Endeavour's proprietary capital base is invested in various types of securities including common shares and warrants of both public and private companies, loans and convertible loans. We classify all the investments in our portfolio as held for trading and therefore fair values the investments at each financial reporting period. The changes in the fair values of investments at each reporting period are recorded as investment income or loss on the statement of operations. A summary of the valuation policies are described below. For a complete description of our assumptions used to determine fair values please refer to Note 2 of Endeavour's audited annual consolidated Financial Statements for the year ended June 30, 2009.

• Securities which includes, options and warrants, held in long or short positions, that are traded on a recognized securities exchange and for which no sales restrictions apply are recorded at carrying values based on the current bid price at the balance sheet dates. When the market for securities is not active, those securities are recorded at carrying values based on the last quoted price at the balance sheet dates.

• Securities which includes, options and warrants, that are traded on a recognized exchange, but that are escrowed or otherwise restricted as to sale or transfer are recorded at amounts discounted from market value. In determining the discount for such investments, the Corporation considers the nature and length of the restriction and any other factors that may be relevant to the ongoing and realizable value of the investments.

• Securities in privately-held companies are recorded at cost unless an upward adjustment is considered appropriate and supported by persuasive and objective evidence such as a significant subsequent equity financing by an unrelated, professional investor at a transaction price higher than the Corporation's carrying value. Downward adjustments to carrying value are made when there is evidence of an other than temporary decline in value as indicated by the assessment of the financial condition of the investment based on operational results, forecasts, financing and other developments since acquisition.

• Warrants for public companies which are not listed or traded on a national exchange are valued at the difference between the exercise price and the quoted market price of the underlying shares, plus an adjustment for time value using the Black-Scholes option pricing model.of the underlying shares. There is no additional value added for time value.

• Options for public companies which are not listed or traded on an national exchange are valued at the difference between the exercise price and the quoted market price of the underlying shares.

• Options and warrants for private companies are valued at the difference between the exercise price and the carrying value of the underlying shares

• Loans are measured at fair value and written down to net realizable value if impaired.

• Convertible loans and debentures are valued at the greater of their loan value amount as described above or as though converted to the underlying securities.

• At each financial reporting period, the Corporation's management determines the valuation of investments based on the criteria above and reflects such valuations ascorporate investments in the consolidated financial statements. The resulting values may differ from values that would be realized had a ready market existed. The amounts at which the Corporation's privately-held investments could be disposed of currently may differ from the carrying value assigned due to changes in valuation assumptions resulting from current market conditions. The amounts at which the Corporation's publicly-traded investments could be disposed of currently may differ from the carrying value based on current bid prices as the value at which significant ownership positions are sold is often different than the current bid price due to a variety of factors such as premiums paid for large blocks or discounts due to illiquidity. The Corporation expenses transaction costs as incurred.