Investing in companies of the future.i i i i i i i i i i i

NEXT EDGE BIO-TECH PLUS FUNDMonthly Report as of

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of its investments appreciating over 20% during August.

• Neurocrine Biosciences (NBIX) ii i

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$40s. It closed August at $122.

• NovaCure (NVCR) surged as investors connectedi

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FUND COMMENTARY

August 31, 2018

• Denali Therapeutics (DNLI) surged in recognition of itstreatments in development for glioblastoma, Alzheimer’sdisease, and Parkinson’s disease.

•Acceleron Pharma (XLRN) rose to an all-time high asthe market took notice that its drug Luspatercept, reportednot just one, but two successful Phase 3 trials in rareblood disorders. The Fund established its original positionat over $22 two years ago. It ended August at $54.

For August, the Fund’s Class A Units advanced +4.43%, and the Class F Units appreciated +4.56%versus +12.82% for the Fund’s Benchmark. The returnswere in line with the Nasdaq Biotech Index (̂ NBI) whichrose +4.86%. Nevertheless, the Fund’s Benchmarkcontinues to be skewed by the 64% marijuana weightedTSX Healthcare Index (̂ TTHC), which surged +29.9% inAugust. Curiously, these ‘healthcare’ companies partnerwith beer companies rather than pharma companies forthe development of their recreational medical products.

-25%

-15%

-5%

5%

15%

25%

35%

45%

55%

65%

75%

-25%

-15%

-5%

5%

15%

25%

35%

45%

55%

65%

75%

31-Jul 3-Aug 6-Aug 9-Aug 12-Aug 15-Aug 18-Aug 21-Aug 24-Aug 27-Aug 30-Aug

POT STOCKS NOW 64% WEIGHT OF TSX HEALTHCARE INDEX (^TTHC)Monthly Return of Cannabis Companies in TSX Healthcare Index (^TTHC)

TSX HEALTHCARE INDEX (^TTHC) APHRIA (APH) AURORA (ACB) CANOPY GROWTH (WEED)

Source: Bloomberg Data, Concept: Next Edge Capital Corp. as of August 31, 2018

MO

NTH

LY R

ETU

RN

F or E x isting Investors and Investment P rofessional U se O nly . P lease see accompany ing important disclosures.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS

1 T oronto S treet, S uite 200, T oronto, O N M 5 C 2V 6 C L IE N T S E R V IC E S 1.844.65 6.23 21 E info@ next edgecapital.comT F 1.87 7 .860.1080 T + 1.416.7 7 5 .3 600 W next edgecapital.com

BANK OF AMERICA MERRILL LYNCH ELEVATES BIOTECH ON QUANTITATIVE UNDERVALUATION

i i ( )i i iwith the most relative upside

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among sectors given the tools of i i i

ior poor investment, whether it is

QUANT MODEL SAYS:

BIOTECH ON TOP, AUTOS A VALUE TRAP

Our quantitative work corroborates our Autos analyst’ bearish views. Within our tactical industry model, Autos screen as a Value Trap (cheap for the wrong reason) given that earnings deterioration has been outpaced by weak price momentum.

Meanwhile, biotech, one of the largest industries within the healthcare sector, now ranks #1—we recently upgraded healthcare to overweight from marketweight amid improving fundamentals and inexpensive valuations, and within the sector, we prefer biotech and pharmaceuticals, another top-ranked industry in our model this month.

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icompetitive advantage.

25 MONTHS OF CONSOLIDATION FOR UNIVERSE OF BIOTECH COMPANIES

i

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US & Foreign Equities

Canadian Equities

Cash

COMPOSITION OF HOLDINGS FOR AUGUST 31, 2018

52%

36%

12%

52%

36%

12%August 31, 2018

For 25 months the percent of Nasdaq Biotech Index (NBI) companies above their 200-DMA have oscillated between 40% at the lower boundary to around 60% to

65% at the upper threshold. This is unprecedented in our data going back to 2002. Ordinarily, this reading will achieve levels of +80% when the sector is ready to pause. The long-

term growth sector, for the most part, has remained below most investors’ radar for the past three years. It has been a ‘stock-pickers’ sector for that period with little help from a sector lift.

During August, U.S. and Foreign holdings declined from 55% to 52% due to monetizing gains on some holdings and pruning non-performing holdings.

The weight of Canadian holdings increased from 33% to 37% as a result of averaging down on core long-term positions that are oversold. Canadian healthcare has been a challenging sector to earn positive returns so far in 2018, but that may reverse in the back half of 2018. Cash was unchanged at 12%.

FUND PERFORMANCE

Cl a s s A1 Cl a s s A1 1 Cl a s s F1 Cl a s s F1 1 Fu n d ' sB e n c h m a r k 2

NAV

1 m o n t h

Y TD

1 y e a r

3 y e a r a n n u a l i z e d

An n u a l i z e d r e t u r n s i n c ei n c e p t i o n

St a n d a r d d e v i a t i o n

W o r s t d r a w d o w n

2

i i

- - - - -

-

$10.79 $11.61

-32.25% -31.68% -31.81% -31.23% -43.25%

23.12% 22.48% 22.52% 22.40% 23.64%

2.26% 4.14% 3.90% 5.05% 2.13%

2.61% 3.36% 3.12% 4.25% -1.13%

11.91% 13.42% 13.18% 14.68% 29.40%

5.74% 6.71% 6.54% 7.52% 16.62%

$11.51 $11.98 N/A

4.43% 4.56% 4.56% 4.72% 12.82%

NEXT EDGE BIO-TECH PLUS FUND CLASS F UNITS1 VS. FUND'S BENCHMARK2

February 13, 2015 (Inception Date) to August 31, 2018

H ISTORICAL PERFORMANCE1 Cl a s s A

2018

2016

H ISTORICAL PERFORMANCE1 Cl a s s A1

2018

2016

H ISTORICAL PERFORMANCE1 Cl a s s F

2018

2016

H ISTORICAL PERFORMANCE1 Cl a s s F1

2018

2016

2018

2016

H ISTORICAL PERFORMANCE2 B e n c h m a r k

-

0.48%4.05% 0.87% 6.40%--

26.51%8.58%1.35%

--

-

--------

-- -- -- --

--

-

--------

--

- -7.92% 14.12% 2.09%

-- -- -- --

-

- -9.56% 2.73%

-0.17% -0.94% 13.74%

-- -- -- --

-30.94%-2.62%2.81%-10.37%0.78%-2.57%2.03%3.79%-3.07% -9.03% 8.51%-5.30%-18.33%

5.84%*9.67%0.70%-14.52%-8.95%6.76%-1.68%4.53%**--

3.95%-3.01%1.24%-1.80%-0.85%-2.63% 7.97% 0.93%6.17%2.68%

5.52%*0.80%7.38%-1.22%-6.66%-2.31%4.98%-4.18%0.34% 3.69% 1.43%1.97%**--

-7.12%6.72%3.01%-9.23%5.09%2.19%0.88%5.12%2.43% -7.85% 14.21%-6.16%-19.21%

13.70%-0.75%0.02%1.68%5.67%1.69%-8.58%3.18%2.50% 9.66% -12.31%8.08%4.32%

7.52%*--------4.72%2.47%-8.62%1.80% 2.22% -2.74%2.02%6.20%

3.69% -7.10% 0.79%3.38%-0.59% -3.19% 7.01% 12.82% -- -- -- -- 16.62%*

4.15%*0.67%7.21%-1.35%-6.79%-2.43%4.86%-4.29%0.22% 3.56% 1.31%1.93%**--

-8.30%6.65%2.92%-9.33%4.97%2.06%0.76%5.01%2.40% -7.94% 14.09%-6.36%-19.29%

13.08%-0.86%-0.08%1.57%5.59%1.66%-8.60%3.12%2.24% 9.55% -12.41%8.01%4.85%

6.54%*--------4.56%2.36%-8.72%1.69% 2.11% -2.85%1.92%6.07%

4.44%*0.69%7.27%-1.32%-6.76%-2.41%4.88%-4.26%0.24% 3.58% 1.33%1.93%**--

-19.27% -6.24% 2.34% 5.04% 0.78% 5.00% -9.31% 2.95% 6.69% -8.01%

4.74% 8.05% -12.39%9.56%2.47% 3.13% -8.69% 1.60% 5.58% 1.59% -0.07% -0.84% 13.20%

6.10% 1.94% -2.83%2.13%1.71% -8.70% 2.38% 4.56% -- -- -- -- 6.71%*

-- -- 0.81%3.25%-- -6.01%*** 4.76% -2.52% -6.94% -1.44% 7.15% 0.57% -1.25%*

-19.36% -6.35% 14.00%-8.01%2.23% 4.93% 0.73% 1.96% 5.06% 6.71% -9.11%

4.70% 9.94% -12.49%9.44%2.23% 3.04% -8.81% 1.49% 5.47% 1.47%

5.97% 1.84% -2.94%2.02%1.60% -8.80% 2.26% 4.43% -- -- -- -- 5.74%*

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inherent in hedge fund investing programs.

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from the registration requirements of those laws.

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11.91% 2.61% N/A N/AN/A N/A N/A

N/A N/A

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of August 31, 2018 29.40% -1.13% N/A N/A

August 31, 2018

11.91% 2.26% 13.42% 3.36%

N/A 4.14% 13.18% 3.12% 3.90%

14.68% 4.25% 5.05%

2.13%

For Existing Investors and Investment Professional Use Only. Please see accompanying important disclosures.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS

1 Toronto Street, Suite 200, Toronto, ON M5C 2V6 CLIENT SERVICES 1.844.656.2321 TF 1.877.860.1080 T +1.416.775.3600 E info@nextedgecapital.com W nextedgecapital.com