---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 20-F

[ ]REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934For the Fiscal year endedDecember 31, 2003

OR

[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

OR

[ ]SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell
company report

For the transition period from _____________to
______________

Commission file number: 0-29862

Forum National Investments
Ltd.(Exact name of Registrant as specified in its charter)

Forum National Investments Ltd.(Translation of
Registrants name into English)

Ontario, Canada(Jurisdiction of incorporation
or organization)

Suite 180A, 13040 #2 Road, Richmond, B.C. Canada V7E
2G1(Address of principal executive offices)

---

Securities registered or to be registered pursuant to Section
12(b) of the Act:

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|None                |                                          

Securities registered or to be registered pursuant to Section
12(g) of the Act:

|Common Shares without par value: | 4,644,661
|-------------------------------- | ---------
|(Title of Class)                 |          

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act. None

Indicate the number of outstanding shares of each of the
issuers classes of capital or common stock as of the close of the period
covered by this annual report.

As of December 31, 2003 Common Shares without par value:1,384,771

Indicate by check mark if the registrant is a well-known
seasoned issuer as defined in Rule 405 of the Securities Act [ ] Yes . [X]
No

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [
] Yes [X] No

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period 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

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer or a non-accelerated filer [ ] Large
Accelerated filer [ ] Accelerated filer [X] Non-accelerated filer

Indicate by check mark which financial statement item the
registrant has elected to follow. [X] Item 17 [ ] Item 18

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) [ ]
Yes . [X] No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of the securities
under a plan confirmed by a court. [ ] Yes [ ] No

(2)

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FORUM NATIONAL INVESTMENTS LTD.TABLE OF CONTENTS

|ITEM I    | IDENTITY OF DIRECTORS, SENIOR
      MANAGEMENT AND ADVISORS   | 7 
|--------- | ------------------------------------------------------------- | --
|A)        | DIRECTORS AND SENIOR MANAGEMENT                               | 7 
|B)        | AUDITORS                                                      | 7 
|ITEM II   | OFFER STATISTICS AND EXPECTED
      TIMETABLE                 | 7 
|ITEM III  | KEY INFORMATION                                               | 7 
|A)        | SELECTED FINANCIAL DATA                                       | 7 
|B)        | CAPITALIZATION AND INDEBTEDNESS                               | 9 
|C)        | REASON FOR THE OFFER AND
      USE OF PROCEEDS                | 9 
|D)        | RISK FACTORS                                                  | 9 
|ITEM IV   | INFORMATION ON THE COMPANY                                    | 14
|A)        | HISTORY AND DEVELOPMENT
      OF THE COMPANY                  | 14
|B)        | BUSINESS OVERVIEW                                             | 18
|C)        | ORGANIZATIONAL STRUCTURE                                      | 23
|ITEM V    | OPERATING AND FINANCIAL
      REVIEW AND PROSPECTS            | 24
|A)        | OPERATING RESULTS                                             | 24
|B)        | LIQUIDITY AND CAPITAL RESERVES                                | 28
|C)        | RESEARCH AND DEVELOPMENT,
      PATENTS AND LICENSES, ETC     | 30
|D)        | TREND INFORMATION                                             | 30
|E)        | OFF-BALANCE SHEET ARRANGEMENTS                                | 31
|F)        | TABULAR DISCLOSURE OF CONTRACTUAL
      OBLIGATIONS           | 31
|ITEM VI   | DIRECTORS, SENIOR MANAGEMENT
      AND EMPLOYEES              | 32
|A)        | DIRECTORS AND SENIOR MANAGEMENT                               | 32
|B)        | COMPENSATION                                                  | 33
|C)        | BOARD PRACTICES                                               | 33
|D)        | EMPLOYEES                                                     | 34
|E)        | SHARE OWNERSHIP                                               | 34
|ITEM VII  | MAJOR SHAREHOLDERS AND RELATED
      PART TRANSACTIONS        | 35
|A)        | MAJOR SHAREHOLDERS                                            | 35
|B)        | RELATED PARTY TRANSACTIONS                                    | 36
|ITEM VIII | FINANCIAL INFORMATION                                         | 37
|A)        | CONSOLIDATED STATEMENTS
      AND OTHER FINANCIAL INFORMATION | 37
|B)        | SIGNIFICANT CHANGES                                           | 38
|ITEM IX   | THE OFFER AND LISTING                                         | 38
|A)        | PRICE RANGE AND VOLUME OF
      SHARES OF COMMON STOCK        | 38
|B)        | PLAN OF DISTRIBUTION                                          | 39
|C)        | MARKETS                                                       | 39
|D)        | SELLING SHAREHOLDERS                                          | 39
|E)        | DILUTION                                                      | 39
|F)        | EXPENSES OF THE ISSUE                                         | 39
|ITEM X    | ADDITIONAL INFORMATION                                        | 40
|A)        | SHARE CAPITAL                                                 | 40
|B)        | MEMORANDUM AND ARTICLES
      OF ASSOCIATION                  | 40
|C)        | MATERIAL CONTRACTS                                            | 41
|D)        | EXCHANGE CONTROLS                                             | 43

(3)

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|E)                                    | TAXATION                                                                           | 44                                                                         
|------------------------------------- | ---------------------------------------------------------------------------------- | ---------------------------------------------------------------------------
|F)                                    | DIVIDENDS AND PAYING AGENTS                                                        | 52                                                                         
|G)                                    | STATEMENT BY EXPERTS                                                               | 52                                                                         
|H)                                    | DOCUMENTS ON DISPLAY                                                               | 52                                                                         
|I)                                    | SUBSIDIARY INFORMATION                                                             | 52                                                                         
|ITEM XI                               | QUANTITATIVE AND QUALITATIVE DISCLOSURE
      ABOUT MARKET RISK                    | 52                                                                         
|ITEM
      XII                        | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                             | 52                                                                         
|                                      |                                                                                    |                                                                            
|PART II                               |                                                                                    |                                                                            
|                                      |                                                                                    |                                                                            
|ITEM
      XIII                       | DEFAULTS, DIVIDENDS, ARREARS AND DELINQUENCIES                                     | 53                                                                         
|ITEM XIV                              | MATERIAL MODIFICATIONS TO THE
      RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 53                                                                         
|ITEM
      XV                         | CONTROLS AND PROCEDURES                                                            | 53                                                                         
|ITEM XVI                              | (A)                                                                                | AUDIT COMMITTEE FINANCIAL EXPERT                                           
|ITEM
      XVI                        | (B)                                                                                | CODE OF ETHICS                                                             
|ITEM XVI                              | (C)                                                                                | PRINCIPAL ACCOUNT FEES AND SERVICE                                         
|ITEM XVI                              | (D)                                                                                | EXEMPTIONS FROM THE LISITNGS
      STANDARD FOR AUDIT COMMITTEES           
|ITEM XVI                              | (A)                                                                                | PURCHASE OF EQUITY SECURITIES BY THE ISSUER
      AND AFFILIATED PURCHASERS
|                                      |                                                                                    |                                                                            
|PART III                              |                                                                                    |                                                                            
|                                      |                                                                                    |                                                                            
|ITEM XVII FINANCIAL STATEMENTS        | 55                                                                                
|ITEM
      XVIII FINANCIAL STATEMENTS | 55                                                                                
|ITEM XIX EXHIBITS                     | 56                                                                                
|INDEX
      TO FINANCIAL STATEMENTS   | 58                                                                                
|SIGNATURE                             | 59                                                                                
|CERTIFICATIONS                        | 57                                                                                

(4)

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GENERAL

In this Annual Report on Form 20-F, all references to Forum,
or the Company refer to Forum National Investments, Ltd. and its subsidiaries
and affiliated companies. References to this Form 20-F and this Annual
Report mean references to this Annual Report on Form 20-F for the year ended
December 31, 2003.

We use the Canadian dollar as our reporting currency. All
references in this Annual Report to dollars or $ are expressed in Canadian
dollars, unless otherwise indicated. See also Item 3. Key Information for more
detailed currency and conversion information. Our consolidated financial
statements, which form part of the annual report are presented in Canadian
dollars and are prepared in accordance with accounting principles generally
accepted in Canada (Canadian GAAP) which differ in certain respects from
accounting principles generally accepted in the United States (U.S. GAAP). The
differences between Canadian GAAP and U.S. GAAP, as they relate to our business,
are explained in the notes to our consolidated financial statements.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements (within
the meaning of the United States Private Securities Litigation Reform Act of
1995) concerning our business strategies, market conditions, outlook and other
matters. These statements relate to analyses and other information that are
based on forecasts of future results, estimates of amounts not yet determinable
and assumptions of management including, but not limited to, certain statements
and projections concerning our plans, intentions, strategies, expectations,
predictions, financial projections, assumptions and estimates related to
accounting policies, concerning the our future activities and results of
operations and other future events or conditions. Any statements that express or
involve discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions or future events or performance (often, but
not always, using words or phrases such as expects or does not expect, is
expected, anticipates or does not anticipate, plans, estimates or
intends, or stating that certain actions, events or results may, could,
would, might or will be taken, occur or be achieved) are not statements of
historical fact and may be forward-looking statements. Forward-looking
statements contained in this report are based on current facts and analyses and
include, but are not limited to, the following:

the effect of certain transactions, including marketing
agreements on our revenues and results of operations in future periods;

our discussions with potential new marketing agents or
membership based organizations and the status of these discussions;

our ability to secure additional financing and improve
operating cash flow to allow it to continue as a going concern;

application of critical accounting policies and the effect of
accounting pronouncements on our results of operations;

our focus on key long-term objectives, including diversifying
our type of membership offerings, maintaining and expanding current membership
levels, and improving its levels and areas of service;

other statements related to our business and results of
operations.

Forward looking statements are made based on managements
reasonable beliefs, estimates

(5)

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and opinions on the date the statements are made. However,
these forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause our actual results, performance or achievements
or industry results to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such risk factors include, but are not limited to, general economic
conditions, our ability to generate sufficient cash flows to support capital
expansion plans and general operating activities; changing travel and lifestyle
trends of consumers; competition; pricing and availability of services; laws and
regulations and changes thereto that may affect the way our services are
marketed, provided and sold; and political and economic uncertainties including
exchange controls, currency fluctuations, taxation and other laws or
governmental economic, fiscal, monetary or political policies of Canada and the
United States affecting foreign travel, investment and taxation and other
factors beyond our reasonable control, which, in turn, could affect our current
or future operations. See Key Information  Risk Factors. Should one or more
of these risks and uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those described in
forward-looking statements. The reader is cautioned not to place undue reliance
on forward-looking statements. We undertake no obligation to publicly revise
these forward-looking statements to reflect events or circumstances that arise
after the date of this filing. Readers should carefully review the cautionary
statements and risk factors contained in this and other documents that we file
from time to time with the Securities and Exchange Commission.

(6)

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PART I

|ITEM I. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
      ADVISORS
|------- | -----------------------------------------------------------

|A) | DIRECTORS AND SENIOR MANAGEMENT
|-- | -------------------------------

Daniel A. Clozza
    President Chief Executive Officer
      Director
    Vancouver, British Columbia, CanadaMartin Tutschek.
    Chief Financial Officer Director Audit
      Committee Member
    North Vancouver, British Columbia, Canada


Advisors Principal Bankers of the Company:

Canadian Imperial Bank of Commerce
    Brentwood Burnaby, British Columbia
      Canada V6C 3A6


Legal Counsel of the Company:

Canada
    Kornfeld Mackoff Silber Davis &
      Company
    1100  One Bentall Center Vancouver,
      British Columbia Canada V7X 1M5 1901 Avenue of the First Canadian
      Place Toronto, ON Canada M5X 1E2US
    Burns Figa & Will, P.C.
    1901 Ave of the 6400 S. Fiddlers Green Circle
      Engelwood, CO 80111


|B) | AUDITORS
|-- | --------

The Companys auditors are SmytheRatcliffe Chartered
Accountants, located at 7th Floor Marine Building, 355 Burrard
Street, Vancouver, British Columbia, Canada, V6C 2G8

|ITEM II. | OFFER STATISTICS AND EXPECTED TIMETABLE
|-------- | ---------------------------------------

This Form 20-F is been filed as an annual report under the
Exchange Act and, as such, there is no requirement to provide information under
this item.

|ITEM III. | KEY INFORMATION
|--------- | ---------------

|A) | SELECTED FINANCIAL DATA
|-- | -----------------------

Set forth below is certain selected financial data for the Company
  for the year-end fiscal periods 1999 to 2003. The following information must
  be read in conjunction with the more detailed financial information contained
  in the accompanying audited financial statements prepared in accordance to Canadian
  GAAP. Unless otherwise stated, all references to dollars herein are to Canadian
  dollars. As at December 31, 2003, one United States Dollar was equal to 1.3128
  Canadian dollars and that value is used in the calculations herein, unless otherwise
  indicated.

(7)

---

otherwise stated, all references to dollars herein are to Canadian
  dollars. As at December 31, 2003, one United States Dollar was equal to 1.3128
  Canadian dollars and that value is used in the calculations herein, unless otherwise
  indicated.

TABLE OF SELECTED CONSOLIDATED FINANCIAL DATA

(Stated in Canadian Dollars)

|                       |      |   | Year Ended December 31 |  
|---------------------- | ---- | - | ---------------------- | -
|                       |      |   | 2003                   |  
|Current Assets         | (2 ) | $ | 852,855                |  
|Capital Assets         |      |   | 3,760,853              |  
|Total Assets           | (2 ) |   | 8,893,775              |  
|Current Liabilities,   | (2 ) |   | 1,581,890              |  
|Excluding Deferred     |      |   |                        |  
|Revenue                |      |   |                        |  
|Deferred Revenue       |      |   | 9,755,212              |  
|Convertible Debentures |      |   | 172,615                |  
|Share Capital          |      |   | 15,028,187             |  
|Shares Subscribed      |      |   | -                      |  
|Deficit                |      |   | (17,979,578            | )

|                       |      |   | Year Ended December 31 | 
|---------------------- | ---- | - | ---------------------- | 
|                       |      |   | 2003                   | 
|Net Revenue from       |      | $ | 9,758,380              | 
|Operations             |      |   |                        | 
|Net Income (Loss) from |      | $ | 3,263,047              | 
|Operations             |      |   |                        | 
|Earnings (Loss) per    | (1 ) | $ | 2.36                   | 
|Share from Operations  |      |   |                        | 
|Fully Diluted Earnings | (1 ) | $ | 2.36                   | 
|(Loss) per Share       |      |   |                        | 
|Weighted Average       |      |   | 1,384,771              | 
|number of shares for   |      |   |                        | 
|calculating basic and  |      |   |                        | 
|diluted Earning (Loss) |      |   |                        | 
|per share              |      |   |                        | 

|(1) | Effective July 5, 2002 the Companys shares were
      consolidated on a ten (10) old for one (1) new basis. The prior years
      numbers have been changed to reflect the reverse
split.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(8)

---

|(2) | The Companys financial statements for 2002, 2001, 2000
      and 1999 have been retroactively restated. The Company previously followed
      the practice of excluding from the balance sheet the amounts receivable
      from the sale of memberships that were not due until future years. In 2003
      the Company changed the policy and now reports long-term receivables net
      of estimated uncollectible, deferred interest and potential GST
      accruals.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On October 31, 2006, the exchange rate for Canadian dollars was
$1.00 (US) for $1.1227 (CAD), as posted by the Bank of Canada. The high and low
buying rate figures are selected from monthly figures for each month of the
previous six-month period ending October 31, 2006. Daily average figures are not
available from any major Canadian chartered bank.

|     | October | September | August | July   | June   | May   
|---- | ------- | --------- | ------ | ------ | ------ | ------
|High | 1.1153  | 1.1053    | 1.1066 | 1.1061 | 1.1099 | 1.0990
|Low  | 1.1385  | 1.1273    | 1.1315 | 1.1416 | 1.1245 | 1.1233

Historical exchange rates for $1.00 (US) expressed in Canadian
dollars over the past five years are as follows:

|           | 2005   | 2004   | 2003   | 2002   | 2001  
|---------- | ------ | ------ | ------ | ------ | ------
|Period End | 1.1659 | 1.2036 | 1.2965 | 1.5776 | 1.5928
|Average    | 1.2116 | 1.3015 | 1.4014 | 1.5702 | 1.5485
|High       | 1.1507 | 1.1774 | 1.5672 | 1.6125 | 1.6034
|Low        | 1.2704 | 1.3968 | 1.2943 | 1.5122 | 1.4935

The above information was obtained from the Bank of Canada and
is believed by the Company to closely approximate the rates certified for
customs purposes by the Federal Reserve Bank in New York.

|B) | CAPITALIZATION AND INDEBTEDNESS
|-- | -------------------------------

This Form 20-F is been filed as an annual report under the
Exchange Act and, as such, there is no requirement to provide information under
this item.

|C) | REASONS FOR THE OFFER AND USE OF PROCEEDS
|-- | -----------------------------------------

This Form 20-F is been filed as an annual report under the
Exchange Act and, as such, there is no requirement to provide information under
this item.

|D) | RISK FACTORS
|-- | ------------

Investment in the Company involves a high degree of risk.
Prospective investors, prior to making an investment in the Company, should
carefully consider, among others, the following risk factors:

Governmental Regulations

In May 2002, the Government of Alberta introduced new consumer
regulations on the licensing, sale, and the marketing of lifetime travel club
memberships in that Province. Management is unable to predict but considers it
likely similar consumer regulations will be introduced in other

(9)

---

provinces. The resulting effect of these regulations could
affect the Companys ability to market its Snowbird vacations travel club
memberships.

On October 1, 2003 the United States federal governments no
call registry went into effect. The new law allows consumers who do not wish to
be solicited and receive telemarketing calls to register on the federal
governments nationwide list. The no call list is receiving millions of
registrants. Management is unable to predict if the Canadian government will
introduce a similar law, but considers the likelihood of similar legislation
being introduced probable in the next few years. This law in Canada if
implemented could effect the companys operations and would result in a higher
marketing cost which could effect the profitability of the Companys Snowbird
Vacations travel club memberships sales.

Terrorism

The airline segment of the travel industry continues to be
subject to tough economic challenges brought about from September 11th, 2001. At
various times throughout the year the government of the United States indicates
elevates levels of terrorist threats. Several terrorist acts overseas including
the Subway bombing in London have had a negative impact on persons willing to
travel overseas. Should additional terrorist actions occur specifically within
North America, it is estimated to have a negative impact on the North American
traveling market. At this time there can be no prediction of the likelihood and
the nature of a Terrorist act. The economic viability of several large airlines
and the services they now provide could again be negatively impacted in the
future resulting in less competition and a reduction in the products and service
available to travel club members and could result in a reduction of the
Company's revenues.

These negative impacts could spread further and deeper to other
segments of the travel industry and have similar negative impacts on the
Companys profitability.

The Company May Require Additional Capital

The Company has a construction loan from Caterpillar Financial
  Services to complete the refit to the 120” Yacht in the amount of $3.9
  million USD, construction and is slated for completion in the first quarter
  of 2007. It presently has a working capital deficiency of $721,171. The Company
  continues to restructure its operations to operate within the continually evolving
  and volatile travel industry and general economic climate. The Company plans
  to generate sufficient operating capital through operations. There can be no
  assurances the Company will be able to generate sufficient investment from borrowing,
  the sale of equity, or a combination thereof. If additional financing is required,
  there is no certainty it will be available when and to the extent required or
  that if available, it will be on acceptable terms. If adequate funds are not
  available on acceptable terms, the Company may not be able to fund existing
  operations in their current state, fund business expansion, develop or enhance
  its products or services, or respond to competitive pressures. This could have
  a material adverse effect on the Company's existing operations and planned growth.

These financial statements have been prepared on a
going-concern-basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. See Note 3 Going
Concern Notes to the Consolidated Financial Statements. Accordingly, these
financial statements do not include any adjustments to the specific amounts and
classifications of assets and liabilities, which might be necessary should the
Company be unable to continue as a going concern.

(10)

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Market for the Companys Securities

The Company's common stock is vulnerable to pricing and purchasing
  actions in the ”Pink Sheets” market that are beyond its control
  and therefore persons holding or acquiring shares may be unable to resell their
  shares at a profit as a result of this volatility. It is the intention of management
  to reinstate the listing of the Company’s shares on the Over-the-Counter
  Bulletin Board. Should the Company be unable to reinstate a listing for the
  securities on the Over-the-Counter Bulletin Board or other exchange, they would
  continue to trade on the “Pink Sheets” Market there would be no
  public market for trading of the company’s common shares.

The Company Does Not Pay Dividends.

The Company does not pay dividends. The Company has not paid
any dividends since its inception, and has no intention of paying any dividends
in the foreseeable future. Any future dividends would be at the discretion of
the Companys board of directors and would depend on, among other things, future
earnings, the operating and financial condition of Forum National Investments
LTD., its capital requirements, and general business conditions. Therefore,
investors should not expect any type of cash flow from their investment.

Price Fluctuations: Share Price Volatility

The trading price of the Company's securities has been subject
to wide fluctuations in response to variations in its operating results, its
announcements of business developments, or new services by the Company or its
competitors, and other events and factors. The securities markets themselves
have from time to time experienced significant price and volume fluctuations
that may be unrelated to the operating performance of any particular companies.
Announcements of delays in the Company's business plans or online commerce
operations, technological innovations or new services by the Company, or its
competitors developments, could have a significant and adverse impact on such
market prices. Also, economic and other external factors, as well as
period-to-period fluctuations in its financial results, may have a significant
impact on the market price of the Company's securities.

There can be no assurance that the continual fluctuations in
price will not occur. In particular, during the financial year ended December
31, 2005, the price per share price of the Companys common shares fluctuated
(US dollar figures) from a high of $0.80 to a low of $0.215.

Common Share Dilution

Situations may arise which could require the issuance of
additional shares of the Registrant. During 2003 the Company issued convertible
debentures in the amount of $124,510 to officers, directors and shareholders of
the company. In spring of 2004 debentures were converted into common stock of
the company increasing the number of shares outstanding to 5,144,661.
Furthermore future equity financings, property transactions, issuance of stock
options among other things may require the subsequent issuance of the
Registrants securities.

Control Lies in the Hands of Existing Management

The Companys officers and board of directors control
approximately 50% of the Companies issued and outstanding stock. The
concentration of such a large percentage of the Companies stock in the hands of
relatively few shareholders may cause a disproportionate effect on minority
shareholders in all matters presented to the companys shareholders.

(11)

---

Company Relies Heavily on Current Management and
Directors

The Company is dependent on a relatively small number of key
directors and officers: Dan Clozza and Martin Tutschek. Loss of any one of those
persons could have an adverse affect on the Company. The Company does not
maintain key-man insurance in respect of any of its management.

Ability to Retain its Key People, or to Attract and Retain
Qualified Individuals.

The Company's future success depends, in significant part, upon
the continuing service and performance of its senior management and other key
personnel, with whom it does not have employment agreements. If it loses the
services of any of these individuals, its ability to effectively deliver
services to its customers and manage its business effectively, could be
impaired. Furthermore, companies seeking to develop business strategies in the
online travel business may hire away some of our key employees. The Company
believes that its future success will depend in large part upon its ability to
attract and retain qualified personnel for its operations. The failure to
attract or retain such persons could materially adversely affect the Company's
business, financial condition and results of operations.

Ability to Attract and Retain Successful Licensees or
Operators.

The Company's future growth depends, in significant part, upon
the continuing traditional method of sales and marketing of its Travel Club
products. If the Company is unable to secure an Operator or hire qualified sales
and marketing staff, its ability to effectively grow and expand its business
could be impaired. In addition to the risk of securing an Operator or
contracting a Licensee, the Companys growth is dependant upon the success of
the entities. Furthermore, companies seeking to also market their Travel Club
memberships may hire away some of our Licensees or Operators and or their key
employees. The Company believes that its future successful growth will depend in
large part upon its ability to attract and retain qualified Licensees or
Operators. The failure to attract or retain such entities could materially
adversely affect the Company's business, financial condition and results of
operations.

The Markets in Which the Company Competes is Highly
Competitive. If the Company Cannot Successfully Compete, its Growth Rate
May Stagnate or Revenues May Decline.

The markets in which the Company competes is intensely
competitive in all its phases. Although there are not many companies in Canada
that currently offer the exact same type of services that the Company does, it
is expected that competition will intensify and increase in the future as more
vacation and travel-related companies engage in e-commerce and or travel clubs.
The Company anticipates that it will compete for customers and experienced
personnel with a number of companies having significantly greater financial,
technical and marketing resources than it has. Established branded companies may
have some marketing advantage due to their market identities and this is likely
to have serious ramifications for the remaining travel industry players. Price
competition may be instituted and sustained further reducing the profit margins
within the travel industry, resulting in a reduction of the Company's market
share, and revenues.

Snowbird Must Develop and Maintain a Distinctive Brand
Identity.

The Company believes brand identity is important to attracting
and expanding the membership base. The Company believes the significance of
brand and name recognition will intensify should the number of competing
companies increase. The Company cannot assure

(12)

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shareholders that it will be able to continue developing a
distinctive brand identity that will ensure significant market recognition.
Without market recognition, the Company may be unable to sell memberships, which
failure would cause no growth of the Travel Club operations.

System Failures May Adversely Affect the Company's
Business.

The Company's ability to facilitate trade successfully and
provide high quality customer service depends on the efficient and uninterrupted
operation of its computer and communications systems. These systems and
operations are vulnerable to damage or interruption from earthquakes, floods,
fires, power loss, telecommunication failures, break-ins, sabotage, intentional
acts of vandalism and similar events. The Company does not have a formal
disaster recovery plan or alternative providers of hosting services, and does
not carry business interruption insurance to compensate it for losses that may
occur. Despite any precautions taken, or planned to be taken, by the Company,
the occurrence of a natural disaster or other unanticipated problems could
result in interruptions in the services provided by the Company. In addition,
system failures to provide the data communications capacity required by the
Company, as a result of human error, natural disasters, or other operational
disruption, could result in interruptions to its service and sales. Any damage
to, or failure of, the Company's systems could result in reductions in, or
terminations of, services that could have a material adverse effect on its
business, results of operations and financial condition. In the case of frequent
or persistent system failures, the Company's reputation could be materially
adversely affected. Although it has implemented certain network security
measures, the Company is also vulnerable to computer viruses, physical or
electronic break-ins and similar disruptions, which could lead to interruptions,
delays, loss of data or the inability to complete customer transactions. The
occurrence of any and all of these events could have a material adverse effect
on its business, results of operations and financial condition.

Security Breaches in Connection with Online e-Commerce and
Communications Could Damage the Company's Reputation and Expose it to
Liability.

A significant barrier to online e-commerce and communications
is the secure transmission of confidential information over public networks. The
Company processes credit cards for purchases of its products. The Company relies
on encryption and authentication technology licensed from third parties to
provide the security and authentication technology to effect secure transmission
of confidential information, including customer credit card numbers. There can
be no assurance that advances in computer capabilities, such as new discoveries
in the field of cryptography, or other events or developments, will not result
in a compromise or breach of the technology used by the Company to protect
customer transaction data.

If any such compromise of the Company's security were to occur,
it could have a material adverse effect on its reputation and, therefore, on its
business, results of operations and financial condition. Furthermore, a party
who is able to circumvent the Company's security measures could misappropriate
proprietary information or cause interruptions in its operations. The Company
may be required to expend significant capital and other resources to protect
against such security breaches or to alleviate problems caused by such breaches.
Concerns over the security of transactions conducted on the Internet and other
online services, and the privacy of users, may also inhibit the growth of the
Internet and other online services generally, and the World Wide Web in
particular, especially as a means of conducting commercial transactions. To the
extent that the Company's activities involve the storage and transmission of
proprietary information, such as credit card numbers, security breaches could
damage its reputation and expose it to a risk of loss, or litigation and
possible liability. There can be no assurance that the Company's security
measures will prevent security breaches, or that failure

(13)

---

to prevent such security breaches will not have a material
adverse effect on its business, results of operations and financial condition.

In summary, the realization of any of the risks described in
these "Risk Factors" could have a significant and adverse impact on such market
prices.

|ITEM IV. | INFORMATION ON THE COMPANY
|-------- | --------------------------

This description contains certain forward-looking statements
that involve risks and uncertainties. Our actual results could differ materially
from the results discussed in the forward-looking statements as a result of
certain risks set forth herein and elsewhere in this Form 20-F.

|A) | History and Development of the Company
|-- | --------------------------------------

The Company was incorporated in British Columbia, Canada on
September 22, 1995, under the name of Snowbird Vacations International Inc., and
was continued to the Province of Ontario on November 12, 1997. The name of the
Company was changed to Intravelnet.com Inc. on February 26, 1999. Further to
shareholder approval on April 17, 2002, the Companys name was changed to Forum
National Investments Ltd., with a consolidation of the share capital on a ten
old for a one new basis, effective July 5, 2002.

The Company’s principal office is Suite 180A, Number 2
  Road, Richmond, British Columbia, Canada VV7E 2G1, the telephone number is (604)
  275-8241and fax number is (604) 275-8745. The Company’s agent in Canada
  is Kornfeld Mackoff Silber, 1100 One Bentall Center, 505 Burrard Street, Box
  11, Vancouver, B.C. V7X 1M5. The Company has the three following web addresses:
  www.snowbirdvacations.com, www.foruminvestments.com,
  www.SpiritOfTwoThousandTen.com

Forum National Investments Ltd. maintains a calendar fiscal
  year. The Company's financial statements are stated in Canadian Dollars and
  are prepared in accordance with Canadian Generally Accepted Accounting Principles
  (GAAP), the application of which, in the case of the Company, conforms in all
  material respects for periods presented with U.S. GAAP except as noted in the
  notes to the Company's financial statements. See "Item XVII Financial Statements".

During the year 2003, the Company obtained judgment in the
Ontario Superior Court of Justice. The judgment was by way of settlement
agreement, Forum had filed suit against former employees and agents and
shareholders of the company: Remo Lorenzetto, Walter Verbetic, 1508812 Ontario
Inc., Family Vacation Centers Ltd., Snowbird Sales & Marketing Inc. and
849092 Alberta Ltd. et al. The suit had alleged breach of contract, breach of
fiduciary duty, and further, That the defendants had engaged in a pattern of
misconduct aimed at destroying Forum's relationship with its Snowbird Travel
Club members and fundamentally undermining the viability of Forum's business
operations.

The Defendants to the Ontario Action (the "FVC Defendants"),
and as applicable, their officers, directors, shareholders, agents, servants,
employees, successors, assigns and those in privity with or controlled by the
FVC Defendants, will not, directly or indirectly: solicit existing members of
Forum's Snowbird Travel Club in any manner and by any means to cancel their
memberships in the Snowbird Travel Club and/or to convert their memberships in
the Snowbird Travel Club to memberships in any travel club operated or
represented by the Defendants; make any vacation or travel bookings for members
of the Snowbird Travel Club; solicit members of the Snowbird Travel Club to
cash-in promissory notes executed in favor of Forum by those members;

(14)

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represent themselves in any manner and by any means as the
successor to the Snowbird Travel Club, Snowbird Vacations or Snowbird Vacations
International; represent themselves in any manner and by any means, including on
the Family Website as hereinafter defined, as being the authorized
representative(s) of Forum or the Snowbird Travel Club, Snowbird Vacations or
Snowbird Vacations International.

The FVC Defendants will delete from their website at
www.familyvacationcenters.com (the "Family Website") all references to Forum,
the Snowbird Travel Club, Snowbird Vacations or Snowbird Vacations
International.

Until February 21, 2004, the FVC Defendants will post on the
Family Website a statement advising those persons visiting the Family Website
that the Defendant Family Vacation Centers Ltd. ("Family") is not associated
with the Snowbird Travel Club, Snowbird Vacations or Snowbird Vacations
International, and directing those Snowbird Travel Club members who may visit
the Family Website to Forum's Internet website at www.snowbirdvacations.com and
to Forum's toll free and local telephone numbers.

The FVC Defendants will direct all telephone and other
inquiries from Snowbird Travel Club members to Forum's local office at Suite
102, 920 Commissioner Road East, London, Ontario N5Z 3J1, Telephone:
519-433-1060, fax: 519-433-1056, toll-free: 1-866-433-1060.

The FVC Defendants will deliver to Forum, all documents in the
FV Defendants' power, possession or control which relate to the sale of Snowbird
Travel Club memberships by the FVC Defendants or as applicable, their officers,
directors, shareholders, agents, servants, employees, successors, assigns and
those in privity with or controlled by the FVC Defendants, including original
contracts with Snowbird Travel Club members, original promissory notes (the
"Promissory Notes") executed after March 1, 2002 by members of Forum's travel
club which, on their face, are stated to be held by any of Forum,
Intravelnet.com, Snowbird Vacations International, Snowbird Vacations or either
Snowbird Marketing or 1508812 Ontario Inc. as agent for any of the foregoing,
membership lists and membership data in respect of the Snowbird Travel Club, and
Forum's sales, marketing and service manuals in respect of the Snowbird Travel
Club.

Forum has the right to request that an independent
investigation be conducted, at its cost, of the documents that the FVC
Defendants were obligated to or did deliver pursuant to this judgment, The FVC
Defendants will co-operate in that investigation and make available to the
investigator the records which the investigators advise are relevant to their
work. If the investigators determine that the FVC Defendants, or any of them,
have failed to deliver any of the Promissory Notes to Forum, the FVC Defendants
will immediately deliver those Promissory Notes (the "Withheld Promissory
Notes") to Forum. If the investigators further determine that after August 21,
2003, the FVC Defendants, or any of them, received any monies pursuant to the
Withheld Promissory Notes, or received any other monies from the makers of the
Withheld Promissory Notes after that date, and if the total of the monies so
received exceeds $5,000, the FVC Defendants will pay Forum two times the amount
of monies so received by the FVC Defendants, or any of them.

The FVC Defendants, and as applicable, their officers,
directors, shareholders, agents, servants, employees, successors, assigns and
those in privity with or controlled by the FVC Defendants, will not use the
former telephone and facsimile numbers.

The FVC Defendants are not to receive any monies from members
of Forum's travel club. The FVC Defendants are to immediately account to Forum
for all monies that they have received from members of Forum's travel club since
May 12, 2003.

(15)

---

The FVC Defendants are to reimburse members of Forum's travel
club for the amounts that the FVC Defendants have received from those members
since May 12, 2003, to the extent that those members have not already been
compensated as at August 21, 2003. The amounts reimbursed are to include bank
charges incurred by the members to the extent that Forum has been advised of
those charges by the members and has advised the FVC Defendants. All
reimbursements are to flow through Forum.

All monies (the "Fees") payable pursuant to the promissory notes
  (the "Promissory Notes") executed after March 1, 2002 by members of Forum's
  travel club which, on their face, are stated to be held by any of Forum, Intravelnet.com,
  Snowbird Vacations International, Snowbird Vacations or either Snowbird Marketing
  or 1508812 Ontario Inc. as agent for any of the foregoing, are to be paid to
  and received by Forum. The face value amount of the Promissory Notes was $ 669,216
  (CDN.)

The FVC Defendants and all other Applicants to the case will
  deliver up to Forum for cancellation all share certificates of Forum in which
  he, she or it has a beneficial or legal interest estimated to be 300,000. Each
  of them will execute a statutory declaration, in a form prepared by counsel
  for Forum, declaring that:

the shares being returned are all of the shares of Forum in
  which the declarant has any legal or beneficial interest;

the declarant has no interest in any option or warrant to acquire
  additional shares of Forum;

that the declarant has not transferred, sold or encumbered the
  declarant's interest in the shares of Forum in which the declarant has any legal
  or beneficial interest;

in the case where the declarant is unable to locate any of the
  share certificates of Forum in which the declarant has a legal or beneficial
  interest, that the share certificates of Forum in which the declarant has a
  legal or beneficial interest have been lost or destroyed, that the declarant
  requires that they be cancelled and that the shareholders register and other
  corporate records of Forum be amended to reflect that cancellation;

That the declarant will indemnify Forum in respect of any damages
  or costs that Forum might incur in the event that some other party claims any
  interest in the share certificates being returned or to which paragraph 18(d),
  above, pertains. The declarant will execute an indemnification of Forum on these
  terms.

As of October 31, 2006 the certificates had not been delivered
up to Forum.

With the return of the London Ontario office to the Company as
part of the judgment, the Company in the 4th quarter of 2003 began
reviving its Travel Club sales and marketing operations in Ontario through a
Commission Agreement. The result was the addition of 311 new members in 2005
(268 in 2004, 67 in 2003) with an additional 437 new members that were activated
as a result of the settlement of the lawsuit.

During 2003 the Registrant incorporated a wholly owned
subsidiary in the Province of Ontario: Intravelnet Limited. As required by
Ontario legislation specifically relating to travel, the new entity incorporated
and domiciled in Ontario was created to handle the Ontario travel club business
for the Ontario members. Subsequent to December 31, 2003 the sole director of
Intravelnet Inc. resigned and a replacement has yet to be found. Given the
circumstances management has instructed the new Ontario Corporation Intravelnet
Limited to handle servicing all travel Club members. The assets of Intravelnet
Inc. were sold to Intravelnet Limited on June 30th, 2004 and all
existing employees were offered continuous employment in the new Company. It is
unknown at this time as to the future status of Intravelnet Inc. It is highly
unlikely

(16)

---

that the Registrant as the parent company will recoup
inter-company loans and advances made to Intravelnet Inc over the last several
years totaling approximating $4.4 million.

A new web site product was launched in January of 2003. It is a
unique combination of top quality resorts, superior service and cutting edge
technology. The web site provides all the elements necessary to browse vacation
listing, tour vacation ownership resorts, and rent vacation weeks at competitive
prices. The web site has its own unique portal with its supporting services and
technology to assist in the retention and growth of the travel club memberships.
The implementation of an on-line booking engine enabling the booking of charter
airlines flights, all Inclusive vacation packages, cruises, and condominium
rentals was implemented in summer of 2004.

The Company has not marketed houseboat memberships for some
time and due to several factors including the prohibitive cost of maintaining an
older fleet of houseboats. Faced with the complete refit of some of the
houseboats the Company has subsequent to December 31, 2005 sold all remaining
houseboat and service vessels in the fleet.

In January of 2004, the Company entered into a Commission Agreement
  with 4226054 Canada Inc., for the operation of the Companys London Ontario
  sales and marketing operations. 4226054 Canada Inc. took control of the offices
  and marketed the Companys Snowbird Vacations Travel Club Membership until
  September of 2004.

In November of 2005 the principal of 4226054 Canada Inc. entered
  into a Commission Agreement with the Company to market the Companys Snowbird
  Vacations Travel Club Membership in the Barrie Ontario area. The Agreement with
  1617165 Ontario Inc was terminated in March of 2005 and at this time no new
  memberships are actively been marketed in the Barrie Ontario area.

In January of 2006 the Company acquired the members of an
upstart Ontario Travel Club called Embassy Vacation Club. The members were
offered to have their members serviced by the Companys travel service provider
Intravelnet Canada Ltd and 110 of Embassy Vacation Club members agreed to our
terms.

Subsequently to 2005 the Company signed a Commission Agreement
with 2094711 Ontario Limited to secure an office location to market Travel Club
memberships in the greater Toronto Ontario area. The new office location in
Pickering Ontario commenced operations In October 2006.

The Company's future growth depends, in significant part, upon
the continuing traditional method of sales and marketing of its Travel Club
products. If the Company is unable to secure an Operator or is unable to
contract a Licensee, its ability to effectively grow and expand its business
could be impaired. In addition to the risk of securing an Operator or
contracting a Licensee, the Companys growth is dependant upon the success of
the entities. (See Item 3 Risk factors, Ability to Attract and retain Successful
Licensees or Operators).

The Company expects to complete the refit on its 120 feet motor
  vessel MV Spirit of Two Thousand and Ten in spring of 2007. In spring of 2005
  Sheerline Yachts completed their component of the refit and Platinum Marine
  Services was retained to complete the almost $9.0 million refit project. The
  Company has a credit facility with Caterpillar Financial Services for up to
  $3 million USD which has provided funding for the project. In October of 2006
  the Company had the credit facility increased to $3.9 million USD. The motor
  vessel was written down to $3.2 million in 2002. The Company continued its refit
  operations of the 120 feet motor vessel with Platinum Marine Services for the
  remainder of 2005 and spent $685,964 during 2005 on this project and another
  $1,924,036 to October 2006. The Motor Vessel has and estimated appraised market
  value of $12 million USD upon completion.

(17)

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If additional financing is required, there is no certainty it
will be available when and to the extent required or that if available, it will
be on acceptable terms. If adequate funds are not available on acceptable terms,
the Company may not be able to fund existing operations in their current state,
fund business expansion, develop or enhance its products or services, or respond
to competitive pressures. This could have a material adverse effect on the
Company's existing operations and planned growth. (See Item 3 Risk factors, The
Company May Require Additional Capital).

|B) | Business Overview
|-- | -----------------

The Company’s main business is providing travel services
  for the members of its “Snowbird Vacations International” travel
  club. A travel club membership entitles the member to access wholesale travel
  at rates marginally above the cost to the travel agency as well as vacation
  condominium rentals at wholesale rates through the Company’s wholesale
  network affiliation with the Cooperative Association of Resort Exchangers (C.A.R.E.)
  and other strategic relationships in the travel industry. The Company continues
  to develop products and services for its members, and seeks to expand its membership
  by securing and contracting licensed marketing agents throughout Canada. The
  Company presently markets new memberships in the Province of Ontario. The following
  table depicts membership sales and membership dues for the Company’s travel
  club.

|                 |      |   | 2003      |  |   | 2002       |  |   | 2001       |  | 
|---------------- | ---- | - | --------- |  | - | ---------- |  | - | ---------- |  | 
|Membership Sales | (1 ) | $ | 5,482,008 |  | $ | 8,397,285  |  | $ | 8,524,067  |  | 
|Membership Dues  | (1 ) | $ | 2,211,120 |  | $ | 2,360,214  |  | $ | 1,966,427  |  | 
|Total            | (1 ) | $ | 7,693,128 |  | $ | 10,757,499 |  | $ | 10,490,494 |  | 

(1) The Companys financial statements for 2002, and have been
retroactively restated. The Company previously followed the practice of
excluding from the balance sheet the amounts receivable from the sale of
memberships that were not due until future years. In 2003 the Company changed
the policy and now reports long-term receivables net of estimated uncollectible,
deferred interest and potential GST accruals.

For the fiscal year 2003, a total of 67 (2002 - 1,968, 2001 -
4,587) travel club memberships were sold for a mean average non-refundable
purchase price of $ 2,207 (2002 - $1,264, 2001 - $3,750) with a standard
deviation of $ 1,641 (2002 - $1,729, 2001 - $1,807). As a result of the judgment
obtained against the Ontario defendants, membership increased by an additional
437 familys.

Travel club memberships are due in full at the time of sale,
and may either be paid in cash or financed by the Company (see Travel Club -
this section). Travel club membership costs to the member range from $995 for a
trial membership to $7,995 for a lifetime membership. Continued membership is
dependent on the member paying a monthly fee of $19.95 to $29.95. If the member
has not paid his/her monthly dues, the member has no entitlements. Entitlements
are restored once arrears of monthly fees are paid, at the sole discretion of
the club.

By tailoring its travel service offerings to include a broader
product portfolio of more affordable vacation packages the Company hopes to
maintain and grow the Snowbird vacations travel club membership. These packages
are designed to appeal to different age groups, both younger and older, and with
varying income levels.

(18)

---

The Company plans to achieve continued growth of its travel
club memberships through five key areas:

- Licensing Snowbird vacation travel club sales and marketing agents in Canada
    and the investigation of potential US market penetration.
- Diversification of its travel services to include varying types of travel
    products.
- Segmenting Snowbird Vacations Travel Club unique Maritime product offering
    versus traditional Travel Clubs Real Estate product offering.
- Affiliating with existing affinity groups to provide travel service to their
    membership.
- Increasing membership based operations in the active lifestyles market.

Travel Club

The Snowbird Vacations travel club membership entitles the
Snowbird Vacations travel club members to wholesale travel at rates marginally
above the cost to the travel agency, and vacation condominium rentals at
wholesale rates through the Companys wholesale network affiliation with the
Cooperative Association of Resort Exchangers (C.A.R.E.), and through the
Companys wholly owned subsidiary travel agencies, ATM Travel Group Ltd.,
InTRAVELnet Inc., and newly formed Intravelnet Limited.

The Company has sold the following travel club memberships:

|                                                                     |   | 2003    |   |   | 2002      |   |   | 2001       |  
|-------------------------------------------------------------------- | - | ------- | - | - | --------- | - | - | ---------- | -
|                                                                     |   |         |   |   |           |   |   |            |  
|Travel Club Memberships entered into
      during the year           | $ | 135,810 |   | $ | 2,488,346 |   | $ | 15,211,582 |  
|Amount recognized as revenue during the year                         |   | (27,162 | ) |   | (471,206  | ) |   | (1,890,515 | )
|                                                                     |   |         |   |   |           |   |   |            |  
|Future years revenue to be earned from current year                  |   |         |   |   |           |   |   |            |  
|membership agreements                                                |   | 108,648 |   |   | 2,017,140 |   |   | 13,321,067 |  
|Cash collected during the year related to future years
      revenue |   | 79,487  |   |   | 1,563,222 |   |   | 10,123,571 |  

Travel club purchasers have the option to pay the initial
membership fee in a single installment or, alternatively, pay a minimum down
payment of 10% and obtain financing from the Company with monthly payments for
the remainder of the balance. The Company seeks interest at an average rate of
9.9% on outstanding membership receivables.

Shuswap Lake

The Company formerly conducted its houseboat operations on
Shuswap Lake through the use of marine facilities provided by Portside
Houseboats. The increased maintenance costs for the aging fleet of vessels and
the inability of the Company to reasonably secure moorage for a defined period
of time caused the Company to abandon houseboat operations at this time.
Subsequent to year end December 31, 2005 the Company sold all remaining
houseboat and service vessels in the fleet.

(19)

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Industry Overview

The Company presently operates in the leisure travel
marketplace and is anticipating entering the market for other Leisure Lifestyle
opportunities. The advances of technology and in particular proliferation of the
Internet combined with an aging population have had the most creative effect on
all areas of the Leisure Lifestyle industry. The company believes these trends
will continue in the future.

The travel industry has been challenged by a variety of
negative drivers in the new millennium, including slowed economic growth and
dramatically heightened concerns about security, war, terrorism, and disease.
Between 2000 and 2003, domestic business travel fell by 15%, airline travel by
14%, and international travel to the U.S. was down by 21%. Since 2003, however,
virtually all sectors of the travel industry have experienced growth.

Areas of growth within the North American Leisure travel market
by age group include 15  24 year olds and all ages over 45. The most rapidly
growing age group of Americans is 55  64 year olds. Between 2000 and 2005 this
aged group increased in size by 10 million, creating a boom for the industry as
this age group spends more on their leisure travel than any other age group.
This age group is expected to grow by 8 million between 2005 and 2010.

Older adults represent a growing segment  creating a
potentially lucrative  market for Leisure Lifestyle. According to Prism
Business Media September 1, 1999 article entitled The New Age The baby
boomers, who have revolutionized every decade that they have lived in, are
especially active people used to doing things and going places. They're intent
on being able to continue to live as they've always lived. They want to keep
active, busy and involved. These people look to the fitness industry to provide
them with ideas for how to fill their time.

Older adults are counting on exercise, better eating and new
innovations to compensate for any feelings of getting older. They'll work harder
to feel younger." This statement is borne out in the following statistics:

* Today, three in 10 health club members are 50 and over; in
1988, this figure was two in 10.

* 27 percent of these members participated in fitness
activities 100 or more times per year.

* 48 percent of those aged 50 and over participate in physical
activity three times per week.

* 30 percent of those aged 50 and over participate in physical
activity one to two times per week.

* Between 1987 and 1998, the number of fitness club members
over the age of 55 increased by more than 200 percent.

The Company believes the opportunity created by the demographic
changes is to be positioned in both the Travel and the Heath Club industry.
By not targeting this market, membership based organizations risk losing active
aging adults to those organizations that will cater to their needs.

Despite encouraging enrollment statistics, fitness clubs have
only scratched the surface of the profitable older market. Clubs have captured
only 10 to 12 percent of the total population, and only 9 percent of people over
the age of 55. There are a lot of people out there who are not members of clubs
but who have more time, disposable income and motivation.

The Company believes the ability to provide both travel and
health club services in efficient upscale facilities providing exceptional
service will be a primary driver of the Companys future growth. The Company is
beginning to develop and implement its vision of integrating Travel Club and
Health Club membership offerings.

(20)

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Growth Strategy

The Company recognizes that it needs to be innovative and
pioneer new avenues for business development. The key to the Companys future
development is the expansion and retention of its existing Travel Club
membership base while adding other Membership based service and or product
offerings. New opportunities have encouraged Forum National Investments to
restructure and reposition itself.

The Company plans to achieve continued growth of its travel
club memberships through five key areas: Licensing Snowbird vacation travel club
sales and marketing agents in Canada and the investigation of potential US
market penetration.

As part of the strategy to increase memberships, the Company
has shifted from Company owned and operated marketing operations to licensed
sales and marketing operations in Canada. With a limited growth potential in
Canada investigation of opportunities in other countries is necessary. This
shift in the Companys method of generating sales will require less capital
resources and management. The goal is to focus on the management and development
of the travel clubs products and services. The Company continues to seek out
those potential independent marketing agents with know how and financing to
market the Companys Snowbird vacations travel club memberships in the Province
of Ontario and beyond. There can be no assurances that the Company will be able
to attack and retain successful licensees or operators. (See Item 3 Risk
factors, Ability to Attract and retain Successful Licensees or Operators).

Diversification of its travel services to include varying types
of travel products.

By tailoring its travel service offerings to include a broader
product portfolio of more affordable vacation packages including exclusive club
member excursions the Company hopes to maintain and grow the Snowbird vacations
travel club membership. These packages are designed to appeal to different age
groups, both younger and particularly the high growth aging boomer market,
with varying income levels. There can be no assurances that the Company will be
able to successfully diversify and market travel related products.

Segmenting Snowbird Vacations Travel Club unique Maritime
product offering versus traditional Travel Clubs Real Estate product offering.

The ability to offer a membership with backing of a maritime
flavor versus the traditional real estate based membership helps to segment and
differentiates our program as unique. Not only offering the traditional travel
club membership and its benefits we seek to attract and retain members through
the availability of maritime themed vacation experiences. Penetrating and
successfully operating in a given marketplace will cause the Company to
investigate further the acquiring and or building of more vessels for future
growth.

Affiliating with existing affinity groups to provide travel
service to their membership

In addition to the traditional marketing efforts, other
referral programs, strategic relationships, and affinity programs are
continually been evaluated.

The Company is also researching the link between the business
travel and leisure travel sectors. The Company traditionally serving the leisure
travel segment believes an opportunity exists to offer first-rate traditional
business travel services to the large number of corporations who require
business travel service. In addition the Company believes a large opportunity
exists to offer these same corporations leisure travel for their employees and
their families. The added benefit of wholesale leisure travel for the employee
and his family continue to be researched.

(21)

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Following this direction Intravelnet Limited seeks to move
physical office locations upon the expiry of existing office leases to areas of
high business concentration.

Increasing membership based operations in the active lifestyles
market

With the increasing age of baby boomers we are anticipating
growth of leisure and lifestyle opportunities. Given our history of membership
based organizations and servicing, the company is actively investigating and
test marketing travel services combined with health club services. The two
combine are referred to as a Resort Lifestyle offering. The desire to travel
coupled with the desire to physically enjoy an active lifestyle creates an
opportunity to align two membership based businesses.

Each facet of the Companys development is interconnected. With
growth in membership the Companys requirements for inventory and vacation
options including maritime product offerings will be increased. The Companys
primary goal is to increase memberships by marketing, its secondary goal being
to increase the number of product offerings available to its members for
vacations, and its tertiary goal being to expand its other holdings. The Company
believes promoting the Resort Lifestyle concept in desirable locations with
value pricing are the building blocks for corporate growth.

The Company is continually developing its systems and web based
membership platform specifically designed to service the travel club members
initially with long-term applications for the timeshare industries and the
retail travel markets. The Company launched the initial phase in January of
2003, which includes an extensive catalogue of properties, a highly efficient
platform for servicing the Snowbird Vacations Travel Club that includes CRM,
accounting, promotions and order processing. The Internet e-commerce platform is
to be continual in development as the need to ever increase products and
services for the Snowbird Vacations Travel Club membership continues. Continual
updates are contemplated to increase member satisfaction.

Government Regulations

On May 17, 2002, the Government of Alberta introduced consumer
regulations on the sales and marketing of lifetime travel club memberships in
that Province. The new regulations have restricted the Companys ability to
market new lifetime travel club memberships.

The Company does not presently market the Snowbird Vacations
travel club in the Province of Alberta. Management believes similar consumer
regulations may be introduced in other provinces including the Province of
Ontario in the future making marketing of the Travel Club memberships
prohibitive.

Accordingly, certain marketing methods used by the Company or
its agents are effected by such regulations as well as other laws and
regulations. On October 1, 2003 the United States federal governments no call
registry went into effect. The new law allows consumers who do not wish to be
solicited and receive telemarketing calls to register on the federal
governments nationwide list. The no call list is receiving millions of
registrants. Management is unable to predict if a similar law will be
successfully introduced by Canadian governments, but considers the likelihood of
proposed legislation been accepted probable within the next two years. This law
in Canada depending on its final wording could effect the companys operations
and would result in a higher marketing cost which could effect the profitability
of the Companys Snowbird Vacations travel club memberships sales. (See Item 3 -
Risk Factors, Government Regulations). In addition, the applicability to the
Internet and commercial online services of existing laws in various
jurisdictions governing issues such as property ownership, sales and other
taxes, libel and personal privacy, is uncertain and may take years to resolve.
For example, tax authorities

(22)

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in a number of jurisdictions are currently reviewing the
appropriate tax treatment of companies engaged in online e-commerce, and new tax
regulations may subject the Company to additional sales and income taxes.

There can be no assurance that unforeseen developments or
introduction of legislation, laws, and other factors will not alter the
Companys ability to achieve it growth targets for marketing and selling Travel
Club programs.

|C) | Organizational Structure
|-- | ------------------------

As of October 31, 2006, the following is a list of all the
Companys subsidiaries, all of which are wholly owned and over which the Company
holds 100% voting control:

|Subsidiary            | Incorporating Jurisdiction
|--------------------- | --------------------------
|Intravelnet Limited.  | Ontario, Canada           
|InTRAVELnet Inc.      | Alberta, Canada           
|ATM Travel Group Ltd. | Alberta, Canada           

Properties

Office Leases

The Company is headquartered at 180A  13040 Number 2 Road,
Richmond British Columbia Canada. where it leases office space housing its
principal administrative and customer services, and its IT department. The
Company's lease for this 1,500 sq. ft. space expires on November 1, 2010. The
Company believes that its current facilities are adequate for its current and
near future operations.

The Company leases an office in Calgary, Alberta, situated at
Suite 250 - 225 7th Avenue S.W., where travel agency and administration offices
are located. The Company's lease for this 1638 sq. ft. space expires on
September 30, 2008.

The Company has a second office in Calgary located at Suite
140, 272 7th Ave S.W. Calgary, Alberta T2P 3H6. The Company leases
approximately 1000 square feet. The lease expires September 30, 2009.

The Company leases an office in Edmonton, Alberta, situated at
Suite 5, 9908, 109th Street, where customer service is administered.
The Company's lease for this 587sq. ft. space expires on October 31, 2008.

The Company leases an office in Windsor, Ontario, situated at
810 Quellette Avenue, where travel agency services are provided. This office is
approximately 600 square feet and the lease expires on January 31, 2007.

The Company leases an office in London, Ontario, situated at
Suite 102  920 Commissioner Street East, London, Ontario where travel agency
services are provided. This lease expires on October 31, 2007.

Motor Vessels

The Company owns and is currently refitting a 120-foot motor
vessel cal the MV Spirit of two Thousand and Ten. The remaining vessels
have been disposed.

(23)

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|Item             | Qty | Description                           
|---------------- | --- | --------------------------------------
|Spirit of Two    | 1   | Type: 120 ft. motor vessel            
|Thousand and Ten |     | Overnight Accommodation: 12 passengers
|                 |     | Dinner cruise - 110 passengers        

The Company expects to complete the refit on its 120 feet motor
  vessel MV Spirit of Two Thousand and Ten in spring of 2007. In spring of 2005
  Platinum Marine Services was retained to complete the almost $9.0 million refit
  project. The Company has a credit facility with Caterpillar Financial Services
  for up to $3 million USD which has provided funding for the project. In October
  of 2006 the Company had the credit facility increased to $3.9 million USD. The
  motor vessel was written down to $3.2 million in 2002. The Company continued
  its refit operations of the 120 feet motor vessel with Platinum Marine Services
  for the remainder of 2005 and spent $685,964 during 2005 on this project and
  another $1,924,036 to October 2006. The Motor Vessel has and estimated appraised
  market value of $12 million USD upon completion.

If additional financing is required, there is no certainty it
will be available when and to the extent required or that if available, it will
be on acceptable terms. If adequate funds are not available on acceptable terms,
the Company may not be able to fund existing operations in their current state,
fund business expansion, develop or enhance its products or services, or respond
to competitive pressures. This could have a material adverse effect on the
Company's existing operations and planned growth. (See Item 3 Risk factors, The
Company May Require Additional Capital.

|ITEM V. | OPERATING AND FINANCIAL REVIEW AND
      PROSPECTS
|------- | --------------------------------------------------

The following discussion of the financial condition, changes in
financial condition and results of operations of the Company for the years ended
December 31, 2003, 2002, and 2001 should be read in conjunction with the
Consolidated Financial Statements of the Company for the years ended December
31, 2003, 2002, and 2001. Except as otherwise indicated, all dollar amounts
contained in this discussion and analysis and the Consolidated Financial
Statements are in Canadian dollars. The financial information presented in the
Consolidated Financial Statements was prepared in accordance with generally
accepted accounting principles (GAAP) in Canada. Note 22 of these Consolidated
Financial Statements of the Company sets forth the material differences between
Canadian and U.S. GAAP.

|A) | OPERATING RESULTS
|-- | -----------------

Critical Accounting Policies

The preparation of our financial statements requires that we
  adopt and follow certain accounting policies generally accepted in Canada. Amounts
  presented in the financial statements have been determined in accordance with
  such policies, certain of which incorporate estimates and assumptions. Although
  management believes that the estimates and assumptions are reasonable, actual
  results may differ.

The detailed accounting policies are listed in Note 4 to the
  Financial Statements for the year ended December 31, 2003. Included below is
  a discussion of the accounting policies that are affected by the most significant
  judgments and estimates used in the preparation of the financial statements,
  how such policies are applied and how results differing from the estimates and
  assumptions would affect the amounts presented in the financial statements.
  Other accounting policies also have a significant effect on our financial statements,
  and some of these policies also require the use of estimates and assumptions.

(24)

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Going concern

The accompanying financial statements have been prepared using
Canadian generally accepted accounting principles applicable to a going concern.

While these accompanying financial statements have been
prepared on the assumption that we are a going concern and will be able to
realize our assets and discharge our liabilities in the normal course of
business, certain events and conditions cast substantial doubt on this
assumption. As of December 31, 2005 the Company had a working capital deficit of
$721,170 and a shareholders equity of $2,487,808 Management has continued to
take steps to try to improve our financial results and cash flows. These steps
include pursuing debt and/or equity financing to fund working capital
requirements. Management believes that we will be able to generate sufficient
revenues and secure any necessary financing; however, there is no assurance that
management will be successful in achieving these objectives.

These financial statements do not reflect adjustments to the
carrying value of assets and liabilities, the reported revenues and expenses and
balance sheet classifications used that would be necessary if the going concern
assumption were not appropriate. Such adjustments could be material.

Revenue Recognition

The Company generates revenues from the sale of memberships,
dues and charter sales. The portion of revenue received from members, which
entitles members to use the Companys vacation and travel club privileges at a
future date, is deferred and recognized in income evenly over the term of the
members entitlements.

The revenue related to three and five-year memberships are
recognized evenly over the term of the contract. For lifetime memberships,
revenue is recognized over a period of five years, which is the best estimate
over which the performance of services will be required. The service period of
lifetime memberships is based on a combination of factors such as the estimated
length of service required, and historical membership cancellations and refunds.
Management regularly reassess the appropriateness of the estimated service
period of lifetime memberships and will revise it prospectively if future
events, which are generally outside of our control, indicate that the service
period is shorter or longer than five years.

Management believes that the assumptions we have made in the
period of recognition described above are reasonable. However, if revisions to
the length of service for lifetime memberships are necessary, the expected
financial results will be impacted and these results may be material.

The Company previously excluded from the balance sheet the amounts
  receivable from the sale of memberships that were not due until future years
  (note 5). In 2003 the Company changed its accounting policy to include these
  long-term receivables net of estimated uncollectible, deferred interest and
  potential GST accruals.

Asset Impairments

Management evaluates the carrying value of intangible assets
for impairment whenever indicators of impairment exist. If it is determined that
such indicators are present, then an undiscounted future net cash flow
projection for the asset is prepared. In preparing this projection, assumptions
must be made concerning future financial performance after considering
historical trends, business plans and likely external factors. If projections of
future

(25)

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net cash flows are in excess of the carrying value of the
recorded asset, no impairment is recorded. If the carrying value of the asset
exceeds the projected undiscounted net cash flows, an impairment is recorded.
The amount of the impairment charge is determined as the deficiency of the
discounted projected net cash flows to the carrying value.

Accounts Receivable

The Company generates a significant portion of revenue and
related accounts receivable from travel memberships. Management with its
auditors evaluates the collectibility of our accounts receivable based on a
combination of factors. In circumstances where we are aware of a specific
customer's inability to meet its financial obligations, a specific reserve for
bad debts against amounts due is recorded to reduce the recognized receivable to
the net amount we reasonably believe will be collected. For all other customers,
reserves are recognized for bad debts based on past write-off history and the
length of time the receivables are past due.

The Company previously followed the practice of excluding from
the balance sheet the amounts receivable from the sale of memberships that were
not due until future years. In 2003 the Company changed the policy and now
includes long-term receivables net of estimated uncollectible, deferred interest
and potential GST accruals and restated the balance sheets for 2002. (See Note 2
 Financial Statements). The restatements are as follows

The restatement has the following effect on accounts
receivable, total assets and shareholders` deficiency at December 31:

|                                                           |   | 2002    |  |   | 2001      | 
|---------------------------------------------------------- | - | ------- |  | - | --------- | 
|Long term accounts receivable as previously
      reported | $ | -       |  | $ | -         | 
|Long-term accounts receivable not previously reported      |   | 453,918 |  |   | 3,197,496 | 
|Accounts receivable as restated                            | $ | 453,918 |  | $ | 3,197,496 | 

Total assets are increased in the same amount and total
shareholders` deficiency is likewise reduced. Corporate income tax loss
available for carryforward have also been reduced by $2,464,542 at December
31,2002.

The following depicts some of the Companys significant
operating results:

|                                         |   | Year End December 31 | 
|---------------------------------------- | - | -------------------- | 
|                                         |   | 2003                 | 
|Travel Club Memberships Sold             | $ | 135, 810             | 
|Amount Recognized as Revenue during      |   | 27, 162              | 
|the year see Note # 11                   |   |                      | 
|Membership Dues                          | $ | 2,211,120            | 
|# Travel Club Memberships Sold (1)       |   | 504                  | 
|Mean Average Membership Price (1)        | $ | 2,207                | 
|Standard Deviation from Mean (1)         |   | 1,601                | 
|Basic Net Income (Loss) for the year (2) |   | 3,263,047            | 

(26)

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|                                |   | Year End December 31 | 
|------------------------------- | - | -------------------- | 
|                                |   | 2003                 | 
|Income (Loss) per Share (2) (3) | $ | 2.35                 | 

|(1) | As a result of the judgement obtained in the Companys
      Ontario litigation a total of 437 new members were added to the total
      membership. These figures were not included in the calculation of
      membership sales, average price or standard deviation. 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                         
|(2) | The Companys financial statements for 2002 and 2001 have
      been retroactively restated as a result of accounting errors occurring in
      those years in recording bad debts allowances, deferred interest
      receivable and potential GST receivable accruals.
|    |                                                                                                                                                                                                                                                                         
|(3) | Effective July 5, 2002 the Companys shares were
      consolidated on a ten (10) old for one (1) new basis. The prior years
      numbers have been changed to reflect the reverse
split.                                                                              

2003 year-end Travel Club Memberships sales totals were down
95% to $ 135,810 ($2,488,346  2002, and $15,211,582  2001), the amount
recognized as revenue during the year was down by 94% to $ 27,162 ($471,206 -
2002, $ 1,890,515 - 2001) and corresponding total revenue decrease of 19% to $
9,758,380 ($11,837,153  2002, $11,685,545  2001).

In 2003 gross cash flow from operations declined 16.36% to $
2,924,095 with a net cash outflow from operations of $174,911, compared to gross
cash flows of $4,976,540 with a net cash outflow from operations of $286,466 in
2002, and gross cash flow of $16,407,665 with a net cash outflow from operations
of $187,313 in 2001.

The Company had revenues from membership dues of approximately
  $2,211,000 for the year ended December 31, 2003, $2,360,000 in 2002, $1,966,000
  in 2001, and expects dues to approximate $1.8 million for the year ended December
  31, 2004.

For the fiscal year 2003, a total of 67 travel club memberships
were sold, down 97% (2002  1,968, 2001  4,587) The mean average non-refundable
travel club membership purchase price increased 75% to $2,207 ($1,264 2002, and
$3,750  2001). Standard deviation from the mean purchase price has decreased 5%
to $ 1,641 ($1,729  2002, and $1,807  2001).

Net Income for the year increased to a $ 3,263,047 ($1,273,629
   2002, and Net Loss $6,816,772  2001). Basic earnings per share
  rose to $2.36 ($0.92  2002, and (($4.49)  2001).

There were 1,384,771 shares outstanding as of December 31, 2003
  compared with 1,384,771 in 2002 and 1,546,961 in 2001. In spring of 2004 the
  debenture holders exercised a conversion privilege on debentures they owned.
  The result was the issuance of 4,060,000 shares of the Company. There are presently
  5,144,661 common shares of the registrant outstanding as of October 31, 2006.

Expenses decreased by 31% or $2,804,386 in 2003 due mainly as a
result of the continued effects of the divesture of the sales and marketing
operations and the operating costs associated with their operations. Income was
decreased by the additional write off of some investments and other receivables.

The largest expense is the amortization of commissions from the
  sale of memberships during the fiscal year. Total commissions costs in 2003
  totaled $1,589,766 compared to $1,597,220 in 2002 and $1,285,311 in 2001. Commissions
  are deferred over a five-year period. In 2003 the commissions expense included
  one-fifth of commissions paid out in 1999, 2000, 2001, 2002 and 2003.

The largest decrease in expenses of $899,063 occurred in bad
debt from attempted collection of promissory notes and receivables owed to the
company. Bad Debt in 2003 totaled $613,505

(27)

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compared to $1,512,568 in 2002 and $213,048 in 2001. In 2002
Management wrote off to bad debt $401,245 to write down accounts receivable
related to delinquent members in 2002 and additionally management increased the
allowance for doubtful accounts by 150%. In 2003 after reviewing and
recalculating the actual results management and its present auditors agreed that
the estimates figures stated for the 2002 Bad Debt Expense were excessive. As a
result management realized a change in estimate and amortized the over-accruals
for bad debt allowance, deferred interest receivable and potential GST liability
over the current year, 2004 and 2005 according to the amortization pattern of
accounts receivable for the same period. The second largest decrease in expenses
of $863,278 occurred in Wage Expenses. Wages in 2003 totaled $1,496,023 compared
to $2,359,301 in 2002 and $4,841,930 in 2001. The Company has continued to
restructure its workforce and the decreasing wage expense is evidence of
this.

The third largest decrease in expenses of $404,662 occurred in
Office and Related expenses. Office and Related expenses in 2003 totaled
$306,531 compared to $711,193 in 2002 and $1,228,883 in 2001. The Company
continues to see the effects of the divesture of the sales and marketing
operations.

Consulting fees in 2003 totaled $135,897 compared to $345,574
in 2002 and $1,142,055 in 2001. The consulting fees in 2003 decreased as the
data base development was completed and the department was reduced.

|B) | LIQUIDITY AND CAPITAL RESOURCES
|-- | -------------------------------

Liquidity

In 2001, the working capital decreased to a deficit of
$5,105,606 primarily due to a decrease in the accounts receivable, an increase
in accounts payable, an increase in the current portion of deferred revenue, and
the addition of the current portion of advances against future revenue streams.
On July 3, 2001 the Company entered an agreement with Monterey Financial
Services, Inc. of Oceanside, California for the purchase of the Companys retail
installment contracts, promissory notes, security agreements, membership
agreements and/or other instruments. Under the terms of the agreement, Monterey
Financial Services has the option to purchase at its discretion, all the
Companys rights, title and interest in and to the contracts submitted by the
Company to Monterey Financial Services. (See Note 4(j)  Financial Statements)
In 2002, the working capital deficit decreased to $ 5,866,547 primarily due to a
decrease in cash and an increase in accounts payable and accrued liabilities.

In 2003, the working capital deficit increased to $ 5,738,618
primarily due to a decrease in accounts payable and accrued liabilities, a
decrease in the current portion of deferred revenue and an increase in cash and
decrease in amounts receivable from related parties.

In 2004, the working capital deficit was $ 3,649,916 primarily
due to a decrease in the current portion of the deferred revenue.

In 2005, the working capital deficit decreased to $ 721,171
primarily due to a decrease in the current portion of the deferred revenue and
recognition of other deferred items in 2005.

The Company continues to operate within the new travel and
economic environment by continuously adjusting its operations accordingly. The
Company plans to generate sufficient operating capital through operations in the
short-term. For long-term growth additional capital is required. The 120-foot
motor vessel is continuing a refit with cash provided from operations and the
proceeds of the construction loan form Caterpillar Financial Services. The
Companys

(28)

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estimated completion date for the project in spring of 2007.
The motor vessel did not contribute to revenue in 2005 or 2006.

The work on the vessel to date has been from cash provided from
operations and the proceeds of the construction loan form Caterpillar Financial
Services. In September of 2005 the company was successful in attaining a credit
facility with Caterpillar Financial Services Corporation for $3.0 million USD.
This credit facility was increased to $3.9 million USD in October of 2006. There
can be no assurances the Company will be able to generate sufficient investment
from borrowing, the sale of equity, or a combination thereof. There is no
certainty it will be available when and to the extent required or that if
available, it will be on acceptable terms. If adequate funds are not available
on acceptable terms, the Company may not be able to fund existing operations in
their current state, fund business expansion, develop or enhance its products or
services, or respond to competitive pressures. This could have a material
adverse effect on the Company's existing operations and planned growth. (See
Item 3 Risk Factors, The Company may require Additional Capital).

The Companys total Revenues decreased in 2003 by $2,078,773 to
$9,758,380. This decrease was largely caused by the reduction in membership
sales of $1,906,633 compared to 2002. Other factors included the stagnation of
the Companys sales activities during the ongoing lawsuit with the former
manager and employees in Ontario. Net Income increased in 2003 by $725,613 in
large part to the amortization of over-accruals for un-collectable receivables,
deferred interest and potential GST as reflected in a change in estimates.

Capital Resources

The Company's capital resources are comprised primarily of
private investors (including members of management) who are either existing
contacts of the Company's management, or who came to the attention of the
Company through brokers, financial institutions and other intermediaries.

In 2005 gross cash flow from operations increased 3.7% to $
2,966,897 with a net cash inflow from operations of $ 394,102, compared to gross
cash flows of $2,859,910 with a net cash outflow from operations of $79,921 in
2004, and gross cash flow of $2,924,095 with a net cash outflow from operations
of $174,990 in 2003.

In September of 2005 the company gained a credit facility with
  Caterpillar Financial Services Corporation for $3.0 million USD. This credit
  facility was increased to $3.9 million USD in October of 2006. The credit facility
  is available in United States Dollars with a floating interest rate set to the
  30-day LIBOR rate. The Company does not currently hedge against foreign exchange
  or interest rate fluctuations.

The Company has utilized $667,965 during 2005 on the refit of
the vessel and another $1,924,036 to October 31, 2006.

We believe that our cash and cash equivalents will be sufficient
  to meet our capital requirements for at least the next 12 months. However, our
  forecast of the period of time through which our financial resources will be
  adequate to support our operations is a forward-looking statement that involves
  risks and uncertainties, and actual results could vary materially. If we are
  unable to raise additional capital when required or on acceptable terms, we
  may have to significantly delay, scale back or discontinue one or more of our
  present operations.

The Company's access to capital is always dependent upon
general financial market conditions. The Company has no agreements with
Management, investors, shareholders or anyone else respecting additional
financing at this time. Because of the nature of the Company's business,

(29)

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there are no trends in the nature of its capital resources that
could be considered predictable. To date, the Company's capital resources have
consisted of the private issuance of common shares and convertible securities
and a credit facility form Caterpillar Financial Services Corporation.

Quantitative and Qualitative Disclosures about Market
Risk

The Company does not have any derivative financial instruments.
The exposure to market risk is limited to interest and exchange rate
sensitivity. The Companys long term debt is denominated in US dollars with a
floating exchange rate set to the LIBOR 30-day rate. These two risks are
affected by changes in the general level of LIBOR and Canadian dollar exchange
rates. The primary strategy of the Companys borrowing activities is to preserve
principal by keeping funds in US dollars and converting to Canadian dollars when
required. The long term debt portfolio is subject to interest rate risk and will
cost more in the event market interest rates increase. The Company does not
currently hedge against foreign exchange or interest rate fluctuations.

|C) | RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES,
      ETC.
|-- | ----------------------------------------------------------

The Companys research and development expenses for the last
three fiscal years have been limited to the development of its Internet
e-commerce site. For fiscal years ended 2003, 2002, and 2001 the Company
expended $ Nil, $ Nil, and $316,000 respectively, for expenses related to its
e-commerce site.

|D) | TREND INFORMATION
|-- | -----------------

The Company is affected by the sales and marketing trends and
uncertainties in the leisure-travel business.

On October 1, 2003 the United States federal governments no
call registry went into effect. The new law allows consumers who do not wish to
be solicited and receive telemarketing calls to register on the federal
governments nationwide list. The no call list is receiving millions of
registrants. Management is unable to predict if a similar law will be introduced
by Canadian governments, but considers the likelihood of similar legislation
been introduced probable in the next few years. This law in Canada could effect
the companys operations and would result in a higher marketing cost, which
could effect the profitability of the Companys Snowbird Vacations Travel Club
memberships sales.

Given the legal environment the Company and its agents must
focus its efforts more heavily in direct mail, traditional media advertising and
Internet based marketing. New advances in technology have allowed for marketing
to large amounts of potential members at lower costs. Presently e-mail and
direct marketing campaigns are been reviewed with media companies to further
evaluate the potential opportunities of these new marketing methods for our
product A significant trend reflected in our recent financial results is
declining revenues. In fall of 2003 the Company as part of the judgment against
the former Ontario Sales and marketing Licensee took back possession of the
London Ontario Sales and marketing operations. The Company is attempting to
reengage the sales and marketing process and can give no assurances as to the
future successes.

In January of 2004, the Company entered into a Commission
Agreement with 42260584 Canada Inc., for the operation of the Companys London
Ontario sales and marketing operations. 4226054 Canada Inc. took control of the
offices and marketed the Companys

(30)

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Snowbird Vacations Travel Club Membership until September of
2004. In November of 2005 the principal of 42260584 Ontario Ltd entered into a
Commission Agreement to market the Companys Snowbird Vacations Travel Club
Membership in the Barrie Ontario area. The Agreement with 1617165 Ontario Inc
was terminated in March of 2005 and at this time no new memberships are actively
been marketed in the Barrie Ontario area. In January of 2006 the Company
acquired the members of an upstart Ontario Travel Club called Embassy Vacation
Club. The members were offered to have their members serviced by the Companys
travel service provider Intravelnet Canada Ltd and the 110 of the Embassy
Vacation Club members continue to do so.

Subsequently to 2005 the Company signed a Commission Agreement
with 2094711 Ontario Limited to secure an office location to market Travel Club
memberships in the greater Toronto Ontario area. The new office location in
Pickering Ontario commenced operations In October 2006.

The Company can give no assurances that licensed marketing
efforts will be successful in the future. In the alternative the Company is
investigating other marketing efforts that differ from the previous traditional
sales cycle.

As of October 31, 2006, the Company had sold or acquired 18,948
  travel club memberships. Of the 18,948 memberships sold or acquired 6,663 are
  active, with 6,632 current and 102 in arrears in monthly membership dues or
  payments. The unit volume of new memberships of its vacation Travel Club memberships
  in 2005 was 311, in 2004 -268 memberships and 2003 - 504 memberships. The Company
  estimates the unit volume of new memberships of its vacation Travel Club memberships
  for the fiscal year 2006 to approximate 250. The mean average price of a membership
  sold was increased to $3,722 from $3,314 in 2004, and $2,207 in 2003. Should
  the marketing of Snowbird Vacations travel club memberships be through licensed
  agents a reduced average price of a membership would be realized by the Company.
  The Company is unable to project sales totals for 2006. Sales totals for 2005
  were $990,645, 2004 - $763,665 and 2003 – 135,810.

Operating costs of the company have declined for the last three
  years (2005 - $4,227,789, 2004 - $5,229,932, 2003 - $6,343,338. Expenses decreased
  by 19.2% or $1,002,143 in 2005 due mainly as a result of the continued effects
  of the divesture of the sales and marketing operations and the operating costs
  associated with their operations.

With the increasing age of baby boomers we are anticipating
growth of leisure and lifestyle opportunities. Given our history of membership
based organizations and servicing, the company is actively investigating and
test marketing travel services combined with health club services. The two
combine are referred to as a Resort Lifestyle offering. The desire to travel
coupled with the desire to physically enjoy an active lifestyle creates an
opportunity to align two membership based businesses.

The Company believes it has taken, and will continue to take,
the necessary steps to develop and provide service to its travel club members.
The Company believes the implementation of necessary measures will allow the
continued growth of the travel club with a corresponding reduction in operating
costs while focusing on membership service and travel products

|E) | OFF-BALANCE SHEET ARRANGEMENTS
|-- | ------------------------------

The Company has no off-balance sheet arrangements required to
be disclosed in the Annual Report 20-F.

|F) | TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS:
|-- | ----------------------------------------------

(31)

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The following table is a summary of our contractual obligations
as of December 31, 2005:

|                            |   | Payments due by period | 
|--------------------------- | - | ---------------------- | 
|                            |   |                        | 
|Contractual Obligations     |   | Total                  | 
|Long-Term Debt Obligations  | $ | 1,324,990              | 
|Operating Lease Obligations |   | 551,382                | 
|Purchase Obligations        |   | -                      | 
|Other Long Term Obligations |   | -                      | 
|Total                       | $ | 1,876,372              | 

FORWARD LOOKING STATEMENTS

This discussion includes certain statements that may be deemed
"forward-looking statements". All statements in this discussion, other than
statements of historical facts, that address future operation activities, growth
and events or developments that the Company expects, are forward-looking
statements. Although the Company believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions, such statements
are not guarantees of future performance and actual results or developments may
differ materially from those in the forward-looking statements. Factors that
could cause actual results to differ materially from those in forward-looking
statements include the tourism demand, market prices, government regulation,
continued availability of capital and financing, and general economic, market or
business conditions. Investors are cautioned that any such statements are not
guarantees of future performance and that actual results or developments may
differ materially form those projected in the forward-looking statements.

|ITEM VI. | DIRECTORS, SENIOR MANAGEMENT AND
      EMPLOYEES
|-------- | ------------------------------------------------

|A) | DIRECTORS AND SENIOR MANAGEMENT
|-- | -------------------------------

The names and municipality of residence of each of the
directors and officers of the Company, the principal occupations in which each
has been engaged during the immediately preceding five years, and their
respective ownership of the Company's common shares as at the date herein, are
as follows:

(32)

---

Name and Address
      Date of Birth
      Principal Occupation For the Past
      Five Years
      Position HeldDaniel Clozza 
        Vancouver, B.C. Canada
      Feb. 9, 1960
      Since September 1995, employed full- 
        time
      by the Company.
      President, CEO 
        and Director since
      September 1995Martin Tutschek 
        Vancouver, B.C. Canada
      May 24, 1960
      Prior to joining the board in 2001, 
        Business Development Manager for US operations of Trader Media.
      From 1996  2000 Circulation Director for North American
      Operations of Trader Media.
      CFO and 
        Director since August 2001


There are no family relationships between any directors or
executive officers and any other director or executive officer. Each Director
serves for a term of one year or until the next annual meeting of the
shareholders at which Directors are elected and qualified.

|B) | COMPENSATION
|-- | ------------

During the year ended December 31, 2003, the Company paid $
Nil, (2002  Nil, 2001 - $264,341) in management fees and $114,827  2003, (2002
- $120,339, 2001, $95,625) in consulting fees to directors. The Company also
reimbursed $156,321 2003, (2002 - $138,802, 2001 - $271,140) to directors for
expenditures made on behalf of the Company.

The Company has no medical, extended medical, dental, pension,
retirement, stock option, stock purchase plan or other similar benefits for
directors or officers pursuant to any existing plan provided by, or contributed
to by, the Company or its subsidiaries.

Directors and senior management are entitled to reimbursement
for reasonable travel and other out-of-pocket expenses incurred in connection
with corporate matters pertaining to the Company. The Board of Directors may
award special remuneration to any director or senior management undertaking any
special services on behalf of the Company other than services ordinarily
required of a director or senior management

|C) | BOARD PRACTICES
|-- | ---------------

The Board of Directors meets formally approximately 6 to 8 times
  per year on an as needed basis to deal matters relating to the Company. Each
  Director serves for a term of one year or until the next annual meeting of the
  shareholders at which Directors are elected and qualified. The Company's last
  annual general meeting was held on June 13, 2006 and the next meeting will be
  held subject to Board approval as specified in the Registrant's Articles. The
  Registrant's executive officers are appointed by and serve at the pleasure of
  the Board of Directors.

Audit Committee

The Companys Audit Committee is composed of three individuals
including one former director and one present director. The Audit Committee
members of the Company at October 31, 2006 are Michael Parsonson, Hendrik Van
der Walt, Dave Ashby and Martin Tutschek. The committee is responsible for
reviewing the Companys financial reporting procedures, internal controls, and
the performance of the Companys external auditors. The committee is also
responsible for reviewing the annual financial statements prior to their
approval by the Board of Directors. The Board is in the process of adopting a
charter for the Audit Committee.

(33)

---

Compensation Committee

The Company does not have a Compensation Committee.

|D) | EMPLOYEES
|-- | ---------

The following is a breakdown of Company employees as at October
31, 2006 and for the years ended December 31st, 2005, 2004, 2003:

|                                       | October **31, 2006** | 2005 | 2004 | 2003
|-------------------------------------- | -------------------- | ---- | ---- | ----
|Administrative
      Staff             | 10                   | 11   | 10   | 12  
|Customer Service
      Representatives | 16                   | 19   | 28   | 30  
|Sales Personnel                        | -                    | -    | -    | -   
|IT / e-Commerce Personnel              | 1                    | 1    | 1    | 1   

|E) | SHARE OWNERSHIP OF MANAGEMENT
|-- | -----------------------------

The following table sets forth the share ownership of
management as of October 31, 2006:

|Name and Address                        | Number of Shares | Percent of Class
|--------------------------------------- | ---------------- | ----------------
|Daniel Clozza, Vancouver, B.C. Canada   | 1,810,000        | 38.97           
|Martin Tutschek, Vancouver, B.C. Canada | 508,000          | 10.94           

Note: Does not include options owned by directors or officers.
Options are disclosed below.

Incentive Share Purchase Plan

The registrant had no Incentive Share Purchase Plan or Stock
Option Plan during 2003 and as of October 31, 2006.

In August 2000, an Incentive Share Purchase Plan (the Purchase
Plan) was implemented to encourage directors, officers and employees
(Participants) to purchase Company common shares at a discount to market
values.

Under the Purchase Plan, eligible participants may contribute
up to 10% of their basic annual salaries, or a lump sum purchase. Shares issued
under the Purchase Plan are restricted from trading for one year from the date
of issuance. The Purchase Plan was terminated on September 30, 2001.

In 2002, 2,810 (2001  155,000) common shares were issued under
the Purchase Plan relating to subscriptions received during 2001. Accordingly,
no value (2001 - $65,115) was assigned to the 2002 issuance of shares previously
subscribed for under the Purchase Plan As at October 31, 2006, there were no
employee or management incentive options outstanding.

Warrants

There are no warrants outstanding.

(34)

---

Other Dilutive Elements

All convertible debentures totaling $53,887 issued prior to
2003 are fully matured as of December 31, 2002. The debentures carry a rate of
interest of eight percent per annum payable semi-annually. The conversion
feature of the debenture allows for the debenture holders to convert his capital
at a rate of $6.00 US to $12.50 US per share. The Company would have 4,622
shares issued if 100% of the debentures were to be converted. During 2003,
$5,571 (2002-$20,571, 2001- $8,400) of convertible debentures was repaid. There
were no conversions during 2003, 2002, or 2001.

During 2003 the Company issued convertible debentures in the
amount of $124,510 to officers, directors and shareholders of the company. The
debentures carry a rate of interest of ten percent per annum payable
semi-annually. The conversion feature of the debentures allows for the debenture
holders to convert their capital at a rate of $0.03 CDN per share. The
debentures were not secured by general mortgage on the Registrants assets. The
conversion privilege to convert to common shares was ratified by shareholders at
the Annual General Meeting June 2, 2004.

Subsequent to the year-end December 31, 2003 the debenture
holders converted all of the amounts outstanding resulting in the issuance of
4,060,000 shares of the Registrants common shares.

Conflicts of Interest

Certain of the Company's directors and officers may serve as
directors or officers of other companies or have significant shareholdings in
other companies and, to the extent that such other companies may participate in
ventures in which the Company may participate, the directors of the Company may
have a conflict of interest in negotiating and concluding terms respecting the
extent of such participation. In the event that such a conflict of interest
rises at a meeting of the Company's directors, a director who has such a
conflict will abstain from voting for or against the approval of such
participation or such terms. It may occur that a particular company will assign
all or a portion of its interest in a particular asset to another of these
companies due to the financial position of the company making the assignment. In
accordance with the Company Act (Ontario), the directors of the Company are
required to act honestly, in good faith and in the best interests of the
Company. In determining whether or not the Company will acquire a particular
asset, the directors will primarily consider the degree of risk to which the
Company may be exposed and its financial position at that time.

|ITEM VII. | MAJOR SHAREHOLDERS AND RELATED PARTY
      TRANSACTIONS
|--------- | -------------------------------------------------------

|A) | MAJOR SHAREHOLDERS
|-- | ------------------

The information as to shares beneficially owned, not being
within the knowledge of the Company, has been furnished by the respective
individuals. The Companys major shareholders do not have different voting
rights. There are no arrangements known to the Company which, may at a
subsequent date result in a change n control of the Company.

The following persons hold, of record or beneficially, directly
or indirectly, or are known by the Company to own beneficially, directly or
indirectly, more than 5% of the issued shares of the Company as at June 30,
2004:

(35)

---

|                     |                             | Amount    | Percentage
|-------------------- | --------------------------- | --------- | ----------
|Title of Class       | Identity of Person or Group | Owned     | of Class  
|Common shares N.P.V. | Daniel Clozza.              | 1,810,000 | 35.18     
|Common shares N.P.V. | Michael Parsonson           | 810,000   | 15.74     
|Common shares N.P.V. | Jay Howser                  | 515,000   | 10.01     
|Common shares N.P.V. | Martin Tutschek             | 508,000   | 9.87      
|Common shares N.P.V. | Jackie Dawydiuk             | 500,000   | 9.71      

There has been a significant change in the issued common shares
of the Registrant from January 1 to June 30, 2004. A total of 4,360,000 common
shares of the company have been issued during this time as a result of the
exercising of a conversion privilege on certain debentures. This has resulted in
the following notable changes in percentage ownership held.

|                     |                             | Prior      | Present   
|-------------------- | --------------------------- | ---------- | ----------
|Title of Class       | Identity of Person or Group | Percentage | Percentage
|Common shares N.P.V. | Daniel Clozza.              | 35.18      | 39.00     
|Common shares N.P.V. | Michael Parsonson           | 15.74      | 18.43     
|Common shares N.P.V. | Jay Howser                  | 10.01      | 0.32      
|Common shares N.P.V. | Martin Tutschek             | 9.87       | 10.94     
|Common shares N.P.V. | Jackie Dawydiuk             | 9.71       | 10.76     

The Company is not owned or controlled, directly or indirectly,
by another corporation or by any foreign government.

|B) | RELATED PARTY TRANSACTIONS
|-- | --------------------------

Except as described below and as noted earlier herein, no
executive officer or senior management of the Registrant, nor any spouse,
relative, associate or affiliate of the foregoing persons, has any interest in
any material transactions which occurred during the Company's last three fiscal
years and involved the Registrant or any of its subsidiaries; or any presently
proposed transaction involving the Registrant or any of its subsidiaries.

During 2003 the Company issued convertible debentures in the
amount of $124,510 to officers, directors and shareholders of the company. The
debentures carry a rate of interest of ten percent per annum payable
semi-annually. The conversion feature of the debentures allows for the debenture
holders to convert their capital at a rate of $0.03 CDN per share. The
debentures were not secured by general mortgage on the Registrants assets. The
conversion privilege to convert to common shares was ratified by shareholders at
the Annual General Meeting June 2, 2004. Subsequent to the year-end December 31,
2003 the debenture holders converted all of the amounts outstanding resulting in
the issuance of 4,060,000 shares of the Registrants common shares.

Subsequent to the year end December 31, 2005 in April of 2006
  a motor vessel was disposed of for 500,000 common shares of the Company for
  submission to treasury at a cost of $350,000 resulting in no gain or loss on
  the purchase and sale of the asset

During the year ended December 31, 2003, the Company paid $
Nil, (2002  Nil, 2001 - $264,341) in management fees and $114,827  2003, (2002
- $120,339, 2001, $95,625) in consulting fees to directors. The Company also
reimbursed $156,321 (2002 - $138,802, 2001 - $271,140) to directors for
expenditures made on behalf of the Company.

(36)

---

Amounts due to shareholders during fiscal year 2003 were
Nil.

Except as disclosed in the preceding discussion, we have not
been a party to any transaction, proposed transaction, or series of transactions
in which the amount involved exceeds $50,000, and in which, to our knowledge,
any of our directors, officers, five percent beneficial security holder, or any
member of the immediate family of the foregoing persons has had or will have a
direct or indirect material interest.

Indebtedness to Company of Directors and Senior Management
totaled.

No directors or senior management of the Company are indebted
to the Company or have been indebted to the Company since the beginning of the
last completed financial year of the Company other than as listed below. The
Company reimburses Directors and Senior Management for expenses incurred in
connection with Companys ordinary course of business. To the extent these
advances and expenses are offset, their exists an indebtedness to the Company of
a net $1,680 as of December 31, 2003.

Interests of Experts and Counsel

Not applicable, filing as an annual report.

|ITEM VIII. | FINANCIAL INFORMATION
|---------- | ---------------------

|A) | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL
      INFORMATION
|-- | -------------------------------------------------------------

This Annual Report contains the consolidated financial
statements for the Company for the fiscal years ended December 31, 2003, 2002
and 2001 which contain an Auditors Report dated August 16, 2004, Consolidated
Balance Sheets as at December 31, 2003 and 2002, Consolidated Statements of
Operations and Deficit, and Consolidated Statements of Cash Flows for the years
ended December 31, 2003, 2002 and 2001, and Notes to Consolidated Financial
Statements.

Indebtedness to Company of Directors and Senior
Management

No directors or senior management of the Company are indebted
to the Company or have been indebted to the Company since the beginning of the
last completed financial year of the Company other than as noted in ITEM VII.
Major Shareholders and Related Party Transactions.

Legal or Arbitration Proceedings

As of the date hereof, the Company is not party to any active
or pending legal proceedings initiated by it and, to the best of its knowledge,
the Company is not subject to any active or pending legal proceedings or claims
against it or any of its properties. However, from time to time, the Company may
become subject to claims and litigation generally associated with any business
venture. In addition, the operations of the Company are subject to risks of
accident and injury, possible violations of other regulations and some of which
cannot be covered by insurance or other risk reduction strategies. Since the
Registrant is a Canadian corporation and the officers, directors and certain of
the persons involved with the Company as professional advisors are resident in
Canada, it may be difficult to effect service within the United States upon such
persons or to realize on any judgment by a court of the United States which is
predicated on civil liabilities under the 1933 Act. The Registrant's Canadian
counsel have advised that there is doubt as to the enforceability in Canada,
either in original actions or

(37)

---

through enforcement of United States judgments, of liabilities
predicated solely upon violations of the 1933 Act or the rules and regulations
promulgated thereunder.

Dividend Distribution Policy

The Registrant has not paid any cash dividends on its Common
Stock and has no present intention of paying any dividends. The current policy
of the Registrant is to retain earnings, if any, for use in operations and in
the development of its business. The Board of Directors will determine the
future dividend policy of the Registrant from time to time.

|B) | SIGNIFICANT CHANGES
|-- | -------------------

There has been a significant change in the issued common shares
  of the Registrant from January 1 to December 31, 2004. A total of 4,360,000
  common shares of the company have been issued during this time as a result of
  the exercising of a conversion privilege on certain debentures. There has been
  a reduction in the number of issued common shares of the Registrant from January
  1 to October 31, 2006. A motor vessel purchased from one of the directors in
  2004, was disposed of in April 2006 for 500,000 common shares of the Company
  for submission to treasury at a cost of $350,000. This has resulted in a significant
  change of the largest shareholders positions as follows:

|                     |                             | **Prior**      | **Present**   
|-------------------- | --------------------------- | -------------- | --------------
|Title of Class       | Identity of Person or Group | **Percentage** | **Percentage**
|Common shares N.P.V. | Daniel Clozza.              | 35.18          | 39.00         
|Common shares N.P.V. | Michael Parsonson           | 15.74          | 18.43         
|Common shares N.P.V. | Jay Howser                  | 10.01          | 0.32          
|Common shares N.P.V. | Martin Tutschek             | 9.87           | 10.94         
|Common shares N.P.V. | Jackie Dawydiuk             | 9.71           | 10.76         

During 2003 the Registrant incorporated a wholly owned subsidiary
  in the Province of Ontario: Intravelnet Limited. As required by Ontario legislation
  specifically relating to travel, the new entity incorporated and domiciled in
  Ontario was created to handle the Ontario travel club business for the Ontario
  members. Subsequent to December 31, 2003 the sole director of Intravelnet Inc.
  resigned and a replacement has yet to be found. Given the circumstances management
  has instructed the new Ontario Corporation Intravelnet Limited to handle servicing
  all travel Club members. It is unknown at this time as to the future status
  of Intravelnet Inc. It is highly unlikely that the Registrant as the parent
  company will recoup inter-company loans and advances made to Intravelnet Inc
  over the last several years totaling approximating $4.4 million. The financial
  statements as presented are consolidated statements. All significant inter-company
  balances and transactions have been eliminated.

|ITEM IX. | THE OFFER AND LISTING
|-------- | ---------------------

|A) | PRICE RANGE AND VOLUME OF SHARES OF COMMON
      STOCK
|-- | ------------------------------------------------------

The following table sets forth the price ranges of the
Registrants shares when listed on the on the OTCBB and the Pink Sheet Exchange
for each of the most current five years, each of the quarters for the most
current two years and each of the most current six months: For the five most
recent full financial years, the annual high and low market prices for the
Companys common stock were as follows (US dollar figures):

|     |   | 2005 |  |  | 2004 |  |  | 2003 |  |  | 2002 |  |  | 2001 |  | 
|---- | - | ---- |  |  | ---- |  |  | ---- |  |  | ---- |  |  | ---- |  | 
|High | $ | 1.00 |  |  | 1.85 |  |  | 2.40 |  |  | 1.75 |  |  | 0.63 |  | 
|Low  | $ | 0.17 |  |  | 0.15 |  |  | 0.07 |  |  | 0.01 |  |  | 0.04 |  | 

(38)

---

For the two most recent full financial years, the high and low
market prices for each full financial quarter for the Companys common stock
were as follows (US dollar figures):

|     |       | 2005 |      |      |       | 2004 |      |      | 
|---- | ----- | ---- | ---- | ---- | ----- | ---- | ---- | ---- | 
|     | Q1    | Q2   | Q3   | Q4   | Q1    | Q2   | Q3   | Q4   | 
|High | $1.00 | 0.51 | 0.50 | 0.50 | $1.85 | 0.90 | 0.29 | 0.20 | 
|Low  | $0.17 | 0.25 | 0.25 | 0.65 | $0.15 | 0.15 | 0.17 | 0.15 | 

For the two most recent six months, the high and low market
prices for each month for the Companys common stock were as follows (US dollar
figures):

|     |       |      | 2006 |      |      |      |      |      | 2005 |      |      |     
|---- | ----- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ----
|     | Nov   | Oct  | Sept | Aug  | July | June | May  | Apr  | Mar  | Feb  | Jan  | Dec 
|High | $2.50 | 3.00 | 1.80 | 1.75 | 1.10 | 1.10 | 1.10 | 0.80 | 0.50 | 0.50 | 0.50 | 0.50
|Low  | $1.90 | 1.65 | 1.70 | 1.35 | 1.00 | 1.00 | 0.60 | 0.40 | 0.25 | 0.30 | 0.25 | 0.25

|B) | PLAN OF DISTRIBUTION
|-- | --------------------

This Form 20F is being filed as an Annual Report under the
Exchange Act and, as such, there is no requirement to provide any information
under this section.

|C) | MARKETS
|-- | -------

As of October 31, 2006 the shares of Forum National Investments
Ltd. are publicly traded on the Pink Sheets Exchange under the trading symbol
FMNIF CUSIP Number 3498450 10 7. The nature and extent of principal non-United
States trading market is approximately 83.5% of all outstanding securities,
which are held outside the United States and approximately 16.5% of all
outstanding securities are held within the United States as of October 31, 2006.
The share price has traded at a high of $3.00 USD in 2006 and a low of $0.01 USD
in 2002.

|D) | SELLING SHAREHOLDERS
|-- | --------------------

This Form 20F is being filed as an Annual Report under the
Exchange Act and, as such, there is no requirement to provide any information
under this section.

|E) | DILUTION
|-- | --------

This Form 20-F is being filed as an Annual Report under the
Exchange Act and, as such, there is no requirement to provide any information
under this section.

|F) | EXPENSES OF THE ISSUE
|-- | ---------------------

This Form 20F is being filed as an Annual Report under the
Exchange Act and, as such, there is no requirement to provide any information
under this section.

(39)

---

|ITEM X. | ADDITIONAL INFORMATION
|------- | ----------------------

|A) | SHARE CAPITAL
|-- | -------------

This Form 20-F is being filed as an Annual Report under the
Exchange Act and, as such, there is no requirement to provide any information
under this section.

|B) | MEMORANDUM AND ARTICLES OF INCORPORATION
|-- | ----------------------------------------

The information called for by this item is contained in an
Exhibit to the Companys Registration Statement on form 20-F filed with the
Commission November 3, 1998 and Exhibits filed herewith. In particular:

1. The Companys Memorandum and Articles are on file with the
Office of the British Columbia Registrar of Companies under Certificate of
Incorporation No. 504791. The Registrant was continued into the province of
Ontario November 12, 1997. The Companys Memorandum and Articles are on file
with the Office of the Ontario Registrar of Companies under Articles of
Continuance No. 1264549. Under the provisions of the Ontario Business
Corporations Act, the Company has the power and capacity of a natural person,
there are no restrictions in the Companys memorandum, on the business that the
Company can carry on nor on the powers the Company can exercise.

2. Article 4.19 of the Companys articles sets out the
circumstances whereby a director must not vote on a proposal, arrangement or
contract in which the director is materially interested, article 4.20 sets out
the directors powers to determine their compensation, Part 3 of the Companys
articles outlines the Companys borrowing powers exercisable by the directors
and article 4.2 sets out that no shares are required to be held for directors
qualification.

3. The Companys common shares rank equally as to dividend
rights, voting rights, rights to share in the Companys profits and liquidation
rights. The Companys common shares are not, under the Companys memorandum and
articles, subject to redemption or sinking fund provisions, liability to further
capital calls, nor any provisions discriminating against any existing or
prospective holder of such shares as a result of such shareholder owning a
substantial number of shares.

4. To the Companys knowledge, there are no conditions imposed
by the memorandum and articles of the Company governing changes in the rights of
holders of stock.

5. Section 10 of the Companys articles together with
applicable corporate and securities laws contain the conditions governing the
manner in which annual and extraordinary general meetings of shareholders are
called including Notice of Meeting/Proxy Solicitation requirements. Part 10 of
the Companys articles deals with proceedings at such meetings including quorum
requirements.

6. To the Companys knowledge, there are no limitations on the
rights to own securities.

7. There are no provisions of the Companys memorandum or
articles that would have an effect of delaying, deferring or preventing a change
in control of the Company and that would operate only with respect to a merger,
acquisition or corporate restructuring involving the Company or any of its
subsidiaries.

8. There are no bylaw provisions governing the ownership
threshold above which shareholder ownership must be disclosed.

9. There are no conditions imposed by the memorandum and
articles of the Company governing changes in the capital of the Company that are
more stringent than is required by law.

(40)

---

|C) | MATERIAL CONTRACTS
|-- | ------------------

On October 14, 2003 Forum obtained judgment by way of
Settlement Agreement in the Ontario Superior Court of Justice. Forum had filed
suit against former employees and agents and shareholders of the company: Remo
Lorenzetto, Walter Verbetic, 1508812 Ontario Inc., Family Vacation Centers Ltd.,
Snowbird Sales & Marketing Inc. and 849092 Alberta Ltd. et al. The suit had
alleged breach of contract, breach of fiduciary duty, and further, That the
defendants had engaged in a pattern of misconduct aimed at destroying Forum's
relationship with its Snowbird Travel Club members and fundamentally undermining
the viability of Forum's business operations.

The Defendants to the Ontario Action (the "FVC Defendants"),
  and as applicable, their officers, directors, shareholders, agents, servants,
  employees, successors, assigns and those in privity with or controlled by the
  FVC Defendants, will not, directly or indirectly:

solicit existing members of Forum's Snowbird Travel Club in any
  manner and by any means to cancel their memberships in the Snowbird Travel Club
  and/or to convert their memberships in the Snowbird Travel Club to memberships
  in any travel club operated or represented by the Defendants;

make any vacation or travel bookings for members of the Snowbird
  Travel Club;

solicit members of the Snowbird Travel Club to cash-in promissory
  notes executed in favor of Forum by those members;

represent themselves in any manner and by any means as the successor
  to the Snowbird Travel Club, Snowbird Vacations or Snowbird Vacations International;

represent themselves in any manner and by any means, including
  on the Family Website as hereinafter defined, as being the authorized representative(s)
  of Forum or the Snowbird Travel Club, Snowbird Vacations or Snowbird Vacations
  International.

The FVC Defendants will delete from their website at
www.familyvacationcenters.com (the "Family Website") all references to Forum,
the Snowbird Travel Club, Snowbird Vacations or Snowbird Vacations
International.

Until February 21, 2004, the FVC Defendants will post on the
Family Website a statement advising those persons visiting the Family Website
that the Defendant Family Vacation Centers Ltd. ("Family") is not associated
with the Snowbird Travel Club, Snowbird Vacations or Snowbird Vacations
International, and directing those Snowbird Travel Club members who may visit
the Family Website to Forum's Internet website at www.snowbirdvacations.com and
to Forum's toll free and local telephone numbers.

The FVC Defendants will direct all telephone and other
inquiries from Snowbird Travel Club members to Forum's local office at Suite
202, 148 York Street, London, Ontario N6A 1A9, Telephone: 519-433-1060, fax:
519-433-1056, toll-free: 1-866-261-8199.

The FVC Defendants will deliver to Forum, all documents in the
FV Defendants' power, possession or control which relate to the sale of Snowbird
Travel Club memberships by the FVC Defendants or as applicable, their officers,
directors, shareholders, agents, servants, employees, successors, assigns and
those in privity with or controlled by the FVC Defendants, including original
contracts with Snowbird Travel Club members, original promissory notes (the
"Promissory Notes") executed after March 1, 2002 by members of Forum's travel
club which, on their face, are stated to be held by any of Forum,
Intravelnet.com, Snowbird Vacations International, Snowbird Vacations or either
Snowbird Marketing or 1508812 Ontario Inc. as agent for any of the foregoing,
membership lists and membership data in respect of the

(41)

---

Snowbird Travel Club, and Forum's sales, marketing and service
manuals in respect of the Snowbird Travel Club.

Forum has the right to request that an independent
investigation be conducted, at its cost, of the documents that the FVC
Defendants were obligated to or did deliver pursuant to this judgment, The FVC
Defendants will co-operate in that investigation and make available to the
investigator the records which the investigators advise are relevant to their
work. If the investigators determine that the FVC Defendants, or any of them,
have failed to deliver any of the Promissory Notes to Forum, the FVC Defendants
will immediately deliver those Promissory Notes (the "Withheld Promissory
Notes") to Forum. If the investigators further determine that after August 21,
2003, the FVC Defendants, or any of them, received any monies pursuant to the
Withheld Promissory Notes, or received any other monies from the makers of the
Withheld Promissory Notes after that date, and if the total of the monies so
received exceeds $5,000, the FVC Defendants will pay Forum two times the amount
of monies so received by the FVC Defendants, or any of them.

The FVC Defendants, and as applicable, their officers,
directors, shareholders, agents, servants, employees, successors, assigns and
those in privity with or controlled by the FVC Defendants, will not use the
former telephone and facsimile numbers.

The FVC Defendants are not to receive any monies from members
of Forum's travel club. The FVC Defendants are to immediately account to Forum
for all monies that they have received from members of Forum's travel club since
May 12, 2003.

The FVC Defendants are to reimburse members of Forum's travel
club for the amounts that the FVC Defendants have received from those members
since May 12, 2003, to the extent that those members have not already been
compensated as at August 21, 2003. The amounts reimbursed are to include bank
charges incurred by the members to the extent that Forum has been advised of
those charges by the members and has advised the FVC Defendants. All
reimbursements are to flow through Forum.

All monies (the "Fees") payable pursuant to the promissory notes
  (the "Promissory Notes") executed after March 1, 2002 by members of Forum's
  travel club which, on their face, are stated to be held by any of Forum, Intravelnet.com,
  Snowbird Vacations International, Snowbird Vacations or either Snowbird Marketing
  or 1508812 Ontario Inc. as agent for any of the foregoing, are to be paid to
  and received by Forum. It is estimated by Remo Lorenzetto that the face amount
  of the Promissory Notes is approximately $ 669,216 (CDN.)

The FVC Defendants and all other Applicants to the case will
  deliver up to Forum for cancellation all share certificates of Forum in which
  he, she or it has a beneficial or legal interest estimated to be 300,000. Each
  of them will execute a statutory declaration, in a form prepared by counsel
  for Forum, declaring that:

the shares being returned are all of the shares of Forum in which
  the declarant has any legal or beneficial interest;

the declarant has no interest in any option or warrant to acquire
  additional shares of Forum;

that the declarant has not transferred, sold or encumbered the
  declarant's interest in the shares of Forum in which the declarant has any legal
  or beneficial interest;

in the case where the declarant is unable to locate any of the
  share certificates of Forum in which the declarant has a legal or beneficial
  interest, that the share certificates of Forum in which the declarant has a
  legal or beneficial interest have been lost or destroyed, that the declarant
  requires that they be cancelled and that the shareholders register and other
  corporate records of Forum be amended to reflect that cancellation;

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That the declarant will indemnify Forum in respect of any
damages or costs that Forum might incur in the event that some other party
claims any interest in the share certificates being returned or to which
paragraph 18(d), above, pertains. The declarant will execute an indemnification
of Forum on these terms.

As of October 31, 2006 the certificates had not been delivered
up to Forum.

On January 1, 2004, the Company entered into a Commission
Agreement with 4226054 Canada Inc., for the operation of the Companys London
Ontario sales and marketing operations.

In November of 2005 the principal of 4226054 Ontario Ltd
entered into a Commission Agreement to market the Companys Snowbird Vacations
Travel Club Membership in the Barrie Ontario area. The Commission Agreement with
1617165 Ontario Inc was terminated in March of 2005 and at this time no new
memberships are actively been marketed in the Barrie Ontario area.

In September of 2005, the Company secured a credit facility
with Caterpillar Financial Services for up to $3 million USD. The Company in
October of 2006 had the credit facility increased to $3.9 million USD

In January of 2006 the Company signed a Commission Agreement
with 2094711 Ontario Limited to secure an office location to market Travel Club
memberships in the greater Toronto Ontario area. The new office location in
Pickering Ontario commenced operations In October 2006.

In April of 2006 the motor vessel was disposed of for 500,000
common shares of the Company for submission to treasury at a cost of $350,000
resulting in no gain or loss on the transaction.

|D) | EXCHANGE CONTROLS
|-- | -----------------

There are no governmental laws, decrees or regulations in
Canada restricting the import or export of capital or affecting the remittance
to the United States of interest, dividends or other payments to non-resident
holders of our shares. However, the payment or crediting of interest or
dividends to United States residents may be subject to applicable withholding
taxes at a rate prescribed by the Income Tax Act (Canada) and modified by
the provisions of the Canada-United States Income Tax Convention, 1980 (see
commentary in the section entitled Taxation below).

Except as provided in the Investment Canada Act (the
ICA), there are no limitations under the laws of Canada, the Province of
Ontario or in our Memorandum or Articles on the right of foreigners to hold
and/or vote the shares of our capital stock.

The ICA has application where a non-Canadian individual or
entity or controlled group of entities proposes to make an investment to acquire
control of a Canadian business enterprise, either directly or indirectly, by way
of purchase of voting shares of a corporation or of substantially all of the
assets used in the Canadian business enterprise. An investment to acquire voting
shares of a corporation is deemed to be an acquisition of control where more
than one-half of the voting shares are acquired. An acquisition of less than
one-third of the voting shares of a corporation is deemed not to be an
acquisition of control and an acquisition of between one-third and one-half of
the voting shares of a corporation is presumed to be an acquisition of control
unless it can be established that the acquisition does not in fact result in
control of the corporation by the investor.

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An investment to acquire control of a Canadian business
enterprise, the gross assets of which exceed certain thresholds, must be
reviewed and approved under the ICA before implementation. An investment to
acquire control of a Canadian business enterprise, the gross asset value of
which falls below these threshold amounts, is one in respect of which
notification must be given under the ICA although approval is not required prior
to implementation of the investment.

Specific investment thresholds apply to investors of the United
States. The investment threshold for a direct acquisition of control has been
established at Cdn$250 million for 2005 and no review is required for an
indirect acquisition of control. Each year the direct acquisition investment
threshold is adjusted for inflation.

|E) | TAXATION
|-- | --------

Canadian Federal Income Tax Considerations

The following is a general discussion of the material Canadian
federal income tax consequences applicable to a holder of our common shares who
is a resident of the United States and who is not, and is not deemed to be, a
resident of Canada, who holds such common shares as capital property and who
does not use or hold such common shares in carrying on a business in Canada (a
Non-Resident Holder).

This summary is based on the current provisions of the Income
Tax Act (Canada) and regulations thereunder (the ITA) and all specific
proposals to amend the ITA publicly announced prior to the date hereof by the
Minister of Finance (Canada) and the current administrative practices of the
Canada Revenue Agency. It has been assumed that all specific proposals to amend
the ITA will be enacted in substantially their present form and that no other
relevant amendments to the ITA will come into force. However, no assurance can
be given to this effect. Except for the foregoing, this summary does not take
into account or anticipate any changes in law, whether by legislative,
administrative or judicial decision or action, nor does it take into account
provincial, territorial or foreign income tax legislation or considerations
which may differ from those described herein. See United States Federal Income
Tax Consequences below.

This summary is not exhaustive of all possible Canadian federal
income tax consequences to all Non-Resident Holders and in particular will not
be applicable where the Non-Resident Holder is a non-resident insurer carrying
on an insurance business in Canada in respect of which our common shares are
held or used in Canada. Nor should these comments be interpreted as legal or tax
advice to any particular Non-Resident Holder, each of whom should consult their
own tax advisors with respect to their particular circumstances.

Dividends

Dividends (including deemed dividends) paid or credited on our
common shares to a NonResident Holder will be subject to withholding tax in
Canada. The Canada-United States Income Tax Convention, 1980, as amended (the
Treaty) provides that the normal 25% rate of withholding tax on the gross
amount of such dividends is reduced to 15% if paid to a resident of the United
States. The Treaty provides for a further reduction of the withholding tax rate
to 5% if the beneficial owner of such dividends is a company (any entity which
is treated as a body corporate for purposes of the ITA) which is a resident of
the United States and which owns at least 10% of our voting stock.

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Capital Gains

A Non-Resident Holder will not be subject to tax under the ITA
in respect of a capital gain realized upon the disposition or deemed disposition
(such as would arise on the death of an individual Non-Resident Holder) of a
common share unless such share is taxable Canadian property to the
Non-Resident Holder. A common share in the capital of our company will be
taxable Canadian property to a Non-Resident Holder if (i) at any time during the
five year period ending at the time of disposition of such share, the
NonResident Holder, persons with whom the Non-Resident Holder did not deal at
arms length, or the Non-Resident Holder together with all such persons owned
(or had an option to acquire) 25% or more of the issued shares of any class or
series of our capital stock; or (ii) the Non-Resident Holder elected under the
ITA to treat such common shares as taxable Canadian property upon ceasing to be
a resident of Canada prior to October 2, 1996.

However, under the Treaty, a Non-Resident Holder to whom our
common shares represent taxable Canadian property will not be liable to tax in
Canada in respect of a capital gain realized on the disposition of such shares
unless: the value of such shares is derived principally from real property
situated in Canada (including mineral properties in Canada and rights in
relation thereto), or the Non-Resident Holder was a resident of Canada for 120
months during any period of 20 consecutive years preceding the disposition of
such shares and was a resident of Canada at any time during the 10 years
immediately preceding such disposition and owned such shares (or property for
which such shares were substituted) at the time the Non-Resident Holder ceased
to be a resident of Canada.

U.S. Federal Income Tax Consequences

The following is a summary of the anticipated material U.S.
federal income tax consequences to a U.S. Holder (as defined below) arising from
and relating to the acquisition, ownership, and disposition of our common shares
(Common Shares).

This summary is for general information purposes only and does
not purport to be a complete analysis or listing of all potential U.S. federal
income tax consequences that may apply to a U.S. Holder as a result of the
acquisition, ownership, and disposition of Common Shares. In addition, this
summary does not take into account the individual facts and circumstances of any
particular U.S. Holder that may affect the U.S. federal income tax consequences
of the acquisition, ownership, and disposition of Common Shares. Accordingly,
this summary is not intended to be, and should not be construed as, legal or
U.S. federal income tax advice with respect to any U.S. Holder. Each U.S. Holder
should consult its own financial advisor, legal counsel, or accountant regarding
the U.S. federal, U.S. state and local, and foreign tax consequences of the
acquisition, ownership, and disposition of Common Shares.

Scope of this Disclosure

Authorities

This summary is based on the Internal Revenue Code of 1986, as
amended (the Code), Treasury Regulations (whether final, temporary, or
proposed), published rulings of the Internal Revenue Service (IRS), published
administrative positions of the IRS, the Convention Between Canada and the
United States of America with Respect to Taxes on Income and on

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Capital, signed September 26, 1980, as amended (the
Canada-U.S. Tax Convention), and U.S. court decisions that are applicable and,
in each case, as in effect and available, as of the date of this Annual Report.
Any of the authorities on which this summary is based could be changed in a
material and adverse manner at any time, and any such change could be applied on
a retroactive basis. This summary does not discuss the potential effects,
whether adverse or beneficial, of any proposed legislation that, if enacted,
could be applied on a retroactive basis.

U.S. Holders

For purposes of this summary, a U.S. Holder is a beneficial
owner of Common Shares that, for U.S. federal income tax purposes, is (a) an
individual who is a citizen or resident of the U.S., (b) a corporation, or any
other entity classified as a corporation for U.S. federal income tax purposes,
that is created or organized in or under the laws of the U.S. or any state in
the U.S., including the District of Columbia, (c) an estate if the income of
such estate is subject to U.S. federal income tax regardless of the source of
such income, or (d) a trust if (i) such trust has validly elected to be treated
as a U.S. person for U.S. federal income tax purposes or (ii) a U.S. court is
able to exercise primary supervision over the administration of such trust and
one or more U.S. persons have the authority to control all substantial decisions
of such trust.

Non-U.S. Holders

For purposes of this summary, a non-U.S. Holder is a
beneficial owner of Common Shares other than a U.S. Holder. This summary does
not address the U.S. federal income tax consequences of the acquisition,
ownership, and disposition of Common Shares to non-U.S. Holders. Accordingly, a
non-U.S. Holder should consult its own financial advisor, legal counsel, or
accountant regarding the U.S. federal, U.S. state and local, and foreign tax
consequences (including the potential application of and operation of any tax
treaties) of the acquisition, ownership, and disposition of Common Shares.

U.S. Holders Subject to Special U.S. Federal Income Tax
Rules Not Addressed This summary does not address the U.S. federal income
tax consequences of the acquisition, ownership, and disposition of Common Shares
to U.S. Holders that are subject to special provisions under the Code, including
the following U.S. Holders: (a) U.S. Holders that are tax-exempt organizations,
qualified retirement plans, individual retirement accounts, or other
tax-deferred accounts; (b) U.S. Holders that are financial institutions,
insurance companies, real estate investment trusts, or regulated investment
companies; (c) U.S. Holders that are broker-dealers, dealers, or traders in
securities or currencies that elect to apply a mark-to-market accounting method;
(d) U.S. Holders that have a functional currency other than the U.S. dollar;
(e) U.S. Holders that are liable for the alternative minimum tax under the Code;
(f) U.S. Holders that own Common Shares as part of a straddle, hedging
transaction, conversion transaction, constructive sale, or other arrangement
involving more than one position; (g) U.S. Holders that acquired Common Shares
in connection with the exercise of employee stock options or otherwise as
compensation for services; (h) U.S. Holders that hold Common Shares other than
as a capital asset within the meaning of Section 1221 of the Code; or (i) U.S.
Holders that own, directly or indirectly, 10% or more, by voting power or value,
of our outstanding shares. U.S. Holders that are subject to special provisions
under the Code, including U.S. Holders described immediately above, should
consult their own financial advisor, legal counsel or accountant regarding the
U.S. federal, U.S. state and local, and foreign tax consequences of the
acquisition, ownership, and disposition of Common Shares.

If an entity that is classified as partnership (or
pass-through entity) for U.S. federal income tax purposes holds Common Shares,
the U.S. federal income tax consequences to such

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partnership (or pass-through entity) and the partners of such
partnership (or owners of such pass-through entity) generally will depend on
the activities of the partnership (or pass-through entity) and the status of
such partners (or owners). Partners of entities that are classified as
partnerships (or owners of pass-through entities) for U.S. federal income tax
purposes should consult their own financial advisor, legal counsel or accountant
regarding the U.S. federal income tax consequences of the acquisition,
ownership, and disposition of Common Shares.

Tax Consequences Other than U.S. Federal Income Tax
Consequences Not Addressed This summary does not address the U.S. state and
local, U.S. federal estate and gift, or foreign tax consequences to U.S. Holders
of the acquisition, ownership, and disposition of Common Shares. Each U.S.
Holder should consult its own financial advisor, legal counsel, or accountant
regarding the U.S. state and local, U.S. federal estate and gift, and foreign
tax consequences of the acquisition, ownership, and disposition of Common
Shares. (See TaxationCanadian Federal Income Tax Considerations above).

U.S. Federal Income Tax Consequences of the Acquisition,
Ownership, and Disposition of Common Shares

Distributions on Common Shares

General Taxation of Distributions

A U.S. Holder that receives a distribution, including a
constructive distribution, with respect to the Common Shares will be required to
include the amount of such distribution in gross income as a dividend (without
reduction for any Canadian income tax withheld from such distribution) to the
extent of our current or accumulated earnings and profits. To the extent that
a distribution exceeds our current and accumulated earnings and profits, such
distribution will be treated (a) first, as a tax-free return of capital to the
extent of a U.S. Holders tax basis in the Common Shares and, (b) thereafter, as
gain from the sale or exchange of such Common Shares. (See more detailed
discussion at Disposition of Common Shares below).

Reduced Tax Rates for Certain Dividends

For taxable years beginning after December 31, 2002 and before
January 1, 2009, a dividend paid by us generally will be taxed at the
preferential tax rates applicable to long-term capital gains if (a) we are a
qualified foreign corporation (as defined below), (b) the U.S. Holder
receiving such dividend is an individual, estate, or trust, and (c) such
dividend is paid on Common Shares that have been held by such U.S. Holder for at
least 61 days during the 121-day period beginning 60 days before the
ex-dividend date (i.e., the first date that a purchaser of such Common Shares
will not be entitled to receive such dividend).

We generally will be a qualified foreign corporation under
Section 1(h)(11) of the Code (a QFC) if (a) we are incorporated in a
possession of the U.S., (b) we are eligible for the benefits of the Canada-U.S.
Tax Convention, or (c) the Common Shares are readily tradable on an established
securities market in the U.S. However, even if we satisfies one or more of such
requirements, we will not be treated as a QFC if we are a passive foreign
investment company (as defined below) for the taxable year during which we pay
a dividend or for the preceding taxable year. In 2003, the U.S. Department of
the Treasury (the Treasury) and the IRS announced that they intended to issue
Treasury Regulations providing procedures for a foreign corporation to certify
that it is a QFC. Although these Treasury Regulations were not issued in 2004,
the Treasury and the IRS have confirmed their intention to issue these Treasury

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Regulations. It is expected that these Treasury Regulations
will obligate persons required to file information returns to report a
distribution with respect to a foreign security issued by a foreign corporation
as a dividend from a QFC if the foreign corporation has, among other things,
certified under penalties of perjury that the foreign corporation was not a
passive foreign investment company for the taxable year during which the
foreign corporation paid the dividend or for the preceding taxable year.

As discussed below, we do not believe that we were a passive
foreign investment company for the taxable year ended December 31, 2005, and we
do not expect that we will be a passive foreign investment company for the
taxable year ending December 31, 2006. (See more detailed discussion at
Additional Rules that May Apply to U.S. Holders below). However, there can be
no assurance that the IRS will not challenge our determination concerning our
passive foreign investment company status or that we will not be a passive
foreign investment company for the current or any future taxable year.
Accordingly, although we anticipate that we may be a QFC, there can be no
assurances that the IRS will not challenge the determination made by us
concerning our QFC status, that we will be a QFC for the current or any future
taxable year, or that we will be able to certify that we are a QFC in accordance
with the certification procedures issued by the Treasury and the IRS.

If we are not a QFC, a dividend paid by us to a U.S. Holder,
including a U.S. Holder that is an individual, estate, or trust, generally will
be taxed at ordinary income tax rates (and not at the preferential tax rates
applicable to long-term capital gains). The dividend rules are complex, and each
U.S. Holder should consult its own financial advisor, legal counsel, or
accountant regarding the dividend rules.

Distributions Paid in Foreign Currency

The amount of a distribution paid to a U.S. Holder in foreign
currency generally will be equal to the U.S. dollar value of such distribution
based on the exchange rate applicable on the date of receipt. A U.S. Holder that
does not convert foreign currency received as a distribution into U.S. dollars
on the date of receipt generally will have a tax basis in such foreign currency
equal to the U.S. dollar value of such foreign currency on the date of receipt.
Such a U.S. Holder generally will recognize ordinary income or loss on the
subsequent sale or other taxable disposition of such foreign currency (including
an exchange for U.S. dollars).

Dividends Received Deduction

Dividends paid on the Common Shares generally will not be
eligible for the dividends received deduction. The availability of the
dividends received deduction is subject to complex limitations that are beyond
the scope of this discussion, and a U.S. Holder that is a corporation should
consult its own financial advisor, legal counsel, or accountant regarding the
dividends received deduction.

Disposition of Common Shares

A U.S. Holder will recognize gain or loss on the sale or other
taxable disposition of Common Shares in an amount equal to the difference, if
any, between (a) the amount of cash plus the fair market value of any property
received and (b) such U.S. Holders tax basis in the Common Shares sold or
otherwise disposed of. Any such gain or loss generally will be capital gain or
loss, which will be long-term capital gain or loss if the Common Shares are held
for more than one year. Gain or loss recognized by a U.S. Holder on the sale or
other taxable disposition of Common Shares generally will be treated as U.S.
source for purposes of applying the U.S. foreign tax credit rules. (See more
detailed discussion at Foreign Tax Credit below).

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Preferential tax rates apply to long-term capital gains of a
U.S. Holder that is an individual, estate, or trust. There are currently no
preferential tax rates for long-term capital gains of a U.S. Holder that is a
corporation. Deductions for capital losses and net capital losses are subject to
complex limitations. For a U.S. Holder that is an individual, estate, or trust,
capital losses may be used to offset capital gains and up to U.S.$3,000 of
ordinary income. An unused capital loss of a U.S. Holder that is an individual,
estate, or trust generally may be carried forward to subsequent taxable years,
until such net capital loss is exhausted. For a U.S. Holder that is a
corporation, capital losses may be used to offset capital gains, and an unused
capital loss generally may be carried back three years and carried forward five
years from the year in which such net capital loss is recognized.

Foreign Tax Credit

A U.S. Holder who pays (whether directly or through
withholding) Canadian income tax with respect to dividends paid on the Common
Shares generally will be entitled, at the election of such U.S. Holder, to
receive either a deduction or a credit for such Canadian income tax paid.
Generally, a credit will reduce a U.S. Holders U.S. federal income tax
liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S.
Holders income subject to U.S. federal income tax. This election is made on a
year-by-year basis and applies to all foreign taxes paid (whether directly or
through withholding) by a U.S. Holder during a year.

Complex limitations apply to the foreign tax credit, including
the general limitation that the credit cannot exceed the proportionate share of
a U.S. Holders U.S. federal income tax liability that such U.S. Holders
foreign source taxable income bears to such U.S. Holders worldwide taxable
income. In applying this limitation, a U.S. Holders various items of income and
deduction must be classified, under complex rules, as either foreign source or
U.S. source. In addition, this limitation is calculated separately with
respect to specific categories of income (including passive income, high
withholding tax interest, financial services income, general income, and
certain other categories of income). Dividends paid by us generally will
constitute foreign source income and generally will be categorized as passive
income or, in the case of certain U.S. Holders, financial services income.
However, for taxable years beginning after December 31, 2006, the foreign tax
credit limitation categories are reduced to passive income and general
income (and the other categories of income, including financial services
income are eliminated). The foreign tax credit rules are complex, and each U.S.
Holder should consult its own financial advisor, legal counsel, or accountant
regarding the foreign tax credit rules.

Information Reporting; Backup Withholding Tax

Payments made within the U.S., or by a U.S. payor or U.S.
middleman, of dividends on, and proceeds arising from certain sales or other
taxable dispositions of, Common Shares generally will be subject to information
reporting and backup withholding tax, at the rate of 28%, if a U.S. Holder (a)
fails to furnish such U.S. Holders correct U.S. taxpayer identification number
(generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification
number, (c) is notified by the IRS that such U.S. Holder has previously failed
to properly report items subject to backup withholding tax, or (d) fails to
certify, under penalty of perjury, that such U.S. Holder has furnished its
correct U.S. taxpayer identification number and that the IRS has not notified
such U.S. Holder that it is subject to backup withholding tax. However, U.S.
Holders that are corporations generally are excluded from these information
reporting and backup withholding tax rules. Any amounts withheld under the U.S.
backup withholding tax rules will be allowed as a credit against a U.S. Holders
U.S. federal income tax liability, if any, or will be refunded, if such U.S.
Holder furnishes required information to the IRS. Each U.S. Holder should
consult its

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own financial advisor, legal counsel, or accountant regarding
the information reporting and backup withholding tax rules.

Additional Rules that May Apply to U.S. Holders

If we are a controlled foreign corporation or a passive
foreign investment company (each as defined below), the preceding sections of
this summary may not describe the U.S. federal income tax consequences to U.S.
Holders of the acquisition, ownership, and disposition of Common Shares.

Controlled Foreign Corporation

We generally will be a controlled foreign corporation under
Section 957 of the Code (a CFC) if more than 50% of the total voting power or
the total value of our outstanding shares is owned, directly or indirectly, by
citizens or residents of the U.S., domestic partnerships, domestic corporations,
domestic estates, or domestic trusts (each as defined in Section 7701(a)(30) of
the Code), each of which own, directly or indirectly, 10% or more of the total
voting power of our outstanding shares (a 10% Shareholder).

If we are a CFC, a 10% Shareholder generally will be subject to
current U.S. federal income tax with respect to (a) such 10% Shareholders pro
rata share of our subpart F income (as defined in Section 952 of the Code) and
(b) such 10% Shareholders pro rata share of our earnings invested in United
States property (as defined in Section 956 of the Code). In addition, under
Section 1248 of the Code, any gain recognized on the sale or other taxable
disposition of Common Shares by a U.S. Holder that was a 10% Shareholder at any
time during the five-year period ending with such sale or other taxable
disposition generally will be treated as a dividend to the extent of our
earnings and profits that are attributable to such Common Shares. If we are
both a CFC and a passive foreign investment company (as defined below), we
generally will be treated as a CFC (and not as a passive foreign investment
company) with respect to any 10% Shareholder.

We do not believe that we have has previously been, or
currently is, a CFC. However, there can be no assurance that we will not be a
CFC for the current or any future taxable year.

Passive Foreign Investment Company

We generally will be a passive foreign investment company
under Section 1297 of the Code (a PFIC) if, for a taxable year, (a) 75% or
more of our gross income for such taxable year is passive income or (b) 50% or
more of the assets held by us either produce passive income or are held for the
production of passive income, based on the fair market value of such assets (or
on the adjusted tax basis of such assets, if we are not publicly traded and
either are a controlled foreign corporation or makes an election). Passive
income includes, for example, dividends, interest, certain rents and royalties,
certain gains from the sale of stock and securities, and certain gains from
commodities transactions.

For purposes of the PFIC income test and assets test described
above, if we own, directly or indirectly, 25% or more of the total value of the
outstanding shares of another foreign corporation, we will be treated as if it
(a) held a proportionate share of the assets of such other foreign corporation
and (b) received directly a proportionate share of the income of such other
foreign corporation. In addition, for purposes of the PFIC income test and asset
test described above, passive income does not include any interest, dividends,
rents, or royalties that are received or accrued by us from a related person
(as defined in Section 954(d)(3) of the Code),

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to the extent such items are properly allocable to the income
of such related person that is not passive income.

If we are a PFIC, the U.S. federal income tax consequences to a
U.S. Holder of the acquisition, ownership, and disposition of Common Shares will
depend on whether such U.S. Holder makes an election to treat us as a qualified
electing fund or QEF under Section 1295 of the Code (a QEF Election) or a
mark-to-market election under Section 1296 of the Code (a Mark-to-Market
Election). A U.S. Holder that does not make either a QEF Election or a
Mark-to-Market Election will be referred to in this summary as a Non-Electing
U.S. Holder.

Under Section 1291 of the Code, any gain recognized on the sale
or other taxable disposition of Common Shares, and any excess distribution (as
defined in Section 1291(b) of the Code) paid on the Common Shares, must be
ratably allocated to each day in a Non-Electing U.S. Holders holding period for
the Common Shares. The amount of any such gain or excess distribution allocated
to prior years of such Non-Electing U.S. Holders holding period for the Common
Shares generally will be subject to U.S. federal income tax at the highest tax
applicable to ordinary income in each such prior year. A Non-Electing U.S.
Holder will be required to pay interest on the resulting tax liability for each
such prior year, calculated as if such tax liability had been due in each such
prior year.

A U.S. Holder that makes a QEF Election generally will not be
subject to the rules of Section 1291 of the Code discussed above. However, a
U.S. Holder that makes a QEF Election generally will be subject to U.S. federal
income tax on such U.S. Holders pro rata share of (a) our net capital gain,
which will be taxed as long-term capital gain to such U.S. Holder, and (b) our
ordinary earnings, which will be taxed as ordinary income to such U.S. Holder.
A U.S. Holder that makes a QEF Election will be subject to U.S. federal income
tax on such amounts for each taxable year in which we are a PFIC, regardless of
whether such amounts are actually distributed to such U.S. Holder by us.

A U.S. Holder that makes a Mark-to-Market Election generally
will not be subject to the rules of Section 1291 of the Code discussed above. A
U.S. Holder may make a Mark-to-Market Election only if the Common Shares are
marketable stock (as defined in Section 1296(e) of the Code). A U.S. Holder
that makes a Mark-to-Market Election will include in gross income, for each
taxable year in which we are a PFIC, an amount equal to the excess, if any, of
(a) the fair market value of the Common Shares as of the close of such taxable
year over (b) such U.S. Holders tax basis in such Common Shares. A U.S. Holder
that makes a Mark-to-Market Election will, subject to certain limitations, be
allowed a deduction in an amount equal to the excess, if any, of (a) such U.S.
Holders adjusted tax basis in the Common Shares over (b) the fair market value
of such Common Shares as of the close of such taxable year.

We do not believe that we were a PFIC for the taxable year
ended December 31, 2005, and we do not expect that we will be a PFIC for the
taxable year ending December 31, 2006. There can be no assurance, however, that
the IRS will not challenge our determination concerning its PFIC status or that
we will not be a PFIC for the current or any future taxable year.

The PFIC rules are complex, and each U.S. Holder should consult
its own financial advisor, legal counsel, or accountant regarding the PFIC rules
and how the PFIC rules may affect the U.S. federal income tax consequences of
the acquisition, ownership, and disposition of Common Shares.

(51)

---

|F) | DIVIDENDS AND PAYING AGENTS
|-- | ---------------------------

This Form 20F is being filed as an Annual Report under the
Exchange Act and, as such, there is no requirement to provide any information
under this section.

|G) | STATEMENTS BY EXPERTS
|-- | ---------------------

This Form 20F is being filed as an Annual Report under the
Exchange Act and, as such, there is no requirement to provide any information
under this section.

|H) | DOCUMENTS ON DISPLAY
|-- | --------------------

Any documents referred to in this document may be inspected at
the head office of the Company, #180A  No 2 Road, Richmond, British Columbia,
Canada, V7E 2G1 during normal business hours.

|I) | SUBSIDIARY INFORMATION
|-- | ----------------------

There is no information relating to the Registrants
subsidiaries which must be provided in Canada and which is not otherwise called
for by the body of generally accepted accounting principles used in preparing
the consolidated financial statements.

ENFORCEABILITY OF CIVIL LIABILITIES

We are a public company incorporated and domiciled under the
  laws of Canada. A majority of our directors and executive officers are residents
  of countries other than the United States. Furthermore, all or a substantial
  portion of their assets and our assets are located outside the United States.
  As a result, it may not be possible for you to:

effect service of process within the United States upon any of
  our directors and executive officers or on us; or

enforce in U.S. courts judgments obtained against any of our
  directors and executive officers or us in the U.S. courts in any action, including
  actions under the civil liability provisions of U.S. securities laws;

enforce in U.S. courts judgments obtained against any of our
  directors and senior management or us in courts of jurisdictions outside the
  United States in any action, including actions under the civil liability provisions
  of U.S. securities laws; or

to bring an original action in an Australian court to enforce
  liabilities against any of our directors and executive officers or us based
  upon U.S. securities laws.

You may also have difficulties enforcing in courts outside the
United States judgments obtained in the U.S. courts against any of our directors
and executive officers or us, including actions under the civil liability
provisions of the U.S. securities laws.

|ITEM XI. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
      MARKET RISK
|-------- | ----------------------------------------------------------------

The Company has no financial instrument about which disclosure
of quantitative or qualitative market risk exposure is required.

|ITEM XII | DESCRIPTION OF SECURITIES OTHER THAN EQUITY
      SECURITIES
|-------- | ------------------------------------------------------------

This Form 20F is being filed as an Annual Report under the
Exchange Act and, as such, there is no requirement to provide any information
under this section.

(52)

---

PART II

|ITEM XIII | DEFAULTS, DIVIDENDS, ARREARS AND DELINQUENCIES
|--------- | ----------------------------------------------

There has not been a material default in the payment of
principal, interest, a sinking fund or purchase fund installment, or any other
material default not cured within thirty days, relating to indebtedness of the
Company. There are no payments of dividend by the Registrant in arrears, nor has
there been any other material delinquency relating to any class of preference
shares of the Registrant.

|ITEM XIV | MATERIAL MODIFICATIONS TO THE RIGHTS OF
      SECURITY HOLDERS AND USE OF PROCEEDS
|-------- | ----------------------------------------------------------------------------------

Material modification to the rights of security holders

There have been no material modifications to the rights of
security holders during the most current fiscal year.

Use of proceeds

This Form 20F is being filed as an Annual Report under the
Exchange Act and, as such, there is no requirement to provide any information
under this section.

|ITEM XV | CONTROLS AND PROCEDURES
|------- | -----------------------

Evaluation and disclosure controls and procedures

Under the supervision and with the participation of the
Companys management, including the Companys Chief Executive Officer and Chief
Financial Officer, the Company evaluated the effectiveness of the design and
operation of its disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934, as amended) as of a date
(the Evaluation Date) being December 31, 2003. Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that, as of the
Evaluation Date, the Companys disclosure controls and procedures were effective
in timely alerting them to the material information relating to the Company (or
the Companys consolidated subsidiaries) required to be included in the
Companys SEC filings.

Changes in internal controls over Financial reporting

There were no significant changes made in the Companys
internal controls or, to the Companys knowledge, in other factors that could
significantly affect these controls subsequent to the date of their evaluation.

Management, including our Chief Executive Officer and Chief
Financial Officer, do not expect that our disclosure controls and procedures or
internal controls and procedures will prevent all error and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the

(53)

---

individual acts of some persons, by collusion of two or more
people, or by management override of the control. The design of any system of
controls also is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions; over time,
control may become inadequate because of changes in conditions, or the degree of
compliance with the policies or procedures may deteriorate. Because of the
inherent limitations in a cost-effective control system, misstatements due to
error or fraud may occur and not be detect.

|XVI | AUDIT COMMITTEE FINANCIAL EXPERT
|--- | --------------------------------

|A) | Audit Committee Financial Expert
|-- | --------------------------------

The Registrant has an Audit Committee established by the Board
  of Directors. Our board has determined that we do not have a financial expert
  serving on our audit committee as defined by Item 401(h) of Regulation S-K of
  the Exchange Act.

We believe that the combined knowledge, skills and experience
of the members of our Audit Committee enables them, as a group, to act
effectively in the fulfillment of their tasks and responsibilities, including
those under the Sarbanes-Oxley Act of 2002, without appointing a member who
would qualify as an audit committee financial expert

|B) | Code of Ethics
|-- | --------------

We have adopted a code of ethics for our Chief Executive
Officer, principal financial officer, principal accounting officer, controller
and other persons performing similar functions. Our code of ethics complies with
the SEC rules. The code of ethics addresses the following: honest and ethical
conduct, including handling of corporate opportunities and conflicts of
interest; full, fair, accurate, timely and quality public disclosure filed with
the SEC and otherwise publicly made by us; compliance with applicable the laws
and regulations; prompt internal reporting of violations of the code of ethics;
and accountability for adherence to the code of ethics; There have been no
waivers to the code of ethics as of the date of this report.

|C) | Principal Accountant Fees and Services
|-- | --------------------------------------

The independent auditors of the Company are the firm of SmytheRatcliffe
  Chartered Accountants, located at 7th Floor Marine Building, 355
  Burrard Street, Vancouver, British Columbia, Canada V6C 2G8.

For the years ended December 31, 2003 and 2002, the Registrant
was invoiced by SmytheRatcliffe and KPMG, the Company's independent auditors,
for audit fees, audit-related fees, tax fees and all other fees as set forth
below:

(54)

---

|                     |  | Year Ended December |  |  | Year Ended December |  | 
|-------------------- |  | ------------------- |  |  | ------------------- |  | 
|                     |  | 31, 2003            |  |  | 31, 2002            |  | 
|Audit fees (1)       |  | 41,000              |  |  | 124,120             |  | 
|Audit  related fees |  | -                   |  |  |                     |  | 
|Tax fees             |  | -                   |  |  | 44,512              |  | 
|All other fees       |  | -                   |  |  |                     |  | 
|Total                |  | 41,000              |  |  | 168,632             |  | 

(1) "Audit Fees" represent fees for the audit of the
  Company's annual financial statements, and review in connection with the Company's
  statutory and regulatory filings.

The Audit Committee has adopted procedures requiring Audit Committee
  review and approval in advance of all particular engagements for services to
  be provided by SmytheRatcliffe. Consistent with applicable laws, the procedures
  permit limited amounts of services, other than audit, review and attest services,
  to be approved by one or more members of the Audit Committee pursuant to authority
  delegated by the Audit Committee, provided the Audit Committee is informed of
  each particular service. The Audit Committee approved all of the engagements
  and fees during the year ended December 31, 2003. The Audit Committee reviews
  with SmytheRatcliffe whether the non-audit services to be provided are compatible
  with maintaining the auditors' independence. The Board has determined that,
  beginning with January 1, 2004, fees paid to the independent auditors for non-audit
  related services in any year will not exceed the fees paid for audit services
  during the year. Permissible non-audit services will be limited to fees for
  tax services, accounting assistance or audits in connection with acquisitions,
  and other services specifically related to accounting or audit matters such
  as registration statements filings or private placements or public offerings.

|D) | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
      COMMITTEES
|-- | ----------------------------------------------------------------

Not Applicable.

|E) | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
      AFFILIATED PURCHASERS
|-- | ----------------------------------------------------------------------------

Not Applicable.

|ITEM XVII | FINANCIAL STATEMENTS
|--------- | --------------------

See the Financial Statements and Exhibits listed in Item XIX
hereof and filed as part of this Annual Report. Included are audited
consolidated balance sheets as at December 31, 2003 and 2002, and the
consolidated statements of operations and deficit and cash flows for each of the
years ended December 31, 2003, 2002 and 2001, including the Auditors Report to
Shareholders.

These financial statements were prepared in accordance with
Canadian GAAP and are expressed in Canadian dollars. Such financial statements
have been reconciled to U.S. GAAP (see note 21 therein). For a history of
exchange rates in effect for Canadian dollars as against U.S. dollars, see Item
III - Key Information, Selected Financial Data  Exchange Rate Data.

|ITEM XVIII | FINANCIAL STATEMENTS
|---------- | --------------------

Not applicable.

(55)

---

|ITEM XIX. | EXHIBITS
|--------- | --------

Exhibits attached to this Form 20-F are as follows:

Financial Statements

|(i)   | Auditors Report dated August 16,
        2004.                                                                                                                                                                                                                                                                                                    
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(ii)  | Consolidated Balance Sheets as at December
        31, 2003, 2002.                                                                                                                                                                                                                                                                                 
|(iii) | Consolidated Statements of Operations
        and Deficit for the years ended December 31, 2003, 2002 and 2001.                                                                                                                                                                                                                                    
|(iv)  | Consolidated Statements of Cash Flows
        for the years ended December 31, 2003, 2002 and 2001.                                                                                                                                                                                                                                                
|(v)   | Notes to the Consolidated Financial
        Statements for the years ended December 31, 2003, 2002 and 2001 Financial
        Statements Schedules are omitted because they are not applicable, not
        required or because the required information is included in the consolidated
        financial statement or notes thereto filed within.

(56)

---

|Exhibit |  | Description                                                                                          
|------- |  | -----------------------------------------------------------------------------------------------------
|        |  |                                                                                                      
|1.1     |  | Registered Incorporation Memorandum. (1).                                                            
|        |  |                                                                                                      
|1.2     |  | Articles of Continuance into Ontario. (1).                                                           
|        |  |                                                                                                      
|1.3     |  | Articles of Amendment, Change of Name. (1).                                                          
|        |  |                                                                                                      
|2b.1    |  | Convertible Debentures for $124,510, issued September
      2003. To be filed upon request.          
|        |  |                                                                                                      
|4.1     |  | Court Ordered Settlement
      by Ontario Superior Court, dated October 14, 2003. Filed herewith.    
|        |  |                                                                                                      
|4.2     |  | 4226054 Canada Inc., Commissison
      Agreement dated Janaury 1, 2004. Filed herewith.              
|        |  |                                                                                                      
|4.3     |  | 1617165 Ontario Inc.,
      Commissison Agreement dated November 1, 2005. Filed herewith.            
|        |  |                                                                                                      
|4.4     |  | 2094711 Ontario Limited,
      Commissison Agreement dated January 1, 2006 Filed herewith.           
|        |  |                                                                                                      
|4.5     |  | Loan Agreement, dated September 21, 2005. To be
      filed upon request.                            
|        |  |                                                                                                      
|4.5(i)  |  | First Ammendment to Loan Agreement, dated October
      21, 2005. To be filed upon request.          
|        |  |                                                                                                      
|4.5(ii) |  | Second Ammendment to Loan Agreement, dated November
      6, 2006. To be filed upon request.         
|        |  |                                                                                                      
|8.1     |  | List of Subsidiaries.
      Filed herewith.                                                          
|        |  |                                                                                                      
|11.1    |  | Code of Ethics, dated
      January 1, 2003. Filed herewith.                                         
|        |  |                                                                                                      
|12.1    |  | Section 302 Certification
      of Chief Executive Officer, dated December 15 , 2006. Filed herewith.
|        |  |                                                                                                      
|12.2    |  | Section 302 Certification
      of Chief Financial Officer, dated december 15, 2006. Filed herewith. 
|        |  |                                                                                                      
|13.1    |  | Section 906 Certification
      of Chief Executive Officer, dated December 15 , 2006. Filed herewith.
|        |  |                                                                                                      
|13.2    |  | Section 906 Certification
      of Chief Financial Officer, dated december 15, 2006. Filed herewith. 

(1) Previously Filed

(57)

---

INDEX TO FINANCIAL STATEMENTS

|                                                                                                             | page
|------------------------------------------------------------------------------------------------------------ | ----
|                                                                                                             |     
|Management’s Responsibility to Financial
      Reporting dated December 22, 2004                             | 59  
|                                                                                                             |     
|Auditors Report dated August 16,
      2004                                                                 | F-i 
|                                                                                                             |     
|Consolidated Balance Sheets as at December
      31, 2003, 2002                                              | F-1 
|                                                                                                             |     
|Consolidated Statements of operations
      and Deficit for the years ended December 31, 2003, 2002 and 2001 | F-2 
|                                                                                                             |     
|Consolidated Statements of Cash Flows
      for the years ended December 31, 2003, 2002 and 2001             | F-3 
|                                                                                                             |     
|Notes to the Consolidated Financial Statements
      for the years ended December 31, 2003, 2002 and 2001    | F-4 

(58)

---

December 22, 2004

Management's Responsibility for Financial Reporting

The accompanying consolidated financial statements of the company
  have been prepared by management in accordance with Canadian generally accepted
  accounting principles, and contain estimates based on management's judgment.
  Management maintains an appropriate system of internal controls to provide reasonable
  assurance that transactions are authorized, assets safeguarded, and proper records
  maintained.

The Audit Committee of the Board of Directors has met with the
  company's independent auditors to review the scope and results of the annual
  audit and to review the consolidated financial statements and related financial
  reporting matters prior to submitting the consolidated financial statements
  to the Board for approval.

The company's independent auditors, SmytheRatcliffe Chartered
  Accountants, are appointed by the shareholders to conduct an audit in accordance
  with generally accepted auditing standards in Canada and the United States,
  and their report follows.

|(signed) Martin Tutschek                | (signed) Dan Clozza               
|--------------------------------------- | ----------------------------------
|                                        |                                   
|Martin Tutschek Chief Financial Officer | Dan Clozza Chief Executive Officer

SIGNATURES

The Company hereby certifies that it meets all of the requirements
  for filing on Form 20-F and that it has duly caused and authorized the undersigned
  to sign this annual report on its behalf.

|       |                         |  |     | Forum National Investments Ltd.
|------ | ----------------------- |  | --- | -------------------------------
|       |                         |  |     | (Formerly inTravelnet.com Inc.)
|       |                         |  |     |                                
|Dated: | December
      22, 2006 |  | By: | /s/ *Martin
      Tutschek*    
|       |                         |  |     | Martin Tutschek, Director      

(59)

---



Consolidated Financial Statements 
  (Expressed in Canadian dollars)

FORUM NATIONAL INVESTMENTS LTD.(Formerly inTRAVELnet.com inc.)

Year ended December 31, 2003, 2002 and 2001



---

REPORT OF INDEPENDENT AUDITORS

TO THE SHAREHOLDERS OF FORUM NATIONAL INVESTMENTS LTD.

We have audited the consolidated balance sheet of Forum National
  Investments Ltd. (formerly inTRAVELnet.com) as at December 31, 2003 and the
  consolidated statements of operations and deficit and cash flows for the year
  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 audit.

We conducted our audit in accordance with auditing standards
  generally accepted in Canada and the standards of the Public Company Accounting
  Oversight Board [United States of America]. Those standards require that we
  plan and perform the audit to obtain reasonable assurance whether the financial
  statements are free of material misstatement. An audit includes examining, on
  a test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used
  and significant estimates made by management, as well as evaluating the overall
  financing statement presentation.

In our opinion, these consolidated financial statements present
  fairly, in all material respects, the financial position of the Company as at
  December 31, 2003 and the results of its operations and its cash flows for the
  year then ended in accordance with accounting principles generally accepted
  in Canada. Accounting principles generally accepted in Canada differ in certain
  significant respects from accounting principles generally accepted in the United
  States of America and are discussed in note 22 to the consolidated financial
  statements.

Comparative figures as at December 31, 2002 and for the year
  then ended were audited by other auditors and have been restated to reflect
  the retroactive changes in accounting policy described in note 2 of these financial
  statements.

Chartered Accountants

/s/ SmytheRatcliffe

Vancouver, Canada
  August 16, 2004, except for note 22 which is as of December 22, 2006

COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA  U.S.
  REPORTING DIFFERENCE

In the United States, reporting standards for auditors requires
  the addition of an explanatory paragraph (following the opinion paragraph) when
  the financial statements are affected by conditions and events that cast substantial
  doubt on the Companys ability to continue as a going concern, such as
  those described in note 3 to the consolidated financial statements. Our report
  to the shareholders dated August 16, 2004 is expressed in accordance with Canadian
  reporting standards which do not permit a reference to such events and conditions
  in the auditors report when these are adequately disclosed in the notes
  to the consolidated financial statements.

Chartered Accountants

/s/ SmytheRatcliffe LLP

Vancouver, Canada 
  December 22, 2006

F-i

---

FORUM NATIONAL INVESTMENTS LTD.(Formerly InTravelnet.com inc.)

Consolidated Balance Sheets 
  (Expressed in Canadian dollars)

December 31

|                                                                           |   |             |   |   | (Restated)  |  
|-------------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                                           |   | 2003        |   |   | 2002        |  
|Assets                                                                     |   |             |   |   |             |  
|                                                                           |   |             |   |   |             |  
|Current assets:                                                            |   |             |   |   |             |  
|Cash                                                                       | $ | 137,882     |   | $ | 72,219      |  
|Short term
      investments                                               |   | 13,000      |   |   | 10,000      |  
|Accounts and notes receivable
      (notes 2 and 5)                        |   | 614,290     |   |   | 789,906     |  
|Other receivables                                                          |   | 49,525      |   |   | -           |  
|Prepaid expenses                                                           |   | 14,833      |   |   | 9,660       |  
|Inventory
       condos                                                   |   | 21,645      |   |   | -           |  
|Amounts due from related parties (notes 12 and 19)                         |   | 1,680       |   |   | 56,873      |  
|                                                                           |   | 852,855     |   |   | 938,658     |  
|                                                                           |   |             |   |   |             |  
|Other receivables (note 7)                                                 |   | 669,216     |   |   | 531,590     |  
|Long-term receivables (notes 2 and 5)                                      |   | 856,243     |   |   | 453,918     |  
|Property, plant and equipment (note 8)                                     |   | 3,760,853   |   |   | 3,817,556   |  
|Deferred costs, net (note 9)                                               |   | 2,739,608   |   |   | 4,257,373   |  
|Other assets, net (note 9)                                                 |   | 15,000      |   |   | 17,500      |  
|Investment (note 10)                                                       |   | -           |   |   | 56,500      |  
|                                                                           |   |             |   |   |             |  
|                                                                           | $ | 8,893,775   |   | $ | 10,073,095  |  
|                                                                           |   |             |   |   |             |  
|Liabilities and Shareholders Deficiency                                   |   |             |   |   |             |  
|                                                                           |   |             |   |   |             |  
|Current liabilities:                                                       |   |             |   |   |             |  
|Accounts
      payable and accrued liabilities                             | $ | 977,252     |   | $ | 1,602,831   |  
|Deferred revenue, current
      portion (note 11)                          |   | 5,072,583   |   |   | 4,849,411   |  
|Amounts due
      to related parties (notes 12 and 19)                     |   | -           |   |   | 48,176      |  
|Current portion of advances
      against future revenue streams (note 13) |   | 243,322     |   |   | 250,900     |  
|Current portion
      of deferred gain (note 7)                            |   | 250,211     |   |   | -           |  
|Convertible debentures (note 14)                                           |   | 48,105      |   |   | 53,887      |  
|                                                                           |   | 6,591,473   |   |   | 6,805,205   |  
|                                                                           |   |             |   |   |             |  
|Deferred revenue (note 11)                                                 |   | 4,682,629   |   |   | 8,628,664   |  
|Advances against future revenue streams (note 13)                          |   | 27,549      |   |   | 333,073     |  
|Deferred gain (note 7)                                                     |   | 419,005     |   |   | 520,591     |  
|Convertible debentures
      (note 14)                                     |   | 124,510     |   |   | -           |  
|                                                                           |   | 11,845,166  |   |   | 16,287,533  |  
|                                                                           |   |             |   |   |             |  
|Shareholders deficiency:                                                  |   |             |   |   |             |  
|Share capital (note 16)                                                    |   | 15,028,187  |   |   | 15,028,187  |  
|Deficit                                                                    |   | (17,979,578 | ) |   | (21,242,625 |  
|Total Shareholders Deficiency                                             |   | (2,951,391  | ) |   | (6,214,438  | )
|                                                                           |   |             |   |   |             |  
|                                                                           | $ | 8,893,775   |   | $ | 10,073,095  |  
|                                                                           |   |             |   |   |             |  
|Continuing operations (note 3)                                             |   |             |   |   |             |  
|Commitment and contingencies (note 18)                                     |   |             |   |   |             |  

See accompanying notes to consolidated financial statements.

Approved on behalf of the Board:

|/s/ Dan
      Clozza | Director |  | /s/ Martin
      Tutschek | Director
|-------------------- | -------- |  | ------------------------- | --------
|Dan Clozza           |          |  | Martin Tutschek           |         

F-1

---

FORUM NATIONAL INVESTMENTS LTD.(Formerly InTravelnet.com inc.)

Consolidated Statements of Operations and Deficit 
  (Expressed in Canadian dollars)

Years ended December 31

|                                                           |   |             |   |   | (Restated)  |   |   | (Restated)  |  
|---------------------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
|                                                           |   | 2003        |   |   | 2002        |   |   | 2001        |  
|                                                           |   |             |   |   |             |   |   |             |  
|Revenues:                                                  |   |             |   |   |             |   |   |             |  
|Membership
      sales and travel revenue                  | $ | 6,490,652   |   | $ | 8,397,285   |   | $ | 9,178,534   |  
|Membership dues                                            |   | 2,211,120   |   |   | 2,360,214   |   |   | 1,966,427   |  
|Interest
      income                                      |   | 184,318     |   |   | 556,518     |   |   | 514,170     |  
|Administration, processing
      and other revenue         |   | 58,707      |   |   | 175,242     |   |   |            |  
|Miscellaneous                                              |   | 813,583     |   |   | 347,894     |   |   | 26,414      |  
|                                                           |   | 9,758,380   |   |   | 11,837,153  |   |   | 11,685,545  |  
|Expenses:                                                  |   |             |   |   |             |   |   |             |  
|Advertising and promotion                                  |   | 6,242       |   |   | 22,204      |   |   | 86,565      |  
|Amortization
      of deferred commission costs            |   | 1,589,766   |   |   | 1,597,220   |   |   | 1,285,311   |  
|Amortization of property,
      plant, equipment           |   |             |   |   |             |   |   |             |  
|and intangibles                                            |   | 68,045      |   |   | 141,487     |   |   | 980,094     |  
|Automotive                                                 |   | 121,205     |   |   | 120,008     |   |   | 210,905     |  
|Bad debts                                                  |   | 613,505     |   |   | 1,512,568   |   |   | 213,048     |  
|Bank charges and interest                                  |   | 265,465     |   |   | 309,362     |   |   | 338,546     |  
|Condominium
      rentals                                  |   | 480,236     |   |   | 493,110     |   |   | 1,026,326   |  
|Consulting fees                                            |   | 135,897     |   |   | 345,574     |   |   | 1,142,055   |  
|Direct selling
      expenses                              |   | 55,454      |   |   | 215,615     |   |   | 515,155     |  
|Equipment leases                                           |   | 81,504      |   |   | 109,922     |   |   | 111,520     |  
|Insurance                                                  |   | 33,509      |   |   | 63,086      |   |   | 70,907      |  
|Investor relations                                         |   | 21,720      |   |   | 27,044      |   |   | 34,382      |  
|Legal and
      accounting                                 |   | 497,840     |   |   | 452,454     |   |   | 464,144     |  
|Management fees                                            |   |            |   |   |            |   |   | 264,341     |  
|Marketing                                                  |   | 16,088      |   |   |            |   |   | 60,994      |  
|Office and related expenses                                |   | 306,534     |   |   | 711,193     |   |   | 1,228,884   |  
|Other expenses                                             |   | 61,078      |   |   | 78,699      |   |   | 112,347     |  
|Parts and maintenance                                      |   | 169,150     |   |   | 154,079     |   |   | 428,986     |  
|Postage,
      copying and printing                        |   | 60,441      |   |   | 125,970     |   |   | 255,377     |  
|Rent                                                       |   | 132,074     |   |   | 201,153     |   |   | 712,666     |  
|Travel                                                     |   | 131,562     |   |   | 107,676     |   |   | 696,013     |  
|Wages                                                      |   | 1,496,023   |   |   | 2,359,301   |   |   | 4,841,930   |  
|                                                           |   | 6,343,338   |   |   | 9,147,725   |   |   | 15,080,515  |  
|                                                           |   |             |   |   |             |   |   |             |  
|Income (loss) before the under noted items                 |   | 3,415,042   |   |   | 2,689,428   |   |   | (3,394,970  | )
|                                                           |   |             |   |   |             |   |   |             |  
|Gain on disposal of Fitness Vacations (note
      6)       |   |            |   |   | 445,157     |   |   |            |  
|Gain on sale of offices (note 7)                           |   |            |   |   | 279,418     |   |   |            |  
|Write-down of goodwill and membership contract
      costs |   |            |   |   | (311,890    | ) |   | (3,331,109  | )
|Write-down of investment and other receivables             |   | (106,557    | ) |   |            |   |   |            |  
|Write-down of property, plant and equipment (note 8)       |   |            |   |   | (1,793,237  | ) |   | (36,100     | )
|                                                           |   |             |   |   |             |   |   |             |  
|Income (loss) for the year before income taxes             |   | 3,308,485   |   |   | 1,308,876   |   |   | (6,762,179  | )
|                                                           |   |             |   |   |             |   |   |             |  
|Income tax (note 15)                                       |   | 45,438      |   |   | 35,247      |   |   | 54,593      |  
|Net Income (Loss)                                          |   | 3,263,047   |   |   | 1,273,629   |   |   | (6,816,772  | )
|                                                           |   |             |   |   |             |   |   |             |  
|Deficit, beginning of year                                 |   | (21,242,625 | ) |   | (22,516,968 | ) |   | (14,997,196 | )
|Deficit, end of year                                       | $ | (17,979,578 | ) | $ | (21,242,625 | ) | $ | (21,813,968 | )
|                                                           |   |             |   |   |             |   |   |             |  
|Basic and diluted earnings (loss) per share (note 17)      | $ | 2.36        |   | $ | 0.92        |   | $ | (4.49       | )

See accompanying notes to consolidated financial statements.

F-2

---

FORUM NATIONAL INVESTMENTS LTD.(Formerly InTravelnet.com inc.)

Consolidated Statements of Cash Flows 
  (Expressed in Canadian dollars)

Years ended December 31

|                                                           |   |            |   |   | (Restated) |   |   | (Restated) |  
|---------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
|                                                           |   | 2003       |   |   | 2002       |   |   | 2001       |  
|                                                           |   |            |   |   |            |   |   |            |  
|Cash flows from operating activities:                      |   |            |   |   |            |   |   |            |  
|Operations:                                                |   |            |   |   |            |   |   |            |  
|Net income
      (loss)                                    | $ | 3,263,047  |   | $ | 1,273,629  |   | $ | (6,816,772 | )
|Items not involving cash:                                  |   |            |   |   |            |   |   |            |  
|Expenses and accounts payable settled                      |   |            |   |   |            |   |   |            |  
|by issuance of capital                                     |   |           |   |   |           |   |   | 163,320    |  
|Amortization of property, plant, equipment,                |   |            |   |   |            |   |   |            |  
|membership contracts and intangibles                       |   | 68,045     |   |   | 141,487    |   |   | 980,094    |  
|Gain on disposal                                           |   |           |   |   | (445,157   | ) |   |           |  
|Gain on sale of offices                                    |   |           |   |   | (279,418   | ) |   |           |  
|Loss on cancellation of lease agreement (note
      18(a)) |   |           |   |   |           |   |   | 131,312    |  
|Write-down of membership contract costs                    |   |            |   |   |            |   |   |            |  
|and goodwill                                               |   |           |   |   | 311,890    |   |   | 3,331,109  |  
|Write-down of property, plant and equipment                |   |           |   |   | 1,793,237  |   |   | 36,100     |  
|Write-down of investment                                   |   | 56,500     |   |   |           |   |   |           |  
|Accretion of discount on advances against                  |   |            |   |   |            |   |   |            |  
|future revenue streams (note 13)                           |   | 137,162    |   |   | 119,652    |   |   | 29,129     |  
|Revenue recognized on advances against                     |   |            |   |   |            |   |   |            |  
|future revenue streams (note 13)                           |   | (577,015   | ) |   | (534,351   | ) |   | (151,146   | )
|Changes in non-cash operating
      working capital:       |   |            |   |   |            |   |   |            |  
|Accounts receivable and other receivables                  |   | (11,534    | ) |   | (192,691   | ) |   | 538,121    |  
|Prepaid expenses                                           |   | (5,172     | ) |   | 69,338     |   |   | (1,693     | )
|Inventory  Condos                                        |   | (21,645    | ) |   |           |   |   |           |  
|Decrease (increase) of long-term receivables               |   | (402,326   |   |   | 2,743,578  |   |   | (1,562,722 | )
|Deferred costs                                             |   | 1,517,764  |   |   | 1,100,356  |   |   | (1,562,722 | )
|Accounts payable and accrued liabilities                   |   | (625,579   | ) |   | 260,338    |   |   | 287,870    |  
|Deferred revenue                                           |   | (3,722,863 | ) |   | (7,168,945 | ) |   | 2,847,965  |  
|Deferred
      gain                                        |   | 148,625    |   |   | 520,591    |   |   |           |  
|Cash flows used in operating activities                    |   | (174,991   | ) |   | (286,466   | ) |   | (187,313   | )
|                                                           |   |            |   |   |            |   |   |            |  
|Cash flows from (used in) investing activities:            |   |            |   |   |            |   |   |            |  
|Purchase of investment                                     |   |           |   |   | (56,500    | ) |   |           |  
|Proceeds
      from sale of offices                        |   |           |   |   | 170,000    |   |   |           |  
|Purchase of property, plant
      and equipment            |   | (8,842     | ) |   | (20,816    | ) |   | (514,423   | )
|Acquisition of short term investments                      |   | (3,000     | ) |   | (10,000    | ) |   |           |  
|Cash flows from (used
      in) investing activities:      |   | (11,842    | ) |   | 82,684     |   |   | (514,423   | )
|                                                           |   |            |   |   |            |   |   |            |  
|Cash flows from (used in) financing activities:            |   |            |   |   |            |   |   |            |  
|Repayment
      of convertible debentures                  |   | (5,782     | ) |   | (20,571    | ) |   | (53,206    | )
|Proceeds from advances against
      future revenue        |   |            |   |   |            |   |   |            |  
|streams
      (note 13)                                    |   | 126,751    |   |   | 163,381    |   |   | 957,308    |  
|Amounts due to to related
      parties                    |   | 7,017      |   |   | (43,362    | ) |   | (203,437   | )
|Proceeds
      from convertible debentures (note 12 & 14)  |   | 124,510    |   |   |           |   |   |           |  
|Issuance of share capital                                  |   |           |   |   |           |   |   | 65,115     |  
|Cash flows from (used in) financing activities:            |   | 252,496    |   |   | 99,448     |   |   | 765,780    |  
|                                                           |   |            |   |   |            |   |   |            |  
|Increase (decrease) in cash                                |   | 65,663     |   |   | (104,334   | ) |   | 64,044     |  
|                                                           |   |            |   |   |            |   |   |            |  
|Cash, beginning of year                                    |   | 72,219     |   |   | 176,553    |   |   | 112,510    |  
|                                                           |   |            |   |   |            |   |   |            |  
|Cash, end of year                                          | $ | 137,882    |   | $ | 72,219     |   | $ | 176,554    |  
|                                                           |   |            |   |   |            |   |   |            |  
|Supplemental cash flow information (note 20)               |   |            |   |   |            |   |   |            |  

See accompanying notes to consolidated financial statement

F-3

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|1. | Incorporation and nature of Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company was incorporated on September 22, 1995,
        under the Business Corporations Act of British Columbia and commenced
        operations on that date. On October 2, 1997, the Company was continued
        under the laws of the Province of Ontario. Effective February 26, 1999,
        the Company changed its name from Snowbird Vacations International Inc.
        to inTRAVELnet.com inc. and on April 17, 2002, the Companys name
        was changed to Forum National Investments Ltd.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company earns dues from members of its travel club,
        who are entitled to the full-travel services of the Company and the charter
        services available on the Companys houseboat fleet.                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|2. | Change in Accounting Policy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company previously excluded from the balance sheet
        the amounts receivable from the sale of memberships that were not due
        until future years (note 4(d) and 5). In 2003 the Company corrected its
        accounting and now reports long-term receivables net of estimated uncollectible,
        deferred interest and potential GST accruals.                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Accordingly, the Company's consolidated balance sheet for 2002 has been
      retroactively restated as follows:                                                                                                                                                                                                                                                                                                                                                                                                 

| | Long term receivables as previously reported                    | $ | -          | 
| | --------------------------------------------------------------- | - | ---------- | 
| | Membership sales receivable in future years previously excluded |   | 453,918    | 
| |                                                                 |   |            | 
| | Long term receivables
      as restated                         | $ | 453,918    | 
| |                                                                 |   |            | 
| | Current deferred revenue as previously reported                 | $ | 4,686,091  | 
| | Long term deferred revenue as previously
      reported         |   | 8,338,066  | 
| | Deferred revenue previously
      excluded                      |   | 453,918    | 
| |                                                                 |   |            | 
| | Deferred revenue as
      end of year, as restated              | $ | 13,478,075 | 

F-4

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|   | Total assets are increased by $2, 464,542
        and total shareholders deficiency is likewise reduced.
      Corporate income tax loss available for carry-forward has
        also been reduced by $2,464,542 at December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | Going concern:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | For the year ended December 31, 2003 the Company
        had net income of $3,263,047 compared to net income of $1,273,629 (as
        restated for the year ended December 31, 2002 and a loss of $6,816,772
        (as restated) for the year ended December 31, 2001. In 2003, the Company
        used net cash in operating activities of $174,991 and at December 31,
        2003 had a working capital deficiency of $5,738,618 (2002 - $5,866,547
        as restated) and a shareholders deficiency of $2,951,391 (2002 - $6,214,438
        as restated).
      These financial statements have been prepared on a going-concern-basis,
        which contemplates the realization of assets and satisfaction of liabilities
        in the normal course of business. Accordingly, these financial statements
        do not include any adjustments to the specific amounts and classifications
        of assets and liabilities which might be necessary should the Company
        be unable to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4. | Significant accounting policies:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-5

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|4. | Significant accounting policies (continued):
|-- | --------------------------------------------
|   |                                             
|   |                                             

| |     | Adjusted net income (loss) per share is not different
        from reported income (loss) per share as a result of the adjustment to
        exclude amortization expense related to goodwill.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | Upon adoption on January 1, 2002, the Company performed
        the first step in the test for goodwill impairment and determined that
        the goodwill was considered not to be impaired. The Company performed
        this test again at December 31, 2002 and has written off the remaining
        balance of goodwill of $22,338.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | The Companys other intangible assets are all determined
        to have a finite useful life and are amortized according to the policies
        in effect before January 1, 2002. This policy includes a periodic review
        of the recoverability of the intangibles. During the year 2002, management
        assessed the recoverability of membership contract costs and determined
        that a permanent impairment in value had occurred. Accordingly, the unamortized
        membership contract costs were written down by $289,552 to $ nil based
        on estimated undiscounted future cash flows. In determining the estimated
        recoverable amount, the Company took into consideration recent financial
        performance and its forecast of future performance.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (b) | Stock-based Compensation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | Effective January 1, 2002, the Company adopted the new
        Recommendations of the CICA regarding Stock-based compensation and
        other stock-based payments. The Recommendations are applied prospectively
        to all stock-based payments to employees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-6

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|4. | Significant accounting policies (continued):
|-- | --------------------------------------------
|   |                                             
|   |                                             
|   |                                             
|   |                                             
|   |                                             
|   |                                             
|   |                                             
|   |                                             
|   |                                             
|   | (c)                                         
|   |                                             
|   |                                             
|   |                                             
|   | (d)                                         
|   |                                             
|   |                                             

Incorporating
      Date of acquisitionSubsidiary
      jurisdiction
      or incorporationinTRAVELnet Inc.
      Alberta, Canada
      November 9, 1999ATM Travel Group Ltd. (ATM)
      British Columbia, Canada
      April 3, 2000


All significant inter-company balances
  and transactions have been eliminated.

As described in note 22, Canadian GAAP
  differ in certain material aspects from accounting principles generally accepted
  in the United States (US GAAP)

F-7

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|4. | Significant accounting policies (continued):
|-- | --------------------------------------------
|   |                                             
|   | (e)                                         
|   |                                             
|   |                                             
|   |                                             
|   | (f)                                         
|   |                                             
|   |                                             
|   |                                             
|   |                                             

| | Asset                    | Basis         | Rate   
| | ------------------------ | ------------- | -------
| |                          |               |        
| | Motor vessels            | Straight-line | 4%     
| | Houseboats               | Straight-line | 4%     
| | Service boats            | Straight-line | 10%    
| | Automobiles and trailers | Straight-line | 25%    
| | Tools                    | Straight-line | 20%    
| | Equipment                | Straight-line | 20%    
| | Computers                | Straight-line | 30%    
| | Leasehold improvements   | Term of lease | 5 years
| | Website development      | Straight-line | 50%    
| |                          |               |        

| | (g) | Deferred costs:                                                                                                                                                                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                             
| |     | Sales commissions are deferred and amortized to operations
        on the same basis as the related membership sales are recognized as revenue.                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                             
| | (h) | Purchased intangibles:                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                             
| |     | The Company defers and amortizes the cost of purchased
        intangibles, which consists of a license that allows ATM to purchase airline
        tickets for the Companys travel service business. Amortization is
        provided on a straight-line basis over a period of ten years.

F-8

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|4. | Significant accounting policies (continued):
|-- | --------------------------------------------
|   |                                             
|   | (i)                                         
|   |                                             
|   |                                             
|   |                                             
|   | (j)                                         
|   |                                             
|   |                                             
|   |                                             
|   | (k)                                         
|   |                                             
|   |                                             
|   |                                             
|   | (l)                                         
|   |                                             
|   |                                             
|   |                                             
|   | (m)                                         
|   |                                             
|   |                                             

F-9

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|4. | Significant accounting policies (continued):                                                                                                                                                                                                                                                                                                                                                    
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (m)                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (n)                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (o)                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|5. | Long-term receivables                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Long-term receivables represent the non-current
        portion of amounts due to the Company in conjunction with membership and
        travel club sales. These receivables are evidenced by promissory notes
        bearing interest at an average rate of 8% per annum and are repayable
        over periods not exceeding 60 months.                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|6. | Sale of Fitness Vacations Inc.:                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Effective January 1, 2002, the Company completed
        the sale of International Fitness Vacations Inc. (Fitness Vacations),
        a wholly-owned subsidiary involved in the marketing of gym and travel
        club memberships for a consideration of 80,000 of the Companys own
        shares, having a fair value of $191,648, resulting in a gain on disposal
        of $445,157.
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The net liabilities of Fitness Vacations on
        January 1, 2002 were comprised of:                                                                                                                                                                                                                                                                                                          

| | Current assets                           | $ | 167,782  |  
| | ---------------------------------------- | - | -------- | -
| | Capital assets                           |   | 165,489  |  
| | Accounts payable and accrued liabilities |   | (16,395  | )
| | Deferred revenue                         |   | (570,385 | )
| |                                          |   |          |  
| |                                          | $ | (253,509 | )

F-10

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|7. | Judgment obtained in Ontario Litigation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On October 14, 2003 the Company obtained judgment in
        the Superior Court of Justice. The judgment was by way of settlement agreement.
        The Company had filed suit against former employees and agents and shareholders
        of the company: REMO LORENZETTO, WALTER VERBETIC, 1508812 ONTARIO INC,
        FAMILY VACATION CENTERS LTD, SNOWBIRD SALES AND MARKETING INC, and 849092
        ALBERTA LTD, et al. The suit had alleged breach of contract, breach of
        fiduciary duty, and further, that the defendants had engaged in a pattern
        of misconduct aimed at destroying the Companys relationship with
        its Snowbird Travel Club members and fundamentally undermining the viability
        of the Companys business operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | As a result $669,216 pursuant to the promissory notes
        (the "Promissory Notes") executed after March 1, 2002 by members of the
        Company`s travel club which, on their face, are stated to be held by any
        of the Company, Intravelnet.com, Snowbird Vacations International, Snowbird
        Vacations or either Snowbird Marketing or 1508812 Ontario Inc. as agent
        for any of the foregoing, are to be paid to and received by the Company.                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The FVC Defendants and all other Applicants to the case
        will deliver up to the Company for cancellation all share certificates
        of the Company in which he, she or it has a beneficial or legal interest.
        It is estimated that this total will approximate 300,000 common shares
        of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|8. | Property, plant and equipment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                        |   |           |  |   | Accumulated  |  |   | Net book  | 
| | ---------------------- | - | --------- |  | - | ------------ |  | - | --------- | 
| | 2003                   |   | Cost      |  |   | amortization |  |   | value     | 
| |                        |   |           |  |   |              |  |   |           | 
| | Motor vessel           | $ | 3,200,000 |  | $ | -            |  | $ | 3,200,000 | 
| | Houseboats             |   | 764,698   |  |   | 247,267      |  |   | 517,431   | 
| | Service boats          |   | 49,979    |  |   | 38,711       |  |   | 11,268    | 
| | Equipment              |   | 205,342   |  |   | 176,508      |  |   | 28,834    | 
| | Computers              |   | 106,458   |  |   | 104,315      |  |   | 2,143     | 
| | Leasehold improvements |   | 25,461    |  |   | 24,284       |  |   | 1,177     | 
| |                        |   |           |  |   |              |  |   |           | 
| |                        | $ | 4,351,938 |  | $ | 591,085      |  | $ | 3,760,853 | 

| |                        |   |           |  |   | Accumulated  |  |   | Net book  | 
| | ---------------------- | - | --------- |  | - | ------------ |  | - | --------- | 
| |                        |   |           |  |   | amortization |  |   |           | 
| |                        |   |           |  |   | and          |  |   |           | 
| | 2002                   |   | Cost      |  |   | write-downs  |  |   | value     | 
| |                        |   |           |  |   |              |  |   |           | 
| | Motor vessel           | $ | 5,661,776 |  | $ | 2,461,776    |  | $ | 3,200,000 | 
| | Houseboats             |   | 764,698   |  |   | 216,680      |  |   | 548,018   | 
| | Service boats          |   | 49,980    |  |   | 33,714       |  |   | 16,266    | 
| | Equipment              |   | 198,647   |  |   | 155,712      |  |   | 42,935    | 
| | Computers              |   | 104,316   |  |   | 100,246      |  |   | 4,070     | 
| | Leasehold improvements |   | 25,461    |  |   | 19,194       |  |   | 6,267     | 
| |                        |   |           |  |   |              |  |   |           | 
| |                        | $ | 6,804,878 |  | $ | 2,987,322    |  | $ | 3,817,556 | 

F-11

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|8. | Property, plant and equipment (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | At December 31, 2003, the Companys motor vessel
        is under construction and therefore is not being amortized. In 2002, the
        Company recorded a write-down of $1,784,000 to reduce the carrying value
        of the motor vessel to its fair value of $3,200,000 as determined by an
        independent marine surveyor.                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In January and May 2002, the Company signed letters
        of intent with 968632 Alberta Ltd. (the Alberta Purchaser),
        which defined the price and terms of sale for its Edmonton and Calgary
        telemarketing and sales offices. Under the terms of the letters of intent,
        the Alberta Purchaser would pay a total of $360,000 in monthly installments
        of $20,000 for the offices and chattels, which had a total net book value
        of $95,186 on the dates the letters of intent were signed.       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In May 2002, the Province of Alberta enacted laws affecting
        companies selling travel club memberships. The Alberta Purchaser did not
        comply with these laws and ceased operations in the Province of Alberta
        in September 2002.                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | An amount of $170,000 was received on the sale of the
        Alberta offices and a gain of $74,814 was recognized in the statement
        of operations.                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In January 2002, the Company signed a letter of intent
        with 849092 Alberta Ltd., (the Ontario Purchaser), which defined
        the price and terms of sale for its London, Windsor and Kitchener telemarketing
        and sales offices. Under the terms of the letter of intent, the Ontario
        Purchaser would pay $400,000 in monthly installments of $20,000 and return
        80,000 of the Companys common shares, which had a market value of
        $204,604 on the date the letter of intent was signed.      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company commenced legal action against the Ontario
        Purchaser for breach of contract (note 7). The Company recognized a gain
        of $204,604 on sale of the offices, which is equal to the total share
        consideration received by the Company. The remaining gain on the sale
        of the Ontario office has been deferred until the amount receivable from
        the Ontario Purchaser is received. The balance of the deferred gain represents
        commission and royalties receivable from the purchaser.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|9. | Other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| |                          |   | 2003      |  |   | 2002      | 
| | ------------------------ | - | --------- |  | - | --------- | 
| | Purchased intangibles    | $ | 25,000    |  | $ | 25,000    | 
| | Accumulated amortization |   | 10,000    |  |   | 7,500     | 
| |                          | $ | 15,000    |  | $ | 17,500    | 
| |                          |   |           |  |   |           | 
| | Deferred Costs           | $ | 4,257,374 |  | $ | 5,357,729 | 
| | Accumlated amortization  |   | 1,517,766 |  |   | 1,100,356 | 
| |                          | $ | 2,739,608 |  | $ | 4,257,373 | 

|10. | Investment:                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                    
|    | In 2002, the Company advanced funds to Merch Motorcycles
        Ltd. (Merch), a privately-owned Canadian motorcycle manufacturing
        company. The Companys investment represented a 7% ownership interest
        in Merch and was recorded at cost. The Company wrote off the investment
        in 2003.

F-12

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|11. | Deferred revenue:
|--- | -----------------

| |                                    |   | 2003      |  |   | 2002       | 
| | ---------------------------------- | - | --------- |  | - | ---------- | 
| | Deferred membership sales and dues | $ | 9,755,212 |  | $ | 13,024,157 | 
| | Current portion                    |   | 5,072,583 |  |   | 4,686,091  | 
| |                                    | $ | 4,682,629 |  | $ | 8,338,066  | 

The deferred membership sales and dues
  relates to the portion of revenue which entitles members to use the Companys
  vacation and travel club privileges at a future date. The revenue is recognized
  as indicated in note 4(d).

During the year, the Company entered
  into travel club membership agreements with a total value of $135,810 (2002
  - $2,488,346). The following table reconciles the total value of these travel
  club memberships entered into during the year to the amounts due to be received
  in future years from these agreements. As described in note 4(d), the revenue
  from these memberships are recognized evenly over the term of the membership.

| |                                                                      |   | 2003    |   |   | 2002       |  
| | -------------------------------------------------------------------- | - | ------- | - | - | ---------- | -
| |                                                                      |   |         |   |   |            |  
| | Travel Club Memberships entered into during
      the year           | $ | 135,810 |   | $ | 2,488,346  |  
| | Amount recognized
      as revenue during the year                   |   | (27,162 | ) |   | (471,206   | )
| |                                                                      |   |         |   |   |            |  
| | Future years revenue to be earned from current year                  |   |         |   |   |            |  
| | membership agreements                                                |   | 108,648 |   |   | 2,017,140  |  
| | Cash collected during
      the year related to future years revenue |   | (79,487 | ) |   | (1,563,222 | )
| |                                                                      |   |         |   |   |            |  
| | Amounts due to be received and recognized as revenue in              |   |         |   |   |            |  
| | subsequent years from current year membership
      agreements       | $ | 29,161  |   | $ | 453,918    |  

|12. | Amounts due from related parties:                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                   
|    | The amounts due from directors and officers are unsecured,
        non-interest bearing and repayable on demand and relate primarily to advances
        made by the Company, net of expenditures.
|    |                                                                                                                                                                                                   
|13. | Advances against future revenue streams:                                                                                                                                                          
|    |                                                                                                                                                                                                   
|    | During the years ended December 31, 2003 and 2002, the
        Company sold future streams of revenue as described in note 4(j). The
        activity is summarized as follows:                   

F-13

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

| |                                                           |   | 2003     |   |   | 2002     |  
| | --------------------------------------------------------- | - | -------- | - | - | -------- | -
| |                                                           |   |          |   |   |          |  
| | Balance, January 1                                        | $ | 583,973  |   | $ | 835,291  |  
| | Proceeds from sale of future revenue streams, net of      |   |          |   |   |          |  
| | discount, reserve and buybacks                            |   | 126,751  |   |   | 163,381  |  
| | Accretion of discount to interest expense during the year |   | 137,162  |   |   | 119,652  |  
| | Recognition of membership revenues during the year        |   | (577,015 | ) |   | (534,351 | )
| |                                                           |   |          |   |   |          |  
| | Balance, December 31                                      |   | 270,871  |   |   | 583,973  |  
| | Current portion                                           |   | 243,322  |   |   | 250,900  |  
| |                                                           |   |          |   |   |          |  
| | Long-term portion                                         | $ | 27,549   |   | $ | 333,073  |  

|14. | Convertible debentures:                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | During 2003, $5,782 (2002 - $20,571) of convertible
        debentures were repaid. There were no conversions during 2003 or 2002.
        The debentures bear interest at a rate of 8% per annum and were convertible
        into common shares prior to their maturity. The convertible debentures
        issued prior to December 31, 2002 are fully matured at December 31, 2003.                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | During 2003 the Company issued convertible debentures
        in the amount of $124,510 to officers, directors and shareholders of the
        Company. The debentures will mature in 2 years from date of issuance.
        A conversion privilege to convert to common shares of the Company is subject
        to approval by shareholders at the Annual General Meeting (held June 2,
        2004, Note 21).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|15. | Income taxes:                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The effective income tax rate differs from the Canadian
        statutory income tax rate. The principal factor causing the different
        rates is shown below:                                                                                                                                                                                                                                              

| |                                                 |   | 2003     |   |   | 2002       |   |   | 2001       |  
| | ----------------------------------------------- | - | -------- | - | - | ---------- | - | - | ---------- | -
| |                                                 |   |          |   |   |            |   |   |            |  
| | Statutory income tax rate                       |   | 36.8%    |   |   | 39.1%      |   |   | 43.26%     |  
| |                                                 |   |          |   |   |            |   |   |            |  
| | Statutory rate applied to income (loss) from    |   |          |   |   |            |   |   |            |  
| | operations before income taxes                  | $ | 845,605  |   | $ | 1,200,812  |   | $ | (2,325,452 | )
| | Non-deductible expenses                         |   | 64,257   |   |   | 421,267    |   |   | 1,592,452  |  
| | Large corporations tax                          |   | 45,438   |   |   | 35,247     |   |   | 54,593     |  
| | Financing costs                                 |   | -        |   |   | -          |   |   | (14,021    | )
| | Benefit to current years losses not recognized |   | -        |   |   | 428,480    |   |   | 747,024    |  
| | Change in valuation allowance                   |   | (909,862 | ) |   | (2,050,559 | ) |   | -          |  
| |                                                 |   |          |   |   |            |   |   |            |  
| |                                                 | $ | 45,438   |   | $ | 35,247     |   | $ | 54,593     |  

F-14

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|15. | Income taxes (continued):                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                
|    | The tax effects of the significant temporary differences,
        which comprise the deferred tax assets and liabilities at December 31,
        2003 and 2002, are as follows:

| |                                                               |   | 2003       |   |   | 2002       |  
| | ------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                                               |   |            |   |   |            |  
| | Future income tax assets:                                     |   |            |   |   |            |  
| | Non-capital loss carry forwards                               | $ | 1,188,040  |   | $ | 3,319,426  |  
| | Capital loss
      carry forwards                             |   | 28,595     |   |   | 39,963     |  
| | Property, plant and equipment
       un depreciated tax cost |   |            |   |   |            |  
| | in excess of net book value                                   |   | 1,423,931  |   |   | 1,355,323  |  
| | Intangibles                                                   |   | 1,269,743  |   |   | 1,359,484  |  
| |                                                               |   |            |   |   |            |  
| | Total gross future income tax assets                          |   | 3,910,309  |   |   | 6,074,196  |  
| |                                                               |   |            |   |   |            |  
| | Valuation allowance                                           |   | (3,910,309 | ) |   | (6,074,196 | )
| |                                                               |   |            |   |   |            |  
| | Net future income
      tax asset                             | $ | -          |   | $ | -          |  

|    | The ultimate realization of the future tax assets is
        dependent upon the generation of future taxable income during the periods
        in which those temporary differences become deductible. In assessing the
        reliability of future tax assets, management considers whether it is more
        likely than not that some portion or all of the future tax assets will
        be realized. Where management does not believe that realization is more
        likely than not, a valuation allowance is provided.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company has non-capital income tax loss carry forwards
        of approximately $1,108,458 available to reduce future years taxable income
        to 2007                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company has a capital loss carry forward of $277,800
        which can be carried forward indefinitely.                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|16. | Share capital:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Effective July 5, 2002 the Companys shares were
        consolidated on a ten (10) old for one (1) new basis. The prior years
        numbers have been retroactively adjusted to reflect this reverse stock
        split.                                                                                                                                                                                                                                                                                                        

| | (a) | The authorized share capital of the Company consists
        of 100,000,000 common shares.
| | --- | ------------------------------------------------------------------------------------------

F-15

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|16. | Share capital (continued):
|--- | --------------------------

| | (b) | The issued share capital of the Company is as follows:
| | --- | ------------------------------------------------------

| |                                                           |  | Number    |   |   |            |  
| | --------------------------------------------------------- |  | --------- | - | - | ---------- | -
| |                                                           |  | of shares |   |   | Amount     |  
| |                                                           |  |           |   |   |            |  
| | Issued and outstanding, December 31, 2001                 |  | 1,546,961 |   | $ | 15,424,439 |  
| |                                                           |  |           |   |   |            |  
| | Issued during the year ended December 31, 2002
      for: |  |           |   |   |            |  
| | Incentive share purchase
      plan (note 16(d))          |  | 2,810     |   |   | -          |  
| | Cancellation
      of consulting services contract        |  | (5,000    | ) |   | -          |  
| | Shares received as consideration
      for sale of        |  |           |   |   |            |  
| | property,
      plant and equipment (note 8)              |  | (80,000   | ) |   | (204,604   | )
| | Shares received as consideration
      for International  |  |           |   |   |            |  
| | Fitness Vacations Inc.
      (note 6)                     |  | (80,000   | ) |   | (191,648   | )
| |                                                           |  |           |   |   |            |  
| | Issued and outstanding, December 31, 2002                 |  | 1,384,771 |   |   | 15,028,187 |  
| |                                                           |  |           |   |   |            |  
| | Issued during the year ended December 31, 2003            |  | -         |   |   | -          |  
| |                                                           |  |           |   |   |            |  
| | Issued and outstanding, December 31, 2003                 |  | 1,384,771 |   | $ | 15,028,187 |  
| |                                                           |  |           |   |   |            |  

| |     | Shares issued for non-cash consideration have been recorded
        at the market value of the shares at the date of agreement.                                                                                                                                                                                                                 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                 
| | (c) | Options:                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                 
| |     | The Company has no outstanding employee and director
        stock options to purchase common shares of the Company.                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                 
| | (d) | Incentive share purchase plan:                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                 
| |     | In August 2000, an Incentive Share Purchase Plan (the
        Purchase Plan) was implemented to encourage directors, officers
        and employees (Participants) to purchase the Companys
        common shares at a discount to market values.                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                 
| |     | Under the Purchase Plan, eligible employees may contribute
        up to 10% of their basic annual salaries to make a lump sum purchase.
        Shares issued under the Purchase Plan are restricted from trading for
        one year from the date of issuance.                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                 
| |     | In 2002, 2,810 common shares were issued under the Purchase
        Plan relating to subscriptions received during 2001 prior to the termination
        of the Purchase Plan in September 2001. Accordingly, no additional value
        was assigned to the 2002 issuance of shares previously subscribed for
        under the Purchase Plan.

|17. | Earnings (loss) per share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Fully diluted earnings (loss) per share reflects the
        dilutive effect of the conversion of the convertible debentures outstanding
        at the end of the year or those items exercised or converted during the
        year, as if they had been exercised at the beginning of the year or the
        date issued, if later. Where the impact of conversion or exercise is anti-dilutive,
        the conversions are not included in the calculation of fully diluted per
        share amounts. For the years ended December 31, 2003, 2002 and there is
        no dilutive effect for potential conversions.

F-16

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|17. | Earnings (loss) per share (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Fully diluted earnings (loss) per share reflects
        the dilutive effect of the conversion of the convertible debentures outstanding
        at the end of the year or those items exercised or converted during the
        year, as if they had been exercised at the beginning of the year or the
        date issued, if later. Where the impact of conversion or exercise is anti-dilutive,
        the conversions are not included in the calculation of fully diluted per
        share amounts. For the years ended December 31, 2003, 2002 and there is
        no dilutive effect for potential conversions.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|18. | Commitments and contingencies:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| | 2004 | $ | 59,329 | 
| | ---- | - | ------ | 
| | 2005 |   | 38,215 | 
| | 2006 |   | 29,239 | 
| | 2007 |   | 9,919  | 

| | (c) | The Company has commitments in respect of office leases
        with total aggregate payments due of approximately $409,704. Payments
        due in each of the next four years are as follows:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2004 | $ | 193,558 | 
| | ---- | - | ------- | 
| | 2005 |   | 161,135 | 
| | 2006 |   | 55,011  | 
| | 2007 |   | 0       | 

|19. | Related party transactions:                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                       
|    | In addition to related party transactions
        disclosed elsewhere in these financial statements, the following transactions
        have occurred:
|    |                                                                                                                                                       
|    | (a)                                                                                                                                                   

F-17

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|19. | Related party transactions (continued):
|--- | ---------------------------------------

| |     | Company. The Company also reimbursed $156,321 (2002
        - $138,802; 2001 - $271,140) to directors for expenditures made on behalf
        of the Company.                                                           
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                         
| | (b) | At December 31, 2003, an amount of $ NIL (2002 - $12,023;
        2001 - $12,023) payable by the Company to a company controlled by an officer
        of the Company, is outstanding and included in other receivables.
| |     |                                                                                                                                                                                                                         
| | (c) | During 2003, the Company wrote-off an amount of $84,781(2002
         $ NIL, 2001 - $181,152) being advances in lieu of expenses due
        from former officers and employees of the Company.                        

|20. | Supplementary information:
|--- | --------------------------
|    |                           
|    | Cash flow information:    

| |                                                   |   | 2003   |  |   | 2002    |  |   | 2001    | 
| | ------------------------------------------------- | - | ------ |  | - | ------- |  | - | ------- | 
| |                                                   |   |        |  |   |         |  |   |         | 
| | Interest paid                                     | $ | 23,347 |  | $ | 4,704   |  | $ | -       | 
| |                                                   |   |        |  |   |         |  |   |         | 
| | Non-cash financing and investing activities:      |   |        |  |   |         |  |   |         | 
| | Issuance of common shares for:                    |   |        |  |   |         |  |   |         | 
| | Settlement of expenses and accounts
      payable |   | -      |  |   | -       |  |   | 163,320 | 
| | Receivable from the exercise of stock options     |   | -      |  |   | -       |  |   | 302,175 | 
| | Common shares of the Company received for:        |   |        |  |   |         |  |   |         | 
| | Disposal of International Fitness Vacations Inc.  |   | -      |  |   | 191,648 |  |   | -       | 
| | Sale of property, plant and equipment             |   | -      |  |   | 204,604 |  |   | -       | 
| |                                                   |   |        |  |   |         |  |   |         | 

|21. | Subsequent events:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | During 2003, the Company issued unsecured convertible
        debentures in the amount of $124,510 to officers, directors and shareholders
        of the Company. The debentures carry a rate of interest of ten percent
        per annum payable semi-annually. The conversion feature of the debentures
        allows for the debenture holders to convert their capital at the option
        of the debenture holder at a rate of $0.03 CDN per share. The conversion
        privilege to convert to common shares was ratified by shareholders at
        the Annual General Meeting June 2, 2004. Subsequently the debenture holders
        converted all of the amounts outstanding resulting in the issuance of
        4,060,000 common shares of the Company.

F-18

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|22. | United States generally accepted accounting principles
        (U.S. GAAP) reconciliation:                                                                                                                                                                                                                                                                                                                                                                                         
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | These financial statements have been prepared in accordance
        with accounting principles generally accepted in Canada (Canadian
        GAAP) which differ in certain respects from those principles and
        practices that the Company would have followed had its consolidated financial
        statements been prepared in accordance with generally accepted accounting
        principles in the United Sates of America (U.S. GAAP) as summarized
        below:

| | (a) | Stock-based compensation:
| | --- | -------------------------

| | (i)  | For U.S. GAAP purposes, the Company accounts for its
        employee stock-based compensation arrangements in accordance with the
        provisions of Accounting Principles Board (APB) Opinion No.
        25, Accounting for Stock Issued to Employees and related interpretations.
        As such, compensation expense under fixed plans is recorded on the grant
        date only if the market price of the Companys stock at that date
        exceeds the exercise price. Variable accounting is required to be applied
        if the exercise price of outstanding fixed stock options is reduced. Under
        variable accounting, the compensations expensed is re-measured based on
        the options intrinsic value at each reporting date until the date
        the award is exercised, forfeited or expires unexercised with changes
        in the intrinsic value recorded in the measurement of net income. For
        Canadian GAAP purposes the Company accounts for the issuance of stock
        options, whether made under a fixed or variable plan, to employees and
        directors by the settlement method which results in no compensation expense
        for the Companys stock-based employee compensation awards. Consideration
        paid by employees or directors on the exercise of stock options is recorded
        as share capital.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | For the year ended December 31, 2003, no employee stock
        options were granted. Accounting for employee stock options under U.S.
        GAAP would not result in additional compensation expense for fiscal 2003,
        2002, or 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (ii) | Under U.S. GAAP, the issue of stock options and warrants
        to non-employees is accounted for under Statement of Financial Accounting
        Standards No. 123 “Accounting for Stock-Based Compensation”
        (“SFAS 123”). The Company recognizes compensation expense
        for stock options, issued to non-employees for services received based
        upon the fair value of the services received or the equity instruments
        issued, whichever is more reliably determined. During the year ended December
        31, 2002, the Company adopted the recommendations of the CICA Handbook
        section related to stock-based compensation payments (note 4(b). Under
        this new policy, stock options issued to non-employees after December
        31, 2001 are accounted for consistently with U.S. GAAP. Therefore, for
        the years ended December 31, 2003 and 2002, the only measurement difference
        for non-employees are those carried forward from the prior years as noted
        below. The fair value of the stock options and warrants granted to non-employees
        during the years ended December 31, 2001 and 2000 were estimated on the
        date of grant using the Black-Scholes option-pricing model and the following
        weighted-average assumptions:                                                         

F-19

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|22. | United States generally accepted accounting principles
        (U.S. GAAP) reconciliation (continued):
|--- | --------------------------------------------------------------------------------------------------------

| | (a) | Stock-based compensation (continued):
| | --- | -------------------------------------

| |                                | 2001      
| | ------------------------------ | ----------
| |                                |           
| | Expected volatility            | 1.73%     
| | Risk-free rate                 | 5.48%     
| | Dividend yield (find research) | 0.0%      
| | Expected life of options       | 0.61 years
| |                                |           

Accounting for the non-employee options
  on this basis would result in recording additional compensation expense and
  share capital of $ nil in 2003, 2002, and 2001 and would be a cumulative amount
  of $684,664 from the year of adoption of FAS No. 123 to December 31, 2001.

| | (b) | Valuation of stock issued for assets and services:
| | --- | --------------------------------------------------

| | (i)  | During the year ended December 31, 2000, the Company
        acquired International Fitness Vacations Inc. (note 6(c)) for 992,000
        common shares of the Company. Under Canadian GAAP, the acquisition was
        valued based on the estimated fair value of the assets acquired. For U.S.
        GAAP purposes the acquisition would be valued based on the market value
        of the shares given. Accordingly as at December 31, 2000, the application
        of U.S. GAAP would result in an increase in share capital of $1,217,705,
        an increase in goodwill of $1,105,346 and an increase in deficit of $112,359.                                                                                                            
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | During the year ended December 31, 2001, goodwill relating
        to the acquisition of International Fitness Vacations Inc. was written
        down, and as such, the additional goodwill recorded on the acquisition
        under U.S. GAAP was written off. Accordingly, as at December 31, 2001,
        the application of U.S. GAAP would result in an increase in share capital
        and deficit of $1,217,705. During the year ended December 31, 2002, the
        Company divested itself of 100% of its investment in International Fitness
        Vacations Inc. Accordingly, as at December 31, 2002 the application of
        US GAAP would result in a decrease in share capital and deficit of $585,748.                        
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (ii) | During the year ended December 31, 2001, the Company
        settled a number of accounts payable by the issuance of stock options
        and common shares. No accounts were settled in 2003 or 2002 by the issuance
        of stock options and or common shares of the Company. For Canadian GAAP
        purposes, the transactions were recorded at the carrying value of services
        received. For U.S. GAAP purposes, the transactions in 2001 and 2000 would
        be valued based on the market value of the options or shares issued. Accordingly,
        for the year ended December 31, 2003, the application of U.S. GAAP would
        result in an increase in share capital and deficit of $666,011 (2002 -
        $666,011).

F-20

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|22. | United States generally accepted accounting principles
        (U.S. GAAP) reconciliation (continued):
|--- | --------------------------------------------------------------------------------------------------------

| | (b) | Valuation of stock issued for assets and services (continued):
| | --- | --------------------------------------------------------------

| | (iii) | During the years ended December 31, 2002 and 2001 the
        Company issued shares under its incentive share purchase plan (note 16(d)).
        For Canadian GAAP purposes, the common shares were recorded based on the
        cash proceeds received.                                  
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                             
| |       | For U.S. GAAP purposes, the common shares would be recorded
        based on the market value of the shares issued. Accordingly, as at December
        31, 2002, the application of U.S. GAAP would result in an increase in
        share capital and deficit of $29,670 (2001 - $29,670).

| | (c) | Recent accounting pronouncements:
| | --- | ---------------------------------

| | (i )    | In April 2002, the FASB issued
        SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64,
        Amendment of FASB Statement No. 13 and Technical Corrections. As a
        result of the rescission of Statement of Financial Accounting Standards
        No. 4 and 64, gains and losses from extinguishments of debt are to be
        accounted for under the provisions of Accounting Principles Board Opinion
        No. 30, Reporting the Results of Operations -- Reporting the Effect
        of Disposal of a Segment of a Business, and Extraordinary, Unusual
        and Infrequently Occurring Events and Transactions.SFAS No.
        145 also rescinds SFAS No. 44, Accounting for Intangible Assets
        of Motor Carriers.SFAS No. 145 amends SFAS No. 13, Accounting
        for Leases, to eliminate an inconsistency between the required accounting
        for sale-leaseback transactions and the required accounting for certain
        lease modifications that have economic effects that are similar to sale-leaseback
        transactions. SFAS No. 145 also amends other existing authoritative pronouncements
        to make various technical corrections, clarify meanings or describe their
        applicability under changed conditions. SFAS No. 145 is effective for
        fiscal years beginning after May 15, 2002. The Company has early adopted
        SFAS No. 145, which did not have a material impact on its financial condition
        or results of operations with the exception that gains and losses from
        extinguishments of debt are no longer disclosed as an extraordinary item.
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | *(ii )* | In June 2002, the
        FASB issued SFAS No. 146, Accounting for Costs Associated with Exit
        or Disposal Activities. SFAS No. 146 addresses financial accounting
        and reporting for                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

F-21

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|22. | United States generally accepted accounting principles
        (U.S. GAAP) reconciliation (continued):
|--- | --------------------------------------------------------------------------------------------------------

| | (c) | Recent accounting pronouncements (continued): costs
        associated with exit or disposal activities and nullifies Emerging Issues
        Task Force Issue No. 94-3, Liability Recognition for Certain Employee
        Termination Benefits and Other Costs to Exit an Activity (including Certain
        Costs Incurred in a Restructuring).SFAS No. 146 requires that a liability
        for a cost associated with an exit or disposal activity be recognized
        when the liability is incurred. SFAS No. 146 also establishes that fair
        value is the objective for initial measurement of the liability. SFAS
        No. 146 is effective for exit or disposal activities that are initiated
        after December 31, 2002. The adoption of FAS No. 146 had no material impact
        on the financial condition or results of operations.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)  | In November 2002, the FASB issued FASB Interpretation
        No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees,
        Including Indirect Guarantees of Indebtedness of Others, an interpretation
        of FASB Statements No. 5, 57 and 107 and Rescission of FASB Interpretation
        No. 34 ("FIN No. 45"). FIN No. 45 clarifies the requirements
        of SFAS No. 5, Accounting for Contingencies, relating to the guarantor's
        accounting for, and disclosure of, the issuance of certain types of guarantees.
        The disclosure provisions of FIN No. 45 are effective for financial statements
        of interim or annual periods that end after December 15, 2002. The provisions
        of FIN No. 45 for initial recognition and measurement are effective on
        a prospective basis for guarantees that are issued or modified after December
        31, 2002, irrespective of a guarantor's year-end. The Company has considered
        the disclosure requirements of FIN No. 45 in the preparation of these
        consolidated financial statements. The Company does not currently believe
        that it has outstanding instruments that, if they had been subject to
        the measurement provisions of FIN No. 45, would have materially impacted
        its reported financial condition or results of operations.
| | ------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (iv)   | In December 2002, the FASB issued SFAS No. 148, Accounting
        for Stock-Based Compensation  transition and disclosure, an Amendment
        to FASB Statement No. 123. SFAS No. 148 provides alternative methods
        of transition for a voluntary change to the fair value-based method of
        accounting for stock-based employee compensation. In addition, SFAS No.
        148 amends the disclosure requirements of SFAS No. 123 to require prominent
        disclosures in both annual and interim financial statements about the
        method of accounting for stock-based employee compensation and the effect
        of the method used on reported results. The Company has adopted the disclosure
        provisions of SFAS No. 148.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (v)    | In January 2003, the FASB issued FASB Interpretation
        No. 46 ("FIN No. 46"), Consolidation of Variable Interest Entities.FIN No. 46 clarifies the application of Accounting Research Bulletin
        No. 51, Consolidated Financial Statements,to certain entities
        in which equity investors do not have the characteristics of a controlling
        financial interest or do not have sufficient equity at risk for the entity
        to finance its activities without additional subordinated financial support
        from other parties. FIN No. 46 applies immediately to variable interest
        entities created after January 31, 2003, and to variable interest entities
        in which an enterprise obtains an interest after that date. FIN No. 46
        applies in the first fiscal year or interim period beginning after June                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | *(vi)* | December 2003, the SEC issued Staff Accounting
        Bulletin No. 104, “Revenue Recognition” (“SAB 104”),
        which codifies, revises and recinds certain sections of SAB No 101, Revenue
        Recognition, in order to make this interperative guidance consistent with
        current authoritative accounting and auditing guidance and SEC rules and
        regulations. (The changes noted in SAB 104 did not have a material effect
        on our financial statements.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

F-22

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|22. | United States generally accepted accounting principles
        (U.S. GAAP) reconciliation (continued):
|--- | --------------------------------------------------------------------------------------------------------

| | (d) | Recent accounting pronouncements (continued):                                                                                                                                                                                                                                                                                                                                                                          
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | 15, 2003, to variable interest entities in which an
        enterprise holds a variable interest that it acquired before February
        1, 2003. FIN No. 46 applies to public enterprises as of the beginning
        of the applicable interim or annual period. The Company believes that
        on adoption, FIN No. 46 will have no material impact on its financial
        condition or results of operations.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (e) | Reconciliation:                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The effect of the differences between Canadian GAAP
        and U.S. GAAP (including practices proscribed by the SEC) on the consolidated
        balance sheets and statements of operations is summarized as follows:                                                                                                                                                                                                

| | (i) | Share capital:
| | --- | --------------

| |                                                     |   | 2003       |  |   | 2002       | 
| | --------------------------------------------------- | - | ---------- |  | - | ---------- | 
| |                                                     |   |            |  |   |            | 
| | Share capital, under Canadian GAAP                  | $ | 15,028,187 |  | $ | 15,028,187 | 
| | Adjustment for stock based compensation for         |   |            |  |   |            | 
| | non-employees (a)(ii)                               |   | 684,664    |  |   | 684,664    | 
| | Adjustment for acquisition of International Fitness |   |            |  |   |            | 
| | Vacations Inc. (b)(i)                               |   | 1,217,705  |  |   | 1,217,705  | 
| | Adjustment for accounts payable settled by share    |   |            |  |   |            | 
| | issuances (b (ii) and (iii))                        |   | 695,681    |  |   | 695,681    | 
| |                                                     |   |            |  |   |            | 
| | Share capital, under U.S. GAAP                      | $ | 17,626,237 |  | $ | 17,626,237 | 

| | (ii) | Deficit:
| | ---- | --------

| |                                             |   | 2003        |   |   | 2002        |  
| | ------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                             |   |             |   |   |             |  
| | Deficit, under Canadian GAAP                |   |             |   |   |             |  
| | (restated 2002)                             | $ | (17,979,578 | ) | $ | (21,242,625 | )
| | Adjustment for stock-based compensation     |   |             |   |   |             |  
| | for non-employees (a)(ii)                   |   | (684,664    | ) |   | (684,664    | )
| | Adjustment for acquisition of International |   |             |   |   |             |  
| | Fitness Vacations Inc. (b)(i)               |   | (1,217,705  | ) |   | (1,217,705  | )
| | Adjustment for accounts payable settled     |   |             |   |   |             |  
| | by share
      issuances (b (ii) and (iii)) |   | (695,681    | ) |   | (695,681    | )
| |                                             |   |             |   |   |             |  
| | Deficit, under U.S.
      GAAP              | $ | (20,577,628 | ) | $ | (23,840,675 | )

F-23

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|(Formerly inTRAVELnet.com inc.)           
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|                                          
|Years ended December 31, 2003 and 2002    
|                                          

|22. | United States generally accepted accounting principles
        (U.S. GAAP) reconciliation (continued):
|--- | --------------------------------------------------------------------------------------------------------

| | (iii) | Net Income (loss) and Earnings (loss) per share for
        the year:
| | ----- | ---------------------------------------------------------------------

| |                                                        |   | Years ended December 31, | 
| | ------------------------------------------------------ | - | ------------------------ | 
| |                                                        |   | 2003                     | 
| |                                                        |   |                          | 
| | Net Income (loss) for the year, under Canadian         |   |                          | 
| | GAAP (2002 & 2001 restated)                            | $ | 3,263,047                | 
| | Adjustment for acquisition of International            |   |                          | 
| | Fitness Vacations Inc. (b)(i)                          |   | -                        | 
| | Adjustment for accounts payable settled                |   |                          | 
| | by share issuances (b (ii) and (iii))                  |   | -                        | 
| |                                                        |   |                          | 
| | Net Income (loss) for the year,                        |   |                          | 
| | under U.S. GAAP                                        | $ | 3,263,047                | 
| |                                                        |   |                          | 
| |                                                        |   |                          | 
| |                                                        |   |                          | 
| | Basic Earnings (loss) per share, under U.S.
      GAAP | $ | 2.36                     | 
| |                                                        |   |                          | 

Effective July 5, 2002 the Companys
  shares were consolidated on a ten (10) old for one (1) new basis. The prior
  years figures have been changed to reflect the reverse split.

F-24

---