E-Delivery

KV Mortgage Fund ended the year with a capital pool of $38 million, up from $13 million at the end of fiscal 2013 and putting it on track to achieve assets of over $50 million by the third quarter of fiscal 2015. In combination with our attractive historical performance and strong corporate governance we expect that achieving this critical mass will facilitate opening new capital raising channels with institutional investors. On this front, we are pleased to report that during 2014 KV Mortgage Fund received its first subscriptions from discretionary money managers. In addition to providing our existing investors with the direct benefits of participating in a larger mortgage portfolio, opening these new capital channels will serve to diversify the investor base within KV Mortgage Fund, ensuring stability of the long term business model. During 2014 institutional, public and private non-bank lenders allocated significant capital to the Alberta private mortgage lending market through their own investment vehicles and origination activities. While these allocations are a testament to both the strategy on which KV Mortgage Fund was founded in 2009, and the attractive risk adjusted yields that have been historically generated by private mortgages on Alberta real estate, the increased presence of these lenders will likely also intensify competition for the opportunities in which the Fund seeks to invest during fiscal 2015. KV Mortgage Fund will respond to this increased competition by leveraging the local presence, established origination networks, full time underwriting staff and mortgage servicing platform of KV Capital to continue operating within our niche market of short term lending opportunities, customized financing arrangements and development projects that are secured by real estate. Our target yield to investors will remain set at 550 basis points over the two year government of Canada bond yield (series V122538). A MESSAGE FROM ALEEM VIRANI, PRESIDENT & JONATHAN HERMAN, CFO 2014 was a transformative year for KV Mortgage Fund (the "Fund"). We are proud to report that over the last 12 months the Fund has experienced significant growth in assets and again realized strong operational results within our dual mandate of preserving capital and generating monthly income for you, our investors – our partners. 15

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