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Kv Mortgage Fund Inc. THE KV ADVANTAGE KV Mortgage Fund Inc. (the "Fund") offers compelling protections to investors through its operational structure: Product Investors hold preferred shares in a mortgage investment corporation where principal and accrued interest on loans are secured by mortgages against real property located within Canada. Experience Management of the Fund is comprised of designated professionals who are former executives of Canadian public entities. The management team is uniquely qualified to execute complex real estate based financial transactions because of its hands-on experience in completing construction projects, real estate developments and customized financing arrangements. Underwriting The portfolio consists exclusively of mortgage investments that are underwritten, and recommended to the Fund, by KV Capital Inc. Investments that represent 10% or more of the Fund's assets, or that correspond with a loan to value of 70% or more, have been approved by the independent lending review committee. Diversification Investors beneficially own, and participate proportionately, in the earnings from the Fund's aggregate investment portfolio. As of February 28, 2013 the Fund's portfolio consists of 23 separate mortgage investments. Alignment of Interest The principals of KV Capital Inc. have invested over $1.5 million into the Fund's Class A preferred shares, and the Fund Manager earns its management fee only if the Fund's net income is sufficient to provide a minimum 8% annualized return on opening capital to investors. Corporate Governance The operations and portfolio of the Fund are overseen by an independent board of directors, and an independent lending review committee. The Fund's independent members of the governance team, on behalf of all the Fund's investors, ensure that the Fund's operations are transparent and risk-appropriate. Regulatory Framework The securities of the Fund are distributed under provincial securities laws, and the Fund is compliant with the requirements of each provincial jurisdiction in which its offering memorandum is filed. KV Capital Inc. is registered with, and subject to ongoing oversight of the British Columbia Securities Commission, Alberta Securities Commission and Ontario Securities Commission under its registrations as an Exempt Market Dealer, Restricted Portfolio Manager and Investment Fund Manager. 5