**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-KSB**





[X]
            ANNUAL
                REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
                1934





For
      the
      fiscal year ended December 31, 2006





[  
                ]
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
                1934





For
      the
      transition period from ___________ to _____________





Commission
      file number: 333-48312





**AMERICAN
      LEISURE HOLDINGS, INC.**


(Name
      of
      small business issuer in its charter)





**Nevada**
            
            **75-2877111**(State
                of organization)
            
            (I.R.S.
                EmployerIdentification
                No.)





**2460
      Sand Lake Road, Orlando, FL 32809**


(Address
      of principal executive offices) (Zip Code)





Issuer's
      telephone number: **(407)
      251-2240**





SECURITIES
      REGISTERED PURSUANT TO SECTION 12(B)


OF
      THE
      EXCHANGE ACT:





NONE








Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
      for
      such shorter periods that the registrant was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90 days. Yes
      [X]
      No [ ]





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of the registrant's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. [X]











Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes [  ] No [X].





The
      issuer's revenues for its most recent fiscal year were $27,720,133.





The
      aggregate market value of the issuer's voting and non-voting common equity
      held
      by non-affiliates computed by reference to the average bid and ask price of
      such
      common equity as of April 13, 2007 was approximately $3,000,390.





At
      April
      13, 2007, there were 10,877,974 shares of the Issuer's common stock
      outstanding.











**TABLE
      OF CONTENTS**





**PART
      I**





ITEM
                1.
            DESCRIPTION
                OF BUSINESS
            4ITEM
                2.
            DESCRIPTION
                OF PROPERTY
            31ITEM
                3.
            LEGAL
                PROCEEDINGS
            32ITEM
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            35**PART
                II**ITEM
                5.
            MARKET
                FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
            36ITEM
                6.
            MANAGEMENT'S
                DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
            40ITEM
                7.
            FINANCIAL
                STATEMENTS
            75ITEM
                8.
            CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                DISCLOSURE.
            118ITEM
                8A.
            CONTROLS
                AND PROCEDURES.
            118ITEM
                8B.
            OTHER
                INFORMATION.
            118**PART
                III**ITEM
                9.
            DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                SECTION
                16(A) OF THE EXCHANGE ACT.
            119ITEM
                10
            .
                EXECUTIVE COMPENSATION.
            123ITEM
                11.
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                STOCKHOLDER MATTERS.
            131ITEM
                12.
            CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS
            133ITEM
                13.
            EXHIBITS
            145ITEM
                14.
            PRINCIPAL
                ACCOUNTANT FEES AND SERVICES.
            158SIGNATURES
            
            159











**PART
      I**





**ITEM
      1. DESCRIPTION OF BUSINESS**





FORWARD-LOOKING
      STATEMENTS





CERTAIN
      STATEMENTS IN THIS ANNUAL REPORT ON FORM 10-KSB (THIS "FORM 10-KSB"), CONSTITUTE
      "FORWARD LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
      ACT OF 1934, AS AMENDED, AND THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
      1995 (COLLECTIVELY, THE "REFORM ACT"). CERTAIN, BUT NOT NECESSARILY ALL, OF
      SUCH
      FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
      TERMINOLOGY SUCH AS "BELIEVES", "EXPECTS", "MAY", "SHOULD", OR "ANTICIPATES",
      OR
      THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY,
      OR
      BY DISCUSSIONS OF STRATEGY THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH
      FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
      OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS
      OF
      AMERICAN LEISURE HOLDINGS, INC. TO BE MATERIALLY DIFFERENT FROM ANY FUTURE
      RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
      FORWARD-LOOKING STATEMENTS. REFERENCES IN THIS FORM 10-KSB, UNLESS ANOTHER
      DATE
      IS STATED, ARE TO DECEMBER 31, 2006. ALL REFERENCES IN THIS REPORT ON FORM
      10-KSB TO "THE COMPANY," "WE," "US," "OUR," “AMLH,” “AMERICAN LEISURE” OR WORDS
      OF SIMILAR MEANING INCLUDE THE OPERATIONS OF AMERICAN LEISURE HOLDINGS, INC.
      AND
      SUBSIDIARIES.





**Business
      Development**





We
      were
      incorporated in Nevada in June 2000 as "Freewillpc.com, Inc.," and until June
      2002, operated as a web-based retailer of built-to-order personal computers
      and
      brand name related peripherals, software, accessories and networking products.
      In June 2002, we acquired American Leisure Corporation, Inc. ("American Leisure
      Corporation"), in a reverse merger (discussed below). We re-designed and
      structured our business to own, control and direct a series of companies in
      the
      travel and tourism industries so that we can achieve vertical and horizontal
      integration in the sourcing and delivery of corporate and leisure travel
      services and offerings.





On
      June
      14, 2002, we entered into a stock purchase agreement with the former
      stockholders of American Leisure Corporation, in connection with the acquisition
      of American Leisure Corporation, pursuant to which we issued the former
      stockholders of American Leisure Corporation 4,893,974 shares of our common
      stock and 880,000 shares of our Series A preferred stock having 10 votes per
      share. As part of this transaction, Vyrtex Limited, a UK company, which owned
      3,830,000 shares of our common stock, surrendered 3,791,700 of the 3,830,000
      shares owned by them. The transaction was treated
      as a reverse merger and a re-capitalization of American Leisure Corporation,
      which was considered the accounting acquirer. The operations of Freewillpc.com
      prior to the transaction were not carried over and were adjusted to $0.
      Effective July 24, 2002, we changed our name to American Leisure Holdings,
      Inc.





-4-








In
      addition to the Company's establishment and continuing operation of a Travel
      Division, we have established a Resort Properties Division and related leisure
      and travel support operations. Through our various subsidiaries, we: manage
      and
      distribute travel services; develop, sell and will manage travel destination
      resorts and vacation home properties; and develop and operate affinity-based
      travel clubs. Further, we owned and operated a call center in Antigua-Barbuda,
      which call center business was sold effective June 30, 2006, as described below,
      and which operations are included in our financial statements and results of
      operations as discontinued operations for the year ended December 31, 2006,
      contained herein. Our businesses are intended to complement each other and
      to
      enhance Company revenues by exploiting consumer cross-marketing opportunities.
      We intend to take advantage of the synergies between the distribution of travel
      services and the creation, marketing, sale and management of vacation home
      ownership and travel destination resorts. In connection with our development
      of
      vacation homes we will also buy and sell parcels of undeveloped
      land.





On
      October 1, 2003, we acquired a 50.83% majority interest in Hickory Travel
      Systems, Inc. ("Hickory" or “HTS") as the key element of our Travel Division.
      Hickory is a travel management service organization that serves its
      network/consortium of approximately 160 well-established travel agency members,
      comprised of over 3,000 travel agents worldwide serving corporate and leisure
      travelers. We intend to complement other Company businesses through the use
      of
      Hickory's 24-hour reservation services, international rate desk services,
      discount hotel programs, preferred supplier discounts, commission enhancement
      programs, marketing services, professional services, technologies, and
      information exchange.





In
      December 2004, Caribbean Leisure Marketing, Ltd. ("Caribbean Leisure
      Marketing"), our former wholly owned subsidiary that was focused on
      telecommunications, entered into a joint venture with IMA Antigua, Ltd. to
      operate a call center in Antigua that Caribbean Leisure Marketing owns. The
      joint venture was operated through Caribbean Media Group, Ltd., an international
      business corporation formed under the laws of Barbados. On June 30, 2006,
      pursuant to a Stock Purchase Agreement (described in greater detail below),
      the
      call center operations and Caribbean Leisure Marketing were sold to Stanford
      International Bank Limited (a minority shareholder and creditor of the
      Company).





On
      December 31, 2004, American Leisure Equities Corporation ("ALEC"), one of our
      wholly owned subsidiaries, acquired substantially all of the assets of Around
      The World Travel, Inc. ("Around The World Travel" or "AWT") which included
      all
      of the tangible and intangible assets necessary to operate the business
      including the business name "TraveLeaders". We engaged Around The World Travel
      to manage the assets and granted Around The World Travel a license to use the
      name "TraveLeaders." TraveLeaders is a fully-integrated
      travel agency and travel services distribution business that provides its
      clients with a comprehensive range of business and vacation travel services
      including corporate travel management, leisure sales, special events and
      incentive planning. TraveLeaders is based in Coral Gables, Florida. On and
      effective on August 1, 2006, the Management Agreement and the License Agreement
      with AWT were terminated by ALEC which, effective on that date, began directly
      managing the travel business assets and operations of
      TraveLeaders.




Except
        as
        expressly indicated or unless the context otherwise requires, "we," "our,"
        or
        "us" means American Leisure Holdings, Inc. and its
        subsidiaries.





-5-











**Business
      Integration**





Our
      mission is to remain focused on the development, sale and management of vacation
      travel destination resorts. As such we have completed the planning and completed
      most of the site development for "The Sonesta Orlando Resort at Tierra Del
      Sol"
      (the "Sonesta Resort"), a planned 972-unit vacation home resort located just
      10
      miles from Walt Disney World, in Orlando, Florida. Additionally, we are in
      the
      planning stages of developing our Reedy Creek Property, which is situated in
      the
      northwest section of Osceola County, Florida about one mile from the "Maingate"
      entrance to Walt Disney World, Orlando and approximately one-half mile from
      the
      south entrance to "Disney's Animal Kingdom" theme park. The Reedy Creek Property
      consists of three parcels totaling over 40 gross acres with approximately 29
      acres of buildable land. The Ready Creek Property is currently planned to
      consist of approximately 522 residential units consisting of mid-rise
      condominium buildings.





Though
      "Developments of Regional Impact" (DRIs) are underway, we are seeking to
      maximize property development and sales by obtaining governmental approval
      for
      more housing units than was initially planned at our Tierra del Sol and Reedy
      Creek properties. Although there is no assurance of the additional density
      that
      may be achieved through the DRI process we believe that both Tierra del Sol
      and
      Reedy Creek may gain approval to develop as many as 859 additional units for
      Tierra del Sol Resort and 678 for Reedy Creek.





Subject
      to having sufficient capital and our determination of value to our shareholders,
      we intend to achieve growth through selected acquisitions of real property
      and
      business assets and interests. Although no agreements related to such future
      acquisitions have been concluded, we expect to negotiate and, subject to our
      final determination as to the merits of such acquisitions(s) and the
      availability of necessary capital, complete the acquisition of Florida
      destination resort property holdings proximate to our existing resort
      developments at initial entry prices for the developable land that may be
      materially below current appraised values. Growth may be realized through our
      continued creation of destination resorts, and through the prospective
      acquisition of qualified, existing destination resorts, thereby creating an
      extensive resort and vacation ownership network further supported by the
      Company's travel services division. Our goal through such expansion would be
      to
      further become an integrated, "one-stop" leisure services company,
      seeking to seamlessly provide for the development, sales, and management of
      and
      the ongoing generation of revenue from destination resorts while offering
      vacation ownership and an extensive range of travel services to an expanding
      customer and client base. In connection with our development of vacation homes
      we will continue to buy and sell parcels of undeveloped
      land.





-6-








During
      the year ended December 31, 2006, we worked to integrate the administrative
      operations of Hickory and TraveLeaders to distribute, fulfill and manage our
      travel services and our Resort Properties; however, the full integration of
      these two divisions has become substantially harder than we anticipated due
      to
      the different operating and system platforms of the two divisions, and as such,
      we have abandoned our previous plans to integrate the two divisions and are
      currently evaluating the synergies and cost/benefits of continuing to maintain
      the two separate divisions.





Our
      business model for support between our divisions is to use the travel
      distribution, fulfillment and management services of the combined resources
      of
      Hickory and TraveLeaders to provide consumer bookings at our planned resorts,
      to
      increase the rental of vacation homes that we plan to manage at these resorts,
      and to fulfill the travel service needs of our affinity-based travel clubs.
      We
      intend to complement our other businesses through the use of Hickory's 24-hour
      reservation services, international rate desk services, discount hotel programs,
      preferred supplier discounts, commission enhancement programs, marketing
      services, professional services, automation and information exchange.
      TraveLeaders is a fully integrated travel services distribution business that
      provides its clients with a comprehensive range of business and vacation travel
      services in both traditional and e-commerce platforms including corporate travel
      management, leisure sales, and meeting, special event and incentive planning.
      TraveLeaders currently fulfills travel orders produced by our affinity travel
      clubs.








**Sonesta
      Resort Financing**





On
      December 29, 2005, certain affiliates of the Company closed two (2) credit
      facilities with Key Bank, National Association ("KeyBank") related to the
      Sonesta Resort. The credit facilities consisted of a $40,000,000 revolving
      construction loan to be used to construct Phase 1 of the Sonesta Resort (the
      "Construction Loan") and a $14,850,000 term loan on the Phase 2 land, the
      proceeds of which were contributed to the Phase 1 partnership as equity and
      used
      to repay existing debt on the property and finance part of the site work of
      the
      property for the Resort and to pay certain related costs (the "Land Loan").
      To
      facilitate the financing for the Sonesta Resort, the Company has formed two
      limited partnerships, each of which will develop Phase 1 and Phase 2 of the
      Resort (the "Development Partnerships"). Each Development Partnership has
      several subsidiaries, which have been formed to develop different portions
      of
      the Sonesta Resort.





Phase
      1
      will also include construction of related amenities, including a swimming pool
      complex and sun decks, a lazy river, a poolside restaurant and other amenities
      typical of a resort of this kind. We have completed approximately 90% of the
      grading and underground
      infrastructure required for the Phase 1 construction to date and began vertical
      construction of the phase one town homes in January 2007. Phase 2 will include
      construction of 144 additional residential condominium units and 442 additional
      town home units, as well as a 126,000 square foot clubhouse (84,000 square
      feet
      under air). Construction of Phase 2, which has not begun yet, is expected to
      overlap with the construction of Phase 1 as soon as the TDS plat has been
      recorded, which is expected to occur in April 2007.





-7-








The
      general partner of each Development Partnership is TDS Management LLC, a limited
      liability company controlled by Malcolm J. Wright, the Company's Chairman and
      Chief Executive Officer. The principal limited partner of each Development
      Partnership is Tierra Del Sol Resort, Inc., which owns a 99.9% interest in
      each
      Development Partnership. The Company owns 100% of Tierra Del Sol Resort,
      Inc.





On
      July
      27, 2006, we, through one of our wholly owned subsidiary companies, formally
      notified KeyBank, that we elected not to open the $40,000,000 revolving credit
      Construction Loan. We have however, established a relationship with GMAC Bank,
      through Millennium Capital Mortgage, to provide construction financing to the
      individual purchasers of the Sonesta Resort town homes, which funding we believe
      will enable all town homes and amenities at Tierra del Sol to be built through
      this program. Additionally, we are in the process of negotiating with several
      lenders for a construction loan on favorable terms for the condominiums and/or
      for the clubhouse and anticipate entering into final agreements regarding such
      funding by the end of the second quarter of fiscal 2007; however, we can provide
      no assurances that we will be able to finalize such funding, or that assuming
      such funding is available, that it will be on favorable terms.





**The
      Land Loan**





The
      borrowers under the Land Loan are Tierra Del Sol Resort (Phase 2), Ltd. (the
      "Phase 2 Partnership") and other entities that are owned by the Phase 2
      Partnership.





The
      Land
      Loan is a $14,850,000 term loan with a maturity date of June 28, 2007. The
      proceeds of the Land Loan were primarily used to repay existing debt of the
      property for the Sonesta Resort. The Land Loan bears interest at LIBOR plus
      3.10% per annum, equal to approximately 8.50% as of February 14, 2007, with
      the
      LIBOR equal to 5.40% as of that date.





The
      Land
      Loan is secured by a first lien on the land within Phase 2 of the Sonesta
      Resort, including any improvements, easements, and rights of way; a first lien
      and security interest in all fixtures and personal property, an assignment
      of
      all leases, subleases and other agreements relating to the property; an
      assignment of construction documents; a collateral assignment of all contracts
      and agreements related to the sale of each condominium unit; a collateral
      assignment of all purchase deposits and any management and/or operating
      agreement.





-8-





The
      borrowers paid 1% of the Land Loan Agreement as a commitment fee, which totaled
      $148,500. The Borrowers were obligated to pay all costs and expenses of KeyBank
      in connection with the commitment and closing of the loan. Additionally, the
      Company will pay an exit fee equal to 4% of the maximum loan amount unless
      the
      loan is repaid with a construction loan from KeyBank or KeyBank declines to
      grant a construction loan to the Company for Phase 2. The Company was obligated
      to pay all costs and expenses of KeyBank in connection with the commitment
      and
      the closing of the loan.





In
      connection with the election not to open the Construction Loan, we and KeyBank
      have agreed to modify the Land Loan. The Land Loan will remain in place, and
      we
      have provided $1 million in cash as additional collateral for the loan. We
      have
      also agreed to a principal payment schedule related to the Company's planned
      construction of the 442 town homes in Phase 2 of the Sonesta Resort to reduce
      the balance of the loan between January 31, 2007 and its maturity
      date.





The
      Company and Mr. Wright have issued guarantees to KeyBank on the Land Loan.
      We
      believe that without the guarantees of Mr. Wright, it would have been more
      difficult, if not impossible, for us to secure the KeyBank credit facility.
      The
      occurrence of any one or more "events of default" under the Land Loan allow
      KeyBank to pursue certain remedies including taking possession of the Sonesta
      Resort project; withholding further disbursement of the proceeds of the loan
      and/or terminate KeyBank's obligations to make further disbursements thereunder;
      and/or declaring the note evidencing the loans to be immediately due and
      payable.





**Westridge
      Community Development District Bonds**





The
      closing of the new credit facilities with KeyBank triggered the closing of
      the
      sale of $25,825,000 in community development bonds issued by the Westridge
      Community Development District (the "District"). The proceeds of the bonds
      will
      be used, in part, to fund infrastructure at the Sonesta Resort and to acquire
      land for public purposes from Tierra Del Sol Resort (Phase 1), Ltd. The debt
      service and retirement of these bonds will be funded by a special district
      tax
      upon the property owners in the District at an interest rate of 5.8% over a
      30-year amortization period. Grading and infrastructure for the District are
      more than 85% complete as of March 2007.





**SIBL
      Credit Facility**





On
      December 29, 2005, Stanford International Bank, Ltd. ("SIBL") provided Tierra
      Del Sol with financial assistance to facilitate the closings of the Land Loan
      and the Construction Loan. The financial assistance consisted of a loan to
      Tierra Del Sol of $2,100,000 (the "SIBL Tierra Del Sol Loan"), and the
      establishment of letters of credit in favor of KeyBank in the amount of
      $4,000,000 and $2,000,000, respectively (the "Letters of Credit"), which Letters
      of Credit were subsequently cancelled, effective June 30, 2006. The financial
      assistance provided by SIBL was evidenced by a Credit Agreement dated as of
      December 29, 2005 between SIBL, Tierra Del Sol Resort, Inc. and the Company
      (the
      "SIBL Credit Agreement"). As consideration for the purchase of the Antiguan
      call
      center including our subsidiary Caribbean Leisure Marketing, Inc. (described
      below), SIBL exchanged the $2,100,000 loan, as well as the accrued interest
      on
      such loan in the amount of $85,867.





-9-










Tierra
      Del Sol used the proceeds of the SIBL Tierra Del Sol Loan to make a capital
      contribution to the Phase 1 Development Partnership, which in turn pledged
      this
      amount to KeyBank as additional collateral for the Construction Loan. SIBL
      is an
      affiliate of Stanford Venture Capital Holdings Inc. Tierra Del Sol used the
      Letters of Credit in lieu of cash to complete its equity requirements under
      the
      Construction Loan.





The
      SIBL
      Tierra Del Sol Loan has a 2-year term, with an initial interest rate of 12%
      per
      annum. Upon the payment of the note in full or the maturity of the loan from
      KeyBank, Tierra Del Sol was also required to pay a one-time minimum fee equal
      to
      3%. After six months, this fee increased by 1% each month until the letters
      of
      credit were released, which KeyBank did effective August 16, 2006. As
      consideration for the purchase of the Antiguan call center including our
      subsidiary Caribbean Leisure Marketing, Inc. (described below), SIBL exchanged
      these fees which amounted to $540,000. Any unpaid amounts on the SIBL Tierra
      Del
      Sol Loan bear interest at the rate of 12% per year. This loan has been repaid
      in
      full.





The
      obligations of Tierra Del Sol under the SIBL credit facility (the "Stanford
      Credit Facility") were guaranteed by the Company and Malcolm J. Wright, the
      Company's Chief Executive Officer and Chairman, along with other third party
      entities, which third party entities are beneficially owned, in part, by Roger
      Maddock, a significant shareholder of the Company, pursuant to an Irrevocable
      and Unconditional Guaranty. We believe that without the guarantees of Mr. Wright
      and other third parties, it would have been more difficult, if not impossible,
      for us to secure the SIBL credit facility. These obligations were also secured
      by a first mortgage lien on a parcel of real property owned by the third party
      entities. The consideration paid for the third party entities' guarantees was
      consistent with the existing debt guarantor agreement issued by the Company
      for
      its executives. The third party entities will receive and share in a guarantee
      fee equal to 3% of the amount guaranteed. The third party entities, by virtue
      of
      pledging collateral for a debt that benefits the Company, will also receive
      a
      collateral pledge fee equal to 2% of the amount guaranteed. The Company paid
      this fee through the grant of 405,000 warrants to the third party entities
      to
      purchase shares of the Company's common stock at an exercise price of $1.02
      per
      share in December 2005. These warrants will expire 5 years from the expiration
      date of the guarantees. In consideration of Mr. Wright's guarantee, and pursuant
      to an existing agreement between Mr. Wright and the Company, Mr. Wright earned
      a
      fee for such guarantee equal to three percent (3%) of the amount guaranteed.
      The
      Company will pay this fee through the grant of 243,000 warrants to Mr. Wright
      to
      purchase shares of the Company's common stock at an exercise price of $1.02
      per
      share in December 2005. These warrants will expire 5 years from the expiration
      date of the guarantee.





Tierra
      Del Sol has pledged its partnership interests in the Development Partnerships
      to
      Stanford as additional collateral for this facility. Following an event of
      default as defined under the Credit Agreement, Stanford has the right for thirty
      (30) days following such event of default, directly or through its affiliates,
      to purchase any unsold units in the Sonesta Resort at a price equal to the
      developer's cost, but only to the extent permitted by KeyBank.





-10-










As
      additional consideration for the loan, the Company granted SIBL warrants to
      purchase 308,000 shares at an exercise price of $5.00 per share of common stock
      and warrants to purchase 154,000 shares at an exercise price of $0.001 per
      share. Subsequent to the issuance of the warrants to SIBL, it exercised all
      154,000 of the warrants to purchase shares of our common stock at an exercise
      price of $0.001 per share, for aggregate consideration of $154. The warrants
      expire 5 years from issuance (January 4, 2011). The warrants contain
      anti-dilution provisions, including a provision which requires the Company
      to
      issue additional shares under the warrants if the Company issues or sells any
      common stock at less than $1.02 per share, or grants, issues or sells any
      options or warrants for shares of the Company's common stock to convert into
      shares of the Company's common stock at less than $1.02 per share.





In
      connection with the warrants, the Company and Stanford entered into a
      Registration Rights Agreement (the "Registration Rights Agreement"). Under
      the
      Registration Rights Agreement, the Company agreed to prepare and file a
      Registration Statement with the SEC covering the shares underlying the warrants
      within 180 days of notice from SIBL of their demand that we file such
      Registration Statement and to use the Company's best efforts to obtain
      effectiveness of such Registration Statement as soon as practicable thereafter.
      In the event the Company does not file a Registration Statement in connection
      with the shares issuable in connection with the exercise of the warrants after
      180 days notice from the warrant holders, the Company agreed to issue the
      warrant holders as liquidated damages, warrants to purchase 10% of the shares
      issuable in connection with the warrants, under the same terms and conditions
      as
      the warrants, upon such default and for every consecutive quarter in which
      such
      default is occurring.





We
      estimate that the cost to complete the construction of Phase I of the Sonesta
      Resort will be $136,500,000 of which $9,000,000 will be for resort amenities,
      $64,000,000 will be for vertical construction on 294 units and $49,500,000
      will
      be for other costs such as contingencies, closing costs and soft costs such
      as
      architectural, engineering, and legal costs. An additional approximate amount
      of
      $14,000,000 will be expended for horizontal construction costs which include
      all
      of Phase I requirements plus most of the infrastructure requirements for the
      entire Project. The $14,000,000 will be funded by the bonds proceeds held by
      the
      Westridge Development District and from equity reserves held by Key Bank. A
      Land
      Loan was also funded by Key Bank which was described above in the amount of
      $14,850,000, of which approximately $14,352,900 had been borrowed under as
      of
      the date of this filing. We previously had entered into the $40,000,000
      Construction Loan with KeyBank, which loan we decided not to open in favor
      of
      alternate, anticipated financing arrangements which we believe will be
      beneficial to the timely completion of the Sonesta Resort project. We are in
      the
      process of negotiating with several lenders for a construction loan for the
      condominiums and clubhouse and anticipate, although we cannot provide any
      assurances, that such loan will be evidenced by a firm commitment during the
      second quarter of 2007. Assuming we are able to enter into a subsequent funding
      arrangement, we believe that we have sufficient funds to provide for the
      completion of Phase 1, assuming there are no material cost overruns, delays
      or
      further increases in material costs. Phase 2 will be financed separately. It
      is
      anticipated that Phase 2 construction will commence by the second or third
      quarters of 2007, although we cannot provide any assurances that we will have
      adequate funding to begin construction at that time, if ever.





-11-










In
      November 2003, we entered into an exclusive sales and marketing agreement with
      Xpress Ltd. ("Xpress") to sell the vacation homes in the Sonesta Resort. Malcolm
      J. Wright, one of our founders and our Chief Executive Officer and Chairman,
      and
      members of his family are the majority shareholders of Xpress. As of December
      31, 2006, Xpress had pre-sold approximately 600 vacation homes in a combination
      of contracts on town homes and reservations on condominiums for total sales
      volume of approximately $230 million.





**REEDY
      CREEK ACQUISITION COMPANY, LLC TRANSACTIONS**





**Background**





In
      July
      2005, the Company and Stanford Financial Group Company ("SFG") formed a new
      limited liability company named Reedy Creek Acquisition Company LLC ("Reedy
      Creek Acquisition Company") for the purpose of acquiring a parcel of
      approximately 40 acres of land located adjacent to the Animal Kingdom Theme
      Park
      at Walt Disney World, in Orlando, Florida (the "Reedy Creek Property"). The
      Reedy Creek Property is described in greater detail below under "Development
      Plans for Reedy Creek Property."





Reedy
      Creek Acquisition Company acquired the Reedy Creek Property in July 2005 for
      a
      purchase price of $12,400,000. Reedy Creek Acquisition Company paid $8,000,000
      of the purchase price in cash and paid the $4,400,000 balance pursuant to the
      terms of a promissory note issued to the sellers secured by a first mortgage
      lien on the Reedy Creek Property. At the time of the purchase, Reedy Creek
      Acquisition Company obtained a $7,150,000 loan from SIBL (the "SIBL Reedy Creek
      Loan"), secured by a second mortgage lien on the property. The proceeds of
      this
      loan were used to pay part of the cash portion of the purchase price and for
      closing costs associated with the closing. The Company contributed the remainder
      of the purchase price. At the time of the acquisition of the Reedy Creek
      Property, Reedy Creek Acquisition Company was owned 99% by SFG and 1% by one
      of
      the Company's wholly owned subsidiaries, American Leisure Reedy Creek Inc.
      ("ALRC"), however ALRC, has since exercised its option (the "Reedy Creek
      Option") to receive 100% of the interest in the Reedy Creek Acquisition Company
      in return for $600,000 paid to SFG in January 2006.





SFG
      and
      SIBL are affiliates of Stanford Venture Capital Holdings Inc., a significant
      shareholder of the Company.










-12-




SIBL Reedy Creek Loan
      Terms


In
      connection with the exercise of the Reedy Creek Option, Reedy Creek Acquisition
      Company and SIBL agreed to modify the terms of the SIBL Reedy Creek Loan made
      by
      SIBL to Reedy Creek Acquisition Company. The modified loan terms are evidenced
      by a Renewed, Amended and Increased Promissory Note (the "Amended Note") made
      by
      Reedy Creek Acquisition Company in favor of SIBL. The Amended Note had a
      maturity date of December 31, 2006, but has since been extended until June
      30,
      2007, pursuant to an Amendment No. 1 to the Amended Note, a principal balance
      of
      $8,000,000 and bears interest at the rate of 8% per year payable quarterly.
      Interest in the amount of $262,885 on the Amended Note has been exchanged as
      consideration for the purchase of the Antiguan call center including our
      subsidiary Caribbean Leisure Marketing, Inc. (described below). Upon an event
      of
      default as described in the Amended Note, SIBL has several rights and remedies,
      including causing the Amended Note to be immediately due and
      payable.





The
      Amended Note was replaced in November 2006, by a Renewed, Amended and Increased
      Promissory Note in the amount of $12,200,000, by a $13,420,000 note in December
      2006 and by a $15,300,000 note in January 2007 (the "RC Note"). The RC Note
      is
      due and payable on June 30, 2007, with $8,000,000 of the RC Note bearing
      interest at the rate of 8% per annum and the remaining $7,300,000 bearing
      interest at the rate of 12% per annum.





The
      RC
      Note is secured by a second lien on the Reedy Creek Property. It is guaranteed
      by the Company and Malcolm J. Wright, the Company's Chief Executive Officer
      and
      Chairman pursuant to a Modification and Reaffirmation of Guaranty and
      Environmental Indemnity Agreement. We believe that without the guarantees of
      Mr.
      Wright, it would have been more difficult, if not impossible, for us to secure
      the SIBL credit facility.





**Bankers
      Credit Corporation Loan**





In
      connection with the exercise of the Reedy Creek Option, the Company and Reedy
      Creek Acquisition Company arranged to receive a $7,000,000 loan from Bankers
      Credit Corporation ("Bankers Credit").





Under
      the
      terms of the Bankers Credit loan, Bankers Credit advanced Reedy Creek
      Acquisition Company $3,000,000 at closing and an additional $4,000,000
      subsequent to the date of closing. On February 1, 2007, the Bankers Credit
      note
      was replaced by an Amended and Restated Promissory Note in the amount of
      $7,860,000, which included an additional advance of $860,000.





The
      Bankers Credit loan is evidenced by a an Amended and Restated Promissory Note
      (the "Bankers Credit Note") and bears interest at the greater of the Wall Street
      Journal published prime rate plus 6.75%, not to exceed the highest rate
      allowable under Florida law or 15% per year. The interest rate of the Bankers
      Credit Note as of March 13, 2007, was 15% (with a prime rate, as reported by
      the
      Wall Street Journal of 8.25%). Interest on the Bankers Credit Note is payable
      monthly. The maturity date of the Bankers Credit Note
      was
      January 3, 2007, but was extended until February 1, 2008, pursuant to the
      amendment to the note. Pursuant to the Bankers Credit Note, Reedy Creek
      Acquisition Company agreed to pay a 10% late charge on any amount of unpaid
      principal or interest under the Bankers Credit Note. The Bankers Credit Note
      is
      subject to a 1% exit fee. Upon an event of default as described in the Bankers
      Credit Note, Bankers Credit has several rights and remedies, including causing
      the Bankers Credit Note to be immediately due and payable.





-13-








The
      Bankers Credit Note is secured by a first lien on the Reedy Creek Property.
      Additionally, the Bankers Credit Note is guaranteed by the Company and Malcolm
      J. Wright, the Company's Chief Executive Officer and Chairman pursuant to a
      Guaranty Agreement. We believe that without the guarantees of Mr. Wright, it
      would have been more difficult, if not impossible, for us to secure the Bankers
      Credit, loan facility.





Reedy
      Creek Acquisition Company utilized the initial proceeds from the Bankers Credit
      loan to pay a portion of the amount owed on the existing first mortgage note
      issued to the sellers of the Reedy Creek Property. The holder of this mortgage
      agreed to release the mortgage in exchange for this payment. Reedy Creek
      Acquisition Company has now paid the balance of this mortgage note upon the
      receipt of the balance of the Bankers Credit loan.





**Development
      Plans for Reedy Creek Property**





The
      Reedy
      Creek Property is situated in the northern section of Osceola County, Florida
      and lies on three contiguous development parcels located to the immediate north
      of U.S. Highway 192 West, about one mile from the "Maingate" entrance to Walt
      Disney World, Orlando and 0.75 miles from the entrance to "Disney's Animal
      Kingdom" theme park. The property is one of only a small number of privately
      owned parcels abutting Walt Disney World (north and east
      boundaries).





The
      Reedy
      Creek Property consists of three parcels totaling over 40 gross acres with
      approximately 29 acres of buildable land. The Osceola County Comprehensive
      Land
      Plan for the site allows vacation homes at a density of 18 units per acre,
      which
      results in a maximum allowable project density of 522 residential units. To
      achieve the maximum density, it is anticipated that the project will consist
      of
      mid-rise condominium buildings. Amenities proposed on-site include a water
      park
      with swimming pools, guest services clubhouse, and other related on-site resort
      amenities.





It
      is
      anticipated that Walt Disney World's Reedy Creek Improvement District (the
      "District"), a quasi-government body whose constituents are all affiliated
      with
      Walt Disney World Company, will agree to construct and pave the widening and
      extension of Reedy Creek Boulevard north and westward at its expense. We are
      currently working with the District towards this end. The District will have
      a
      public hearing during which it is anticipated that the District will be given
      the authority to acquire the land from Reedy Creek Acquisition Company and
      make
      the improvements to Reedy Creek Boulevard. If the District acquires the
      requisite authority from its constituents, Reedy Creek Acquisition
      Company has agreed to convey relatively small portions of the three combined
      properties to constitute this roadway. Reedy Creek Acquisition Company will
      benefit from the conveyance by saving the cost of the road it would have to
      build anyway and it will enhance the required road frontage for the
      project.





-14-








Though
      "Developments of Regional Impact" (DRI) are underway, we are seeking to maximize
      Reedy Creek's property development and sales by obtaining governmental approval
      for more housing units than was initially planned. Although there is no
      assurance of the additional density that may be achieved through the DRI
      process, we believe that Reedy Creek may gain approval to develop as many as
      678
      additional units.





The
      Company's development of the Reedy Creek Property is currently planned to begin
      in the fourth quarter of 2009, with the completion of such property planned
      for
      2010 or 2011, subject to funding and scheduling permitting. The Company will
      not
      know the total estimated cost of the development of the Reedy Creek Property
      until it has determined the market and completed designs for the properties.
      The
      Company does not currently have any funding in place for any of the capital
      which will be required to complete the development of the Reedy Creek Property
      and there is no assurance that funding will be available on favorable terms,
      if
      at all. The Company is currently seeking a joint venture partner for this
      property.





**Note
      Modification Agreement**





In
      February 2006, we entered into a Note Modification Agreement with SIBL, whereby
      we agreed to modify certain provisions of our outstanding promissory notes
      with
      SIBL to grant extensions of payments due. Pursuant to the Note Modification
      Agreement, we and SIBL agreed that all interest due on our $6,000,000 note,
      from
      January 1, 2005, through September 30, 2006, shall be due and payable on
      September 30, 2006, which due date has since been extended by SIBL to December
      31, 2008, with all interest thereafter payable with the original terms of that
      note however, as consideration for the purchase of the Antiguan call center
      including our subsidiary Caribbean Leisure Marketing, Inc. (described below),
      SIBL exchanged $546,000 of accrued interest; that all interest accrued on the
      $3,000,000 note we have with SIBL, from the date of the note until September
      30,
      2006, shall be due and payable on September 30, 2006, which due date has since
      been extended by SIBL to April 22, 2007, which has been further extended to
      January 1, 2008, pursuant to the Modification Agreement effective December
      31,
      2006, described above, with all interest thereafter payable with the original
      terms of that note; however, as consideration for the purchase of the Antiguan
      call center including our subsidiary Caribbean Leisure Marketing, Inc.
      (described below), SIBL exchanged the $654,080 of accrued interest as of June
      30, 2006 as well as our $1,250,000 note with SIBL which was previously due
      September 30, 2006, and that no payments of principal or interest on that note
      shall be payable until the extended due date of that note; however, as
      consideration for the purchase of the Antiguan call center including our
      subsidiary Caribbean Leisure Marketing, Inc. (described below), SIBL exchanged
      this note and $161,342 of accrued interest; that the maturity date of our
      $1,355,000 note with SIBL be extended until June 30, 2007, which has been
      further extended to January 1, 2008, pursuant to the Modification
      Agreement effective December 31, 2006, described above, and that no payments
      of
      principal or interest on that note shall be payable until the extended due
      date
      of that note; that the maturity date of our $305,000 note with SIBL be extended
      until June 30, 2007, which has further been extended until January 1, 2008,
      pursuant to the Modification Agreement effective December 31, 2006, described
      above, and that no payments of principal or interest on that note shall be
      payable until the extended due date of that note, however, as consideration
      for
      the purchase of the Antiguan call center including our subsidiary Caribbean
      Leisure Marketing, Inc. (described below), SIBL exchanged interest of $85,867
      on
      our $2,100,000 note with SIBL with a maturity date of December 27,
      2007.





-15-







**Purchase
      of Minority Interest In Tierra Del Sol**





In
      March
      2006, and effective as of December 31, 2005, we purchased the minority interest
      of our now wholly owned subsidiary, Tierra Del Sol, Inc. (the "Minority
      Interest") from Harborage Leasing Corporation ("Harborage"). The purchase price
      of the Minority Interest from Harborage was a promissory note for $1,411,705
      ("Harborage Note"), which was paid in August 2006; the right to receive, without
      payment, two (2) three-bedroom condominium units to be constructed in Phase
      2 of
      the Sonesta Resort, or in the event title to both such units is not delivered
      by
      December 31, 2007, then, in lieu thereof, payment of $500,000 for each such
      unit
      that is not transferred by such date; 197,000 shares of the Company's common
      stock; and warrants to acquire 300,000 additional shares of the Company's common
      stock at an exercise price of $5.00 per share. The warrants expire if
      unexercised five (5) years from their date of grant. Pursuant to the Stock
      Purchase Agreement, Harborage had the right to require the Company to purchase
      all or a portion of the Harborage 197,000 shares at $5.00 per share, for sixty
      (60) days, beginning January 1, 2007 (the "Put Option"), however such Put Option
      was extended pursuant to an Amendment to the Stock Purchase Agreement entered
      into with Harborage on January 1, 2007, and now allows Harborage the right
      to
      require us to repurchase the 197,000 shares at $5.00 per share, at any time
      during the six (6) month period beginning January 1, 2008 and ending June 30,
      2008. The Harborage Note and shares are guaranteed by Malcolm J. Wright, the
      Company's Chief Executive Officer and Chairman of the Company.





**TRAVEL
      SERVICES**





**Travel
      Services Industry Overview**





The
      travel services industry is made up of two broad categories, corporate business
      travel and individual leisure travel. TraveLeaders does the majority of their
      business in the corporate travel management category and a small portion of
      individual leisure travel, while Hickory provides services to a variety of
      agencies that focus on corporate business travel.





Corporate
      travel management became prevalent largely as a result of the deregulation
      of
      the airline industry in 1978. Complex pricing strategies and airline rules
      and
      the elimination
      of previously available commission arrangements created an opportunity for
      travel management companies to assist corporate clients in optimizing the value
      of their travel expenditures.





-16-








Travel
      is
      generally the second largest controllable expense, behind personnel, for most
      companies. Corporate travel management companies like TraveLeaders and most
      of
      Hickory's members reduce travel expenses for their clients by creating and
      documenting travel policies, negotiating favorable pricing directly with travel
      suppliers, and streamlining the reservation process with customized profiles
      and
      client-selected technologies including on-line booking tools.





The
      corporate travel management industry has changed significantly in the last
      ten
      years. Elimination of airline commissions drove the industry to fee-for-service
      arrangements, and rapid enhancements to technology allowed an expansion of
      service offerings to clients. Successfully servicing those clients requires
      significant technological, financial and operational resources, meaning that
      larger corporate travel management companies such as TraveLeaders and Hickory
      may have a competitive advantage. We believe the corporate travel management
      industry is undergoing a period of consolidation as a result and that
      significant growth opportunity exists in the industry.





The
      industry's role and capacity as a distribution channel, and its relationship
      with both clients and suppliers, is also undergoing significant change as a
      result of the Internet and other technological innovations. We believe these
      innovations offer opportunities for corporate travel management companies to
      increase the efficiency of their distribution capacities and enhance services
      provided to travelers and management.





**Our
      Travel Services**





We
      manage
      and distribute travel services through Hickory, our 50.83% owned subsidiary
      and
      previously contracted with Around The World Travel, Inc. to manage TraveLeaders,
      a fully integrated travel services distribution business based in Coral Gables,
      Florida, which contract was terminated on August 1, 2006. We acquired our
      interest in Hickory in October 2003. On December 30, 2004, we and ALEC, entered
      into an Asset Purchase Agreement with AWT (the "Asset Purchase Agreement")
      to
      acquire substantially all of Around The World Travel's assets which included
      the
      business name "TraveLeaders" and all of the tangible and intangible assets
      necessary to operate TraveLeaders. The purchase price was originally $17.5
      million, which price was determined by an independent valuation company based,
      in part, on economic information provided by Around The World Travel, Inc.
      and
      was comprised of the value as determined by the valuation firm, $16 million,
      calculated on a going concern basis plus $1.5 million.





We
      amended the Asset Purchase Agreement effective March 31, 2005 ("Amended Purchase
      Agreement"), to change the form of consideration that we paid for the
      TraveLeaders assets. Under the amendment, the liabilities assumed were reduced
      to $4,242,051, we exchanged certain working capital loans in the amount of
      $4,774,619 that Around The World Travel, Inc. owed to us and we cancelled the
      issuance of Series F preferred
      stock, which was originally included in the purchase price. In addition, we
      issued a 60 month, 6% per annum note in favor of Around The World Travel in
      the
      principal amount of $8,483,330 (the "Purchaser Note"). During the first quarter
      of 2005, we transferred to Around The World Travel allowance for doubtful
      accounts, pre-paids and security deposits that we had acquired pursuant to
      the
      Asset Purchase Agreement to reduce the amount of the note. We also allowed
      Around The World Travel to retain an amount of accounts receivable that we
      had
      acquired, which further offset the note.





-17-








On
      or
      about November 14, 2005, the Company and ALEC asserted certain claims against
      AWT with respect to the alleged breach of the Asset Purchase Agreement and
      a
      Management Agreement (the "Management Agreement"). The claimed breach of the
      Management Agreement was the failure of AWT to pay withholding taxes for its
      employees to the Internal Revenue Service. After negotiations among the parties,
      the parties agreed to settle the claims made by the Company and ALEC regarding
      the Asset Purchase Agreement pursuant to the terms of a Settlement Agreement
      entered into on February 24, 2006, and effective as of December 31, 2005 (the
      "Settlement Agreement").





The
      Settlement Agreement provided that the purchase price under the Amended Purchase
      Agreement be reduced from $17,500,000 to $9,000,000. The parties agreed to
      implement the reduction of the purchase price by eliminating the remaining
      balance of the Purchaser Note (which had a balance of $5,297,788 as of December
      31, 2005) and by establishing an obligation of AWT to pay to ALEC the amount
      of
      $3,185,548 as of December 31, 2005, which has not been paid to date, but was
      written-off during the three months ended December 31, 2006. As a result of
      the
      write-off, AWT no longer owes us any money.





Under
      the
      terms of the Settlement Agreement, the Company, ALEC and AWT agreed to release
      each other (and their respective officers and Directors) from all claims based
      upon the Asset Purchase Agreement. Additionally, the parties agree to waive
      any
      right to indemnity or contribution which they may have against each other (and
      their respective officers and Directors) for any liability which they might
      incur to certain plaintiffs in certain pending litigation including Simon
      Hassine and Seamless Technologies, provided that the waiver does not cover
      any
      liability incurred by the releasing party that is attributable to any act or
      omission of the released party that constitutes bad faith or is not known to
      the
      releasing party.





**TraveLeaders**





We
      provide our clients with a comprehensive range of business and vacation travel
      services, including corporate travel management (including reservations,
      profiled service levels, financial and statistical reporting and supplier
      negotiations), leisure sales (including sales to individuals and to travel
      and
      vacation clubs), and meeting, special event and incentive planning. We provide
      integrated solutions for managing corporate travel on a worldwide scale. We
      also
      offer corporate travel services on a local and regional level. Our corporate
      travel services provide our clients with a complete suite of travel services
      that range from completely 'agent-free' Internet booking tools to specialized
      expert travel agent guidance. Our private label websites provide our corporate
      clients
      with an exclusive portal for corporate and leisure travel planning and booking.
      Our corporate-clients range in size from companies with as few as two to three
      travelers to companies with several hundred travelers or more. We develop
      corporate travel policies, manage corporate travel programs and design and
      develop information systems tailored for our clients. The benefits derived
      by
      our clients typically increase proportionately with the amount of spending,
      in
      that we can obtain direct benefits for the clients by negotiating favored terms
      with suppliers and provide the client with better management information
      regarding their spending patterns through active, involved account management
      and customized reporting capabilities.





-18-








We
      provide vacation travel services using destination specialists who have
      first-hand knowledge of various destinations and the capability to handle a
      client's specific vacation travel needs. We help our clients design and
      implement vacations suited to their particular needs and try to do this in
      the
      most cost-efficient manner. We provide meeting, special event and incentive
      planning to corporate clients ranging from Fortune 500 companies with thousands
      of travelers to smaller companies with more modest meeting requirements. We
      plan
      events ranging in size from 10 to over 3,000 people. We have the capability
      to
      coordinate all aspects of a client's conference or event including servicing
      general travel needs, booking group airline tickets as well as meeting
      supervision and the production of all collateral needs. Our meeting, special
      event and incentive planning services include program development, promotion
      support, site selection, contract negotiations, registration and on-site
      management for corporate events in addition to fulfillment of travel service
      requirements. We also provide discount airline ticket and hotel
      programs.





**Hickory
      Travel Systems, Inc.**





Hickory
      is a travel management service organization that serves its network/consortium
      of approximately 160 well-established travel agency members, comprising more
      than 3,000 travel agency locations worldwide, that focus primarily on corporate
      travel. We utilize Hickory's 24-hour reservation services, international rate
      desk services, discount hotel programs, preferred supplier discounts, commission
      enhancement programs, marketing services, professional services, automation
      and
      information exchange.





**American
      Travel & Marketing Group**





American
      Travel & Marketing Group, Inc., our 81% owned subsidiary, develops and
      operates affinity-based travel clubs. We believe that highly advantageous travel
      benefits are the key to distinguishing our affinity club creation and management
      from the older model of single purpose clubs. In addition to travel benefits,
      we
      actively promote cross-marketing strategies to engage non-traditional sponsors
      to provide significant benefits to the members that would otherwise not be
      available to them in a traditional affinity club. We utilize TraveLeaders to
      fulfill the travel service needs of these affinity-based clubs.








-19-





**Distribution
      Of Our Travel Services**





We
      provide our travel services to our clients through several distribution
      channels, including traditional brick and mortar regional and branch offices,
      dedicated on-site corporate travel departments, call centers and Internet based
      technologies.





TraveLeaders
      has two large customer service operations in Coral Gables, Florida and Irvine,
      California with five branch offices as follows:





**Florida**





o
      Boca
      Raton;


o
      Orlando; and


o
      Tampa





**Ohio**





o
      Cincinnati





**California**





o
      Irving;
      and


o
      San
      Francisco





These
      branch offices provide several corporate and vacation travel services to our
      clients. These offices are primarily used by small companies as well as vacation
      travelers seeking expertise in domestic and international destinations. In
      addition, TraveLeaders has one leisure travel office in Largo,
      Florida.





We
      operate approximately twenty-four (24) on-site offices through TraveLeaders
      located at corporate client premises, where we provide private label websites,
      customized trip planning, reservation and ticketing services to the employees
      of
      such corporate clients.





Hickory
      operates a 24-hour call center that we use to service our travel clients and
      provide travel marketing services.





We
      also
      maintain an online reservation and booking website at www.traveleaders.com.
      This
      website permits both corporate and vacation clients to book airline flights,
      hotel reservations, car rental reservations, cruises and vacation specials.
      We
      currently operate over a dozen web sites dedicated to specific types of travel
      planning.





**Competition
      In The Travel Industry**





The
      travel services industry is highly competitive. We compete with a large number
      of other providers of corporate and vacation travel services. Some of our
      competitors include multi-national corporations that have significantly greater
      resources than we have.
      These significantly larger competitors continue to expand their size, which
      may
      provide them access to new products and more competitive pricing than we can
      offer and may provide them certain economies of scale, which we may be unable
      to
      compete with. We also compete with Internet travel service providers and
      directly with travel suppliers including, airlines, cruise companies, hotels
      and
      car rental companies. Additionally, we are faced with increasing use of the
      Internet by both business and vacation travelers to purchase products and
      services directly from travel suppliers that could result in bypassing us and
      travel service providers similarly situated to us. To meet that competition,
      we
      have developed and will continue to develop business models to enable
      TraveLeaders to obtain a growing market share of the 'agent free' travel
      business. We also compete by bundling our products in competitively priced
      tour
      packages.





-20-








**Vacation
      Home And Travel Resort Operations**





Our
      vacation home and travel resort operations will be conducted within three
      business segments. One will acquire tracts of real estate suitable for the
      development of vacation resort properties, which will be subdivided, improved
      and sold, typically on a retail basis as vacation home sales. The second segment
      is the ongoing hospitality management of the resorts built by us. The third
      operation is planned to develop, market and sell vacation ownership interests
      in
      our future resort properties primarily through vacation clubs. While our
      vacation home management programs will not be a condition of purchase at any
      of
      our resorts, the consumer may elect to employ our management subsidiary to
      handle all aspects of the care and economics of their vacation home, including
      but not limited to the supervision of the home in a rental
      arrangement.





**Travel
      Clubs**





We
      have
      developed a travel club system and travel incentive strategy that creates and
      fulfills the travel and incentive needs of corporations, organizations and
      associations with significant member bases. Typically, we identify a national
      retail entity and propose to create a club comprising persons in their target
      demographic for the purpose of fostering loyalty to the entity's brands. The
      incentives for membership are a rich assortment of discounted travel
      opportunities that are tailored to the target demographic as well as a
      significant array of special membership benefits that are provided by sponsors
      of nationally known products and services. We will derive revenues from
      membership dues, sponsorship premiums and travel commissions. In addition to
      revenue generation, we also plan to seek to provide traffic to our vacation
      home
      and resort properties. We believe that we will generate increased travel
      business through the creation of additional clubs comprised of affinity-based
      travelers. We are the proprietor and manager of the clubs that we create. As
      such, we anticipate that we will generate revenues from annual membership fees
      and commissions earned on the sale of travel services once our infrastructure
      has been finalized to enable our other businesses to communicate and sell to
      the
      affinity-based club databases we operate. We expect to derive revenue from
      sales
      opportunities to Hickory's corporate clients, Hickory's bulk purchasing power
      and fulfillment capacity, and access to vacation home and resort properties
      that
      we plan to develop.





-21-








**Communications
      Services**





In
      December 2004 we entered into a joint venture with IMA Antigua, Ltd., a Barbados
      company, to operate a call center in Antigua that we own. The joint venture
      is
      operated through Caribbean Media Group, Ltd., an international business
      corporation formed under the laws of Barbados. We owned 49% of this joint
      venture which operated the call center, until August 2006, at which time we
      sold
      our interest in the call center to Stanford International Bank Limited (“SIBL”),
      pursuant to a Stock Purchase Agreement (the "Stock Purchase Agreement"), as
      described in greater detail under “Recent Events.” These operations are reported
      as discontinued operations in the attached financial statements.





The
      co-venturer in the call center, IMA, Ltd. owns the remaining 51% interest in
      the
      call center. The call center provides in-bound and out-bound traffic for
      customer service, customer retention and accounts receivable management. The
      clients of the call center are well known national businesses with
      well-established credit and operational systems.





Due
      to
      the Stock Purchase Agreement, we no longer have any interest in the Caribbean
      Media Group, Ltd. or the call center.





**Patents,
      Trademarks & Licenses**





We,
      through our wholly owned subsidiary American Leisure Equities Corporation
      ("ALEC"), hold a registered trademark, Serial Number 78611764, registration
      number 3170741, for the service mark "TraveLeaders."





**Government
      Regulation**





The
      travel, real estate development and vacation ownership industries are subject
      to
      extensive and complex regulation. We are, and may in the future be, subject
      to
      compliance with various federal, state, and local environmental, zoning,
      consumer protection and other statutes and regulations regarding the
      acquisition, subdivision and sale of real estate and vacation ownership
      interests. On a federal level, the Federal Trade Commission has taken an active
      regulatory role through the Federal Trade Commission Act, which prohibits unfair
      or deceptive acts or competition in interstate commerce. We are, or may be
      subject to the Fair Housing Act and various other federal statutes and
      regulations. In addition, there can be no assurance that in the future, vacation
      ownership interests will not be deemed to be securities subject to regulation,
      which could increase the cost of such products. We believe that we are in
      compliance in all material respects with applicable regulations. However, the
      cost of complying with applicable laws and regulations may be significant.
      Any
      failure to comply with current or future applicable laws or regulations could
      have a material adverse effect on us.





We
      are
      subject to various federal and state laws regarding our tele-service sales
      and
      telemarketing activities. We believe we are in compliance in all material
      respects with all federal
      and state telemarketing regulations. Our practices and methods may be or become
      subject to additional regulation or regulatory challenge.





-22-








The
      industries we will serve may also be subject to varying degrees of government
      regulation. Generally, in these instances, we rely on our clients and their
      advisors to develop and provide us with the scripts for their particular
      purposes. We anticipate that our clients will indemnify us against claims and
      expenses arising with respect to the scripts provided by our
      clients.





**Employees**





We
      have
      approximately 295 employees, all of which are full-time employees. Those
      employees are distributed among our parent and subsidiary companies as
      follows:





o
      TraveLeaders


-200
      employees;





o
      Hickory
      Travel Systems, Inc.


-
      89
      employees;





o
      American Leisure Equities Corporation


-
      1
      employee; and





o
      American Leisure Holdings, Inc.


-
      5
      employees.





There
      are
      no collective bargaining contracts covering any of our employees. We believe
      our
      relationship with our employees is satisfactory.





**RECENT
      EVENTS**





In
      August
      2006, with an effective date of June 30, 2006, we and several of our
      subsidiaries, including Castlechart Limited ("CLM"), our former wholly owned
      subsidiary, which owns 81% of the issued and outstanding stock of Caribbean
      Leisure Marketing Limited ("Caribbean Leisure Marketing"), which in turn owned
      49% of the issued and outstanding stock of Caribbean Media Group, Ltd.
      ("Caribbean Media Group"), which owned and operated our call center in Antigua,
      entered into a Stock Purchase Agreement with Stanford International Bank Limited
      ("SIBL" and the "Stock Purchase Agreement").





The
      Stock
      Purchase Agreement provided that we would sell SIBL, all of our interest in
      CLM
      for an aggregate purchase price of $5,663,274. In connection with the purchase,
      SIBL also agreed to exchange the interest on several of our outstanding
      promissory notes withSIBL, and to amend the due date of such notes,
      described in greater detail below, and we agreed to grant SIBL a warrant to
      purchase 355,000 shares of our common stock at an exercise price of $10.00
      per
      share, which warrants have an expiration date of April 30,
      2008,
      and contain certain anti-dilution clauses, whereby if we grant any options
      or
      sell any shares of common stock for less than $1.02 per share, the exercise
      price of the 355,000 warrants will reset to such lower price.





-23-








In
      connection with the Stock Purchase Agreement, SIBL exchanged the following
      debts
      which we owed to SIBL: a $1,250,000 promissory note and accrued interest thereon
      through June 30, 2006; a $2,100,000 promissory note and accrued interest thereon
      through June 30, 2006; all accrued and unpaid interest on our $6,000,000 note
      with SIBL as of June 30, 2006; all accrued and unpaid interest on our $3,000,000
      promissory note payable to SIBL as of June 30, 2006; and $262,885 of accrued
      interest on our $8,000,000 promissory note payable to SIBL, and all accrued
      fees
      on our $6,000,000 letter of credit, which SIBL agreed to guaranty in connection
      with the KeyBank loans.





Additionally,
      in connection with the Stock Purchase Agreement, SIBL also agreed to restate
      the
      due dates of the notes which we owe to SIBL, including, the $6,000,000 note,
      which due date has been further restated due to the Modification Agreement
      described below to January 1, 2008; the $3,000,000 note, which now has a
      maturity date of January 1, 2008 pursuant to the Modification Agreement; the
      $1,355,000 note, which now has a maturity date of January 1, 2008 due to the
      Modification Agreement; the $8,000,000 note, which has since been further
      extended to June 30, 2007; and the $305,000 note, which has a maturity date
      of
      January 1, 2008, which was further extended in connection with the Modification
      Agreement.





Finally,
      in connection with the Stock Purchase Agreement, CLM was released and discharged
      from any liability under the $6,000,000 note or the $305,000 note with SIBL,
      which it previously agreed to guarantee.





On
      and
      effective as of August 1, 2006, our Management Agreement and the License
      Agreement with Around the World Travel ("AWT"), which we entered into with
      AWT
      on December 30, 2004, was terminated. American Leisure Equities Corporation,
      which is a wholly owned subsidiary, is now operating and managing the
      TraveLeaders assets.





In
      August
      2006, Tierra del Sol Resorts, Inc. entered into a guaranteed maximum price
      construction contract with Resorts Construction, LLP ("Resorts Construction")
      to
      construct and develop part of the Sonesta Resort and its town home properties.
      Resorts Construction is 50% owned by Malcolm J. Wright, the Company's Chief
      Executive Officer and Chairman. We believe that the contract with Resorts
      Construction provides significant savings over our previous contract with PCL
      Construction, and is advantageous to the Company in comparison with terms
      available in the market from other third party contractors. Pursuant to the
      contract with Resorts Construction, we agreed to pay Resorts Construction a
      contractor's fee equal to 5% of the total cost of the construction performed
      by
      Resorts Construction and 7.5% for general conditions. Any payments owed under
      the Resorts Construction contract which are not paid when due bear interest
      at
      the rate of 12% per annum. We provided Resorts Construction a payment of
      $4,000,000 upon our entry into the construction agreement with Resorts
      Construction, which
      funds Resorts Construction has used to begin construction of Phase 1 of the
      Sonesta Resort.





-24-








**Purchase
      of Vici Note**





In
      August
      2006, we entered into a Purchase Agreement with SIBL, whereby we agreed to
      purchase a $750,000 promissory note from SIBL, which note was originally
      received by SIBL from Scott Roix, an individual, in connection with SIBL's
      sale
      of its interest in Vici Marketing Group, LLC ("Vici" and the "Vici Note") to
      Mr.
      Roix, and which Note bears interest at the rate of 8% pre annum, payable on
      June
      30, 2008. In consideration for the purchase of the Vici Note, we agreed to
      issue
      SIBL 235,000 shares of our common stock and a five year warrant to purchase
      235,000 shares of our common stock at an exercise price of $20 per share (the
      "Vici Warrant"). We also granted SIBL demand registration rights in connection
      with the registration of the shares underlying the Vici Warrant. The balance
      of
      the Vici Note as of December 31, 2006 was $500,000.





**Employment
      Agreement**





In
      August
      2006, we entered into an Employment Agreement with Jason Williams, who agreed
      to
      serve as our Associate General Counsel and Assistant Secretary for a period
      of
      two years, which Employment Agreement shall terminate on August 21, 2008, unless
      terminated earlier pursuant to the agreement. Pursuant to the Employment
      Agreement, Mr. Williams will receive a salary of $150,000 per year (pro rated
      for any incomplete years), which salary shall increase by no less than 10%
      per
      annum each year he is employed under the Employment Agreement. He is also
      eligible to receive a bonus in connection with his Employment Agreement and
      received 50,000 warrants to purchase shares of our common stock at $1.02 per
      share immediately upon his entry into the Employment Agreement and will receive
      an additional 25,000 warrants upon the one and two year anniversaries,
      respectively, of such Employment Agreement, if he is still employed by us at
      that time. The Employment Agreement may be terminated by us at any time for
      "cause" as defined in the agreement, or by Mr. Williams at any time. Upon the
      expiration of the initial term of the agreement, if not terminated by either
      party previously, the employment agreement shall continue for additional six
      (6)
      month terms subject to termination by either party with thirty (30) days written
      notice.





**Credit
      Agreements**





On
      November 22, 2006, we entered into a Credit Agreement through our wholly owned
      subsidiary Reedy Creek Acquisition Company, LLC ("RCAC") and Stanford
      International Bank Limited ("SIBL"), to provide RCAC a $4,300,000 credit
      facility (the "RC Credit Agreement"). SIBL had previously loaned RCAC $7,150,000
      on July 8, 2005 and $850,000 on January 5, 2006, which loans were evidenced
      by a
      Renewed, Amended and Increased Promissory Note in the amount of $8,000,000,
      which we had guaranteed. In connection with the RC Credit Agreement, the
      Renewed, Amended and Increased Promissory Note was replaced by a Second Renewed,
      Amended and Increased Promissory Note in the amount of $12,200,000, which was
      replaced by a Third Renewed, Amended
      and Increased Promissory Note in the amount of $13,420,000, which was replaced
      by a Fourth Renewed, Amended and Increased Promissory Note in the amount of
      $15,300,000 (the "Amended RC Note"). Malcolm J. Wright, our Chairman and Chief
      Executive Officer personally guaranteed the repayment of the RC Note. In
      December 2006, Mr. Wright received 366,000 warrants to purchase shares of our
      common stock at an exercise price of $1.02 per share in connection with his
      guaranty of the RC Credit Agreement, equal to three percent (3%) of to the
      total
      indebtedness of the RC Credit Agreement.





-25-








We
      entered into a Second Mortgage Modification Agreement and Future Advance
      Certificate with SIBL in connection with our entry into the RC Credit Agreement,
      which provided SIBL a mortgage over certain real property owned by us in Osceola
      County, Florida, to secure the repayment of the RC Note.





On
      December 18, 2006, we entered into "Amendment No. 1 to the $4.3 Million Credit
      Agreement" the ("Amended RC Credit Agreement") with SIBL and RCAC, which amended
      the terms of the RC Credit Agreement, to increase the loan amount under such
      agreement from $4,300,000 to $5,420,000, to include an advance of $1,120,000
      which was received on December 18, 2006 to cover the placement of an appeal
      bond
      by us and related expenses paid by us on behalf of South Beach Resorts, LLC
      ("Resorts," which we purchased pursuant to the Purchase Agreement, described
      and
      defined below) in connection with Resorts' purchase of the Boulevard Hotel
      (described below) from a company which was then in Chapter 11 bankruptcy, and
      a
      subsequent dispute regarding such purchase. The Amended RC Credit Agreement
      also
      amended and restated the RC Note in the amount of $13,420,000, evidenced by
      a
      "Third Renewed, Amended and Increased Promissory Note" (the "Amended RC Note"),
      to include the increased Amended RC Credit Agreement amount and provided for
      Malcolm J. Wright, our Chief Executive Officer and Chairman to provide a
      restated Guaranty to SIBL to include the amended loan amount. Mr. Wright
      received 33,600 warrants to purchase shares of our common stock at an exercise
      price of $1.02 per share in connection with his guaranty of Amended RC Credit
      Agreement, equal to three percent (3%) of the total indebtedness of the
      increased amount of the RC Credit Agreement.





We
      also
      entered into a Third Mortgage Modification Agreement and Future Advance
      Certificate in connection with the increased RC Loan, which increased SIBL's
      mortgage on certain of our property in Osceola County, Florida to secure the
      Amended RC Loan.





On
      January 31, 2007, we entered into an "Amendment No. 2 to the $4.3 Million Credit
      Agreement" the ("Second Amended RC Credit Agreement") with SIBL and RCAC, which
      amended the terms of the Amended RC Credit Agreement, to increase the loan
      amount under such agreement from $5,420,000 to $7,300,000, to include an advance
      of $1,880,000. The Second Amended RC Credit Agreement also amended and restated
      the RC Note in the amount of $15,300,000, evidenced by a "Fourth Renewed,
      Amended and Increased Promissory Note" (the "Amended RC Note"), to include
      the
      increased Second Amended RC Credit Agreement amount and provided for Malcolm
      J.
      Wright, our Chief Executive Officer and Chairman to provide a restated Guaranty
      to SIBL to include the amended
      maximum loan amount of $7,300,000. Mr. Wright received 56,400 warrants to
      purchase shares of our common stock at an exercise price of $1.02 per share
      in
      connection with his guaranty of Amended RC Credit Agreement, equal to three
      percent (3%) of the total indebtedness of the increased amount of the RC Credit
      Agreement.





-26-








On
      November 22, 2006, we entered into a Credit Agreement with Stanford Venture
      Capital Holdings, Inc. ("Stanford"), Tierra Del Sol Resort (Phase 2), Ltd.,
      Costa Blanca II Real Estate, LLC, Costa Blanca III Real Estate, LLC, TDS Town
      Homes (Phase 2) LLC and TDS Clubhouse, Inc. (the "TDSR Credit Agreement") to
      provide $6,200,000 of capital for (1) the repayment of the RC Credit Agreement,
      which was later amended to include the repayment of the increased amount of
      the
      Amended RC Credit Agreement in connection with the Amended TDSR Credit Agreement
      (described below), (2) construction of the pool complex at the Tierra del Sol
      Phase One project, (3) furniture, fixtures and equipment, and (4) various other
      expenses. Any amounts borrowed under the TDSR Credit Agreement bear interest
      at
      the rate of 12% per annum, and any amounts not paid when due will bear interest
      at the rate of 15% per annum. Any amounts borrowed under the TDSR Credit
      Agreement are due and payable on June 30, 2007.





On
      December 18, 2006, we also entered into "Amendment No. 1 to $6.2 Million Credit
      Agreement" (the "Amended TDSR Credit Agreement") to amend the TDSR Credit
      Agreement to reflect the Amended RC Credit Agreement amount, which is to be
      repaid with any funds received in connection with the exercise of the Amended
      TDSR Credit Agreement.





On
      January 31, 2007, we entered into "Amendment No. 2 to $6.2 Million Credit
      Agreement" (the "Second Amended TDSR Credit Agreement") to amend the TDSR Credit
      Agreement to reflect the Second Amended RC Credit Agreement amount, which is
      to
      be repaid with any funds received in connection with the exercise of the Second
      Amended TDSR Credit Agreement.





The
      Second Amended TDSR Credit Agreement is not effective until we substitute a
      portion of Tierra Del Sol Resorts, Inc. as collateral for future advances under
      the Second Amended TDSR Credit Agreement, and as such, we have not borrowed
      any
      funds pursuant to the Second Amended TDSR Credit Agreement to date. We
      anticipate the funds received from the Second Amended TDSR Credit Agreement,
      if
      such agreement is funded to be used to repay the Second Amended RC Credit
      Agreement.





We
      paid
      Stanford a placement fee of $186,000 (or 3% of the TDSR Credit Agreement amount)
      as a placement fee upon our execution of the TDSR Credit Agreement. Malcolm
      J.
      Wright has agreed to guarantee the repayment of a $6,200,000 promissory note,
      which we plan to provide Stanford to evidence the amount borrowed under the
      TDSR
      Credit Agreement, assuming we choose to move forward with such credit facility.
      It is anticipated that if the Amended TDSR Credit Agreement is funded, Mr.
      Wright will receive approximately 186,000 warrants to purchase shares of our
      common stock at an exercise price of $1.02 per share, in connection with his
      guaranty.





-27-





**Warrant
      Participation Agreement**





In
      connection with SIBL's agreeing to enter into the Amended RC Credit Agreement,
      we entered into a Warrant Participation Agreement with SIBL, Resorts, Malcolm
      J.
      Wright and Frederick Pauzar (the "Participation Agreement"), whereby we granted
      SIBL and six (6) of its assigns the right to a 25% participation interest (the
      "Participation Interest") in the Net Proceeds (as defined below) realized by
      us
      upon the disposition of the real property located at 740 Ocean Drive, Miami
      Beach, Florida, known as the Boulevard Hotel (the "Property"), for aggregate
      consideration of $1.00 per warrant (collectively, the "Warrant"). "Net Proceeds"
      is defined as the proceeds realized upon the disposition or refinancing of
      the
      Property, less our cost basis in the Property, excluding any operating losses
      or
      operating profits. In the event the Property is not sold by us by December
      22,
      2009, we agreed to appoint SIBL as true and lawful proxy of us in connection
      with the engagement of a real estate broker and the subsequent sale of the
      Property. Mr. Wright and Mr. Pauzar are jointly and severally liable for our
      obligations under the Participation Agreement, however they are not receiving
      any warrants in connection with such guaranties.





The
      Warrant was evidenced by seven (7) Warrants, which are exercisable at any time
      prior to the disposition date of the Property, which Warrants were distributed
      as follows:





**Percentage
                of****Percentage
                  of**Participation Interest
            
            **Total
                Net Proceeds**
            
            **Name**
            
            **Exercise
                Price**SIBL
            
            $
            1.00
            
            
            50
            %
            
            12.5
            %Daniel
                T. Bogar
            
            $
            1.00
            
            
            11.5625
            %
            
            2.891
            %William
                R. Fusselmann
            
            $
            1.00
            
            
            11.5625
            %
            
            2.891
            %Osvaldo
                Pi
            
            $
            1.00
            
            
            11.5625
            %
            
            2.891
            %Ronald
                M. Stein
            
            $
            1.00
            
            
            11.5625
            %
            
            2.891
            %Charles
                M. Weiser
            
            $
            1.00
            
            
            1.8750
            %
            
            0.468
            %Tal
                Kimmel
            
            $
            1.00
            
            
            1.8750
            %
            
            0.468
            %**Totals**
            
            **$**
            **7.00**
            
            
            **100**
            **%**
            
            **25**
            **%**








**Purchase
      of South Beach Resorts, LLC**





On
      December 21, 2006, we entered into a Purchase Agreement with SBR Holding
      Company, LLC ("SBR") which was owned by Frederick Pauzar, a Director of us
      and
      our President, and Malcolm J. Wright, our Chairman and Chief Executive Officer
      (the "Purchase Agreement"). Pursuant to the Purchase Agreement, we purchased
      100% of the outstanding membership interests in South Beach Resorts, LLC, a
      Florida limited liability company from SBR ("Resorts") and then acquired SBR
      Holdings, LLC for no consideration. The Purchase price for Resorts was equal
      to
      75% of the Net Proceeds (as defined above) realized by us upon the planned
      disposition the Property (as defined above), up to a maximum of $3,000,000.
      The
      ownership of Resorts was transferred to us in connection with our entry into
      the
      Purchase Agreement pursuant to an Assignment of Interest,
      and the consideration payable to SBR in connection with the sale of the Property
      will be paid immediately after the disposition of the
      Property.





-28-








On
      or
      around the closing of the Resorts purchase, we also entered into a note with
      Roger Maddock a significant shareholder of us, to evidence $3,590,811 in loans
      and advances Mr. Maddock had previously made to Resorts (the "Maddock Note"),
      the payment of which was guaranteed by us pursuant to a Guaranty
      Agreement.





The
      Maddock Note bears interest at the rate of 12% per annum until paid, provided
      that any amount not paid when due shall bear interest at the rate of the lesser
      of 18% per annum or the highest rate of interest allowable by law.





The
      Maddock Note is due and payable by us, together with any accrued and unpaid
      interest on December 31, 2008. Accrued interest is due quarterly in arrears
      under the Maddock Note, on the last day of each calendar quarter. We have the
      right to prepay the Maddock Note at any time prior to the due date of the note
      without penalty.





On
      January 11, 2007, Resorts, our wholly owned subsidiary defaulted on a loan
      due
      to Marathon Structured Finance Fund L.P. ("Marathon"). The loan principal is
      $7,498,900 and accrued interest of $79,910 is due at January 11, 2007. Marathon
      has a mortgage interest on the Property in connection with the loan.





A
      Forbearance Agreement was subsequently executed with Marathon to waive the
      default until April 11, 2007, provided SBR continues to make monthly interest
      payments on the debt outstanding and a principal payment of $750,000 was made
      on
      February 8, 2007. An additional forbearance to July 11, 2007 is allowed provided
      that an additional $500,000 principal payment is made on or before July 3,
      2007.




On
      February 9, 2007, SBR entered into a 180 day, $750,000 loan agreement at the
      Wall Street Journal prime rate plus 1%, currently equal to 9.25%, with the
      prime
      rate at 8.25% as of the filing of this report, with International Property
      Investors AG, a corporation organized under the laws of Liechtenstein, secured
      by SBR’s property. The proceeds of the loan were used solely for the payment of
      fees owed by SBR to Marathon pursuant to the Forbearance Agreement.




We
      are
      currently working to secure new financing to replace the Marathon loan; however
      we can provide no assurances that such financing will be raised on favorable
      terms, if at all. The Marathon loan bears interest at the rate of the greater
      of
      (a) ten percent (10%) or (b) the London Interbank Offered Rate (LIBOR) plus
      seven percent (7%). The note also required a $180,000 exit fee to be paid at
      the
      time the loan was repaid, which amount has not been paid to date. Marathon
      may
      also require us to pay a 5% late payment fee in connection with our failure
      to
      repay the loan amount. We are required to pay the default rate of interest
      on
      the Marathon loan while obtaining a replacement loan. The default rate of
      interest is LIBOR plus twelve percent (12%), which was equal to approximately
      17.17%, with the LIBOR at 5.17% as of the filing of this Report.





With
      an
      effective date of December 31, 2006, we and SIBL entered into an amendment
      to
      the Amended RC Note, to extend the due date of such note to June 30,
      2007.





-29-








With
      an
      effective date of December 31, 2006, we entered into a Note Modification
      Agreement (the “Modification Agreement”) with SIBL, various of our subsidiaries
      and Malcolm J. Wright, our Chief Executive Officer and Chairman. The
      Modification Agreement extended the due date of our $3,000,000 note with SIBL
      to
      January 1, 2008; the due date of our $1,355,000 note with SIBL to January 1,
      2008, and the due date of our $305,000 note with SIBL to January 1, 2008.





On
      January 30, 2007, AMLH entered into a promissory note with Applebee Holding
      Company in the amount of $150,000 at 4% for seven years. As part of the
      agreement, 2,840 shares of AMLH Series E Convertible Preferred Stock were issued
      bearing a 4% per annum cumulative preferred dividend rate, par value of $.001
      and convertible into AMLH common stock at a strike price of $15.00 per
      share.




In
      January 2007, Reedy Creek entered into a Fourth Renewed, Amended and Increased
      Promissory Note with SIBL, pursuant to which Reedy Creek obtained an advance
      of
      $1,880,000 and the RC Note was increased to $15,300,000. The RC Note is due
      and
      payable on June 30, 2007, with $8,000,000 of the RC Note bearing interest at
      the
      rate of 8% per annum and the remaining $7,300,000 bearing interest at the rate
      of 12% per annum.





The
      RC
      Note is secured by a second lien on the Reedy Creek Property. It is guaranteed
      by the Company and Malcolm J. Wright, the Company's Chief Executive Officer
      and
      Chairman pursuant to a Modification and Reaffirmation of Guaranty and
      Environmental Indemnity Agreement. We believe that without the guarantees of
      Mr.
      Wright, it would have been more difficult, if not impossible, for us to secure
      the SIBL credit facility.





We
      also
      entered into an Amendment No. 2 to $4.3 Million Credit Agreement with SIBL
      and
      an Amendment No. 2 to $6.2 Million Credit Agreement with Stanford on January
      31,
      2007, as described in greater detail above under “Credit
      Agreements.”




On
      March
      13, 2007, we entered into a $10,000,000 Credit Agreement with SIBL, whereby
      SIBL
      agreed to loan us $10,000,000 to use for the construction and development of
      Phase II of the Sonesta Resort. The loan was evidenced by a $10,000,000
      Promissory Note, which bears interest at the rate of 10% per annum. The
      Promissory Note is secured by a second priority security interest and lien
      on
      the land underlying Phase II of the Sonesta Resort, all buildings, structures
      and other improvements on such land, and all fixtures, equipment, goods,
      inventory or property owned by us currently or in the future, which security
      interests are evidenced by a Mortgage and Security Agreement, which we and
      several of our wholly owned subsidiaries entered into with SIBL in connection
      with the Credit Agreement. The loan is due in full and payable along with any
      accrued and unpaid interest on March 13, 2008. Any amounts not paid when due
      under the loan bear interest at the rate of 15% per annum.





The
      Credit Agreement provides for additional advances to be made to us in an amount
      not to exceed $750,000, assuming that certain conditions are met by us in the
      future, including (a) that SIBL has received current financial information
      regarding our operations
      (as further described in the Credit Agreement) and that we have issued SIBL
      26,250 warrants to purchase shares of common stock and (b) that we are able
      to
      obtain additional loans in an aggregate amount of $750,000 from parties other
      than SIBL; and an additional loan in an amount not to exceed $1,500,000,
      assuming (a) and (b) above and that we have issued additional warrants (to
      be
      determined prior to such additional advance), to SIBL.





-30-








Immediately
      upon our execution of the Credit Agreement, we paid SIBL a placement fee of
      $200,000, plus SIBL’s reasonable costs and expenses incurred
      in connection with the closing of the Credit Agreement.




We
      have
      received $2,905,000 from Resorts Funding Group, LLC, which has been matching
      the
      funds from the SIBL Credit Agreement (see above) through the end of March
      2007.




We
      intend
      to enter into an agreement with Resorts Funding Group, LLC, on similar terms
      and
      conditions to those of the SIBL Credit Agreement.










**ITEM
      2. DESCRIPTION OF PROPERTY**





Our
      corporate headquarters are located in Orlando, Florida. Our Orlando facility
      is
      approximately 9,000 square feet, of which 250 square feet houses our executive
      offices. This facility is leased by American Leisure Real Estate Group, Inc.,
      a
      company owned by Mr. Wright, our Chairman and Chief Executive Officer, that
      manages the development of our resort properties in return for a fee of 4%
      of
      the total costs as per the agreement entered into in November 2003 with Tierra
      Del Sol Resort, Inc. The lease on our corporate headquarters expires on April
      30, 2008.





Our
      subsidiary owns the land on which The Sonesta Orlando Resort at Tierra Del
      Sol
      will be situated. It purchased this land for $5,560,366 in February 2000. We
      have spent approximately $4,450,000 to create the Westridge Community
      Development District. The land is currently subject to the KeyBank mortgages
      described above. As a developer of vacation resort properties, we plan to also
      purchase additional parcels of land for resort development.





Reedy
      Creek Property: The Reedy Creek Property is situated in the northern section
      of
      Osceola County, Florida and lies on three contiguous development parcels located
      to the immediate north of U.S. Highway 192 West, about one mile from the
      "Maingate" entrance to Walt Disney World, Orlando and 0.75 miles from the
      entrance to "Disney's Animal Kingdom" theme park. The property is one of only
      a
      small number of privately owned parcels abutting Walt Disney World (north and
      east boundaries).





The
      Reedy
      Creek Property consists of three parcels totaling over 40 gross acres with
      approximately 29 acres of buildable land. The Osceola County Comprehensive
      Land
      Plan for the site allows vacation homes at a density of 18 units per acre,
      which
      results in a maximum allowable project density of 522 residential units. To
      achieve the maximum density,
      it is anticipated that the project will consist of mid-rise condominium
      buildings. Amenities proposed on-site include a water park with swimming pools,
      guest services clubhouse, and other related on-site resort
      amenities.





-31-








South
      Beach Resorts, LLC, which we recently purchased owns the Boulevard Hotel
      Property located in Miami Beach, Florida, which is undergoing remodeling and
      refurbishing to convert the property into a timeshare facility. As of December
      31, 2006, approximately $3,405,000 had been incurred in the remodeling and
      refurbishment of such facility.





Hickory
      Travel Systems, Inc. (“HTS”) rents approximately 7,133 square feet of office
      space in Saddle Brook, New Jersey, at a monthly rental cost of approximately
      $13,077, which lease expires on April 14, 2008.





American
      Leisure Equities Corp. (“ALEC”) rents approximately 12,850 square feet of office
      space in Coral Gables, Florida, at a monthly rental cost of approximately
      $24,621.50 per month, which rental cost shall increase to $25,156.75 from March
      1, 2008 until February 28, 2009; and to $26,227.25 from March 1, 2009 to
      February 28, 2010, at which time the current lease will expire. The lease also
      provides for ALEC to pay various other amounts in connection with the upkeep
      and
      expenses associated with the common areas of the rental space.





ALEC
      also
      rents approximately 11,524 square feet of office space in Irving, California,
      pursuant to a three year lease entered into on September 1, 2006, which expires
      on August 31, 2009. The monthly rental cost of the office space during the
      term
      of the lease is $24,776. The lease also provides for ALEC to pay various other
      amounts in connection with the upkeep and expenses associated with the common
      areas of the rental space.





**ITEM
      3. LEGAL PROCEEDINGS**





**Litigation**





In
      the
      ordinary course of its business, the Company may from time to time become
      subject to claims or proceedings relating to the purchase, subdivision, sale
      and/or financing of its real estate or its operations.




We
      are a
      party in an action that was filed in Orange County, Florida and styled as Rock
      Investment Trust, P.L.C. and RIT, L.L.C. vs. Malcolm J. Wright, American
      Vacation Resorts, Inc., American Leisure, Inc., Inversora Tetuan, S.A., Sunstone
      Golf Resort, Inc., and Sun Gate Resort Villas, Inc., Case No. CIO-01-4874,
      Ninth
      Judicial Circuit, Orange County, Florida. In June, 2001, after almost 2 years
      from receiving notice from Malcolm Wright that one Mr. Roger Smee, doing
      business under the names Rock Investment Trust, PLC (a British limited company)
      and RIT, LLC (a Florida limited liability company) (collectively, the Smee
      Entities) had defaulted under various agreements to loan or to joint venture
      or
      to fund investment into various real estate enterprises founded by
      Mr.
      Wright, the Smee Entities brought the Lawsuit against Mr. Wright, American
      Leisure, Inc. (ALI) and several other entities. The gravamen of the initial
      complaint is that the Smee Entities made financial advances to Wright with
      some
      expectation of participation in a Wright real estate enterprise. In general,
      the
      suit requests either a return of the Smee Entities alleged advances of $500,000
      or an undefined ownership interest in one or more of the defendant entities.
      Mr.
      Wright, American Leisure, Inc., and Inversora Tetuan, S.A., have filed a
      counterclaim and cross complaint against the Smee Entities and Mr. Smee denying
      the claims and such damages in the amount of $10 million for the tortuous acts
      of the Smee entities. In the unlikely event the matter ever proceeds to trial
      and the court rules that Mr. Wright is liable under his guarantee of the
      American Leisure, Inc. obligation to Smee, it is believed that such a ruling
      would not directly affect American Leisure Holdings, Inc. The litigation has
      been in abeyance, with no activity by the Smee entities for one year, and is
      not
      currently set for trial. We expect that this case will either be dismissed
      for
      lack of activity or will result in a judgment in favor of Malcolm
      Wright.







-32-






In
      March
      2004, Manuel Sanchez and Luis Vanegas as plaintiffs filed a lawsuit against
      American Leisure Holdings, Inc. American Access Corporation, Hickory Travel
      Systems, Inc., Malcolm J. Wright and L. William Chiles, et al., seeking a claim
      for securities fraud, violation of Florida Securities and Investor Protection
      Act, breach of their employment contracts, and claims for fraudulent inducement.
      All defendants have denied all claims and have a counterclaim against Manuel
      Sanchez and Luis Vanegas for damages. The litigation commenced in March 2004.
      No
      material activity has occurred in this case, and we do not expect any activity
      in the near future. The claims are without merit and the claims are not material
      to us. We intend to vigorously defend the lawsuit.




In
      early
      May 2004, Around The World Travel, Inc. substantially all of the assets of
      which
      we purchased, filed a lawsuit in the Miami-Dade Florida Circuit Court against
      Seamless Technologies, Inc. and e-TraveLeaders, Inc. alleging breach of contract
      and seeking relief that includes monetary damages and termination of the
      contracts. They were granted leave to intervene as plaintiffs in the original
      lawsuits against Seamless and e-TraveLeaders. On June 28, 2004, the above named
      defendants brought suit against Around The World Travel and American Leisure
      Holdings, Inc. in an action styled Seamless Technologies, Inc. et al. v. Keith
      St. Clair et al. This suit alleges that Around The World Travel has breached
      the
      contracts and also that American Leisure Holdings, Inc's and Around The World
      Travel’s Chief Executive Officers were complicit with certain officers and
      directors of Around The World Travel in securing ownership of certain assets
      for
      American Leisure Holdings, Inc. that were alleged to have been a business
      opportunity for Around The World Travel. This lawsuit involves allegations
      of
      fraud against Malcolm J. Wright. The lawsuit filed by Seamless has been abated
      and consolidated with the original lawsuit filed by Around The World Travel.
      In
      a related matter, Seamlesss attorneys brought another action entitled Peter
      Hairston v. Keith St. Clair et al. This suit mimics the misappropriation of
      business opportunity claim, but it is framed within a shareholder derivative
      action. The relief sought against American Leisure Holdings, Inc. includes
      monetary damages and litigation costs. We intend to vigorously support the
      original litigation filed against Seamless and defend the counterclaim
      and allegations against us. On February 9, 2007, the court heard AMLH, ALEC,
      and
      Mr. Wright’s motion to dismiss the various counts of the complaint.  The
      court dismissed with prejudice the E-Traveleaders / Seamless claims for
      rescission, constructive trust, and civil conspiracy.  It dismissed without
      prejudice the claims for tortuous interference and priority as against
      TraveLeaders, and allowed the breach of contract claims to continue.  We
      believe that with further discovery, the court will dismiss or grant to AMLH,
      ALEC, and Mr. Wright summary judgment on all remaining or repleaded
      counts.







-33-







On
      May 4,
      2005, Simon Hassine, along with members of his family, filed a lawsuit against
      us and Around The World Travel in the Circuit Court of Dade County, Florida,
      Civil Division, Case Number 05-09137CA. The plaintiffs are the former majority
      shareholders of Around The World Travel and former owners of the assets of
      TraveLeaders. The plaintiffs allege that that they have not been paid for i)
      a
      subordinated promissory note in the principal amount of $3,550,000 plus interest
      on such note which they allege was issued to them by Around The World Travel
      in
      connection with their sale of 88% of the common stock of Around The World
      Travel; and ii) subordinated undistributed retained earnings and accrued bonuses
      in an aggregate amount of $1,108,806 which they allege were due to them as
      part
      of the sale. The plaintiffs allege that the note was issued to them net of
      $450,000 of preferred stock of Around The World Travel that they further allege
      they never received. The plaintiffs also allege that in December 2004 they
      entered into a settlement agreement with the Company regarding these matters.
      The plaintiffs are pursuing a claim of breach of the alleged settlement
      agreement with damages in excess of $1,000,000, interest and costs as well
      as
      performance under the alleged settlement agreement or, in the alternative,
      a
      declaratory judgment that the promissory note, undistributed retained earnings
      and accrued bonuses are not subordinated to the Galileo Debt and full payment
      of
      the promissory note, undistributed retained earnings and accrued bonuses plus
      prejudgment interest, stated interest on the note, costs and reasonable
      attorneys fees. The plaintiffs are also pursuing a claim for breach of contract
      regarding the preferred stock of Around The World Travel and seeking $450,000
      plus interest, costs and reasonable attorneys fees. The plaintiffs are also
      pursuing claims of fraudulent transfer regarding our acquisition of interests
      in
      the debt and equity of Around The World Travel and seeking unspecified amounts.
      Our counsel filed various motions including a motion to dismiss the complaint
      in
      its entirety as against us and Malcolm J. Wright due to the failure by the
      plaintiffs to comply with a provision in the underlying document that grants
      exclusive jurisdiction to the courts located in Cook County, Illinois. The
      parties are currently in discussions regarding a cessation of the litigation
      while the plaintiffs seek relief from unrelated parties.




On
      August
      10, 2006, Patsy Berman and Berman Mortgage Corporation served a complaint
      against Tierra del Sol Resort, Inc., Malcolm Wright, our Chief Executive Officer
      and Chairman, and a non-existent entity, Vantage Circa 39 Condotel Limited
      Partnership ("Vantage"), in the 11th Judicial Circuit in and for Miami-Dade
      County, Florida. The complaint alleges that Tierra del Sol and Vantage sought
      loans, that the plaintiffs offered to make loans, that Mr. Wright guaranteed
      the
      loans, that valid contracts were formed, and that because such loans did not
      close, the plaintiffs claim $3,550,000 in damages,
      representing funding fees, brokerage fees, and interest. We have concluded
      that
      the plaintiffs' complaint is wholly frivolous. We filed a Motion to Dismiss
      and
      a Motion for sanctions against the plaintiffs of the lawsuit, for failure to
      state a good faith claim in law or fact and the court granted the motion to
      dismiss without prejudice. Berman filed an amended complaint, and we responded
      with another motion to dismiss and motion to strike the request for a jury
      trial. The motions will be heard by the court in May 2007.







-34-






Lufthansa
      City Center, et al (“LCC”) v. Hickory Travel Systems, Inc.  LCC has sued
      for Breach of Contract or, alternatively, Breach of a Settlement
      Agreement.  Hickory and LCC entered an agreement whereby LCC would
      exclusively use Hickory’s hotel program and Hickory would pay $110,000 per year
      to LCC.  LCC did not bring the promised value to the deal. 
Additionally, LCC entered an agreement with a competitor for hotel services
      prior to termination of the agreement.  Hickory vigorously disputes the
      allegations in the complaint and intends to counterclaim to recoup the damages
      from LCC’s breach of the agreement.




In
      the
      ordinary course of our business, we may from time to time become subject to
      routine litigation or administrative proceedings, which are incidental to our
      business.




We
      are
      not aware of any proceeding to which any of our directors, officers, affiliates
      or security holders are a party adverse to us or have a material interest
      adverse to us.




**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





We
      did
      not submit any matters to a vote of security holders during the fourth quarter
      of 2006.






-35-




**PART
        II**
 
 **ITEM
        5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS**
 
 Our
        common stock, $.001 par value per share, is traded on the over-the-counter
        Bulletin Board (the "OTCBB") under the trading symbol "AMLH."
 
 The
        following table sets forth the high and low bid prices for our common stock
        for
        the periods indicated as reported on the OTCBB, except as otherwise noted.
        The
        quotations reflect inter-dealer prices, without retail mark-up, markdown
        or
        commission and may not represent actual transactions.
 
 High
                  Bid
              
              Low
                  BidDecember
                  31, 2006
              
              $
              1.15
              
              $
              0.61September
                  31, 2006
              
              $
              1.20
              
              $
              0.64June
                  30, 2006
              
              $
              1.80
              
              $
              0.90March
                  31, 2006
              
              $
              1.95
              
              $
              0.93December
                  31, 2005
              
              $
              1.50
              
              $
              0.86September
                  30, 2005
              
              $
              1.50
              
              $
              0.76June
                  30, 2005
              
              $
              3.00
              
              $
              1.50
 
 (1)
        Our
        common stock was de-listed from the OTCBB during the period from May 21,
        2004 to
        January 26, 2005, as a result of one delinquent filing with the Commission.
        Our
        common stock was cleared for quotation on the OTCBB on January 26, 2005.
        As of
        December 31, 2006, the Company had approximately 330 holders of record of
        its
        common stock. The number of holders of the common stock includes nominees
        of
        various depository trust accounts for an undeterminable number of individual
        stockholders.
 
 **Dividend
        Policy**
 
 We
        have
        never declared or paid dividends on our common stock. We do not anticipate
        paying dividend on our common stock in the foreseeable future. We intend
        to
        reinvest in our business operations any funds that could be used to pay
        dividends. Our common stock is junior in priority to our preferred stock
        with
        respect to dividends.
 
 Cumulative
        dividends on our issued and outstanding Series A preferred stock, Series
        B
        preferred stock, Series C preferred stock and Series E preferred stock accrue
        at
        a rate of $1.20, $12.00, $4.00, and $4.00, respectively, per share per annum,
        payable in preference and priority to any payment of any cash dividend on
        our
        common stock. We have authorized Series F preferred stock, which accrues
        dividends at a rate of $1.00 per share per annum, payable in preference and
        priority to any payment of any cash dividend on our
        common stock; however no shares of Series F preferred stock are currently
        outstanding. Dividends on our preferred stock accrue from the date on which
        such
        shares of preferred stock are issued and outstanding and thereafter from
        day to
        day whether or not earned or declared and whether or not there exists profits,
        surplus or other funds legally available for the payment of dividends. We
        may
        authorize and/or issue additional shares of preferred stock with dividends
        rights that are superior to our common stock. We have never paid any cash
        dividends on our preferred stock. We have never paid any cash dividends on
        our
        preferred stock. We will be required to pay accrued dividends on our preferred
        stock before we can pay any dividends on our common
        stock.
  -36-
  
 **Recent
        Sales Of Unregistered Securities**
 
 The
        Company has issued the following securities without registration under the
        Securities Act of 1933 (the "Act" or the "Securities Act") during the period
        covered by this report:
 
 Pursuant
        to a Stock Purchase Agreement SIBL, effective June 30, 2006, we sold all
        of our
        interest in our former wholly owned subsidiary CLM, along with a promissory
        note
        payable to us by CLM in the amount of $5,663,274, which amount evidences
        our
        total investment in CLM, for an aggregate purchase price of $5,663,275. In
        connection with the purchase, SIBL also agreed to exchange the interest on
        several of our outstanding promissory notes with SIBL, and to amend the due
        date
        of such notes, described in greater detail above under "Recent Events," and
        we
        agreed to grant SIBL a warrant to purchase 355,000 shares of our common stock
        at
        an exercise price of $10.00 per share, which warrants have an expiration
        date of
        April 30, 2008, and contain certain anti-dilution clauses, whereby if we
        grant
        any options or sell any shares of common stock for less than $1.02 per share,
        the exercise price of the 355,000 warrants will reset to such lower price.
        We
        relied on an exemption from registration set forth in Section 4(2) of the
        Act in
        issuing the securities as the issuance of the securities did not involve
        a
        public offering, the recipient acquired the securities for investment purposes
        and we took appropriate measures to restrict transfer. No underwriters or
        agents
        were involved in the foregoing issuance and no underwriting discounts were
        paid
        by us.
 
 In
        August
        2006, we agreed to grant Mr. Jason Williams, our current Associate
        General Counsel and Assistant Secretary, warrants to purchase up to 50,000
        shares of our common stock at an exercise price of $1.02 per share immediately
        upon his entry into an Employment Agreement and agreed to grant him an
        additional 25,000 warrants upon the one and two year anniversaries,
        respectively, of his employment, assuming he is still employed by us at
        those times (which warrants were granted in December 2007). We claim an
        exemption from registration afforded by Section 4(2) of the Securities Act
        of
        1933, as amended, since the foregoing issuance did not involve a public
        offering, the recipient took the securities for investment and not resale
        and we
        took appropriate measures to restrict transfer. No underwriters or agents
        were
        involved in the foregoing issuance and no underwriting discounts or commissions
        were paid by us.
 
 In
        August
        2006, in connection with the purchase of the Vici Note (as described above)
        we
        agreed to issue SIBL 235,000 shares of our common stock and a five year warrant
        to purchase 235,000 shares of our common stock at an exercise price of $20
        per
        share. We also
        granted SIBL demand registration rights in connection with the registration
        of
        the shares underlying the Vici Warrant. We claim an exemption from registration
        afforded by Section 4(2) of the Securities Act of 1933, as amended, since
        the
        foregoing issuances did not involve a public offering, the recipient took
        the
        securities for investment and not resale and we took appropriate measures
        to
        restrict transfer. No underwriters or agents were involved in the foregoing
        issuance and no underwriting discounts or commissions were paid by
        us.
  -37-
  
 In
        September 2005, we granted warrants to purchase 100,000 shares of our common
        stock at an exercise price of $1.02 per share to Frederick Pauzar for his
        services as a Director. One-fourth (25,000) of the warrants vested immediately
        and an additional 25,000 shares vested on the first anniversary of the date
        he
        became a Director of the Company (September 2006). The remaining 50,000 shares
        vest to Mr. Pauzar on the next two anniversaries of the date on which Mr.
        Pauzar
        became a Director (September 2007 and 2008), provided that Mr. Pauzar is
        still
        serving as a Director on such dates.
 
 In
        October 2006, we issued Joseph and Helena Palumbo 1,655 shares of our Series
        E
        Preferred Stock, which shares of Preferred Stock we had previously agreed
        to
        issue pursuant to and in connection with our purchase of the assets of AWT
        in
        December 2004. We claim an exemption from registration afforded by Section
        4(2)
        of the Securities Act of 1933, as amended, since the foregoing issuance did
        not
        involve a public offering, the recipients took the securities for investment
        and
        not resale and we took appropriate measures to restrict transfer. No
        underwriters or agents were involved in the foregoing issuance and no
        underwriting discounts or commissions were paid by us.
 
 In
        October 2006, we issued 170 shares of Series E Preferred Stock to Gregory
        Wasik,
        which shares of Preferred Stock we had previously agreed to issue pursuant
        to
        and in connection with our purchase of the assets of AWT in December 2004.
        We
        claim an exemption from registration afforded by Section 4(2) of the Securities
        Act of 1933, as amended, since the foregoing issuance did not involve a public
        offering, the recipient took the securities for investment and not resale
        and we
        took appropriate measures to restrict transfer. No underwriters or agents
        were
        involved in the foregoing issuance and no underwriting discounts or commissions
        were paid by us.
 
 On
        December 22, 2006, pursuant to a Warrant Participation Agreement, we agreed
        to
        grant Stanford International Bank Limited, and six of its assigns, warrants
        to
        purchase up to a 25% participation interest in the net proceeds (defined
        as the
        proceeds realized upon the disposition or refinancing of the Property, less
        our
        cost basis, excluding any operating losses or profits) realized by us upon
        the
        disposition of the real property located at 740 Ocean Drive, Miami Beach,
        Florida, known as the Boulevard Hotel (the "Property"). We claim an exemption
        from registration afforded by Section 4(2) of the Securities Act of 1933,
        as
        amended, since the foregoing issuance did not involve a public offering,
        the
        recipient took the securities for investment and not resale and we took
        appropriate measures to restrict transfer. No underwriters or agents were
        involved in the foregoing issuance and no underwriting discounts or commissions
        were paid by us.
  -38-
  In
        December 2006, we granted Malcolm J. Wright, our Chief Executive Officer
        and
        Chairman an aggregate of 585,000 warrants to purchase shares of our common
        stock
        at an exercise price of $1.02 per share, in connection with Mr. Wright’s
        guaranty of certain of our outstanding loans and debts pursuant to a Debt
        Guaranty Agreement previously entered into with Mr. Wright. We relied on
        an
        exemption from registration set forth in Section 4(2) of the Act in issuing
        the
        securities as the issuance of the securities did not involve a public offering,
        the recipient acquired the securities for investment purposes and we took
        appropriate measures to restrict transfer. No underwriters or agents were
        involved in the foregoing issuance and no underwriting discounts were paid
        by
        us.
 
 In
        December 2006, we granted an aggregate of 300,000 warrants to purchase shares
        of
        our common stock at an exercise price of $1.02, to three employees of the
        Company, which options shall expire if unexercised on December 22, 2010.
        Of the
        warrants granted, 100,000 warrants were granted to Omar Jimenez, who was
        later
        appointed as our Chief Financial Officer in April 2007, and the additional
        200,000 warrants were granted to two other employees in consideration for
        past
        services rendered. We relied on an exemption from registration set forth
        in
        Section 4(2) of the Act in issuing the securities as the issuance of the
        securities did not involve a public offering, the recipients acquired the
        securities for investment purposes and we took appropriate measures to restrict
        transfer. No underwriters or agents were involved in the foregoing issuance
        and
        no underwriting discounts were paid by us.
 
 On
        January 30, 2007, AMLH entered into a promissory note with Applebee Holding
        Company in the amount of $150,000 at 4% for seven years. As part of the
        agreement, 2,840 shares of AMLH Series E Convertible Preferred Stock were
        issued
        bearing a 4% per annum cumulative preferred dividend rate, par value of $.001
        and convertible into AMLH common stock at a strike price of $15.00 per share.
        We
        relied on an exemption from registration set forth in Section 4(2) of the
        Act in
        issuing the securities as the issuance of the securities did not involve
        a
        public offering, the recipient acquired the securities for investment purposes
        and we took appropriate measures to restrict transfer. No underwriters or
        agents
        were involved in the foregoing issuance and no underwriting discounts were
        paid
        by us.
 
 In
        March
        2007, we issued Anthony Lastumbo 504 shares of our Series E Preferred Stock,
        which shares of Preferred Stock we had previously agreed to issue pursuant
        to
        and in connection with our purchase of the assets of AWT in December 2004.
        We
        claim an exemption from registration afforded by Section 4(2) of the Securities
        Act of 1933, as amended, since the foregoing issuance did not involve a public
        offering, the recipient took the securities for investment and not resale
        and we
        took appropriate measures to restrict transfer. No underwriters or agents
        were
        involved in the foregoing issuance and no underwriting discounts or commissions
        were paid by us.
 
 
  -39-
  **ITEM
        6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
        OPERATION**
 
 **PLAN
        OF OPERATIONS**
 
 We
        previously planned to integrate the administrative operations of Hickory
        and
        TraveLeaders; however, the integration process was slower than we anticipated
        and we have since abandoned our plans to integrate those operations. We are
        currently evaluating our options regarding Hickory and TraveLeaders, including
        whether we should sell either of those divisions. Additionally, time has
        been
        required to analyze and determine the impact, if any, of certain litigation
        commenced by Around The World Travel regarding its contracts with Seamless
        Technologies, Inc. and others, as discussed in "Legal Proceedings,"
        herein.
 
 Under
        our
        arrangement with Around The World Travel, which operates the TraveLeaders
        assets
        on our behalf and from whom we acquired the assets, we receive and recognize
        as
        income 90% of the net earnings of the TraveLeaders assets before interest,
        taxes, depreciation and amortization. The balance was retained by Around
        The
        World Travel as a management fee, although that management agreement has
        been
        terminated.
 
 During
        the year ended December 31, 2006, we generated modest revenues from our call
        center joint venture in Antigua. Effective June 30, 2006, we sold our call
        center operations to Stanford, as described in greater detail above under
        "Recent Events."
 
 We
        believe that the capital requirement for the first phase of the resort will
        be
        approximately $136,500,000, of which $9,000,000 will be for the resort
        amenities, $64,000,000 will be for vertical construction on 294 units and
        $49,500,000 will be for other costs such as contingencies, closing costs
        and
        soft costs such as architectural, engineering, and legal costs. An additional
        approximate amount of $14,000,000 will be expended for horizontal construction
        costs which include all of Phase I requirements plus most of the infrastructure
        requirements for the entire Project. On or about December 29, 2005, we closed
        on
        $54.85 million of senior debt to be used in the development of The Sonesta
        Orlando Resort at Tierra Del Sol (the "Project"), described in greater detail
        above. KeyBank, N.A. is the lender of a credit facility for the benefit of
        AMLH.
        The credit facility is a land loan in the amount of $14,850,000, which is
        secured by Project land on phase two of the Sonesta Resort, that is dedicated
        to
        specific phases of the development. KeyBank had also originally agreed to
        provide us a $40,000,000 revolving construction loan, for up to $72,550,000
        in
        funding, however we have since decided not to move forward with such funding.
        KeyBank Capital Markets had the underwriting role in the sale of the Community
        Development District Bonds. We are in the process of negotiating with several
        lenders for a construction loan for the condominiums and anticipate that
        such
        loan will be evidenced by a firm commitment during the second quarter of
        2007,
        of which there can be no assurance. Financing for the balance of the development
        budget, which includes infrastructure, retention, roads and green space of
        approximately $26,000,000, was through the sale of Westridge Community
        Development District bonds which was completed on December 29, 2005, as
        described above.  In June 2005,
        we
        began the earth moving and clearing process on the land for the resort and
        have
        completed approximately 90% of the grading and the underground infrastructure
        on
        the property to date. We began the vertical construction of Phase 1 of the
        property in the first quarter of 2007. We have established a relationship
        with
        GMAC Bank, through Millennium Capital Mortgage, to provide construction
        financing to the individual purchasers of the Sonesta Resort town homes,
        which
        funding we believe will enable all town homes and amenities at Tierra del
        Sol to
        be built through this program. Additionally, we are in the process of
        negotiating with several lenders for a construction loan on favorable terms
        for
        the condominiums and/or for the clubhouse. We anticipate that such loan will
        be
        evidenced by a firm commitment during the second quarter of 2007, but we
        have no
        assurances that a commitment will be secured on favorable terms, if at all.
        Assuming we are able to enter into a subsequent funding arrangement, we believe
        that we have sufficient funds to provide for the completion of Phase 1, assuming
        there are no material cost overruns, delays or further increases in material
        costs. Phase 2 will be financed separately.
  -40-
  
 If
        no
        funding is raised subsequent to the filing of this report, we anticipate
        being
        able to satisfy our cash requirements for approximately two to three months.
        We
        anticipate the need for approximately $85,000,000 in additional funding during
        the next twelve months to meet our construction and overhead demands in
        connection with the construction of the Sonesta Resort.
 
 **Known
        Trends, Events, And Uncertainties**
 
 We
        expect
        to experience seasonal fluctuations in our gross revenues and net earnings
        due
        to higher sales volume during peak periods. Advertising revenue from the
        publication of books by Hickory that list hotel availability is recognized
        either when the books are published (December) or on a performance basis
        throughout the year, depending on the contractual terms. This seasonality
        may
        cause significant fluctuations in our quarterly operating results and our
        cash
        flows. In addition, other material fluctuations in operating results may
        occur
        due to the timing of development of resort projects and our use of the completed
        contracts method of accounting with respect thereto. Furthermore, costs
        associated with the acquisition and development of vacation resorts, including
        carrying costs such as interest and taxes, are capitalized as inventory and
        will
        be allocated to cost of real estate sold as the respective revenues are
        recognized. We intend to continue to invest in projects that will require
        substantial development and significant amounts of capital funding during
        2007
        and in the years ahead.
 
 **Critical
        Accounting Estimates**
 
 Our
        discussion and analysis of our financial condition and results of operations
        is
        based upon our financial statements, which have been prepared in accordance
        with
        accounting principals generally accepted in the United States. The preparation
        of these financial statements requires us to make estimates and judgments
        that
        affect the reported amounts of assets, liabilities, revenues and expenses,
        and
        related disclosure of any contingent assets and liabilities. We base our
        estimates on various assumptions that we believe to be reasonable
        under the circumstances, the results of which form the basis for making
        judgments about carrying values of assets and liabilities that are not readily
        apparent from other sources. On an on-going basis, we evaluate our estimates.
        Actual results may differ from these estimates if our assumptions do not
        materialize or conditions affecting those assumptions
        change.
  -41-
  
 We
        believe the following critical accounting policies affect our more significant
        judgments and estimates used in the preparation of our financial
        statements:
 
 **Going
        Concern Considerations**
 
 We
        have
        incurred losses during our existence and we have negative retained earnings.
        We
        had an accumulated deficit of $21,607,362 at December 31, 2006 and a net
        loss of
        $8,148,896 for the year ended December 31, 2006. We expect our travel operations
        for the year ended December 31, 2007, to require additional working capital
        of
        approximately $2,000,000 and Hickory to require approximately $500,000 in
        working capital during the next twelve months. If we are unable to obtain
        these
        funds, we may have to curtail or delay our travel business plan. In addition
        to
        our ability to raise additional capital, our continuation as a going concern
        also depends upon our ability to generate sufficient cash flow to conduct
        our
        operations. If we are unable to raise additional capital or generate sufficient
        cash flow to conduct our Travel Division operations and/or to complete the
        construction of our planned vacation homes, we may be required to delay the
        acquisition of additional travel agencies and restructure or refinance all
        or a
        portion of our outstanding debt. The accompanying financial statements do
        not
        include any adjustments that might result from the outcome of this
        uncertainty.
 
 **Revenue
        Recognition**
 
 We
        recognize revenues on the accrual method of accounting. Revenues from Hickory
        are recognized as earned, which is primarily at the time of delivery of the
        related service, publication or promotional material. Fees from advertisers
        to
        be included in the hotel book and web service operated by Hickory are recognized
        upon the annual publication of the book or when performance levels are achieved.
        Revenue from the delivery of services is recognized when it is invoiced to
        the
        recipient of the service.
 
 One
        of
        our principal sources of revenue is associated with access to the travel
        portals
        that provide a database of discounted travel services. Annual renewals occur
        at
        various times during the year. Costs and revenue related to portal usage
        charges
        are incurred in the month prior to billing. Customers are charged additional
        fees for hard copies of the site access information. Occasionally these items
        are printed and shipped at a later date, at which time both revenue and expenses
        are recognized.
 
 Revenues
        and expenses from our TraveLeaders business are not included in our results
        as
        the same are borne by Around The World Travel, Inc., the former third party
        manager of the business from January 1, 2005 through July 31, 2006. We
        recognized as revenue only the net operating results of TraveLeaders operations
        after deducting the management fee paid
        to
        Around The World Travel of 10% of net earnings before interest expense, taxes,
        depreciation and amortization through July 31, 2006.
  -42-
  
 Thereafter,
        gross revenues are recognized by our wholly owned subsidiary ALEC. Specifically,
        commission revenues for cruises, hotel and car rentals are recognized upon
        completion of travel, hotel stay or car rental. Commission fees for ticketing
        are recognized at the time of departure.
 
 Revenues
        also include undeveloped land sales, which is recognized at closing when
        title
        has passed.
 
 **Goodwill**
 
 We
        adopted the provisions of Statement of Financial Accounting Standards ("SFAS")
        No. 142, "Goodwill and Other Intangible Assets." This statement requires
        that
        goodwill and intangible assets deemed to have indefinite lives not be amortized,
        but rather be tested for impairment on an annual basis. Finite-lived intangible
        assets are required to be amortized over their useful lives and are subject
        to
        impairment evaluation under the provisions of SFAS No. 144. The goodwill
        will be
        evaluated on an annual basis and impaired whenever events or circumstances
        indicate the carrying value of the goodwill may not be recoverable.
 
 **COMPARISON
        OF OPERATING RESULTS**
 
 **YEAR
        ENDED DECEMBER 31, 2006 COMPARED TO THE YEAR ENDED DECEMBER 31,
        2005**
 
 We
        had
        total revenues of $27,720,133 for the year ended December 31, 2006, compared
        to
        total revenues of $19,778,081 for the year ended December 31, 2005, an increase
        in total revenues of $7,942,052 or 40.2% from the prior period. Revenues
        for the
        year ended December 31, 2006, consisted of operating revenues of $14,590,886,
        which increased $6,832,805 or 88.1% over operating revenues of $7,758,081
        for
        the year ended December 31, 2005 and undeveloped land sales of $13,129,247,
        which increased $1,109,247 or 9.2% over undeveloped land sales of $12,020,000
        for the year ended December 31, 2005, which was due to higher valued land
        sales
        during the year ended December 31, 2006, compared to 2005.
 
 Our
        operating revenues increased due to our termination of our management agreement
        with AWT on August 1, 2006. Previous to that date, AWT managed our travel
        division, and we recognized revenues and expenses based on EBITDA (earnings
        before the deduction of interest, tax, depreciation and amortization expenses)
        and subsequent to that date, we recognized gross revenues received, which
        were
        much higher than the EBITDA amounts for the periods from August 1, 2006 to
        December 31, 2006, which in turn increased our revenues for the year ended
        December 31, 2006.
  -43-
  Operating
        revenues for the year ended December 31, 2006, included approximately
        $13,509,000 in revenues from our travel services division, HTS; $2,071,000
        in
        revenues from our real estate division, ALEC; $1,168,000 in revenues from
        our
        hospitality division; offset by $2,157,000 in elimination of consolidated
        results of operations.
 
 We
        had
        total cost of operating revenues of $12,647,116 for the year ended December
        31,
        2006, compared to total cost of operating revenues of $5,513,367 for the
        year
        ended December 31, 2005, an increase in total cost of operating revenues
        of
        $7,133,749 or 129.4% from the prior period. Our cost of operating revenues
        increased due to the termination of our management agreement with AWT, as
        described above, due to the fact that under the management agreement we
        recognized revenues for our travel division after costs of operating revenues
        were already deducted from those revenues and from August 1, 2006 to December
        31, 2006, after we terminated the management agreement, we recognized direct
        expenses from our travel division, which in turn increased our overall cost
        of
        operating revenues for the year ended December 31, 2006.
 
 We
        had
        total cost of undeveloped land sales of $9,796,634 for the year ended December
        31, 2006, compared to total cost of undeveloped land sales of $8,122,562
        for the
        year ended December 31, 2005, and increase of $1,674,072 or 20.6% from the
        prior
        period.
 
 We
        had a
        total gross margin of $5,276,383 for the year ended December 31, 2006, compared
        to a total gross margin of $6,142,152 for the year ended December 31, 2005,
        a
        decrease in total gross margin of $865,769 or 14.1% from the prior period,
        which
        decrease in gross margin was mainly due to the 129.4% increase in cost of
        operating revenues and the 20.6% increase in the cost of undeveloped land
        sales,
        which was not sufficiently offset by the 88.1% increase in operating revenues
        and the 9.2% increase in undeveloped land sales for the year ended December
        31,
        2006, compared to the year ended December 31, 2005.
 
 We
        had
        total depreciation and amortization expenses of $784,155 for the year ended
        December 31, 2006, compared to total depreciation and amortization expenses
        of
        $827,237 for the year ended December 31, 2005, a decrease in total depreciation
        and amortization expenses of $43,082 or 5.2% from the prior period, which
        decrease was due to the fact that our call center business was sold effective
        as
        of June 30, 2006, and the fact that such operations were therefore not
        depreciated during the six months ended December 31, 2006.
 
 We
        had
        total general and administrative expenses of $3,609,487 for the year ended
        December 31, 2006, compared to total general and administrative expenses
        of
        $5,028,139 for the year ended December 31, 2005, a decrease in total general
        and
        administrative expenses of $1,418,652 or 28.2% from the prior period, which
        decrease was mainly due to the fact that AWT had payroll and office rental
        expenses that were not assumed by us after the AWT management agreement was
        terminated in August 2006, as well as the fact that we closed down several
        travel center offices during the year ended December 31, 2006, which caused
        our
        expenses for the year ended December 31, 2006, to be lower than our expenses
        for
        the year ended December 31, 2005.
  -44-
  
 We
        had a
        write-off of advances to receivables from AWT of $6,588,579 for the year
        ended
        December 31, 2006, which was not represented during the year ended December
        31,
        2005, which write-off was due to loans and advances owed from AWT to us and
        earnings owed from AWT to ALEC which were not collectible and therefore written
        off.
 
 We
        had
        total operating expenses of $10,982,221 for the year ended December 31, 2006,
        compared to total operating expenses of $5,855,376 for the year ended December
        31, 2005, a decrease of $5,126,845 or 87.6% from the prior period. The decrease
        in operating expenses for the year ended December 31, 2006, compared to the
        year
        ended December 31, 2005 was mainly due to the $6,588,579 write-off of advances
        to receivables from AWT.
 
 We
        had
        total interest expense of $5,183,620 for the year ended December 31, 2006,
        compared to total interest expense of $3,317,033 for the year ended December
        31,
        2005, an increase in interest expense of $1,866,587 or 56.3% from the prior
        period, which increase in interest expense was mainly in connection with
        interest on the loans we entered into in the fourth quarter of 2005, which
        accrued interest only during the fourth quarter of 2005, but during all four
        quarters of 2006, including the Reedy Creek Loan and Land Loan (described
        above).
 
 We
        a had
        loss from operations of $10,889,458 for the year ended December 31, 2006,
        compared to loss from operations of $3,030,257 for the year ended December
        31,
        2005, an increase in loss from operations of $7,859,201 or 259.4% from the
        prior
        period.
 
 We
        had
        total provision for income taxes of $4,376 for the year ended December 31,
        2006,
        compared to $5,004 in income tax provision for the year ended December 31,
        2005,
        a decrease of $628 or 12.5% from the prior period.
 
 We
        had
        $2,744,938 in gain from discontinued operations for the year ended December
        31,
        2006, compared to a loss from discontinued operations of $1,050,564 for the
        year
        ended December 31, 2005, an increase in gain from discontinued operations
        of
        $3,795,502 or 361.3% from the prior year.
 
 Gain
        from
        discontinued operations for the year ended December 31, 2006 was due to the
        call
        center operations of Caribbean Media Group, Ltd. ("Caribbean Leisure
        Marketing"), our former wholly owned subsidiary, which owns 49% of Caribbean
        Media Group, Ltd. Subsequent to June 30, 2006, we sold Caribbean Leisure
        Marketing to Stanford, as described in greater detail above. The increase
        in
        gain from discontinued operations for the year ended December 31, 2006, compared
        to the year ended December 31, 2005, was due to the call center operations
        being
        profitable during the year ended December 31, 2006 (during the time we operated
        such call center, i.e. until June 30, 2006) and was operating at a loss during
        the year ended December 31, 2005.
 
 -45-
  We
          had a
          total net loss of $8,148,896 for the year ended December 31, 2006, compared
          to
          total net loss of $4,085,825 for the year ended December 31, 2005, an increase
          in net loss
 of
        $4,063,071 or 99.4% from the prior period, which increase in net loss was
        mainly
        due to the operations of HTS, which accounted for approximately $283,000
        of net
        loss and the operations of ALEC, which accounted for approximately $5,548,000
        in
        net loss, coupled with approximately $243,000 of net loss from our call center
        operations which we sold, effective June 30, 2006, and a further decrease
        in net
        income of approximately $6,588,579 in connection with the write-off of advances
        to receivables from AWT.
 
 **LIQUIDITY
        AND CAPITAL RESOURCES**
 
 We
        had
        total current assets as of December 31, 2006, of $7,282,498, consisting of
        cash
        of $1,110,000, restricted cash of $1,030,921, accounts receivable, net of
        $3,148,730, other receivable of $217,233, and prepaid other expenses and
        other
        of $1,775,614. This represented a decrease in total current assets of $3,874,234
        or 34.7% from total current assets of $11,156,732 as of December 31, 2005,
        which
        decrease was mainly due to the write-off of certain amounts owed by AWT,
        during
        the year ended December 31, 2006, as described above.
 
 We
        had
        total non-current assets as of December 31, 2006 of $112,860,980, consisting
        of
        property and equipment, net of $9,170,540, land held for development of
        $71,930,263 and total other assets of $31,760,177.
 
 Other
        assets as of December 31, 2006, consisted of restricted cash of $10,364,681,
        prepaid sales commissions of $9,804,036, prepaid sales commissions-affiliated
        entity of $3,443,851, goodwill of $4,559,134, trademark of $950,000 and other
        assets of $2,638,475.
 
 The
        restricted cash represents funds held in escrow for deposits received for
        condo
        and townhome sales for the units at the Sonesta Resort. The escrowed funds
        will
        be applied to the purchase price by the buyer at closing. Also included in
        the
        escrowed funds are the equity requirements from KeyBank of $1.03 million
        as part
        of the credit facilities described above. The funds are not readily available
        to
        the Company and can only be disbursed with the consent of KeyBank to be used
        for
        the construction of Sonesta Resort.
 
 We
        had
        total current liabilities as of December 31, 2006 of $56,631,757, which included
        current maturities of long-term debt and notes payable of $35,681,931, current
        maturities of notes payable-related parties of $7,480,395, accounts payable
        and
        accrued expenses of $4,518,175, accrued expenses-officers of $2,795,000 and
        other expenses of $6,156,256.
 
 In
        June
        2006, Malcolm J. Wright, our Chief Executive Officer and Chairman was paid
        $1,540,500 in accrued salaries and interest which he was owed. Accrued
        expenses-officers as of December 31, 2006, included $2,225,000 in salaries
        and
        $202,500 interest due to Mr. Wright. Mr. Wright's accrued and unpaid salaries
        accrue interest at the rate of 12% per year until paid. Additionally included
        in
        accrued expenses-officers was $345,000 owed to L. William Chiles, the Chief
        Executive Officer of Hickory and our Director, which included $300,000 of
        unpaid
        salary accrued to Mr. Chiles and $45,000 of accrued interest on such unpaid
        salary. Total current liabilities as of December 31, 2006 increased
        $43,859,446 or 343.4% from total current liabilities of $12,772,311 as of
        December 31, 2005. The increase in current liabilities was mainly attributable
        to an increase of $32,029,696 or 876.9% in current maturities of long term
        debt
        and notes payable which increase was mainly due to the Reedy Creek Acquisition
        Company loan, the SIBL and Stanford loans and the Banker's Credit loan, which
        are due and payable within the next twelve months.
  -46-
  
 As
        of
        December 31, 2006, we owed $7,480,395 in connection with current portion
        of
        notes payable to related parties including $310,363 owed to our Director,
        L.
        William Chiles.
 
 We
        had
        long term debt and notes payable of $21,583,106 and note payable - related
        parties, net of current liabilities of $3,353,252, as of December 31, 2006,
        put
        liability of $985,000, and $37,465,685 of deposits on unit pre-sales as of
        December 31, 2006.
 
 The
        put
        liability was in connection with 197,000 shares of common stock issued to
        Harborage Leasing Corporation (“Harborage”) in connection with our entry into a
        purchase agreement with Harborage in March 2006, which was effective as of
        December 31, 2005, whereby we purchased the minority interest in Tierra Del
        Sol,
        Inc. from Harborage for a promissory note in the amount of $1,411,705
        ("Harborage Note"), which was paid in August 2006; the right to receive,
        without
        payment, two (2) three-bedroom condominium units to be constructed in Phase
        2 of
        the Sonesta Resort, or in the event title to both such units is not delivered
        by
        December 31, 2007, then, in lieu thereof, payment of $500,000 for each such
        unit
        that is not transferred by such date; 197,000 shares of the Company's common
        stock; and warrants to acquire 300,000 additional shares of the Company's
        common
        stock at an exercise price of $5.00 per share. Harborage had the right to
        require the Company to purchase all or a portion of the Harborage 197,000
        shares
        at $5.00 per share, during the six month period commencing January 1, 2008
        and
        ending June 30, 2008.
 
 We
        had
        total negative working capital of $49,349,259 and a ratio of current assets
        to
        current liabilities of 0.129 as of December 31, 2006.
 
 We
        had
        net cash used by operating activities of $30,693,906 for the year ended December
        31, 2006, which was mainly due to net loss of $8,148,896 and $35,784,094
        of
        increase in land held for development, offset by $8,313,134 of increase in
        accounts payable and accrued expenses, $6,588,579 of write-off of advances
        and
        receivables from AWT and $2,102,276 of non-cash interest expense.
 
 We
        had
        $793,979 of net cash provided by investing activities for the year ended
        December 31, 2006, which was due to $1,069,079 of increase in restricted
        cash,
        offset by $275,100 of acquisition of fixed assets.
 
 We
        had
        cash provided by financing activities of $30,729,065 for the year ended December
        31, 2006, which was due to $33,285,535 of proceeds from the sale of notes
payable
        and $308 from the proceeds of the exercise of warrants, which was offset
        by
        $2,556,778 of payment of debt.
  -47-
  
 We
        expect
        that we will require approximately $2,500,000 through the end of the 2007
        fiscal
        year for working capital for our travel management and services businesses
        and
        up to $85,000,000 for construction and overhead on our Sonesta Resort, as
        described below.
 
 We
        estimate that the cost to complete the construction of Phase I of the Sonesta
        Resort will be approximately $135,500,000 of which $8,000,000 will be for
        resort
        amenities, $64,000,000 will be for vertical construction on 294 units and
        $49,500,000 will be for other costs such as contingencies, closing costs
        and
        soft costs such as architectural, engineering, and legal costs. An additional
        approximate amount of $14,000,000 will be expended for horizontal construction
        costs which include all of Phase I requirements plus most of the infrastructure
        requirements for the entire Project. As of December 31, 2006, approximately
        $14,352,900 had been advanced to the Company pursuant to the Land Loan (as
        described and defined above).
 
 On
        December 30, 2005, we closed on an aggregate of $54,850,000 in senior debt
        to be
        used in the development of The Sonesta Orlando Resort at Tierra Del Sol.
        KeyBank, N.A. is the lender of the senior debt, which was provided to us
        in the
        form of two credit facilities. The first is a land loan in the amount of
        $14,850,000, which is secured by Project land that is dedicated to specific
        phases of the development. The second was a $40,000,000 revolving construction
        loan that we originally planned to use to fund the development and construction
        for Phase 1 of the Sonesta Resort, but which we subsequently decided not
        to use.
        We have received approximately three letters of intent with various lenders
        and
        anticipate finalizing the funding of the construction loan during the second
        quarter of 2007, of which there can be no assurance. We also have funding
        in the
        amount of $25,825,000 from the Westridge Community Development District ("CDD"
        or the "District"), which bonds will be used to pay for infrastructure
        facilities for public purposes such as water supply and retention systems,
        roadways, green space and nature recreation areas. In addition to the KeyBank
        provided senior debt, the Project is also benefiting from $25,825,000 in
        bonds
        issued by the CDD, a special purpose taxing district formed for the purpose
        of
        financing the installation of vital public services such as water supply
        and
        retention, sanitary and storm water sewer systems, roadways and the landscaping
        attendant to those uses. The CDD supports these initiatives, through the
        provision of capital and maintenance, via a tax upon the property owners
        of the
        district that utilizes a low finance rate (5.8% per annum) and a long-term
        amortization of the capital costs (30 years).
 
 The
        first
        phase of site work on the Sonesta Resort, at an estimated cost exceeding
        $19
        million, will be funded by the CDD via the sale by the CDD of bonds issued
        on a
        non-recourse basis to the Company ("CDD Bonds"). The CDD was initially created
        by the Company in September 2003 and enabled by an order of a Florida State
        District Court. The CDD Bond issue was underwritten by KeyBanc Capital Markets
        Group in the amount of $25,825,000. The first issue of the CDD Bonds was
        successfully sold and closed simultaneous with the closing of the Key Bank
        senior debt facilities. Upon closing of
        the
        loan, we repaid $7,862,250 of short-term debt plus accrued interest of
        approximately $256,512. This short-term debt originally matured on March
        31,
        2005, but it was extended until the closing of the KeyBank credit facilities
        in
        December 2005.
  -48-
  
 We
        had
        borrowed approximately $14,352,900 pursuant to the land loan as of December
        31,
        2006. We hope to obtain alternate financing for the amounts which were
        originally to be loaned to us by KeyBank pursuant to the Construction Loan,
        which alternate financing we anticipate finalizing in the second quarter
        of
        2007, of which there can be no assurance. Assuming we raise such additional
        funding, we believe that such funding and the bond sale proceeds will provide
        sufficient capital for the construction of Phase 1 of The Sonesta Orlando
        Resort
        at Tierra Del Sol. In June 2005, we began the earth moving and clearing process
        on the land for the Sonesta Resort, and have completed approximately 90%
        of the
        grading and underground infrastructure to date. We began the vertical
        construction of Phase 1 in the first quarter of 2007. We will need to raise
        additional capital to begin and complete Phase 2 of the Sonesta Resort, assuming
        the construction of Phase 1 is successful, of which there can be no assurance.
        Additionally, we will need to raise significant capital to plan and construct
        our planned development activities on our Reedy Creek Property.
 
 In
        August
        2006, with an effective date of June 30, 2006, we and several of our
        subsidiaries, including CLM, our former wholly owned subsidiary, which owns
        81%
        of the issued and outstanding stock of Caribbean Leisure Marketing, which
        in
        turn owns 49% of the issued and outstanding stock of Caribbean Media Group,
        which owned and operated our call center in Antigua, entered into a Stock
        Purchase Agreement with Stanford International Bank Limited.
 
 The
        Stock
        Purchase Agreement provided that we would sell SIBL, all of our interest
        in CLM,
        along with a promissory note payable to us by CLM in the amount of approximately
        $5,663,275, which amount evidences our total investment in CLM, for an aggregate
        purchase price of approximately $5,663,275. The sale of CLM resulted in a
        gain
        of $2,988,082, which is represented above in our net cash provided by operating
        activities as "gain on sale of subsidiary." In connection with the purchase,
        SIBL also agreed to forgive the interest on several of our outstanding
        promissory notes with SIBL, and to amend the due date of such notes, described
        in greater detail below, and we agreed to grant SIBL a warrant to purchase
        355,000 shares of our common stock at an exercise price of $10.00 per share,
        which warrants have an expiration date of April 30, 2008, and contain certain
        anti-dilution clauses, whereby if we grant any options or sell any shares
        of
        common stock for less than $1.02 per share, the exercise price of the 355,000
        warrants will reset to such lower price.
 
 In
        connection with the Stock Purchase Agreement, SIBL exchanged the following
        debts
        which we owed to SIBL: a $1,250,000 promissory note and accrued interest
        thereon
        through June 30, 2006; a $2,100,000 promissory note and accrued interest
        thereon
        through June 30, 2006; all accrued and unpaid interest on our $6,000,000
        note
        with SIBL as of June 30, 2006; all accrued and unpaid interest on our $3,000,000
        promissory note payable to SIBL as of June 30, 2006; $262,885 of the $331,178
        of
        accrued interest on our $8,000,000
        promissory note payable to SIBL, and all accrued fees on our $6,000,000 letter
        of credit, which SIBL agreed to guaranty in connection with the KeyBank
        loans.
  -49-
  
 Additionally,
        in connection with the Stock Purchase Agreement, SIBL also agreed to restate
        the
        due dates of the notes which we owe to SIBL, including, the $6,000,000 note,
        which now has a maturity date of December 31, 2008; the $3,000,000 note,
        which
        now has a maturity date of December 1, 2008; the $1,355,000 note, which now
        has
        a maturity date of December 31, 2008; the $8,000,000 Reedy Creek loan note,
        which has since been increased to $13,420,000 and extended until June 30,
        2007;
        and the $305,000 note, which has a maturity date of January 1,
        2008.
 
 Finally,
        pursuant to the Stock Purchase Agreement, we and SIBL agreed that CLM would
        be
        released and discharged from any liability under the $6,000,000 note or the
        $305,000 note with SIBL, which it previously agreed to guarantee.
 
 On
        August
        16, 2006, pursuant to a Purchase Agreement between us and SIBL, a promissory
        note in the principal amount of $750,000 made by Scott Roix in favor of SIBL
        was
        purchased from SIBL for 235,000 shares of our common stock and a five year
        warrant to purchase up to 235,000 shares of our stock at an exercise price
        of
        $20 per share. The note has a maturity date of June 30, 2008 and bears interest
        at the rate of 8% per annum. As of December 31, 2006, the balance of the
        promissory note totaled $500,000.
 
 At
        December 31, 2006, we had an outstanding principal balance of $6,000,000
        under
        our secured revolving credit facility with Stanford, which bears interest
        at a
        fixed rate of 6% per annum payable accruing from July 1, 2006 quarterly in
        arrears and matures on December 31, 2008. We previously issued 355,000 warrants
        with a strike price of $10 per share with a maturity of April 30, 2008 to
        Stanford to replace the conversion feature of the credit facility whereby
        the
        loan could previously be converted into shares of our common stock at a
        conversion price of $15.00 per share in connection with our entry into the
        Stock
        Purchase Agreement with SIBL. The $6,000,000 credit facility is guaranteed
        by
        Malcolm J. Wright, our Chief Executive Officer and Chairman and is secured
        by a
        second mortgage on our Sonesta Orlando Resort property, including all fixtures
        and personal property located on or used in connection with these properties,
        and all of the issued and outstanding capital stock and assets of our
        subsidiary, American Leisure Marketing & Technology, Inc. We believe that
        without the guarantees of Mr. Wright, it would have been more difficult,
        if not
        impossible, for us to secure the Stanford, credit facility.
 
 As
        of
        December 31, 2006, we had an outstanding principal balance of $3,000,000,
        under
        another secured revolving credit facility with Stanford, which bears interest
        at
        a fixed rate of 8% per annum accruing from July 1, 2006 payable quarterly
        in
        arrears and matures on January 1, 2008. At the sole election of the lender,
        any
        amount outstanding under the credit facility may be converted into shares
        of our
        common stock at a conversion price of $10.00 per share. The credit facility
        is
        secured by collateral assignments of our stock in the
        active Travel Division subsidiaries as well as a collateral assignment of
        our
        first lien security interest in the assets formerly owned by Around The World
        Travel, Inc.
  -50-
  
 As
        of
        December 31, 2006, we had a total of $1,355,000 outstanding under our secured
        revolving credit facility with Stanford, which bears interest at a fixed
        rate of
        8% per annum and matures on January 1, 2008. Interest on the credit facility
        accrues from July 1, 2006 and is due quarterly in arrears. At the sole election
        of the lender, any amount outstanding under the credit facility may be converted
        into shares of our common stock at a conversion price of $10.00 per share.
 
 As
        of
        December 31, 2006 we had another credit facility in the amount of $305,000
        with
        Stanford. The credit facility bears interest at 8.0% per annum and accrues
        interest from July 1, 2006 and is secured by the assets and stock of the
        Company. The credit facility is due on January 1, 2008.
 
 On
        December 29, 2005, Stanford International Bank, Ltd. ("SIBL") provided Tierra
        Del Sol with financial assistance to facilitate the establishment of the
        Land
        Loan and the Construction Loan. The financial assistance consisted of a loan
        to
        Tierra Del Sol of $2,100,000 (the "SIBL Tierra Del Sol Loan"), however, as
        consideration for the purchase of the Antiguan call center, SIBL exchanged
        this
        note and $191,100 of accrued interest and the establishment of letters of
        credit
        in favor of KeyBank in the amount of $4,000,000 and $2,000,000, respectively
        (the "Letters of Credit"), the fees for which amounting to $540,000, were
        also
        exchanged as consideration for the purchase of the Antiguan call center,
        as
        described above. As additional consideration for this financial assistance,
        we
        granted SIBL and its affiliates warrants to purchase 308,000 shares of our
        common stock at an exercise price of $5.00 per share and warrants to purchase
        154,000 shares of our common stock at an exercise price of $0.001 per share.
        Additionally, in January 2006, in connection with the SIBL Reedy Creek Loan,
        we
        granted SIBL and its affiliates warrants to purchase 308,000 shares of our
        common stock at an exercise price of $5.00 per share and warrants to purchase
        154,000 shares of the Company's common stock at an exercise price of $0.001
        per
        share. The warrants expire 5 years from issuance. The warrants contain
        anti-dilution provisions, including a provision which requires us to issue
        additional shares under the warrants if we issue or sell any common stock
        at
        less than $1.02 per share, or grant, issue or sell any options or warrants
        for
        shares of the Company's common stock to convert into shares of our common
        stock
        at less than $1.02 per share. If we do issue or sell common stock, which
        would
        cause a re-pricing of the warrants issued to SIBL, it would likely have an
        adverse effect on the trading value of our common stock and could cause
        substantial dilution to our then shareholders.
 
 On
        March
        13, 2007, we entered into a $10,000,000 Credit Agreement with SIBL, whereby
        SIBL
        agreed to loan us $10,000,000 to use for the construction and development
        of
        Phase II of the Sonesta Resort. The loan was evidenced by a $10,000,000
        Promissory Note, which bears interest at the rate of 10% per annum. The
        Promissory Note is secured by a second priority security interest and lien
        on
        the land underlying Phase II of the Sonesta Resort, all buildings, structures
        and other improvements on such land, and all fixtures, equipment, goods,
        inventory or property owned by us currently or in the future, which
        security interests are evidenced by a Mortgage and Security Agreement, which
        we
        and several of our wholly owned subsidiaries entered into with SIBL in
        connection with the Credit Agreement. The loan is due in full and payable
        along
        with any accrued and unpaid interest on March 13, 2008. Any amounts not paid
        when due under the loan bear interest at the rate of 15% per
        annum.
  -51-
  
 The
        Credit Agreement provides for additional advances to be made to us in an
        amount
        not to exceed $750,000, assuming that certain conditions are met by us in
        the
        future, including (a) that SIBL has received current financial information
        regarding our operations (as further described in the Credit Agreement) and
        that
        we have issued SIBL 26,250 warrants to purchase shares of common stock and
        (b)
        that we are able to obtain additional loans in an aggregate amount of $750,000
        from parties other than SIBL; and an additional loan in an amount not to
        exceed
        $1,500,000, assuming (a) and (b) above and that we have issued additional
        warrants (to be determined prior to such additional advance), to
        SIBL.
 
 All
        of
        our credit facilities with SIBL contain customary covenants and restrictions,
        including covenants that prohibit us from incurring certain types of
        indebtedness, paying dividends and making specified distributions. Failure
        to
        comply with these covenants and restrictions would constitute an event of
        default under our credit facilities, notwithstanding our ability to meet
        our
        debt service obligations. Upon the occurrence of an event of default, the
        lender
        may convert the debt to the Company's common stock, accelerate amounts due
        under
        the applicable credit facility, and may foreclose on collateral and/or seek
        payment from a guarantor of the credit facility. At December 31, 2006, we
        believe we were in compliance with the covenants and other restrictions
        applicable to us under each credit facility.
 
 **Resorts
        Funding Group, LLC Credit Facility**
  We
        have
        received $2,905,000 from Resorts Funding Group, LLC, which has been matching
        the
        funds from the SIBL Credit Agreement (see above) through the end of March
        2007.
  We
        intend
        to enter into an agreement with Resorts Funding Group, LLC, on similar terms
        and
        conditions to those of the SIBL Credit Agreement.
  
 Our
        subsidiary Hickory Travel Systems, Inc. owes $250,000 to Sabre, Inc. ("Sabre"),
        which final payment of $250,000 on such amount was due December 31, 2003.
        The
        amount originally accrued interest at 8% per annum and is secured by the
        personal guaranty of L. William Chiles who is a Director of the Company.
        Interest has not been paid or accrued on this amount since December 31, 2003,
        as
        there is no interest penalty or default rate applicable to the final unpaid
        payment. Sabre has not requested the final payment of $250,000 of the amount
        due
        from Hickory to date.
 
 Additionally,
        Hickory has a $375,900 loan through the U.S. Small Business Administration
        ("SBA") of which $361,272 had been drawn as of December 31, 2006. The SBA
        loan
        is due by May 2033 and bears interest at 4% per annum with principal and
interest
        payments of approximately $1,862 due monthly from May 2005 until May 2033.
        The
        SBA note is secured by Hickory's assets and the personal guaranty of L. William
        Chiles, who is our Director.
  -52-
  
 In
        connection with our purchase of the assets of Around The World Travel, Inc.
        ("AWT"), as of December 31, 2006, there is a balance from those notes we
        assumed
        from AWT of $2,174,481.
 
 In
        connection with the exercise of the Reedy Creek Option, Reedy Creek Acquisition
        Company and SIBL agreed to modify the terms of the SIBL Reedy Creek Loan
        made by
        SIBL to Reedy Creek Acquisition Company. The modified loan terms are evidenced
        by a Renewed, Amended and Increased Promissory Note (the "Amended Note")
        made by
        Reedy Creek Acquisition Company in favor of SIBL. The Amended Note had a
        principal balance of $8,000,000, bears interest at the rate of 8% per year
        and
        had a maturity date of December 31, 2006, but which date has since been verbally
        extended until June 30, 2007. The Amended Note was replaced in November 2006,
        by
        a Renewed, Amended and Increased Promissory Note in the amount of $12,200,000
        (the "RC Note"), which was in turn replaced by an additional amendment, which
        increased the amount of the note to $13,420,000, and a fourth amendment in
        January 2007, which increased the amount of the note to $15,300,000, in
        connection with a $1,880,000 advance received from Reedy Creek (the “Amended RC
        Note”). The Amended RC Note is due and payable on June 30, 2007, with $8,000,000
        of the Amended RC Note bearing interest at the rate of 8% per annum and the
        remaining $7,300,000 bearing interest at the rate of 12% per annum.
 
 The
        principal and accrued interest due on the Amended RC Note is due and payable
        on
        the maturity dates of the Amended RC Note. Upon an event of default as described
        in the Amended RC Note, SIBL has several rights and remedies, including causing
        the Amended RC Note to be immediately due and payable.
 
 The
        Amended RC Note is secured by a second lien on the Reedy Creek Property.
        It is
        guaranteed by the Company and Malcolm J. Wright, the Company's Chief Executive
        Officer and Chairman pursuant to a Modification and Reaffirmation of Guaranty
        and Environmental Indemnity Agreement. We believe that without the guarantees
        of
        Mr. Wright, it would have been more difficult, if not impossible, for us
        to
        secure such loan facility. In consideration for Mr. Wright's guarantee, and
        pursuant to an existing agreement between Mr. Wright and the Company, Mr.
        Wright
        earned a fee equal to three percent (3%) of the principal amount of the Amended
        Note. The Company paid this fee through the grant of warrants to Mr. Wright
        to
        purchase 240,000 shares of the Company's common stock at an exercise price
        of
        $1.02 per share. These warrants will expire 5 years from the expiration of
        the
        guaranty.
 
 In
        connection with the exercise of the Reedy Creek Option, the Company and Reedy
        Creek Acquisition Company arranged to receive a $7,000,000 loan from Bankers
        Credit Corporation ("Bankers Credit"). Under the terms of the Bankers Credit
        loan, Bankers Credit advanced Reedy Creek Acquisition Company $3,000,000
        at
        closing and an additional $4,000,000 subsequent to the date of closing, for
        an
        aggregate of $7,000,000.
  -53-
  
 The
        Bankers Credit loan is evidenced by a Promissory Note which previously accrued
        interest at the greater of the Wall Street Journal published prime rate plus
        7.75%, not to exceed the highest rate allowable under Florida law or 15%
        per
        year. The interest rate of the note as of March 13, 2007 was 15% (with a
        prime
        rate, as reported by the Wall Street Journal of 8.25%). In February 2007,
        we
        entered into an Amended and Restated Promissory Note with Bankers Credit,
        which
        increased the amount of the note to $7,860,000 in connection with an $860,000
        advance and extended the due date of the note from January 3, 2007 to February
        1, 2008, and decreased the interest rate to the greater of prime rate plus
        6.75%
        or 15%, which is equal to 15% as of the date of this filing (the "Bankers
        Credit
        Note").
 
 Interest
        on the Bankers Credit Note is payable monthly. Pursuant to the Bankers Credit
        Note, Reedy Creek Acquisition Company agreed to pay a 10% late charge on
        any
        amount of unpaid principal or interest under the Bankers Credit Note. The
        Bankers Credit Note is subject to a 1% exit fee. Upon an event of default
        as
        described in the Bankers Credit Note, Bankers Credit has several rights and
        remedies, including causing the Bankers Credit Note to be immediately due
        and
        payable.
 
 The
        Bankers Credit Note is secured by a first lien on the Reedy Creek Property.
        Additionally, the Bankers Credit Note is guaranteed by the Company and Malcolm
        J. Wright, the Company's Chief Executive Officer and Chairman pursuant to
        a
        Guaranty Agreement. We believe that without the guarantees of Mr. Wright,
        it
        would have been more difficult, if not impossible, for us to secure the Bankers
        Credit, loan facility. In consideration for Mr. Wright's guarantee, and pursuant
        to an existing agreement between Mr. Wright and the Company, Mr. Wright earned
        a
        fee equal to three percent (3%) of the Bankers Credit Note. The Company paid
        this fee through the grant of warrants to Mr. Wright to purchase 210,000
        shares
        of the Company's common stock at an exercise price of $1.02 per share. These
        warrants will expire 5 years from the expiration of the guaranty.
 
 Reedy
        Creek Acquisition Company utilized the initial proceeds from the Bankers
        Credit
        loan to pay a portion of the amount owed on the existing first mortgage note
        issued to the sellers of the Reedy Creek Property. The holder of this mortgage
        agreed to release the mortgage in exchange for this payment.
 
 In
        August
        2006, we received an aggregate of $5,714,569 in loans from West Villas, Inc.,
        Orlando Tennis Village, Inc. and Maingate Towers, Inc., entities controlled
        by
        Roger Maddock, a significant shareholder of the Company. The loans bear interest
        at the rate of 16% per annum until paid and are due and payable one year from
        the date such loans were made. The loans totaled $5,875,444 as of December
        31,
        2006.
 
 On
        December 22, 2006 the Company acquired 100% of South Beach Resorts, LLC (“SBR”
or “Resorts”) for $1,120,000 plus 25% participation interest granted to Stanford
        International Bank Limited in the net proceeds realized by SBR upon the
        disposition of its Boulevard Hotel property located in Miami Beach, Florida.
        We
        also entered into a note with Roger Maddock a significant shareholder of
        us, to
        evidence $3,590,811 in loans and
        advances Mr. Maddock had previously made to Resorts (the "Maddock Note"),
        the
        payment of which was guaranteed by us pursuant to a Guaranty Agreement, which
        amount totaled $3,353,252 as of December 31, 2006.
  -54-
  
 While
        we
        currently believe we have sufficient funds to continue our business plan,
        because we have decided not to move forward with the KeyBank Construction
        Loan,
        we will need to find alternative financing for the construction of Phase
        1 of
        the Sonesta Resort, of which there can be no assurance.
 
 On
        January 11, 2007, Resorts (which we now own) defaulted on a $7,700,000 loan
        which it sold to Marathon Structured Finance Fund L.P. ("Marathon") in June
        2005, in connection with its original purchase of the Property. To date,
        the
        loan principal is $7,498,900; there is accrued interest of $79,910 plus other
        fees that amount to $567,968. Marathon has a mortgage interest on the Property
        in connection with the June 2005 loan.
 
 A
        Forbearance Agreement was subsequently executed with Marathon to waive the
        default until April 11, 2007, provided SBR continues to make monthly interest
        payments on the debt outstanding and a principal payment of $750,000 was
        made on
        February 8, 2007. An additional forbearance to July 11, 2007 is allowed provided
        that an additional $500,000 principal payment is made on or before July 3,
        2007.
 
 On
        February 9, 2007, SBR entered into a 180 day, $750,000 loan agreement at
        the
        Wall Street Journal prime rate plus 1%, currently equal to 9.25%, with the
        prime
        rate at 8.25% as of the filing of this report, with International Property
        Investors AG, a corporation organized under the laws of Liechtenstein, secured
        by SBR’s property. The proceeds of the loan were used solely for the payment of
        fees owed by SBR to Marathon pursuant to the Forbearance Agreement.
 
 We
        are
        currently working to secure new financing to replace the Marathon loan; however
        we can provide no assurances that such financing will be raised on favorable
        terms, if at all. The Marathon loan bears interest at the rate of the greater
        of
        (a) ten percent (10%) or (b) the London Interbank Offered Rate (LIBOR) plus
        seven percent (7%). The note also required a $180,000 exit fee to be paid
        at the
        time the loan was repaid, which amount has not been paid to date. Marathon
        may
        also require us to pay a 5% late payment fee in connection with our failure
        to
        repay the loan amount. We are required to pay the default rate of interest
        on
        the Marathon loan while obtaining a replacement loan. The default rate of
        interest is LIBOR plus twelve percent (12%), which was equal to approximately
        17.4%, with the LIBOR at 5.4% as of the filing of this Report.
 
 On
        January 30, 2007, AMLH executed a promissory note with Applebee Holding Company
        in the amount of $150,000 at 4% for seven years. As part of the agreement,
        2,840
        shares of AMLH Series E Convertible Preferred Stock were issued bearing a
        4% per
        annum cumulative preferred dividend rate, par value of $.001 and convertible
        into AMLH common stock at a strike price of $15.00 per share.
   -55-
  We
        have
        established a relationship with GMAC Bank, through Millennium Capital Mortgage,
        to provide construction financing to the individual purchasers of the Sonesta
        Resort town homes, which funding we believe will enable all town homes and
        amenities at Tierra del Sol to be built through this program. Additionally,
        we
        are in the process of negotiating with several lenders for a construction
        loan
        on favorable terms for the condominiums and/or for the clubhouse which we
        anticipate will be finalized during the second quarter of 2007. Although
        we have
        received letters of intent with various lending parties, we can provide no
        assurances a commitment will be secured. Assuming we are able to enter into
        a
        subsequent funding arrangement, we believe that we will have sufficient funds
        to
        provide for the completion of Phase 1, assuming there are no material cost
        overruns, delays or further increases in material costs. Phase 2 will be
        financed separately.
 
 However,
        even if we are able to secure sufficient financing for the construction of
        Phase
        1 of the Sonesta Resort, moving forward, our growth and continued operations
        may
        be impaired by limitations on our access to the capital markets. In the event
        that our current anticipated costs of developing the Sonesta Resort and/or
        the
        Reedy Creek Property, are more than we anticipate, and/or our other travel
        service operations do not continue to generate revenue at their current levels,
        we may not have sufficient funds to complete such construction projects and/or
        repay amounts owed on the notes payable described above. As a result, we
        may be
        forced to reduce our annual construction goals and maintain our operations
        at
        current levels, and/or scale back our operations which could have a material
        adverse impact upon our ability to pursue our business plan and/or the value
        or
        common stock. There can be no assurance that capital from outside sources
        will
        be available, or if such financing is available, that it will not involve
        issuing additional securities senior to our common stock or equity financings
        which are dilutive to holders of our common stock.
 
 While
        our
        common stock currently trades on the Over-The-Counter Bulletin Board in the
        United States, there is the potential that we may choose to change our common
        stock listing to an alternative market in the future in order to improve
        our
        liquidity and our access to the capital markets.
 
 **Off-Balance
        Sheet Arrangements**
 
 We
        do not
        have any off balance sheet arrangements that have or are reasonably likely
        to
        have a current or future effect on our financial condition, changes in financial
        condition, revenues or expenses, results of operations, liquidity, capital
        expenditures, or capital resources that is material to investors.
 
 
  -56-
  **RISK
        FACTORS**
 
 **RISKS
        RELATING TO OUR CAPITAL AND LIQUIDITY NEEDS**
 
 **WE
        HAVE A LIMITED HISTORY OF OPERATIONS AND WE HAVE A HISTORY OF OPERATING
        LOSSES.**
 
 Since
        our
        inception, we have been assembling our Travel Division including the acquisition
        of Hickory in October 2003 and TraveLeaders in December 2004, planning The
        Sonesta Orlando Resort at Tierra Del Sol, building travel club membership
        databases, and assembling our management team. We have incurred net operating
        losses since our inception. As of December 31, 2006, we had an accumulated
        deficit of $21,607,362 and negative working capital of $52,541,876. If we
        are
        unable to obtain profitable operations and/or meeting our current liabilities,
        we could be forced to curtail or abandon our operations, which could cause
        any
        investment in the Company to become worthless.
 
 **WE
        MAY NOT GENERATE ENOUGH OPERATING REVENUE OR CAPITAL TO MEET OUR OPERATING
        AND
        DEVELOPMENT COSTS.**
 
 Our
        costs
        of establishing our business models for both the Travel Division and the
        Resort
        Development Division, including acquisitions and the due diligence costs
        of that
        process, together with the un-financed development costs incurred in the
        Resort
        Development Division requires significant capital. Historically, our sources
        for
        capital have been through loans from our founding and majority shareholders
        as
        well as from loans from our capital partner, Stanford. On December 29, 2005,
        certain affiliates of the Company closed two (2) credit facilities with Key
        Bank
        related to the Sonesta Resort. The credit facilities consisted of a $40,000,000
        revolving construction loan which we planned to use to construct Phase 1
        of the
        Sonesta Resort (the "Construction Loan"), but which we have subsequently
        elected
        not to open and a $14,850,000 term loan used to finance the acquisition of
        the
        property for the Resort and to pay certain related costs (the "Land Loan").
        Since we have not decided to move forward with the Construction Loan financing,
        we will need to obtain alternative financing for the construction of Phase
        1 of
        the Sonesta Resort, which may be on less favorable terms than the Construction
        Loan, if such financing is available at all. We are currently hope to close
        additional financing in the second quarter of 2006, of which there can be
        no
        assurance. If we are unable to enter into an alternative funding arrangement
        in
        connection with the construction of Phase 1 of the Sonesta Resort, generate
        enough operating revenue to satisfy our capital needs, or if we cannot obtain
        future capital from our founding and majority shareholders or from Stanford,
        and/or if we are not able to repay the Land Loan, it will have a material
        adverse effect on our financial condition and results of operation.
 
  -57-
  **WE
        OWE A SIGNIFICANT AMOUNT OF MONEY TO KEYBANK IN CONNECTION WITH THE LAND
        LOAN,
        WHICH MONEY WE DO NOT CURRENTLY HAVE, AND WHICH LOANS ARE SECURED BY THE
        SONESTA
        RESORT.**
 
 The
        occurrence of any one or more "events of default" under the Land Loan would
        allow KeyBank to pursue certain remedies against us including taking possession
        of the Sonesta Resort project; withholding further disbursement of the proceeds
        of the loan and/or terminate KeyBank's obligations to make further disbursements
        thereunder; and/or declaring the note evidencing the loans to be immediately
        due
        and payable. We do not currently have cash on hand sufficient to repay the
        approximately $14,352,900 which had been borrowed from KeyBank pursuant to
        the
        Land Loan as of December 31, 2006. The Land Loan is due for repayment on
        June
        28, 2007, and we do not currently have sufficient cash to repay such loan
        when
        due. Furthermore, we currently anticipate the need for a significant amount
        of
        additional funding to complete the construction of Phase 1 of the Sonesta
        Resort, and as such, we will likely not have sufficient cash to repay the
        Land
        Loan or any future loan in connection with the funding of Phase 1 of the
        Sonesta
        Resort, assuming such financing is obtained, until the completion of the
        units
        in the Sonesta Report, without additional financing. If we do not repay the
        amounts owing under the Land Loan or any subsequent loans when due, KeyBank
        may
        take possession of the Sonesta Resort project, and we may be forced to curtail
        or abandon our current business plans, which could cause the value of our
        securities to become worthless.
 
 Furthermore,
        we have established a relationship with GMAC Bank, through Millennium Capital
        Mortgage, to provide construction financing to the individual purchasers
        of the
        Sonesta Resort town homes, which funding we believe will enable all town
        homes
        and amenities at Tierra del Sol to be built through this program. Additionally,
        we are in the process of obtaining alternate financing for the construction
        of
        the condominiums and/or for the clubhouse in Phase 1 of the Sonesta Resort.
        We
        anticipate that such loan will be evidenced by a firm commitment during the
        second quarter of 2007, but we can provide no assurances that a commitment
        will
        be obtained on favorable terms, if at all. Assuming we are able to enter
        into a
        subsequent funding arrangement, we believe that we will have sufficient funds
        to
        provide for the completion of Phase 1, assuming there are no material cost
        overruns, delays or further increases in material costs. We plan to finance
        Phase 2 separately.
 
 **A
        SIGNIFICANT AMOUNT OF OUR LIABILITIES ARE CURRENT LIABILITIES WHICH ARE DUE
        WITHIN THE NEXT TWELVE MONTHS, AND WHICH WE DO NOT CURRENTLY HAVE SUFFICIENT
        CASH ON HAND TO REPAY.**
 
 As
        of
        December 31, 2006, we had a total of $56,631,757 in current liabilities,
        which
        liabilities are payable within the next twelve months. Included in those
        liabilities was the Land Load, which currently has a balance of approximately
        $14,352,900 and is due on June 28, 2007, the amended Reedy Creek Loan in
        the
        principal amount of $13,420,000 along with any accrued and unpaid interest,
        which was due and payable on December 31, 2006,
        but
        which has since been extended until June 30, 2007, the Bankers Credit loan
        in
        the amount of $7,860,000 is due and payable, along with any accrued and unpaid
        interest on February 1, 2008, as well as various other loans and notes payables.
        As we do not currently have sufficient cash on hand to repay these amounts
        as of
        the filing of this report, we anticipate the need to raise substantial funding
        in the next six to twelve months to repay these notes, which funding, if
        available, could be on unfavorable terms and which could cause immediate
        and
        substantial dilution to our then existing shareholders. If we are unable
        to
        repay our substantial current liabilities when due, we could be forced to
        curtail or abandon our business operations, which could cause the value of
        our
        securities to become worthless.
  -58-
  
 **WE
        HAVE RECEIVED $4,355,000 OF CONVERTIBLE DEBT FINANCING FROM STANFORD, WHICH
        IS
        SECURED BY MORTGAGES ON OUR PROPERTY AND LIENS ON OUR
        ASSETS.**
 
 We
        have
        received an aggregate of $4,355,000 of convertible debt financing from Stanford.
        The terms of our financial arrangements with Stanford are secured by the
        following mortgages on our properties and liens on our assets:
 
 -
              Our
                  $3,000,000 credit facility is secured by collateral assignments
                  of our
                  stock in American Leisure Marketing & Technology, Inc., Orlando
                  Holidays, Inc, American Leisure, Inc, Welcome To Orlando, Inc.,
                  American
                  Travel & Marketing Group, Inc. and Hickory Travel Systems,
                  Inc.
 
 -
              Our
                  $1,355,000 credit facility is secured by all of the issued and
                  outstanding
                  stock of our subsidiaries American Leisure Marketing & Technology,
                  Inc., Orlando Holidays, Inc, American Leisure, Inc., Welcome To
                  Orlando,
                  Inc., American Travel & Marketing Group, Inc. and Hickory Travel
                  Systems, Inc. This facility is non-recourse to the Company but
                  for the
                  assets and revenues of those
                  subsidiaries.
 
 If
        we
        fail to comply with the covenants in our credit facilities, Stanford can
        elect
        to accelerate the amounts due under the credit facilities and may foreclose
        on
        our assets and property that secures the loans.
 
 
 **BUSINESS
        ACQUISITIONS OR JOINT VENTURES MAY DISRUPT OUR BUSINESS, DILUTE SHAREHOLDER
        VALUE OR DISTRACT MANAGEMENT ATTENTION.**
 
 As
        part
        of our business strategy, we may consider the acquisition of, or investments
        in,
        other businesses that offer services and technologies complementary to ours.
        If
        the analysis used to value acquisitions is faulty, the acquisitions could
        have a
        material adverse affect on our operating results and/or the price of our
        common
        stock. Acquisitions also entail numerous risks, including:
  -59-
   
 -
              difficulty
                  in assimilating the operations, products and personnel of the acquired
                  business;  -
              potential
                  disruption of our ongoing business;
 
 -
              unanticipated
                  costs associated with the
                  acquisition;
 
 -
              inability
                  of management to manage the financial and strategic position of
                  acquired
                  or developed services and
                  technologies;
 
 -
              the
                  diversion of management's attention from our core
                  business;
 
 -
              inability
                  to maintain uniform standards, controls, policies and
                  procedures;
 
 -
              impairment
                  of relationships with employees and customers, which may occur
                  as a result
                  of integration of the acquired
                  business;
 
 -
              potential
                  loss of key employees of acquired
                  organizations;
 
 -
              problems
                  integrating the acquired business, including its information systems
                  and
                  personnel;
 
 -
              unanticipated
                  costs that may harm operating results;
                  and
 
 -
              risks
                  associated with entering an industry in which we have no (or limited)
                  prior experience.
 
 If
        any of
        these occur, our business, results of operations and financial condition
        may be
        materially adversely affected.
 
 **RISKS
        RELATED TO OUR RESORT DEVELOPMENT DIVISION**
 
 **WE
        OWE A SIGNIFICANT AMOUNT OF MONEY TO KEYBANK, NATIONAL ASSOCIATION, WHICH
        WE DO
        NOT CURRENTLY HAVE FUNDS TO RE-PAY, AND WHICH LOANS INCLUDE LIENS ON OUR
        PROPERTIES.**
 
 In
        December 2005, we closed two credit facilities with KeyBank, National
        Association ("KeyBank") related to the Sonesta Resort. The credit facilities
        consisted of a $40,000,000 revolving credit line (the "Construction Loan")
        and a
        $14,850,000 term loan to be used to finance the acquisition of the property
        for
        the resort (the "Land Loan"). We have since decided not to move forward with
        the
        Construction Loan, however we have approximately $14,352,900 outstanding
        under
        the Land Loan to date. The Land Loan bears interest at the rate of the daily
        London Interbank Offered Rate ("LIBOR") plus 3.10%, respectively, currently
        8.27%, with the LIBOR equal to approximately 5.17% as of March 7, 2007. The
        maturity date of the Land Loan is June 28, 2007. The Land Loan is secured
        by a
        first lien on the land within Phase 2 of the Sonesta Resort, including any
improvements,
        easements, and rights of way; a first lien and security interest in all fixtures
        and personal property, an assignment of all leases, subleases and other
        agreements relating to the property; an assignment of construction documents;
        a
        collateral assignment of all contracts and agreements related to the sale
        of
        each condominium unit; a collateral assignment of all purchase deposits and
        any
        management and/or operating agreement. As of the date of this filing, we
        have
        borrowed $14,352,900 under the Land Loan, which amount we do not currently
        have
        funds on hand to repay. Our business plan includes retiring that debt with
        a
        construction loan to build Phase 2 of the Sonesta Resort, assuming that we
        raise
        sufficient funding to complete the construction of Phase 1 of the Sonesta
        Resort
        first, of which there can be no assurance.
  -60-
  
 **WE
        NEED SIGNIFICANT ADDITIONAL FINANCE FACILITIES TO BEGIN AND COMPLETE THE
        DEVELOPMENT OF PHASE 2 OF THE SONESTA RESORT, TO CONTINUE THE VERTICAL
        CONSTRUCTION OF PHASE 1 OF THE SONESTA RESORT AND TO BEGIN AND COMPLETE OUR
        PLANNED CONSTRUCTION OF THE REEDY CREEK PROPERTY.**
 
 As
        we
        have decided not to move forward with the Construction Loan, we currently
        anticipate the need for a significant amount of additional funding to complete
        the development of Phase 1 of the Sonesta Resort. Additionally, we do not
        currently have sufficient capital to begin or complete Phase 2 of the Sonesta
        Resort and/or our planned development of the Reedy Creek Property (as described
        above). We are currently in discussions with several parties regarding obtaining
        financing for the vertical construction of Phase 1 of the Sonesta Resort,
        and
        hope to finalize such funding in the second quarter of 2007, of which there
        can
        be no assurance. Our plan for the financing of the Phase 2 town homes is
        to use
        a program from a national mortgage lender to employ construction loans issued
        to
        each purchaser that will, upon completion, convert to permanent, conventional
        mortgages. The finance plan for the Phase 2 amenities is to employ a line
        of
        credit secured by a segment of the profits from the sale of the residential
        units. We will employ a conventional construction loan for the condominium
        units. As of this date, the Company has not yet secured the line of credit
        for
        the amenities or the construction loan for the condominium units. It is
        impossible at this time for us to estimate the cost of completing Phase 1
        or
        Phase 2 of the Sonesta Resort and/or the development of the Reedy Creek
        Property, however, based upon the size of the projects, we would anticipate
        such
        costs to be substantial. We will not begin the construction of Phase 1 or
        Phase
        2 until we have capitalized the construction appropriately. If we cannot
        obtain
        the appropriate financing, we may have to delay the commencement of the
        construction of Phase 1 and/or Phase 2 until such time as we have adequate
        funding available. We may never have sufficient capital to begin or complete
        the
        development of Phase 1 or Phase 2 of the Sonesta Resort which could force
        us to
        modify or abandon the development plan for the Sonesta Resort. Our business
        plan
        for the development of the Reedy Creek Property is to enter into a partnership
        agreement with an experienced and high credit development partner, and as
        such,
        we do not expect to raise capital or incur debt to begin or complete that
        project. At present, the Company has not yet chosen such partner although
        we are
        in receipt of proposals from qualified developers that are consistent with
        our
        business plan.
  -61-
  
 **THE
        CONSTRUCTION OF THE SONESTA RESORT IS SUBJECT TO DELAYS AND COST OVERRUNS,
        WHICH
        COULD CAUSE THE ESTIMATED COST OF THE RESORT TO INCREASE AND WHICH COULD
        CAUSE
        US TO CURTAIL OR ABANDON THE CONSTRUCTION OF THE SONESTA
        RESORT.**
 
 All
        construction projects, especially construction projects as large as our planned
        Sonesta Resort are subject to delays and cost overruns. We have experienced
        very
        significant cost increases and overruns since sales commenced in 2004, due
        to
        significant price increases in construction materials, which have been
        exacerbated by the hurricanes of 2004 and 2005, as well as to a lesser extent
        the threat of hurricanes in 2006 and 2007. The increased costs have impacted
        construction throughout the southeastern United States and are not unique
        to us.
        Because of the significant cost increases, we are evaluating and plan to
        implement a program to revise upwards the price of sold and unsold units
        or to
        cancel contracts on units because of cost overruns. If we continue to experience
        substantial delays or additional cost overruns during the construction of
        Phase
        1 of the Sonesta Resort and/or Phase 2, we could be forced to obtain additional
        financing to complete the projects, which could be at terms worse than our
        then
        current funding, assuming such funding is available to us at all, of which
        there
        can be no assurance, and could force us to curtail or abandon our current
        plans
        for Phases 1 and 2 of the Sonesta Resort. As a result, sales of our town
        homes
        and condominiums could be severely effected, which could force us to curtail
        or
        abandon our business plans and/or could make it difficult if not impossible
        to
        repay the significant amount of money due to KeyBank and Stanford (as explained
        above), which as a result could cause the value of our securities to become
        worthless.
 
 **EXCESSIVE
        CLAIMS FOR DEVELOPMENT-RELATED DEFECTS IN ANY REAL ESTATE PROPERTIES THAT
        WE
        PLAN TO BUILD THROUGH OUR RESORT DEVELOPMENT DIVISION COULD ADVERSELY AFFECT
        OUR
        LIQUIDITY, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.**
 
 We
        will
        engage third-party contractors and have additionally engaged Resorts Development
        Group, LLC, which is owned by our Chief Executive Officer and Chairman, Malcolm
        J. Wright, to construct portions of our resorts. However, our customers may
        assert claims against us for construction defects or other perceived development
        defects including, but not limited to, structural integrity, the presence
        of
        mold as a result of leaks or other defects, electrical issues, plumbing issues,
        or road construction, water or sewer defects. In addition, certain state
        and
        local laws may impose liability on property developers with respect to
        development defects discovered in the future. To the extent that the contractors
        do not satisfy any proper claims as they are primarily responsible, and to
        the
        extent claims are not satisfied by third-party warranty coverage, claims
        for
        development-related defects could be brought against us. To the extent that
        claims brought against us are not covered by insurance, our payment of those
        claims could adversely affect our liquidity, financial condition, and results
        of
        operations.
  -62-
  **MALCOLM
        J. WRIGHT, WHO SERVES AS OUR CHIEF EXECUTIVE OFFICER AND AS CHAIRMAN OF THE
        BOARD OF DIRECTORS, IS INVOLVED IN OTHER BUSINESSES THAT HAVE CONTRACTED
        WITH US
        AND IS ALSO INVOLVED WITH PROPERTY DEVELOPMENT PROJECTS THAT MAY BE IN
        COMPETITION WITH US.**
 
 Malcolm
        J. Wright is the President of American Leisure Real Estate Group, Inc., a
        real
        estate development company with which we have contracted for the development
        of
        our resorts including The Sonesta Orlando Resort at Tierra Del Sol ("ALREG")
        and
        Reedy Creek Property. Mr. Wright has a 100% interest in ALREG. Additionally,
        Mr.
        Wright is an officer of Xpress Ltd., with which we have contracted for exclusive
        sales and marketing for The Sonesta Orlando Resort at Tierra Del Sol and
        Reedy
        Creek. Mr. Wright is also an officer and shareholder of Inovative Concepts,
        Inc., which does not have any operations, M J Wright Productions, Inc., which
        does not have any operations, but which owns our Internet domain names, Resorts
        Development Group, LLC which develops resort properties in Orlando including
        Bella Citta, Los Jardines Del Sol, The Preserve, Tortuga Cay and Sherberth
        Development LLC, Resorts Construction, LLC with whom we have contracted to
        construct part of the Sonesta Resort as described above, Resorts Concepts,
        LLC
        which operates a design business, and Titan Manufacturing, LLC from whom
        we
        intend to purchase roof tiles for our developments. Because Mr. Wright is
        employed by us and the other party to these transactions, Mr. Wright might
        profit from a transaction when we do not.
 
 Management
        believes that these transactions are in the best interest of, or not detrimental
        to, the Company, and are as good or better than could be achieved, if even
        possible to achieve, by contracting with a wholly unrelated party. Additionally,
        the transactions were negotiated by us in a manner akin to an arms length
        transaction. Additionally, from time to time, Mr. Wright pursues real estate
        investment and sales ventures that may be in competition with ventures that
        we
        pursue or plan to pursue. Mr. Wright, however, has personally guaranteed
        our
        debts, and has encumbered his personal assets to secure financing for the
        above
        described projects.
 
 **BECAUSE
        MALCOLM J. WRIGHT, WHO SERVES AS OUR CHIEF EXECUTIVE OFFICER AND THE CHAIRMAN
        OF
        THE BOARD OF DIRECTORS, IS INVOLVED IN A NUMBER OF OTHER BUSINESSES, HE MAY
        NOT
        BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS
        OPERATIONS.**
 
 Malcolm
        J. Wright is the President of ALREG, Xpress Ltd., Inovative Concepts, Inc.,
        M J
        Wright Productions, Inc., Resorts Development Group, LLC, Resorts Construction,
        LLC, Titan Manufacturing LLC, Tortuga Cay Resort, LLC, Osceola Business
        Managers, Inc., Florida World, Inc., SBR Holding LLC (a non trading holding
        company which formerly held South Beach Resorts, LLC), RDG LLC, and SunGate
        Resort Villas, Inc. Mr. Wright is engaged full-time as the Company's Chairman
        and as a senior executive officer. Although Mr. Wright has not indicated
        any
        intention to reduce his activities on behalf of the Company, we do not have
        an
        employment agreement with Mr. Wright and he
        is
        under no requirement to spend a specified amount of time on our business.
        If Mr.
        Wright does not spend sufficient time serving our company, it could have
        a
        material adverse effect on our business and results of
        operations.
  -63-
  
 **WE
        MAY PROVIDE THE EXECUTIVE OFFICERS OF OUR SUBSIDIARIES AN AGGREGATE BONUS
        OF UP
        TO 19% OF THE PRE-TAX PROFITS OF THE SUBSIDIARY IN WHICH THEY SERVE AS OUR
        EXECUTIVE OFFICERS, WHICH WOULD REDUCE ANY PROFITS THAT WE MAY
        EARN.**
 
 We
        may
        provide the executive officers of each of our subsidiaries an aggregate bonus
        of
        up to 19% of the pre-tax profits, if any, of the subsidiaries in which they
        serve as executive officers. For example, Malcolm J. Wright would receive
        19% of
        the pre-tax profits of Leisureshare International Ltd, Leisureshare
        International Espanola SA, American Leisure Homes, Inc., Advantage Professional
        Management Group, Inc., Tierra Del Sol Resort, Inc., and Wright Resorts Villas
        & Hotels, Inc. However, we do not have any agreements with our officers
        regarding the bonus other than our agreement with L. William Chiles. Mr.
        Chiles
        is entitled to receive 19% of the profits of Hickory up to a maximum payment
        over the life of his contract of $2,700,000. As Mr. Chiles' bonus is limited,
        it
        is not subject to the buy-out by us described below. The executive officers
        of
        our other subsidiaries would share a bonus of up to 19% of the pre-tax profits
        of the subsidiary in which they serve as executive officers. We would retain
        the
        right, but not the obligation to buy out all of the above agreements after
        a
        period of five years by issuing such number of shares of our common stock
        equal
        to the product of 19% of the average after-tax profits for the five-year
        period
        multiplied by one-third of the price-earnings ratio of our common stock at
        the
        time of the buyout divided by the greater of the market price of our common
        stock or $5.00. If we pay bonuses in the future, it will reduce our profits
        and
        the amount, if any, that we may otherwise have available to pay dividends
        to our
        preferred and common stockholders. Additionally, if we pay bonuses in the
        future
        it will take away from the amount of money we have to repay our outstanding
        loans and the amount of money we have available for reinvestment in our
        operations and as a result, our future results of operations and business
        plan
        could be affected by such bonuses, and we could be forced to curtail or abandon
        our current business plan and plans for future expansion.
 
 **WE
        HAVE EXPERIENCED DELAYS IN OBTAINING SIGNATURES FOR AGREEMENTS AND TRANSACTIONS,
        WHICH HAVE PREVENTED THEM FROM BEING FINALIZED AND/OR DISCLOSED IN OUR
        FILINGS.**
 
 We
        have
        experienced delays in obtaining signatures for various agreements and
        transactions in the past. In some cases, we have either disclosed the terms
        of
        these agreements and transactions in our periodic and other filings with
        the SEC
        and/or filed such agreements with only the limited signatures which we could
        obtain by the required filing dates of such reports, with the intention to
        re-file such agreements at a later date once we are able to obtain all of
        the
        required signatures; however, these agreements and transactions are not final.
        Until they are finalized, their terms are subject to change although we do
        not
        have any present intention to do so. If the terms of these agreements and
        transactions were to change, we may be required to amend our prior disclosures
        and any revisions could be substantial.
  -64-
  
 **WE
        RELY ON KEY MANAGEMENT AND IF WE LOSE ANY OF THEM, IT COULD HAVE A MATERIAL
        ADVERSE AFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS.**
 
 Our
        success depends, in part, upon the personal efforts and abilities of Malcolm J.
        Wright. Mr. Wright is the Chairman of the Company and the Company's Chief
        Executive Officer. Our ability to operate and implement our business plan
        is
        dependent on the continued service of Mr. Wright. We are in the process of
        entering into a written employment agreement with Mr. Wright. If we are unable
        to retain and motivate him on economically feasible terms, our business and
        results of operations will be materially adversely affected. In addition,
        the
        absence of Mr. Wright may force us to seek a replacement who may have less
        experience or who may not understand our business as well.
 
 **WE
        OWE A SUBSTANTIAL AMOUNT OF MONEY TO MALCOLM J. WRIGHT, OUR CHIEF EXECUTIVE
        OFFICER AND CHAIRMAN FOR HIS SERVICES AS AN EXECUTIVE OFFICER AND A
        DIRECTOR, AND IF WE DO NOT EVENTUALLY PAY HIM THESE ACCRUED AMOUNTS, WE COULD
        LOSE HIS SERVICES.**
 
 We
        currently accrue $500,000 per year which is payable to Malcolm J. Wright
        for his
        services as an executive officer and an additional $18,000 per year for his
        services as a Chairman as of the filing of this report, which accrued
        amount bears interest at the rate of 12% per annum until paid, compounded
        annually. Although we paid Mr. Wright an aggregate of $1,540,500 in June
        2006,
        consisting of $1,275,000 of the principal amount he was owed in salary and
        $265,500 of interest on such amount, we still owe Mr. Wright approximately
        $2,225,000 as of the date of this filing. Furthermore, we may pay Mr. Wright
        a
        bonus of up to 19% of the pre-tax profits, if any, of various subsidiaries
        as
        discussed above. We have made payments to entities controlled by Mr. Wright
        in
        consideration for substantial valuable services that those entities have
        provided to us for The Sonesta Orlando Resort at Tierra Del Sol. If we do
        not
        have sufficient cash on hand to pay Mr. Wright for his salary, Director's
        compensation and bonus in the future, he may determine to spend less of his
        time
        on our business or to resign his positions as an officer and a
        Director.
 
 -65-
 **COMPANIES
          AFFILIATED WITH OUR CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD,
          MALCOLM
          J. WRIGHT ARE PAID A SUBSTANTIAL AMOUNT OF OUR REVENUES IN CONNECTION WITH
          SERVICES RENDERED.**
 
 Certain
          companies controlled by our Chief Executive Officer and Chairman, Malcolm
          J.
          Wright, including American Leisure Real Estate Group, Inc. ("ALRG"), which
          entered into an exclusive Development Agreement with our subsidiary, Tierra
          del
          Sol Resort, Inc.
 
 **RISKS
        RELATED TO OUR TRAVEL DIVISION**
 
 **WE
        NEED APPROXIMATELY $2,500,000 OF CAPITAL THROUGH THE END OF THE 2007 FISCAL
        YEAR
        FOR OUR TRAVEL DIVISION OPERATIONS AND THE OPERATIONS OF HICKORY, WHICH MAY
        NOT
        BE AVAILABLE TO US ON FAVORABLE TERMS, IF AT ALL.**
 
 We
        anticipate needing to raise approximately $2,000,000 through the end of the
        2007
        fiscal year for the working capital needs for the Travel Division, as well
        as
        approximately $500,000 for the operations of Hickory, which includes Hickory's
        requirement to cover its seasonal losses, and TraveLeaders' requirements
        during
        its reorganization to adopt our business models. If we do not receive a
        sufficient amount of additional capital on acceptable terms, or at all, we
        may
        be unable to fully implement our business plan. We have identified sources
        of
        additional working capital, but we do not have any written commitments from
        third parties or from our officers, Directors or majority shareholders.
        Additional capital may not be available to us on favorable terms, if at all.
        If
        we cannot obtain a sufficient amount of additional capital, we will have
        to
        delay, curtail or scale back some or all of our travel operations, any of
        which
        would materially adversely affect our travel businesses. In addition, we
        may be
        required to delay the acquisition of additional
        travel agencies and restructure or refinance all or a portion of our outstanding
        debt.
  -66-
  
 **OUR
        COMMISSIONS AND FEES ON CONTRACTS WITH SUPPLIERS OF TRAVEL SERVICES FOR OUR
        TRAVEL DIVISION MAY BE REDUCED OR THESE CONTRACTS MAY BE CANCELLED AT WILL
        BY
        THE SUPPLIERS BASED ON OUR VOLUME OF BUSINESS, WHICH COULD HAVE A MATERIAL
        ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION OR RESULTS OF
        OPERATIONS.**
 
 Our
        suppliers of travel services including airline, hotel, cruise, tour and car
        rental suppliers may reduce the commissions and fees that we earn under contract
        with them based on the volume of business that we generate for them. These
        contracts generally renew annually and in some cases may be cancelled at
        will by
        the suppliers. If we cannot maintain our volume of business, our suppliers
        could
        contract with us on terms less favorable than the current terms of our contracts
        or the terms of their contracts with our competitors, exclude us from the
        products and services that they provide to our competitors, refuse to renew
        our
        contracts, or, in some cases, cancel their contracts with us at will. In
        addition, our suppliers may not continue to sell services and products through
        global distribution systems on terms satisfactory to us. If we are unable
        to
        maintain or expand our volume of business, our ability to offer travel service
        or lower-priced travel inventory could be significantly reduced. Any
        discontinuance or deterioration in the services provided by third parties,
        such
        as global distribution systems providers, could prevent our customers from
        accessing or purchasing particular travel services through us. If these
        suppliers were to cancel or refuse to renew our contracts or renew them on
        less
        favorable terms, it could have a material adverse effect on our business,
        financial condition or results of operations.
 
 **OUR
        SUPPLIERS OF TRAVEL SERVICES TO OUR TRAVEL DIVISION COULD REDUCE OR ELIMINATE
        OUR COMMISSION RATES ON BOOKINGS MADE THROUGH US BY PHONE AND OVER THE INTERNET,
        WHICH COULD REDUCE OUR REVENUES.**
 
 We
        receive commissions paid to us by our travel suppliers such as hotel chains
        and
        cruise companies for bookings that our customers make through us by phone
        and
        over the Internet. Consistent with industry practices, our suppliers are
        not
        obligated by regulation to pay any specified commission rates for bookings
        made
        through us or to pay commissions at all. Over the last several years, travel
        suppliers have substantially reduced commission rates and our travel suppliers
        have reduced our commission rates in certain instances. Future reductions,
        if
        any, in our commission rates that are not offset by lower operating costs
        or
        increased volume could have a material adverse effect on our business and
        results of operations.
 
  -67-
  **FAILURE
        TO MAINTAIN RELATIONSHIPS WITH TRADITIONAL TRAVEL AGENTS FOR OUR TRAVEL DIVISION
        COULD ADVERSELY AFFECT OUR BUSINESS AND RESULTS OF
        OPERATIONS.**
 
 Hickory
        has historically received, and expects to continue to receive, a significant
        portion of its revenue through relationships with traditional travel agents.
        Maintenance of good relationships with these travel agents depends in large
        part
        on continued offerings of travel services in demand, and good levels of service
        and availability. If Hickory does not maintain good relations with its travel
        agents, these agents could terminate their memberships and use of Hickory's
        products and services, which would have a material adverse effect on our
        business and results of operations.
 
 **DECLINES
        OR DISRUPTIONS IN THE TRAVEL INDUSTRY COULD SIGNIFICANTLY REDUCE OUR REVENUE
        FROM THE TRAVEL DIVISION.**
 
 Potential
        declines or disruptions in the travel industry may result from any one or
        more
        of the following factors:
 
 -
              price
                  escalation in the airline industry or other travel related industries;
 -
              airline
                  or other travel related strikes;
 -
              political
                  instability, war and hostilities;
 -
              long
                  term bad weather;
 -
              fuel
                  price escalation;
 -
              increased
                  occurrence of travel-related accidents; and/or
 -
              economic
                  downturns and recessions.
 
 **OUR
        TRAVEL REVENUES MAY FLUCTUATE FROM QUARTER TO QUARTER DUE TO SEVERAL FACTORS
        INCLUDING FACTORS THAT ARE OUTSIDE OF OUR CONTROL, AND IF BECAUSE OF THESE
        FACTORS, OUR REVENUES ARE BELOW OUR EXPECTATIONS IT WOULD LIKELY HAVE A MATERIAL
        ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS.**
 
 We
        may
        experience fluctuating revenues because of a variety of factors, many of
        which
        are outside of our control. These factors may include, but are not limited
        to,
        the timing of new contracts; reductions or other modifications in our clients'
        marketing and sales strategies; the timing of new product or service offerings;
        the expiration or termination of existing contracts or the reduction in existing
        programs; the timing of increased expenses incurred to obtain and support
        new
        business; changes in the revenue mix among our various service offerings;
        labor
        strikes and slowdowns at airlines or other travel businesses; and the seasonal
        pattern of TraveLeaders' business and the travel agency members of Hickory.
        In
        addition, we make decisions regarding staffing levels, investments and other
        operating expenditures based on our revenue forecasts. If our revenues are
        below
        expectations in any given quarter, our operating results for that quarter
        would
        likely be materially adversely affected.
  -68-
  **GLOBAL
        TRAVEL DISTRIBUTION SYSTEM CONTRACTS THAT WE MAY ENTER INTO GENERALLY PROVIDE
        FOR FINANCIAL PENALTIES FOR NOT ACHIEVING PERFORMANCE
        OBJECTIVES.**
 
 We
        are
        seeking to enter into multi-year global distribution system contracts. These
        contracts typically cover a five-year period and would require us to meet
        certain performance objectives. If we do not structure a global distribution
        system contract effectively, it may trigger financial penalties if the
        performance objectives are not met. In the event that we enter into global
        distribution system contracts and are unable to meet the performance objectives,
        it would have a material adverse effect on our business, liquidity and results
        of operations.
 
 **OUR
        CONTRACTS WITH CLIENTS OF THE TRAVELEADERS BUSINESS DO NOT GUARANTEE THAT
        WE
        WILL RECEIVE A MINIMUM LEVEL OF REVENUE, ARE NOT EXCLUSIVE, AND MAY BE
        TERMINATED ON RELATIVELY SHORT NOTICE.**
 
 Our
        contracts with clients of the TraveLeaders business do not ensure that we
        will
        generate a minimum level of revenue, and the profitability of each client
        may
        fluctuate, sometimes significantly, throughout the various stages of our
        sales
        cycles. Although we will seek to enter into multi-year contracts with our
        clients, our contracts generally enable the client to terminate the contract,
        or
        terminate or reduce customer interaction volumes, on relatively short notice.
        Although some contracts require the client to pay a contractually agreed
        amount
        in the event of early termination, there can be no assurance that we will
        be
        able to collect such amount or that such amount, if received, will sufficiently
        compensate us for our investment in any canceled sales campaign or for the
        revenues we may lose as a result of the early termination. If we do not generate
        minimum levels of revenue from our contracts or our clients terminate our
        multi-year contracts, it will have a material adverse effect on our business,
        results of operation and financial condition.
 
 **WE
        RECEIVE CONTRACTUALLY SET SERVICE FEES AND HAVE LIMITED ABILITY TO INCREASE
        OUR
        FEES TO MEET INCREASING COSTS.**
 
 Most
        of
        our travel contracts have set service fees that we may not increase if, for
        instance, certain costs or price indices increase. For the minority of our
        contracts that allow us to increase our service fees based upon increases
        in
        cost or price indices, these increases may not fully compensate us for increases
        in labor and other costs incurred in providing the services. If our costs
        increase and we cannot, in turn, increase our service fees or we have to
        decrease our service fees because we do not achieve defined performance
        objectives, it will have a material adverse effect on our business, results
        of
        operations and financial condition.
 
  -69-
  **THE
        TRAVEL INDUSTRY IS LABOR INTENSIVE AND INCREASES IN THE COSTS OF OUR EMPLOYEES
        COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, LIQUIDITY OR RESULTS
        OF
        OPERATIONS.**
 
 The
        travel industry is labor intensive and has experienced high personnel turnover.
        A significant increase in our personnel turnover rate could increase our
        recruiting and training costs and decrease operating effectiveness and
        productivity. If we obtain a significant number of new clients or implement
        a
        significant number of new, large-scale campaigns, we may need to recruit,
        hire
        and train qualified personnel at an accelerated rate, but we may be unable
        to do
        so. Because significant portions of our operating costs relate to labor costs,
        an increase in wages, costs of employee benefits, employment taxes or other
        costs associated with our employees could have a material adverse effect
        on our
        business, results of operations or financial condition.
 
 **OUR
        INDUSTRY IS SUBJECT TO INTENSE COMPETITION AND COMPETITIVE PRESSURES COULD
        ADVERSELY AFFECT OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL
        CONDITION.**
 
 We
        believe that the market in which we operate is fragmented and highly competitive
        and that competition may intensify in the future. We compete with small firms
        offering specific applications, divisions of large entities, large independent
        firms and the in-house operations of clients or potential clients. A number
        of
        competitors have or may develop greater capabilities and resources than us.
        Additional competitors with greater resources than us may enter our market.
        Competitive pressures from current or future competitors could cause our
        services to lose market acceptance or result in significant price erosion,
        all
        of which could have a material adverse effect upon our business, results
        of
        operations or financial condition.
 
 **WE
        RELY AND PLAN TO RELY ON ONLY A FEW MAJOR CLIENTS FOR OUR
        REVENUES.**
 
 We
        plan
        to focus our marketing efforts on developing long-term relationships with
        companies in our targeted travel and vacation resort industry. As a result,
        we
        will derive a substantial portion of our revenues from relatively few clients.
        There can be no assurances that we will not continue to be dependent on a
        few
        significant clients, that we will be able to retain those clients, that the
        volumes of profit margins will not be reduced or that we would be able to
        replace such clients or programs with similar clients or programs that would
        generate a comparable profit margin. Consequently, the loss of one or more
        of
        those clients could have a material adverse effect on our business, results
        of
        operations or financial condition.
 
  -70-
  **RISKS
        RELATING TO OUR STOCK AND**
 **GENERAL
        BUSINESS RISKS**
 
 **RE-PRICING
        WARRANTS AND ISSUING ADDITIONAL WARRANTS TO OBTAIN FINANCING HAS CAUSED AND
        MAY
        CAUSE ADDITIONAL DILUTION TO OUR EXISTING STOCKHOLDERS.**
 
 In
        the
        past, to obtain additional financing, we have modified the terms of our warrant
        agreements to lower the exercise price per share to $.001 from $5.00 with
        respect to warrants to purchase 100,000 shares of our common stock and to
        $.001
        from $2.96 with respect to warrants to purchase 1,350,000 shares of our common
        stock. Additionally, we have granted an additional 616,000 warrants to SIBL
        and
        affiliates to purchase shares of our common stock at $5.00 per share, 308,000
        warrants to SIBL and affiliates to purchase shares of our common stock at
        $0.001
        per share, 355,000 warrants to purchase shares of our common stock at $10
        per
        share and 235,000 warrants to purchase shares of our common stock at $20
        per
        share. Re-pricing of our warrants and issuing additional warrants has caused
        and
        may cause substantial additional dilution to our existing shareholders and
        shareholders owning shares of our common stock at the time of the exercise
        of
        such warrants described above, if exercised.
 
 **WARRANTS
        GRANTED TO STANFORD INTERNATIONAL BANK, LTD., IN CONNECTION WITH THE TIERRA
        DEL
        SOL LOAN AND LETTERS OF CREDIT CONTAIN ANTI-DILUTION FEATURES, WHICH COULD
        EFFECT THE VALUE OF OUR COMMON STOCK.**
 
 On
        December 29, 2005, Stanford International Bank, Ltd. ("SIBL") provided Tierra
        Del Sol with financial assistance to facilitate the establishment of the
        Land
        Loan and the Construction Loan. The financial assistance consisted of a loan
        to
        Tierra Del Sol of $2,100,000 (the "SIBL Tierra Del Sol Loan") however, as
        consideration for the purchase of our Antiguan call center and in connection
        with our entry into the Stock Purchase Agreement, described above, SIBL
        exchanged this note and $191,100 of accrued interest, and the establishment
        of
        letters of credit in favor of KeyBank in the amount of $4,000,000 and
        $2,000,000, respectively (the "Letters of Credit"), the fees for which amounting
        to $540,000 were also exchanged as part of the consideration for the purchase
        of
        the Antiguan call center. As additional consideration for this financial
        assistance, we granted SIBL and its affiliates warrants to purchase 308,000
        shares of our common stock at an exercise price of $5.00 per share and warrants
        to purchase 154,000 shares of our common stock at an exercise price of $0.001
        per share. Additionally, in January 2006, in connection with the SIBL Reedy
        Creek Loan, we granted SIBL and its affiliates warrants to purchase 308,000
        shares of our common stock at an exercise price of $5.00 per share and warrants
        to purchase 154,000 shares of the Company's common stock at an exercise price
        of
        $0.001 per share. Additionally, in June 2006, in connection with the sale
        of our
        call center operations and in August 2006, in connection with the Vici
        transaction (described herein), we granted SIBL 355,000 warrants to purchase
        shares of our common stock at $10 per share and 235,000 warrants to purchase
        shares of our common stock at $20 per share, respectively. The warrants contain
        anti-dilution provisions, including a provision
        which requires us to issue additional shares under the warrants if we issue
        or
        sell any common stock at less than $1.02 per share, or grant, issue or sell
        any
        options or warrants for shares of the Company's common stock to convert into
        shares of our common stock at less than $1.02 per share. If we do issue or
        sell
        common stock which causes a re-pricing of the warrants issued to SIBL, it
        would
        likely have an adverse effect on the trading value of our common stock and
        could
        cause substantial dilution to our then shareholders.
  -71-
  
 **THERE
        MAY NOT BE AN ACTIVE OR LIQUID TRADING MARKET FOR OUR COMMON STOCK, WHICH
        MAY
        LIMIT INVESTORS' ABILITY TO RESELL THEIR SHARES.**
 
 An
        active
        and liquid trading market for our common stock may not develop or, if developed,
        such a market may not be sustained. In addition, we cannot predict the price
        at
        which our common stock will trade. If there is not an active or liquid trading
        market for our common stock, investors in our common stock may have limited
        ability to resell their shares.
 
 **WE
        HAVE AND MAY CONTINUE TO ISSUE PREFERRED STOCK THAT HAS RIGHTS AND PREFERENCES
        OVER OUR COMMON STOCK.**
 
 Our
        Articles of Incorporation, as amended, authorize our Board of Directors to
        issue
        preferred stock, the relative rights, powers, preferences, limitations, and
        restrictions of which may be fixed or altered from time to time by the Board
        of
        Directors. Accordingly, the Board of Directors may, without approval from
        the
        shareholders of our common stock, issue preferred stock with dividend,
        liquidation, conversion, voting, or other rights that could adversely affect
        the
        voting power and other rights of the holders of our common stock. The preferred
        stock can be utilized, under certain circumstances, as a method of discouraging,
        delaying, or preventing a change in our ownership and management that
        shareholders might not consider to be in their best interests. We have issued
        various series of preferred stock, which have rights and preferences over
        our
        common stock including, but not limited to, cumulative dividends and preferences
        upon liquidation or dissolution.
 
 **WE
        DO NOT EXPECT TO PAY DIVIDENDS IN THE NEAR FUTURE, WHICH COULD MAKE AN
        INVESTMENT IN OUR COMMON STOCK LESS ATTRACTIVE FOR CERTAIN INVESTORS THAN
        OTHER
        SIMILAR COMPANIES’ STOCK WHICH PAY DIVIDENDS.**
 
 We
        have
        never declared or paid dividends on our common stock. We do not anticipate
        paying dividends on our common stock in the near future. Our ability to pay
        dividends is dependent upon, among other things, future earnings as well
        as our
        operating and financial condition, capital requirements, general business
        conditions and other pertinent factors. We intend to reinvest in our business
        operations any funds that could be used to pay dividends. Our common stock
        is
        junior in priority to our preferred stock with respect to dividends. Cumulative
        dividends on our issued and outstanding Series A preferred stock,
        Series B preferred stock, Series C preferred stock and Series E preferred
        stock
        accrue dividends at a rate of $1.20, $12.00, $4.00, and $4.00, respectively,
        per
        share per annum, payable in preference and priority to any payment of any
        cash
        dividend on our common stock. We have authorized Series F preferred stock
        with
        cumulative dividends that accrue at a rate of $1.00 per share per annum and
        are
        also payable in preference and priority to any payment of any cash dividend
        on
        our common stock. Dividends on our preferred stock accrue from the date on
        which
        we agree to issue such preferred shares and thereafter from day to day whether
        or not earned or declared and whether or not there exists profits, surplus
        or
        other funds legally available for the payment of dividends. We have never
        paid
        any cash dividends on our preferred stock. We will be required to pay accrued
        dividends on our preferred stock before we can pay any dividends on our common
        stock. Because we do not currently pay dividends on our preferred or common
        stock, an investment in our Company may be less attractive to certain investors
        who are looking to invest in company’s which pay regular dividends and as such,
        the trading value of our common stock may decline in value and/or be less
        than
        similar sized companies which do pay dividends on their preferred and common
        stock.
  -72-
  
 **BECAUSE
        OF THE SIGNIFICANT NUMBER OF SHARES OWNED BY OUR DIRECTORS, OFFICERS AND
        PRINCIPAL SHAREHOLDERS, OTHER SHAREHOLDERS MAY NOT BE ABLE TO SIGNIFICANTLY
        INFLUENCE OUR MANAGEMENT.**
 
 Our
        Directors, officers, and principal shareholders beneficially own a substantial
        portion of our outstanding common and preferred stock. Malcolm J. Wright,
        who
        serves as our Chief Executive Officer and Chairman, and Roger Maddock, one
        of
        our majority shareholders, own, directly and indirectly, approximately an
        aggregate of 72% of the voting power in us. As a result, these persons control
        our affairs and management, as well as all matters requiring shareholder
        approval, including the election and removal of members of the Board of
        Directors, transactions with Directors, officers or affiliated entities,
        the
        sale or merger of the Company or substantially all of our assets, and changes
        in
        dividend policy. This concentration of ownership and control could have the
        effect of delaying, deferring, or preventing a change in our ownership or
        management, even when a change would be in the best interest of other
        shareholders.
 
 **IF
        WE ARE LATE IN FILING OUR QUARTERLY OR ANNUAL REPORTS WITH THE SEC, WE MAY
        BE
        DE-LISTED FROM THE OVER-THE-COUNTER BULLETIN BOARD.**
 
 Pursuant
        to Over-The-Counter Bulletin Board ("OTCBB") rules relating to the timely
        filing
        of periodic reports with the SEC, any OTCBB issuer which fails to file a
        periodic report (Form 10-QSB's or 10-KSB's) by the due date of such report
        (not
        withstanding any extension granted by the filing of a Form 12b-25), three
        (3)
        times during any twenty-four (24) month period is automatically de-listed
        from
        the OTCBB. Such removed issuer would not be re-eligible to be listed on the
        OTCBB for a period of one-year, during which time any subsequent late filing
        would reset the one-year period of de-listing. If we are late in our filings
        three times in any twenty-four (24) month period and are de-listed from
        the
        OTCBB, our securities may become worthless and we may be forced to curtail
        or
        abandon our business plan.
  -73-
  
 **THERE
        IS CURRENTLY A LIMITED MARKET FOR OUR COMMON STOCK AND OUR STOCK PRICE IS
        VOLATILE.**
 
 There
        is
        currently a limited and volatile market for our common stock. Such market
        has
        been and will continue to be subject to wide fluctuations in response to
        several
        factors including, but not limited to:
 
 (1)
        actual or anticipated variations in our results of operations;
 (2)
        our
        ability or inability to generate new revenues;
 (3)
        the
        number of shares in our public float;
 (4)
        increased competition; and
 (5)
        conditions and trends in the travel services, vacation, and/or real estate
        and
        construction markets.
 
 Furthermore,
        because our common stock is traded on the NASD over the counter bulletin
        board,
        our stock price may be impacted by factors that are unrelated or
        disproportionate to our operating performance. These market fluctuations,
        as
        well as general economic, political and market conditions, such as recessions,
        interest rates or international currency fluctuations may adversely affect
        the
        market price of our common stock. Additionally, at present, we have a limited
        number of shares in our public float, and as a result, there could be extreme
        fluctuations in the price of our common stock. Further, due to the limited
        volume of our shares which trade and our limited public float, we believe
        that
        our stock prices (bid, asked and closing prices) are entirely arbitrary,
        are not
        related to the actual value of the Company, and do not reflect the actual
        value
        of our common stock (and in fact reflect a value that is much higher than
        the
        actual value of our common stock). Shareholders and potential investors in
        our
        common stock should exercise caution before making an investment in the Company,
        and should not rely on the publicly quoted or traded stock prices in determining
        our common stock value, but should instead determine value of our common
        stock
        based on the information contained in the Company's public reports, industry
        information, and those business valuation methods commonly used to value
        private
        companies.
 
  -74-
  **ITEM
        7. FINANCIAL STATEMENTS**


INDEPENDENT
        REGISTERED PUBLIC ACCOUNTING FIRM
 
 To
        the
        Board of Directors
 American
        Leisure Holdings, Inc. and Subsidiaries
 Orlando,
        Florida
 
 We
        have
        audited the accompanying consolidated balance sheets of American Leisure
        Holdings, Inc. and Subsidiaries (the "Company") as of December 31, 2006 and
        2005, and the related consolidated statements of operations, stockholders’
equity and cash flows for each of the two years then ended. These financial
        statements are the responsibility of the Company’s management. Our
        responsibility is to express an opinion on these financial statements based
        on
        our audits.
 
 We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. The Company is not required
        to
        have, nor were we engaged to perform, an audit of its internal control over
        financial reporting. Our audits included consideration of internal control
        over
        financial reporting as a basis for designing audit procedures that are
        appropriate in the circumstances, but not for the purpose of expressing an
        opinion on the effectiveness of the Company’s internal control over financial
        reporting. Accordingly, we express no such opinion. An audit also includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements, assessing the accounting principles used and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audits provide a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the consolidated financial position of American
        Leisure Holdings, Inc. and Subsidiaries as of December 31, 2006 and 2005,
        and
        the results of its operations and its cash flows for the years ended December
        31, 2006 and 2005, in conformity with accounting principles generally accepted
        in the United States of America.
 
 As
        discussed in Note 3 to the financial statements, the Company's recurring
        losses
        from operations and the need to raise additional financing in order to satisfy
        its vendors and other creditors and execute its Business Plan raise substantial
        doubt about its ability to continue as a going concern. Management's plans
        as to
        these matters are also described in Note 3. The 2006 consolidated financial
        statements do not include any adjustments that might result from the outcome
        of
        this uncertainty.
 
 LBB
&
        Associates Ltd., LLP
 Houston,
        Texas
 March
        27,
        2007
 
 
 -75-


**AMERICAN
                LEISURE HOLDINGS, INC. AND SUBSIDIARIES****CONSOLIDATED
                BALANCE SHEETS****As
                of December 31, 2006 and 2005****2006**
            
            
            **2005****As
                restated****ASSETS**CURRENT
                ASSETS:Cash
            
            $
            1,110,000
            
            $
            280,862Cash
                - restricted
            
            
            1,030,921
            
            
            2,100,000Accounts
                receivable, net
            
            
            3,148,730
            
            
            2,084,095Other
                receivable
            
            
            217,233
            
            
            6,592,357Prepaid
                expenses and other
            
            
            1,775,614
            
            
            99,418Total
                Current Assets
            
            
            7,282,498
            
            
            11,156,732PROPERTY
                AND EQUIPMENT, NET
            
            
            9,170,540
            
            
            12,574,334LAND
                HELD FOR DEVELOPMENT
            
            
            71,930,263
            
            
            36,146,169OTHER
                ASSETSCash
                - restricted
            
            
            10,364,681
            
            
            11,075,354Prepaid
                sales commissions
            
            
            9,804,036
            
            
            7,770,949Prepaid
                sales commissions - affiliated entity
            
            
            3,443,851
            
            
            3,516,209Investment-senior
                notes
            
            
            -
            
            
            5,170,000Goodwill,
                net
            
            
            4,559,134
            
            
            5,925,437Trademark,
                net
            
            
            950,000
            
            
            975,000Other
            
            
            2,638,475
            
            
            5,156,193Total
                Other Assets
            
            
            31,760,177
            
            
            39,589,142TOTAL
                ASSETS
            
            $
            120,143,478
            
            $
            99,466,377**LIABILITIES
                AND STOCKHOLDERS' EQUITY**CURRENT
                LIABILITIES:Current
                maturities of long-term debt and notes payable
            
            $
            35,681,931
            
            $
            3,652,235Current
                maturities of notes payable-related parties
            
            
            7,480,395
            
            
            1,650,605Accounts
                payable and accrued expenses
            
            
            4,518,175
            
            
            3,790,528Accrued
                expenses - officers
            
            
            2,795,000
            
            
            3,393,500Other
            
            
            6,156,256
            
            
            285,443Total
                Current Liabilities
            
            
            56,631,757
            
            
            12,772,311Long-term
                debt and notes payable, net of current maturities
            
            
            21,583,106
            
            
            39,587,421Notes
                payable - related parties, net of current maturities
            
            
            3,353,252
            
            
            2,195,969Put
                liability
            
            
            985,000
            
            
            985,000Deposits
                on unit pre-sales
            
            
            37,465,685
            
            
            37,666,368Total
                Liabilities
            
            
            120,018,800
            
            
            93,207,069Commitments
                and contingenciesSTOCKHOLDERS'
                EQUITY:Preferred
                stock; 1,000,000 shares authorized; $.001 par value;1,000,000
                Series "A" shares issued and outstanding atDecember
                31, 2006 and 2005
            
            
            10,000
            
            
            10,000Preferred
                stock; 100,000 shares authorized; $.01 par value;2,825
                Series "B" shares issued and outstanding atDecember
                31, 2006 and 2005
            
            
            28
            
            
            28Preferred
                stock, 28,000 shares authorized; $.01 par value;27,189
                Series "C" shares issued and outstanding atDecember
                31, 2006 and 2005
            
            
            272
            
            
            272Preferred
                stock; 50,000 shares authorized; $.001 par value;32,249
                and 25,926 Series "E" shares issued and outstanding atDecember
                31, 2006 and 2005
            
            
            32
            
            
            25Preferred
                stock; 150,000 shares authorized; $.01 par value;0
                Series "F" shares issued and outstanding atDecember
                31, 2006 and 2005
            
            
            -
            
            
            -Common
                stock, $.001 par value; 100,000,000 shares authorized;10,877,974
                and 10,334,974 shares issued and outstanding atDecember
                31, 2006 and 2005
            
            
            10,878
            
            
            10,335Additional
                paid-in capital
            
            
            21,710,830
            
            
            19,697,114Accumulated
                deficit
            
            
            (21,607,362
            )
            
            (13,458,466
            )Total
                Stockholders' Equity
            
            
            124,678
            
            
            6,259,308TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY
            
            $
            120,143,478
            
            $
            99,466,377*See
                accompanying notes to financial statements.*






-76-


**AMERICAN
                  LEISURE HOLDINGS, INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF OPERATIONS****Years
                  Ended December 31, 2006 and 2005****2006**
              
              **2005**As
                  restatedRevenuesService
                  revenues
              
              $
              14,590,886
              
              $
              7,758,081Undeveloped
                  land sales
              
              
              13,129,247
              
              
              12,020,000Total
                  revenue
              
              
              27,720,133
              
              
              19,778,081CostsCost
                  of service revenues
              
              
              (12,647,116
              )
              
              (5,513,367
              )Cost
                  of undeveloped land sales
              
              
              (9,796,634
              )
              
              (8,122,562
              )Total
                  costs
              
              
              (22,443,750
              )
              
              (13,635,929
              )Gross
                  margin
              
              
              5,276,383
              
              
              6,142,152Operating
                  expenses:Depreciation
                  and amortization
              
              
              (784,155
              )
              
              (827,237
              )General
                  and administrative expenses
              
              
              (3,609,487
              )
              
              (5,028,139
              )Write
                  off of advances and receivables from Aroundthe
                  World Travel, Inc.
              
              
              (6,588,579
              )
              
              -Total
                  operating expenses
              
              
              (10,982,221
              )
              
              (5,855,376
              )Income
                  (loss) from continuing operations
              
              
              (5,705,838
              )
              
              286,776Interest
                  expense
              
              
              (5,183,620
              )
              
              (3,317,033
              )Loss
                  from continuing operations before income taxes
              
              
              (10,889,458
              )
              
              (3,030,257
              )Provision
                  for income taxes
              
              
              (4,376
              )
              
              (5,004
              )Net
                  loss from continuing operations
              
              
              (10,893,834
              )
              
              (3,035,261
              )Gain
                  (loss) from discontinued operations (including gainon
                  disposal of business of $2,998,082 and $0)
              
              
              2,744,938
              
              
              (1,050,564
              )Net
                  loss
              
              $
              (8,148,896
              )
              $
              (4,085,825
              )Net
                  loss per share:Basic
                  and diluted
              
              $
              (0.76
              )
              $
              (0.41
              )Weighted
                  average shares outstandingBasic
                  and diluted
              
              
              10,725,227
              
              
              10,070,467*See
                  accompanying notes to financial statements.*


-77-




**AMERICAN
                  LEISURE HOLDINGS, INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF STOCKHOLDERS' EQUITY****Years
                  Ended December 31,**Additional
              
              
              
              TotalPreferred
                  Stock
              
              Capital
                  Stock
              
              Paid-in
              
              Accumulated
              
              Stockholders'Shares
              
              Amount
              
              Shares
              
              Amount
              
              Capital
              
              Deficit
              
              EquityBalance-December
                  31, 2004
              
              
              1,056,051
              
              $
              10,343
              
              
              9,977,974
              
              $
              9,978
              
              $
              15,636,322
              
              $
              (9,372,641
              )
              $
              6,284,002Issuance
                  of Series F preferred stockin
                  connection with the acquisition of certainassets
                  and assumumption of certain liabilitiesof
                  Around the World Travel
              
              
              (1,936
              )
              
              (19
              )
              
              -
              
              
              -
              
              
              (193,629
              )
              
              -
              
              
              (193,648
              )Issuance
                  of common stock in connection with theexercise
                  of warrants by an affiliate
              
              
              -
              
              
              -
              
              
              160,000
              
              
              160
              
              
              -
              
              
              -
              
              
              160Purchase
                  of Tierra Del Sol, Inc minority interest
              
              
              -
              
              
              -
              
              
              197,000
              
              
              197
              
              
              416,726
              
              
              -
              
              
              416,923Issuance
                  of warrants in connection with debt
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              3,837,696
              
              
              -
              
              
              3,837,696Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (4,085,825
              )
              
              (4,085,825
              )Balance-December
                  31, 2005 (As restated)
              
              
              1,054,115
              
              
              10,324
              
              
              10,334,974
              
              
              10,335
              
              
              19,697,115
              
              
              (13,458,466
              )
              
              6,259,308Issuance
                  of common stock in connection with theexercise
                  of warrants
              
              
              -
              
              
              -
              
              
              308,000
              
              
              308
              
              
              -
              
              
              -
              
              
              308Issuance
                  of warrants as compensation
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              190,809
              
              
              -
              
              
              190,809Issuance
                  of warrants in connection with debt
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,073,146
              
              
              -
              
              
              1,073,146Issuance
                  of common stock and warrants inconnection
                  with purchase of note receivable
              
              
              -
              
              
              -
              
              
              235,000
              
              
              235
              
              
              749,765
              
              
              -
              
              
              750,000Issuance
                  of Series E preferred stock in connection with thepurchase
                  of certain assets of Around the World Travel, Inc.
              
              
              8,148
              
              
              8
              
              
              -
              
              
              -
              
              
              (5
              )
              
              -
              
              
              3Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (8,148,896
              )
              
              (8,148,896
              )Balance-December
                  31, 2006
              
              
              1,062,263
              
              $
              10,332
              
              
              10,877,974
              
              $
              10,878
              
              $
              21,710,830
              
              $
              (21,607,362
              )
              $
              124,678*See
                  accompanying notes to financial statements.*






-78-




**AMERICAN
                  LEISURE HOLDINGS, INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS****Years
                  Ended December 31, 2006 and 2005****2006**
              
              **2005****As
                  restated**CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (8,148,896
              )
              $
              (4,085,825
              )Adjustments
                  to reconcile net loss to net cash provided (used) byoperating
                  activities:Depreciation
                  and amortization
              
              
              1,434,519
              
              
              1,680,336Write-off
                  investments in marketable securities
              
              
              170,000
              
              
              -Non-cash
                  interest expense
              
              
              2,102,276
              
              
              1,887,623Non-cash
                  preferred stock and warrant compensation
              
              
              190,812
              
              
              -Bad
                  debt expense
              
              
              73,910
              
              
              -Gain
                  on sale of subsidiary
              
              
              (2,988,082
              )
              
              -Write-off
                  of advances and receivables from Around the World Travel, Inc.
              
              
              6,588,579
              
              
              -Changes
                  in assets and liabilities:(Increase)
                  decrease in restricted cash
              
              
              710,673
              
              
              (11,075,354
              )(Increase)
                  decrease in accounts receivable and other receivables
              
              
              (1,138,545
              )
              
              1,455,292Increase
                  in prepaid expenses and other
              
              
              (56,780
              )
              
              (7,564,683
              )Increase
                  in prepaid sales commissions
              
              
              (1,960,729
              )
              
              (2,655,267
              )Increase
                  in land held for development
              
              
              (35,784,094
              )
              
              (7,782,776
              )Increase
                  in notes payable
              
              
              -
              
              
              71,823Increase
                  (decrease) in deposits on unit pre-sales
              
              
              (200,683
              )
              
              20,997,022Increase
                  in accounts payable and accrued expenses
              
              
              8,313,134
              
              
              6,468,380Net
                  cash provided (used) by operating activities
              
              
              (30,693,906
              )
              
              (603,429
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Acquisition
                  of fixed assets
              
              
              (275,100
              )
              
              (175,689
              )Acquisition
                  of AWT assets
              
              
              -
              
              
              (3,185,547
              )Advances
                  to Caribbean Media Group
              
              
              -
              
              
              (141,400
              )Acquisition
                  of SBR assets
              
              
              -
              
              
              55,807Investment
                  in Reedy Creek
              
              
              -
              
              
              (901,705
              )(Increase)
                  decrease in restricted cash
              
              
              1,069,079
              
              
              (2,100,000
              )Net
                  cash provided (used) in investing activities
              
              
              793,979
              
              
              (6,448,534
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Payment
                  of debt
              
              
              (2,556,778
              )
              
              (7,308,532
              )Proceeds
                  from notes payable
              
              
              33,285,535
              
              
              13,077,537Proceeds
                  from exercise of warrants
              
              
              308
              
              
              -Payments
                  of notes payable - related parties
              
              
              -
              
              
              (943,947
              )Proceeds
                  of notes payable - related parties
              
              
              -
              
              
              241,725Net
                  cash provided (used) by financing activities
              
              
              30,729,065
              
              
              5,066,783Net
                  increase (decrease) in cash
              
              
              829,138
              
              
              (1,985,180
              )CASH
                  AT BEGINNING PERIOD
              
              
              280,862
              
              
              2,266,042CASH
                  AT END OF PERIOD
              
              $
              1,110,000
              
              $
              280,862SUPPLEMENTAL
                  CASH FLOW INFORMATION:Cash
                  paid for interest
              
              $
              489,482
              
              $
              1,010,308Cash
                  paid for income taxes
              
              $
              -
              
              $
              -SUPPLEMENTAL
                  DISCLOSURE OF NON CASH TRANSACTIONS:Purchase
                  of promissory note for equity
              
              $
              750,000
              
              $
              -Stock
                  and warrants issued in connection with acquisition
              
              $
              -
              
              $
              416,923Issuance
                  of warrants to acquire common stock fordebt
                  issuance costs
              
              $
              1,073,146
              
              $
              3,837,696Purchase
                  of minority interest of TDS in exchange fornotes
                  payable of $2,062,206, put liabilityof
                  $985,000, common stock valued at $183,210and
                  warrants valued at $233,713
              
              $
              -
              
              $
              3,464,129*See
                  accompanying notes to financial statements.*






-79-





AMERICAN
      LEISURE HOLDINGS, INC. AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS





**NOTE
      1 - THE COMPANY**





American
      Leisure Holdings, Inc., a Nevada corporation, was incorporated in May 2002.
      American Leisure, through its subsidiaries, is involved in the development
      of
      vacation real estate in Orlando, Florida and the supplying of products related
      to the travel and leisure business throughout the United States of America.
      The
      consolidated entity is hereinafter referred to as "American Leisure", “the
      Company” or “AMLH".





The
      Company operates in three segments, real estate, where we are developing
      vacation real estate in Orlando Florida; travel, where we provide travel related
      services and products (ticketing, reservations, travel packages, corporate
      meetings and events etc.) and hospitality, where we operate a hotel in South
      Beach Florida. We had operated a call center through June 2006 when it was
      sold.





**Principles
      of Consolidation**





In
      determining whether American Leisure has a direct or indirect controlling
      financial interest in affiliates, consideration is given to various factors,
      including common stock ownership, possession of securities convertible into
      common stock and the related conversion terms, voting rights, representation
      on
      the board of directors, rights or obligations to purchase additional ownership
      interests as well as the existence of contracts or agreements that provide
      control features. When American Leisure determines that its ownership, direct
      or
      indirect, exceeds fifty percent of the outstanding voting shares of an
      affiliate, American Leisure will consolidate the affiliate. Furthermore, when
      American Leisure determines that it has the ability to control the financial
      or
      operating policies through its voting rights, board representation or other
      similar rights, American Leisure will consolidate the affiliate.





For
      those
      affiliates that American Leisure does not have the ability to control the
      operating and financial policies thereof, the investments are accounted for
      under the equity or cost method, as appropriate. American Leisure applies the
      equity method of accounting when it has the ability to exercise significant
      influence over operating and financial policies of an investee in accordance
      with APB Opinion No. 18, "The Equity Method of Accounting for Investments in
      Common Stock." In determining whether American Leisure has the ability to
      exercise significant influence, consideration is given to various factors
      including the nature and significance of the investment, the capitalization
      structure of the investee, representation on the board of directors, voting
      rights, veto rights and other protective and participating rights held by
      investors and contractual arrangements.





American
      Leisure applies accounting principles generally accepted in the United States
      of
      America and interpretations when evaluating whether it should consolidate
      entities. Typically, if American Leisure does not retain both control of the
      assets transferred to the entities, as well as the risks and rewards of those
      assets, American Leisure will not consolidate such entities. In determining
      whether the securitization entity should be consolidated, American Leisure
      considers whether the entity is a qualifying special purpose entity, as defined
      by Statement of Financial Accounting Standards ("SFAS") No. 140, "Accounting
      for
      Transfers and Servicing of Financial Assets and Extinguishments of Liabilities-a
      replacement of FASB Statement No. 125."





-80-








The
      consolidated financial statements include the accounts of American Leisure
      Holdings, Inc. and its subsidiaries owned and/or controlled by American Leisure
      as follows:




Company
            
            PercentageAmerican
                Leisure Corporation, Inc. (ALC)
            
            100.00%Florida
                Golf Group, Inc.(FGG)
            
            100.00%American
                Leisure Equities Corporation (ALEC)
            
            100.00%American
                Leisure Homes, Inc. (ALH)
            
            100.00%I-Drive
                Limos, Inc. (ID)
            
            100.00%Orlando
                Holidays, Inc. (OH)
            
            100.00%Welcome
                to Orlando, Inc. (WTO)
            
            100.00%American
                Leisure, Inc. (ALI)
            
            100.00%Pool
                Homes Managers, Inc. (PHM)
            
            100.00%Advantage
                Professional Management Group, Inc. (APMG)
            
            100.00%Leisureshare
                International Ltd (LIL)
            
            100.00%Leisureshare
                International Espanola S.A. (LIESA)
            
            100.00%American
                Travel & Marketing Group, Inc. (ATMG)
            
            81.00%American
                Leisure Marketing and Technology, Inc.
            
            100.00%Tierra
                Del Sol, Inc. (TDS)
            
            100.00%Hickory
                Travel Systems, Inc. (Hickory)
            
            50.83%American
                Travel Club, Inc.
            
            100.00%American
                Access Telecommunications Corporation
            
            100.00%American
                Switching Technologies, Inc.
            
            100.00%Affinity
                Travel Club, Inc.
            
            100.00%Club
                Turistico Latinoamericano, Inc.
            
            100.00%Affinity
                Travel, Inc.
            
            100.00%Pool
                Homes, Inc.
            
            100.00%American
                Sterling Corp.
            
            100.00%American
                Sterling Motorcoaches, Inc.
            
            100.00%





-81-








Comtech
                Fibernet, Inc.
            
            100.00%TDS
                Amenities, Inc.
            
            100.00%TDS
                Clubhouse, Inc
            
            100.00%Costa
                Blanca Real Estate, Inc.
            
            100.00%Ameritel,
                Inc.
            
            100.00%American
                Leisure Travel Group, Inc.
            
            100.00%Luxshare,
                Inc.
            
            100.00%AAH
                Kissimmee LLC
            
            100.00%Castlechart
                Ltd.
            
            100.00%Reedy
                Creek Acquisition Corp.
            
            100.00%Wright
                Resorts Villas & Hotels
            
            100.00%South
                Beach Resorts, LLC
            
            100.00%





Minority
      interests are reflected in the consolidated statements of operations to the
      extent income or losses are allocated to the minority interest shareholders.
      Losses in excess of the minority shareholders’ basis are not allocated to the
      minority interest shareholders.





All
      significant inter-company accounts and transactions have been eliminated in
      the
      consolidation.





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





This
      summary of significant accounting policies of American Leisure is presented
      to
      assist in understanding American Leisure's financial statements. The financial
      statements and notes are representations of American Leisure's management,
      which
      is responsible for their integrity and objectivity. These accounting policies
      conform to generally accepted accounting principles and have been consistently
      applied in the preparation of the financial statements.





**Use
      of Estimates**





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the reporting period.
      Actual results could materially differ from those estimates.





**Concentration
      of Risk**





American
      Leisure places its cash and temporary cash investments with established
      financial institutions. At various times during the year, the Company maintained
      cash balances in excess of FDIC insurable limits. Management feels this risk
      is
      mitigated due to the longstanding
      reputation of these banks. No losses have been incurred by the Company related
      to this risk.





-82-








In
      the
      normal course of business, the Company extends unsecured credit to the majority
      of its travel business customers. Management periodically reviews its
      outstanding accounts receivable and establishes an allowance for doubtful
      accounts based on historical collection trends and other criteria.





**Fair
      Value of Financial Instruments**





The
      Company's short-term financial instruments consist of cash, restricted cash,
      accounts receivable, accounts payable, accrued expenses and debt. The carrying
      amounts of these financial instruments approximate fair value because of their
      short-term maturities. Financial instruments that potentially subject the
      Company to a concentration of credit risk consist principally of cash and
      accounts receivable.





The
      Company does not hold or issue financial instruments for trading purposes nor
      does it hold or issue interest rate or leveraged derivative financial
      instruments.





**Equity
      Investments**





AMLH
      holds various minority equity investments in companies that meet AMLH’s
      investment criteria. AMLH applies the equity method of accounting for minority
      investments when AMLH has the ability to exert significant influence over the
      operating and financial policies of an investment. In the absence of such
      ability, AMLH accounts for these minority investments under the cost method.
      Certain investments carry restrictions on immediate disposition. Declines in
      value that are judged to be other than temporary are reported in other income
      and expense.





**Long-Lived
      Assets**





Long-lived
      assets are stated at cost. Maintenance and repairs are expensed as incurred.
      Depreciation is determined using the straight-line method over the estimated
      useful lives of the assets, which is three to seven years.





Where
      an
      impairment of a property's value is determined to be other than temporary,
      an
      allowance for the estimated potential loss is established to record the property
      at its net realizable value.





When
      items of land, building or equipment are sold or retired, the related cost
      and
      accumulated depreciation are removed from the accounts and any gain or loss
      is
      included in the results of operations. The Company does not have any long-lived
      tangible assets that are considered to be impaired as of December 31, 2006
      and
      2005.





**Land
      Held for development**





Land
      held
      for development includes the initial cost of acquisition of the land and all
      subsequent capitalized construction and development costs.





Construction
      and development costs include all expenditures incurred in readying certain
      construction and development related assets of the Company for their intended
      use. These expenditures consist of direct costs such as land, financing costs,
      interest, legal fees, consulting fees, surveying, engineering, architects,
      contractors, real estate taxes, permits, licenses, fees, insurance, photos,
      copies, printing, general and administrative, and sales and marketing costs.





-83-





Interest
      costs are capitalized during the capitalization period, which commences when
      i)
      expenditures for the asset have been made, ii) activities that are necessary
      to
      get the asset ready for its intended use are in progress, and iii) interest
      cost
      is being incurred, and continues as long as these three conditions are present.
      The amount capitalized in an accounting period shall be determined by applying
      an interest rate(s) (the “capitalization rate") to the average amount of
      accumulated expenditures for the asset during the period. The capitalization
      rates are based on the rates applicable to borrowings, both directly and
      indirectly associated with the subject asset, outstanding during the
      period.





For
      the
      periods ending December 31, 2006 and 2005, interest capitalized totaled
      $2,110,015 and $2,198,853, respectively. As of December 31, 2006 and 2005,
      $187,271 and $1,240,403, respectively, of interest expense was accrued and
      unpaid.





All
      capitalized construction costs are subject to write-down inasmuch as the
      Company’s construction and development assets are carried at the lower of cost
      or net realizable value.





The
      Company defers costs directly relating to the acquisition of new properties
      and
      resort businesses that, in management's judgment, have a high probability of
      closing. If the acquisition is abandoned, any deferred costs are expensed
      immediately. These costs are capitalized as land held for development upon
      closing





**Intangibles
      with Finite Lives**





In
      June
      2001, the Financial Accounting Standards Board issued "Statement of Financial
      Accounting Standards, ("FAS") No. 142 "Goodwill and Other Intangible Assets",
      effective for fiscal years beginning after December 15, 2001. FAS No. 142
      addressed the recognition and measurement of intangible assets acquired
      individually or with a group of other assets and the recognition and measurement
      of goodwill and other intangible assets subsequent to their acquisition. Under
      these rules, goodwill and intangible assets with indefinite lives are no longer
      amortized, but are subject to annual or more frequent impairment testing. Other
      intangible assets deemed to have a finite life continue to be amortized over
      their useful lives.





The
      Company amortizes the following intangible assets with finite lives using
      straight-line method.





Trademarks
            40
                YearsCustomer
                List
            5
                Years





These
      intangible assets with finite lives are reviewed for potential impairment
      whenever events or circumstances indicate that their carrying amounts may not
      be
      recoverable. During 2006 and 2005 management determined that no impairment
      adjustment related to these intangibles was necessary.





**Income
      Taxes**





American
      Leisure accounts for income taxes using the asset and liability method. The
      differences between the financial statement and tax basis of assets and
      liabilities are determined annually. Deferred income tax assets and liabilities
      are computed for those differences that have future tax consequences using
      the
      currently enacted tax laws and rates that apply to the period in which they
      are
      expected to affect taxable income. Valuation allowances are established, if
      necessary, to reduce deferred tax asset accounts to the amounts that will more
      likely than not be realized. Income tax expense is the current tax payable
      or
      refundable for the period, plus or minus the net change in the deferred tax
      asset and liability accounts.





-84-


**Goodwill**





American
      Leisure adopted the provisions of SFAS No. 142, "Goodwill and Other Intangible
      Assets". This statement requires that goodwill and intangible assets deemed
      to
      have indefinite lives not be amortized, but rather be tested for impairment
      on
      an annual basis. Finite-lived intangible assets are required to be amortized
      over their useful lives and are subject to impairment evaluation under the
      provisions of SFAS No. 144. The intangible assets relate to 1) the acquisition
      goodwill for the controlling interest of HTS, and 2) the net assets purchased
      from Around The World Travel, Inc. pursuant to the Asset Purchase Agreement
      between Around The World Travel, Inc. and American Leisure Equity Corporation.





American
      Leisure reduced goodwill that resulted from the purchase of assets from Around
      the World Travel, Inc. in 2006 for the release of an assumed liability of
      $1,366,303.





**Cash
      and Cash Equivalents and Restricted Cash**





American
      Leisure considers all highly liquid investments with original maturities of
      three months or less to be cash equivalents.





The
      restricted cash classified as long-term represents funds held in escrow for
      deposits received for condo and townhome sales for the units at Tierra Del
      Sol
      Resorts. The escrowed funds will be applied to the purchase price by the buyer
      at closing. Restricted cash classified as current are the escrowed funds that
      are the equity requirements from KeyBank of $1.03 million as part of the credit
      facilities. The funds are not readily available to the Company and can only
      be
      disbursed with the consent of KeyBank to be used for the construction of Tierra
      Del Sol Resorts.





**Accounts
      Receivable, Net**





At
      December 31, 2006 and 2005, accounts receivable, net consisted of the
      following:


2006
            
            2005Trade
                receivables
            
            $
            3,064,849
            
            $
            2,184,936Miscellaneous
                receivables
            
            
            201,090
            
            
            13,0003,265,939
            
            
            2,197,936Less:
                reserve for doubtful accounts
            
            
            117,209
            
            
            113,841$
            3,148,730
            
            $
            2,084,095





**Allowance
      for Doubtful Accounts**





Our
      reported balance of accounts receivable, net of the allowance for doubtful
      accounts, represents our estimate of the amount that ultimately will be realized
      in cash. We review the adequacy of our allowance for doubtful accounts on an
      ongoing basis, using historical payment trends and the age of the receivables
      and knowledge of our individual customers. When our analyses indicate, we
      increase or decrease our allowance accordingly. However, if the financial
      condition of our customers were to deteriorate, additional allowances may be
      required.





-85-





****** **Shares
      for Services and Other Assets**





The
      Company adopted the provisions of SFAS No. 123(R) in the first quarter of 2006
      which requires all share-based payments to employees and directors to be
      recognized in the financial statements based on their fair values, using
      prescribed option-pricing models. The Company used the modified prospective
      method of adoption and continues to use the Black-Scholes option pricing model
      to value share-based payments. The modified prospective method requires
      companies to recognize compensation cost beginning with the effective date
      of
      adoption based on (a) the requirements for all share-based payments granted
      after the effective date of adoption and (b) the requirements for all unvested
      awards granted to employees prior to the effective date of
      adoption.





Prior
      to
      2006 American Leisure accounted for non-cash stock-based compensation issued
      to
      employees in accordance with the provisions of Accounting Principles Board
      ("APB") Opinion No. 25, “Accounting for Stock Issued to Employees,” and complies
      with the disclosure provisions of SFAS No. 123, “Accounting for Stock-Based
      Compensation,” issued by the Financial Accounting Standards Board and EITF No.
      96-18, “Accounting for Equity (deficit) Investments That Are Issued to
      Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services.”
Under APB No. 25, compensation cost was recognized over the vesting period
      based
      on the difference, if any, on the date of grant between the fair value of
      American Leisure's stock and the amount an employee must pay to acquire the
      stock. Common stock issued to non-employees and consultants was based upon
      the
      value of the services received or the quoted market price, whichever value
      is
      more readily determinable. Accordingly, no compensation expense was recognized
      for grants of options to employees with the exercise prices at or above market
      price of the Company's common stock on the measurement dates.




Had
      compensation expense been determined based on the estimated fair value at the
      measurement dates of awards under those plans consistent with the method
      prescribed by SFAS No. 123, the Company's December 31, 2005, net loss would
      have
      been changed to the pro forma amounts indicated below.




2005Net
                loss as reported
            
            $
            (4,085,825
            )Less:
                stock based compensation under intrinsic
            
            
            -Stock
                based compensation under fair value method
            
            
            (129,573
            )Pro
                forma
            
            $
            (4,215,398
            )Net
                loss per share - basic and dilutedAs
                reported
            
            $
            (0.41
            )Pro
                forma
            
            $
            (0.42
            )





The
      fair
      value of each option grant was estimated on the date of grant using the
      Black-Scholes option pricing model with the following assumptions: Risk free
      rate of 1.5% for 2006 and 2005; volatility of 131% to 146% for 2006 and 196%
      for
      2005 with no assumed dividend yield; and expected lives of five years for 2006
      and 2005.










-86-





**Revenue
      Recognition**




Revenues
      from Hickory are recognized as earned, which is primarily at the time of
      delivery of the related service, publication or promotional material. Fees
      from
      advertisers to be included in the hotel book and web service operated by Hickory
      are recognized upon the annual publication of the book or when performance
      levels are achieved. Revenue from the delivery of services is recognized upon
      performance.





One
      of
      our sources of revenue is associated with access to the travel portals that
      provide a database of discounted travel services. Annual renewals occur at
      various times during the year. Costs and revenue related to portal usage charges
      are incurred in the month prior to billing. Customers are charged additional
      fees for hard copies of the site access information. Occasionally these items
      are printed and shipped at a later date, at which time both revenue and expenses
      are recognized.





Revenues
      and expenses from our TraveLeaders business, for the period from January 1,
      2005
      through July 31, 2006 (the “Period”) are not included in our results as the same
      are borne by Around The World Travel, Inc., the former third party manager
      of
      the business. We recognized as revenue only the net operating results of
      TraveLeaders operations after deducting the management fee paid to Around the
      World Travel of 10% of net earnings before interest expense, taxes, depreciation
      and amortization during the period.





Thereafter,
      gross revenues are recognized by our wholly owned subsidiary ALEC. Specifically,
      commission revenues for cruises, hotel and car rentals are recognized upon
      completion of travel, hotel stay or car rental. Commission fees for ticketing
      are recognized at the time of departure.





We
      have
      entered into approximately 606 pre-construction sales contracts for units in
      the
      Sonesta Orlando Resort at Tierra Del Sol. We will recognize revenue when title
      is transferred to the buyer.





Revenues
      also include undeveloped land sales, which are recognized at closing when title
      has passed.





**Resort
      Unit Pre-sales**





American
      Leisure receives deposits between 5% and 20% of the sales price and these
      amounts are recorded as deposits on unit pre-sales. Certain amounts received
      are
      restricted and recorded in restricted cash. American Leisure prepays brokers
      commissions up to 6% and prepays Xpress, Ltd. a commission of 1.5% and the
      amounts are recorded as prepaid commissions and are expensed when the revenue
      from the sale is recognized. Xpress, Ltd. is majority owned by Malcolm J. Wright
      and members of his family.





**Managed
      Assets - TraveLeaders**





Through
      one of our wholly owned subsidiaries, ALEC we acquired the tradename of
      TraveLeaders, as well as substantially all of the assets and certain other
      liabilities of the TraveLeaders operations, on December 31, 2004 from Around
      the
      World Travel (“AWT”).





Concurrent
      with this acquisition, ALEC entered into a management agreement with AWT,
      whereby AWT manages the TraveLeaders franchise and employs the personnel
      necessary to operate the TraveLeaders retail locations. The risk of loss from
      this operation is that of AWT, as all agreements and licenses are in its name.
      AWT is paid a management fee of 10% of earnings before interest, taxes, and
      depreciation and amortization. The management agreement
      was terminated on August 1, 2006. Revenues were $1,113,562 and $973,610 under
      this agreement for the years ended December 31, 2006 and 2005,
      respectively.





-87-








**Loss
      Per Share**





American
      Leisure is required to provide basic and dilutive earnings (loss) per common
      share information.





The
      basic
      net loss per common share is computed by dividing the net loss applicable to
      common stockholders by the weighted average number of common shares outstanding.





Diluted
      net loss per common share is computed by dividing the net loss applicable to
      common stockholders, adjusted on an "as if converted" basis, by the weighted
      average number of common shares outstanding plus potential dilutive securities.





For
      the
      period ended December 31, 2006 and 2005, potential dilutive securities had
      an
      anti-dilutive effect and were not included in the calculation of diluted net
      loss per common share. Total shares issuable upon the exercise of warrants
      and
      the conversion of preferred stock for the years ended December 31, 2006 and
      2005, were 19,419,199 and 17,223,230, respectively.





**Recent
      Accounting Pronouncements**





In
      November 2004, the FASB ratified the consensus reached by the Emerging Issues
      Task Force (“EITF”), on Issue NO. 03-13. “Applying the Conditions in Paragraph
      42 of FASB Statement No. 144 on Determining Whether to Report Discontinued
      Operations”.  The Issue provides a model to assist in evaluating (a) which
      cash flows should be considered in the determination of whether cash flows
      of
      the disposal component have been or will be eliminated from the ongoing
      operations of the entity and (b) the types of continuing involvement that
      constitute significant continuing involvement in the operations of the disposal
      component.  Should significant continuing ongoing involvement exist, then
      the disposal component shall be reported in the results of continuing operations
      or the consolidated statements of operations and cash flows.  We are
      currently evaluating the premises of EITF No. 03-13 and will adopt it as
      required.





In
      July
      2006, the FASB issued FASB Interpretation (“FIN”) No. 48 “Accounting for
      Uncertainly in Income Taxes - An Interpretation of FASB Statement No.
      109.”  FIN 48 prescribes detailed guidance for the financial statement
      recognition, measurement, and disclosure of uncertain tax positions recognized
      in an enterprise’s financial statements in accordance with SFAS No. 109,
      Accounting for Income Taxes.  Tax positions must meet a
      more-likely-than-not recognition threshold at the effective date to be
      recognized upon the adoption of FIN 48 and in subsequent periods.  FIN 48
      will be effective for fiscal years beginning after December 15, 2006, and the
      provisions of FIN 48 will be applied to all positions upon the adoption of
      the
      Interpretation.  The cumulative effect of this applying the provisions of
      this Interpretation will be reported as an adjustment to the opening balance
      of
      retained earnings for that fiscal year.  Management is currently evaluating
      the impact of FIN 48 on the financial statements but does not believe that
      its
      adoption will have a material effect on the Companies’ financial position,
      results of operations, or cash flows.










-88-





In
      September 2006, the SEC issued Staff Accounting Bulletin No. 108,
“Considering the Effects of Prior Year Misstatements” when Quantifying
      Misstatements in Current Year Financial Statements (“SAB 108”).
      SAB 108 requires companies to evaluate the materiality of identified
      unadjusted errors on each financial statement and related financial statement
      disclosure using both the rollover approach and the iron curtain approach,
      as
      those terms are defined in SAB 108. The rollover approach quantifies
      misstatements based on the amount of the error in the current year financial
      statement, whereas the iron curtain approach quantifies misstatements based
      on
      the effects of correcting the misstatement existing in the balance sheet at
      the
      end of the current year, irrespective of the misstatement’s year(s) of origin.
      Financial statements would require adjustment when either approach results
      in
      quantifying a misstatement that is material. Correcting prior year financial
      statements for immaterial errors would not require previously filed reports
      to
      be amended. If a Company determines that an adjustment to prior year financial
      statements is required upon adoption of SAB 108 and does not elect to
      restate its previous financial statements, then it must recognize the cumulative
      effect of applying SAB 108 in fiscal 2006 beginning balances of the
      affected assets and liabilities with a corresponding adjustment to the fiscal
      2006 opening balance in retained earnings. SAB 108 is effective for interim
      periods of the first fiscal year ending after November 15, 2006. The
      Company does not expect the adoption of this interpretation to have an impact
      on
      its financial position or results of operations.





On
      October 10, 2006, the FASB issued FSP No. FAS 123(R)-5, titled “Amending
      Guidance for Accounting for Modifications of Instruments in Connection with
      Equity Restructuring” ("Fsp Fas 123(R)-5"). Fsp Fas 123(R)-5 addresses whether a
      modification of an instrument in connection with an equity restructuring should
      be considered a modification for purposes of applying FSP FAS 123(R)-1. It
      stipulates that for instruments that were originally issued as employee
      compensation and then modified solely to reflect an equity restructuring that
      occurs when the holders are no longer employees, that there is no change in
      the
      recognition or measurement of those instruments if (a) there is no increase
      in
      fair value of the award and (b) all holders of the same class of instruments
      are
      treated in the same manner. The guidance in FSP
      FAS
      123(R)-5 is effective in the first reporting period beginning after October
      10,
      2006. Early
      application is permitted in periods for which financial statements have not
      been
      issued.Management is currently evaluating the impact of FSP FAS 123(R)-5 on the
      financial statements but does not believe that its adoption will have a material
      effect on the Companies’ financial position, results of operations, or cash
      flows.





FSP
      FAS
      123(R)-6 was issued to make several technical corrections to SFAS 123(R). These
      include exemption for non-public entities from disclosing the aggregate
      intrinsic value of outstanding fully vested share options, revision to the
      computation of the minimum compensation cost that must be recognized, indication
      that at the date the illustrative awards were no longer probable of vesting,
      any
      previously recognized compensation cost should have been reversed, and changes
      to the definition of short-term inducement to exclude an offer to settle an
      award. The guidance in FSP FAS 123(R)-6 is effective in the first reporting
      period beginning after October 20, 2006. Early application is permitted in
      periods for which financial statements have not yet been issued. Management
      is
      currently evaluating the impact of FSP FAS 123(R)-6 on the financial statements
      but does not believe that its adoption will have a material effect on the
      Companies’ financial position, results of operations, or cash
      flows.





In
      February 2006, the FASB issued SFAS No. 155, “” (“SFAS No. 155”)
      which amends SFAS No. 133, “Accounting for Derivative Instruments and
      Hedging Activities” (“SFAS No. 133”) and SFAS No. 140, “Accounting for
      Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”
(“SFAS No. 140”). SFAS No. 155 simplifies the accounting for certain
      derivatives embedded in other financial instruments by allowing them to be
      accounted for as a whole if the holder elects to account for the whole
      instrument on a fair value basis. SFAS No. 155 also clarifies and amends
      certain other provisions of SFAS No. 133 and SFAS No. 140. SFAS
      No. 155 is effective for all financial instruments acquired, issued or
      subject to a re-measurement event occurring in fiscal years beginning after
      September 15, 2006. Earlier adoption is permitted, provided the company has
      not yet issued financial statements, including for interim periods, for that
      fiscal year. SFAS No. 155 will be effective for the Company in the first
      quarter of fiscal 2007 and is not expected to have an impact on the Company’s
      financial statements.





-89-







In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No. 157, Fair Value Measurements.  SFAS No. 157 defines fair value,
      establishes a framework for measuring fair value in GAAP, and expands
      disclosures about fair value measurements.  This statement is effective for
      financial statements issued for fiscal years beginning after November 15,
      2007.  Management is currently evaluating the impact SFAS No. 157 will have
      on the Company’s financial position, results of operations, and cash
      flows.





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities - including an amendment of FASB
      statement No. 115.” This Statement permits all entities to choose, at specified
      election dates, to measure eligible items at fair value (the “fair value
      option”). A business entity shall report unrealized gains and losses on items
      for which the fair value option has been elected in earnings (or another
      performance indicator if the business entity does not report earnings) at each
      subsequent reporting date. Upfront costs and fees related to items for which
      the
      fair value option is elected shall be recognized in earnings as incurred and
      not
      deferred. If an entity elects the fair value option for a held-to-maturity
      or
      available-for-sale security in conjunction with the adoption of this Statement,
      that security shall be reported as a trading security under Statement 115,
      but
      the accounting for a transfer to the trading category under paragraph 15(b)
      of
      Statement 115 does not apply. Electing the fair value option for an existing
      held-to-maturity security will not call into question the intent of an entity
      to
      hold other debt securities to maturity in the future. This statement is
      effective as of the first fiscal year that begins after November 15, 2007.
      The
      Company is currently analyzing the effects SFAS 159 will have on the Company's
      financial condition and results of operations.





**RECLASSIFICATIONS**





Certain
      amounts in the December 31, 2005 financial statements have been reclassified
      to
      conform to the December 31, 2006 financial statement presentation.





**NOTE
      3 - FINANCIAL CONDITION AND GOING CONCERN**





American
      Leisure's financial statements have been presented on the basis that it is
      a
      going concern, which contemplates the realization of assets and the satisfaction
      of liabilities in the normal course of business. American Leisure has a working
      capital deficiency of $49,349,259 and is seeking adequate financing to complete
      the Orlando Resort property. American Leisure incurred a net loss of $8,148,896
      during 2006 and a net loss of $4,085,825 during 2005; there is substantial
      doubt
      as to American Leisure’s ability to achieve profitable operations until it
      delivers the 508 townhomes and 144 condominiums, expected in November 2007
      through the summer of 2008.





American
      Leisure's management intends to raise additional operating funds through equity
      and/or debt offerings. However, there can be no assurance management will be
      successful in its endeavors. Ultimately, American Leisure will need to achieve
      profitable operations in order to continue as a going concern.





American
      Leisure has insufficient capital to maintain its operations. The proceeds from
      the sale of a parcel of Orlando Resort property, the cash received from the
      pre-sales of the Company’s Orlando Resort units, the land loans funded in 2005
      and 2006 and the Community Development District Bond in January 2006 financed
      through KeyBank, N.A., have provided American Leisure with funds to continue
      its
      operations until the balance of the financing is obtained for the construction
      of the Orlando Resort property.





-90-










There
      are
      no assurances that American Leisure will be able to either (1) achieve a level
      of revenues adequate to generate sufficient cash flow from operations; or (2)
      obtain additional financing through either private placement, public offerings
      and/or bank financing necessary to support American Leisure's working capital
      requirements. To the extent that funds generated from operations and any private
      placements, public offerings and/or bank financing are insufficient, American
      Leisure will have to raise additional working capital. No assurance can be
      given
      that additional financing will be available, or if available, will be on terms
      acceptable to American Leisure. If adequate working capital is not available,
      American Leisure may be required to curtail its operations.





**NOTE
      4 - ACQUISITIONS AND DIVESTMENTS**





On
      December 31, 2005, the Company through its subsidiary Tierra Del Sol, Inc.
      (“TDS”) acquired the remaining 19% minority interest held by Raster Investments
      in TDS for a note payable of $1,432,046 which was paid in August 2006, and
      197,000 of American Leisure common stock shares valued at $183,210 and 300,000
      warrants with an exercise price at $5.00 per share valued at $233,713, and
      two 3
      bedroom condominiums to be built in Phase II of the Orlando Resort valued at
      $630,160. After January 2007, Raster can sell the American Leisure shares back
      to American Leisure for $985,000, which is recorded as a put liability. The
      put
      option is void if AMLH’s stock price is greater than $5.00 per share for 30
      consecutive days in 2007. The Company accounted for this acquisition using
      the
      purchase method of accounting and allocated the purchase price to the land
      held
      for development. Full ownership gives the Company the ability to recognize
      all
      of the profits on the development of the Orlando Resort property.





Effective
      June 30, 2006, we sold our subsidiary, Caribbean Leisure Marketing Limited
      ("CLM), to Stanford International Bank Limited ("SIBL"), a minority shareholder
      and creditor, under a stock purchase agreement. CLM owns a 49% in Caribbean
      Media Group, Ltd. ("Caribbean Media Group"), which owns and operates a call
      center in Antigua. In exchange for the common stock of CLM, SIBL exchanged
      certain promissory notes in the amounts of $1,250,000 and $2,100,000, fees
      and
      accrued interest of $2,313,175 or $5,663,274. The sale resulted in a gain of
      $2,988,082. We also issued 355,000 warrants with an exercise price of $10.00
      expiring on April 30, 2008.





SIBL
      was
      expanding their call center business in the Caribbean and CLM would provide
      them
      with both synergies and effective economies of scale (in terms of operations
      and
      sales force) for expansion into other markets.





The
      results of operations for CLM are reported as gain (loss) from discontinued
      operations and these results are reported under the Call Center segment as noted
      in Note 18 below.  The following table reports the results of the component
      of the Company’s operations reported as discontinued operations:




-91-
 Results
          of Operations for discontinued operations for the year ended December
          31:
 2006
                  
                  2005Call
                      center services revenues
                  
                  $
                  -
                  
                  $
                  -
 Revenue
                  from discontinued operations
              
              
              -
              
              
              -Operating
                  expenses
              
              
              371,122
              
              
              757,363Net
                  loss on discontinued operations
              
              
              (371,122
              )
              
              (757,363
              )Interest
                  expense
              
              
              (12,266
              )
              
              -Equity
                  in operations of unconsolidated sub.
              
              
              140,244
              
              
              (293,201
              )Gain
                  on sale of discontinued operations
              
              
              2,988,082
              
              
              -Gain
                  (loss) on discontinued operations
              
              $
              2,744,938
              
              $
              (1,050,564
              )




In
      accordance with the provisions of Statement of Financial Accounting Standard, *Accounting
      for the Impairment or Disposal of Long-Lived Assets* (“SFAS
      No. 144”), the results of operations of the disposed assets and the losses
      related to this sale have been classified as discontinued operations for all
      periods presented in the accompanying consolidated statements of
      operations.





On
      July
      5, 2005, the Company acquired a 1% interest in Reedy Creek Acquisition Company,
      LLC (“Reedy Creek”) for $901,705 that was recorded in other assets. Reedy Creek
      owns 40.68 acres of undeveloped land in Osceola County, Florida located 1.5
      miles west of Walt Disney World Orlando Maingate Entrance. The property will
      be
      used in the development of vacation second homes with resort amenities. On
      January 3, 2006, The Company acquired an additional 99% interest in Reedy Creek
      (total ownership of 100%) for a purchase price of $12,400,000. The Company
      is
      holding this land for future development.





On
      December 22, 2006 the Company acquired 100% of South Beach Resorts, LLC (“SBR”)
      for $1,120,000 plus 25% participation interest to Stanford International Bank
      Limited in the net proceeds realized by SBR upon the disposition of its
      Boulevard Hotel property located in Miami Beach, Florida. The $1,120,000 was
      provided as a loan from Stanford International Bank Limited to Reedy Creek
      Acquisition Corporation. SBR was owned by SBR Holdings, LLC that is owned
      equally by Malcolm Wright (CEO, CFO and Director of the Company) and Frederick
      Pauzar (COO, President and Director of the Company). At the date of acquisition,
      the Boulevard Hotel was encumbered with a mortgage due to LaSalle Bank, National
      Association, as Trustee of Marathon Real Estate CDO 2006-1 Grantor Trust,
      successor-in-interest to marathon Structured Finance Fund L.P. (“LaSalle”) in
      the amount of $7,498,900 that matured on January 11, 2007. The mortgage has
      matured and remains unpaid; however, the mortgage is not in default and a
      forbearance agreement is in place with LaSalle. The Company is actively seeking
      to replace the debt with a new lender. SBR was acquired by Malcolm Wright and
      Frederick Pauzar in July 2005 and the financial statement presentation has
      been
      restated to present SBR as a subsidiary since that acquisition
      date.





-92-





The
        financial statements at December 31, 2005 have been restated to include SBR
        and
        to record the sale of CLM as discontinued operations as follows:
 
 As
                  originally filed
              
              Adjustment
              
              As
                  restatedBalance
                  Sheet:Current
                  Assets:Cash
              
              $
              225,055
              
              $
              55,807
              
              $
              280,862Accounts
                  receivable, net
              
              
              2,043,141
              
              
              40,954
              
              
              2,084,095Other
                  receivables
              
              
              6,587,357
              
              
              5,000
              
              
              6,592,357


Total
                current assets
            
            
            11,054,971
            
            
            101,761
            
            
            11,156,732Property
                and equipment
            
            
            4,583,853
            
            
            7,990,481
            
            
            12,574,334Land
                held for development
            
            
            34,695,281
            
            
            1,450,888
            
            
            36,146,169Total
                assets
            
            
            89,923,247
            
            
            9,543,130
            
            
            99,466,377Current
                Liabilities:Accounts
                payable and accrued expenses
            
            
            3,782,822
            
            
            7,706
            
            
            3,790,528Total
                current liabilities
            
            
            12,764,605
            
            
            7,706
            
            
            12,772,311Long-term
                debt and notes payable
            
            
            32,288,920
            
            
            7,298,501
            
            
            39,587,421Notes
              payable -- related parties, net of current maturity
            
            
            -
            
            
            2,195,969
            
            
            2,195,969Total
                liabilities and stockholders’ equity
            
            
            89,923,247
            
            
            9,543,130
            
            
            99,466,377Statements
                of Operations:Operating
                revenues
            
            $
            7,361,284
            
            $
            396,797
            
            $
            7,758,081Cost
                of operating revenues
            
            
            5,157,524
            
            
            355,843
            
            
            5,513,367Gross
                margin
            
            
            6,101,198
            
            
            40,954
            
            
            6,142,152Operating
                expenses:Depreciation
                and amortization
            
            
            (1,476,326
            )
            
            649,089
            
            
            (827,237
            )General
                and administrative
            
            
            (5,136,413
            )
            
            108,274
            
            
            (5,028,139
            )Income
                (loss) from continuing operations
            
            
            (511,541
            )
            
            798,317
            
            
            286,776Interest
                expense
            
            
            (3,317,033
            )
            
            -
            
            
            (3,317,033
            )Equity
                in operations of unconsolidated
              subsidiary
            
            
            (293,201
            )
            
            293,201
            
            
            -Loss
                from continuing operations
            
            
            (4,121,775
            )
            
            1,091,518
            
            
            (3,030,257
            )Provision
                for income taxes
            
            
            (5,004
            )
            
            -
            
            
            (5,004
            )Net
                loss from continuing operations
            
            
            (4,126,779
            )
            
            1,091,518
            
            
            (3,035,261
            )Gain
                (loss) from discontinued operations
            
            
            -
            
            
            (1,050,564
            )
            
            (1,050,564
            )Net
                loss
            
            $
            (4,126,779
            )
            $
            40,954
            
            $
            (4,085,825
            )Statements
                of Cash Flows:Cash
                flows from operating activities:Net
                loss
            
            $
            (4,126,779
            )
            $
            40,954
            
            $
            (4,082,825
            )Changes
                in assets and liabilities:(Increase)
                decrease in accounts
              receivable
            
            
            1,496,246
            
            
            (40,954
            )
            
            1,455,292Cash
                flows from investing activities:Acquisition
                of SBR
            
            
            -
            
            
            55,807
            
            
            55,807Net
                cash from investing activities
            
            
            (6,504,341
            )
            
            55,807
            
            
            (6,448,534
            )










-93-





The
      SBR
      transaction was recorded at the shareholders original basis and at their
      original date of purchase which was July 2005. The transaction was recorded
      like
      a “pooling of interest” based on the shareholders ownership percentages of both
      entities. The
      following table summarizes the net assets acquired and liabilities assumed
      in
      the SBR transaction as reportedin July 2005:


Cash
              
              $
              55,807Other
                  receivables
              
              
              5,000Property
                  and equipment, net
              
              
              7,990,481Land
                  held for development
              
              
              1,450,888Accounts
                  payable
              
              
              (7,706
              )Notes
                  payable - related parties
              
              
              (2,195,969
              )Long-term
                  debt
              
              
              (7,298,501
              )$
              -




**NOTE
      5 - OTHER RECEIVABLES**





Other
      receivables consist of the following





2006
            
            2005Advances
                to Frederick Pauzar
            
            $
            100,000
            
            $
            -Advances
                to Around the World Travel
            
            
            -
            
            
            4,536,312Due
                from West Villas, Inc., Maingate Towers,
              Inc.
                and Orlando Tennis Village, Inc
            
            
            -
            
            
            1,828,390Employee
                advances
            
            
            37,791
            
            
            5,000Due
                from other third parties
            
            
            79,442
            
            
            222,655$
            217,233
            
            $
            6,592,357





The
      due
      from West Villas, Inc., Maingate Towers, Inc. and Orlando Tennis Village, Inc.
      of $1,828,390 is from the sale of the 40 acres described in Note 7. The amounts
      due from Around the World Travel, Inc. (AWT) of $4,536,312 are predominantly
      from advances and from amounts earned by the Company in connection with the
      management agreement, under which AWT managed the assets acquired December
      31,
      2004. The Company earned $1,113,561 for the period from January 1, 2006 through
      July 31, 2006 and $973,610 in 2005 under the management agreement. The
      Management Agreement and Licensing Agreement with AWT were cancelled as of
      August 1, 2006. The advances and other amounts due from AWT were deemed
      uncollectible and the receivable of $6,588,579 was written off in December
      2006.





**NOTE
      6 - PROPERTY AND EQUIPMENT, NET**





At
      December 31, 2006 and 2005, property and equipment consisted of the
      following:


Useful
                Lives
            
            2006
            
            2005Computer
                equipment
            
            3-5
            
            $451,008
            
            $419,683Furniture
                & fixtures
            
            
            5-7
            
            
            1,988,851
            
            
            1,898,511Automobiles
            
            
            5
            
            
            -
            
            
            63,230Leasehold
                improvements
            
            
            5
            
            
            3,100
            
            
            31,919Telecommunications
                equipment
            
            
            7
            
            
            3,536,664
            
            
            6,764,848Hotel
                building
            
            
            35
            
            
            7,990,481
            
            
            7,990,48113,970,104
            
            
            17,168,672Less:
                accumulated depreciation and amortization
            
            
            
            
            
            4,799,564
            
            
            4,594,338$
            9,170,540
            
            $
            12,574,334





Depreciation
      expense was $1,434,519 and $1,603,854 for 2006 and 2005,
      respectively.





-94-








**NOTE
      7 - LAND HELD FOR DEVELOPMENT**





American
      Leisure is developing a 972-unit resort in Orlando, Florida on 122 acres of
      undeveloped land. Pre-construction sales commenced in February
      2004.





As
      of
      December 31, 2006, Xpress, Ltd., a related party, see Note 20, has pre-sold
      approximately 600 vacation homes in a combination of contracts on town homes
      and
      reservations on condominiums for a total sales volume of approximately $230
      million. In connection with the sales, the Company has received deposits
      totaling approximately $36,836,000 and has prepaid sales commissions and
      advances to various brokers and agents of approximately $9,804,000 and has
      prepaid sales commissions of approximately $3,444,000 to Xpress, Ltd., a related
      party.





On
      January 11, 2006, the Company sold 42 acres in the Sonesta Resort for $9,090,130
      to the District and an additional $4,039,116 in connection with reimbursements
      for site improvements. The land sold to the District will be used for public
      infrastructure for the Sonesta Resort, including the creation of roads and
      for
      water collection.





On
      December 28, 2005, The Company completed the sale of 41 acres of its development
      property located in Polk County, Florida (adjacent to the Orlando Resort
      property) for $8,000,000 and realized a profit of $3,324,736 on the sale. The
      sale was brokered through American Leisure Real Estate Group, Inc, an entity
      controlled by Malcolm Wright (American Leisure’s CEO); the broker commission on
      the sale amounted to $400,000. The Company had approximately $1,823,000 due
      from
      the buyers West Villas, Inc., Maingate Towers, Inc. and Orlando Tennis Village
      and included in other receivables at December 31, 2005. The amount was paid
      off
      in 2006. These entities are related to a shareholder.





On
      March
      8, 2005, American Leisure sold 13.5 acres of commercial property for $4,020,000,
      plus the reimbursement of expenses in the amount of $157,219. The Company
      realized a gain on the sale of approximately $968,000.





The
      Boulevard Hotel property located in Miami Beach, Florida is undergoing
      remodeling and refurbishing to convert the property into a timeshare facility.
      As of December 31, 2006, $3,405,418 has been incurred in the remodeling and
      refurbishment and, as of December 31, 2005, $1,450,888 has been
      incurred.





**NOTE
      8 - INVESTMENT IN SENIOR SECURED NOTES AND CONTINGENT
      LIABILTY**





During
      2004, AMLH acquired senior secured notes receivable paper (the “Notes”) for
      340,000 shares of AMLH stock and the assumption of a non-recourse note payable
      to CNG Hotels (CNG Note) for $5,000,000. The Notes are secured by substantially
      all of the assets of Around the World Travel (“AWT”), the maker. The purpose of
      the Company’s acquisition of the Notes was to allow AMLH to get in a senior
      secured position in AWT at the time AMLH was evaluating purchase of the assets
      of AWT.





The
      approximately $24,000,000 balance of the Notes includes unpaid interest of
      approximately $6,000,000. The Notes are in default and no interest is being
      accrued by AMLH relating to these Notes. The Company’s projection of discounted
      future cash flows from the Notes at the time of purchase exceeded the $5,170,000
      carrying value, based primarily on the net realizable value of the collateral
      assets.





-95-








Repayment
      of the $5,000,000 CNG Note is contingent, and equal to, the proceeds received by
      the Company on the investment in the Notes. The Company’s obligation will not
      exceed $5,000,000 under this contingency, even in the event proceeds from the
      investment in the note receivable exceed that amount.





In
      December 2004, the Company acquired substantially all of the assets of AWT
      (See
      Note 4). This acquisition had the effect of impairing the Notes, in that the
      collateral was no longer security for the Notes; however, AWT was managing
      these
      operations from January 1, 2005 through July 31, 2006 under a management
      agreement with ALEC. After the cancellation of the management agreement, the
      Company determined that the expected discounted future cash flow from the
      investment in the Notes that the Company can reasonably expect is $0. Effective
      December 30, 2006, the Company recorded an impairment charge of $5,170,000
      related to these Notes.





In
      conjunction with the net realizable value of the Notes being reduced to zero,
      the future obligation under the CNG Note could not be reasonably estimated,
      and
      the likelihood of any required repayment became remote. Accordingly, because
      of
      the contingent nature of repayment being based on an asset with no estimated
      future value, the CNG Note was adjusted to $0 at December 30, 2006, and the
      Company recognized a gain on forgiveness of debt in the amount of $5,000,000,
      the amount of debt previously recorded.





Because
      of the economic interdependence of the above-described impairment charge and
      gain on debt forgiveness, the two amounts are netted in the statement of
      operations for the year ended December 31, 2006, and the net charge of $170,000
      is included in general and administrative expenses.





**NOTE
      9 - OTHER ASSETS**





Other
      assets include the following at December 31:





2006
            
            2005Deferred
                financing Costs
            
            $
            2,102,725
            
            $
            4,192,988Deposits
                and Other
            
            
            35,750
            
            
            61,500Investment
                in Promissory Note
            
            
            500,000
            
            
            -Investment
                in Reedy Creek
            
            
            -
            
            
            901,705Total
                other assets
            
            $
            2,638,475
            
            $
            5,156,193




On
      August
      16, 2006, pursuant to Purchase Agreement between the Company and Stanford
      International Bank Limited (a minority shareholder and creditor of the Company),
      a promissory note in the principal amount of $750,000 made by Scott Roix in
      favor of Stanford International Bank Limited was purchased for 235,000 shares
      of
      common stock of the Company and a five year warrant to purchase 235,000 share
      of
      the Company’s stock at an exercise price of $20 per share. The note will be
      repaid in full on July 1, 2007. As of December 31, 2006, $250,000 of the note
      had been repaid and the investment in promissory note had a balance of
      $500,000.







-96-


**NOTE
        10 - LONG-TERM DEBT AND NOTES PAYABLE**
  Below
        is
        a summary of Long-term debt and notes payable as of December 31, 2006 and
        2005:
 Collateral
                
                Maturity
                    Date
                
                Interest
                  rate
                
                2006
                
                2005Note
                    Payable, Lending Institution
                Personal
                    Guarantees
                
                12/31/03
                
                8%
                
                $250,000
                
                $250,000Individual
                Unsecured
                
                On
                    Demand
                
                10%
                
                -
                
                30,000Equipment,
                    Third Party Entities
                Equipment
                
                3/31/05
                
                18%
                
                -
                
                9,029Financial
                    Institution
                Lien
                    on property, assets and stock of the company & personal
                    guarantees
                
                9/30/06
                
                8%
                
                -
                
                1,250,000Financial
                    Institution
                Lien
                    on property, assets and stock of the company
                
                1/11/07
                
                8%
                
                7,498,900
                
                7,298,501Financial
                    Institution
                1stlien on 53 acres of undeveloped land & personal
                    guarantees
                
                6/28/07
                
                12%
                    (libor +310 basis)
                
                14,352,900
                
                10,250,376Financial
                    Institution
                Lien
                    on property, assets and stock of the company& personal
                    guarantees
                
                6/30/07
                
                8%
                
                8,000,000
                
                -Financial
                    Institution
                Lien
                    on property, assets and stock of the company& personal
                    guarantees
                
                6/30/07
                
                12%
                
                5,056,000
                
                -Financial
                    Institution
                Lien
                    on property, assets and stock of the company & personal
                    guarantees
                
                12/27/07
                
                8%
                
                -
                
                2,100,000Note
                    Payable, Credit Line
                Assets
                    of the Company and Personal Guarantees
                
                1/08
                
                8.75%
                
                51,463
                
                51,000Financial
                    Institution
                Lien
                    on property, assets and stock of the company & personal
                    guarantees
                
                1/1/08
                
                8%
                
                3,000,000
                
                3,000,000Financial
                    Institution
                Lien
                    on property, assets and stock of the company & personal
                    guarantees
                
                1/1/08
                
                8%
                
                1,355,000
                
                1,355,000Financial
                    Institution
                Lien
                    on property, assets and stock of the company
                
                1/1/08
                
                8%
                
                305,000
                
                289,000
  -97-





Financial
                Institution
            Lien
                on property, assets and stock of the company& personal
                guarantees
            
            2/1/08
            
            15%
            
            7,000,000
            
            -Financial
                Institution
            Lien
                on property, assets and stock of the company& personal
                guarantees
            
            6/22/08
            
            8%
            
            1,229,861
            
            -Individual
            Personal
                guarantees
            
            7/1/08
            
            12%
            
            630,160
            
            2,062,206Financial
                Institution
            Lien
                on property, assets and stock of the company & personal
                guarantees
            
            12/31/08
            
            6%
            
            6,000,000
            
            6,000,000Note
                payable,
              Third
                Party
            Lien
                on assets
            
            2/23/09
            
            5%
            
            -
            
            5,000,000Auto
                Loan
            Vehicle
            
            3/10/10
            
            9.39%
            
            -
            
            30,942Third
                Party notes assumed from assets purchased from Around The World Travel,
                Inc.
            Secured
                by Common Stock of Around The World Travel, Inc.
            
            4/1/11
            
            4%
            
            2,174,481
            
            3,893,915Note
                Payable, Lending Institution
            Assets
                of the Company and Personal Guarantees
            
            5/1/33
            
            4%
            
            361,272
            
            369,68757,265,037
            
            43,239,656Less: 
                current portion of long-term debt and notes payable
            
            
            
            
            
            (35,681,931
            )
            (3,652,235
            )Long-term
                debt and notes payable
            
            
            
            
            
            $21,583,106
            
            $39,587,421





*
      Effective December 31, 2006, Stanford International Bank Limited, an Antiguan
      banking corporation, further modified the terms of the notes due to extend
      the
      maturity dates of the notes and accrue the unpaid interest from October 1,
      2006
      and thereafter as follows:





·
            The
                maturity date of the $6,000,000 Note is extended to January 1, 2008.
                Interest on the $6,000,000 Note has been paid through September 30,
                2006.
                The principal amount of the Note, together with all interest accrued
                from
                October 1, 2006 to the maturity date shall be due and payable on
                that
                date.·
            The
                maturity date of the $3,000,000 Note is extended to January 1, 2008.
                Interest on the $3,000,000 Note has been paid through September 30,
                2006.
                The principal amount of the Note, together with all interest accrued
                from
                October 1, 2006 to the maturity date shall be due and payable on
                that
                date.·
            The
                maturity date of the $1,355,000 Note is extended to January 1, 2008.
                Interest on the $1,355,000 Note has been paid through September 30,
                2006.
                The principal amount of the Note, together with all interest accrued
                from
                October 1, 2006 to the maturity date shall be due and payable on
                that
                date.·
            The
                maturity date of the $305,000 Note is extended to January 1, 2008.
                Interest on the $305,000 Note has been paid through September 30,
                2006.
                The principal amount of the Note, together with all interest accrued
                from
                October 1, 2006 to the maturity date shall be due and payable on
                that
                date.






-98-


The
      weighted average interest rate on long-term debt and notes payable was 8.8%
      and
      6.4% for 2006 and 2005, respectively. The maximum amount outstanding was
      $57,265,037 and $43,239,656 for 2006 and 2005, and the average amount
      outstanding was approximately $45,691,050 and $27,165,215 during 2006 and 2005.
      The effective interest rate, including the amortization of the deferred
      financing costs was 11.3% and 12.2% in 2006 and 2005.





Principal
      repayments for the next years are as follows:





Amount2007
            
            $
            35,681,9312008
            
            
            19,927,1642009
            
            
            355,6812010
            
            
            355,6822011
            
            
            355,683Thereafter
            
            
            588,896$
            57,265,037







**NOTE
      11 - NOTES PAYABLE - RELATED PARTIES**




Collateral
            
            Maturity
              Date
            
            Interest
              Rate
            
            2006
            
            2005Related
                Party
            Unsecured
            
            Demand
            
            12%
            
            $117,300
            
            $131,945Related
                Party
            Unsecured
            
            Demand
            
            12%
            
            293,000
            
            306,500Related
                Party
            Unsecured
            
            Demand
            
            12%
            
            180,000
            
            180,000Related
                Party
            Unsecured
            
            Demand
            
            12%
            
            20,000
            
            20,000Related
                Party
            Unsecured
            
            Demand
            
            12%
            
            122,390
            
            327,028Related
                Party
            Unsecured
            
            12/31/08
            
            12%
            
            3,353,252
            
            2,195,969Related
                Party
            Unsecured
            
            Demand
            
            12%
            
            5,875,444
            
            -Shareholder
            Unsecured
            
            Demand
            
            12%
            
            394,198
            
            178,366Related
                Party
            Unsecured
            
            Demand
            
            10%
            
            193,063
            
            97,504Related
                Party
            Unsecured
            
            Demand
            
            10%
            
            285,000
            
            285,000Related
                Party
            Unsecured
            
            Demand
            
            12%
            
            -
            
            124,262Less:
                current portion of notes payable -- related parties
            
            
            
            
            
            
            10,833,647
            
            3,846,574Notes
                payable -- related parties
            
            
            
            
            
            
            7,480,395
            
            1,650,605$3,353,252
            
            $2,195,969





The
      weighted average interest rate on notes payable - related parties was 11.8%
      and
      11.1% for 2006 and 2005, respectively. The maximum amount outstanding was
      $10,833,647 and $3,846,574 for 2006 and 2005, and the average amount outstanding
      was approximately $7,277,980 and $2,579,079 during 2006 and 2005. The effective
      interest rate was 12% and 11% in 2006 and 2005.





-99-





**NOTE
      12 - STOCKHOLDERS EQUITY AND REDEEMABLE PREFERRED STOCK**





**Common
      Stock and Mandatory Redeemable Preferred Stock**





On
      August
      16, 2006, pursuant to Purchase Agreement between the Company and SIBL (a
      minority shareholder and creditor of the Company), a promissory note in the
      principal amount of $750,000 made by Scott Roix in favor of SIBL was purchased
      for 235,000 shares of common stock of the Company and a five year warrant to
      purchase 235,000 share of the Company’s stock at an exercise price of $20 per
      share. The note will be repaid in full on July 1, 2007.




In
      August
      2006, Tierra del Sol Resorts, Inc. entered into a guaranteed maximum price
      construction contract with Resorts Construction, LLP ("Resorts Construction")
      to
      construct and develop part of the Sonesta Resort and its town home properties.
      Resorts Construction is 50% owned by Malcolm J. Wright, the Company's Chief
      Executive Officer and Chairman. Pursuant to the contract with Resorts
      Construction, we agreed to pay Resorts Construction a contractor's fee equal
      to
      5% of the total cost of the construction performed by Resorts Construction
      and
      7.5% for general conditions. Any payments owed under the Resorts Construction
      contract which are not paid when due bear interest at the rate of 12% per annum.
      We provided Resorts Construction a non-refundable payment of $4,000,000 upon
      our
      entry into the construction agreement with Resorts Construction, which funds
      Resorts Construction have been used to begin construction of Phase 1 of the
      Sonesta Resort.





Effective
      June 30, 2006, pursuant to Stock Purchase Agreement between the Company and
      SIBL
      (a minority shareholder and creditor of the Company), the Call Center operations
      (Caribbean Leisure Marketing, Ltd.) was sold. Promissory notes in the amounts
      of
      $1,250,000 and $2,100,000 were exchanged along with $2,313,175 of fees and
      accrued interest for total consideration of $5,663,175. This sale resulted
      in a
      gain of $2,988,082 attributable to the recapture of depreciation and interest
      expense from prior periods. The Stock Purchase Agreement also cancelled the
      equity conversion feature that was to expire on April 30, 2007, of an
      outstanding loan with SIBL and provided for the issuance of 355,000 warrants
      with an exercise price of $10.00 expiring on April 30, 2007.





On
      June
      30 2005, 160,000 shares of common stock were issued upon the exercise of
      warrants at $0.001 per share (or $160).





**Preferred
      Stock**





American
      Leisure is authorized to issue up to 10,000,000 shares in aggregate of preferred
      stock:





Total
                Series Authorized
            
            Stated
                Value
            
            Voting
            
            Annual
                Dividends per Share
            
            Conversion
                RateSeries
                A
            1,000,000
            
            $
                10.00
            
            Yes
            
            $
                1.20
            
            10
                to 1Series
                B
            100,000
            
            100.00
            
            Yes
            
            12.00
            
            20
                to 1Series
                C
            28,000
            
            100.00
            
            Yes
            
            4.00
            
            20
                to 1Series
                E
            50,000
            
            100.00
            
            Yes
            
            4.00
            
            6.66
                to 1


Series
                F
            150,000
            
            100.00
            
            Yes
            
            1.00
            
            2
                to 1




Series
      A
      have voting rights equal to 10 common shares to 1 Series A preferred share.






-100-


Series
      A
      are redeemable at the American Leisure's option after 10 years if not converted
      by the holder. The conversion period is 10 years from the date of issue. The
      redemption amount per share will equal the liquidation value plus accrued but
      unpaid dividends.




Conversion
      is at a fixed amount of 10 for 1, except for an adjustment if the common stock
      market price is below $1.00 for any thirty (30) consecutive days. In the event
      that the average market price of the common stock for any thirty (30)
      consecutive trading days is below $1.00 and the market price of the common
      stock
      remains below $1.00 through the trading day immediately prior to the conversion
      date, then the conversion rate shall be the lower of (i) the Liquidation Value
      divided by the average market price of the common stock for the ten (10)
      consecutive trading days immediately prior to the conversion date, or (ii)
      10
      for 1.




Upon
      any
      conversion, the holder, by converting, waives his right to the payment of cash
      for such accrued but unpaid dividends. In lieu of a cash dividend the holder
      shall receive such number of shares of Common Stock equal to (A) the amount
      of
      accrued but unpaid dividends on such Preferred Stock surrendered for conversion
      by such holder, divided by (B) the market value of common stock on the
      conversion date.




Dividends
      are payable if funds are available. Accrued but unpaid dividends do not pay
      interest.




Series
      B
      have voting rights equal to 20 common shares to 1 Series B preferred share.




Series
      B
      are redeemable at the American Leisure's option after 5 years if not converted
      by the holder. The conversion period is 5 years from the date of issue. The
      redemption amount per share will equal the liquidation value plus accrued but
      unpaid dividends.




Conversion
      is not less than 20 for 1 nor more than 12.5 for 1 based on the market price.
      Conversion is calculated by dividing the liquidation value by the market price
      but such conversion shall not be greater than 20 shares of common stock for
      1
      preferred share or not lower than 12.5 shares of common stock for 1 preferred
      share. The maximum shares (20 to 1) will be issued when the market price of
      common stock is $5 or below $5 and the minimum conversion (12.5 to 1) will
      be
      when the market price of common stock is $8 or above $8. Upon any conversion,
      the holder, by converting, waives his right to the payment of cash for such
      accrued but unpaid dividends. In lieu of a cash dividend the holder shall
      receive such number of shares of Common Stock equal to (A) the amount of accrued
      but unpaid dividends on such Preferred Stock surrendered for conversion by
      such
      holder, divided by (B) the market value of common stock on the conversion date.




Dividends
      are payable if funds are available. Accrued but unpaid dividends do not pay
      interest.




Series
      C
      are redeemable after 5 years if not converted by the holder. The conversion
      period expires 5 years from the date of issue. The redemption amount per share
      will equal the liquidation value plus accrued but unpaid dividends.




Conversion
      is not less than 20 for 1 nor more than 12.5 for 1 based on the market price.
      Conversion is calculated by dividing the liquidation value by the market price
      but such conversion shall not be greater than 20 shares of common stock for
      1
      preferred share or not lower than 12.5 shares of common stock for 1 preferred
      share. The maximum shares will be issued when the market price of common stock
      is $5 or below and the minimum conversion will be when the market price of
      common stock is $8 or higher. Upon any conversion, the holder, by converting,
      waives his right to the payment of cash for such accrued but unpaid dividends.
      In lieu of a cash dividend the holder shall receive such number of shares of
      Common Stock equal to (A) the amount of accrued but unpaid dividends on such
      Preferred Stock surrendered for conversion by such holder, divided by (B) the
      market value of common stock on the conversion date.







-101-




Series
      E
      are redeemable after 5 years if not converted by the holder. The conversion
      period expires 5 years from the date of issue. The redemption amount per share
      will equal the liquidation value plus accrued but unpaid dividends.




Conversion
      is at a maximum of 6.66 for 1 or if the market price is above $15.00 then the
      conversion is $100 divided by the market price at the date of conversion, for
      example $100/$20 or 5 common shares for 1 preferred share. Upon any conversion,
      the holder, by converting, waives his right to the payment of cash for such
      accrued but unpaid dividends. In lieu of a cash dividend the holder shall
      receive such number of shares of Common Stock equal to (A) the amount of accrued
      but unpaid dividends on such Preferred Stock surrendered for conversion by
      such
      holder, divided by (B) the market value of common stock on the conversion
      date.




Series
      E
      have voting rights equal to 6.66 common shares to 1 Series E preferred share.




In
      February 2006, we issued Joseph and Helena Palumbo 1,655 shares of our Series
      E
      Preferred Stock, which shares of Preferred Stock we had previously agreed to
      issue pursuant to and in connection with our purchase of the assets of AWT
      in
      December 2004. We claim an exemption from registration afforded by Section
      4(2)
      of the Securities Act of 1933, as amended, since the foregoing issuance did
      not
      involve a public offering, the recipients took the securities for investment
      and
      not resale and we took appropriate measures to restrict transfer. No
      underwriters or agents were involved in the foregoing issuance and no
      underwriting discounts or commissions were paid by us.





In
      February 2006, we issued 170 shares of Series E Preferred Stock to Gregory
      Wasik, which shares of Preferred Stock we had previously agreed to issue
      pursuant to and in connection with our purchase of the assets of AWT in December
      2004. We claim an exemption from registration afforded by Section 4(2) of the
      Securities Act of 1933, as amended, since the foregoing issuance did not involve
      a public offering, the recipient took the securities for investment and not
      resale and we took appropriate measures to restrict transfer. No underwriters
      or
      agents were involved in the foregoing issuance and no underwriting discounts
      or
      commissions were paid by us.





In
      February 2006, we issued William and Margaret Applebee 2,840 shares of our
      Series E Preferred Stock, which shares of Preferred Stock we had previously
      agreed to issue pursuant to and in connection with our purchase of the assets
      of
      AWT in December 2004. We claim an exemption from registration afforded by
      Section 4(2) of the Securities Act of 1933, as amended, since the foregoing
      issuance did not involve a public offering, the recipients took the securities
      for investment and not resale and we took appropriate measures to restrict
      transfer. No underwriters or agents were involved in the foregoing issuance
      and
      no underwriting discounts or commissions were paid by us.





In
      February 2006, we issued Randy Haddad 2,852 shares of our Series E Preferred
      Stock, which shares of Preferred Stock we had previously agreed to issue
      pursuant to and in connection with our purchase of the assets of AWT in December
      2004. We claim an exemption from registration afforded by Section 4(2) of the
      Securities Act of 1933, as amended, since the foregoing issuance did not involve
      a public offering, the recipients took the securities for investment and not
      resale and we took appropriate measures to restrict transfer. No underwriters
      or
      agents were involved in the foregoing issuance and no underwriting discounts
      or
      commissions were paid by us.





-102-





In
      February 2006, we issued 631 shares of our Series E Preferred Stock to various
      individuals in fulfillment of prior commitments. We claim an exemption from
      registration afforded by Section 4(2) of the Securities Act of 1933, as amended,
      since the foregoing issuance did not involve a public offering, the recipients
      took the securities for investment and not resale and we took appropriate
      measures to restrict transfer. No underwriters or agents were involved in the
      foregoing issuance and no underwriting discounts or commissions were paid by
      us.





Series
      F
      issuance was retracted in 2005 in connection with the purchase price adjustment
      of the Around the World, Inc. assets.





Dividends
      are payable if funds are available. Accrued but unpaid dividends do not pay
      interest.





American
      Leisure has not declared dividends as of December 31, 2006, however cumulative
      and unpaid dividends are as follows:


December
                  31, 2006
              
              December
                  31, 2005Series
                  A
              
              $
              6,294,049
              
              $
              5,094,049Series
                  B
              
              
              174,752
              
              
              140,852Series
                  C
              
              
              412,975
              
              
              304,219Series
                  E
              
              
              358,912
              
              
              261,824$
              7,240,688
              
              $
              5,800,944


American
      Leisure would be required to issue up to 10,818,633 and 10,760,793 shares of
      common stock if all preferred shares were converted at their most favorable
      conversion terms at December 31, 2006 and 2005.




**Warrants**




In
      2006,
      American Leisure issued 2,175,000 warrants of which 1,035,000 were issued in
      connection with loan guarantees and financing, 550,000 were issued for services,
      355,000 were issued for the sale of a subsidiary and 235,000 were issued for
      the
      acquisition of a promissory note.





In
      2005,
      American Leisure issued 4,354,032 warrants of which 3,854,032 were issued in
      connection with loan guarantees and financing, 200,000 were issued to directors
      and 300,000 were issued for the acquisition of the minority interest in Tierra
      Del Sol, Inc.





Warrants
      for Loan Guarantees and Financing Costs





2006


During
      2006, American Leisure issued 1,035,000 warrants valued at $865,518. The
      warrants were issued in connection with loan guarantees and in connection with
      obtaining additional financing and recorded as deferred financing costs. These
      warrants are exercisable from $1.02 and have terms of 5 years. The estimated
      fair value of the warrants was valued using the Black-Scholes option pricing
      model with the following assumptions: dividend yield 0.0%, expected
      volatility ranging from 131% to 146%, risk-free interest rate of 1.5% and
      expected lives of 60 months.





-103-





In
      January 2006, the Company authorized the issuance of warrants to Malcolm Wright,
      a director of the Company and the Company's Chief Executive Officer to purchase
      450,000 shares of our common stock at an exercise price of $1.02 per share.





In
      December 2006, the Company authorized the issuance of warrants to Mr. Wright
      to
      purchase 585,000 shares of our common stock at an exercise price of $1.02 per
      share. The Company is under a continued obligation to issue warrants at $1.02
      to
      Mr. Wright for guarantees he may be required to give on the Company's behalf
      going forward. The warrants were recorded as deferred financing
      costs.





2005


During
      2005, American Leisure issued 3,854,032 warrants valued at $3,837,696. The
      warrants were issued in connection with loan guarantees and in connection with
      obtaining additional financing and recorded as deferred financing costs. These
      warrants are exercisable from $0.001 to $5 and have terms ranging from 3 to
      5
      years. The estimated fair value of the warrants was valued using the
      Black-Scholes option pricing model with the following assumptions: dividend
      yield 0.0%, expected volatility of 195%, risk-free interest rate of 1.5% and
      expected lives of 36 to 60 months.





In
      July
      2005, the Company authorized the issuance of warrants to Malcolm Wright, a
      director of the Company and the Company's Chief Executive Officer and Bill
      Chiles, a director of the Company to purchase 347,860 shares and 168,672 shares,
      respectively, of our common stock at an exercise price of $1.02 per share.





In
      December 2005, the Company authorized the issuance of warrants to Mr. Wright
      to
      purchase 2,008,500 shares of our common stock at an exercise price of $1.02
      per
      share. The Company is under a continued obligation to issue warrants at $1.02
      to
      Messrs Chiles and Wright for guarantees they may be required to give on the
      Company's behalf going forward. The warrants were recorded as deferred financing
      costs. In addition, in December 2005, the Company authorized the issuance of
      warrants to Stanford International Bank, Stanford Venture Capital Holdings
      and
      their executives to purchase 924,000 shares of our common stock. These warrants
      are exercisable from $0.001 to $5 and have terms of 3 years of which 308,000
      warrants were exercised in 2006.





Warrants
      for Services





2006


During
      2006, American Leisure issued 550,000 warrants valued at $502,454. The warrants
      were issued to executives and vendors for services. These warrants are
      exercisable from $1.02 and have terms ranging from 3 to 5 years. The estimated
      fair value of the warrants was valued using the Black-Scholes option pricing
      model with the following assumptions: dividend yield 0.0%, expected volatility
      ranging from 131% to 146%, risk-free interest rate of 4.0% and expected lives
      of
      36 to 60 months.





2005


During
      2005, American Leisure issued 200,000 warrants valued at $144,057. The warrants
      were issued to members of the board of directors. These warrants are exercisable
      from $1.02 and have terms of 3 years. The estimated fair value of the warrants
      was valued using the Black-Scholes option pricing model with the following
      assumptions: dividend yield 0.0%, expected
      volatility of 158%, risk-free interest rate of 1.5% and expected lives of 36
      months.





-104-








Warrants
      for Sale of Subsidiary




During
      2006, American Leisure issued 355,000 warrants valued at $83,894 in connection
      with the sale of our subsidiary, Caribbean Leisure Marketing Limited ("CLM),
      to
      SIBL under a stock purchase agreement. These warrants are exercisable at $10.00
      and expire on April 30, 2008. The estimated fair value of the warrants was
      valued using the black-scholes option pricing model with the following
      assumptions: dividend yield 0.0%, expected volatility of 120%, risk-free
      interest rate of 1.5% and expected lives of 22 months. In connection with the
      agreement, SIBL agreed to amend the due date of certain notes, described in
      greater detail in Note 11. The warrants contain certain anti-dilution clauses,
      whereby if we grant any options or sell any shares of common stock for less
      than
      $1.02 per share, the exercise price of the 355,000 warrants will reset to such
      lower price.





Warrants
      for Purchase of Promissory Note





On
      August
      16, 2006, pursuant to Purchase Agreement between the Company and Stanford
      International Bank Limited (a minority shareholder and creditor of the Company),
      a promissory note in the principal amount of $750,000 made by Scott Roix in
      favor of Stanford International Bank Limited was purchased for 235,000 shares
      of
      common stock of the Company and a five year warrant to purchase 235,000 shares
      of the Company’s stock at an exercise price of $20 per share. The estimated fair
      value of the warrants was valued at $122,336 using the Black-Scholes option
      pricing model with the following assumptions: dividend yield 0.0%, expected
      volatility of 127%, risk-free interest rate of 1.5% and expected life of 60
      months. The note will be repaid in full on July 1, 2007.





Warrants
      Issued for Minority Interest





During
      2005, American Leisure issued 300,000 warrants valued at $233,713. The warrants
      were issued in connection with the acquisition of minority interest in Tierra
      Del Sol, Inc. The warrants are exercisable at $5 and have term of 5 years.
      The
      estimated fair value of the warrants was valued using the black-scholes option
      pricing model with the following assumptions: dividend yield 0.0%, expected
      volatility of 158%, risk-free interest rate of 1.5% and an expected life of
      60
      months.





At
      December 31, 2006, there are 8,658,246 warrants outstanding (including 8,383,246
      that were exercisable) with exercise prices ranging from $0.001 to $20.00 that
      expire between 2008 and 2011.





Stock
      Based Compensation





The
      does
      not maintain a formal stock option plan, however, the Company has granted
      warrants to officers and directors.




Effective
      January 1, 2006, the Company adopted SFAS No. 123 (revised
      2004) using the modified prospective transition method and, as a result did
      not retroactively adjust results from prior periods. Under this transition
      method, stock-based compensation expense for the year ended December 31,
      2006 includes compensation expense for all stock options granted prior to,
      but
      not yet vested as of January 1, 2006, based on the grant date fair value
      estimated in accordance with the original provisions of SFAS No. 123,
      and expense related to all stock options granted on or subsequent to
      January 1, 2006 based on the grant date fair value estimated
      in accordance with the provisions of SFAS No. 123 (revised 2004).
      Stock-based compensation expense totaled approximately $191,000 for the year
      ended December 31, 2006.







-105-




During
      2006, the Company granted 550,000 non-qualified warrants to certain employees
      pursuant to employment agreements and for services. The warrants all have an
      exercise price of $1.02 and lives ranging from 3 to 5 years.




100,000
      options vested 100% on the date of grant and the other options vest 50% at
      issuance and 25% over the next two years.





The
      Company utilizes the Black-Scholes valuation model in determining the fair
      value
      of stock-based grants. The resulting compensation expense is recognized over
      the
      requisite service period, which is generally the warrant vesting term of up
      to 2
      years. The weighted average fair value at the grant date for options issued
      during the years ended December 31, 2006 and 2005 was $0.91 and
      $0.72 per warrant, respectively. The fair value of warrants at the date of
      grant was estimated using the following assumptions during the years ended
      December 31, 2006 and 2005, respectively: (a) no dividend yield on the
      Company’s stock, (b) expected stock price volatility of approximately 146%
      and 195%, (c) a risk-free interest rate of approximately 4%, and 1.5%, and
      (d) an expected warrant term of 3 to 5 years.




The
      expected term of the warrants granted in 2006 is calculated using the simplified
      method as prescribed by Staff Accounting Bulletin No. 107. The
      expected term for each warrant grant represents the vesting term plus the
      original contract term divided by two. For 2006, expected stock price volatility
      represent the one year historical annualized volatility calculated using daily
      closing market prices for the Company’s common stock. The risk-free interest
      rate is based on the five year U.S. Treasury yield at the date of grant.
      The Company has not paid dividends in the past and does not currently anticipate
      paying any dividends in the near future.





The
      following summarizes warrant activity during the two years ended
      December 31, 2006:


Shares
              
              Weighted
                  average exercise price
              
              Weighted
                  average remaining contractual term
              
              Aggregate
                  intrinsic valueOutstanding,
                December
                  31, 2004
              
              
              525,000
              
              $
              1.02Granted
              
              
              200,000
              
              
              1.02Exercised
              
              
              -
              
              
              -Canceled
                  or expired
              
              
              -
              
              
              -Outstanding,
                December
                  31, 2005
              
              
              725,000
              
              
              1.02Granted
              
              
              550,000
              
              
              1.02Exercised
              
              
              -
              
              
              -Canceled
                  or expired
              
              
              -
              
              
              -Outstanding,
                December
                  31, 2006
              
              
              1,275,000
              
              $
              1.02
              
              
              2.11
              
              $
              -Exercisable,
                December
                  31, 2006
              
              
              1,000,000
              
              $
              1.02
              
              
              3.9
              
              $
              -





-106-





The
      following summarizes non vested stock options as of December 31, 2005 and
      changes through the year ended December 31, 2006:




Shares
              
              Weighted
                  average grant date fair valueNon-vested
                  at December 31, 2004
              
              
              262,500
              
              
              .88Granted
              
              
              200,000
              
              
              .72Vested
              
              
              (231,250
              )
              
              .72Non-vested
                  at December 31, 2005
              
              
              231,250
              
              
              .91Granted
              
              
              550,000
              
              
              .91Vested
              
              
              (506,250
              )
              
              .81Canceled
              
              
              -
              
              
              -Non-vested
                  at December 31, 2006
              
              
              275,000
              
              $
              .91


The
      aggregate intrinsic value in the table above represents the intrinsic value
      (the
      difference between the Company closing stock price on December 31, 2006 and
      the exercise price, multiplied by the number of in-the-money options) that
      would
      have been received by the option holders had all option holders exercised their
      options on December 31, 2006. No warrants were exercised in 2006 and 2005.
      The total fair value of shares vesting during the years ended December 31,
      2006 and 2005 was approximately $.88 and $.87, respectively. As of
      December 31, 2006, total unrecognized stock-based compensation expense
      related to non-vested stock options was approximately $300,000 which is
      expected to be recognized over a weighted average period of approximately
      2.5 years.





**NOTE
      13 - NET LOSS PER SHARE**




Dividends
      have not been declared on the Company’s cumulative preferred stock. The
      accumulated dividends are deducted from Net Loss to arrive at Net loss per
      share
      as follows:





Description
            
            2006
            
            2005Net
                Loss (as reported)
            
            $
            (8,148,896
            )
            $
            (4,085,825
            )Less
                Undeclared Preferred Stock Dividend
            
            
            (1,439,743
            )
            
            (1,439,405
            )Net
                Loss after Preferred Stock Dividend
            
            $
            (9,588,639
            )
            $
            (5,525,230
            )Net
                Income (Loss) per share Basic and Diluted
            
            $
            (0.89
            )
            $
            (0.55
            )





**NOTE
      14 - INCOME TAXES**





Deferred
      taxes are determined based on the temporary differences between the financial
      statement and income tax bases of assets and liabilities as measured by the
      enacted tax rates which will be in effect when these differences
      reverse.





The
      components of deferred income tax assets (liabilities) at December 31, 2006
      and
      2005, were as follows:





2006
            
            2005Net
                operating loss carry forwards
            
            $
            6,500,000
            
            $
            3,700,000


Valuation
                  allowance
              
              
              (6,500,000
              )
              
              (3,700,000
              )Net
                  deferred tax assets
              
              $
              -
              
              $
              -


-107-










American
      Leisure follows Statement of Financial Accounting Standards Number 109 (SFAS 109),
      "Accounting for Income Taxes." SFAS No. 109 requires a valuation allowance,
      if
      any, to reduce the deferred tax assets reported if, based on the weight of
      the
      evidence, it is more likely than not that some portion or all of the deferred
      tax assets will not be realized. Management has determined that a valuation
      allowance of $6,500,000 at December 31, 2006 is necessary to reduce the deferred
      tax assets to the amount that will more than likely than not be realized. The
      change in valuation allowance for 2006 was approximately
      $2,800,000.





At
      December 31, 2006, American Leisure had a net operating loss carry forward
      for
      Federal income tax purposes totaling approximately $17,100,000 which, if not
      utilized, will expire in the year 2026.





In
      June
      2002, American Leisure had a change in ownership, as defined by Internal Revenue
      Code Section 382, which has resulted in American Leisure’s net operating loss
      carry forward being subject to certain utilization limitations in the
      future.





The
      federal statutory tax rate reconciled to the effective tax rate for 2006 is
      as
      follows:





2006
            
            2005Tax
                at U.S. statutory rate
            
            
            34.0
            %
            
            34
            %State
                tax rate, net of federal benefits
            
            
            0.0
            
            
            0.0Change
                in valuation allowance
            
            
            (34.0
            )%
            
            (34.0
            )%Effective
                tax rate
            
            
            0.0
            %
            
            0.0
            %





**NOTE
      15 - COMMITMENTS AND CONTINGENCIES**





**Lease
      Commitments**





American
      Leisure leases office facilities under non-cancelable operating lease
      agreements. Future minimum rental payments are as follows:





December
                31,2007
            
            $
            748,6332008
            
            
            643,9002009
            
            
            510,7992010
            
            
            52,455$
            1,955,787





Rent
      expense totaled $913,023 and $243,509 for 2006 and 2005,
      respectively.





**Employment
      Agreements**





The
      Company has various employment agreements with select members of their
      management. These agreements provide for a base salary plus bonuses of up to
      19%
      of the profits
        of each subsidiary company based upon the Company’s operating earnings as
        defined in each agreement.





-108-





**Litigation**




In
        the
        ordinary course of its business, the Company may from time to time become
        subject to claims or proceedings relating to the purchase, subdivision, sale
        and/or financing of its real estate or its operations.
  We
        are a
        party in an action that was filed in Orange County, Florida and styled as
        Rock
        Investment Trust, P.L.C. and RIT, L.L.C. vs. Malcolm J. Wright, American
        Vacation Resorts, Inc., American Leisure, Inc., Inversora Tetuan, S.A., Sunstone
        Golf Resort, Inc., and Sun Gate Resort Villas, Inc., Case No. CIO-01-4874,
        Ninth
        Judicial Circuit, Orange County, Florida. In June, 2001, after almost 2 years
        from receiving notice from Malcolm Wright that one Mr. Roger Smee, doing
        business under the names Rock Investment Trust, PLC (a British limited company)
        and RIT, LLC (a Florida limited liability company) (collectively, the Smee
        Entities) had defaulted under various agreements to loan or to joint venture
        or
        to fund investment into various real estate enterprises founded by Mr. Wright,
        the Smee Entities brought the Lawsuit against Mr. Wright, American Leisure,
        Inc.
        (ALI) and several other entities. The gravamen of the initial complaint is
        that
        the Smee Entities made financial advances to Wright with some expectation
        of
        participation in a Wright real estate enterprise. In general, the suit requests
        either a return of the Smee Entities alleged advances of $500,000 or an
        undefined ownership interest in one or more of the defendant entities. Mr.
        Wright, American Leisure, Inc., and Inversora Tetuan, S.A., have filed a
        counterclaim and cross complaint against the Smee Entities and Mr. Smee denying
        the claims and such damages in the amount of $10 million for the tortuous
        acts
        of the Smee entities. In the unlikely event the matter ever proceeds to trial
        and the court rules that Mr. Wright is liable under his guarantee of the
        American Leisure, Inc. obligation to Smee, it is believed that such a ruling
        would not directly affect American Leisure Holdings, Inc. The litigation
        has
        been in abeyance, with no activity by the Smee entities for one year, and
        is not
        currently set for trial. We expect that this case will either be dismissed
        for
        lack of activity or will result in a judgment in favor of Malcolm
        Wright.
   In
        March
        2004, Manuel Sanchez and Luis Vanegas as plaintiffs filed a lawsuit against
        American Leisure Holdings, Inc. American Access Corporation, Hickory Travel
        Systems, Inc., Malcolm J. Wright and L. William Chiles, et al., seeking a
        claim
        for securities fraud, violation of Florida Securities and Investor Protection
        Act, breach of their employment contracts, and claims for fraudulent inducement.
        All defendants have denied all claims and have a counterclaim against Manuel
        Sanchez and Luis Vanegas for damages. The litigation commenced in March 2004.
        No
        material activity has occurred in this case, and we do not expect any activity
        in the near future. The claims are without merit and the claims are not material
        to us. We intend to vigorously defend the lawsuit.





-109-




In
        early
        May 2004, Around The World Travel, Inc. substantially all of the assets of
        which
        we purchased, filed a lawsuit in the Miami-Dade Florida Circuit Court against
        Seamless Technologies, Inc. and e-TraveLeaders, Inc. alleging breach of contract
        and seeking relief that includes monetary damages and termination of the
        contracts. They were granted leave to intervene as plaintiffs in the original
        lawsuits against Seamless and e- TraveLeaders. 
        On June 28, 2004, the above named defendants brought suit against Around
        The
        World Travel and American Leisure Holdings, Inc. in an action styled Seamless
        Technologies, Inc. et al. v. Keith St. Clair et al. This suit alleges that
        Around The World Travel has breached the contracts and also that American
        Leisure Holdings, Inc. and Around The World Travel’s Chief Executive Officer
        were complicit with certain officers and directors of Around The World Travel
        in
        securing ownership of certain assets for American Leisure Holdings, Inc.
        that
        were alleged to have been a business opportunity for Around The World Travel.
        This lawsuit involves allegations of fraud against Malcolm J. Wright. The
        lawsuit filed by Seamless has been abated and consolidated with the original
        lawsuit filed by Around The World Travel. In a related matter, Seamlesss
        attorneys brought another action entitled Peter Hairston v. Keith St. Clair
        et
        al. This suit mimics the misappropriation of business opportunity claim,
        but it
        is framed within a shareholder derivative action. The relief sought against
        American Leisure Holdings, Inc. includes monetary damages and litigation
        costs.
        We intend to vigorously support the original litigation filed against Seamless
        and defend the counterclaim and allegations against us. On February 9, 2007,
        the
        court heard AMLH, ALEC, and Mr. Wright’s motion to dismiss the various counts of
        the complaint.  The court dismissed with prejudice the E-Traveleaders /
        Seamless claims for rescission, constructive trust, and civil conspiracy. 
It dismissed without prejudice the claims for tortuous interference and priority
        as against TraveLeaders, and allowed the breach of contract claims to
        continue.  We believe that with further discovery, the court will dismiss
        or grant to AMLH, ALEC, and Mr. Wright summary judgment on all remaining
        or
        repleaded counts.
  On
          May 4,
          2005, Simon Hassine, along with members of his family, filed a lawsuit
          against
          us and Around The World Travel in the Circuit Court of Dade County, Florida,
          Civil Division, Case Number 05-09137CA. The plaintiffs are the former majority
          shareholders of Around The World Travel and former owners of the assets
          of
          TraveLeaders. The plaintiffs allege that that they have not been paid for
          i) a
          subordinated promissory note in the principal amount of $3,550,000 plus
          interest
          on such note which they allege was issued to them by Around The World Travel
          in
          connection with their sale of 88% of the common stock of Around The World
          Travel; and ii) subordinated undistributed retained earnings and accrued
          bonuses
          in an aggregate amount of $1,108,806 which they allege were due to them
          as part
          of the sale. The plaintiffs allege that the note was issued to them net
          of
          $450,000 of preferred stock of Around The World Travel that they further
          allege
          they never received. The plaintiffs also allege that in December 2004 they
          entered into a settlement agreement with the Company regarding these matters.
          The plaintiffs are pursuing a claim of breach of the alleged settlement
          agreement with damages in excess of $1,000,000, interest and costs as well
          as
          performance under the alleged settlement agreement or, in the alternative,
          a
          declaratory judgment that the promissory note, undistributed retained earnings
          and accrued bonuses are not subordinated to the Galileo Debt and full payment
          of
          the promissory note, undistributed retained earnings and accrued bonuses
          plus
          prejudgment interest, stated interest on the note, costs and reasonable
          attorneys fees. The plaintiffs are also pursuing a claim for breach of
          contract
          regarding the preferred stock of Around The World Travel and seeking $450,000
          plus interest, costs and reasonable attorneys fees. The plaintiffs are also
          pursuing claims of fraudulent transfer regarding our acquisition of interests
          in
          the debt and equity of Around The World Travel and seeking unspecified
          amounts.
          Our counsel filed various motions including a motion to dismiss the complaint
          in
          its entirety as against us and Malcolm J. Wright due to the failure by
          the
          plaintiffs to comply with a provision in the underlying document that grants
          exclusive jurisdiction to the courts located in Cook County, Illinois.
          The
          parties are currently in discussions regarding a cessation of the litigation
          while the plaintiffs seek relief from unrelated parties.
 -110-


On
        August
        10, 2006, Patsy Berman and Berman Mortgage Corporation served a complaint
        against Tierra del Sol Resort, Inc., Malcolm Wright, our Chief Executive
        Officer
        and Chairman, and a non-existent entity, Vantage Circa 39 Condotel Limited
        Partnership ("Vantage"), in the 11th Judicial Circuit in and for Miami-Dade
        County, Florida. The complaint alleges that Tierra del Sol and Vantage sought
        loans, that the plaintiffs offered to make loans, that Mr. Wright guaranteed
        the
        loans, that valid contracts were formed, and that because such loans did
        not
        close, the plaintiffs claim $3,550,000 in damages, representing funding fees,
        brokerage fees, and interest. We have concluded that the plaintiffs' complaint
        is wholly frivolous. We filed a Motion to Dismiss and a Motion for sanctions
        against the plaintiffs of the lawsuit, for failure to state a good faith
        claim
        in law or fact and the court granted the motion to dismiss without prejudice.
        Berman filed an amended complaint, and we responded with another motion to
        dismiss and motion to strike the request for a jury trial. The motions will
        be
        heard by the court in May 2007.
  Lufthansa
        City Center, et al (“LCC”) v. Hickory Travel Systems, Inc.  LCC has sued
        for Breach of Contract or, alternatively, Breach of a Settlement
        Agreement.  Hickory and LCC entered an agreement whereby LCC would
        exclusively use Hickory’s hotel program and Hickory would pay $110,000 per year
        to LCC.  LCC did not bring the promised value to the deal. 
Additionally, LCC entered an agreement with a competitor for hotel services
        prior to termination of the agreement.  Hickory vigorously disputes the
        allegations in the complaint and intends to counterclaim to recoup the damages
        from LCC’s breach of the agreement.
  In
        the
        ordinary course of our business, we may from time to time become subject
        to
        routine litigation or administrative proceedings, which are incidental to
        our
        business.
  We
        are
        not aware of any proceeding to which any of our directors, officers, affiliates
        or security holders are a party adverse to us or have a material interest
        adverse to us.
  **NOTE
        16 - EMPLOYEE BENEFITS**





The
      Company’s subsidiaries, HTS and ALEC, maintain qualified 401(k) profit sharing
      plans covering substantially all of its full time employees who have completed
      ninety days of service. Eligible employees may voluntarily contribute a
      percentage of their compensation up to established limits imposed by the
      Internal Revenue Service. At the discretion of the Board of Directors, the
      Company may make a matching contribution equal to a percentage of each
      employee’s contribution. There were no matching contributions made for the year
      ended December 31, 2006.





**NOTE
      17 - SELF-INSURED HEALTH INSURANCE**





The
      Company’s subsidiary, HTS, was partially self-insured for benefits provided
      under an employee health insurance plan through Great West Life Insurance
      Company through May 2006. Benefits included medical, prescription drug, dental
      and group term life insurance. The plan provided for self-insurance up to
      $30,000 per employee per year. Accordingly, there exists a contingent liability
      for unprocessed claims in excess of those reflected in the accompanying
      consolidated financial statements. Since June 2006, HTS has been insured through
      a traditional health insurance plan that does not include any self-insured
      components.





-111-





**NOTE
      18 - OPERATING SEGMENTS**





The
      Company has adopted the provisions of SFAS No. 131, "Disclosures about Segments
      of an Enterprise and Related Information". At December 31, 2006, the Company's
      four business units have separate management teams and infrastructures that
      offer different products and services. The business units have been aggregated
      into four reportable segments.




As
      noted
      in Note 7, Tierra Del Sol, Inc. is planning to construct a 972-unit resort
      in
      Orlando, Florida on 122 acres of undeveloped land. Development is scheduled
      to
      commence in the spring of 2006. Presales commenced in February 2004.




Through
      June 30, 2006, American Leisure operated a call center where revenues were
      recognized upon the completion of the earning process from the completion of
      the
      travel of the customer, the trip to the properties for the potential purchase,
      or the appropriate event based on the agreement with American Leisure's client
      as to the ability to be paid for the service.




Travel
      Unit ("Travel") provides travel related services.




Travel
      Unit ("Travel") provides travel related services. On and effective as of August
      1, 2006, the Management Agreement and the License Agreement was
      terminated.  The net receivable due from AWT of $6,588,579 is composed of
      $2,087,168 for cumulative earnings from January 1, 2005 and $4,501,411 for
      working capital advances made from ALEC to AWT.  These amounts are
      individually and unconditionally guaranteed by Jim Tolzien, the President of
      AWT, and Keith St. Clair, its controlling owner. Collection of the $6,588,579
      receivable is not expected and it has been written-off as of December 31,
      2006.





Hospitality
      segment is the Boulevard Hotel Property located in Miami Beach, Florida, which
      is undergoing remodeling and refurbishing to convert the property into a
      condominium and timeshare facility from a hotel.




For
      the
      year ending December 31, 2006:







In
                (000’s)
            
            Real
                Estate
            
            Call
                Center *
            
            Travel
            
            Hospitality
            
            Elim.
            
            Consol.RevenueServices
            
            $
            2,071
            
            $
            -
            
            $
            13,509
            
            $
            1,168
            
            $
            (2,157
            )
            $
            14,591Undeveloped
                land
            
            $
            13,129
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            13,129Segment
                income(loss)
            
            $
            (4,228
            )
            $
            -
            
            $
            (4,967
            )
            $
            162
            
            $
            (1,861
            )
            $
            (10,894
            )Equity
                inunconsolidatedaffiliate
            
            $
            -
            
            $
            140
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            140Gain
                fromdiscontinuedoperations
            
            $
            -
            
            $
            2,605
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            2,605Total
                income (loss)
            
            $
            (1,240
            )
            $
            (243
            )
            $
            (4,967
            )
            $
            162
            
            $
            (1,861
            )
            $
            (8,149
            )Total
                Assets
            
            $
            109,055
            
            $
            -
            
            $
            8,154
            
            $
            12,742
            
            $
            (9,807
            )
            $
            120,144CapitalExpenditures
            
            $
            28
            
            $
            -
            
            $
            269
            
            $
            7
            
            $
            (29
            )
            $
            275Depreciation
            
            $
            783
            
            $
            324
            
            $
            328
            
            $
            1
            
            $
            -
            
            $
            1,435




*
      Call
      center was sold as of June 30, 2006, results are through June 30,
      2006


**
      Depreciation is included in cost of operating revenues.




For
      the
      year ending December 31, 2005 (as restated):


In
                  (000’s)
              
              Real
                  Estate
              
              Call
                  Center
              
              Travel
              
              Hospitality
              
              Elim.
              
              Consol.RevenueServices
              
              $
              1,851
              
              $
              -
              
              $
              7,074
              
              $
              386
              
              $
              (1,563
              )
              $
              7,758Undeveloped
                  land
              
              $
              12,020
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              12,020Segment
                  income(loss)
              
              $
              (1,929
              )
              $
              -
              
              $
              (466
              )
              $
              -
              
              $
              (640
              )
              $
              (3,035
              )Equity
                  inUnconsolidatedAffiliate
              
              $
              -
              
              $
              (293
              )
              $
              -
              
              $
              -
              
              $
              -
              
              $
              (293
              )Loss
                  fromdiscontinuedoperations
              
              $
              -
              
              $
              (758
              )
              $
              -
              
              $
              -
              
              $
              -
              
              $
              (758
              )Total
                  income (loss)
              
              $
              (1,929
              )
              $
              (1,051
              )
              $
              (466
              )
              $
              -
              
              $
              (640
              )
              $
              (4,086
              )Total
                  Assets
              
              $
              94,150
              
              $
              2,898
              
              $
              12,366
              
              $
              11,204
              
              $
              (21,152
              )
              $
              99,466Capital
                Expenditures
              
              $
              5
              
              $
              -
              
              $
              171
              
              $
              -
              
              $
              -
              
              $
              176Depreciation
              
              $
              720
              
              $
              649
              
              $
              311
              
              $
              -
              
              $
              -
              
              $
              1,680
  ·
              Depreciation
                  is included in cost of operating
                  revenues.
 
 The
        accounting policies of the reportable segments are the same as those described
        in Note 2. The Company evaluates the performance of its operating segments
        based
        on our net loss.







-112-





**Note
      19 - RELATED PARTY TRANSACTIONS**




We
      accrue
      salaries payable to our Chief Executive Officer, President and Chief Financial
      Officer, Malcolm J. Wright. As of December 31, 2006 and 2005, the aggregate
      amount of unpaid salaries payable to Mr. Wright was $2,225,000 and $2,700,000.
      The Company accrues interest at a rate of 12% compounded annually on the
      salaries payable to Mr. Wright. As of December 31, 2006 and 2005, the aggregate
      amount of interest accrued on salaries payable to Mr. Wright was $477,000 and
      $454,500.




We
      accrue
      salaries payable to L. William Chiles, the President of Hickory, at $100,000
      per
      year as for his services. Mr. Chiles also receives paid compensation for his
      services from Hickory. As of December 31, 2006 and 2005, the aggregate amount
      of
      salaries payable to Mr. Chiles was $300,000 and $200,000. The Company accrues
      interest at a rate of 12% compounded annually on the salaries payable to Mr.
      Chiles beginning in January 2005. As of December 31, 2006 and 2005, the
      aggregate amount of interest accrued on salaries payable to Mr. Chiles was
      $45,000 and $16,500.




We
      pay or
      accrue directors' fees to each of our directors in an amount of $18,000 per
      year
      for their services as directors. During the last two fiscal years the Company
      has not paid director fees and accrued $130,500. The balance of fees due to
      directors as of December 31, 2006 and 2005 is $260,500 and $135,000.




The
      Company entered into an agreement with Mr. Wright and Mr. Chiles whereby the
      Company agreed to indemnify Mr. Wright and Mr. Chiles against all losses, costs
      or expenses relating to the incursion of or the collection of the Company's
      indebtedness against Mr. Wright or Mr. Chiles or their collateral. This
      indemnity extends to the cost of legal defense or other such reasonably incurred
      expenses charged to or assessed against Mr. Wright or Mr. Chiles. In the event
      that Mr. Wright or Mr. Chiles make a personal guarantee for the Company's
      benefit in conjunction with any third-party financing, and Mr. Wright or Mr.
      Chiles elect to provide such guarantee, then Mr. Wright and/or Mr. Chiles shall
      earn a fee for such guarantee equal to three per cent (3%) of the total original
      indebtedness and two per cent (2%) of any collateral posted as security. This
      fee is to be paid by the issuance of warrants to purchase the Company's common
      stock at a fixed strike price of $1.02 per share, when the debt is incurred.
      In
      July 2005, the Company authorized the issuance of warrants to Mr. Wright and
      Mr.
      Chiles to purchase 347,860 shares and 168,672 shares, respectively, of our
      common stock at an exercise price of $1.02 per share and in December 2005,
      the
      Company authorized the issuance of warrants to Mr. Wright to purchase 2,008,500
      shares of our common stock at an exercise price of $1.02 per share. In January
      2006, the Company authorized the issuance of warrants to Malcolm Wright, a
      director of the Company and the Company's Chief Executive Officer to purchase
      450,000 shares of our common stock at an exercise price of $1.02 per share.
      In
      December 2006, the Company authorized the issuance of warrants to Mr. Wright
      to
      purchase 585,000 shares of our common stock at an exercise price of $1.02 per
      share. The Company is under a continued obligation to issue warrants at $1.02
      to
      Mr. Wright for guarantees he may be required to give on the Company's behalf
      going forward. The warrants were valued using the Black-Scholes option pricing
      model and recorded as deferred financing costs.





-113-







The
      Company has generally agreed to provide the executive officers of each of its
      subsidiaries a bonus of up to 19% of the profits, if any, of the subsidiary
      in
      which they serve as our executive officers. The bonus will be paid for the
      five-year period beginning on the date that the Company enters into such an
      agreement with the subsidiary. Pursuant to this general agreement, Malcolm
      J.
      Wright is entitled to receive up to 19% of the profits of Leisureshare
      International Ltd, Leisureshare International Espanola SA, TDSR, American
      Leisure Homes, Inc., Advantage Professional Management Group, Inc., and American
      Leisure Hospitality Group Inc. and any new company formed for the development
      and sale of vacation homes, hospitality management, and vacation ownership
      . In
      2005, $182,647 was accrued to Malcolm Wright from the profits of Advantage
      Professional Management Group, Inc. L. William Chiles is entitled to receive
      19%
      of the profits of Hickory up to a maximum payment of $2,700,000. Although Mr.
      Chiles' bonus is limited, it is not subject to the buy-out by the Company as
      discussed below as it will cease as soon as the $2,700,000 amount has been
      paid
      to him. The executive officers of other the Company's other subsidiaries are
      entitled to share a bonus of up to 19% of the profits of the subsidiary in
      which
      they serve as our executive officers. The Company has the right to buy-out
      of
      these agreements after a period of five years by issuing such number of shares
      of its common stock equal to the product of the average after-tax profits for
      the five-year period multiplied by one-third (1/3) of the P/E ratio of the
      Company's common stock at the time of the buyout divided by the greater of
      the
      market price of the Company's common stock or $5.00. The Company has not paid
      bonus as of the filing of this report. There were no such accruals in 2006.




Malcolm
      J. Wright is the President and 81% majority shareholder of American Leisure
      Real
      Estate Group, Inc. (ALRG). On November 3, 2003 TDSR, entered into an exclusive
      development agreement with ALRG to provide development services for the
      development of the Sonesta Orlando Resort. Pursuant to this development
      agreement, ALRG is responsible for all development logistics and TDSR is
      obligated to reimburse ALRG for all of ALRG's costs and to pay ALRG a
      development fee in the amount of 4% of the total costs of the project paid
      by
      ALRG. During the fiscal years ended December 31, 2006 and 2005, ALRG
      administered operations and paid bills in the amount of $23,117,280 and
      $8,007,899 and received a fee of 4% (or approximately $980,691 and $320,316)
      under the development agreement. Total fees earned amount to $1,387,615 and
      $466,561 for the years ended December 31, 2006 and 2005.







Malcolm
      J. Wright and members of his family are the majority shareholders of Xpress.
      On
      November 3, 2003, TDSR entered into an exclusive sales and marketing agreement
      with Xpress to sell the units being developed by TDSR. This agreement provides
      for a sales fee in the
      amount of 3% of the total sales prices received by TDSR plus a marketing fee
      of
      1.5%. During the period since the contract was entered into and ended December
      31, 2006 and 2005 the total sales made by Xpress amounted to approximately
      $229,590,043 and $234,413,949. As a result of the sales through December 31,
      2006 and 2005, TDSR is obligated to pay Xpress a total sales fee of $6,887,701
      and $7,032,418 and a marketing fee of $3,443,851 and $3,516,209. As of December
      31, 2006 and 2005, the Company has paid Xpress $6,887,701 and $4,458,269 of
      cash. Issued Xpress 120,000 shares of Series A Preferred Stock valued at
      $1,200,000 in 2004, and transferred to Xpress a 1913 Mercedes Benz valued at
      $500,000 in 2005.







-114-





M
      J
      Wright Productions, Inc., of which Mr. Wright is the President, owns our
      Internet domain names.




The
      Company and Mr. Wright have agreed to terms in principle of an employment
      agreement pursuant to which Mr. Wright will serve as our Chief Executive
      Officer. The Company will provide the terms of a definitive employment agreement
      in a future filing with the Commission.




In
      September 2006, the Company (through its subsidiaries TDS Town Homes (Phase
      1),
      LLC and TDS Town Homes (Phase 2), LLC) contracted with Resorts Construction,
      LLC
      to furnish construction administration and management services at the Tierra
      Del
      Sol Resort property. Resorts Construction, LLC will provide all labor,
      materials, equipment and services necessary to construct 540 town homes. Malcolm
      Wright, CEO and Director of the Company, owns a 50% membership interest in
      Resorts Construction, LLC. The Company was required to pay to Resorts
      Construction, LLC $4 million with the execution of the contract as a payment
      for
      material required to begin construction, which amount shall be credited against
      reduction in retainage upon completion of 50% of the work. The contract has
      a
      lump sum price of $106,283,274 subject to certain increases. In addition,
      Resorts Construction, LLC will construct stem wall foundations for the town
      homes at the rate of $235.00 per linear foot which is in addition to the lump
      sum price of $106,283,274.




In
      September 2006, the Company (through its subsidiaries TDS Clubhouse, Inc.;
      TDS
      Amenities, Inc., and Costa Blanca I Real Estate, LLC) contracted with Resorts
      Construction, LLC to furnish construction administration and management services
      at the Tierra Del Sol Resort property. Resorts Construction, LLC will provide
      all labor, materials, equipment and services necessary to construct the Club
      House (Phase i), five Costa Blanca Condominium Buildings (Phase 2) and Water
      Park, Sports Bar, Additional Pool, Flow Rider and Other Amenities (Phase 3).
      Malcolm Wright, CEO and Director of the Company, owns a 50% membership interest
      in Resorts Construction, LLC. The Company was required to pay to Resorts
      Construction, LLC a non-refundable $500,000 payment with the execution of the
      contract as a payment for commitment and mobilization, which amount shall be
      credited against reduction in retainage upon completion of 50% of the work.
      The
      contract is stated at costs incurred plus 5%.




Through
      December 31, 2006, Resorts Construction, LLC has been paid
      $8,220,187.




On
      December 22, 2006 the Company acquired 100% of South Beach Resorts, LLC (“SBR”)
      for $1,120,000 plus 25% participation interest to Stanford International Bank
      Limited in the net proceeds realized by SBR upon the disposition of its
      Boulevard Hotel property located in Miami Beach, Florida. The $1,120,000 was
      provided as a loan from Stanford International Bank Limited to Reedy Creek
      Acquisition Corporation. SBR was owned by SBR Holdings, LLC that is owned
      equally by Malcolm Wright (CEO, CFO and Director of the Company) and Frederick
      Pauzar (COO, President and Director of the Company). At the date of acquisition,
      the Boulevard Hotel was encumbered with a mortgage due to LaSalle Bank, National
      Association, as Trustee of Marathon Real Estate CDO 2006-1 Grantor Trust,
      successor-in-interest to marathon Structured Finance Fund L.P. in the amount
      of
      $7,498,900 that matured on January 11, 2007. The mortgage has matured and
      remains unpaid however, the mortgage is not in default and a forbearance
      agreement is in place with LaSalle Bank, National Association, as Trustee of
      Marathon Real Estate CDO 2006-1 Grantor Trust, successor-in-interest to marathon
      Structured Finance Fund L.P. The Company is actively seeking to replace the
      debt
      with a new lender. SBR was acquired by Malcolm Wright and Frederick Pauzar
      in
      July 2005 and the financial statement presentation has been restated to present
      SBR as a subsidiary since that acquisition date.





-115-








**NOTE
      20 - SUBSEQUENT EVENTS**





**Forbearance
      Agreement**




On
      January 11, 2007 the mortgage due from South Beach Resorts LLC (SBR) to LaSalle
      Bank, National Association, as Trustee of Marathon Real Estate CDO 2006-1
      Grantor Trust, successor-in-interest to marathon Structured Finance Fund L.P.
      (Lender) became due and has not been paid. A Forbearance Agreement was executed
      with Lender to waive the default until April 11, 2007 provided SBR continues
      to
      make monthly interest payments on the debt outstanding up to $9,000,000 of
      which
      $7,498,900 has been drawn as of December 31, 2006 and a principal payment of
      $750,000 is made on February 8, 2007. An additional forbearance to July 11,
      2007
      is allowed provided that an additional $500,000 principal payment is made on
      or
      before July 3, 2007.




**Applebee
      Loan and Preferred Stock Issuance**




On
      January 30, 2007 AMLH entered executed a promissory note with Applebee Holding
      Company in the amount of $150,000 at 4% for seven years. As part of the
      agreement, 2,840 shares of AMLH Series E Convertible Preferred Stock were issued
      bearing a 4% per annum cumulative preferred dividend rate, par value of $.001
      and convertible into AMLH common stock at a strike price of $15.00 per
      share.




**International
      Property Investors AG Loan**




On
      February 9, 2007 South Beach Resorts, LLC (SBR) entered into a 180 day, $750,000
      loan agreement at the Wall Street Journal prime rate plus 1% with International
      Property Investors AG, a corporation organized under the laws of Liechtenstein,
      secured by SBR’s property. The proceeds of the loan were used solely for the
      payment of fees owed by SBR to Lender pursuant to the Forbearance Agreement.




**Litigation
      with E-Traveleaders/Seamless**




On
      February 9, 2007, the court heard AMLH, ALEC, and Mr. Wright’s motion to dismiss
      the various counts of the complaint.  The court dismissed with prejudice
      the E-Traveleaders/Seamless claims for rescission, constructive trust, and
      civil
      conspiracy.  It dismissed without prejudice the claims for tortuous
      interference and priority as against TraveLeaders, and allowed the breach of
      contract claims to continue.  We believe that with further discovery, the
      court will dismiss or grant to AMLH, ALEC, and Mr. Wright summary judgment
      on
      all remaining or repleaded counts.




**Put
      Option Extension**




On
      December 31, 2005, the Company through its subsidiary Tierra Del Sol, Inc.
      (“TDS”) acquired the remaining 19% minority interest held by Raster Investments
      in TDS for a note payable of $1,432,046 which was paid in August 2006, and
      197,000 of American Leisure common stock shares valued at market price on the
      date of the transaction or $183,210 and 300,000
      warrants with an exercise price at $5.00 per share valued at $233,713 using
      the
      Black-Scholes option pricing model with the following assumptions: Risk free
      rate of 1.5%; volatility
      of 157% and no dividends, two 3 bedroom condominium to be built in Phase II
      of
      the Orlando Resort valued at $630,160 and, post January 2007, Raster can sell
      the American Leisure shares to American Leisure for $985,000, which is recorded
      as a put liability. The put option is void if AMLH’s stock price is greater than
      $5.00 per share for 30 consecutive days in 2007. The Company accounted for
      this
      acquisition using the purchase method of accounting and allocated the purchase
      price to the land held for development. Full ownership gives the Company the
      ability to recognize all of the profits on the development of the Orlando Resort
      property. The put option was amended to state that the right to exercise the
      Put
      Option during the six months commencing twelve months after January 1, 2007
      and
      ending June 30, 2008.





-116-





**Preferred
      Stock Issued**




In
      March
      2007, we issued Anthony Lastumbo 504 shares of our Series E Preferred Stock,
      which shares of Preferred Stock we had previously agreed to issue pursuant
      to
      and in connection with our purchase of the assets of AWT in December 2004.
      We
      claim an exemption from registration afforded by Section 4(2) of the Securities
      Act of 1933, as amended, since the foregoing issuance did not involve a public
      offering, the recipients took the securities for investment and not resale
      and
      we took appropriate measures to restrict transfer. No underwriters or agents
      were involved in the foregoing issuance and no underwriting discounts or
      commissions were paid by us.







**SBR
      Holdings, LLC Acquisition**




In
      February 2007 the Company acquired 100% of SBR Holdings, LLC from Malcolm Wright
      (CEO and Director of the Company) and Frederick Pauzar (COO and President and
      Director of the Company) for no consideration. SBR Holdings, LLC sold South
      Beach Resorts, LLC to the Company in December 2006 (see Note 4 - Acquisitions).
      SBR Holdings, LLC’s only asset was its ownership of the membership interest in
      South Beach Resorts, LLC. As of February 2007, the Company transferred its
      membership interest in South Beach Resorts, LLC to SBR Holdings,
      LLC.




**SIBL
      Credit Agreement**




On
      March
      13, 2007, we entered into a $10,000,000 Credit Agreement with SIBL, whereby
      SIBL
      agreed to loan us $10,000,000 to use for the construction and development of
      Phase II of the Sonesta Resort. The loan was evidenced by a $10,000,000
      Promissory Note, which bears interest at the rate of 10% per annum. The
      Promissory Note is secured by a second priority security interest and lien
      on
      the land underlying Phase II of the Sonesta Resort, all buildings, structures
      and other improvements on such land, and all fixtures, equipment, goods,
      inventory or property owned by us currently or in the future, which security
      interests are evidenced by a Mortgage and Security Agreement, which we and
      several of our wholly owned subsidiaries entered into with SIBL in connection
      with the Credit Agreement. The loan is due in full and payable along with any
      accrued and unpaid interest on March 13, 2008. Any amounts not paid when due
      under the loan bear interest at the rate of 15% per annum. Through March 27,
      2007 $2,950,000 has been drawn from the Credit Agreement.




The
      Credit Agreement provides for additional advances to be made to us in an amount
      not to exceed $750,000, assuming that certain conditions are met by us in the
      future, including (a) that SIBL has received current financial information
      regarding our operations (as further described in the Credit Agreement) and
      that
      we have issued SIBL 26,250 warrants to purchase shares of common stock and
      (b)
      that we are able to obtain additional loans in an aggregate amount of $750,000
      from parties other than SIBL; and an additional loan in an amount not to exceed
      $1,500,000, assuming (a) and (b) above and that we have issued additional
      warrants (to be determined prior to such additional advance), to
      SIBL.




Immediately
      upon our execution of the Credit Agreement, we paid SIBL a placement fee of
      $200,000, plus SIBL’s reasonable costs and expenses incurred in connection with
      the closing of the Credit Agreement.




**Resorts
      Funding Group, LLC Credit Facility**




We
      have
      received $2,905,000 from Resorts Funding Group, LLC which has been matching
      the
      funds from the SIBL Credit Agreement (see above) through the end of March
      2007.




We
      intend
      to enter into an agreement with Resorts Funding Group, LLC on similar terms
      and
      conditions to those of the SIBL Credit Agreement.




-117-







**ITEM
        8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE**
 
 None.
 
 **ITEM
        8A. CONTROLS AND PROCEDURES.**
 
 (a)
        Evaluation of disclosure controls and procedures. Our Chief Executive Officer
        and Chief Financial Officer, after evaluating the effectiveness of the Company's
        "disclosure controls and procedures" (as defined in the Securities Exchange
        Act
        of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered
        by
        this quarterly report (the "Evaluation Date"), have concluded that as of
        the
        Evaluation Date, our disclosure controls and procedures are effective to
        provide
        reasonable assurance that information we are required to disclose in reports
        that we file or submit under the Exchange Act is recorded, processed, summarized
        and reported within the time periods specified in the Securities and Exchange
        Commission rules and forms, and that such information is accumulated and
        communicated to our management, including our Chief Executive Officer and
        Chief
        Financial Officer, as appropriate, to allow timely decisions regarding required
        disclosure.
 
 However,
        because we have not fully integrated and no longer plan to integrate our
        administrative operations, we face pressure related to recording, processing,
        summarizing and reporting consolidated financial information required to
        be
        disclosed by us in the reports that we file or submit under the Exchange
        Act in
        a timely manner as well as accumulating and communicating such information
        to
        our management, including our Chief Executive Officer and Chief Financial
        Officer, as appropriate to allow timely decisions regarding required disclosure.
 
 (b)
        Changes in internal control over financial reporting. There were no changes
        in
        the Company's internal control over financial reporting during the fiscal
        quarter covered by this report that materially affected, or are reasonably
        likely to materially affect, the Company's internal control over financial
        reporting.
 
 **ITEM
        8B. OTHER INFORMATION** .
 
 None.
  -118-
  **PART
        III**
 
 **ITEM
        9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH
        SECTION 16(A) OF THE EXCHANGE ACT.**
 
 ***OFFICERS
        AND DIRECTORS:***
 
 Our
        executive officers and Directors, and their ages and positions are as
        follows:
 
 
 
 **NAME**
              
              **AGE**
              
              **TITLE**Malcolm
                  J. Wright
              
              56
              
              Chief
                  Executive Officer andChairman
                  of the Board of DirectorsOmar
                  Jimenez
              
              45
              
              Chief
                  Financial OfficerFrederick
                  Pauzar
              
              52
              
              President,
                  Chief Operating Officer,and
                  DirectorMichael
                  Crosbie
              
              38
              
              Corporate
                  General Counsel,Executive
                  Vice President,and
                  SecretaryL.
                  William Chiles
              
              64
              
              Director,
                  Chief Executive Officer,and
                  Chairman of the Board ofDirectors
                  of Hickory Travel Systems, Inc.James
                  Leaderer
              
              53
              
              DirectorJeffrey
                  Scott
              
              50
              
              President
                  of Hickory Travel Systems, Inc.
 
  **BIOGRAPHICAL
        INFORMATION OF**
 **CURRENT
        OFFICERS AND DIRECTORS**
 
 **MALCOLM
        J. WRIGHT** is the
        driving force behind our business model, has served as a member of our Board
        of
        Directors and as our Chief Executive Officer since June 2002. Mr. Wright
        served
        as our Secretary from June 2002 until December 28, 2005 and as our President
        from June 2002 until March 7, 2006. Since March 7, 2006, Mr. Wright has served
        as the Chairman of our Board of Directors. Between June 2002 and March 2007,
        Mr.
        Wright served as our Chief Financial Officer. Prior to joining us, Mr. Wright
        successfully developed vacation properties abroad that are similar to the
        ones
        planned at The Sonesta Orlando Resort at Tierra Del Sol. Since 1998, Mr.
        Wright
        served as the President of American Leisure Inc, which we acquired in June
        2002.
        Mr. Wright currently serves as the President of American Leisure Real Estate
        Group, Inc., a real estate development company with which we have contracted
        for
        the development of the resort, Xpress Ltd., with which we contracted for
        the
        exclusive sales and marketing for resort, , M J Wright Productions, Inc.,
        which
        owns our Internet domain names, and Resorts Development Group, LLC, which
        engages in real estate development. Mr. Wright is also the President of Osceola
        Business Managers, Inc., Innovative Concepts, Inc. Florida World, Inc. and
        SunGate Resort Villas, Inc. which do not currently conduct any business
        operations. Since 1980, Mr. Wright has spent a considerable amount of time
        and
        money in establishing a large and effective marketing network in the United
        Kingdom and parts of Europe, that has been responsible for the pre-sales
        at The
        Sonesta Orlando Resort at Tierra Del Sol Mr. Wright was admitted to Associate
        Membership of the Institute of Chartered Accountants in England & Wales in
        1974 and admitted to Fellowship of the Institute of Chartered Accountants
        in
        England & Wales in 1978.
  -119-
   
 Mr.
        Wright has devoted substantially all of his time over the past few years
        to the
        growth and success of the Company. In addition to providing the vision and
        strategy for the acquisition and integration of the various subsidiaries,
        Mr.
        Wright has taken personal responsibility for the welfare of the Company.
        Mr.
        Wright has also guaranteed certain loan facilities, without which the Company
        would be in a decidedly different position. He has put his personal assets
        at
        stake to advance the interests of the Company. Furthermore, Mr. Wright has
        accrued his salary since 2002 in an effort to preserve capital. He has led
        the
        Company to transactions that have the potential to provide greater shareholder
        value.
 
 **OMAR
        JIMENEZ,** has
        served as our Chief Financial Officer since March 2007. Mr. Jimenez has served
        as the Chief Financial Officer of our wholly owned subsidiary, American Leisure
        Equities Corporation since December 2004. From June 2004 until December 2004,
        Mr. Jimenez served as a consultant to the Company. From April 2003 until
        June
        2004, Mr. Jimenez served as the Director of Operations of US Installation
        Group,
        Inc., which specialized in home improvement installations. From April 2002
        until
        April 2003, Mr. Jimenez served as Chief Financial Officer of Onyx Group,
        which
        specialized in finance, real estate, transportation, agriculture and insurance.
        From March 1998 to April 2002, Mr. Jimenez served as Chief Financial Officer
        of
        BCC Financial Management, Inc., which specialized in employee leasing and
        accounts receivable management services. From February 1991 until March 1998,
        Mr. Jimenez served as Chief Financial Officer of various insurance and finance
        companies.
 
 Mr.
        Jimenez received a Bachelors degree in Finance and Accounting from the
        University of Miami in 1983, and received a Masters of Business Administration
        degree from Florida International University in 2002. Mr. Jimenez is a Certified
        Public Accountant, Chartered Property and Casualty Underwriter, a Mortgage
        Broker, a Member of the American Institute of Certified Public Accountants
        and a
        Member of the Florida Institute of Certified Public Accountants.
 
 
 **FREDERICK
        PAUZAR** has
        served as our Director and Chief Operating Officer since September 1, 2005.
        Since March 7, 2006, Mr. Pauzar has served as our President. From December
        28,
        2005 until March 15, 2006, Mr. Pauzar served as our Secretary. Mr. Pauzar
        currently serves as Chairman of Group One Productions, Inc., a Florida-based
        business and real estate consulting and development firm, and has held this
        position since he co-founded the company in 1991. Also, Mr. Pauzar served
        as the
        Chief Executive Officer until December 2005. From January 1997 to February
        2005,
        Mr. Pauzar served as Chief Executive Officer of Fugleberg and from February
        2005
        to December 2005 Mr. Pauzar served as a Director and Vice President. Mr.
        Pauzar
        received an Associate in Science degree from Excelsior College in Albany,
        New
        York. Mr. Pauzar serves on the board of the University of Central Florida
        Lou
        Frey Institute of Politics and Government.
  -120-
  
 **MICHAEL
        CROSBIE** has
        served as our General Counsel, Executive Vice President, and Secretary since
        March 15, 2006. Mr. Crosbie previously served as a Partner with Foley &
Lardner, a national law firm in its Orlando, Florida, office from February
        2004
        until March 2006. From February 2002 until January 2004, Mr. Crosbie served
        as
        senior counsel with Foley & Lardner and from September 1998 until January
        2002, he served as an associate with Foley & Lardner. Prior to joining Foley
& Lardner, Mr. Crosbie served as a law clerk for United States District
        Judge Steven D. Merryday in Tampa, Florida, from June 1997 until August 1998.
        From August 1995 until May 1997, he was employed as an associate attorney
        with
        Rumberger, Kirk & Caldwell, in Orlando, Florida. Mr. Crosbie obtained his
        bachelors degree from the University of Central Florida in Political Science
        in
        1992 and obtained his Juris Doctorate from the University of Florida in 1995.
        Mr. Crosbie is a member of The Florida Bar, the Supreme Court of Florida,
        the
        United States District Court for the Middle District of Florida, the United
        States Court of Appeals for the Ninth and Eleventh Circuits and is also a
        member
        of the Federalist Society.
 
 **L.
        WILLIAM CHILES** has
        served as a member of our board of Directors since June 2002. Mr. Chiles
        served
        as our Chief Executive Officer from August 2002 to May 2004. Since August
        1998,
        Mr. Chiles has served as the Chief Executive Officer and President of Hickory
        Travel Systems, Inc., which we acquired in October 2003. Mr. Chiles received
        a
        Masters degree in marketing and finance from the University of Colorado and
        a
        Bachelors degree in business administration from Colorado State University.
        Mr.
        Chiles has specialized education in management. He is a Member of the Young
        Presidents Organization, the Chicago Presidents Organization and the Minister
        ARC Advisory Board.
 
 **JAMES
        LEADERER** has
        served as a member of our board of Directors since May 2002, and served as
        our
        President, Chief Executive Officer, Treasurer and Secretary from May 2002
        to
        July 2002. From January 1999 to November 2003, Mr. Leaderer served as the
        General Principal of Momentum Securities. Mr. Leaderer received a Bachelor
        of
        Science degree in engineering from Syracuse University.
 
 **JEFFREY
        SCOTT** was
        appointed as the President of Hickory Travel Systems, Inc. on March 7, 2006.
        Mr.
        Scott served as General Manager of Thor, Inc, a Cendant company. a travel
        services company, from November 2002 until March 2006. From August 2002 until
        November 2002, he served as Vice President of Sales and Client Services for
        Thor, Inc.
        From
        June 1990 to March 2001, he served in various positions with Worldspan L.P,
        including serving as Director of Customer Operations from April 1996 to March
        2001; serving as Manager in the Sales and Marking Department from April 1994
        to
        April 1996; and serving as a Regional Sales Manager of Zone Manager from
        June
        1990 until April 1994. Mr. Scott obtained a Bachelor of Science degree in
        Management from National Louis University, in Atlanta, Georgia in June
        2001. 
 There
          are
          no family relationships among our Directors, executive officers or persons
          nominated to become Directors or executive officers.
  -121-
 
 We
        are
        not aware of the occurrence during the last five years of any events described
        in Item 401(d) of Regulation S-B under the Securities Act regarding our
        Directors, persons nominated to become Directors, executive officers, or
        control
        persons.
 
 **Term
        Of Office**
 
 Our
        Directors are elected annually and hold office until our next annual meeting
        of
        the shareholders and until their successors are elected and qualified. Our
        officers are appointed by our board of Directors and hold office until they
        are
        removed by the board or they resign.
 
 **Code
        of Ethics**
 
 The
        Company has adopted a code of ethics that applies to the Company's principal
        executive officer, principal financial officer, principal accounting officer
        or
        controller, or persons performing similar functions. The Company will provide
        to
        any person without charge, upon request, a copy of such code of ethics. Persons
        wishing to make such a request should do so in writing to the Secretary at
        American Leisure Holdings, Inc., 2460 Sand Lake Road, Orlando, Florida,
        32809.
 
  -122-
  **ITEM
        10. EXECUTIVE COMPENSATION.**
 
 The
        following table sets forth information regarding the compensation that we
        paid
        to our Chief Executive Officer and each of our four other most highly
        compensated executive officers during the three years ended December 31,
        2006
        (Mr. Jimenez was appointed Chief Financial Officer subsequent to the year
        ended
        December 31, 2006, and his compensation has therefore not been disclosed
        below).
        We refer to these officers in this report as the named executive
        officers.
 
 **SUMMARY
        COMPENSATION TABLE** *****
 
 **Securities**
              
              **Total****Other
                  annual**
              
              **Underlying**
              
              **Annual****Name
                  and**
              
              
              
              **Salary**
              
              **Bonus**
              
              **compensation**
              
              **Options/SARs**
              
              **Compensation****Principal
                  Position**
              
              **Year**
              
              **($)**
              
              **($)**
              
              **($)**
              
              **($)**
              
              **($)**Malcolm
                  J. Wright
              
              2006
              
              $1,275,000(1)
              
              
              
              $29,280
                  (2)(3)
              
              $865,518
                  (8)
              
              $2,169,798(4)Chief
                  Executive Officer
              
              2005
              
              $560,000(5)
              
              $182,647(6)
              
              $29,280
                  (2)(3)
              
              $2,256,657
                  (8)
              
              $3,028,584and
                  Chairman
              
              2004
              
              $545,000(5)
              
              --
              
              $29,280
                  (2)(3)
              
              $481,015(8)
              
              $1,055,295L.
                  William Chiles
              
              2006
              
              $241,800(9)
              
              --
              
              $46,500(2)(13)
              
              
              
              $288,300
                  (13)Director
                  and the Chief
              
              2005
              
              $245,438(10)
              
              --
              
              $18,000(2)
              
              $217,334
                  (12)
              
              $480,772Executive
                  Officer of
              
              2004
              
              $252,902(11)
              
              --
              
              $18,000(2)
              
              $237,382
                  (12)
              
              $588,284(14)Hickory
                  TravelSystems,
                  Inc.Michael
                  Crosbie
              
              2006(14)
              
              $165,063
              
              --
              
              --
              
              $110,253(15)
              
              $275,316General
                  Counsel,Executive
                  VicePresident,
                  and SecretaryChristopher
                  Dane
              
              2005(16)
              
              $108,496
              
              --
              
              --
              
              --
              
              $108,496Former
                  Presidentof
                  HickoryTravel
                  Systems, Inc.Frederick
                  Pauzar
              
              2006
              
              $275,000
              
              --
              
              $18,000(2)
              
              --
              
              $293,000President,
              
              2005
              
              $93,333
                  (17)
              
              --
              
              $18,000(2)
              
              $72,029
                  (18)
              
              $183,362Chief
                  OperatingOfficer,
                  and DirectorCharles
                  Sieberling
              
              2006
              
              $125,000
              
              --
              
              --
              
              --
              
              $125,000Secretary
                  of Hickory
              
              2005
              
              $128,240
              
              --
              
              --
              
              --
              
              $128,240Travel
                  Systems, Inc
              
              2004
              
              $131,731
              
              --
              
              --
              
              --
              
              $131,731Jeffrey
                  Scott
              
              2006
              
              $118,173
              
              --
              
              --
              
              $110,253(19)
              
              $228,426President
                  of HickoryTravel
                  Systems, Inc.James
                  Leaderer
              
              2006
              
              $0
              
              --
              
              $18,000(2)
              
              --
              
              $18,000Director
  -123-
  
 *Does
        not
        include perquisites and other personal benefits in amounts less than 10%
        of the
        total annual salary and other compensation listed for each individual above.
        There are no stock option, retirement, pension, or profit sharing plans for
        the
        benefit of our officers and Directors and no individual listed above received
        any restricted stock awards during the periods listed.
 
 (1)
        Includes $775,000 which Mr. Wright was paid for prior years services and
        $500,000 in salary which was accrued during the year ended December 31,
        2006.
 
 (2)
        Includes $18,000 accrued per year for each Director for services rendered
        to the
        Company as member of the Company’s Board of Directors, which amount bears
        interest at the rate of 12% per annum, compounded annually until
        paid.
 
 (3)
        We
        pay $940 per month and related expenses to provide Mr. Wright with business
        use
        of a motor vehicle.
 
 (4)
        Includes $202,500 of accrued interest on salary payable to Mr.
        Wright.
 
 (5)
        Includes $500,000 and $250,000 of accrued salary for Mr. Wright's services
        as an
        executive officer for 2005 and 2004, respectively, and $60,000 and $45,000
        of
        accrued interest on salaries payable in 2005 and 2004, respectively, at 12%
        per
        annum.
 
 (6)
        Represents a bonus of $182,647 which was paid to Mr. Wright equal to 19%
        of the
        total net revenues of the Company's subsidiary, Advantage Professional
        Management, Inc. in connection with the terms of Mr. Wright's employment
        with
        the Company, which have not as of the date of this filing been finalized
        in a
        written employment agreement. The $182,647 bonus accrued to Mr. Wright during
        the year ended December 31, 2005.
 
 (8)
        Includes 1,035,000 options granted to Mr. Wright during the year ended December
        31, 2006; 2,365,510 options granted to Mr. Wright during the year ended December
        31, 2005; and 695,720 options granted to Mr. Wright during the year ended
        December 31, 2004 in connection with guarantees Mr. Wright made of debts
        which
        we owed, which pursuant to the terms of a Debt Guaranty Agreement we previously
        entered into with Mr. Wright, provide for him to receive warrants to purchase
        3%
        of any amount he guarantees on our behalf at an exercise price of $1.02 per
        share. The amount listed for the year ended December 31, 2004 also includes
        100,000 options to purchase shares of our common stock at an exercise price
        of
        $1.02 per share, which were granted to him in consideration for services
        rendered to the Company as a Director.
 
 (9)
        Mr.
        Chiles was paid $141,800 in salary for his services to the Company as Chief
        Executive Officer of Hickory Travel Systems, Inc. during the year ended December
        31, 2006. He also accrued $100,000 of salary for his services to the Company
        as
        Chief Executive Officer of Hickory Travel Systems, Inc., which accrued salary
        bears interest at the rate of 12% per year compounded annually until paid.
        Mr.
        Chiles is provided a new insured automobile for his use during the term of
        his
        employment with Hickory, which vehicle shall have an approximate value of
        $80,000, and which amount is not included in the total compensation included
        above as the value of the use of such vehicle by Mr. Chiles does not exceed
        10%
        of his salary for any year disclosed above.
  -124-
   
 (10)
        Mr.
        Chiles was paid $145,438 in salary for his services to the Company as Chief
        Executive Officer of Hickory Travel Systems, Inc. during the year ended December
        31, 2005. He also accrued $100,000 of salary for his services to the Company
        as
        Chief Executive Officer of Hickory Travel Systems, Inc., which accrued salary
        bears interest at the rate of 12% per year compounded annually until paid.
 
 (11)
        Includes $152,902 of salary paid to Mr. Chiles for his services as an executive
        officer of Hickory for 2004,and $100,000 of accrued salary for 2004.
 
 (12)
        Represents 168,672 options granted to Mr. Chiles during the year ended December
        31, 2006 and 337,000 options granted to Mr. Chiles during the year ended
        December 31, 2005, in connection with guarantees Mr. Chiles made of debts
        which
        we owed, which pursuant to the terms of a Debt Guaranty Agreement we previously
        entered into with Mr. Chiles, provide for him to receive warrants to purchase
        3%
        of any amount he guarantees on our behalf at an exercise price of $1.02 per
        share. The amount listed for the year ended December 31, 2004 also includes
        100,000 options to purchase shares of our common stock at an exercise price
        of
        $1.02 per share, which were granted to him in consideration for services
        rendered to the Company as the Company’s Director.
 
 (13)
        Includes $28,500 of accrued interest on amounts owed to Mr. Chiles.
 
 (14)
        Mr.
        Crosbie was appointed as our General Counsel, Executive Vice President and
        Secretary on March 15, 2006.
 
 (15)
        Includes 100,000 options with an exercise price of $1.02 per share, of which
        50,000 options vested to Mr. Crosbie upon his appointment as our General
        Counsel, Executive Vice President and Secretary on March 15, 2006, and the
        remaining 50,000 options vest to Mr. Crosbie on the first and second
        anniversaries of his appointment as an officer of the Company, assuming he
        is
        still employed by the Company at that time.
 
 (16)
        Mr.
        Dane served as president of Hickory Travel Systems, Inc. from March 1, 2005
        until March 1, 2006.
 
 (17)
        Mr.
        Pauzar was paid $93,333 for his services as the Company's Chief Operating
        Officer from September 1, 2005 until December 31, 2005 and for his services
        as
        the Company's Secretary from December 28, 2005 until December 31, 2005. Mr.
        Pauzar did not accrue any salary for the year ended December 31, 2005. Mr.
        Pauzar does not have an employment agreement with the Company as of the date
        of
        this filing.
 
 (18)
        Includes 100,000 options with an exercise price of $1.02 per share, of which
        50,000 options vested to Mr. Pauzar upon his appointment as President of
        the
        Company in September 2005, and the remaining 50,000 options vest to Mr. Pauzar
        on the first and second
        anniversaries of his appointment as President of the Company (of which 25,000
        additional options have vested to date on the first anniversary of his
        appointment), assuming he is still employed by the Company at that
        time.
  (19)
        Includes 100,000 options with an exercise price
        of $1.02 per share, of which 50,000 options vested to Mr. Scott upon his
        appointment as President of Hickory on March 2, 2006, and the remaining 50,000
        options vest to Mr. Scott on the first and second anniversaries of his
        appointment as President of Hickory (of which 25,000 additional options have
        vested to date on the first anniversary of his appointment), assuming he
        is
        still employed by the Hickory at that time.
  -125-
  
  
 **EMPLOYMENT
        AGREEMENTS**
 
 Mr.
        Wright and we are negotiating an employment agreement pursuant to which Mr.
        Wright will serve as our Chief Executive Officer.
 
 Mr.
        Pauzar and we are negotiating an employment agreement pursuant to which Mr.
        Pauzar will serve as our President and Chief Operating Officer.
 
 Effective
        March 15, 2006, we entered into a three year Employment Agreement with Michael
        Crosbie to serve as our Executive Vice President, Secretary and General Counsel.
        During the term of the employment agreement, Mr. Crosbie will receive a salary
        equal to $170,000 per year, subject to yearly increases of no less than 10%
        per
        year. Pursuant to the Employment Agreement he is also eligible for yearly
        bonuses. In connection with Mr. Crosbie’s Employment Agreement, Mr. Crosbie
        received 100,000 warrants to purchase shares of our common stock at an exercise
        price of $1.02 per share, of which 25,000 warrants vested on March 15, 2006,
        and
        25,000 warrants will vest to him as of March 15, 2007, 2008 and 2009 (assuming
        he is still employed under the Employment Agreement on those dates). Mr.
        Crosbie
        is also eligible for a vehicle allowance equal to 5% of his annual
        salary.
 
 On
        May
        18, 2004, we entered into a three-year employment agreement with L. William
        Chiles to serve as Chairman of our board of Directors and a separate three-year
        employment agreement for him to serve as the President and Chief Executive
        Officer of Hickory Travel Systems, Inc. ("Hickory"). Mr. Chiles ceased serving
        as President of Hickory on March 7, 2006 and ceased serving as the Chairman
        of
        our board of Directors on March 7, 2006. The agreements provide that Mr.
        Chiles
        will receive a base salary of $100,000 for his services as our Chairman and
        $150,000 for his services as the Chief executive Officer of Hickory. Under
        each
        agreement, Mr. Chiles is eligible to receive an annual incentive-based bonus
        based on his achievement of goals and objectives that he and our board of
        Directors agree upon. Mr. Chiles is entitled to one and one-half weeks of
        vacation at two times his base salary rate per week per $50,000 of his base
        salary for his services as Chairman and $75,000 of his base salary for his
        services as Chief Executive Officer of Hickory. Mr. Chiles is also entitled
        to
        share in the profits of Hickory in an amount not to exceed $2,700,000 over
        the
        life of his employment agreement with Hickory. Hickory is required to provide
        Mr. Chiles with key man life insurance equal to eight times his base salary;
        however, neither we nor Hickory have obtained such policy as of the date
        of this
        report. Hickory is also required to provide Mr. Chiles with one insured
        automobile having a value of $80,000 every year of his employment agreement.
        If
        Mr. Chiles is terminated without cause, under each agreement, he will receive
        thirty-six months' base salary and any incentive-based bonus that otherwise
        would have been payable to him through the date that we terminate his
        employment. We do not have an obligation to pay base salary or incentive-based
        bonus to Mr. Chiles under either agreement if he voluntarily terminates his
        employment or he is terminated for cause. For purposes of these employment
        agreements, "cause" means the following activities:
  -126-
   
 -
              Use
                  of alcohol, narcotics or other controlled substances that prevent
                  him from
                  efficiently performing his duties;
 
 -
              Disclosure
                  of confidential information or competes against us in violation
                  of the
                  employment agreements;
 
 -
              Theft,
                  dishonesty, fraud, or embezzlement from us or a violation of the
                  duty of
                  loyalty to us;
 
 -
              If
                  Mr. Chiles is directed by a regulatory or governmental authority
                  to
                  terminate his employment with us or engages in activities that
                  cause
                  actions to be taken by regulatory or government authorities, that
                  have a
                  material adverse effect on us;
 
 -
              Conviction
                  of a felony (other than a felony resulting in a traffic violation)
                  involving any crime of moral turpitude or any crime involving us;
 
 -
              Sexual
                  harassment or sexually inappropriate behavior;
 
 -
              Materially
                  disregards duties under the employment agreements;
 
 -
              Egregious
                  misconduct or pattern of conduct; or
 
 -
              Entering
                  into enforceable commitments on our behalf without conforming to
                  our
                  policies and procedures or in violation of any of our
                  directives.
 
  -127-
  **COMPENSATION
        DISCUSSION AND ANALYSIS**
 
 **Audit
        Committee**
 
 We
        do not
        have an audit committee or an audit committee financial expert. We expect
        the
        nomination and acceptance of several Directorships in the future. We anticipate
        that we will form an audit committee when new members join our board of
        Directors, and anticipate that one of them will serve as an independent audit
        committee financial expert.
 
 **Compensation
        Committee**
 
 We
        do not
        have a compensation committee. We expect the nomination and acceptance of
        several Directorships in the future. We anticipate that we will form a
        compensation committee when new members join our board of
        Directors.
 
 **Compensation
        Of Directors**
 
 We
        pay or
        accrue $18,000 per year for each person who serves on the board of Directors.
        During the last two fiscal years we accrued all Directors salaries, which
        amount
        totaled approximately $260,500 as of December 31, 2006.
 
 In
        June
        2004, we granted to each of Malcolm J. Wright and L. William Chiles warrants
        to
        purchase 100,000 shares (or an aggregate of 200,000 shares) of our common
        stock
        at an exercise price of $1.02 per share for their services. Warrants to purchase
        75,000 shares have vested to each of them. Warrants to purchase the remaining
        25,000 shares will vest to each of them on their next anniversary dates as
        Directors, provided that they are still serving as Directors. They may exercise
        the warrants for a period of five years from the dates on which such warrants
        vest.
 
 In
        September 2005, we granted warrants to purchase 100,000 shares of our common
        stock at an exercise price of $1.02 per share to Frederick Pauzar for his
        services as a Director. The warrants vested immediately with respect to 25%
        of
        the shares and will vest with respect to 25% of the shares on the next three
        anniversaries of the date on which Mr. Pauzar became a Director, provided
        that
        Mr. Pauzar is still serving as a Director on such dates.
 
 **Executive
        Compensation Philosophy**
 
 Our
        Board
        of Directors determines the compensation provided to our executive officers
        in
        their sole determination. Our executive compensation program is designed
        to
        attract and retain talented executives to meet our short-term and long-term
        business objectives. In doing so, we attempt to align our executives’ interests
        with the interests of our shareholders by providing an adequate compensation
        package to such executives. This compensation package includes a base salary,
        which we believe is competitive with other companies of our relative size.
        In
        addition, we have previously granted certain options to our executive and
        non-executive employees as part of our compensation package, and our Board
        of
        Directors reserves the right to award incentive bonuses which are linked
        to our
performance,
        as well as to the individual executive officer’s performance in the future. This
        package may also include long-term, stock based compensation to certain
        executives which is intended to align the performance of our executives with
        our
        long-term business strategies.
  -128-
  
 **Base
        Salary**
  The
        base
        salary of our executive officers, as described in the table and footnotes
        above,
        was established by evaluating the range of responsibilities of their positions,
        as well as the anticipated impact that such individuals could have in meeting
        our strategic objectives. The established base salary of each individual
        was
        then benchmarked to comparable positions within our industry and similarly
        sized
        companies. Base salaries may be adjusted to reflect the varying levels of
        position responsibilities and individual executive performance.
 
 **Incentive
        Bonus**
 
 Along
        with our executives’ base salaries, the Board of Directors reserves the right to
        give incentive bonuses to our executive officers, which bonuses the Board
        of
        Directors may grant in its sole discretion, if the Board of Directors believes
        such bonuses are in the Company’s best interest, after analyzing our current
        business objectives and growth, if any, and the amount of revenue we are
        able to
        generate each month, which revenue is a direct result of the actions and
        ability
        of such executives in the sole discretion of the Board of
        Directors.
 
 **Long-term,
        Stock Based Compensation**
 
 In
        order
        to attract, retain and motivate executive talent necessary to support the
        Company’s long-term business strategy we may award certain executives with
        long-term, stock based compensation in the future, in the sole discretion
        of our
        Board of Directors, which we do not currently have any immediate plans to
        award.
 
 **Criteria
        for Compensation Levels**
 
 The
        Company has always sought to attract and retain qualified executives and
        employees able to positively contribute to the success of the Company for
        the
        benefit of its various stakeholders, the most important of which is its
        shareholders, but also including its customers, its employees, and the
        communities in which the Company operates.
 
 The
        Board
        of Directors (in establishing compensation levels for the Chief Executive
        Officer and President, as well as other executive positions) and the Company
        (in
        establishing compensation levels for all executive and non-executives of
        the
        Company) consider many factors, including, but not limited to, the individual’s
        abilities and executed performance that results in: the advancement of corporate
        goals of the Company, execution of the Company’s business strategies,
        contributions to positive financial results, contributions to the Company’s
        overall image and reputation in the Company’s
        industry, and contributions to the development of the management team and
        other
        employees. An employee must demonstrate his or her ability to deliver results
        in
        his or her areas of responsibility, which can include, among other things:
        business development with new and existing customers, development of new
        products, sales and marketing, efficient management of operations and systems,
        implementation of appropriate changes and improvements to operations and
        systems, personnel management, financial management, and strategic decision
        making. In determining compensation levels, the Board of Directors also
        considers: competitiveness of compensation packages relative to other comparable
        companies, both inside and outside of the resort construction and travel
        services industries, and the experience level of each particular individual.
  -129-
  
 Compensation
        levels for executive officers are generally reviewed upon the expiration
        of such
        executive’s employment and/or consulting agreements (if any), or annually, but
        may be reviewed more often as deemed appropriate by our Board of Directors.
 
 **Compensation
        Philosophy and Strategy**
 
 In
        addition to the “Criteria for Compensation Levels” set forth above, the Company
        has a “Compensation Philosophy” for all employees of the Company (set forth
        below), and a “Compensation Strategy for Key Management Personnel” (set forth
        below), a substantial portion of which also applies to all employees of the
        Company.
 
 **Compensation
        Philosophy**
 
 The
        Company’s compensation philosophy is as follows:
 
 ·
              The
                  Company believes that compensation is an integral component of
                  its overall
                  business and human resource strategies. The Company’s compensation plans
                  will strive to promote the hiring and retention of personnel necessary
                  to
                  execute the Company’s business strategies and achieve its business
                  objectives.
 
 ·
              The
                  Company’s compensation plans will be strategy-focused, competitive, and
                  recognize and reward individual and group contributions and results.
                  The
                  Company’s compensation plans will strive to promote an alignment of the
                  interests of employees with the interests of the shareholders by
                  having a
                  portion of compensation based on financial results and actions
                  that will
                  generate future shareholder value.
 
 ·
              In
                  order to reward financial performance over time, the Company’s
                  compensation programs generally will consist of: base compensation,
                  and
                  may also consist of short-term variable incentives and long-term
                  variable
                  incentives, as appropriate.
 
 ·
              The
                  Company’s compensation plans will be administered consistently and fairly
                  to promote equal opportunities for the Company’s
                  employees.
  -130-
  **Compensation
        Strategy for Key Management Personnel**
 
 The
        Company’s compensation strategy for its key management personnel is as follows:
 
 ·
              Total
                  compensation may include base salary and short-term and long-term
                  variable
                  incentives based on annual and long term performance, and long-term
                  variable incentives, in each case, where
                  appropriate.
 
 ·
              Compensation
                  will be comparable to general and industry-specific compensation
                  practices.
 
 ·
              Generally,
                  base compensation, and targeted short and long-term variable compensation,
                  if any, will be established within the range of compensation of
                  similarly
                  situated companies in the Company’s industry. The Company’s organization
                  size and complexity will be taken into account, and therefore similarly
                  situated companies include companies of similar size and complexity
                  whether or not such companies are in the Company’s industry or
                  not.
 
 ·
              When
                  determining compensation for officers, managers and consultants,
                  the
                  Company takes into account the employee’s (and/or consultant’s) knowledge,
                  experience, past employment history and connections in the industry,
                  including industry specific knowledge and experience, to the extent
                  such
                  knowledge and experience contributes to the Company’s ability to achieve
                  its business objectives.
 
 ·
              The
                  Company reserves the right to adjust annual base salaries of employees
                  and/or to award performance based bonuses if individual performance
                  is at
                  or above pre-established performance
                  expectations.
 
 **ITEM
        11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
        STOCKHOLDER MATTERS.**
 
 The
        following table sets forth information as of March 1, 2007, with respect
        to the
        beneficial ownership of our common stock by (i) each Director and officer
        of the
        Company, (ii) all Directors and officers as a group and (iii) each person
        known
        by the Company to own beneficially 5% or more of our common stock:
  **Total****Preferred**
              
              
              
              **Total**
              
              **Percentage
                  of****Common**
              
              **Stock
                  Voting**
              
              
              
              **Voting**
              
              **Beneficial****Stock(1)**
              
              **Rights(1)**
              
              **Warrants(1)**
              
              **Shares(1)**
              
              **Voting
                  Shares(1)****Roger
                  Maddock**
              
              2,447,616(2)
              
              5,050,000(3)
              
              513,000(4)
              
              8,010,616(2)(3)(4)
              
              48.7%(5)**Malcolm
                  J. Wright**
              
              1,565,675(6)
              
              3,900,000(7)
              
              4,196,230(8)
              
              9,661,905(6)(7)(8)
              
              50.9%(9)CEO
                  and Chairman**Omar
                  Jimenez**
              
              -
              
              -
              
              100,000(24)
              
              100,000(24)
              
              0.1%CFO**Stanford
                  Venture****Capital**
              
              845,733(10)
              
              -
              
              708,000(11)
              
              1,553,733(10)(11)
              
              13.4%(12)**Holdings,
                  Inc.****Stanford**
              
              1,560,500(13)
              
              477,000(14)
              
              744,000(15)
              
              2,781,500(13)(14)(15)
              
              22.2%(16)**International****Bank
                  Limited****L
                  William Chiles**
              
              850,000
              
              -
              
              606,016(17)
              
              1,456,016(17)
              
              12.7%(18)Director**James
                  Leaderer**
              
              10,000
              
              -
              
              
              
              10,000
              
              0.1%(19)Director**Frederick
                  Pauzar**
              
              1,000
              
              -
              
              75,000(20)
              
              75,000(20)
              
              0.7%(21)Director**Michael
                  Crosbie**
              
              -
              
              -
              
              75,000(22)
              
              75,000(22)
              
              0.7%(23)General
                  Counsel
                Executive
                  Vice President and
                  Secretary**(All
                  officers**
              
              **2,426,675**
              
              **3,900,000(7)**
              
              **5,052,246(8)(17)**
              
              **11,378,921(6)(7)(8)**
              
              **57.3%(25)****and
                  Directors**
              
              
              
              
              
              
              
              **(20)(22)(17)(20)(22)****as
                  a group****six
                  persons)**
 
 (1)
        The
        number of shares of common stock owned are those "beneficially owned" as
        determined under the rules of the Commission, including any shares of common
        stock as to which a person has sole or shared voting or investment power
        and any
        shares of common stock which the person has the right to acquire within sixty
        (60) days through the exercise of any option, warrant or right. As of March
        1,
        2007, there were 10,877,974 shares of common stock outstanding.
 
 (2)
        Includes 2,102,268 shares of common stock owned by Arvimex, Inc., whose
        president is Mr. Maddock and 345,348 shares of common stock owned directly
        by
        Mr. Maddock.
 
 (3)
        Includes 30,000 shares of Series A Preferred Stock, which are convertible
        into
        300,000 shares of common stock, owned directly by Mr. Maddock and 475,000
        shares
        of Series A Preferred Stock, which are convertible into 4,750,000 shares
        of
        common stock held by Arvimex, Inc., whose president is Mr. Maddock.
 
 (4)
        Includes 270,000 warrants to purchase shares of the Company's common stock
        which
        were granted to Avirmex, Inc., whose president is Mr. Maddock, in January,
        2004
        and 243,000 warrants to purchase shares of the Company's common stock at
        $1.02
        per share, which warrants were issued to Mr. Maddock in connection with his
        guaranty of the Company's $8,100,000 credit facility from Stanford International
        Bank, Ltd.
 
 (5)
        Using
        16,440,974 shares outstanding, which assumes the conversion of Mr. Maddock's
        5,050,000 shares of Series A Preferred Stock and the exercise of all 513,000
        warrants which he beneficially owns.
 
 (6)
        Includes 845,733 shares of common stock held individually by Mr. Wright and
        719,942 shares held by Xpress, Ltd. ("Xpress"), of which Mr. Wright serves
        as
        president.
 
 (7)
        Includes 55,000 shares of Series A Preferred Stock which are convertible
        into
        550,000 shares of the common stock, which are owned individually by Mr. Wright
        and 335,000 shares of Series A Preferred Stock owned directly by Xpress,
        which
        Mr. Wright is the president of, which are convertible into 3,350,000 shares
        of
        common stock. Mr. Wright has pledged 845,733 shares of common stock to Stanford
        as collateral for an aggregate of $6,000,000 of financing that Stanford has
        provided to us. Mr. Wright disclaims beneficial
        ownership of 302,000 shares of common stock owned directly by James Hay
        Trustees, Ltd. as Mr. Wright does not have voting or investment power over
        these
        shares, which the trust is holding for the benefit of Mr. Wright's
        pension.
  -131-
  
 (8)
        Includes 4,196,230 warrants to purchase shares of the Company's common stock
        at
        $1.02 per share.
 
 (9)
        Using
        18,974,204 shares of common stock outstanding, assuming the conversion of
        Mr.
        Wright's 390,000 shares of Series A Preferred Stock and the exercise of all
        4,196,230 warrants held by Mr. Wright.
 
 (10)
        Includes 845,733 shares of common stock pledged by Mr. Wright, see footnote
        (7)
        above. However, this amount does not include the shares of common stock directly
        owned by four Stanford employees or shares issuable upon exercise of the
        warrants owned by such employees, as there are no contracts, agreements or
        understandings pursuant to which Stanford has or shares voting power, which
        includes the power to vote, or direct the voting of, or investment power,
        which
        includes the power to dispose or direct the disposition of, in connection
        with
        the shares held by the Stanford employees.
 
 (11)
        Includes 708,000 warrants to purchase shares of the Company's common stock
        at
        $5.00 per share.
 
 (12)
        Using 11,585,974 shares of common stock outstanding, which amount assumes
        the
        exercise by Stanford of all 708,000 warrants which it holds.
 
 (13)
        Includes 1,125,000 shares of common stock held by Stanford International
        Bank,
        Ltd., and an aggregate of $4,355,000 in convertible promissory notes convertible
        into shares of common stock at $10 per share, which are convertible into
        an
        aggregate of 435,500 shares of common stock at the option of Stanford
        International Bank, Ltd.
 
 (14)
        Includes 23,850 shares of Series C Preferred Stock held by Stanford
        International Bank, Ltd., which are convertible into 477,000 shares of common
        stock.
 
 (15)
        Includes warrants to purchase 231,000 shares of the Company's common stock
        at
        $0.001 per share and warrants to purchase 154,000 shares of the Company's
        common
        stock at $5.00 per share.
 
 (16)
        Using 12,099,044 shares outstanding, which amount includes the conversion
        of all
        23,850 shares of Series C Preferred Stock held by Stanford International
        Bank,
        Ltd., and the exercise of warrants to purchase 744,000 shares which Stanford
        International Bank, Ltd. holds.
 
 (17)
        Includes 606,026 warrants held by Mr. Chiles, 437,374 of which have an exercise
        price of $1.02 per share and 168,672 of which have an exercise price of $2.96
        per share.
 
 (18)
        Using 11,483,990 shares of common stock outstanding, which amount assumes
        the
        exercise by Mr. Chiles of all 606,016 warrants which he holds to purchase
        shares
        of the Company's common stock.
 
 (19)
        Using 10,877,974 shares of common stock outstanding as of March 1,
        2007.
 
 (20)
        Includes 75,000 warrants to purchase shares of the Company's common stock
        at
        $1.02 per share.
 
 (21)
        Using 10,952,974 shares of common stock outstanding, which amount assumes
        the
        exercise by Mr. Pauzar of all 75,000 warrants which he holds to purchase
        shares
        of the Company's common stock.
 
 (22)
        Includes 75,000 warrants to purchase shares of the Company's common stock
        at
        $1.02 per share.
 
 (23)
        Using 10,952,974 shares of common stock outstanding, which amount assumes
        the
        exercise by Mr. Crosbie of all 75,000 warrants which he holds to purchase
        shares
        of the Company's common stock.
 
 (24)
        Mr.
        Jimenez was granted 100,000 warrants to purchase shares of our common stock
        in
        December 2006, which warrants vested immediately.
  -132-
  
 (25)
        Using 19,730,220 shares of common stock outstanding, which amount assumes
        the
        exercise by the officers and Directors of all shares of Preferred Stock which
        they hold, as described in footnote (7) and the exercise of all warrants
        to
        purchase shares of the Company's common stock held by the officers and
        Directors, as described in footnotes (8),(15),(17)(20) and (22).
 
 **Change
        in Control**
 
 We
        are
        unaware of any arrangement or understanding that may, at a subsequent date,
        result in a change of control of our Company.
 
 **ITEM
        12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**
 
 We
        believe that all prior related party transactions have been entered into
        upon
        terms no less favorable to us than those that could be obtained from
        unaffiliated third parties. Our reasonable belief of fair value is based
        upon
        proximate similar transactions with third parties or attempts to obtain the
        services from third parties, if such transaction would be available from
        third
        parties. All past, ongoing and future transactions with such persons, including
        any loans from or compensation to such persons, have been or will in the
        future
        be approved by a majority of disinterested members of the Board of
        Directors.
 
 We
        accrue
        $500,000 per year as salary payable to Malcolm J. Wright, our Chief Executive
        Officer. Prior to 2004, we accrued $250,000 per year as salary payable to
        Mr.
        Wright. We accrue interest at a rate of 12% compounded annually on the salary
        owed to Mr. Wright. As of December 31, 2006, the aggregate amount of salary
        payable and accrued interest owed to Mr. Wright was $2,225,000. We also accrue
        $100,000 per year as salary payable to L. William Chiles, a Director of the
        Company and the President of Hickory, for his services, and interest at a
        rate
        of 12% compounded annually beginning in 2005. As of December 31, 2006, the
        aggregate amount of salary payable to Mr. Chiles was $300,000.
 
 We
        pay or
        accrue Directors' fees to each of our Directors in an amount of $18,000 per
        year
        for their services as Directors. During the last three fiscal years, we have
        accrued approximately $260,500 in Directors’ fees, which amount has not been
        paid to date.
 
 We
        may
        provide the executive officers of each of our subsidiaries an aggregate bonus
        of
        up to 19% of the pre-tax profits, if any, of the subsidiaries in which they
        serve as executive officers. Malcolm J. Wright will receive 19% of the pre-tax
        profits of Leisureshare International Ltd, Leisureshare International Espanola
        SA, American Leisure Homes, Inc., APMG, TDSR, and American Leisure Hospitality
        Group, Inc. We do not have any agreements with our officers regarding the
        bonus
        other than with L. William Chiles. Mr. Chiles is entitled to receive 19%
        of the
        profits of Hickory up to a maximum payment over the life of his contract
        of
        $2,700,000. As Mr. Chiles' bonus is limited, it is not subject to the buy-out
        by
        us (discussed below) as it will cease as soon as the $2,700,000 amount has
        been
        paid to him. The executive officers of our other subsidiaries would share
        a
        bonus of up to 19% of the pre- tax
        profits of the subsidiary in which they serve as executive officers. We would
        retain the right, but not have the obligation
        to buy-out all of the above agreements after a period of five years by issuing
        such number of shares of our common stock equal to the product of 19% of
        the
        average after-tax profits for the five-year period multiplied by one-third
        of
        the price to earnings ratio of our common stock at the time of the buyout
        divided by the greater of the market price of our common stock or $5.00.
        We have
        not paid or accrued any bonus as of the filing of this report. While the
        terms
        of Mr. Wright's bonus agreement have been agreed to, such terms have not
        been
        memorialized in a formal agreement as of the date of this
        filing.
  -133-
  
 Since
        the
        reverse merger in July of 2002, we have relied almost exclusively upon Malcolm
        J. Wright for the experience and energy required to cultivate opportunities
        for
        us in vacation real estate development. We have accrued salary and other
        compensation to Mr. Wright up to this point. Therefore, we have entered into
        agreements with entities owned or controlled by Mr. Wright to secure advancement
        of our real estate development projects.
 
 Malcolm
        J. Wright is the President and 81% majority shareholder of American Leisure
        Real
        Estate Group, Inc. ("ALREG"). We do not own any interest in ALREG. On November
        3, 2003, we entered into an exclusive development agreement with American
        Leisure Real Estate Group to provide development services for the development
        of
        The Sonesta Orlando Resort at Tierra Del Sol. Pursuant to this development
        agreement, it is responsible for all development logistics and we are obligated
        to reimburse it for all of its costs and to pay it a development fee in the
        amount of 4% of the total costs of the project paid by it. As of December
        31,
        2006, it had administered operations and paid bills in the amount of $23,117,280
        and accrued a fee of 4% (or approximately $980,691) under the development
        agreement.
 
 Mr.
        Wright is also an officer and shareholder of, M J Wright Productions, Inc.,
        which owns our Internet domain names, Resorts Development Group, LLC which
        develops resort properties in Orlando including Bella Citta, Los Jardines
        Del
        Sol, The Preserve, Tortuga Cay and Sherberth Development LLC, Resorts
        Construction, LLC with whom we intend to contract to construct part of the
        Sonesta Resort as described above, Titan Manufacturing, LLC with whom we
        intend
        to purchase roof tiles for our developments, Malcolm J. Wright and members
        of
        his family are the majority shareholders of Xpress Ltd., a company that has
        experience marketing vacation homes in Europe. On November 3, 2003, we entered
        into an exclusive sales and marketing agreement with Xpress to sell the units
        in
        The Sonesta Orlando Resort at Tierra Del Sol being developed by us. This
        agreement provides for a sales fee in the amount of 3% of the total sales
        prices
        received by us plus a marketing fee of 1.5%. Pursuant to the terms of the
        agreement, one-half of the sales fee is payable upon entering into a sales
        contract (with deposits paid as required by the sales contract) for a unit
        in
        the resort and the other half is due upon closing the sale. For the fiscal
        year
        ended December 31, 2006, the total sales made by Xpress amounted to
        approximately $229,590,043. As a result of the sales, we were obligated to
        pay
        Xpress a total sales fee of $6,887,701, which has been paid to date and a
        marketing fee of $3,443,851, which has not been paid to date. As of December
        31,
        2006, we had paid Xpress $6,887,701 of cash, issued Xpress 120,000 shares
        of
        Series A Preferred Stock
        valued at $1,200,000, and transferred to Xpress a 1913 Benz automobile valued
        at
        $500,000 in connection with sales fees.
  -134-
  
 In
        February 2004, Malcolm J. Wright, individually and on behalf of Xpress, and
        Roger Maddock, individually and on behalf of Arvimex, Inc., entered into
        contracts with us to purchase an aggregate of 32 town homes for $13,356,800.
        Mr.
        Wright and Mr. Maddock paid an aggregate deposit of $2,327,360 and were given
        a
        10% discount that we otherwise would have had to pay as a commission to a
        third-party real estate broker. Roger Maddock is directly (and indirectly
        through Arvimex) the beneficial owner of more than 5% of our common
        stock.
 
 In
        November 2003, Malcolm Wright, our Chief Executive Officer and Chairman,
        Gillian
        Wright our former Director, and our subsidiary, American Leisure, Inc., sold
        82.5% of the ownership interests of American Vacation Resorts, Inc. ("AVR"),
        a
        vacation club to our current President and Director, Frederick Pauzar, in
        consideration for an aggregate of $1,500,000 in promissory notes, pursuant
        to
        the terms of a Stock Purchase Agreement. In April 2004, pursuant to an amendment
        to the stock purchase agreement, the parties agreed to substitute seventeen
        (17)
        vacation properties located in Kissimmee, Florida, as consideration for the
        purchase of the interests of AVR, in place of the payment of $1,500,000 in
        promissory notes.
 
 In
        June
        2004, we granted warrants to each of Malcolm J. Wright and L. William Chiles
        for
        their services as Directors to purchase 100,000 shares (or an aggregate of
        200,000 shares) of our common stock at an exercise price of $1.02 per share.
        Warrants to purchase 75,000 shares have vested to each of them. Warrants
        to
        purchase the remaining 25,000 shares will vest to each of them on the next
        anniversary date of each of their terms as a Director, provided they are
        then
        serving in said capacity. While the terms of these warrants have been agreed
        to,
        they have not been memorialized in a formal agreement as of the date of this
        filing.
 
 On
        February 1, 2005, Gillian Wright resigned as one of our Directors.
 
 M
        J
        Wright Productions, Inc., of which Mr. Wright is the President, owns our
        Internet domain names.
 
 Mr.
        Wright and we are negotiating an employment agreement pursuant to which Mr.
        Wright will serve as our Chief Executive Officer. We will provide the terms
        of
        the employment agreement when it is finalized. In June 2005, we entered into
        an
        indemnification agreement with Mr. Wright.
 
 In
        March
        2005, we closed on the sale of 13.5 acres of commercial property in Davenport,
        Polk County, Florida at the corner of U.S. Hwy. 27 and Sand Mine Road. The
        property was sold for $4,020,000. We paid-off secured debt on the property
        of
        $1,300,000 plus accrued interest and other costs. We used the net proceeds
        for
        working capital and to pay $1,948,411 of notes payable to related parties
        attributable to the acquisition and retention of the property. Profits on
        the
        sale of this property amounted to approximately $968,000.
  -135-
  
 Thomas
        Cornish has previously served as a member of our advisory board, which we
        no
        longer have. He is the President of the Seitlin Insurance Company. Our board
        of
        Directors has authorized Seitlin to place a competitive bid to provide insurance
        for The Sonesta Orlando Resort at Tierra del Sol. During 2004 and 2005, Mr.
        Cornish provided services on our advisory board in consideration for $1,500
        and
        $3,000, respectively. David Levine has served as a member of our advisory
        board,
        which we no longer have. He provided services on our advisory board during
        2004
        and 2005 in consideration for $3,000 and $1,500, respectively. We reimbursed
        Mr.
        Levine for travel expenses in the amount of $1,613 and $8,521 during 2004
        and
        2005, respectively. Charles J. Fernandez, a member of our advisory board
        provided services on our advisory board during 2005 for which he was paid
        $3,000. We authorized warrants to each of Thomas Cornish, Charles J. Fernandez
        and David Levine to purchase 100,000 shares (or an aggregate of 300,000 shares)
        of our common stock at an exercise price of $1.02 per share in consideration
        for
        their services as advisors. The warrants vested immediately with respect
        to the
        purchase of 50,000 shares by each of them. Warrants to purchase the remaining
        50,000 shares will vest to by each of them in equal amounts on their next
        two
        anniversary dates as advisors. While the terms of these warrant agreements
        have
        been agreed to, they have not been memorialized in a formal agreement as
        of the
        date of this filing. We previously announced Messrs Cornish, Levine and
        Fernandez as Director nominees, however we currently have no present intention
        for such individuals to serve on our Board of Directors.
 
 In
        June
        2005, Arvimex, Inc., which is controlled by our significant shareholder,
        Roger
        Maddock, exercised warrants to purchase 160,000 shares of our common stock
        at
        $0.001 per share, for aggregate consideration of $160.
 
 In
        July
        2005, we issued 171 shares of Series E preferred stock to The Martin Topolsky
        Trust in exchange for an equity interest in Around The World Travel Holdings,
        Inc., consisting of 13,500 shares of its Series A preferred stock and 21,687
        shares of its common stock.
 
 On
        July
        1, 2005, we granted warrants to L. William Chiles, a Director, to purchase
        168,672 shares of our common stock at an exercise price of $1.02 per share
        and
        warrants to Malcolm J. Wright, our Chief Executive Officer and Chairman,
        to
        purchase 347,860 shares of our common stock at an exercise price of $1.02
        per
        share. We issued the warrants to Mr. Chiles and Mr. Wright as consideration
        for
        them renewing their personal guarantees regarding the loan with Grand Bank
&
Trust of Florida in connection with our renewal of that loan.
 
 South
        Beach Resorts, LLC, contracted with one of the Company's subsidiaries Wright
        Resort Villas & Hotels, Inc. to receive hotel management services for a
        hotel which it owns and is redeveloping. Mr. Pauzar, Mr. Wright and Mr. Maddock
        controlled the membership interests of the limited liability company SBR
        Holdings, LLC which owns and controls South Beach Resorts, LLC.
  -136-
  On
        December 28, 2005 we granted warrants to Malcolm J. Wright, our Chief Executive
        Officer and Chairman, to purchase 2,008,500 shares of our common stock at
        an
        exercise price of $1.02 per share. We issued the warrants to Mr. Wright as
        consideration for his personal guarantee regarding the construction and land
        loans with KeyBank, N.A. While the terms of these warrants have been agreed
        to,
        they have not been memorialized in a formal agreement as of the date of this
        filing.
 
 In
        December 2005, in connection with the Stanford Credit Facility, the Company
        granted SIBL and its designees warrants to purchase 308,000 shares of the
        Company's common stock at an exercise price of $5.00 per share and warrants
        to
        purchase 154,000 shares of the Company's common stock at an exercise price
        of
        $0.001 per share, which warrants expire five years from their grant date.
        (The
        Stanford Credit Facility and warrants are described in greater detail
        above).
 
 In
        December 2005 in connection with their guaranty of the Stanford Credit Facility
        pursuant to the Irrevocable and Unconditional Guaranty, the Company agreed
        to
        issue an aggregate of 405,000 warrants to purchase shares of the Company's
        common stock to certain third party entities. The warrants have an exercise
        price of $1.02 and expire 5 years from the expiration date of the third parties
        guaranties. (the Stanford Credit Facility and Irrevocable and Unconditional
        Guaranty are described in greater detail above). While the terms of these
        warrants have been agreed to, they have not been memorialized in a formal
        agreement as of the date of this filing.
 
 On
        January 9, 2006, with an effective date of June 14, 2002, the Company entered
        into an Amended Debt Guarantor Agreement ("Amended Debt Agreement") with
        Malcolm
        J. Wright, its Chief Executive Officer and Chairman and L. William Chiles,
        a Director of the Company (collectively, Mr. Wright and Mr. Chiles are referred
        to herein as the "Guarantors"). Pursuant to the Amended Debt Agreement, the
        Company and the Guarantors agreed to amend the terms of the prior Debt Guarantor
        Agreement entered into between the parties. The original Debt Guarantor
        Agreement provided for the Guarantors to receive warrants to purchase shares
        of
        the Company's common stock at $2.96 per share in an amount equal to 3% of
        any
        Company indebtedness that they personally guarantee. The Amended Debt Agreement
        decreased the exercise price of the warrants to be issued in connection with
        any
        of the Guarantor's guarantees to $1.02 per share (the "Guarantor Warrants").
        Under the Amended Debt Agreement, the warrants issued to the Guarantors are
        exercisable until five years after the date the Guarantor is no longer obligated
        to personally guarantee such Company indebtedness. Additionally, under the
        Amended Debt Agreement, the fee which the Guarantors receive for a pledge
        of
        personally owned collateral to secure Company indebtedness was increased
        from 1%
        of such total indebtedness guaranteed (as was provided under the original
        Debt
        Guarantor Agreement), to 2% of the total amount of indebtedness guaranteed.
        The
        2% fee is paid to the Guarantors in Guarantor Warrants with the same terms
        and
        conditions as provided above.
 
 -137-
  Mr.
          Wright pledged to Stanford 845,733 shares of our common stock which he
          holds.
          Stanford is currently in possession of the shares of our common stock that
          Mr.
          Wright pledged; however, Mr. Wright retained the power to vote (or to direct
          the
          voting) and the power to dispose (or direct the disposition) of those shares.
          Mr. Chiles had personally guaranteed $2,000,000 of the $6,000,000 received
          from
          Stanford and pledged to Stanford 850,000 shares of our common stock held
          by Mr.
          Chiles. Stanford released Mr. Chiles from the personal guarantee and released
          his common stock from the pledge when we closed the $6,000,000 credit facility.
          Mr. Wright and Mr. Chiles have each also given a personal guarantee regarding
          a
          loan in the principal amount of $6,000,000 that was made to Tierra Del
          Sol
          Resort Inc. by Grand Bank & Trust of Florida. We have authorized the grant
          of warrants to Mr. Wright and Mr. Chiles to purchase 695,720 shares and
          337,344
          shares, respectively, of our common stock at an exercise price of $1.02
          per
          share. We are under a continuing obligation to issue warrants at $1.02
          to
          Messrs. Wright and Chiles for guarantees that they may be required to give
          on
          our behalf going forward.
 
 In
        January 2006, in connection with the SIBL Reedy Creek Loan, the Company granted
        SIBL warrants to purchase 154,000 shares of the Company's common stock at
        an
        exercise price of $5.00 per share and warrants to purchase 77,000 shares
        of the
        Company's common stock at an exercise price of $0.001 per share, which warrants
        expire five years from their grant date.
 
 In
        January 2006, in connection with the SIBL Reedy Creek Loan, the Company granted
        warrants to four separate affiliates of SIBL entitling them to purchase an
        aggregate of 154,000 shares of the Company's common stock at an exercise
        price
        of $5.00 per share and 77,000 shares at an exercise price of $.001 per share.
        The warrants have a term of five years and are immediately
        exercisable.
 
 In
        January 2006, in connection with Mr. Wright's guarantee of the Amended Note,
        the
        Company agreed to grant Mr. Wright warrants to purchase 240,000 shares of
        the
        Company's common stock at an exercise price of $1.02 per share. The warrants
        are
        being granted pursuant to an existing agreement between the Company and Mr.
        Wright and expire 5 years from the expiration date of the guarantees. In
        addition, the Company has agreed to register the shares underlying the warrants
        granted to Mr. Wright on its next registration statement. While the terms
        of
        these warrants have been agreed to, they have not been memorialized in a
        formal
        agreement as of the date of this filing.
 
 In
        March
        2006, in connection with Mr. Crosbie's appointment as Executive Vice President,
        General Counsel and Secretary of the Company, Mr. Crosbie was granted 100,000
        warrants to purchase shares of the Company's common stock at an exercise
        price
        of $1.02 per share. One half of the warrants, or 50,000 vested on March 15,
        2006, with the remaining warrants vesting 25,000 at a time on March 15, 2007
        and
        March 15, 2008, assuming he is still employed by the Company on those dates.
 
 In
        March
        2006, we appointed Jeffrey Scott as President of Hickory. In connection with
        Mr.
        Scott's appointment, we agreed to grant him warrants to purchase 100,000
        shares
        of the Company's common stock. The warrants have an exercise price of $5.00
        per
        share. One half, or 50,000 of Mr. Scott's warrants vested on March 2, 2006,
        with
        the remaining 50,000 warrants vesting as follows, 25,000 warrants on March
        2,
        2007 and the remaining 25,000
        warrants on March 2, 2008, assuming Mr. Scott is still employed by the Company
        on those dates. While the terms of these warrants have been agreed to, they
        have
        not been memorialized in a formal agreement as of the date of this
        filing.
  -138-
  
 In
        March
        2006, with an effective date of December 30, 2005, we purchased the minority
        interest of our now wholly owned subsidiary, Tierra Del Sol, Inc. (the "Minority
        Interest") from Harborage Leasing Corporation ("Harborage"). The purchase
        price
        of the Minority Interest from Harborage was a promissory note for $1,411,705
        ("Harborage Note"); the right to receive, without payment, two (2) three-bedroom
        condominium units to be constructed in Phase 2 of the Tierra Del Sol Resort,
        or
        in the event title to both such units is not delivered by December 31, 2007,
        then, in lieu thereof, payment of $500,000.00 for each such unit that is
        not
        transferred by such date; 197,000 shares of the Company's common stock; and
        warrants to acquire 300,000 additional shares of the Company's common stock
        at a
        price of $5.00 per share. The Harborage Note is guaranteed by Malcolm J.
        Wright,
        the Company's Chief Executive Officer and Chairman, for which he received
        a
        guaranty fee equal to three percent (3%) of the amount guaranteed. The Company
        paid this fee through the grant of 102,321 warrants to purchase shares of
        the
        Company's common stock at an exercise price of $1.02 per share. These warrants
        will expire 5 years from the expiration date of the guaranty. While the terms
        of
        these warrants have been agreed to, they have not been memorialized in a
        formal
        agreement as of the date of this filing.
 
 In
        September 2006, the Company (through its subsidiaries TDS Town Homes (Phase
        1),
        LLC and TDS Town Homes (Phase 2), LLC) contracted with Resorts Construction,
        LLC
        to furnish construction administration and management services at the Tierra
        Del
        Sol Resort property. Resorts Construction, LLC will provide all labor,
        materials, equipment and services necessary to construct 508 townhomes. Malcolm
        Wright, CEO and Director of the Company, owns a 50% membership interest in
        Resorts Construction, LLC. The Company was required to pay to Resorts
        Construction, LLC $4 million in connection with the execution of the contract
        as
        a payment for material required to begin construction. The contract has a
        lump
        sum price of $106,283,274, subject to certain price increases. In addition,
        Resorts Construction, LLC will construct stem wall foundations for the townhomes
        at the rate of $235.00 per linear foot which is in addition to the lump sum
        price of $106,283,274.
 
 In
        September 2006, the Company (through its subsidiaries TDS Clubhouse, Inc.;
        TDS
        Amenities, Inc., and Costa Blanca I Real Estate, LLC) contracted with Resorts
        Construction, LLC to furnish construction administration and management services
        at the Tierra Del Sol Resort property. Resorts Construction, LLC will provide
        all labor, materials, equipment and services necessary to construct the Club
        House (Phase i), five Costa Blanca Condominium Buildings (Phase 2) and Water
        Park, Sports Bar, Additional Pool, Flow Rider and Other Amenities (Phase
        3).
        Malcolm Wright, CEO and Director of the Company, owns a 50% membership interest
        in Resorts Construction, LLC. The Company was required to pay to Resorts
        Construction, LLC a non-refundable $500,000 payment with the execution of
        the
        contract as a payment for commitment and mobilization. The contract is stated
        at
        costs incurred plus 5%.
  -139-
  
 Through
        December 31, 2006, Resorts Construction, LLC has been paid a total of $8,220,187
        under the two contracts described above.
 
 On
        December 22, 2006 the Company acquired 100% of South Beach Resorts, LLC (“SBR”)
        and SBR Holdings, LLC for $1,120,000 plus a 25% participation interest granted
        to Stanford International Bank Limited in the net proceeds realized by SBR
        upon
        the disposition of its Boulevard Hotel property located in Miami Beach, Florida.
        The $1,120,000 was provided as a loan from Stanford International Bank Limited
        to Reedy Creek Acquisition Corporation. SBR was owned by SBR Holdings, LLC
        which
        was owned equally by Malcolm Wright (CEO, CFO and Director of the Company)
        and
        Frederick Pauzar (COO, President and Director of the Company). At the date
        of
        acquisition, the Boulevard Hotel was encumbered with a mortgage due to LaSalle
        Bank, National Association, as Trustee of Marathon Real Estate CDO 2006-1
        Grantor Trust, successor-in-interest to Marathon Structured Finance Fund
        L.P. in
        the amount of $7,498,900 that matured on January 11, 2007. The mortgage has
        matured and remains unpaid however, the mortgage is not in default and a
        forbearance agreement is in place with LaSalle Bank, National Association,
        as
        Trustee of Marathon Real Estate CDO 2006-1 Grantor Trust, successor-in-interest
        to Marathon Structured Finance Fund L.P.. The Company is actively seeking
        to
        replace the debt with a new lender. SBR was acquired from Malcolm Wright
        and
        Frederick Pauzar in July 2005 and the financial statement presentation has
        been
        restated to present SBR as a subsidiary since that acquisition
        date.
 
 We
        also
        entered into a note with Roger Maddock, a significant shareholder of us,
        to
        evidence $3,590,811 in loans and advances Mr. Maddock had previously made
        to
        Resorts (the "Maddock Note"), the payment of which was guaranteed by us pursuant
        to a Guaranty Agreement.
 
 In
        August
        2006, we entered into a Purchase Agreement with SIBL, whereby we agreed to
        purchase a $750,000 promissory note from SIBL, which note was originally
        received by SIBL from Scott Roix, an individual, in connection with SIBL's
        sale
        of its interest in Vici Marketing Group, LLC ("Vici" and the "Vici Note")
        to Mr.
        Roix, and which Note bears interest at the rate of 8% per annum, payable
        on June
        30, 2008. In consideration for the purchase of the Vici Note, we agreed to
        issue
        SIBL 235,000 shares of our common stock and a five year warrant to purchase
        235,000 shares of our common stock at an exercise price of $20 per share
        (the
        "Vici Warrant"). We also granted SIBL demand registration rights in connection
        with the registration of the shares underlying the Vici Warrant. The balance
        of
        the Vici Note as of December 31, 2006 was $500,000.
 
 In
        August
        2006, we entered into an Employment Agreement with Jason Williams, who agreed
        to
        serve as our Associate General Counsel and Assistant Secretary for a period
        of
        two years, which Employment Agreement shall terminate on August 21, 2008,
        unless
        terminated earlier pursuant to the agreement.
 
 -140-
  On
          November 22, 2006, we entered into a Credit Agreement with Reedy Creek
          Acquisition Company, LLC ("RCAC") and Stanford International Bank Limited
          ("SIBL"), to provide RCAC, our wholly owned subsidiary, a $4,300,000 credit
          facility (the "RC Credit Agreement"). SIBL had previously loaned RCAC $7,150,000
          on July 8, 2005 and $850,000 on January 5, 2006, which loans were evidenced
          by a
          Renewed, Amended and Increased Promissory Note in the amount of $8,000,000,
          which we had guaranteed. In connection with the RC Credit Agreement, the
          Renewed, Amended and Increased Promissory Note was replaced by a Second
          Renewed,
          Amended and Increased Promissory Note in the amount of $12,200,000 (the
          "RC
          Note"), which was replaced by a Third Renewed, Amended and Increased Promissory
          Note in the amount of $13,420,000, which was replaced by a Fourth Renewed,
          Amended and Increased Promissory Note in the amount of $15,300,000 (the
          "Amended
          RC Note"). The Amended RC Note provides that the principal amount of $8,000,000,
          the initial indebtedness, together with all accrued and unpaid interest
          under
          the original note shall bear interest at the rate of eight percent per
          annum and
          shall be due and payable on June 30, 2007. The Amended RC Note provides
          that the
          principal amount of $7,300,000, future advance indebtedness, together with
          all
          accrued and unpaid interest on the future advance indebtedness shall bear
          interest at the rate of twelve percent per annum and shall be due and payable
          on
          June 30, 2007. Malcolm J. Wright, our Chairman and Chief Executive Officer
          personally guaranteed the repayment of the RC Note. Mr. Wright received
          129,000
          warrants to purchase shares of our common stock at an exercise price of
          $1.02
          per share in connection with his guaranty of the RC Credit Agreement, equal
          to
          three percent (3%) of to the total indebtedness of the RC Credit
          Agreement.
 
 We
        entered into a Second Mortgage Modification Agreement and Future Advance
        Certificate with SIBL in connection with our entry into the RC Credit Agreement,
        which provided SIBL a mortgage over certain real property owned by us in
        Osceola
        County, Florida, to secure the repayment of the RC Note.
 
 On
        December 18, 2006, we entered into "Amendment No. 1 to the $4.3 Million Credit
        Agreement" the ("Amended RC Credit Agreement") with SIBL and RCAC, which
        amended
        the terms of the RC Credit Agreement, to increase the loan amount under such
        agreement from $4,300,000 to $5,420,000, to include an advance of $1,120,000
        which was received on December 18, 2006 to cover the placement of an appeal
        bond
        by us and related expenses paid by us on behalf of South Beach Resorts, LLC
        ("Resorts," which we purchased pursuant to the Purchase Agreement, described
        and
        defined below) in connection with Resorts' purchase of the Boulevard Hotel
        (described below) from a company which was then in Chapter 11 bankruptcy,
        and a
        subsequent dispute regarding such purchase. The Amended RC Credit Agreement
        also
        amended and restated the RC Note in the amount of $13,420,000, evidenced
        by a
        "Third Renewed, Amended and Increased Promissory Note" (the "Amended RC Note"),
        to include the increased Amended RC Credit Agreement amount and provided
        for
        Malcolm J. Wright, our Chief Executive Officer and Chairman to provide a
        restated Guaranty to SIBL to include the amended loan amount. Mr. Wright
        received 33,600 warrants to purchase shares of our common stock at an exercise
        price of $1.02 per share in connection with his guaranty of Amended RC Credit
        Agreement, equal to three percent (3%) of the total indebtedness of the
        increased amount of the RC Credit Agreement.
  -141-
  We
        also
        entered into a Third Mortgage Modification Agreement and Future Advance
        Certificate in connection with the increased RC Loan, which increased SIBL's
        mortgage on certain of our property in Osceola County, Florida to secure
        the
        Amended RC Loan.
 
 On
        January 31, 2007, we entered into we entered into "Amendment No. 2 to the
        $4.3
        Million Credit Agreement" the ("Second Amended RC Credit Agreement") with
        SIBL
        and RCAC, which amended the terms of the Amended RC Credit Agreement, to
        increase the loan amount under such agreement from $5,420,000 to $7,300,000,
        to
        include an advance of $1,880,000. The Second Amended RC Credit Agreement
        also
        amended and restated the RC Note in the amount of $15,300,000, evidenced
        by a
        "Fourth Renewed, Amended and Increased Promissory Note" (the "Amended RC
        Note"),
        to include the increased Second Amended RC Credit Agreement amount and provided
        for Malcolm J. Wright, our Chief Executive Officer and Chairman to provide
        a
        restated Guaranty to SIBL to include the amended loan amount. Mr. Wright
        received 56,400 warrants to purchase shares of our common stock at an exercise
        price of $1.02 per share in connection with his guaranty of Amended RC Credit
        Agreement, equal to three percent (3%) of the total indebtedness of the
        increased amount of the RC Credit Agreement.
 
 On
        November 22, 2006, we entered into a Credit Agreement with Stanford Venture
        Capital Holdings, Inc. ("Stanford"), Tierra Del Sol Resort (Phase 2), Ltd.,
        Costa Blanca II Real Estate, LLC, Costa Blanca III Real Estate, LLC, TDS
        Town
        Homes (Phase 2) LLC and TDS Clubhouse, Inc. (the "TDSR Credit Agreement")
        to
        provide $6,200,000 of capital for (1) the repayment of the RC Credit Agreement,
        which was later amended to include the repayment of the increased amount
        of the
        Amended RC Credit Agreement in connection with the Amended TDSR Credit Agreement
        (described below), (2) construction of the pool complex at the Tierra del
        Sol
        Phase One project, (3) furniture, fixtures and equipment, and (4) various
        other
        expenses. Any amounts borrowed under the TDSR Credit Agreement bear interest
        at
        the rate of 12% per annum, and any amounts not paid when due will bear interest
        at the rate of 15% per annum. Any amounts borrowed under the TDSR Credit
        Agreement are due and payable on June 30, 2007.
 
 On
        Janaury 31, 2007, we entered into "Amendment No. 2 to $6.2 Million Credit
        Agreement" (the "Second Amended TDSR Credit Agreement") to amend the TDSR
        Credit
        Agreement to reflect the Second Amended RC Credit Agreement amount, which
        is to
        be repaid with any funds received in connection with the exercise of the
        Second
        Amended TDSR Credit Agreement.
 
 The
        Second Amended TDSR Credit Agreement is not effective until we substitute
        a
        portion of Tierra Del Sol Resorts, Inc. as collateral for future advances
        under
        the Second Amended TDSR Credit Agreement, and as such, we have not borrowed
        any
        funds pursuant to the Second Amended TDSR Credit Agreement to date. We
        anticipate the funds received from the Second Amended TDSR Credit Agreement,
        if
        such agreement is funded to be used to repay the Second Amended RC Credit
        Agreement.
 
 We
        paid
        Stanford a placement fee of $186,000 (or 3% of the TDSR Credit Agreement
        amount)
        as a placement fee upon our execution of the TDSR Credit Agreement. Malcolm
        J.
        Wright has agreed to guarantee the repayment of a $6,200,000 promissory note,
        which we plan to provide Stanford to evidence the amount borrowed under the
        TDSR
        Credit Agreement, assuming we choose to move forward with such credit facility.
  -142-
  
 In
        connection with SIBL's agreeing to enter into the Amended RC Credit Agreement,
        we entered into a Warrant Participation Agreement with SIBL, Resorts, Malcolm
        J.
        Wright and Frederick Pauzar (the "Participation Agreement"), whereby we agreed
        to grant SIBL and six (6) of its assigns the right to a 25% participation
        interest (the "Participation Interest") in the Net Proceeds (as defined below)
        realized by us upon the disposition of the real property located at 740 Ocean
        Drive, Miami Beach, Florida, known as the Boulevard Hotel (the "Property"),
        for
        aggregate consideration of $1.00 per warrant (collectively, the "Warrant").
        "Net
        Proceeds" is defined as the proceeds realized upon the disposition or
        refinancing of the Property, less our cost basis in the Property, excluding
        any
        operating losses or operating profits. In the event the Property is not sold
        by
        us by December 22, 2009, we agreed to appoint SIBL as true and lawful proxy
        of
        us in connection with the engagement of a real estate broker and the subsequent
        sale of the Property. Mr. Wright and Mr. Pauzar are jointly and severally
        liable
        for our obligations under the Participation Agreement, however they are not
        receiving any warrants in connection with such guaranties.
 
 With
        an
        effective date of December 31, 2006, we entered into a Note Modification
        Agreement (the “Modification Agreement”) with SIBL, various of our subsidiaries
        and Malcolm J. Wright, our Chief Executive Officer and Chairman. The
        Modification Agreement extended the due date of our $3,000,000 note with
        SIBL to
        January 1, 2008; the due date of our $1,355,000 note with SIBL to January
        1,
        2008, and the due date of our $305,000 note with SIBL to January 1, 2008.
        The
        Modification Agreement also provided that no payments shall be required to
        be
        made prior to January 1, 2008, on the notes discussed above. Interest payments
        were previously being made by the Company.
 
 In
        February 2007, we acquired 100% of SBR Holdings, LLC from Malcolm J. Wright,
        our
        Chief Executive Officer and Chairman, and Frederick Pauzar, our President
        and a
        Director of the Company, for no consideration. SBR Holdings, LLC sold South
        Beach Resorts, LLC to the Company in December 2006. SBR Holdings, LLC’s only
        asset was its ownership of the membership interest in South Beach Resorts,
        LLC.
        As of February 2007, the Company transferred its membership interest in South
        Beach Resorts, LLC to SBR Holdings, LLC.
  In
        March,
        2007, Malcolm J. Wright resigned as Chief Financial Officer of the Company
        and
        Omar Jimenez was appointed as Chief Financial Officer to fill the vacancy
        left
        by Mr. Wright’s departure as Chief Financial Officer.
 
 On
        March
        13, 2007, we entered into a $10,000,000 Credit Agreement with SIBL, whereby
        SIBL
        agreed to loan us $10,000,000 to use for the construction and development
        of
        Phase II of the Sonesta Resort. The loan was evidenced by a $10,000,000
        Promissory Note, which bears interest at the rate of 10% per annum. The
        Promissory Note is secured by a second priority security interest and lien
        on
        the land underlying Phase II of the Sonesta Resort, all buildings, structures
        and other improvements on such land, and all fixtures,
        equipment, goods, inventory or property owned by us currently or in the future,
        which security interests are evidenced by a Mortgage and Security Agreement,
        which we and several of our wholly owned subsidiaries entered into with SIBL
        in
        connection with the Credit Agreement. The loan is due in full and payable
        along
        with any accrued and unpaid interest on March 13, 2008. Any amounts not paid
        when due under the loan bear interest at the rate of 15% per
        annum.
  -143-
  
 The
        Credit Agreement provides for additional advances to be made to us in an
        amount
        not to exceed $750,000, assuming that certain conditions are met by us in
        the
        future, including (a) that SIBL has received current financial information
        regarding our operations (as further described in the Credit Agreement) and
        that
        we have issued SIBL 26,250 warrants to purchase shares of common stock and
        (b)
        that we are able to obtain additional loans in an aggregate amount of $750,000
        from parties other than SIBL; and an additional loan in an amount not to
        exceed
        $1,500,000, assuming (a) and (b) above and that we have issued additional
        warrants (to be determined prior to such additional advance), to
        SIBL.
 
 Immediately
        upon our execution of the Credit Agreement, we paid SIBL a placement fee
        of
        $200,000, plus SIBL’s reasonable costs and expenses incurred
        in connection with the closing of the Credit Agreement.
 
 **Resorts
        Funding Group, LLC Credit Facility**
  We
        have
        received $2,905,000 from Resorts Funding Group, LLC which has been matching
        the
        funds from the SIBL Credit Agreement (see above) through the end of March
        2007.
  We
        intend
        to enter into an agreement with Resorts Funding Group, LLC on similar terms
        and
        conditions to those of the SIBL Credit Agreement.
  
 
  -144-
  **ITEM
        13. EXHIBITS**
 
 The
        exhibits listed below are filed as part of this annual report.
 **Exhibit
                  No****.**
              
              **Description
                  of Exhibit**2.1
                  (1)
              
              Stock
                  Purchase Agreement3.1
                  (2)
              
              Articles
                  of Incorporation3.2
                  (3)
              
              Amended
                  and Restated Articles of Incorporation filed July 24,
                  20023.3
                  (3)
              
              Certificate
                  of Amendment of Amended and Restated Articles of Incorporation
                  filed July
                  24, 20023.4
                  (3)
              
              Amended
                  and Restated Bylaws4.1
                  (3)
              
              Certificate
                  of Designation of Series A Convertible Preferred Stock4.2
                  (5)
              
              Certificate
                  of Designation of Series B Convertible Preferred Stock4.3
                  (5)
              
              Certificate
                  of Designation of Series C Convertible Preferred Stock4.4
                  (10)
              
              Amended
                  and Restated Certificate of Designation of Series C Convertible
                  Preferred
                  Stock4.5
                  (20)
              
              Corrected
                  Certificate of Designation of Series E Convertible Preferred Stock,
                  which
                  replaces the Form of Certificate of Designation of Series E Convertible
                  Preferred Stock, filed as Exhibit 1 to the Registrant's Form 8-K
                  on April
                  12, 20044.6
                  (18)
              
              Certificate
                  of Designation of Series F Convertible Preferred Stock, which replaces
                  the
                  Form of Certificate of Designation of Series F Convertible Preferred
                  Stock, filed as Exhibit 3.1 to the Registrant's Form 8-K on January
                  6,
                  200510.1
                  (3)
              
              Stock
                  Option Agreement with L. William Chiles Regarding Hickory Travel
                  Systems,
                  Inc.10.2
                  (5)
              
              Securities
                  Purchase Agreement with Stanford Venture Capital Holdings, Inc.
                  dated
                  January 29, 200310.3
                  (5)
              
              Registration
                  Rights Agreement with Stanford dated January 29,
                  2003
   -145-
  10.4
                  (5)
              
              Securities
                  Purchase Agreement with Charles Ganz dated January 29,
                  200310.5
                  (5)
              
              Asset
                  Sale Agreement with Charles Ganz dated January 29, 200310.6
                  (5)
              
              Registration
                  Rights Agreement with Charles Ganz dated January 29,
                  200310.7
                  (5)
              
              Securities
                  Purchase Agreement with Ted Gershon dated January 29,
                  200310.8
                  (5)
              
              Asset
                  Sale Agreement with Ted Gershon dated January 29, 200310.9
                  (5)
              
              Registration
                  Rights Agreement with Ted Gershon dated January 29,
                  200310.10(6)
              
              Confirmation
                  of Effective Date and Closing Date of $6,000,000 Line of
                  Credit10.11(6)
              
              Credit
                  Agreement with Stanford for $6,000,000 Line of Credit10.12(6)
              
              First
                  Amendment to Credit Agreement with Stanford for $6,000,000 Line
                  of
                  Credit10.13(6)
              
              Mortgage
                  Modification and Restatement Agreement between Tierra Del Sol Resort
                  Inc.,
                  formerly Sunstone Golf Resort, Inc., formerly Sunstone Golf Resort,
                  Inc.
                  ("TDSR")10.14(6)
              
              Registration
                  Rights Agreement with Stanford dated December 18, 200310.15(6)
              
              Florida
                  Mortgage and Security Agreement securing the $6,000,000 Line of
                  Credit10.16(6)
              
              Second
                  Florida Mortgage and Security Agreement securing the $6,000,000
                  Line of
                  Credit10.17(6)
              
              Security
                  Agreement by Caribbean Leisure Marketing Limited and American Leisure
                  Marketing and Technology Inc. dated December 18, 2003, securing
                  the
                  $6,000,000 Line of Credit10.18(6)
              
              Warrants
                  issued to Daniel T. Bogar to purchase 168,750 shares at $2.96 per
                  share
   
 10.19(7)
              
              Warrants
                  issued to Arvimex, Inc. to purchase 120,000 shares at $0.001 per
                  share10.20(7)
              
              Warrant
                  Purchase Agreement with Stanford to purchase 600,000 shares at
                  $0.001 per
                  share and 1,350,000 shares at $2.96 per share10.21(7)
              
              Warrants
                  issued to Arvimex to purchase 270,000 shares at $2.96 per
                  share10.22(10)
              
              Credit
                  Agreement with Stanford for $1,000,000 Credit Facility10.23(10)
              
              Credit
                  Agreement with Stanford for $3,000,000 Credit Facility10.24(10)
              
              Instrument
                  of Warrant Repricing to purchase 1,350,000 shares at $0.001 per
                  share10.25(10)
              
              Warrant
                  Purchase Agreement with Stanford to purchase 500,000 shares at
                  $5.00 per
                  share10.26(10)
              
              Registration
                  Rights Agreement with Stanford dated June 17, 200410.27(8)
              
              Agreement
                  and First Amendment to Agreement to Purchase Galileo Notes with
                  GCD
                  Acquisition Corp. ("GCD"), dated March 19, 2004 and March 29, 2004,
                  respectively10.28(8)
              
              Assignment
                  Agreement for Security for Galileo Notes10.29(18)
              
              Bridge
                  Loan Note for $6,000,000 issued by Around The World Travel, Inc.
                  in favor
                  of Galileo International, LLC and acquired by the
                  Registrant10.30(18)
              
              Third
                  Amended and Restated Acquisition Loan Note for $6,000,000 issued
                  by Around
                  The World Travel, Inc. in favor of Galileo International, LLC and
                  acquired
                  by the Registrant10.31(18)
              
              Amended
                  and Restated Initial Loan Note for $7,200,000 issued by Around
                  The World
                  Travel in favor of Galileo and acquired by the
                  Registrant10.32(18)
              
              Promissory
                  Note for $5,000,000 issued by Around The World Travel, Inc. in
                  favor of
                  CNG Hotels, Ltd. and assumed by the Registrant10.33(18)
              
              Promissory
                  Note for $2,515,000 issued by TDSR in favor of Arvimex and Allonge
                  dated
                  January 31, 2000
   -146-
  10.34(18)
              
              Registration
                  Rights Agreement with Arvimex dated January 23, 200410.35(13)
              
              Development
                  Agreement between TDSR and American Leisure Real Estate Group,
                  Inc.10.36(14)
              
              Exclusive
                  Sales and Marketing Agreement between TDSR and Xpress
                  Ltd.10.37(15)
              
              Asset
                  Purchase Agreement with Around The World Travel, Inc. for
                  TraveLeaders10.38(16)
              
              Operating
                  Agreement between American Leisure Hospitality Group, Inc. and
                  Sonesta
                  Orlando, Inc., dated January 29, 200510.39(17)
              
              Second
                  Re-Instatement and Second Amendment to Contract of Advantage Professional
                  Management Group, Inc. to sell unimproved land in Davenport, Florida
                  to
                  Thirteen Davenport, LLC10.40(17)
              
              Purchase
                  Agreement between Advantage Professional Management Group, Inc.
                  and
                  Paradise Development Group, Inc. to sell part of unimproved land
                  in
                  Davenport, Florida10.41(17)
              
              First
                  Amendment to Purchase Agreement between Advantage Professional
                  Management
                  Group, Inc. and Paradise Development Group, Inc. to sell part of
                  unimproved land in Davenport, Florida10.42(17)
              
              Assignment
                  of Purchase Agreement, as amended, to Thirteen Davenport, LLC to
                  sell part
                  of unimproved land in Davenport, Florida10.43(20)
              
              Note
                  and Mortgage Modification Agreement dated May 12, 2005, regarding
                  a
                  Promissory Note in the original amount of $985,000 dated January
                  31, 2000,
                  issued by TDSR in favor of Raster Investments, Inc. and a Mortgage
                  in
                  favor of Raster Investments, Inc.10.44(20)
              
              First
                  Amendment to Asset Purchase Agreement with Around The World Travel,
                  Inc.
                  for TraveLeaders dated March 31, 200510.45(21)
              
              Management
                  Agreement with Around The World Travel, Inc. dated January 1,
                  200510.46(21)
              
              License
                  Agreement with Around The World Travel, Inc. dated January 1,
                  2005
   -147-
  10.47(21)
              
              Agreement
                  with Shadmore Trust U/A/D dated April 1, 2004 to acquire common
                  stock,
                  preferred stock and indebtedness of AWT10.48(21)
              
              Promissory
                  Note for $1,698,340 issued by the Registrant in favor of Shadmore
                  Trust
                  U/A/D and dated April 1, 200410.49(21)
              
              Stock
                  Purchase Agreement dated April 12, 2004 to acquire preferred stock
                  of
                  Around The World Travel, Inc.10.50(21)
              
              Additional
                  $1.25M issued by the Registrant in favor of Stanford and dated
                  November
                  15, 2004.10.51(21)
              
              Third
                  Amendment to Credit Agreement with Stanford for $1,000,000 and
                  Second
                  Additional Stock Pledge Agreement dated December 13,
                  200410.52(21)
              
              Second
                  Renewal Promissory Note for $1,355,000 issued by the Registrant
                  in favor
                  of Stanford and dated December 13, 200410.53(21)
              
              Agreement
                  dated March 17, 2005, to Terminate Right of First Refusal Agreement
                  and
                  Amend Registration Rights Agreement with Stanford10.54(22)
              
              Warrant
                  Agreement and Warrants to Malcolm J. Wright to purchase 100,000
                  shares at
                  $1.02 per share10.55(22)
              
              Warrant
                  Agreement and Warrants to L. William Chiles to purchase 100,000
                  shares at
                  $1.02 per share10.56(22)
              
              Warrant
                  Agreement and Warrants to T. Gene Prescott to purchase 100,000
                  shares at
                  $1.02 per share10.57(22)
              
              Warrant
                  Agreement and Warrants to Charles J. Fernandez to purchase 100,000
                  shares
                  at $1.02 per share10.58(22)
              
              Warrant
                  Agreement and Warrant to Steven Parker to purchase 200,000 shares
                  at $1.02
                  per share10.59(22)
              
              Warrant
                  Agreement and Warrants to Toni Pallatto to purchase 25,000 shares
                  at $1.02
                  per share10.60(21)
              
              Employment
                  Agreement, as amended, between L. William Chiles and Hickory Travel
                  Systems, Inc.
   -148-
   10.61(21)
              
              Employment
                  Agreement between L. William Chiles and the Registrant10.62(21)
              
              First
                  Amendment to $3 Million Credit Agreement10.63(21)
              
              Instrument
                  of Warrant Repricing to purchase 100,000 shares at $0.001 per
                  share10.60(23)
              
              Commitment
                  Letter with KeyBank National Association for $96,000,000 for Phase
                  I10.61(23)
              
              Commitment
                  Letter with KeyBank National Association for $14,850,000 for Phase
                  II10.62(24)
              
              Re-Stated
                  Promissory Note for $6,356,740 issued in favor of Around The World
                  Travel,
                  Inc. dated June 30, 2005.10.63(26)
              
              Commitment
                  Letter with KeyBank National Association for $96,000,000 for Phase
                  I10.63(27)
              
              Commitment
                  Letter with KeyBank National Association for $14,850,000 for Phase
                  II10.64(27)
              
              Commitment
                  Letter with KeyBank National Association for up to $72,550,000,
                  with a
                  maximum principal balance of $40,000,000 for Phase 1 dated December
                  1,
                  200510.65(27)
              
              Commitment
                  Letter with KeyBank National Association for up to $14,850,000
                  for Phase 2
                  dated December 1, 200510.66(28)
              
              Construction
                  Loan Agreement with KeyBank National Association for $40,000,000
                  for Phase
                  1 dated December 29, 200510.67(28)
              
              Promissory
                  Note with KeyBank National Association for $40,000,00010.68(28)
              
              Loan
                  Agreement with KeyBank National Association for $14,850,000 for
                  Phase 2
                  dated December 29, 200510.69(28)
              
              Promissory
                  Note with KeyBank National Association for $14,850,00010.70(28)
              
              Promissory
                  Note for $4,000,000 issued by TDS Management, LLC in favor of PCL
                  Construction Enterprises, Inc.
   -149-
  10.71(28)
              
              Guaranty
                  by the Registrant of the $4,000,000 Promissory Note to PCL Construction
                  Enterprises, Inc.10.72(28)
              
              Guaranty
                  of Malcolm J. Wright guaranteeing the $4,000,000 Promissory Note
                  to PCL
                  Construction Enterprises, Inc.10.73(28)
              
              Addendum
                  to Construction Loan Agreement Condominium and Townhouse Project
                  Development10.74(28)
              
              Payment
                  Guaranty Phase 110.75(28)
              
              Payment
                  Guaranty Phase 210.76(28)
              
              Amended
                  Debt Guarantor Agreement10.77(28)
              
              Guaranty
                  of Tierra Del Sol (Phase 1), Ltd. guaranteeing the $4,000,000 Promissory
                  Note to PCL Construction Enterprises, Inc. (exhibit
                  10.7)10.78(28)
              
              Performance
                  and Completion Guaranty10.79(28)
              
              Pledge
                  and Security Agreement10.80(29)
              
              Option
                  Exercise Agreement with Stanford Financial Group
                  Company10.81(29)
              
              Assignment
                  of Interest in Reedy Creek Acquisition Company, LLC10.82(30)
              
              Registration
                  Rights Agreement with SIBL dated January 4, 200610.4(30)
              
              Credit
                  Agreement with SIBL10.83(29)
              
              $7,000,000
                  Promissory Note with Bankers Credit Corporation10.7(29)
              
              Modification
                  and Reaffirmation of Guaranty and Environmental Indemnity
                  Agreement10.84(29)
              
              Renewed,
                  Amended and Increased Promissory Note10.85(30)
              
              Stanford
                  International Bank, Ltd. Warrant for 77,000 shares at $0.001 per
                  share10.86(30)
              
              Stanford
                  International Bank, Ltd. Warrant for 154,000 shares at $5.00 per
                  share
   -150-
  10.87(29)
              
              Irrevocable
                  and Unconditional Guaranty10.88(30)
              
              Registration
                  Rights Agreement with SIBL dated December 28, 200510.89(29)
              
              SIBL
                  $2.1 million note10.90(30)
              
              Partnership
                  Interest Pledge and Security Agreement and Collateral Assignment
                  (Phase
                  1)10.91(30)
              
              Partnership
                  Interest Pledge and Security Agreement and Collateral Assignment
                  (Phase
                  2)10.92(30)
              
              SIBL
                  Warrant Agreement for 2% Phase 1 interest10.93(30)
              
              SIBL
                  Warrant Agreement for 2% Phase 2 interest10.94(29)
              
              Stanford
                  International Bank, Ltd. Warrant for 154,000 at $0.001 per
                  share10.95(29)
              
              Stanford
                  International Bank, Ltd. Warrant for 308,000 at $5.00 per
                  share10.96(31)
              
              Original
                  Purchase Agreement10.97(32)
              
              First
                  Amendment to Asset Purchase Agreement10.98(33)
              
              Settlement
                  Agreement effective as of December 31, 2005 by and among American
                  Leisure
                  Holdings, Inc., American Leisure Equities Corporation and Around
                  The World
                  Travel, Inc.10.99(34)
              
              Stock
                  Purchase Agreement between Harborage Leasing Corporation and the
                  Company10.100(34)
              
              $1,411,705
                  Promissory Note payable to Harborage Leasing
                  Corporation10.101(34)
              
              Malcolm
                  J. Wright Guaranty Agreement regarding $1,411,705 Promissory Note
                  with
                  Harborage Leasing Corporation10.102(34)
              
              Harborage
                  Leasing Corporation warrant to purchase 300,000 shares of common
                  stock at
                  $5.00 per share10.103(35)
              
              Third
                  Party Debt Guarantor Agreement10.104(35)
              
              Note
                  Modification Agreement with SIBL
   -151-
  10.105(35)
              
              Stock
                  Purchase Agreement with SIBL for the purchase of our Antigua call
                  center
                  operations10.106(35)
              
              Warrant
                  Agreement with SIBL for the purchase of up to 355,000 shares of
                  common
                  stock at the exercise price of $10.00 per share10.107(36)
              
              Purchase
                  Agreement between Scott Roix, American Leisure Holdings, Inc. and
                  Stanford
                  International Bank Limited10.108(36)
              
              Warrant
                  Agreement for the Purchase of 235,000 shares of common stock at
                  an
                  exercise price of $20.00 per share granted to Stanford International
                  Bank
                  Limited10.109(37)(ii)
              
              Credit
                  Agreement - $4,300,000 credit facility10.110(37)
              
              Second
                  Renewed, Amended and Increased Promissory Note issued by Reedy
                  Creek
                  Development Company, LLC10.111(37)
              
              Second
                  Mortgage Modification Agreement and Future Advance Certificate10.112(37)
              
              Modification
                  and Reaffirmation of Guaranty and Environmental Indemnity Agreement
                  (November 2006)10.113(37)(ii)
              
              Amendment
                  No. 1 to $4.3 Million Credit Agreement10.114(37)
              
              Third
                  Renewed, Amended and Increased Promissory Note issued by Reedy
                  Creek
                  Development Company, LLC10.115(37)
              
              Modification
                  and Reaffirmation of Guaranty and Environmental Indemnity Agreement
                  (December 2006)10.116(37)
              
              Third
                  Mortgage Modification Agreement and Future Advance
                  Certificate10.117(37)(iii)
              
              Credit
                  Agreement - $6,200,000 credit facility10.118(37)(iii)
              
              Amendment
                  No. 1 to $6.2 Million Credit Agreement10.119(37)
              
              Purchase
                  Agreement (South Beach Resorts, LLC)10.120(37)
              
              Assignment
                  of Interests in South Beach Resorts, LLC10.121(37)
              
              Promissory
                  Note payable to Roger Maddock
   -152-
  10.122(37)
              
              Guaranty
                  Agreement in connection with Maddock Promissory Note10.123(37)(ii)
              
              Warrant
                  and Participation Agreement10.124(37)(iv)
              
              Form
                  of Warrant10.125(37)
              
              Promissory
                  Note (South Beach Resorts, LLC)10.126*
              
              Amendment
                  No.1 to $13,420,000 Renewed, Amended and Increased Promissory Note
                  with
                  (Reedy Creek Note)10.127*
              
              Amended
                  and Restated Promissory Note (Bankers Credit -
                  $7,860,000)10.128*
              
              Note
                  Modification Agreement with SIBL (December 2006)10.129*
              
              Amendment
                  to Stock Purchase Agreement (Harborage)10.130*
              
              Forbearance
                Agreement (LaSalle Bank/South Beach Resorts, LLC)10.131*
              
              Amendment
                  No. 2 to $4.3 Million Credit Agreement10.132*
              
              Fourth
                  Renewed, Amended and Increased Promissory Note issued by Reedy
                  Creek
                  Development Company, LLC10.133*
              
              Modification
                  and Reaffirmation of Guaranty and Environmental Indemnity Agreement
                  (January 2007)10.134*
              
              Fourth
                  Mortgage Modification Agreement and Future Advance
                  Certificate10.135*
              
              Amendment
                  No. 2 to $6.2 Million Credit Agreement10.136*
              
              Malcolm
                  J. Wright - Guaranty Agreement of $7,000,000 Bankers Credit
                  Note10.137*
              
              March
                  2007 - $10,000,000 Credit Agreement with Stanford International
                  Bank,
                  Ltd.10.138*
              
              March
                  2007 - $10,000,000 Promissory Note payable to Stanford International
                  Bank,
                  Ltd.10.139*
              
              March
                  2007, Mortgage and Security Agreement with Stanford International
                  Bank,
                  Ltd.10.140*
              
              Mortgage
                and Security Agreement10.141(38)
              
              Michael
                D. Crosbie Employment Agreement
   -153-
  21.1*
              
              List
                of Subsidiaries31.1*
              
              Chief
                  Executive Officer Certification pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 200231.1*
              
              Chief
                  Financial Officer Certification pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 200232.1*
              
              Chief
                  Executive Officer Certification pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 200232.2*
              
              Chief
                  Financial Officer Certification pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 200299.1(6)
              
              Personal
                  Guarantee by Malcolm J. Wright guaranteeing the $6,000,000 Line
                  of
                  Credit99.2(25)
              
              Press
                  Release issued September 6, 2005, announcing Frederick W. Pauzar
                  as Chief
                  Operating Officer and a Director
 
 *
        Filed
        herein.
 
 (1)
        Filed
        as Exhibit 2.1 to the Registrant's Form 8-K on June 28, 2002, and incorporated
        herein by reference.
 
 (2)
        Filed
        as Exhibit 3.1 to the Registrant's Form SB-1 on October 20, 2000, and
        incorporated herein by reference.
 
 (3)
        Filed
        as Exhibits 3.1, 3.2, 3.3, 3.4 10.2, and 16.1, respectively, to the Registrant's
        Form 10-QSB on August 19, 2002, and incorporated herein by
        reference.
 
 (4)
        Filed
        as Exhibit 16.1 to the Registrant's Form 8-K on May 23, 2003, and incorporated
        herein by reference.
 
 (5)
        Filed
        as Exhibits 99.2, 99.1, 99.3, 99.5, 99.6, 99.7, 99.8, 99.9, 99.10 and 99.11,
        respectively, to the Registrant's Form 10-KSB on May 23, 2003, and incorporated
        herein by reference.
 
 (6)
        Filed
        as Exhibits 99.1, 99.2, 99.3, 99.4, 99.7, 99.8, 99.9, 99.10, 99.11 and 99.5,
        respectively, to the Registrant's Form 8-K on April 1, 2004, and incorporated
        herein by reference.
 
 (7)
        Filed
        as Exhibits 99.11, 99.12 and 99.13, respectively, to the Registrant's Form
        10-QSB on May 25, 2004, and incorporated herein by reference.
  -154-
  (8)
        Filed
        as Exhibits 99.1 and 99.2, respectively, to the Registrant's Form 8-K on
        April
        6, 2004, and incorporated herein by reference.
 
 (9)
        Filed
        as Exhibits 3.1, 10.1, 10.2, 10.3, 10.4, 10.5 and 99.2, respectively, to
        the
        Registrant's Forms 8-K/A filed on August 6, 2004, and incorporated herein
        by
        reference.
 
 (10)
        Filed as Exhibits 3.1, 10.1, 10.2, 10.3, 10.4, 10.5 and 99.2, respectively,
        to
        the Registrant's Forms 8-K/A filed on August 6, 2004, and incorporated herein
        by
        reference.
 
 (11)
        Filed as Exhibits 16.2, 16.3, 16.4 and 16.5, respectively, to the Registrant's
        Forms 8-K/A filed on August 18, 2004, and incorporated herein by
        reference.
 
 (12)
        Filed as Exhibit 16.1 to the Registrant's Form 8-K on August 18, 2004, and
        incorporated herein by reference.
 
 (13)
        Filed as Exhibit 10.6 to the Registrant's Form 10-QSB on August 20, 2004,
        and
        incorporated herein by reference.
 
 (14)
        Filed as Exhibit 10.6 to the Registrant's Form 10-QSB/A on December 8, 2004,
        and
        incorporated herein by reference.
 
 (15)
        Filed as Exhibit 10.1 to the Registrant's Form 8-K on January 6, 2005, and
        incorporated herein by reference.
 
 (16)
        Filed as Exhibit 10.1 to the Registrant's Form 8-K on February 2, 2005, and
        incorporated herein by reference.
 
 (17)
        Filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to the Registrant's
        Form 8-K on March 14, 2005, and incorporated herein by reference.
 
 (18)
        Filed as Exhibits 4.6, 10.29, 10.30, 10.31, 10.32, 10.33, and 10.34,
        respectively, to the Registrant's Form 10-KSB on March 31, 2005, and
        incorporated herein by reference.
 
 (19)
        Filed as Exhibit 16.2 to the Registrant's Form 8-K on March 28, 2005, and
        incorporated herein by reference.
 
 (20)
        Filed as Exhibits 4.5, 10.43 and 10.44, respectively to the Registrant's
        Form
        10-QSB on May 23, 2005, and incorporated herein by reference.
 
 (21)
        Filed as Exhibits 10.45, 10.46, 10.47, 10.48, 10.49, 10.50, 10.51, 10.52,
        10.53,
        10.60, 10.61, 10.62, 10.63 and 23.1, respectively, to the Registrant's Form
        SB-2
        on June 30, 2005, and incorporated herein by reference.
 
 (22)
        Filed as Exhibits 10.54, 10.55, 10.56, 10.57, 10.58 and 10.59, respectively,
        to
        the Registrant's Form SB-2/A on July 7, 2005, an incorporated herein by
        reference.
  -155-
  (23)
        Filed as Exhibit 10.1 and 10.2, respectively to the Registrant's Form 8-K
        on
        August 18, 2005, and incorporated herein by reference.
 
 (24)
        Filed as Exhibit 10.5 to the Registrant's Form 8-K on August 19, 2005, and
        incorporated herein by reference.
 
 (25)
        Filed as Exhibit 99.1 to the Registrant's Form 8-K on September 6, 2005,
        and
        incorporated herein by reference.
 
 (26)
        Filed as Exhibits to our Report on Form 8-K filed with the Commission on
        August
        18, 2005, and incorporated herein by reference.
 
 (27)
        Filed as Exhibits to our Report on Form 8-K filed with the Commission on
        December 15, 2005 and incorporated herein by reference.
 
 (28)
        Filed as Exhibits to the Registrant's report on form 8-K on January 12, 2006
        and
        incorporated by reference herein.
 
 (29)
        Filed as Exhibits to the Registrant's report on Form 8-K filed on January
        19,
        2006 and incorporated herein by reference.
 
 (30)
        Filed as Exhibits to the Company's report on Form 8-K, which was filed with
        the
        SEC on March 28, 2006.
 
 (31)
        Filed as Exhibit 10.1 to the Company's report on Form 8-K, which was filed
        with
        the SEC on January 6, 2005, and is incorporated herein by
        reference.
 
 (32)
        Filed as Exhibit 10.44 to the Company's report on Form 10-QSB for the quarter
        ended March 31, 2005, which was filed with the SEC on May 23, 2005, and is
        incorporated herein by reference.
 
 (33)
        Filed as Exhibit 10.3 to the Company's report on Form 8-K, which was filed
        with
        the SEC on March 2, 2006, and is incorporated herein by reference.
 
 (34)
        Filed as Exhibits to the Company's Report on Form 8-K, which was filed with
        the
        SEC on March 29, 2006, and is incorporated herein by reference.
 
 (35)
        Filed as Exhibits to the Company's Report on Form 10-QSB, which was filed
        with
        the SEC on August 21, 2006, and is incorporated herein by
        reference.
 
 (36)
        Filed as exhibits to the Company’s Quarterly Report on Form 10-QSB filed with
        the Commission on November 20, 2006, and incorporated herein by
        reference.
 
 (37)
        Filed as Exhibits to the Company’s Form 8-K filed with the Commission on January
        16, 2007, and incorporated herein by reference.
  (38)
        Filed as an Exhibit to the Company's Quarterly
        Report on Form 10-QSB filed with the Commission on May 22, 2006, and
        incorporated herein by reference.
  -156-
  (i)
        In
        addition to Stanford International Bank, Ltd. ("SIBL"), four individuals
        were
        granted warrants in connection with the Option Agreement. Those four
        individuals, Ronald Stein, Osvaldo Pi, Daniel Bogar and William Fusselman
        were
        each granted warrants to purchase 19,250 shares of the Company's common stock
        at
        $0.001 per share, and warrants to purchase 38,500 shares of the Company's
        common
        stock at $5.00 per share, which warrants are identical to the SIBL warrants
        attached hereto as Exhibits 10.9 and 10.10, respectively, other than the
        number
        of shares which those warrants are exercisable for.
 
 (ii)
        While we believe these documents to be final and in effect, and we have received
        the entire amount of the funds required to be loaned pursuant to each of
        these
        agreements, we been unable to obtain the signatures of SIBL on such
        documents.
 
 (iii)
        While we believe these documents to be final and in effect, as of the filing
        of
        this report, we have been unable to obtain the signatures of Stanford on
        such
        documents.
 
 (iv)
        We
        granted Stanford International Bank Limited ("SIBL") and six of its assigns,
        including Daniel T. Bogar ("Bogar"), William R. Fusselmann ("Fusselmann"),
        Osvaldo Pi ("Pi"), Ronald M. Stein ("Stein"), Charles M. Weiser ("Weiser")
        and
        Tal Kimmel ("Kimmel") warrants to purchase up to a 25% participation interest
        in
        the net proceeds (defined as the proceeds realized upon the disposition or
        refinancing of the Property, less our cost basis, excluding any operating
        losses
        or profits) realized by us upon the disposition of the real property located
        at
        740 Ocean Drive, Miami Beach, Florida, known as the Boulevard Hotel (the
        "Property"). The warrants are identical other than as to the party the warrant
        was granted to and the participation interest in the Net Proceeds granted.
        As
        such, we have only attached a form of warrant. Each warrant has an aggregate
        exercise price of $1.00, and the participation interests in the Net Proceeds
        granted to each grantee is as follows: SIBL 12.5%, Bogar 2.891%, Fusselmann
        2.891%, Pi 2.891%, Stein 2.891%, Weiser 0.468%, and Kimmel 0.468%.
 
 **Reports
        on Form 8-K:**
 
 We
        file
        no reports on Form 8-K during the three months ended December 31,
        2006.
 
 We
        filed
        one report on Form 8-K subsequent to the period ended December 31,
        2006:
 
 o  On
        January 16, 2007, to report our entries into the RC Credit Agreement, Amended
        RC
        Credit Agreement, the TDSR Credit Agreement, the Amended TDSR
        Credit
 Agreement, and related transactions, as well as our purchase of South Beach
        Resorts, LLC.
 
 
  -157-
  **ITEM
        14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.**
 
 **Audit
        Fees**
 
 The
        audit
        and audit related fees billed for audit and review of the Company's annual
        and
        quarterly financial statements were $71,112 and $83,257 for the fiscal years
        ended December 31, 2006 and December 31, 2005, respectively.
 
 **Audit
        Related Fees**
 
 The
        Company did not pay any additional fees for the years ended December 31,
        2006
        and 2005 for assurance and related services reasonably related to the
        performance of the audit or review of the Company's financials
        statements.
 
 **Tax
        Fees**
 
 The
        Company paid $15,000 and $41,990, in fees for the years ended December 31,
        2006
        and 2005, respectively, for professional services rendered for tax compliance,
        tax advice and tax planning.
 
 **All
        Other Fees**
 
 The
        Company's principal independent accountants did not bill the Company for
        any
        services other than the foregoing for the fiscal years ended December 31,
        2006
        and December 31, 2005.
 
  -158-
  **SIGNATURES**
 
 In
        accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
        this report to be signed on its behalf by the undersigned, thereunto duly
        authorized.
 
 AMERICAN
        LEISURE HOLDINGS, INC.
 
 By:
        /s/ Malcolm J. Wright
 Name:
        Malcolm J. Wright
 Title:
        Chief Executive Officer
 and
        Chairman of the Board of Directors
 
 By:
        /s/ Omar Jimenez
 Name:
        Omar Jimenez
 Chief
        Financial Officer
 (Principal
        Accounting Officer)
 
 Date:
        April 17, 2007
 
 In
        accordance with the Exchange Act, this report has been signed below by the
        following persons on behalf of the registrant and in the capacities and on
        the
        dates indicated.
 
 **SIGNATURE******
              
              **TITLE******
              
              **DATE******/s/
                  Malcolm J. Wright
              
              Chief
                  Executive Officer
              
              April
                  17, 2007Malcolm
                  J. Wright
              
              and
                  Chairman of the Board of Directors/s/
                  Omar Jimenez
              
              Chief
                  Financial Officer
              
              April
                  17, 2007Omar
                  Jimenez
              
              (Principal
                  Accounting Officer)/s/
                  Frederick Pauzar
              
              President,
                  Chief Operating Officer,
              
              April
                  17, 2007Frederick
                  Pauzar
              
              and
                  Director/s/
                  Michael Crosbie
              
              General
                  Counsel,
              
              April
                  17, 2007Michael
                  Crosbie
              
              Executive
                  Vice President,and
                  Secretary/s/
                  James Leaderer
              
              Director
              
              April
                  17, 2007James
                  Leaderer
 
 
 -159-