NEBULAE CANADIAN RESOURCE FUND LTD. (expressed in Canadian Dollars)

KPMG PO Box 493 Century Yard Grand Cayman KY1-1106 CAYMAN ISLANDS Telephone: Fax: Internet: +1 345 949-4800 +1 345 949-7164 www.kpmg.ky FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE FUND LTD. KPMG, a Cayman Islands partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. `

ABCD KPMG PO Box 493 Telephone: +1 345 949-4800 Century Yard Fax: +1 345 949-7164 Grand Cayman KY1-1106 Internet: www.kpmg.ky CAYMAN ISLANDS INDEPENDENT AUDITORS REPORT To the Shareholders of Nebulae Canadian Resource Fund Ltd. We have audited the accompanying financial statements of Nebulae Canadian Resource Fund Ltd. (the Fund ) which comprise the statements of net assets and investment portfolio as at October 31, 2013, the statements of operations and changes in net assets for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as at October 31, 2013, its results of operations and changes in net assets for the year then ended and its investment portfolio as at October 31, 2013 in accordance with Canadian generally accepted accounting principles. March 10, 2014 KPMG, a Cayman Islands partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity.

Statement of Net Assets October 31, 2013 with comparative figures as at October 31, 2012 2013 2012 Assets Investments - long, at fair value (cost 2013 - $1,446,396; 2012 - $2,040,944) $ 2,092,201 $ 2,060,889 Cash 590,884 418,490 Prepaids 1,742 890 Receivables: Dividends 2,177 600 Portfolio assets sold 52,309 1,071 Unrealized gain on derivative instruments 1,345 5,249 Due from the Manager (note 10) 11,391 6,195 67,222 13,115 Total Assets 2,752,049 2,493,384 Liabilities Investments - short, at fair value (proceeds 2013 - $163,851; 2012 - $424,134) 172,200 369,655 Payables: Accrued expenses (note 7) 12,400 29,435 Portfolio assets purchased 89,369 70,500 Dividend payable 480 910 Performance bonus payable (note 7) 18,829 121,078 100,845 293,278 470,500 Net assets representing shareholders equity (note 9) $ 2,458,771 $ 2,022,884 Net assets representing shareholders equity: Class A $ 323,382 $ 257,057 Class B $ 2,135,389 $ 1,765,827 Shares outstanding (note 5): Class A 2,500 2,500 Class B 17,500 17,500 Net asset value per share (note 9): Class A $ 129.35 $ 102.82 Class B $ 122.02 $ 100.90 Class A shares reported in USD $ 124.04 $ 102.87 See accompanying notes to financial statements. Approved on behalf of the Board of Directors of Nebulae Canadian Resource Fund Ltd. on March 10, 2014 Kenneth E.G. Taves Director Michael McDonald Director 2 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

Statement of Operations with comparative figures for the year ended October 31, 2012 2013 2012 Investment income: Interest $ 3,197 $ 3,396 Dividends 32,860 32,783 Net gains on investments held short 10,084 234,408 Withholding tax (7,298) (6,486) 38,843 264,101 Investment expenses: Administrative fees (note 7) 42,398 39,903 Performance fee (note 7) 30,550 Legal and filing fees 19,820 2,156 Dividend expenses on investments sold short 18,670 21,255 Director fees (note 7) 12,428 9,863 Interest and borrowing costs 9,687 17,151 Audit fees 5,220 26,017 Other (recovery) expense (323) 2,096 Management fees (recovery) (note 7) (1,928) Operating expense recovery (note 10) (11,391) (19,193) 127,059 97,320 Net investment (loss) income (88,216) 166,781 Gain (loss) on investments: Net realized loss on sales of investments (35,125) (136,182) Net realized gain (loss) on derivative instruments 14,587 (10,118) Transaction costs (note 8) (14,487) (19,839) Change in unrealized appreciation in fair value of investments 563,032 175,009 Change in unrealized (loss) gain on derivative instruments (3,904) 9,888 Net gain on investments 524,103 18,758 Increase in net assets from operations $ 435,887 $ 185,539 Increase in net assets from operations: Class A $ 66,325 $ 25,465 Class B $ 369,562 $ 160,074 Increase in net assets from operations per share: Class A $ 26.53 $ 10.19 Class B $ 21.12 $ 9.15 See accompanying notes to financial statements. 3 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

Statement of Changes in Net Assets with comparative figures for the year ended October 31, 2012 Class A Class B Class A Class B 2013 2013 2012 2012 Increase in net assets from operations $ 66,325 $ 369,562 $ 25,465 $ 160,074 Capital share transactions: Proceeds from sale of shares Issue costs (40) (282) (40) (282) Increase in net assets for the year 66,325 369,562 25,425 159,792 Net assets, beginning of year 257,057 1,765,827 231,632 1,606,035 Net assets, end of year $ 323,382 $ 2,135,389 $ 257,057 $ 1,765,827 See accompanying notes to financial statements. 4 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

Statement of Investment Portfolio As at October 31, 2013 Description Number of common shares Cost/(Proceeds) Fair Value Canadian Equities Long (108.97%) AKITA Drilling Ltd., Class 'A' NON VTG 5,500 $ 71,502 $ 84,205 Calfrac Well Services Ltd. 2,200 71,443 71,346 DeeThree Exploration Ltd. 16,500 116,394 150,150 Legacy Oil + Gas Inc., Class 'A' 19,000 111,546 133,950 Manitok Energy Inc. 46,000 128,464 120,060 McCoy Corporation 10,000 46,149 71,800 Petrowest Energy Services Corp., Class 'A' 151,600 52,721 130,376 Peyto Exploration & Development Corp. 2,500 60,354 78,500 Raging River Exploration Inc. 26,840 63,673 151,646 RMP Energy Inc. 27,000 64,090 167,670 Secure Energy Services Inc. 13,000 117,288 192,140 Surge Energy Inc. 21,000 88,020 146,160 TORC Oil & Gas Ltd. 14,000 114,415 139,860 Vermilion Energy, Inc. 1,800 90,346 103,158 Western Energy Services Corp. 9,000 67,521 70,380 Whitecap Resources Inc. 18,000 140,980 217,800 Yoho Resources Inc. 20,000 44,740 63,000 Transaction costs (3,250) Total Investments - Long $ 1,446,396 $ 2,092,201 Canadian Equities - Short (-8.97%) Canadian Oil Sands Ltd. (3,000) (57,035) (61,020) Strategic Oil & Gas Ltd. (70,000) (64,078) (67,200) Trican Well Service Ltd. (3,000) (42,738) (43,980) Total Investments - Short $ (163,851) $ (172,200) See accompanying notes to financial statements. 5 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

Schedule of Derivative Instruments As at October 31, 2013 Credit Settlement Currency to be Fair Value in Currency to be Contract Unrealized Counterparty Rating Date Delivered Cdn Dollars Received Price Gain Bank of Nova Scotia A+ November 15, 2013 319,963CA 321,308 308,000US 0.9626 $ 1,345 Total unrealized gain $ 1,345 See accompanying notes to financial statements. 6 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

1. The Fund: Nebulae Canadian Resource Fund Ltd. (the Fund ) was incorporated as an Exempted Company with limited liability under the provisions of the Companies Law (as amended) of the Cayman Islands on April 26, 2011. The Fund was registered under the Mutual Funds Law of the Cayman Islands on June 1, 2011 and commenced operations on June 30, 2011. The Fund offers Participating Shares classified as Class A Shares and Class B Shares to investors who are not Restricted Persons. Class A Shares are offered to subscribers wishing to subscribe in U.S. Dollars and Class B Shares are offered to subscribers wishing to subscribe in Canadian Dollars. The Directors reserve the right to establish and offer additional classes (each, a Class ) of Participating Shares in the future including, if required, subscriptions in different currencies. Admiral Administration, Ltd. (the Administrator ), a company located in Grand Cayman, Cayman Islands, has been retained by the Fund to provide certain administration services for the Fund.Hesperian Capital Management Ltd. is the Manager and Portfolio Manager for the Fund. As Manager, it provides overall management and direction for the funds as well as manages the day-today operation of the Fund. As Portfolio Manager, it provides investment management services to the Fund. 2. Significant accounting policies: These financial statements, prepared in accordance with Canadian generally accepted accounting principles ( GAAP ), include estimates and assumptions made by management that affect the reported amounts of assets, liabilities, income and expenses, and gains and losses during the reporting period. Actual results could differ from those estimates. Significant estimates include valuation of investments and investment income accruals. The following is a summary of significant accounting policies followed by the Fund. (a) Financial instruments - recognition and measurement: All financial instruments must be classified as held-for-trading, available-for-sale, held to maturity, loans and receivables, or other liabilities. Cash and receivables are classified as loans and receivables and liabilities are classified as other liabilities and are measured at amortized cost. Investments are deemed to be categorized as held for trading and are measured at fair value, with changes in fair value recorded in the statement of operations. 1 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

2. Significant accounting policies (continued): (b) Valuation of Investments: Investments are recognized on the trade date and are measured at each period end at fair value, as substantially established by the closing bid price for investments held long and by the closing ask price for investments held short for trading on the recognized public stock exchange on which the security is listed or principally traded. The policy set out in the Offering Memorandum pursuant to which shares of the Fund were issued, requires securities to be valued at the last quoted trade price. As at October 31, 2013, there was a difference between the reported net asset value of the Fund for dealing purposes using the policy prescribed by the Offering Memorandum and the valuation required by GAAP as reflected in these financial statements. Refer to Note 9 for reconciliation. Average cost is used to determine realized gains or losses and unrealized appreciation or depreciation on the value of investments, which are recorded through the statement of operations. Fair value of investments in share purchase warrants is determined using a recognized economic model taking into account various factors including the risk free rate of interest, dividend rates, volatility, market value and trading volume of the underlying stock. Transaction costs incurred in the purchase and sale of investments are expensed as incurred. A three-tier hierarchy is used as a framework for disclosing fair value based on inputs used to value the Fund s investments. The hierarchy of inputs is summarized below: quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1). inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) (Level 2); and inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3). Changes in valuation methods may result in transfers into or out of an investment s assigned level. At October 31, 2013 and 2012, the fund s investments, other than derivative contracts, were all classified as Level 1. 2 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

2. Significant accounting policies (continued): (c) Recognition of income and expenses: The Fund follows the accrual method of recording income and expenses with dividends being recorded on the ex-dividend date. (d) Purchase and redemption of participating shares: The value at which participating shares are issued or redeemed is determined by dividing the net assets at fair value, based on last trading price, of each class by the total number of participating shares outstanding for the Class at the Valuation Time on the Dealing Day (generally at each month end). Amounts received on the issuance of participating shares and amounts paid by the Class on the redemption of participating shares are added to or deducted from net assets. (e) Income taxes: There are no taxes on income or gains in the Cayman Islands and the Fund has received an undertaking from the Governor in Cabinet of the Cayman Islands exempting it from all local income, profits and capital taxes until May 10, 2031 should such taxes be enacted. Accordingly, no provisions for income taxes are included in these financial statements. However, some dividends and interest income received by the Fund are subject to withholding tax imposed in certain countries of origin. Income that is subject to such tax is recognized gross of the taxes and the corresponding withholding tax is recognized as withholding tax expense. (f) Increase (decrease) in net assets from operations per participating share to shareholders: Increase (decrease) in net assets from operations per share is calculated as the net increase (decrease) in net assets for the shares from operations attributable to the Class for the period, divided by the weighted average shares outstanding during the period. (g) Translation of foreign currency: Foreign currency amounts are expressed in Canadian dollars as follows: (i) (ii) fair value of investments and accrued receivables and payables and other assets and liabilities at the rate of exchange at the end of the period. purchases and sales of investments and dividend and interest income at the rate of exchange prevailing on the respective dates of such transactions. 3 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

2. Significant accounting policies (continued): (h) Derivative financial instruments: The Fund may use derivative financial instruments to reduce its exposure to fluctuations in foreign currency exchange rates. Derivatives are recorded at fair value and unrealized gains and losses are deferred and recognized in the statement of operations. (i) Short selling: The Fund may make short sales whereby a security that it does not own is sold in anticipation of a decline in the fair value of the security. Securities that are sold short are valued at the last ask price reported by the principal securities exchange on which the security is traded on the financial statement date. To enter into a short sale, the Fund may need to borrow the security for delivery to the buyer. Also, while the transaction is open, the Fund will incur a liability for any paid dividends or interest that is due to the lender of the security. (j) Future accounting pronouncements: The Canadian Accounting Standards Board confirmed that investment funds have received a deferral in their transition to International Financial Reporting Standards ( IFRS ), which will replace Canadian generally accepted accounting principles (Canadian GAAP) for publicly accountable enterprises. For investment funds, IFRS implementation is now to be applied to fiscal periods beginning on or after January 1, 2014. The fund has determined that, even though it may not meet the definition of publicly accountable, it will transition to IFRS for the year ending October 31, 2015. Consequently, the Fund will publish its first annual audited financial statements in accordance with IFRS for the year ending October 31, 2015, with comparatives for the year ending October 31, 2014, and prepare an opening IFRS statement of net assets at November 1, 2014. The Fund will publish unaudited interim financial statements in accordance with IFRS for the six month period ending April 30, 2015. Based on the Manager s current evaluation of the differences between Canadian GAAP and IFRS, the Manager does not expect that the net asset value per unit will be materially impacted by the changeover to IFRS. However, this determination is subject to change as the Manager finalizes its assessment of the impact of IFRS, and the impact of new standards issued by the International Accounting Standards Board (IASB) prior to the Fund s adoption of IFRS. The criteria contained within IAS 32 Financial Instruments: Presentation may require unitholders equity to be classified as a liability within the Fund s Statement of Net Assets, unless certain conditions are met. The Manager is currently assessing the Fund s unitholder structure to confirm the appropriate classification in accordance with IFRS. 4 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

2. Significant accounting policies (continued): (j) Future accounting pronouncements (continued): IFRS is also expected to affect the overall presentation of financial statements, such as the inclusion of a Statement of Cash Flows in the financial statements. Overall, enhanced disclosure requirements are expected. Upon adoption of IFRS the Fund will apply IFRS 13 Fair Value Measurement. IFRS 13 defines fair value, sets out a single IFRS framework for measuring fair value and requires disclosure about fair value measurements. It applies when other IFRSs require or permit fair value measurement. If an asset or a liability measured at fair value has a bid price and an ask price, it requires valuation to be based on a price within the bid-ask spread that is most representative of fair value. It allows the use of mid-market pricing or other pricing conventions that are used by market participants as a practical expedient for fair value measurements within a bid-ask spread. This may result in eliminating the difference between the NAV per unit and net assets per unit under current Canadian GAAP. In October 31, 2012, the IASB published Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27), which provides an exemption from consolidation of subsidiaries under IFRS 10 Consolidated Financial Statements for entities which meet the definition of an 'investment entity'. A qualifying investment entity is required to account for investments in controlled entities as well as investments in associates and joint ventures at fair value through profit or loss; the only exception would be subsidiaries that are considered an extension of the investment entity s investing activities. The consolidation exception is mandatory not optional. 3. Fair Value of Financial Instruments: Fair value hierarchy The following is a summary of the inputs used as of October 31, 2013 and 2012 in valuing investments and derivatives carried at fair values: October 31, 2013 Quoted prices in Significant active markets for other Significant identical assets observable unobservable (level 1) inputs (level 2) inputs (level 3) Total Public securities long $2,092,201 $ $ $ 2,092,201 Public securities short (172,200) (172,200) Unrealized gain on derivative instruments 1,345 1,345 Total investments $1,920,001 $ 1,345 $ $ 1,921,346 5 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

3. Fair Value of Financial Instruments (continued): Fair value hierarchy (continued) October 31, 2012 Quoted prices in Significant active markets for other Significant identical assets observable unobservable (level 1) inputs (level 2) inputs (level 3) Total Public securities long $2,060,889 $ $ $ 2,060,889 Public securities short (369,655) (369,655) Unrealized gain on derivative instruments 5,249 5,249 Total investments $1,691,234 $ 5,249 $ $ 1,696,483 4. Financial instruments and associated risks: The nature and extent of the financial instruments outstanding at the statement of net assets date and the risk management policies employed by the Fund are discussed below. Market risk: Market risk embodies the potential for both loss and gains and includes currency risk, interest rate risk and price risk. The Fund s strategy on the management of investment risk is driven by the Fund s investment objective. The Fund is designed to generate long-term capital appreciation by investing primarily in equity and equity-related securities of Canadian companies involved in the energy and natural resources sector, although the Fund may also invest in other securities, including convertible debt, preferred shares and derivatives. The investment restrictions of the Fund may be changed, if required, to comply with applicable laws. In addition, the Manager reserves the right to amend the investment restrictions. The Fund s market risk is managed on a daily basis by the Manager in accordance with the Fund s strategy. Details of the nature of the Fund s investment portfolio at October 31, 2013 are disclosed in the Statement of Investment Portfolio. (a) Currency risk: The Fund may invest in financial instruments and enter into transactions denominated in currencies other than the Canadian dollar. Consequently, the Fund is exposed to risks that the exchange rate of the Canadian dollar to other foreign currencies may fluctuate. 6 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

4. Financial instruments and associated risks (continued): Market risk (continued): (a) Currency risk (continued): The investments are primarily Canadian, but may also, as market opportunities dictate, include global securities. The proportions of the different securities in the Fund s portfolio will vary from time to time based upon the Manager s assessment of market conditions. The Class A Shares have a functional currency of U.S. Dollars, and the Net Asset Value Per Share of these Shares are reported and quoted in U.S. Dollars. However, generally the Fund s assets are valued and accounted for in Canadian Dollars. Changes in the exchange rate will therefore affect the Net Asset Value Per Share of the Class A Shares. The subscription amounts received by the Fund in U.S. Dollars have been converted into Canadian Dollars, at the relevant exchange rate obtained by the Fund on the relevant date. These statements reflect the Canadian Dollar value of the Class A shares. Holders of Class A Shares are subject to the risk that the value of the Canadian Dollar will decrease against the U.S. Dollar. The Fund may, in the discretion of the Manager, attempt to reduce or minimize the effect of fluctuations in the Exchange Rate on the value of the Class A Shares by entering into spot or forward contracts, currency options and currency futures contracts or other financial investments to hedge such risks. As at October 31, 2013 the Fund has entered into a forward contract to buy U.S. Dollars to offset the risk that the Canadian Dollar will decrease against the U.S. Dollar. (b) Interest rate risk: Interest rate risk arises on interest bearing financial instruments. The majority of the Fund s assets are non-interest-bearing. Interest-bearing financial assets mature or re-price in the shortterm, no longer than twelve months. There are no interest-bearing financial liabilities. As a result, the Fund is subject to limited exposure to fair value interest rate risks due to fluctuations in the prevailing levels of market interest rates. (c) Other price risk: Other price risk is the risk that value of the instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment or its issuer, or by factors affecting all instruments traded in the market. All securities present a risk of loss of capital. Price risk is managed by the Manager by constructing a diversified portfolio of instruments. The price of a stock is affected by individual company developments and by general economic and financial conditions in those countries where the issuer of the stock is located, does business or where the stock is listed for trading. The Manager monitors these factors daily and makes decisions regarding the portfolio based on their knowledge of the market conditions and diversifies the portfolio of investments accordingly. 7 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

4. Financial instruments and associated risks (continued): Market risk (continued): (c) Other price risk (continued): The Fund s equity instruments are susceptible to market price risk arising from uncertainties about future prices of the instrument. At October 31, 2013, the Fund was invested 100% in listed equities. Sensitivity analysis: A 1% increase or decrease on the S&P/TSX Capped Energy Total Return Index at October 31, 2013 would have impacted the net assets and the net increase/decrease in net assets from operations by $19,200. Credit risk: Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Fund. The carrying amounts of financial assets best represent the maximum credit risk exposure at the statement of net assets date. Credit risk arising on transactions for shares purchased and portfolio assets sold relates to transactions awaiting settlement. Risk relating to unsettled transactions is considered small due to the short settlement period involved. Also, legal entitlement will not pass until all monies have been received for the portfolio assets sold. If either party does not meet its obligation then the transaction will fail. Substantially all of the assets of the Fund are held by Scotia Capital Inc., the custodian. Bankruptcy or insolvency of the custodian may cause the Fund s rights with respect to securities held by the custodian to be delayed or limited. The Fund monitors its risk by monitoring the credit quality and credit rating and financial position of the custodian the Fund uses. If the credit quality or the financial position deteriorates significantly then the Manager will move the cash holdings to another financial institution. Liquidity risk: The Fund is exposed to monthly cash redemptions of participating shares. Investments in small capitalization companies may involve greater risks than in larger, more established companies since such companies may have more limited markets and financial resources and their securities may be more sensitive to market changes. As well, the liquidity of the securities may be limited. Consequently, in order to fund redemptions, the Fund may have to liquidate its shareholdings in the more liquid large and medium-sized companies. As well, to the extent that the liquidity is limited, the Fund s ability to realize profits and/or minimize losses may be limited, which could adversely affect the net asset value of the Fund. 8 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

4. Financial instruments and associated risks (continued): Liquidity risk (continued): Pending the selection and purchase of suitable investments, the payment of expenses or other anticipated distributions, a portion of the assets of the Fund may be held in cash. In addition, during periods in which the Manager believes that market conditions make it advisable, the Manager may reduce the Fund s holdings of investments and hold a portion of the Fund s assets in cash. The Fund s liquidity risk is managed on a daily basis by the Manager. Minimum cash balances are required to be maintained in the Fund at the discretion of the Manager to allow for monies to cover redemptions. At October 31, 2013, the Fund had a cash balance equal to 24% of the net assets. The Fund s redemption policy allows for redemptions on the last business day of any given month provided 30 days advance notice is given per the Offering Memorandum. 5. Share Capital: The Fund s authorized share capital is CAD$50,000 divided into: 4,990,000 Participating Shares being redeemable participating shares with a par value of CAD$0.01 and 100 Management Shares with a par value of CAD $1.00 each. The Directors will issue Participating Shares in Classes and Series with such designations or classifications as the Directors may determine (and the Directors may re-name or re-designate any issued class or series of Participating Shares) without the consent of or notice to existing investors. As of the date hereof, the Fund has issued Class A shares (subscribed to in U.S. Dollars) and Class B Shares (subscribed to in Canadian Dollars). The Participating Shares do not have the right to receive notice of, attend, speak or vote at general meetings of the Fund and are redeemable at the option of the holder. The Participating Shares are subject to compulsory redemption in certain circumstances. Although not anticipated to be paid, dividends may, in the absolute discretion of the Directors, be paid to the holders of the Participating Shares out of the reserves available for distribution. In liquidation, after the payment of the capital paid on the Management Shares, the assets available for distribution are to be distributed to the holders of the Participating Shares pari passu in proportion to the Net Asset Value per Participating Share of the relevant Class and Series of Participating Shares held. The Management Shares have been issued and are held by the Manager. Management Shares carry one vote per share but do not carry any right to dividends. In a liquidation, the Management Shares rank only for a return of the nominal amount paid up on those shares before any payment to the holders of Participating Shares and any other shares ranking pari passu with the Participating Shares. A redemption fee may be charged if a redemption is made within 180 days of purchase. 9 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

5. Share Capital (continued): Participating Shares Issued: Class A Class B Balance, October 31, 2013 and October 31, 2012 2,500 17,500 6. Net assets value per share at end of year: Class A Class B October 31, 2013 $ 129.35 $ 122.02 October 31, 2012 $ 102.82 $ 100.90 October 31, 2011 $ 92.65 $ 91.77 7. Management fees, expenses and management expense ratio: (a) Manager and management fees: The Fund pays monthly management fees in arrears in respect of the Class A Participating Shares and the Class B Participating Shares (the Management Fee ) equal to an aggregate of 1/12 th of 2.0% of the Net Asset Value attributable to such Participating Shares, calculated and payable at the beginning of each month based on the prior month-end Net Asset Value attributable to the Class A Participating Shares and the Class B Participating Shares. Included in accrued expenses is $nil related to these fees. The Manager has agreed to a waive its Management Fee and to reimburse certain operating expenses, in order to ensure that management expenses paid by the Fund do not exceed 3% (excluding performance fee) of the net asset value of the Fund ( the MER Waiver ). The Fund shall pay the Manager a performance fee (the Performance Fee ) on each Participating Share outstanding on the last business day of March, June, September and December in each year (each a Performance Valuation Date ) that is based on the Fund s ability to generate a return in excess of the Annualized Return. The Performance Fee is calculated over each calendar quarter, and is equal to 20% of the excess (if any, and only if positive) of the Fund s Actual Performance over the Annualized Return (7.00%) in respect of such quarter, multiplied by the average Net Asset Value of the Fund for that quarter. The Performance Fee that was charged to the Fund was $30,550 during the year ended October 31, 2013 of which $18,829 was payable at year end. 10 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

7. Management fees, expenses and management expense ratio (continued): (b) Expenses: All fees and expenses applicable to the administration and operation of each series, including record keeping and communication costs, custodian fees, legal and filing fees, audit, applicable taxes and bank charges are payable by the Fund. Brokerage costs are incorporated in the cost and proceeds of securities transactions. The Manager can charge the Fund for administration services. The Manager has waived these fees for an undetermined amount of time. The Administrator has charged $42,398 (2012 $39,903) relating to administration fees. Director fees are paid to the directors of the Fund for their services throughout the year. Included in accrued expenses is $ nil related to these fees owing to the Manager. In addition, the Administrator charges an administration fee that is based on a percentage of the Net Asset Value of the Fund which is subject to a monthly minimum charge. (c) Management expense ratio ( MER ): Class A Class B 2013 4.66% 4.24% 2012 2.93% 2.93% 2011 3.25% 3.25% The management expense ratio includes the Performance Fee as discussed above. The management expense ratio is calculated by dividing the total expenses of each Class for the period by the average net asset value of the Fund for the period. For periods less than one year, the management expense ratio is further adjusted to reflect annualized results. The Manager may, at its discretion, agree to a reduction in the Management Fees charged to the Fund in order to achieve competitive fees for such investments. 8. Brokerage commissions on securities transactions: The Fund paid brokerage commissions in connection with portfolio transactions during the year amounting to $13,464 (2012 - $18,737). 11 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013

9. Net assets value reconciliation: In accordance with industry standards, quoted market values per share and performance reporting continue to use market values as determined by the last traded price. In addition, standard industry practice allows issue costs to be amortized over a five-year period while GAAP requires issue costs to be expensed through equity as incurred. A reconciliation of net asset value per share at the current period s closing price with issue costs amortized and net asset value per share at the current period s last bid/ask price with issue costs expensed as incurred according to GAAP is presented below. Class A October 31, 2013 October 31, 2012 Total Per unit Total Per unit Net assets value, industry standard $ 329,298 $ 131.72 $ 258,752 $ 103.50 Difference as a result of utilizing bid/ask prices (5,916) (2.37) (1,695) (0.68) Net assets value, financial statements $ 323,382 $ 129.35 $ 257,057 $ 102.82 Class B October 31, 2013 October 31, 2012 Total Per unit Total Per unit Net assets value, industry standard $ 2,174,457 $ 124.25 $ 1,777,474 $ 101.57 Difference as a result of utilizing bid/ask prices (39,068) (2.23) (11,647) (0.67) Net assets value, financial statements $ 2,135,389 $ 122.02 $ 1,765,827 $ 100.90 10. Due from the Manager: The Manager has the ability to reimburse the Fund for expenses as it deems necessary. As at October 31, 2013 the Manager owed the Fund $11,391 as a result of a general expense reimbursement. 12 FINANCIAL STATEMENTS OF NEBULAE CANADIAN RESOURCE CLASS OCTOBER 31, 2013