1933 Act for the registration for the resale by Trafalgar of at least two times
the number of shares which are anticipated to be issued upon conversion of the
Note. The Company shall cause the Registration Statement to remain effective
until all of the converted shares have been sold.
 
 In the
event the Company fails to file the registration statement ,or it does not
become effective within 60 days of the filing deadline (“Scheduled Effective
Date”), or sales cannot be made due to a fault in the registration statement,
the Company is required to pay as liquidated damages to Trafalgar, at its
option, either a cash amount or shares of the Company’s common stock within
three (3) business days, after demand therefore, equal to two percent (2%) of
the liquidated value of the Note outstanding as for each thirty (30) day period
(or any part thereof) after the Scheduled Filing Deadline or the Scheduled
Effective Date as the case may be.
 
 As
additional consideration for the debt facility, Trafalgar has the right to
accept monthly repayment of principle and interest (approximately $70,000 per
month) in the form of common shares only if the common stock price is trading
above $.40 per share. Trafalgar would then have the right to receive such
monthly payment(s) at a fixed conversion price of $.17 per share subject to
certain potential adjustments.
 
 The funds
from the loan will be used in conjunction with the Company's Tennessee prospect
and specific corporate overhead.
 
 Interest
charged to operation on the debenture for the three months ending June 30, 2008
and 2007 amounted to $77,839 and $0, respectively.
 
 The
outstanding balance of the obligation is $1,280,412 at June 30,
2008.
 
 
 F-14
 Table of Contents
 
 Agreement
#4
 
 The
Company completed a $2,300,000 financing pursuant to a Securities Purchase
Agreement dated effective May 21, 2008 with Trafalgar Capital Specialized Fund,
Luxembourg ("Trafalgar") for Trafalgar to loan $2,300,000 to the Company (the
"Loan") pursuant to a secured Promissory Note (the "Note") dated May 21, 2008
with an annual interest rate of 10% due in monthly payments of interest only for
the first two months and then commencing three (3) months from the date of the
Note, principal and interest amortized over the remaining twenty five months of
the Loan and a monthly redemption premium of 15% of the payment is payable in
monthly installments with all principal and accrued but unpaid interest due on
or before August 21, 2010.
 
 Trafalgar
is entitled, at its option, to convert until the Note is fully paid all or any
part of the principal amount of the Note, plus accrued interest, into shares of
the Company’s common stock, at the price per share equal to $0.081 when the
Common Stock is trading at or above $0.30 per share.  If the Company
fails to make a monthly payment within 5 days of its due date, then Trafalgar
can convert its debt into shares of the Company’s common stock at a price per
share equal to eighty-five percent (85%) of the lowest daily closing bid
price of the Company’s Common Stock, as quoted by Bloomberg, LP, for the ten
trading days immediately preceding the Conversion Date.
 
 The
Company issued 2,300,000 shares of its common stock into escrow as additional
security for the loan.
 
 As long
as the Note is not in default and the trading price of the Company’s common
stock is $.30 per share or higher, the Company has the right to pay down all or
a portion of the principal balance and accrued interest plus a 15% redemption
fee. The funds from the loan will be used in conjunction with the Company's
Tennessee prospect and specific corporate overhead.
 
 In the
event that the Company authorizes a stock split or a stock dividend, the
conversion price in effect immediately prior to such split or dividend will be
proportionately decreased, and in the event that the Company shall at any time
combine the outstanding shares of common stock, the conversion price in effect
immediately prior to such combination shall be proportionately increased,
effective at the close of business on the date of split, dividend or combination
as the case may be.
  The
Company is required to prepare and file, no later than thirty days from the date
of failing to make any cash payment, including the applicable cure period
(“Scheduled Filing Deadline”), a registration statement with the SEC under the
1933 Act for the registration for the resale by Trafalgar of at least two times
the number of shares which are anticipated to be issued upon conversion of the
Note. The Company shall cause the Registration Statement to remain effective
until all of the converted shares have been sold.
 
 In the
event the Company fails to file the registration statement ,or it does not
become effective within 60 days of the filing deadline (“Scheduled Effective
Date”), or sales cannot be made due to a fault in the registration statement,
the Company is required to pay as liquidated damages to Trafalgar, at its
option, either a cash amount or shares of the Company’s common stock within
three (3) business days, after demand therefore, equal to two percent (2%) of
the liquidated value of the Note outstanding as for each thirty (30) day period
(or any part thereof) after the Scheduled Filing Deadline or the Scheduled
Effective Date as the case may be.
 
 As
additional consideration for the debt facility, Trafalgar has the right to
accept monthly repayment of principle and interest (approximately $115,000 per
month) in the form of common shares only if the common stock price is trading
above $.30 per share. Trafalgar would then have the right to receive such
monthly payment(s) at a fixed conversion price of $.081 per share subject to
certain potential adjustments.
 
 The funds
from the loan will be used in conjunction with the Company's Tennessee prospect
and specific corporate overhead.
 
 Interest
charged to operation on the debenture for the three months ending June 30, 2008
and 2007 amounted to $19,167 and $0, respectively.
 
 The
outstanding balance of the obligation is $2,300,000 at June 30,
2008.
 
  Note
9. Note Payable - Other
 
 Note
#1
 
 Wyoming
Energy Corp, a corporation previously owned by the Company’s President, returned
its 10% interest in Permian Energy Services LLC in order to bring the settlement
with Permian to a successful conclusion. In consideration for the loss of
Wyoming's interest in the LLC, the Company transferred its obligation to Permian
to Wyoming under the same terms and conditions.
 
 Under the
terms of the note, all principal and accrued interest was due two years from the
date of the note, on April 5, 2007.   Interest accrued and
charged to operations on this obligation accruing during the three months ended
June 30, 2008 and 2007 totaled $3,836 and $3,624, respectively. The total
balance of this obligation at June 30, 2008 is $260,271. The due date of this
obligation including accrued interest has been extended to March 31,
2008.
 
 Note
#2
 
 On
November 29, 2007 the Company borrowed $100,000 from an unrelated party under a
promissory note.  The terms of the note call for interest in the
amount of $5,000 and repayment of the principal and interest within 60
days.  The note also called for the issuance of 100,000 shares of the
Company’s common stock in payment of a loan fee.   The loan fee
was valued at $22,000, which was based on the market price of the shares on the
date of issuance.  The loan fee is included in expense for the year
ended March 31, 2008. Interest accrued and charged to operations on this
obligation accruing during the three months ended June 30, 2008 and 2007 totaled
$3,863 and $0, respectively. The total balance of this obligation at June 30,
2008 is $100,000. The maturity date of the Note was extended to March 29, 2008.
Under the amended terms of the Note, interest is assessed on the principal
balance at an annual rate of 15%.
 
 Note
#3
 
 On
December 30, 2007 the Company acquired the remaining 75% working interest in the
Young County, Texas prospect through the issuance of a note payable to Zone
Petroleum, LLC in the amount of $210,000.  Pursuant to the note,
$10,000 is payable on or before February 15, 2008 and the remaining $200,000
accrues interest at 8% per annum with interest only payments payable quarterly
commencing April 1, 2008 for a period of two years at which time all remaining
principal and accrued but unpaid interest shall be due and payable. Interest
accrued and charged to operations on this obligation accruing during the three
months ended June 30, 2008 and 2007 totaled $2,630 and $0, respectively. The
total balance of this obligation at June 30, 2008 is $6,810.
 
 Note
#4
 
 On
December 30, 2007 the Company acquired the remaining 75% working interest in the
Tennessee prospects through the issuance of a note payable to Homestead Oil and
Gas, Inc. in the amount of $320,000.  Pursuant to the note, $20,000 is
payable on or before February 15, 2008 and the remaining $300,000 accrues
interest at 8% per annum with interest only payments payable quarterly
commencing April 1, 2008 for a period of two years at which time all remaining
principal and accrued but unpaid interest shall be due and payable.
 
 On May
16, 2008, the Homestead agreed to cancel its 4% overriding royalty interest in
the Young County, Texas property in exchange for $500,000.  The
Company and Homestead modified the original note payable and entered into a new
note payable which included the $300,000 principal balance as discussed
above.  Under the new agreement, the Company paid $200,000 to
Homestead and entered into a new note for $600,000 for a term of 18 months,
accruing interest at 10% per annum.
 
 Interest
accrued and charged to operations on this obligation accruing during the three
months ended June 30, 2008 and 2007 totaled $10,356 and $0, respectively. The
total balance of this obligation at June 30, 2008 is $616,677.
 
 
 Note
#5
 
 Effective
January 17, 2008, the Company entered into an agreement with Energas to acquire
certain properties (See Note 6) in exchange for $2,300,000 of which $100,000 was
paid at the closing and $2,200,000 was paid by the Company executing a 7 1/2 %
interest non recourse promissory note (the "Note") secured by the assets
transferred to the Company. The Note further provides that the Company pay
Energas Resources $100,000 on April 1, 2008, $100,000 on July 1, 2008 and
commencing October 1, 2008, quarterly payments of interest only until January 1,
2010 when all outstanding principal and accrued but unpaid interest is due in
full. Interest accrued and charged to operations on this obligation accruing
during the three months ended June 30, 2008 and 2007 totaled $40,849 and $0,
respectively. The total balance of this obligation at June 30, 2008 is
$2,181,986.
 
 Note
#6
 
 On
February 20, 2008 the Company borrowed $200,000 from a shareholder under a
promissory note.  The terms of the note call for interest to accrue at
15%, payment of accrued interest on a monthly basis and repayment of the
principal and any accrued but unpaid interest within one
year.  Interest accrued and charged to operations on this obligation
accruing during the years ended June 30, 2008 and 2007 totaled $7,480 and $0,
respectively. The total balance of this obligation at June 30, 2008 is
$202,466.
 
 Note
#7
 
 On March
7, 2008 the Company borrowed $100,000 from a shareholder under a promissory
note.  The terms of the note call for interest to accrue at 15%,
payment of accrued interest on a monthly basis and repayment of the principal
and any accrued but unpaid interest within one year.  Interest accrued
and charged to operations on this obligation accruing during the years ended
June 30, 2008 and 2007 totaled $0 and $0, respectively. The total balance of
this obligation at June 30, 2008 is $0.
 
 
 Note
#8
 
 On March
17, 2008 the Company borrowed $50,000 from an unrelated party under a promissory
note.  The terms of the note call for interest to accrue at 15%,
payment of accrued interest on a quarterly basis and repayment of the principal
and any accrued but unpaid interest within one year.  Interest accrued
and charged to operations on this obligation accruing during the three months
ended June 30, 2008 and 2007 totaled $0 and $0, respectively. The total balance
of this obligation at June 30, 2008 is $0.
 
 Note
#9
 
 On March
18, 2008 the Company borrowed $100,000 from an unrelated party under a
promissory note.  The terms of the note call for interest to accrue at
15%, payment of accrued interest on a monthly basis and repayment of the
principal and any accrued but unpaid interest within one
year.  Interest accrued and charged to operations on this obligation
accruing during the three months ended June 30, 2008 and 2007 totaled $4,315 and
$0, respectively. The total balance of this obligation at June 30, 2008 is
$100,000.
 
 
 Note
#10
 
 On April
25, 2008 the Company borrowed $50,000 from a shareholder under a promissory
note.  The terms of the note call for interest to accrue at 15%,
payment of accrued interest on a monthly basis and repayment of the principal
and any accrued but unpaid interest within one year.  Interest accrued
and charged to operations on this obligation accruing during the three months
ended June 30, 2008 and 2007 totaled $1,366 and $0, respectively. The total
balance of this obligation at June 30, 2008 is $50,000.
 
 Note
#11
 
 On June
9, 2008 the Company borrowed $75,000 from a shareholder under a promissory
note.  The terms of the note call for interest to accrue at 15%,
payment of accrued interest on a monthly basis and repayment of the principal
and any accrued but unpaid interest within one year.  Interest accrued
and charged to operations on this obligation accruing during the three months
ended June 30, 2008 and 2007 totaled $647 and $0, respectively. The total
balance of this obligation at June 30, 2008 is $75,000.
 
 
 Note
#12
 
 On June
10, 2008 the Company borrowed $50,000 from an unrelated party under a promissory
note.  The terms of the note call for interest to accrue at 15%,
payment of accrued interest on a monthly basis and repayment of the principal
and any accrued but unpaid interest within one year.  Interest accrued
and charged to operations on this obligation accruing during the three months
ended June 30, 2008 and 2007 totaled $411 and $0, respectively. The total
balance of this obligation at June 30, 2008 is $100,000.
 
 F-15
 Table of Contents
 
 Note
10. Due to Related Parties
 
 As of
June 30, 2008, the Company owed its President, Blair Merriam, a total of
$235,620 under various loan obligations, including accrued
interest.  The loans are assessed interest at an annual rate of
12%.  Interest charged to operations for the three months ended June
30, 2008 and 2007 on these loans totaled $7,041 and $7,910, respectively. In
addition, under the terms of the loans, until the principal loans balance and
accrued interest are paid in full, the President has the right to convert the
obligation due him, including accrued interest, into shares of the Company’s
common stock at $0.17 per share.
 
 On June
13, 2008, the Company issued 200,000 shares of Preferred D stock to Mr. Merriam
in payment of $20,000 of debt.  The shares had a fair value of
$2,200,000.  Accordingly, the Company recognized a loss of $2,180,000
on the settlement of debt.
 
 
 Note
11. Shareholders' Deficit
 
 Preferred
Stock
 
 In April
2008, the Company issued 12,500 shares of its Series D Preferred Stock for
services rendered by consultants.  The shares were valued at $112,500,
based upon the market price of the underlying common shares at date of
issuance.
 
 In April
2008, the Company issued 2,000 shares of its Series C Preferred Stock for a loan
fee.  The shares were valued at $20,000, based upon the market price
of the underlying common shares at date of issuance.
 
 In April
2008, the Company issued 10,000 shares of its Series D Preferred Stock for a
loan fee.  The shares were valued at $120,000, based upon the market
price of the underlying common shares at date of issuance.
 
 In May
2008, the Company issued 5,000 shares of its Series D Preferred Stock for
services rendered by a consultant.  The shares were valued at $50,000,
based upon the market price of the underlying common shares at date of
issuance.
 
 In May
2008, the Company issued 3,500 shares of its Series D Preferred Stock for
interest expense.  The shares were valued at $31,500, based upon the
market price of the underlying common shares at date of issuance.
 
 In June
2008, the Company issued 3,500 shares of its Series D Preferred Stock for
interest expense.  The shares were valued at $35,000, based upon the
market price of the underlying common shares at date of issuance.
 
 In June
2008, the Company issued 1,000 shares of its Series D Preferred Stock for a loan
fee.  The shares were valued at $9,000, based upon the market price of
the underlying common shares at date of issuance.
 
 In June
2008, the Company issued 4,500 shares of its Series D Preferred Stock for
accrued compensation.  The shares were valued at $45,000, based upon
the market price of the underlying common shares at date of
issuance.  Accordingly, the Company recognized a $21,000 loss on the
settlement of debt.
 
 In June
2008, the Company issued 3,000 shares of its Series D Preferred Stock for a loan
fee.  The shares were valued at $30,000, based upon the market price
of the underlying common shares at date of issuance.
 
 In June
2008, the Company issued 7,500 shares of its Series D Preferred Stock to its
three directors for services rendered.  The shares were valued at
$75,000, based upon the market price of the underlying common shares at date of
issuance.
 
 In June
2008, the Company issued 1,000 shares of its Series D Preferred Stock for a loan
fee.  The shares were valued at $10,000, based upon the market price
of the underlying common shares at date of issuance.
 
 In June
2008, the Company issued 200,000 shares of its Series D Preferred Stock to its
President, Blair Merriam for the cancellation of $20,000 of debt.  The
shares were valued at $2,200,000, based upon the market price of the underlying
common shares at date of issuance.  Accordingly, the Company
recognized a $2,180,000 loss on the settlement of debt.
 
 In June
2008, the Company issued 10,000 shares of its Series D Preferred Stock for
services rendered by a consultant.  The shares were valued at
$100,000, based upon the market price of the underlying common shares at date of
issuance.
 
 In June
2008, the Company issued 11,500 shares of its Series D Preferred Stock to
certain employees for safety rewards.  The shares were valued at
$115,000, based upon the market price of the underlying common shares at date of
issuance.
 
 Common
Stock
 
 In April
2008, the Company issued 180,000 shares of its common stock as the result of a
conversion of 1,800 shares of its Series C Preferred stock.
 
 In May
2008, the Company issued 2,100,100 shares of its common stock as the result of a
conversion of 21,001 shares of its Series B Preferred stock.
 
 In May
2008, the Company issued 912,300 shares of its common stock as the result of a
conversion of 9,123 shares of its Series B Preferred stock.
 
 In June
2008, the Company issued 352,942 shares of its common stock in exchange for the
consulting services.  The services were valued at $35,294, which was
based on the market value of the shares on the date of issuance.
 
 Stock
Warrants
 
 At March
31, 2008, there were total warrants outstanding to purchase 8,000,000 shares of
rule 144 common stock at $0.25; 500,000 shares of rule 144 common stock at $0.50
and 3,000,000 shares of common stock at $1.00. The expiration dates of the
warrants vary from January 17, 2010 to March 31, 2013.  During the
year ended March 31, 2008, the Company issued an extension for certain warrants
and accordingly, recorded an expense of $35,767 associated with the expiration
of the warrants.  Also during the year ended March 31, 2008 the
Company issued 11,500,000 warrants, included above, and accordingly recorded an
expense of $125,904 associated with the amortization of these warrants over
their respective life.
 
 Employee Stock Option
Plan
 
 On March
25, 2005, the Company established a stock option plan for officers, directors,
employees and consultants. Under the plan, certain options issued will
constitute “Incentive Stock Options” within the meaning of section 422A of the
Internal Revenue Code, and other options issued will be deemed nonstatutory. The
Company’s Board of Directors is responsible for the plan and the granting of the
options.  The number of common shares reserved to be issued through
the plan is 3,000,000. Options are exercisable for as period up to ten years
from the date of grant. The Company’s Board of Directors decides the actual term
of each option. Options granted to employees are subject to a vesting schedule
based upon the number of years of continuous service that the employee has with
the Company from the grant date of the respective option. After three years of
continuous service from the date of grant, the respective options held by an
employee are fully vested. The price for shares issued through the exercise of
incentive stock options are at fair market value for all employees with the
exception of employees who are significant shareholders, who will pay no less
than 110% of market value. The price for shares issued through the exercise of
nonstatutory options shall be decided by the Company’s Board, but at a price no
less than 100% of the shares market value at date of grant.
 
 On March
28, 2007, the Company granted stock options for a total of 3,000,000 common
shares. The options were issued to its management and its employee under its
2005 Stock Option Plan. The options are exercisable any time through March 27,
2012 at a price of $.09 per share. The agreements limit the amount of shares
exercised per holder in any year to 100,000. These options were valued using the
Black-Scholes option pricing model using the following assumptions: term
of 5 years, a risk-free interest rate of 4.50%, a dividend yield
of 0% and volatility of 139%.  Compensation recognized on
the above option grants was $215,500 which will be charged to operations over
the next five years.  For the year ended March 31, 2008, amortization
of the options was $43,100.
 
 On March
28, 2007, the Company granted a consultant options to purchase 200,000 shares of
its common stock at a price of $0.10 per share, the option expires on March 27,
2010.  The options were valued using the Black-Scholes option pricing
model using the following assumptions: term of 3 years, a risk-free
interest rate of 4.49%, a dividend yield of 0% and volatility
of 139%. . Compensation recognized on the above option grant was $13,940
which was charged to operations at March 31, 2007,
 
 On April
13, 2007, the Company granted a consultant options to purchase 200,000 shares of
its common stock at a price of $0.10 per share, the option expires on April 12,
2010.  The options were valued using the Black-Scholes option pricing
model using the following assumptions: term of 3 years, a risk-free
interest rate of 4.71%, a dividend yield of 0% and volatility
of 164%. Compensation recognized on the above option grant was $17,100
which was charged to operations during the year ended March 31,
2008,
 
 On June
7, 2007, the Company granted a consultant options to purchase 1,000,000 shares
of its common stock at a price of $0.28 per share, the option expires on June 7,
2012.  The options were valued using the Black-Scholes option pricing
model using the following assumptions: term of 5 years, a risk-free interest
rate of 4.71%, a dividend yield of 0% and volatility of
164%.  Compensation recognized on the above option grant was $262,200
which will be charged to operations over the next five years.  For the
year ended March 31, 2008, amortization of the options was $39,330.
 
 The
following table summarizes the options and warrants outstanding at June 30,
2008:
   Options/Warrants
      Outstanding
                Weighted
      Average Exercise PriceBalance
      March 31, 2008
                
                19,700
                
                $0.35Granted
                
                0
                
                0Exercised
                
                0
                
                0Forfeited
                
                0
                
                0Balance
      June 30, 2008
                
                19,700
                
                $0.35
  F-16
 Table of Contents
 
 Note
12. Related Parties
 
 Stock
Issuances
 
 In June
2008, the Company issued 200,000 shares of its Series D Preferred Stock to its
President, Blair Merriam for the cancellation of $20,000 of debt.  The
shares were valued at $2,200,000, based upon the market price of the underlying
common shares at date of issuance.  Accordingly, the Company
recognized a $2,180,000 loss on the settlement of debt.
 
 Stock
Options
 
 The
Company had granted stock options to related parties to purchase shares of the
Company common stock. As of June 30, 2008, the 4,000,000 stock options
outstanding were all issued to related parties .
 
 Noncash
Transactions
 
 For the
three months ended June 30, 2008 and 2007, the Company accrued $0 and $60,000,
respectively, for compensation due its officers for services rendered. The
balances due to these officers at June 30, 2008 totaled $383,000.
 
 
 Note
13. Subsequent Events




F-17
 Table of Contents






ITEM
2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS





General





Platina
Energy Group Inc. (the “Company”) is an early stage, independent oil and gas
exploration and production company headquartered in Dallas,
Texas.  The Company is engaged primarily in the exploration and
development of oil and gas properties, currently in the States of Texas,
Oklahoma, Tennessee, Kentucky and Wyoming.  The Company will continue
to engage in a broad range of activities associated with the oil and gas
business in an effort to develop oil and gas reserves, and to produce crude oil
and natural gas as its principal products.  The Company anticipates
its activities will continue to include acquiring interests in oil or gas
properties located in established fields, managing and participating in
developmental drilling operations, acquiring interests in producing oil or gas
properties, acquiring and participating in tertiary recovery technologies on
existing wells using thermal dynamic pulse units (“TPU’s”), which involve a
proprietary, enhanced oil recovery technology, and license technology to further
enhance oil and gas recovery and more.  The Company has evolved from
primarily focusing on the TPU technology in 2005 to emphasizing the development
of the Company’s leased properties since 2007.  As a result of
shareholder encouragement coupled with increased commodity prices, beginning
near the end of fiscal 2007 until the present, the Company has focused more
heavily on lease acreage acquisitions, the drilling of new wells and tertiary
recovery procedures on existing wells, while also continuing to develop the TPU
technology and another technology that the Company has acquired.




The
Company was incorporated under Delaware law on January 19, 1988 as
"Windom."  After incorporation, the Company went through several
unrelated transactions involving other businesses that have subsequently been
divested.  A further subsequent restructure of the Company on June 25,
2005 resulted in the name change to “Platina Energy Group Inc.” with a new
business focus on the oil and gas sector.





The
corporate address is 14850 Montfort Dr. Suite 131, Dallas, Texas 75254-6750. The
main telephone number is (972)-458-9600.  The Company website address
is www.PlatinaEnergyGroup.com.





There can
be no assurance that we will be successful in our exploration, development, and
production activities. The oil and gas business involves numerous risks, the
principal ones of which are described in the section captioned “Risk Factors” in
our Annual Report on Form 10-KSB for the year ended March 31, 2008.





Listed
below are key Company events that occurred in fiscal 2009:





*
            The
      Company completed another loan financing with Trafalgar, this time for the
      loan amount of $2.3 million.





*
            The
      Company successfully drilled and tested one well in
    Wyoming.





*
            The
      Company successfully drilled four wells in Laurel County,
      Kentucky.






1
 Table of Contents




The
following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our consolidated financial
statements and related notes included elsewhere in this Report. In addition to
historical information, the discussion in this Report contains forward-looking
statements that involve risks and uncertainties. Actual results could differ
materially from those anticipated by these forward-looking statements due to
factors including, but not limited to, those factors set forth elsewhere in this
Report and in the section captioned "RISK FACTORS" in our Annual Report on Form
10-KSB for the year ended March 31, 2008.











Results
of Operations





Quarter Ended June 30, 2008
Compared to the Quarter Ended June 30, 2007








Revenues.  The
Company had $49,180 in income earned during the exploratory stage in the first
quarter of fiscal 2009, while the Company had no such income in the first
quarter of fiscal 2008.  The Company had no revenue from the sale or
lease of its thermal dynamic pulse units in the first quarter of fiscal 2009,
while the Company had $7,200 in revenue from an equipment lease from the
jv/leasing arrangement of a thermal dynamic pulse unit in the first quarter of
fiscal 2008.





Expenses. Operating expenses
increased to $2,004,402 in the first quarter of fiscal 2009 from $480,921 in the
first quarter of fiscal 2008.  This change comprises large increases
in general and administrative expense primarily attributable to non-cash stock
compensation, and to a much lesser extent by a depletion, depreciation, and
amortization expense in the amount of $53,886 in the first quarter of fiscal
2009 (-0- in the first quarter of fiscal 2008) the increase in operating
expenses was offset slightly due to no testing costs associated with
thermal pump in the first quarter of fiscal 2009 ($7,000 in the first quarter of
fiscal 2008).





*
            General
      and Administrative Expenses.  The increase in general and
      administrative expense to $1,950,516 in the first quarter of fiscal 2009
      from $473,721 in the first quarter of fiscal 2008 primarily reflects
      larger charges due to stock-based compensation (approximately $1.3 million
      in the first quarter of fiscal 2009 compared to approximately $302k in the
      first quarter of fiscal 2008) and a larger scale of operations during the
      first quarter of fiscal 2009.





Operating Loss. As a result
of the above described revenues and expenses, we incurred an operating loss of
$1,955,222 in the first quarter of fiscal 2009 as compared to an operating loss
of $473,721 in the first quarter of fiscal 2008.





Other
Income (Expense).





*
            Interest
      expense.  Interest expense increased the first quarter of fiscal
      2009 to $585,150 from $21,391 the first quarter of fiscal 2008 due to
      higher outstanding balances of indebtedness, the amortization of loan
      fees, and the amortization of the discounts on convertible debt incurred
      subsequent to the first quarter of fiscal
2008.





*
            Changes
      in fair value of derivative liability.  In the first quarter of
      fiscal 2009, the Company had positive changes in fair value of derivative
      liability in the amount of $2,470,673.  Negative changes in the
      preceding amount arose in fiscal 2008 primarily because the Company’s
      committed common shares exceeded the total shares that it had authorized.
      In the first quarter of fiscal 2009, the share authorization was increased
      thereby eliminating this derivative liability and resulting in the
      positive changes in fair value of derivative
  liability.





*
            Loss
      on settlement of debt.  Loss on settlement of debt increased in
      the first quarter of fiscal 2009 to $5,924,397 from $3,230,166 in the
      first quarter of fiscal 2008.  In the first quarter of fiscal
      2009,
      the Company issued 34,484,870 shares of its common stock in exchange for
      canceling $44,485 of indebtedness.  The Company recognized a
      loss of $3,723,397 on the conversions, which is the difference between the
      prevailing market price of the shares on the date of conversion and the
      conversion price.  Moreover, in the first quarter of fiscal
      2009, the Company issued 200,000 shares of Preferred D stock to Blair
      Merriam, the Company's Chief Executive Officer, in payment of $20,000 of
      debt.  The shares had a fair value of
      $2,200,000.  Accordingly, the Company recognized a loss of
      $2,180,000 on the settlement of debt.  The Company had one more
      stock issuance in the first quarter of fiscal 2009, which resulted in an
      additional loss of $21,000 on the settlement of
    debt.










2
 Table of Contents






Net Loss.The
Company incurred a net loss of $5,992,601, or $.07 per share, in the first
quarter of fiscal 2009 as compared to a net loss of $3,725,278, or $0.05 per
share, in the first quarter of fiscal 2008.  The increase in the net
loss is largely due to increased general and administrative expense (most was
attributed to third party stock issuances), increased interest expense, and an
increased loss on settlement of debt, offset to a large extent by large
favorable changes in fair value of derivative liability.








Liquidity and Capital
Resources





As of June 30, 2008, the Company had
cash in the amount of $71,571, while we had cash in the amount of $57,304 as of
March 31, 2008.  As of June 30, 2008, the Company had other
receivables from other sources totaling $92,066, and prepaid expenses in the
amount of $1,708,546.  Prepaid expense largely consists of the value of
shares of common stock and warrants issued to various consultants that are being
amortized into operations over the respective term of the various consulting
agreements.  As of June 30, 2008, the Company had current assets
totaling $1,872,183.  Moreover, as of June 30, 2008 the Company
had current liabilities totaling $5,262,602, which exceeded current assets by
$3,390,419.  This large working capital deficit raises a substantial
doubt as to the Company’s ability to continue as a going concern, and the
Company’s auditor added an emphasis paragraph to its report on the Company’s
consolidated financial statements for the year ended March 31, 2008 to such
effect.  Management believes that the Company will be able to resolve
the excess of current liabilities over current assets through revenues from
future oil and gas production, but there can be no assurance in this
regard.  If the Company is unable to meet its cash requirements
through future production, the Company would be constrained to obtain additional
financing.  If the Company is not able to obtain additional funds, the
Company may have to reduce the scope of its business activities, and may be
constrained to attempt to sell some of the oil and gas interests that it has
accumulated.  However, the Company cannot assure anyone that the
Company will be able to find interested buyers or that the funds received from
any such sale would be adequate to fund its activities.  Under certain
circumstances, the Company could be forced to cease its operations and liquidate
its remaining assets, if any.  The ability of the Company to continue
to pursue its business plan throughout fiscal 2009 and beyond will depend on the
Company's ability to continue to meet its cash requirements and ultimately to
achieve profitability with respect to its business operations.  There
can be no assurance that the Company will sustain this ability or achieve this
goal.





From the time that the business was
changed to oil and gas exploration and development in the summer of 2005 until
early January 2008, the business was financed through a series of private
placements, loans from affiliates, and loans from unaffiliated, commercial
lenders, none of which were very large in size.





On January 10, 2008, the Company
completed a $1,500,000 financing pursuant to a Securities Purchase Agreement
dated effective December 31, 2007 with Trafalgar Capital Specialized Fund,
Luxembourg ("Trafalgar") for Trafalgar to loan $1,500,000 the Company (the
"First Loan") pursuant to a secured Promissory Note (the "First Note") dated
December 31, 2007 with an annual interest rate of 10% due in monthly payments of
interest only for the first two months and then commencing three (3) months from
the date of the First Note, principal and interest amortized over the remaining
twenty-five months of the First Loan and a monthly redemption premium of 15% of
the payment is payable in monthly installments with all principal and accrued
but unpaid interest due on or before March 30, 2010.   In the
event of a material default which includes non-payment of principal or interest
when due, 24,000,000 treasury and third party non-affiliate shares were pledged
as additional collateral for the First Loan. The First Note is further secured
by all of the Company’s assets.  The funds from the First Loan were
used to drill and complete
five wells on the Tennessee prospect and to pay specific corporate
overhead.   Furthermore, the Company has the right, so long as
the First Note is not in default, at any time to retire the debt facility for
the then interest and principle amount plus a 15% redemption fee.  As
additional consideration for the debt facility, Trafalgar has the right to
accept monthly repayment of principle and interest (approximately $70,000 per
month) in the form of common shares only if the common stock price is trading
above $.40 per share. Trafalgar would then have the right to receive such
monthly payment(s) at a fixed conversion price of $.17 per share subject to
certain potential adjustments.





3
 Table of Contents




On May 22, 2008, a
$2,300,000 financing was completed pursuant to a Securities Purchase Agreement
dated effective May 21, 2008 with Trafalgar for Trafalgar to loan $2,300,000
(the “Second Loan”) pursuant to a secured Convertible Promissory Note (the
“Second Note”) dated May 21, 2008 with interest at 10% due in monthly payments
of interest only commencing one (1) month from the date of the Second Note, with
all principal and accrued but unpaid interest due on or before August 21, 2011.
Only when the Company’s Common Stock is trading at $0.30 or above, Trafalgar may
convert all or any part of the principal plus accrued interest into shares of
our Common Stock at the fixed price of $0.081 per share, subject to various
adjustments.   The material default provisions include
non-payment of principal or interest when due.  As part of this
transaction, 2,300,000 restricted shares of our Common Stock were issued to
Trafalgar and pledged 57,500 shares of Series E Preferred Stock to Trafalgar to
secure the Second Note.  The Second Note is further secured by all of
the Company’s assets.  The funds from the Second Loan have been and
will be used in conjunction with our oil and gas prospects.




Although
management believes that the Company has leased enough land to move forward with
the current plan of operation, it was necessary to obtain additional financing
before this plan can be partially implemented. This was accomplished through the
second funding obtained from Trafalgar.  The Company will likely need
to raise additional funds to finance its planned operations, including fully
implementing the current plan of operation and making lease and debt payments as
they come due.  Management is currently identifying sources of
capital.  However there are currently no binding commitments for, or
readily available sources of, additional financing.  Management cannot
assure anyone that additional financing will be available to the Company when
needed or, if available, that it can be obtained on commercially reasonably
terms.  If additional financing is not obtained it will not be
possible to fully implement our planned drilling and exploration activities and
may not be able to maintain all the Company’s leases.  Moreover, our
plan of operations may have to be reduced accordingly, although management will
strive to complete as many producible wells as possible with the funds
available.  If additional financing is not obtained through an equity
or debt offering, management may attempt to sell the Company’s interests in some
or all of the properties in which it has acquired together with any proprietary
information that developed concerning such properties, such as title searches,
title policies, engineering reports and records, core information, drilling
reports, and production records, if any.  However, management cannot
assure anyone that it will be able to find interested buyers or that the funds
received from any such sale would be adequate to fund planned
activities.





A drilling
budget for fiscal 2009 has not been established, and the ultimate size of this
budget will depend on the amount of funds that are raised.  Management
believes that with the capital resources readily available as of the date of
this Quarterly Report, the Company’s 10 Kentucky wells can be completed, and
production from such wells can commence.  Management believes that the
Company has available to it sufficient funds to pursue the Company’s business
plan for the next 12 months, but there can be no assurance in this
regard.    We expect that we will accept whatever funds as
we are able to raise and will use those funds to the extent that we
can.




The
Company believesthat
production from the exploration and drilling efforts will provide the Company
with a positive cash flow, and that
the increases in proven reserves should increase the value of the Company’s
properties and should better
enablethe
Company to obtain bank financing (after the wells have produced for a period of
time to satisfy the related lender).  Both of these results would
enable management to continue with the Company’s drilling
activities.  Cash flow and conventional bank financing are as critical
to management’s plan of operation as additional debt or equity
financing.





In
addition to the capital necessary to undertake planned drilling activities,
additional sufficient cash flow will be needed in order to make scheduled debt
payments on the indebtedness owed to Trafalgar.A balloon payment in the
amount of $1.5 million is due to Trafalgar on or before March 30, 2010, and
another payment in the amount of $2.3 million is due to Trafalgar on or before
August 21, 2011.  It is anticipated that the proceeds generated
by the wells successfully drilled in Kentucky will enable the obligations to
Trafalgar to be met.  However, failure to generate sufficient income
to pay these debt payments could cause result in the loss of a significant
portion of the Company’s assets and could cause Trafalgar to exercise other
creditor rights, which could result in the loss of all or nearly all of the
value of the Company’s outstanding equity and bring operations to an
end.  For further information in this regard, see the risk factor
captioned "The current lending transactions, which are secured by all of
Platina’s assets, feature limiting operating covenants and require substantial
future payments, expose the Company to certain risks and may adversely affect
the ability to operate the business" in ITEMS 1 and 2. DESCRIPTION OF BUSINESS
AND PROPERTIES - RISK FACTORS of our Annual Report on Form 10-KSB for the year
ended March 31, 2008.





To conserve on capital requirements,
the Company may in the future issue shares in lieu of cash payments to employees
and outside consultants, as has done in the past.  Moreover, to
conserve on capital requirements, management intends occasionally to seek other
industry investors who are willing to participate in the Company’s exploration
and production activities.  Management expects to retain a promotional
interest in these prospects, but generally will have to finance a portion (and
sometimes a significant portion) of the acquisition and drilling
costs.  Also, the Company periodically may acquire interests in
properties by issuing shares of common stock.






4
 Table of Contents






Critical
Accounting Policies and Estimates





Our
discussion of our financial condition and results of operations is based on the
information reported in our financial statements. The preparation of our
financial statements requires us to make assumptions and estimates that affect
the reported amounts of assets, liabilities, revenues and expenses as well as
the disclosure of contingent assets and liabilities as of the date of our
financial statements. We base our assumptions and estimates on historical
experience and other sources that we believe to be reasonable at the time.
Actual results may vary from our estimates due to changes in circumstances,
weather, politics, global economics, mechanical problems, general business
conditions and other factors. Our significant accounting policies are detailed
in Note 1 to our financial statements included in this Quarterly Report. We have
outlined below certain of these policies that have particular importance to the
reporting of our financial condition and results of operations and that require
the application of significant judgment by our management.





Key
Definitions





Proved
reserves, as defined by the U.S. Securities and Exchange Commission, are the
estimated quantities of crude oil, condensate, natural gas and natural gas
liquids that geological and engineering data demonstrate with reasonable
certainty are recoverable in future years from known reservoirs under existing
economic and operating conditions. Valuations include consideration of changes
in existing prices provided only by contractual arrangements, but not on
escalations based upon future conditions. Prices do not include the effect of
derivative instruments, if any, entered into by us.





Proved
developed reserves are those reserves expected to be recovered through existing
equipment and operating methods. Additional oil and gas volumes expected to be
obtainedthrough the
application of fluid injection or other improved recovery techniques for
supplementing the natural forces and mechanisms of primary recovery are included
as proved developed reserves only after testing of a pilot project or after the
operation of an installed program has confirmed through production response that
increased recovery will be achieved.





Proved
undeveloped reserves are those reserves that are expected to be recovered from
new wells on non-drilled acreage, or from existing wells where a relatively
major expenditure is required for re-completion. Reserves on non-drilled acreage
are limited to those drilling units offsetting productive units that are
reasonably certain of production when drilled. Proved reserves for other
non-drilled units are claimed only where it can be demonstrated with certainty
that there is continuity of production from the existing productive
formation.





Oil and Gas
Properties





The
Company follows the full cost method of accounting for crude oil and natural gas
properties. Under this method, all direct costs and certain indirect costs
associated with acquisition of properties and successful as well


as
unsuccessful exploration and development activities are
capitalized.  Depreciation, depletion, and amortization of capitalized
crude oil and natural gas properties and estimated future development costs,
excluding unproved properties, are based on the unit-of-production method based
on proved reserves.





Long-Lived
Assets





The
Company accounts for its long-lived assets in accordance with SFAS No. 144,
“Accounting for the Impairment or Disposal of Long-Lived
Assets.”  SFAS No. 144 requires that long-lived assets be reviewed for
impairment whenever events or changes in circumstances indicate that the
historical cost carrying value of an asset may no longer be
appropriate.  Management assesses recoverability of the carrying value
of an asset by estimating the future net cash flows expected to result from the
asset, including eventual disposition.  If the future net cash flows
are less than the carrying value of the asset, an impairment loss is recorded
equal to the difference between the asset’s carrying value and fair value or
disposable value.





Convertible
Debentures





If the
conversion feature of conventional convertible debt provides for a rate of
conversion that is below market value, this feature is characterized as a
beneficial conversion feature (“BCF”).  A BCF is recorded as a debt
discount pursuant to EITF Issue No. 98-5 (“EITF 98-05”), Accounting for
Convertible Securities with Beneficial Conversion Features or Contingency
Adjustable Conversion Ratio, and EITF Issue No. 00-27, Application of EITF Issue
No. 98-5 to Certain Convertible Instruments.  In those circumstances,
the convertible debt will be recorded net of the discount related to the
BCF.  The Company amortizes the discount to interest expense over the
life of the debt using the effective interest method.





Non-Conventional Convertible
Debentures





The
Company accounts for its non-conventional convertible debt and the related stock
purchase warrants.  In the case of non-conventional convertible debt,
we bifurcate our embedded derivative instruments and records them under the
provisions of SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities,” as amended, and EITF Issue No. 00-19, Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own
Stock. ” These embedded derivatives include the conversion feature, liquidated
damages related to registration rights and default provisions.  The
accounting treatment of derivative financial instruments requires that we record
the derivatives and related warrants at their fair values as of the inception
date of the agreement and at fair value as of each subsequent balance sheet
date.  In addition, under the provisions of EITF Issue No. 00-19, as a
result of entering into the non-conventional convertible debenture, we are
required to value and classify all other non-employee stock options and warrants
as derivative liabilities at that date and mark them to market at each reporting
date thereafter.  Any change in fair value will be recorded as
non-operating, non-cash income or expense at each reporting date.  If
the fair value of the derivatives is higher at the subsequent balance sheet
date, we will record a non-operating, non-cash charge.  If the fair
value of the derivatives is lower at the subsequent balance sheet date, we will
record non-operating, non-cash income.  We value our derivatives
primarily using the Black-Scholes Option Pricing Model.  The
derivatives are classified as long-term liabilities.







5
 Table of Contents






Other
derivatives





The
Company accounts for our committed common shares in excess of the number of our
authorized and unissued shares pursuant to EITF 00-19 “Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Company's Own
Stock”.  EITF 00-19, requires that we record a liability for the fair
value of committed shares in excess of the authorized and unissued
shares.





Committed
shares are any shares on which 1) we are obligated to issue pursuant to the
terms of convertible debt that we are obligated, 2) shares that we are obligated
to issue pursuant to the terms of our issued and outstanding convertible
preferred stock, and 3) depending on the exercise price in terms of our trading
price, shares that we are obligated to issue pursuant to stock warrants and
options the we granted and that are currently exercisable.





Revenue
recognition





Revenue
is recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 101,
“Revenue Recognition in Financial Statements,” as revised by SAB No.
104.  As such, revenue is recognized when persuasive evidence of an
arrangement exists, title transfer has occurred, the price is fixed or readily
determinable and collectability is probable.  Sales are recorded net
of sales discounts.





Stock Based
Compensation





The
Company accounts for stock-based compensation under SFAS No. 123R, "Share- based
Payment” " and SFAS No. 148, "Accounting for Stock-Based
Compensation--Transition and Disclosure--An amendment to SFAS No. 123." These
standards define a fair value based method of accounting for stock-based
compensation. In accordance with SFAS Nos. 123R and 148, the cost of stock-based
employee compensation is measured at the grant date based on the value of the
award and is recognized over the vesting period. The value of the stock-based
award is determined using the Black-Scholes option-pricing model, whereby
compensation cost is the excess of the fair value of the award as determined by
the pricing model at the grant date or other measurement date over the amount an
employee must pay to acquire the stock. The resulting amount is charged to
expense on the straight-line basis over the period in which we expect to receive
the benefit, which is generally the vesting period.





Issuance of Stock for
Non-Cash Consideration





All
issuances of the Company’s stock for non-cash consideration have been assigned a
per share amount equaling either the market value of the shares issued or the
value of consideration received, whichever is more readily determinable. The
majority of the non-cash consideration received pertains to services rendered by
consultants and others and has been valued at the market value of the shares on
the dates issued.





Net Loss per
Share





The
provisions of SFAS No. 128, “Earnings Per Share” (“EPS”) have been
adopted.  SFAS No. 128 provides for the calculation of basic and
diluted earnings per share.   Basic EPS includes no dilution and
is computed by dividing income or loss available to common shareholders by the
weighted average number of common shares outstanding for the
period.  Diluted EPS reflects the potential dilution of securities
that could share in the earnings or losses of the entity, arising from the
exercise of options and warrants and the conversion of convertible
debt.





Fair Value of Financial
Instruments





The
Company’s financial instruments consist of cash and cash equivalents, accounts
payable, and notes payable.  Pursuant to SFAS No. 107, “Disclosures
About Fair Value of Financial Instruments,” management is required to estimate
the fair value of all financial instruments at the balance sheet
date.   The carrying values of our financial instruments in the
financial statements are considered in order to approximate their fair values
due to the short -term nature of the instruments.




Forward-Looking
Statements





Statements
in the preceding discussion relating to future plans, projections, events, or
conditions are forward-looking statements.  Actual results, including
production growth and capital spending, could differ materially due to changes
in long-term oil or gas prices or other changes in market conditions affecting
the oil and gas industry; political events or disturbances; severe weather
events; reservoir performance; changes in OPEC quotas; timely completion of
development projects; changes in technical or operating conditions; and other
factors including those discussed herein and in the section captioned "RISK
FACTORS" in our Annual Report on Form 10-KSB for the year ended March 31,
2008.





ITEM 4T.  CONTROLS AND
PROCEDURES





Evaluation of Disclosure Controls and
Procedures





Under the supervision and
with the participation of our management, including our principal executive
officer and principal financial officer, we conducted an evaluation of our
disclosure controls and procedures, as such term is defined under Rule 13a-15(e)
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).  Based on this evaluation, our principal executive officer and
our principal financial officer concluded that our disclosure controls and
procedures were effective as the end of the period covered by this report. There
were no changes in our internal control over financial reporting during the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, our internal controls over financial
reporting.





6
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PART
II. OTHER INFORMATION





ITEM
1.  LEGAL PROCEEDINGS





We are
not now a party to any legal proceeding requiring disclosure in accordance with
the rules of the U.S. Securities and Exchange Commission.  In the
future, we may become involved in various legal proceedings from time to time,
either as a plaintiff or as a defendant, and either in or outside the normal
course of business.  We are not now in a position to determine when
(if ever) such a legal proceeding may arise. If we ever become involved in such
a legal proceeding, our financial condition, operations, or cash flows could be
materially and adversely affected, depending on the facts and circumstances
relating to such proceeding.





ITEM
2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS





Preferred
Stock





In April
2008, the Company issued 12,500 shares of its Series D Preferred Stock for
services rendered by consultants.  The shares were valued at $112,500,
based upon the market price of the underlying common shares at date of
issuance.





In April
2008, the Company issued 2,000 shares of its Series C Preferred Stock for a loan
fee.  The shares were valued at $20,000, based upon the market price
of the underlying common shares at date of issuance.





In April
2008, the Company issued 10,000 shares of its Series D Preferred Stock for a
loan fee.  The shares were valued at $120,000, based upon the market
price of the underlying common shares at date of issuance.





In May
2008, the Company issued 5,000 shares of its Series D Preferred Stock for
services rendered by a consultant.  The shares were valued at $50,000,
based upon the market price of the underlying common shares at date of
issuance.





In May
2008, the Company issued 3,500 shares of its Series D Preferred Stock for
interest expense.  The shares were valued at $31,500, based upon the
market price of the underlying common shares at date of issuance.





In June
2008, the Company issued 3,500 shares of its Series D Preferred Stock for
interest expense.  The shares were valued at $35,000, based upon the
market price of the underlying common shares at date of issuance.





In June
2008, the Company issued 1,000 shares of its Series D Preferred Stock for a loan
fee.  The shares were valued at $9,000, based upon the market price of
the underlying common shares at date of issuance.





In June
2008, the Company issued 4,500 shares of its Series D Preferred Stock for
accrued compensation.  The shares were valued at $45,000, based upon
the market price of the underlying common shares at date of
issuance.  Accordingly, the Company recognized a $21,000 loss on the
settlement of debt.


In June
2008, the Company issued 3,000 shares of its Series D Preferred Stock for a loan
fee.  The shares were valued at $30,000, based upon the market price
of the underlying common shares at date of issuance.





In June
2008, the Company issued 7,500 shares of its Series D Preferred Stock to its
three directors for services rendered.  The shares were valued at
$75,000, based upon the market price of the underlying common shares at date of
issuance.





In June
2008, the Company issued 1,000 shares of its Series D Preferred Stock for a loan
fee.  The shares were valued at $10,000, based upon the market price
of the underlying common shares at date of issuance.





In June
2008, the Company issued 200,000 shares of its Series D Preferred Stock to its
President, Blair Merriam for the cancellation of $20,000 of debt.  The
shares were valued at $2,200,000, based upon the market price of the underlying
common shares at date of issuance.  Accordingly, the Company
recognized a $2,180,000 loss on the settlement of debt.





In June
2008, the Company issued 10,000 shares of its Series D Preferred Stock for
services rendered by a consultant.  The shares were valued at
$100,000, based upon the market price of the underlying common shares at date of
issuance.





In June
2008, the Company issued 11,500 shares of its Series D Preferred Stock to
certain employees for safety rewards.  The shares were valued at
$115,000, based upon the market price of the underlying common shares at date of
issuance.





Common
Stock





In April
2008, the Company issued 180,000 shares of its common stock as the result of a
conversion of 1,800 shares of its Series C Preferred stock.





In May
2008, the Company issued 2,100,100 shares of its common stock as the result of a
conversion of 21,001 shares of its Series B Preferred stock.





In May
2008, the Company issued 912,300 shares of its common stock as the result of a
conversion of 9,123 shares of its Series B Preferred stock.





In June
2008, the Company issued 352,942 shares of its common stock in exchange for the
consulting services.  The services were valued at $35,294, which was
based on the market value of the shares on the date of issuance.





During
the three months ended June 30, 2008, the Company issued 34,484,870 shares of
its common stock in exchange for canceling $44,485 of
indebtedness.  These shares cannot be sold in the U.S. market for five
years. The Company recognized a loss of $3,723,397 on the conversions, which is
the difference between the prevailing market price of the shares on the date of
conversion and the conversion price.




7
 Table of Contents




ITEM
6.  EXHIBITS





(a)           The
following exhibits are filed with this Quarterly Report or are incorporated
herein by reference:





Exhibit


Number   Description





31.01
            Certification
      pursuant to Rule 13a-14(a) of the Securities Exchange Act of
      1934.31.02
            Certification
      pursuant to Rule 13a-14(a) of the Securities Exchange Act of
      1934.32.01
            Certification
      Pursuant to 18 U.S.C. Section 1350, as pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.32.02
            Certification
      Pursuant to 18 U.S.C. Section 1350, as pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.







SIGNATURES





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




PLATINA
      ENERGY GROUP INC.(Registrant)By:
            /s/
      Blair J. MerriamBlair
      J. Merriam,Chief
      Executive Officer(Principal
      Executive Officer, Principal Financial Officer and Principal Accounting
      Officer)


August
19, 2008






8
 Table of Contents




Exhibit
31.01


CERTIFICATIONS





I, Blair
J. Merriam, certify that:





1.           I
have reviewed this quarterly report on Form 10-Q of Platina Energy Group
Inc.;





2.
            Based
      on my knowledge, this report does not contain any untrue statement of a
      material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this
      report;





3.
            Based
      on my knowledge, the consolidated financial statements, and other
      financial information included in this report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the company as of, and for, the periods presented in this
      report;





4.
            The
      company’s other certifying officer and I are responsible for establishing
      and maintaining disclosure controls and procedures (as defined in Exchange
      Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
      reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
      the company and have:





(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;





(b)
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of consolidated financial statements for external purposes
in accordance with generally accepted accounting principles;





(c)
Evaluated the effectiveness of the company's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and





(d)
Disclosed in this report any change in the company's internal controls over
financial reporting that occurred during the company's most recent fiscal
quarter (the company's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the
company's internal controls over financial reporting; and





5.
            The
      company's other certifying officer(s) and I have disclosed, based on our
      most recent evaluation of internal controls over financial reporting, to
      the company's auditors and the audit committee of the company's Board of
      Directors (or persons performing the equivalent
  functions):





(a) All
significant deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting which are reasonably likely to
adversely affect the company's ability to record, process, summarize and report
financial information; and





(b) Any
fraud, whether or not material, that involves management or other employees who
have a significant role in the company's internal controls over financial
reporting.





Date:
August 19, 2008


/s/ Blair
J. Merriam


-----------------------------------------


Blair J.
Merriam,


Chief
Executive Officer






9
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Exhibit
31.02


CERTIFICATIONS





I, Blair
J. Merriam, certify that:





1.           I
have reviewed this quarterly report on Form 10-Q of Platina Energy Group
Inc.;





2.
            Based
      on my knowledge, this report does not contain any untrue statement of a
      material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this
      report;





3.
            Based
      on my knowledge, the consolidated financial statements, and other
      financial information included in this report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the company as of, and for, the periods presented in this
      report;





4.
            The
      company’s other certifying officer and I are responsible for establishing
      and maintaining disclosure controls and procedures (as defined in Exchange
      Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
      reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
      the company and have:





(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;





(b)
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of consolidated financial statements for external purposes
in accordance with generally accepted accounting principles;





(c)
Evaluated the effectiveness of the company's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and





(d)
Disclosed in this report any change in the company's internal controls over
financial reporting that occurred during the company's most recent fiscal
quarter (the company's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the
company's internal controls over financial reporting; and





5.
            The
      company's other certifying officer(s) and I have disclosed, based on our
      most recent evaluation of internal controls over financial reporting, to
      the company's auditors and the audit committee of the company's Board of
      Directors (or persons performing the equivalent
  functions):





(a) All
significant deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting which are reasonably likely to
adversely affect the company's ability to record, process, summarize and report
financial information; and





(b) Any
fraud, whether or not material, that involves management or other employees who
have a significant role in the company's internal controls over financial
reporting.





Date
August 19, 2008





/s/ Blair
J. Merriam


-------------------------------------


Blair J.
Merriam,


Chief
Financial Officer




10
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Exhibit
32.01





CERTIFICATION
PURSUANT TO


18 U.S.C.
SECTION 1350


AS
ADOPTED PURSUANT TO


SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002





In
connection with the Quarterly Report of Platina Energy Group Inc. (the
"Company") on Form 10-Q for the quarter ended June 30, 2008 as filed with the
Securities and Exchange Commission on or about the date hereof ("Report"), the
undersigned, in the capacities and on the dates indicated below, hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to his knowledge:





1.           The
Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and





2.           The
information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company.





Dated:
August 19,
2008                                                                                     /s/ Blair J.
Merriam


Blair J.
Merriam,


Chief Executive
Officer








11
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Exhibit
32.02





CERTIFICATION
PURSUANT TO


18 U.S.C.
SECTION 1350


AS
ADOPTED PURSUANT TO


SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002





In
connection with the Quarterly Report of Platina Energy Group Inc. (the
"Company") on Form 10-Q for the quarter ended June 30, 2008 as filed with the
Securities and Exchange Commission on or about the date hereof ("Report"), the
undersigned, in the capacities and on the dates indicated below, hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to his knowledge:





1.           The
Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and





2.           The
information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company.





Dated:
August 19,
2008                                                                                     /s/ Blair J.
Merriam


Blair J.
Merriam,


Chief Financial
Officer