Forward Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including "could", "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report.

This management's discussion and analysis or plan of operation should be read in conjunction with the financial statements and notes thereto of the Company for the three months ended August 31, 2008. The reported results may not necessarily reflect the future.

Business Overview and Uncertainties

We were incorporated as a Nevada company on January 22, 2007. Our principal office is located at 1205 - 207 West Hastings Street, Vancouver, British Columbia, Canada, V6B 1H7. Our telephone number is (604) 609-2898. Our fiscal year end is May 31. Our website is www.mantraenergy.com. In December 2007 our common stock became quoted on the OTC Bulletin Board under the symbol "MVTG.OB". On February 18, 2008 our stock became eligible for trading on the Frankfurt Stock Exchange under the symbol "EDV 5MV". The Frankfurt Stock Exchange is a stock exchange located in Frankfurt, Germany.

We are building a portfolio of companies and technologies that mitigate negative environmental and health consequences that arise from the production of energy and the consumption of resources. On November 2, 2007, through our wholly owned subsidiary, Mantra Energy Alternatives Ltd., we entered into a technology assignment agreement with 0798465 BC Ltd. whereby we acquired 100% ownership of an invention for the electro-reduction of carbon dioxide. This technology is described in greater detail under the heading "Our Business" below. Other than this, we have not acquired or developed any further commercially exploitable technologies. There is no guarantee that we will ever acquire any further commercially exploitable technologies, that any of our present or future technologies will be commercially viable, or that we will succeed in commercially exploiting any of our technologies.

We carry on our business through our six wholly owned subsidiaries and one majority owned subsidiary as follows:

� Mantra Energy Alternatives Ltd., through which we identify, acquire, develop and market technologies related to alternative energy production, greenhouse gas emissions reduction and resource consumption reduction;

� Carbon Commodity Corp., through which we intend to license or develop carbon footprint assessment software and develop an online carbon reduction marketplace;

� Climate ESCO Ltd., through which we plan obtain the distribution or licensing rights to commercialized technologies and broker them to residential and industrial consumers seeking sustainability solutions;

� Mantra Media Corp., through which we offer promotional and marketing services to companies in the sustainability sector or those seeking to adopt sustainable practices;

� Mantra Wind Inc., through which we plan to develop small to medium scale wind farms;

� Mantra China Inc., our majority owned subsidiary, through which we intend to distribute Asian-produced technologies in North America; and

� Mantra China Limited, through which we, together with our joint venture partners, plan to develop our business in Hong Kong and mainland China.

Results of Operations for the Period From January 22, 2007 (Date of Inception) to August 31, 2008 and for the Three Months Ended August 31, 2008 compared to the Three Months Ended August 31, 2007.

Lack of Revenues

We have had limited operational history since our inception on January 22, 2007. From our inception on January 22, 2007 to May 31, 2008 we did not generate any revenues; however for the three months ended August 31, 2008 we generated $8,000 in website development revenue. As at August 31, 2008, we had total assets of $149,859 and total liabilities of $231,619. Since our inception to August 31, 2008, we have an accumulated deficit of $2,456,364. We anticipate that we will incur substantial losses over the next year and our ability to generate additional revenues in the next 12 months remains uncertain.

Expenses

We accumulated total expenses of $2,459,750 from the date of our inception to August 31, 2008, including $102,052 in research and development costs, $26,174 in amortization expense, $366,916 in consulting and advisory fees (of which $ 220,873 is stock based), $202,102 in business development expenses (of which $167,404 is stock based), $354,000 in management fees (of which $72,977 is stock based), $288,403 in shareholder communication, awareness and financing (of which $45,407 is stock based), $283,618 in professional fees (of which $41,500 is stock based), $148,864 in public listing costs (of which 40,000 is stock based), $161,806 in expenses related to website development and corporate branding (of which $26,975 is stock based) $286,246 in other general and administrative expenses.

For the three months ended August 31, 2008, we incurred total expenses of $413,138 including $19,624 in research and development costs, $4,955 in amortization expense, $23,733 in consulting and advisory fees ($28,262 is stock based), $1,449 in business development expense, $94,033 in management fees (of which $51,711 is stock based), $538 in expenses related to corporate branding, $104,491 in shareholder awareness, and financing expense(of which $35,713 is stock based), $1,817 public listing costs, $91,363 in professional fees, and $42,363 in other general and administrative expenses.

By comparison, our total operating expenses were $284,272 for the three months ended August 31, 2007. Our expenses during that period consisted primarily of $194,175 in general and administrative expense, $36,497 in consulting and advisory fees, and $16,000 in professional fees.

Our other general and administrative expenses consist of bank charges, travel, meals and entertainment, foreign exchange, office rent and maintenance, communication expenses (cellular, internet, fax, and telephone), courier, postage costs and office supplies. Our professional fees include legal, accounting and auditing fees.

Net Loss

Since our inception on January 22, 2007 to August 31, 2008, we have incurred net loss of $2,449,244. For the three months ended August 31, 2008, we incurred net loss of $402,632.compared to our net loss of $284,272 for the same period in 2007. .

Liquidity and Capital Resources

At August 31, 2008 we had cash of $932 in our bank accounts and a working capital deficit of $203,621. This compares to our cash of $26,201 and working capital deficit of $192,290 for the period ended May 31, 2008. We are solely dependent on the funds raised through our equity or debt financing and our net loss was funded through equity financing.

During the three months ended August 31, 2008, we raised gross proceeds of $646,720 from the sale of our securities as described in the following table.

                                   Type of     Number of   Price per   Total funds
        Date of issuance           security   securities    security     received
                                    issued      issued        ($)          ($)
                                   Options      100,000       0.20     For services
June 2008                           Common      37,500        0.20     For services
                                    Shares
                                    Common      50,000        0.40     For services
July 2008                           Shares
July 2008                          Options      150,000       0.25     For services
July 2008
July 2008                           Units      2,400,000     0.125       300,000
July 2008                           Common      62,000       0.45-     For services
                                    Shares

During the three months ended August 31, 2008, we used net cash of $28,319 in investing activities and net cash of $304,862 in operating activities. This compares to our net cash used in investing activities of $13,198 and net cash used in operating activities of $8,120 for the same period in 2007. During the three months ended August 31, 2008 we received net cash of $300,000 from financing activities compared to $35,300 for the same period in 2007. The increase in cash received from financing for the three months ended August 31, 2008 was due to the sale of our common stock.

We expect to require approximately $3,725,000 in financing to acquire and develop technologies and launch our online carbon reduction marketplace over the next 12 months (beginning October 1, 2008), as follows:

                                                        Estimated
              Description                                expenses
                                                            ($)
              Full launch and development of an online   100,000
              carbon reduction marketplace
              Development and marketing of the ERC      2,800,000
              Technology
              Development of promotional and marketing   225,000
              service business
              Evaluation and acquisition of new          600,000
              technologies
              Total                                     3,725,000

Our other planned operational expenses for the next twelve months (beginning October 1, 2008) are summarized as follows:

Description                               Target completion    Estimated expenses
                                            date or period             ($)
Completion of road shows                  December 31, 2008          26,000
Management and consulting fees
(including expenses of our Scientific         12 months             700,000
Advisory Board)
Raise additional private or public
equity (legal, accounting and marketing   December 31, 2008         176,000
fees)
Legal and professional fees                   12 months             140,500
Travel and promotional expenses               12 months             230,000
General and administrative expenses           12 months             129,500
Total                                                              1,402,000

At present, our cash requirements for the next twelve months outweigh the funds available to maintain or develop our operations. Of the $5,127,000 that we need for the next 12 months, we had $932 in cash as of August 31, 2008. In order to fully carry out our business plan, we need additional financing of approximately $5,127,000 for the next 12 months. In order to improve our liquidity, we intend to pursue additional equity financing from private investors or possibly a registered public offering. We intend to negotiate with our management and consultants to pay parts of salaries and fees with stock and stock options instead of cash. We also intend to implement cost reduction measures which may include reducing our budget for the evaluation of potential new projects, focusing our expenditures on less speculative or less developed projects, reducing our reliance on outside contractors, and tailoring our investor awareness programs and initiatives to a scale that is appropriate to our level of activity and the nature of our business. Finally, we intend to seek out alternative sources of funding, such as research and development grants to offsetting the cost of our technology development

There can be no assurance we will be successful in our efforts to secure additional equity financing. If we are unable to raise equity or obtain alternative financing, we may not be able to continue operations with respect to the continued development and marketing of our company and our subsidiaries and we may not be able to continue our operations and our business plan may fail. You may lose your entire investment.

If operations and cash flow improve through these efforts, management believes that we can continue to operate. However, no assurance can be given that management's actions will result in profitable operations or an improvement in our liquidity situation. The threat of our ability to continue as a going concern will be removed only when revenues have reached a level that sustains our business operations.

Off-Balance Sheet Arrangements

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