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## 6. Inventory 

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## 7. Financial Instruments 

a. Financial Assets and Liabilities 

The carrying values of financial assets by category at June 30, 2011 and June 30, 2010 are as follows: 

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The Company’s cash equivalents bear interest at rates of 1.20% to 1.38% (2010 –  0.60% to Prime less 2.00%) and mature on February 27, 2012 (2010 - July 14, 2010 and September 12, 2010). 

The carrying values of financial liabilities by category at June 30, 2011 and June 30, 2010 are as follows: 

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Cash and cash equivalents, restricted cash and accounts receivable are classified as Level 2 within the fair value hierarchy. The following table sets forth the Company’s financial liabilities measured at fair value by level within th e fair value hierarchy at June 30, 2011 (June 30, 2010 - $Nil): 

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b. Financial Instrument Risk Exposure 

The Company’s  financial instruments are exposed to certain financial risks, including market risk, credit risk, and liquidity risk. 

 (i) Market risk 

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk is comprised of three types of risk: foreign currency risk, price risk and interest rate risk. 

