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ANNUAL REPORT Statements of Cash Flows Years ended February 28, 2014 and 2013 2014 2013 Cash provided by (used in): Operating activities: Increase in net assets from operations $ 2,025,183 $ 781,198 Change in non-cash operating items: Accrued interest receivable (271,876) (21,389) Lender fees due from Fund Manager - 3,735 Other assets (5,000) 3,500 Due to Fund Manager 93,219 (22,317) Accounts payable and accrued expenses 16,920 7,706 Unearned income - (10,012) Share based compensation to board members 5,000 5,000 1,863,446 747,421 Financing activities: Subscription proceeds receivable (181,611) 6,841 Proceeds from issuance of Class A preferred shares 13,373,096 5,655,095 Proceeds from issuance of Class B preferred shares 11,411,434 1,271,237 Preferred share issue costs - (7,373) Recovery of previously paid share issue costs - 99,421 Redemption of Class A preferred shares (694,129) (2,246,740) Redemption of Class B preferred shares (9,000) - Cash dividends paid (1,032,745) (386,244) 22,867,045 4,392,237 Investing activities: Funding of mortgage loan investments (38,148,352) (14,142,515) Discharge of mortgage loan investments 14,099,748 8,963,829 (24,048,604) (5,178,686) Increase (decrease) in cash 681,887 (39,028) Cash, beginning of year 128,938 167,966 Cash, end of year $ 810,825 $ 128,938 Supplemental cash flow on non-cash financing activities: Class A preferred shares issued under dividend reinvestment plan (note 4) $ 742,633 $ 367,160 Class B preferred shares issued under dividend reinvestment plan (note 4) 173,765 487 See accompanying notes to financial statements. 40

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