5. Derivative Liabilities

1 Months Ended

Dec. 31, 2012

Derivatives, Policy [Policy Text Block]

5.    Derivative Liabilities

As at December 31, 2012, the following are the fair value of the derivative to account for the convertibility feature of the convertible debenture as well as the fact that there is no lower limit on the number of issuable common shares upon conversion:

	December 31, 2012 $
Convertible promissory note, due December 5, 2014	395,285

On December 6, 2012 (issuance date), the Company recorded the initial fair value of the derivative liability at $497,557, and a loss on change in the fair value of the derivative liability of $347,557.  At December 31, 2012, the Company mark-to-market the fair value of the derivative liability to $395,285, and a gain on the change in fair value of the derivative liability of $102,272.  During the period ended December 31, 2012, the Company recorded a loss on the fair value of the derivative liability of $245,285. The fair value of the derivative financial liabilities was determined using the multinomial lattice models and the following assumptions:

	Expected Volatility	Risk-free Interest Rate	Expected Dividend Yield	Expected Life (in years)
At December 6, 2012 (issuance date)	318%	0.25%	0%	2.00
At December 31, 2012	312%	0.25%	0%	1.93