2 Significant Accounting Policies: Derivative Financial Instruments (Policies)

12 Months Ended

Jun. 30, 2013

Policies

Derivative Financial Instruments

Derivative financial instruments

The Company’s derivative financial instruments consist of embedded derivatives related to the warrants.  The accounting treatment of derivative financial instruments requires that the Company record the warrants at their fair values as of the inception date and at fair value as of each subsequent balance sheet date.  Any change in fair value is recorded as non-operating, non-cash income or expense at each balance sheet date.  If the fair value of the derivatives was higher at the subsequent balance sheet date, the Company recorded a non-operating, non-cash charge. If the fair value of the derivatives was lower at the subsequent balance sheet date, the Company recorded non-operating, non-cash income.

During the years ended June 30, 2013 and 2012, the Company recognized other income of nil and $1,161, respectively, relating to recording the warrant and derivative liabilities at fair value.  At June 30, 2013 and 2012 there were no warrant and derivative liabilities.