**UNITED STATESSECURITIES AND EXCHANGE COMMISSION****Washington,  D.C. 20549**

**FORM 20-F/A**

**(Mark One)**

**____ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THESECURITIES EXCHANGE ACT OF 1934**

**OR**

**  X  **** ANNUAL REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**September 30, 2011**

**OR**

**____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

**OR**

**____ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

Date of event requiring this shell company report

**For the transition period from**_______________________

Commission File Number: 000-29862

**FORUM NATIONAL INVESTMENTS LTD.**(Exact name of registrant as specified in its charter)

**Province of Ontario****, Canada******(Jurisdiction of incorporation or organization) 

**Suite 180, 13040, No 2 Road, Richmond, B.C. Canada V7E 2G1******(Address of principal executive offices) 

**Martin Tutschek****Tel: 778-588-7780 Fax604-275-8745Info@foruminvestments.com****Suite 180, 13040,No 2 Road, Richmond, B.C. Canada V7E 2G1**(Name, Telephone, E-mailand or Facsimile number and Address of Company Contact Person)

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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**            | **Not Applicable**              |

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

**Common Shares Without Par Value******(Title of Class)

Securitiesregistered or to be registered pursuant to Section 15(D) of the Act: 

**None******(Title of Class)

Indicate thenumber of outstanding shares of each of the issuer’s classes of capital orcommon stock as of the close of the period covered by the annual report. **32,515,984**

Indicate bycheck mark if the registrant is a well-known seasoned issuer, as defined inRule 405 of the Securities Act. Yes ___ No **X**

If this reportis an annual or transitional report, indicate by check mark if the registrantis not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. Yes ___ No **X**

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.Yes **X**No ___

Indicate bycheck mark whether the registrant has submitted electronically and posted onits corporate Web site, if any, every Interactive Data File required to be submittedand posted pursuant to Rule 405 of Regulation s-T (232.405 of this chapter)during the preceding 12 months (or for such shorter period that the registrantwas required to submit and post such files). Yes **X**No ___

Indicate bycheck mark whether the registrant is a large accelerated filer, an acceleratedfiler, or a non-accelerated filer. See definition of “accelerated filer andlarge accelerated filer” on Rule 12b-2 of the Exchange Act. (Check One): 

| Large accelerated  filer ___ | Accelerated filer ___ | Non-accelerated  filer**X** |
|------------------------------|-----------------------|-----------------------------|

Indicate by check mark which basis of accounting used to prepare thefinancial statements included in this filing:

| US GAAP ___ | International  Financial Reporting  Standards   as issued by the International   Accounting  Standards Board ___ | Other**X** |
|-------------|------------------------------------------------------------------------------------------------------------------|------------|

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If “Other” has been checked in response to the previous questions, indicate by check mark which financial statement item the registrant has elected to follow.Item 17 **X **Item 18 ___

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

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**EXPLANATORY NOTE**

 Amendment No 1 

 Forum National Investments Ltd.  (“we or the “Company”) is filing this Amendment No. 1 on Form 20-F/A  (“Amendment No. 1”) to its annual report on Form 20-F for the year ended  September 30, 2011 originally filed with the Securities and Exchange Commission  on March 28, 2012 (the “original filing”) to reflect the following amendments: 

| 1) | Item  XV – Controls and procedures |
|----|------------------------------------------|

|   | a) | Amended  disclosure controls and procedures to clarify a material weakness affecting  internal control over financial reporting. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------|

| 2) | Part  III – Item XVII Financial Statements |
|----|--------------------------------------------------|

|   | a) | Amended  to include the audit report by another auditor who expressed an unmodified  opinion on those statements in their report dated May 14, 2010. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3) | Part  III – Item XIX Exhibits |
|----|-------------------------------------|

|   | a) | Amended  Exhibit 9.1 Audited Financial Statements for the year ended September 30, 2009,  due to reference to the audit report in Item XVII. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------|

| 4) | New  certifications of our principal executive and financial officer are included as  exhibits to this amendment. |
|----|-------------------------------------------------------------------------------------------------------------------|

**General**

 For the convenience of the  reader, Amendment No. 1 sets forth the original Form 20-F as amended in its  entirety. However, this Amendment No. 1 only amends the items specifically  described above. No other information in the original Form 20-F as amended. In  addition, pursuant to the rules of the SEC, the original Form 20-F has been  amended to contain currently dated certifications from our Chief Executive  Officer and Chief Financial Officer, as required by Sections 302 and 906 of the  Sarbanes-Oxley Act of 2002. This Amendment does not reflect events that have  occurred after March 28, 2012, the date the Annual Report on Form 20-F was  originally filed. 

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**FORUM NATIONALINVESTMENTS LTD.**

TABLE OF CONTENTS 

| GENERAL.                                                                                                          | 1  |
|------------------------------------------------------------------------------------------------------------------------|----|
| NOTE REGARDING FORWARD-LOOKING STATEMENTS.                                                                             | 1  |
| PART I.                                                                                                                | 2  |
|      ITEM I. IDENTITY OF DIRECTORS, SENIORMANAGEMENT AND ADVISORS.                            | 2  |
|      ITEM II. OFFER STATISTICS AND EXPECTEDTIMETABLE.                                         | 2  |
|      ITEM III. KEY INFORMATION.                                                               | 2  |
|           B) CAPITALIZATION AND INDEBTEDNESS.                        | 3  |
|           C) REASONS FOR THE OFFER AND USE OFPROCEEDS.               | 4  |
|           D) RISK FACTORS.                                           | 4  |
|      ITEM IV. INFORMATION ON THE COMPANY.                                                     | 8  |
|           A) HISTORY AND DEVELOPMENT OF THE COMPANY.                 | 8  |
|           B) BUSINESS OVERVIEW.                                      | 9  |
|           C) ORGANIZATIONAL STRUCTURE.                               | 13 |
|      ITEM V. OPERATING AND FINANCIAL REVIEW ANDPROSPECTS.                                     | 14 |
|           A) OPERATING RESULTS.                                      | 14 |
|           B) LIQUIDITY AND CAPITAL RESOURCES.                        | 18 |
|           C) RESEARCH AND DEVELOPMENT, PATENTS ANDLICENSES, ETC.     | 20 |
|           D) TREND INFORMATION.                                      | 20 |
|           E) OFF-BALANCE SHEET ARRANGEMENTS.                         | 21 |
|           F) TABULAR DISCLOSURE OF CONTRACTUALOBLIGATIONS.           | 21 |
|           G) SAFE HARBOR.                                            | 22 |
|      ITEM VI. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.                                     | 22 |
|           A) DIRECTORS AND SENIOR MANAGEMENT.                        | 22 |
|           B) COMPENSATION.                                           | 23 |
|           C) BOARD PRACTICES.                                        | 24 |
|           D) EMPLOYEES.                                              | 25 |
|           E) SHARE OWNERSHIP OF MANAGEMENT.                          | 25 |
|      ITEM VII. MAJOR SHAREHOLDERS AND RELATEDPARTY TRANSACTIONS.                              | 26 |
|           A) MAJOR SHAREHOLDERS.                                     | 26 |
|           B) RELATED PARTY TRANSACTIONS.                             | 27 |
|      ITEM VIII. FINANCIAL INFORMATION.                                                        | 28 |
|           A) CONSOLIDATED STATEMENTS AND OTHERFINANCIAL INFORMATION. | 28 |
|           B) SIGNIFICANT CHANGES.                                    | 29 |
|      ITEM IX. THE OFFER AND LISTING.                                                          | 29 |
|           A) PRICE RANGE AND VOLUME OF SHARES OFCOMMON STOCK.        | 29 |
|           B) PLAN OF DISTRIBUTION.                                   | 29 |
|           C) MARKETS.                                                | 30 |
|           D) SELLING SHAREHOLDERS.                                   | 30 |
|           E) DILUTION.                                               | 30 |
|           F) EXPENSES OF THE ISSUE.                                  | 30 |
|      ITEM X. ADDITIONAL INFORMATION.                                                          | 30 |

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|           A) SHARE CAPITAL.                                                              | 30 |
|--------------------------------------------------------------------------------------------------------------------------------------------|----|
|           B) MEMORANDUM AND ARTICLES OF INCORPORATION                                    | 30 |
|           C) MATERIAL CONTRACTS.                                                         | 32 |
|           D) EXCHANGE CONTROLS.                                                          | 32 |
|           E) TAXATION.                                                                   | 33 |
|           F) DIVIDENDS AND PAYING AGENTS.                                                | 33 |
|           G) STATEMENTS BY EXPERTS.                                                      | 38 |
|           H) DOCUMENTS ON DISPLAY.                                                       | 38 |
|           I) SUBSIDIARY INFORMATION.                                                     | 38 |
|      ITEM XI. QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK.                                          | 38 |
|      ITEM XII. DESCRIPTION OF SECURITIES OTHERTHAN EQUITY SECURITIES.                                             | 39 |
| PART II.                                                                                                                                   | 39 |
|      ITEM XIII. DEFAULTS, DIVIDENDS, ARREARS ANDDELINQUENCIES.                                                    | 39 |
|      ITEM XIV. MATERIAL MODIFICATIONS TO THERIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS                        | 39 |
|           MATERIAL MODIFICATION TO THE RIGHTS OFSECURITY HOLDERS.                        | 39 |
|           USE OF PROCEEDS.                                                               | 39 |
|      ITEM XV. CONTROLS AND PROCEDURES.                                                                            | 39 |
|           DISCLOSURE CONTROLS AND PROCEDURES.                                            | 39 |
|           MANAGEMENT’S ANNUAL REPORT ON INTERNALCONTROLS OVER FINANCIAL REPORTING. | 39 |
|           REMEDIATION STEPS TO ADDRESS MATERIALWEAKNESS.                                 | 41 |
|      ITEM XVI. AUDIT COMMITTEE FINANCIAL EXPERT.                                                                  | 41 |
|           AUDIT COMMITTEE FINANCIAL EXPERT.                                              | 41 |
|           CODE OF ETHICS.                                                                | 41 |
|           PRINCIPAL ACCOUNTANT FEES AND SERVICES.                                        | 42 |
|           EXEMPTIONS FROM THE LISTING STANDARDS FORAUDIT COMMITTEES.                     | 43 |
|           PURCHASES OF EQUITY SECURITIES BY THEISSUER AND AFFILIATED PURCHASERS.         | 43 |
| PART III.                                                                                                                                  | 43 |
|      ITEM XVII. FINANCIAL STATEMENTS.                                                                             | 43 |
|      ITEM XVIII. FINANCIAL STATEMENTS.                                                                            | 43 |
|      ITEM XIX. EXHIBITS.                                                                                          | 43 |
|           FINANCIAL STATEMENTS.                                                          | 43 |
| SIGNATURES.                                                                                                                                | 44 |

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**GENERAL**

In this AnnualReport on Form 20-F, all references to “Forum”, or the “Company” refer to ForumNational Investments, Ltd. and its subsidiaries and affiliated companies.References to this “Form 20-F” and this “Annual Report” mean references to thisAnnual Report on Form 20-F for the period ended September 30, 2011. 

We use theCanadian dollar as our reporting currency. All references in this Annual Reportto “dollars” or “$” are expressed in Canadian dollars, unless otherwiseindicated. See also “Item 3. Key Information” for more detailed currency andconversion information. Our consolidated financial statements, which form partof the annual report are presented in Canadian dollars and are prepared inaccordance with accounting principles generally accepted in Canada (“CanadianGAAP”) which differ in certain respects from accounting principles generallyaccepted in the United States (“U.S. GAAP”). The differences between CanadianGAAP and U.S. GAAP, as they relate to our business, are explained in the notes toour consolidated financial statements. 

**NOTE REGARDING FORWARD-LOOKINGSTATEMENTS**

This AnnualReport contains forward-looking statements (within the meaning of the UnitedStates Private Securities Litigation Reform Act of 1995) concerning ourbusiness strategies, market conditions, outlook and other matters. Thesestatements relate to analyses and other information that are based on forecastsof future results, estimates of amounts not yet determinable and assumptions ofmanagement including, but not limited to, certain statements and projectionsconcerning our plans, intentions, strategies, expectations, predictions,financial projections, assumptions and estimates related to accountingpolicies, concerning the our future activities and results of operations andother future events or conditions. Any statements that express or involvediscussions 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 statementsof historical fact and may be “forward-looking statements.” Forward-lookingstatements contained in this report are based on current facts and analyses andinclude, 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 grow operating     cash flow; 
- our ability to compete successfully in the Life Settlement     marketplace and source adequate amounts and appropriate pricing of Life     Settlement policies. 
- 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 through various marketing channels, and improving all     levels and areas of service; 
- other statements related to our business and results of     operations. 

Forward lookingstatements are made based on management’s reasonable beliefs, estimates andopinions on the date the statements are made. However, these forward-lookingstatements involve known and unknown risks, uncertainties and other factorsthat may cause our actual results, performance or achievements or industryresults to be materially different from any future results, performance or achievementsexpressed or implied by such forward-looking statements. Such risk factorsinclude, but are not limited to, general economic conditions, our ability togenerate sufficient cash flows to support capital expansion plans; changingtravel and lifestyle trends of consumers; competition; pricing and availabilityof services; insurance laws and regulations and changesthereto that may affect the way our services are marketed, provided and sold;and political and economic uncertainties including exchange controls, currencyfluctuations, taxation and other laws or governmental economic, fiscal,monetary or political policies 

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of Canada and the United States affectingforeign travel, investment and taxation and other factors beyond our reasonablecontrol, which, in turn, could affect our current or future operations. See“Key Information – Risk Factors”. Should one or more of these risks anduncertainties materialize, or should underlying assumptions prove incorrect,actual results may vary materially from those described in forward-lookingstatements. The reader is cautioned not to place undue reliance onforward-looking statements. We undertake no obligation to publicly revise theseforward-looking statements to reflect events or circumstances that arise afterthe date of this filing. Readers should carefully review the cautionarystatements and risk factors contained in this and other documents that we filefrom time to time with the Securities and Exchange Commission.

**PART I**

**ITEM I. IDENTITY OF DIRECTORS, SENIORMANAGEMENT AND ADVISORS**

This Form 20-Fis been filed as an annual report under the Exchange Act and, as such; there isno requirement to provide information under this item. 

**ITEM II. OFFER STATISTICS ANDEXPECTED TIMETABLE**

This Form 20-Fis been filed as an annual report under the Exchange Act and, as such; there isno requirement to provide information under this item. 

**ITEM III. KEY INFORMATION**

***A)SELECTED FINANCIAL DATA***

Set forth belowis certain selected financial data for the Company for the year-end fiscalperiods 2007 to 2011. The following information must be read in conjunctionwith the more detailed financial information contained in the accompanyingaudited financial statement. Unless otherwise stated, all references to dollarsherein are to Canadian dollars. As at September 30, 2011, one United StatesDollar was equal to 1.017 Canadian dollars and that value is used in thecalculations herein, unless otherwise indicated. 

TABLE OFSELECTED CONSOLIDATED FINANCIAL DATA

(Stated inCanadian Dollars) 

|                                     |   | **Sep 30, 2011** |   |   | **Sep 30, 2010** |   |   | **Sep 30, 2009** |   |   | **Sep 30, 2008** |   |   | **Sep 30, 2007*** |   |
|------------------------------------------|--------|------------------|--------|--------|------------------|--------|--------|-----------------------|--------|--------|-----------------------|--------|--------|-------------------|--------|
| **Current Assets**                       | $      | 191,131          |   | $      | 509,224          |   | $      | 4,378,578             |   | $      | 6,050,471             |   | $      | 9,264,232         |   |
| **Capital Assets**                       |   | 7,767,783        |   |   | 8,994,166        |   |   | 9,562,321             |   |   | 17,850,031            |   |   | 9,100,127         |   |
| **Total Assets**                         |   | 11,091,999       |   |   | 12,506,220       |   |   | 18,475,423            |   |   | 29,481,590            |   |   | 20,035,886        |   |
| **Current Liabilities**, (1)             |   | 3,913,637        |   |   | 3,875,415        |   |   | 5,272,867             |   |   | 12,422,360            |   |   | 1,015,552         |   |
| **Deferred Revenue**(1)                  |   | 182,472          |   |   | 751,868          |   |   | 1,482,092             |   |   | 2,404,163             |   |   | 1,389,678         |   |
| **Convertible Debentures**               |   | 40,486           |   |   | 40,486           |   |   | 40,486                |   |   | 40,486                |   |   | 40,486            |   |
| **Long Term Debt**                       |   | 4,748,054        |   |   | 4,846,198        |   |   | 5,222,774             |   |   | 4,211,715             |   |   | 3,988,031         |   |
| **Share Capital**                        |   | 25,782,966       |   |   | 25,810,369       |   |   | 25,810,369            |   |   | 24,255,952            |   |   | 24,194,793        |   |
| **Contributed surplus**                  |   | 2,757,581        |   |   | 2,757,581        |   |   | 2,757,581             |   |   | 2,913,377             |   |   | 2,944,536         |   |
| **Deficit**                              |   | (26,481,283      | )      |   | (25,535,211      | )      |   | (22,070,260           | )      |   | (16,725,977           | )      |   | (15,854,337       | )      |
| **Net Revenue from****Operations**       | $      | 3,380,691        |   | $      | 3,941,297        |   | $      | 3,516,417             |   | $      | 3,717,154             |   | $      | 2,572,638         | )      |
| **Net Income (Loss) from****Operations** |   | (946,072         | )      |   | (3,464,951       | )      |   | (5,344,283            | )      |   | (871,640              | )      |   | (2,500,922        | )      |

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|                                                                  |              |   | **Sep 30, 2011** |   |   | **Sep 30, 2010** |   |   | **Sep 30, 2009** |   |   | **Sep 30, 2008** |   |   | **Sep 30, 2007*** |   |
|-----------------------------------------------------------------------|-------------------|--------|------------------|--------|--------|------------------|--------|--------|------------------|--------|--------|------------------|--------|--------|-------------------|--------|
| **Earnings (Loss) per****Share from Operations**                      | (2)          |   | (0.03            | )      |   | (0.12            | )      |   | (0.19            | )      |   | (0.03            | )      |   | (0.14             | )      |
| **Fully Diluted Earnings****per Share**                               | (2)          |   | (0.03            | )      |   | (0.12            | )      |   | (0.19            | )      |   | (0.03            | )      |   | (0.14             | )      |
| **Weighted Average****number of shares for****calculating basic and** | (2)     |   | 29,990,231       |   |   | 28,948,776       |   |   | 28,553,321       |   |   | 28,425,526       |   |   | 18,477,377        |   |
| **diluted Earnings (Loss)****per share**                              | (3)          |   | 29,990,231       |   |   | 28,948,776       |   |   | 28,553,321       |   |   | 28,425,526       |   |   | 18,477,377        |   |

**Notes:**

(*) The Companyhas changed its year end to September 30th effective for the nine months endedSeptember 30, 2007. Fiscal period for September 30, 2007 includes nine monthsfor comparison and does not include the October 18, 2007, purchase of FamilyVacation Centers and associated increase in revenues.

(1) DeferredRevenue – Current portion included in Current Liabilities

(2) EffectiveApril 16, 2007, the Company's common shares were forward split on a three new forone old basis.

(3) In a lossyear, common shares equivalents are excluded from the calculation of dilutedearnings (loss) per share as the effect would be anti dilutive.

On December 31,2011, the exchange rate for Canadian dollars was $1.00 (US) for $0.9833 (CAD),as posted by the Bank of Canada.

The high and lowbuying rate figures are selected from monthly figures for each month of theprevious six-month period ending December 31, 2011. Daily average figures arenot available from any major Canadian chartered bank. 

|     |   | **February** |   |   | **January** |   |   | **December** |   |   | **November** |   |   | **October** |   |   | **September** |   |
|----------|--------|--------------|--------|--------|-------------|--------|--------|--------------|--------|--------|--------------|--------|--------|-------------|--------|--------|---------------|--------|
| **High** |   | 1.0016       |   |   | 1.0272      |   |   | 1.0406       |   |   | 1.0487       |   |   | 1.0604      |   |   | 1.0389        |   |
| **Low**  |   | 0.9866       |   |   | 0.9986      |   |   | 1.0105       |   |   | 1.0126       |   |   | 0.9935      |   |   | 0.9752        |   |

Historicalexchange rates for $1.00 (US) expressed in Canadian dollars over the past fiveyears are as follows: 

|           |   | **2011** |   |   | **2010** |   |   | **2009** |   |   | **2008** |   |   | **2007** |   |
|----------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| **Period End** |   | 0.9833   |   |   | 0.9946   |   |   | 1.0722   |   |   | 1.0599   |   |   | 1.0905   |   |
| **Average**    |   | 0.9891   |   |   | 1.0299   |   |   | 1.1453   |   |   | 1.0660   |   |   | 1.0747   |   |
| **High**       |   | 1.0604   |   |   | 1.0778   |   |   | 1.3066   |   |   | 1.2969   |   |   | 1.0905   |   |
| **Low**        |   | 0.9449   |   |   | 0.9946   |   |   | 1.0251   |   |   | 0.9719   |   |   | 0.9215   |   |

The aboveinformation was obtained from the Bank of Canada and is believed by the Companyto closely approximate the rates certified for customs purposes by the FederalReserve Bank in New York. 

**B) CAPITALIZATION AND INDEBTEDNESS**

This Form 20-Fis been filed as an annual report under the Exchange Act and, as such; there isno requirement to provide information under this item. 

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**C) REASONS FOR THE OFFER AND USEOF PROCEEDS**

This Form 20-Fis been filed as an annual report under the Exchange Act and, as such; there isno requirement to provide information under this item. 

**D) RISKFACTORS**

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

The  Company’s business is heavily regulated and changes in regulations, changes in  interpretation of  existing regulations or failure to obtain required regulatory approvals or  licenses could adversely affect the Company’s ability to operate or  compete effectively.

In the 1990’swith the growth of the Life Settlement industry various states introducedlegislation. The state legislative actions were designed to introduce consumerprotection type regulations for policy holders and purchasers while the federalgovernment with the Securities and Exchange Commission seeks to regulate themarket for the protection of a purchaser. Most states require the licensing oflife settlement brokers and providers, mandate disclosures to sellers orpurchasers or both, require periodic reporting requirements, and set forthprohibited business practices. It is anticipated within the next 3 years thatall states will have some form of regulation governing commerce in the LifeSettlement industry. 

The UnitedStates Securities and Exchange Commission treat Life Settlements as securitiesunder state and federal securities law when viewed as a structured product. Nostate federal or regulatory body or private litigant has successfully assertedthat our settlements transactions are under state or federal law. As thepurchaser or possible seller of policies we represent that we are asophisticated individual and have diminutive needs for protection afforded bysecurities laws. We have utilized some exceptions and exemptions in conductingour life settlement transactions.

The insuranceindustry is highly regulated. The Company is not required to be licensed as aninsurance company or insurance broker as the Company does not issue policies.Regulations that cover policy terms, premium payment, transferability, andreceipt of policy benefits could adversely affect the secondary market for lifesettlements in which the company operates.

There can be noassurance that unforeseen developments or introduction of legislation, laws,and other factors in Consumer, Securities or Insurance regulations at Federalor State level will not alter the Company’s ability to achieve it growthtargets for marketing and selling Travel Club programs or entering andoperating in the Life Settlement market. 

The Companymay require additional capital to grow its Life Settlement division; if we areunable to obtainfinancing necessary to supportour operations, we may be unable to grow this segment of the Company.

As  of September 30, 2011 the Company had a working capital deficiency of $3,710,892.  The Company generates operating cash flow through its charter operations. There can be no assurances the Company will beable to generate sufficient investment from borrowing, the sale of equity, or acombination thereof to rapidly grow its life Settlement 

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division and otherbusiness developments. If additional financing is required, there is nocertainty it will be available when and to the extent required or that ifavailable, it will be on acceptable terms. If adequate funds are not availableon acceptable terms, the Company may not be able to maintain and rapidly growits business expansion. This could have a material adverse effect on theCompany's planned growth.

Because of daily price and volume limitations associated with beingan OTCBB quoted company, you maynot be able tosell your shares of our common stock at a particular price on any particulartrading day, orat all.

The Company'scommon stock is vulnerable to pricing and purchasing actions in the “OTCBB”market that are beyond its control and therefore persons holding or acquiringshares may be unable to resell their shares at a profit as a result of thisvolatility.

The Companydoes not expect to pay dividends in the future. Any return on investment may belimited tothe value of the Company’s stock.

The Company doesnot anticipate paying cash dividends on its stock in the foreseeable future.The payment of dividends on the Company’s stock will depend on its earnings,financial condition and other business and economic factors affecting theCompany at such time as the board of directors may consider relevant. If theCompany does not pay dividends, its stock may be less valuable because a returnon your investment will only occur if the Company’s stock price appreciates.

The marketprice for our common shares has been and is expected to continue to bevolatile; and as aresult the value of yourinvestment in the Company may decrease.

The tradingprice of the Company's securities has been subject to wide fluctuations inresponse to variations in its operating results, its announcements of businessdevelopments, or new services by the Company or its competitors, and otherevents and factors. The securities markets themselves have from time to timeexperienced significant price and volume fluctuations that may be unrelated tothe operating performance of any particular companies. Announcements of delaysin the Company's business plans or online commerce operations, technologicalinnovations 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 fluctuationsin its financial results, may have a significant impact on the market price ofthe Company's securities.

There  can be no assurance that the continual fluctuations in price will not occur. In  particular, subsequent to the financial period ended September 30, 2011, the  price per share of the Company’s common shares fluctuated (US dollar figures)  from a low of $0.15 to a high of $0.48 and a current level of $0.17.

We may issueadditional shares in the Company thereby further diluting the total sharesissued andoutstanding. As well, a substantialnumber of our shares of common stock will be eligible for future sale,andthe sale of these shares may cause our stock price to decline, even if ourbusiness is doing well.

Situations mayarise which could require the issuance of additional shares of the Company. 

Future equityfinancings, property transactions, issuance of stock options among other thingsmay require the subsequent issuance and further dilution of the Company’ssecurities. 

Oursignificant shareholders and management personnel have potential conflicts ofinterest with us, whichmay result in theirtaking corporate actions which you may not believe to be in your best interestsor in thebest interests of the Company.

The Company’sofficers and board of directors control more than 50% of the Company’s issuedand outstanding stock. The concentration of such a large percentage of theCompany’s stock in the hands of relatively few 

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shareholders may cause adisproportionate effect on minority shareholders in all matters presented tothe company’s shareholders. The Company’s officers and board of directors asmajority shareholders have the power to take corporate actions which othershareholders may not believe are in their best interests or in the bestinterests of the Company. There can be no assurance that the Company’s officersand Board of Directors as will not cause the Company to take such corporateactions. 

We rely onour founders, Messrs. Dan Clozza and Martin Tutschek, the loss of either couldhave amaterial adverse effect on our business.

Our success willdepend to a significant extent on the efforts and abilities of our ChiefExecutive Officer, Mr. Dan Clozza and our Chief Financial Officer, Mr. MartinTutschek. Messrs. Clozza and Tutschek are actively engaged in our managementand together determine our strategic direction, especially with regard toinvestment and business development activity. An audit committee has beenestablished with three additional directors elected to the board, and wecontinue the process of establishing a management structure designed to reduceour dependence on Messrs. Clozza and Tutschek, the sudden departure or reducedattention of either Messrs. Clozza or Tutschek to us could have a materialadverse effect on our operations, financial condition and operating results.The Company does not maintain “key man” insurance in respect of any of its management.

For ourbusiness to be successful we will need to attract and retain qualifiedpersonnel, licensees oroperators, brokers orlife settlement providers. Failure to attract and retain such parties couldhave amaterial adverse effect on our business.

The Company'sfuture success depends, in significant part, upon the continuing service andperformance of its senior management and other key personnel, with whom it doesnot have employment agreements at this time. If it loses the services of any ofthese individuals, its ability to effectively deliver services to its customersand manage its business effectively, could be impaired. Furthermore, companiesseeking to develop similar business strategies may hire away some of our keyemployees.

The Company's historicalcore growth had depended, in significant part, upon the continuing sales andmarketing of its Travel Club products which it has sold subsequent to fiscalyear end. We continue to develop our network of Life Settlementprovider companies and other industry affiliates. Our ability to initiate,build and grow these relationships is dependent on many factors including thepurchase volume and amount of commissions received from transactions with theCompany. The relationship with these individuals is fundamental to operating inthis market. We have no contractual arrangements with financial planners,insurance brokers or Life Settlement providers. The Company believes that itsfuture success will depend in large part upon its ability to attract and retainqualified personnel, Licensees or operators, and brokers or Life Settlementproviders for its operations. The failure to continue to attract or retain suchpersons or entities could materially adversely affect the Company's business,financial condition and results of operations. 

The marketsin which the Company competes are  competitive. If the Company cannotsuccessfullycompete, its growth rate maystagnate or revenues may decline.

The LifeSettlement market is a relatively new market within the financial servicessector. Its continued growth and precise direction is unclear. Though theCompany has been successful in Life Settlement industry to date the Company’ssuccessful growth in the Life Settlement market may be slowed for various reasonsthis includes: 

- The ability of the Company to compete with other Life     Settlement companies; 
- The ability of the Company to locate sufficient policy flow; 
- The ability of the Company to successfully negotiate and close     Life Settlement transactions; 
- The Company’s ability to raise sufficient ongoing funding to     rapidly grow the business; 
- Introduction of financially burdensome governmental regulation;  

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Estimates oflife expectancy in the Life Settlement market are uncertain at best and anymaterialunderestimation will materially affectthe cost, lower the anticipated returns, and effect the liquidity of thesecondarymarketplace.

In the LifeSettlement market, the price of a successful bid for a settlement insurancepolicy is based upon several variables. The most relevant being the face valueof the policy, the continuing premium costs, and the anticipated lifeexpectancy of the insured. An insured’s life expectancy is estimated from amedical life expectancy report, medical history, genetic history and actuarialdata. Bids for policies are priced with this information and seek to obtaincompetitive yields available for other financial products with similar risk. 

It is impossibleto predict with accuracy an insured’s exact life expectancy. In September of2008 one of the largest providers of life expectancy reports announced itslengthening of life expectancy tables by nearly 25% with others underwritersfollowing suite with 10% increases. An underestimation will result in lowerreturns than projected. An underestimation also increases the amount of capitalnecessary to be reserved for premium payments. Similarly an overestimation willresult in higher returns and lower premium reserves.

Taking intoaccount all available information, the Company cannot assure that it will noterr by underestimating or overestimating the average life expectancy of anindividual and the amounts required for future premiums. Any associated lossescould have a material adverse effect on our business, financial condition, andoperating results. 

It may not bepossible for investors to effect service of process within the United Statesupon us or ourDirectors or corporate auditorsor to enforce against us or these persons judgments obtained in UnitedStatescourts predicated upon the civil liability provisions of the federal securitieslaws of the UnitedStates.

We are a publiccompany incorporated and domiciled under the laws of Canada. Three of our sevendirectors and two of our executive officers are residents of countries otherthan the United States. Furthermore, all or a substantial portion of theirassets and our assets are located outside the United States. As a result, itmay 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

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- 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 a Canadian court to enforce    liabilities against any of our directors and executive officers or us    based upon U.S. securities laws.

You may alsohave difficulties enforcing in courts outside the United States judgmentsobtained in the U.S. courts against any of our directors and executive officersor us, including actions under the civil liability provisions of the U.S.securities laws. 

In summary, therealization 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 descriptioncontains certain forward-looking statements that involve risks anduncertainties. Our actual results could differ materially from the resultsdiscussed in the forward-looking statements as a result of certain risks setforth herein and elsewhere in this Form 20-F.

**A) HISTORY AND DEVELOPMENT OF THECOMPANY**

The Company wasincorporated in British Columbia, Canada on September 22, 1995, under the nameof Snowbird Vacations International Inc., and was continued to the Province ofOntario on November 12, 1997. The name of the Company was changed to Intravelnet.comInc. on February 26, 1999. Further to shareholder approval on April 17, 2002,the Company’s name was changed to Forum National Investments Ltd., with aconsolidation of the share capital on a ten old for a one new basis, effectiveJuly 5, 2002. On April 16 of 2007 the share capital of the Company was forwardsplit on a 3 new for 1 old basis. 

The Company’sprincipal office is Suite 180, 13040 No 2 Road, Richmond, B.C. Canada V7E 2G1,the telephone number is (604) 778-588-7780 and fax number is (604) 275-8745.The Company’s agent in Canada is KMS Corporate Services Inc, 1100 One BentallCenter, 505 Burrard Street, Box 11, Vancouver, B.C., V7X 1M5. The Company hasthe following web addresses: www.foruminvestments.com,www.SpiritOfTwoThousandTen.com, www.spirityachtcharters.com, www.americanlifesettlementsociety.com, and www.thealss.com,

Forum NationalInvestments Ltd. maintains a fiscal year ending September 30. The Company'sfinancial statements are stated in Canadian Dollars and are prepared inaccordance with Canadian Generally Accepted Accounting Principles (GAAP), theapplication of which, in the case of the Company, conforms in all materialrespects for periods presented with U.S. GAAP except as noted in the notes tothe Company's financial statements. See "Item XVII FinancialStatements". 

The Company'shistorical core growth had depended, in significant part, upon the continuingsales and marketing of its Travel Club products which it has sold subsequent tofiscal year end. (See Item 3 Risk factors, Ability to Attract and retainSuccessful Licensees or Operators). 

The  Company has completed the launch of the 120 foot motor vessel MV Spirit of Two  Thousand and Ten in 2009. The Company had established an initial construction  credit facility with Caterpillar Financial Services for up to $3 million USD  which had provided funding for the project. The Company subsequently had the  credit facility increased to $4.3 million USD in spring of 2007. The  construction loan has been converted to a 5 year term loan facility of $5  million USD with an interest rate of 7%. The Company incurred additional  capital expenditures of $410,872 in the fiscal year ending September 30, 2010,  and $2,025 in fiscal year ending September 30, 2011.

 

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The Companyformed a wholly owned subsidiary in August 2008 called Spirit Yacht ChartersLtd. Limited chartering operations began in summer of 2009 facilitated throughthe Spirit Yacht Charters subsidiary. 

In2005, Forumbegan to investigate the business opportunities in the secondary Life Insurancemarket also known as *“Life Settlements”*. The Company began researchingthe strategy of purchasing life insurance policies from consumers activelyinterested in selling their policies. Forum has invested in the purchasing ofLife Insurance policies issued in the Unites States sold by the policy holderswith life expectancies of 6 to 15 years. The Company then becomes theirrevocable beneficiary of these policies. 

Since theCompany began to research the Life Settlement industry it has completed asubstantial amount of due-diligence and invested capital to create largechannels of Life Settlement “policy flow”. The Company is currently sourcesLife Settlement policies through “Business to Business” (B2B) Channels andanticipates launching a “Business to Consumer” (B2C) model upon securingsufficient capital commitments. 

The Company usesan industry standard Milliman Report (consultants for the health care insuranceindustry) along with recent purchases and sales of similar life insurancepolicies, financial standing of the insurer, changes in general economicconditions, standard, actuarially developed mortality tables and industry lifeexpectancy reports to determine an acceptable purchase price. In fiscal 2008,the Company entered the Life Settlement industry with the initial purchase of$30,930 thousand USD face value of Life Insurance policies. During the thirdquarter of 2008 a $5 Million USD policy matured resulting in a portfolio facevalue of $25,930 thousand USD at a cost of $1,548,070($1,506,473 USD).

In 2011,  the Company raised capital backed by a secured interest in two of the life  Settlement policies beneficial interest owned by the Company. The initial sale to  accredit investors of a secured interest was done though a convertible  debenture allowing payment to the debenture holder in cash or stock. In  addition to a portion of the beneficial interest the debenture holder is  responsible for a proportionate share of the insurance premiums. Capital raised  under this program totaled $ 344,101 in fiscal 2011. 

To expand beyondis present financial capabilities in the Life Settlement market, additionalfinancing will be sought. There can be no assurances the Company will be ableto generate sufficient investment from borrowing, the sale of equity, or acombination thereof to rapidly grow its life settlement investment. Ifadditional financing is required, there is no certainty it will be availablewhen and to the extent required or that if available, it will be on acceptableterms. If adequate funds are not available on acceptable terms, the Company maynot be able to grow and expand its business at an accelerated rate. This couldhave a material adverse effect on the Company's planned growth. This and otherrisks related to operating in the Life Settlement industry could have amaterial adverse effect on the Company's operations and planned growth. (SeeItem 3 Risk factors, The Company May Require Additional Capital). 

**B) BUSINESS OVERVIEW**

The Company operates in the hospitality andtourism business segment. Under this segment, the company operates a chartercruise vessels. 

- The Company owns a passenger carrying yacht the 120’ MV Spirit     of 2010, an 18 foot tender, two jet skis, and ocean going kayaks. The     equipment is for charter cruises to the Pacific Northwest, and Baja     Mexico. 

Excess fundson-hand, either from equity financing, borrowings, sales of assets or generatedfrom operations, may from time-to-time be reinvested in marketable securitiesand/or life settlement contracts. Currently, the Company has paid $1,788,567($1,742,817 USD) to invest in life settlement contracts, which was funded bythe recent Private Placements completed in July of 2007. During the thirdquarter of 2008 a $5 Million USD policy matured resulting in a portfolio facevalue of $25,930 thousand USD at a cost of $1,548,070 ($1,506,473 USD).

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Real  risks exist in investing in life settlement contracts. These risks may have a  material adverse effect on the Company's investment in the Life Settlement  marketplace. (See Item 3 Risk factors, 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). 

Travel Club

The Company’shistorical business is providing travel services for the members of its travelclubs. Subsequent to year end the Company sold its travel club and supportingoperations. 

Information regarding vacation membership:

|                    |   | **2011**  |   |   | **2010**  |   |   | **2009**  |   |
|-------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| **Membership****Sales** | $      | ----      |   |   | ----      |   |   | ----      |   |
| **Membership Dues**     | $      | 1,694,693 |   |   | 1,928,687 |   |   | 2,192,932 |   |
| **Total**               | $      | 1,694,693 |   |   | 1,928,687 |   |   | 2,192,932 |   |

For the fiscalperiod 2011, a total for both travel clubs (Snowbird Vacations (Snowbirds) and FamilyVacations Centers (FVC)) of Nil (2010 – Nil, 2009– Nil) travel club membershipswere sold for a mean average non-refundable purchase price of $Nil (2010 - $Nil,2009 - $Nil).

The Company hadnot actively sold travel club memberships: 

|                                                                              |   | **2011** |   |   | **2010** |   |   | **2009** |   |
|-----------------------------------------------------------------------------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
|                                                                              |   |     |   |   |     |   |   |     |   |
| **Travel Club Memberships entered into for the  period**                          | $      | –  |   | $      | –  |   | $      | –  |   |
|                                                                              |   |     |   |   |     |   |   |     |   |
| **Amount recognized as revenue during the year**                                  |   | –  |   |   | –  |   |   | –  |        |
|                                                                              |   |     |   |   |     |   |   |     |   |
| **Future years revenue to be earned from current  year****Membership agreements** |   | –  |   |   | –  |   |   | –  |   |
| **Cash collected during the year related to future  years****revenue**            |   | (306,768 | )      |   | (346,845 | )      |   | (517,769 | )      |
| **Amounts due to be received in subsequent years**                                | $      | –  |   | $      | –  |   | $      | –  |   |
| **from current period membership agreements**                                     |   |     |   |   |     |   |   |     |   |

CharterCruises

The Company ownsand a 120 foot passenger carrying motor vessel MV Spirit ofTwo-Thousand-and-Ten. The vessel is for charter cruises to the PacificNorthwest, and Baja Mexico in addition to day and evening dinner cruises fromits summer home port in Vancouver, B.C., and winter home port of Cabo SanLucas, Mexico. Approximately 40% of the custom yacht cruise market are fullyacht charters by a single entity for a corporate retreat, corporate awardsprogram and family retreats etc.. The Company is marketing and promoting tomany tourism based organizations the cruise experience in Seat of Cortez forWinter season and the Pacific Northwest for Summer Season and has a web site www.spirityachtcharters.com to present the vessel and provide an overview of the yachtoffering. 

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The  Company had established an initial construction credit facility with  Caterpillar Financial Services for up to $3 million USD which had provided  funding for the project. The Company subsequently had the credit facility  increased to $4.3 million USD in spring of 2007. The construction loan has been  converted to a 5 year term loan facility of $5 million USD with an interest  rate of 7%. The Company incurred additional capital expenditures of $410,872 in  the fiscal year ending September 30, 2010, and $2,025 in fiscal year ending  September 30, 2011.

LifeSettlements

In 2005, Forumbegan to investigate the business opportunities in the secondary Life Insurancemarket also known as *“Life Settlements”*. The Company began researchingthe strategy of purchasing life insurancepolicies from consumers actively interested in selling their policies. Forumhas invested by purchasing a beneficial interest in Life Insurance policiesissued in the Unites States sold by the policy holders with life expectanciesof 6 to 15 years. The Company has becomes the irrevocable beneficiary of thesepolicies. 

Althoughrelatively new, the Life Settlement market is the fastest growing segment ofthe financial services industry. The life insurance industry is a “doubledigit” trillion dollar industry and the Life Settlement market is projected togrow significantly within the next few years. The senior and the baby boomermarkets are the fastest growing segments of the population,resulting in billions of dollars in policies rolling into the Life Settlementpolicy industry annually.

Expected growthof the Life Settlement market will parallel the aging population boom. Thesignificant, additional money that many policy holders receive from lifesettlement companies in the secondary market represents “found money”;turning otherwise illiquid assets into cash. In general, this windfallsignificantly improves the lifestyle of the policy holder when most seniorsneed it, i.e. -- allowing them to afford long-term health care or maintaintheir current standard of living for many more additional years. LegitimateLife Settlement companies have been described as providing a “sociallyresponsible” service. 

The Companybegan to research the Life Settlement and has completed a substantial amount ofdue-diligence and invested capital to create large channels of Life Settlement“policy flow”. The Company believes successful entrance and capture of marketshare in this emerging industry will dominate the future Company direction andthe allocation of resources. The Company is currently sourcing Life Settlementpolicies through “Business to Business” (B2B) Channels and anticipates launchinga “Business to Consumer” (B2C) Channel subject to additional financing.  

The Company usesan industry standard Milliman Report (consultants for the health care insuranceindustry) along with recent purchases and sales of similar life insurancepolicies, financial standing of the insurer, changes in general economicconditions, standard, actuarially developed mortality tables and industry lifeexpectancy reports to determine an acceptable purchase price. In fiscal 2008,the Company entered the Life Settlement industry with the initial purchase of$30,930 thousand USD face value of Life Insurance policies. The Company paid$1,788,567 ($1,742,817 USD) which was funded by the recent Private Placementscompleted by the Company in July of 2007. During the third quarter of 2008 a $5Million USD policy matured resulting in a portfolio face value of $25,930thousand USD at a cost of $1,548,070 ($1,506,473 USD) at the end of thefinancial year 2009.

LifeSettlement Industry Overview

Following thetheme of older adults and the growth of the group as a percentage of thepopulation, the Company is entering the Life Settlement market. The exact sizeof the market is difficult to accurately quantify. In 2005, Sanford C.Bernstein & Co., LLC, a research unit of Alliance Bernstein L.P. estimatedthe market to be approximately $13 billion in face value of policies purchasedfrom 1998 through 2005. Data from theAmerican Council of Life Insurers shows that the voluntary termination ratesfor individual policies has dropped steadily from 6.6% in 2002 to 5.1% in 2007.  Becausethe decline in the lapse rate coincides with the increasing number of reportedlife settlement transactions, we believe this indicates that more policyholdersare choosing to sell their policies in life settlement transactions rather thanvoluntarily terminating these policies.  We also believe thiscorroborates predictions that the life settlement market will continue to growin size as these transactions become more familiar to policyholders.

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The growth isexpected to continue in the next few decades with the increase in the number ofolder Americans. American seniors consider selling their policies in thesecondary Life Settlement market for a variety of reasons including: 

Living Longer...Seniors must have more liquid capital during retirement to support themselves.Additionally, parents of seniors are also living longer which some will have tofinancially support. 

Income... Manycompanies have encountered financial trouble and therefore pensions have beenreduced or wiped out. In 2003, 1,197 companies eliminated their pensionsreported the American Federation of Labor jeopardizing the retirement ofthousands who presumed these funds were guaranteed. 

Debt Crisis...Many seniors do not adequately save or plan financially for retirement. USAToday, Jan/07 “seniors are becoming the face of the indebted and the fastestpopulation group seeking bankruptcy, many are having extreme difficultypaying mortgage, food and medical costs... we are just seeing the tip of theiceberg”. 

Social Securityin Trouble... A looming large risk for seniors is government social security -- acritical source of income – which could go bankrupt and not be able tosupport the growing seniors market. At a minimum, social security benefitpayments are estimated to be reduced.

SkyrocketingMedical Costs... As reported in Business Week “Seniors Pushing Medicaid toBreaking Point” (Feb/05) “as 70 million baby boomers age, their demand for carethreatens to crush Medicaid”. In 2004alone, medical insurancepayments, co-pays and deductibles increased 40%. Medical costs areestimated to continue to rise and fixed income seniors will have to find someway to pay for this large, unbudgeted but essential cost of retirement. 

The  Company recognizes that it needs to be innovative and pioneer new avenues for  business development. New opportunities have encouraged  the Company to expand and position itself for entry into the Life Settlement  market. 

GovernmentRegulations

In the 1990’swith the growth of the Life Settlement industry various states introducedlegislation. The state legislative actions were designed to introduce consumerprotection type regulations for policy holders and purchasers while the federalgovernment with the Securities and Exchange Commission seeks to regulate themarket for the protection of a purchaser. Most states require the licensing oflife settlement brokers and providers, mandate disclosures to sellers orpurchasers or both, require periodic reporting requirements, and set forthprohibited business practices. It is anticipated within the next 3 years thatall states will have some form of regulation governing commerce in the LifeSettlement industry. 

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The UnitedStates Securities and Exchange Commission treat Life Settlements as securitiesunder state and federal securities law when viewed as a structured product. Nostate federal or regulatory body or private litigant has successfully assertedthat our settlements transactions are under state or federal law. As thepurchaser or possible seller of policies we represent that we are asophisticated individual and have diminutive needs for protection afforded bysecurities laws. We have utilized some exceptions and exemptions in conductingour life settlement transactions.

The insuranceindustry is highly regulated. The Company is not required to be licensed as aninsurance company or insurance broker as the Company does not issue policies.Regulations that cover policy terms, premium payment, transferability, andreceipt of policy benefits could adversely affect the secondary market for lifesettlements in which the company operates.

There can be noassurance that unforeseen developments or introduction of legislation, laws,and other factors in Consumer, Securities or Insurance regulations at Federalor State level will not alter the Company’s ability to achieve it growthtargets for marketing and selling Travel Club programs or entering and operatingin the Life Settlement market. 

**C) ORGANIZATIONAL STRUCTURE**

As of December31, 2011, the following is a list of all the Company’s subsidiaries, all ofwhich are wholly owned and over which the Company holds 100% voting control:

|                                 |      | Incorporating             | Date of Acquisition |
|--------------------------------------|-----------|---------------------------|---------------------|
| Subsidiaries                         | Ownership | Jurisdiction              | or Incorporation    |
|                                 |      |                      |                |
| American Life Settlement Society LLC | 100%      | State of Delaware, USA    | November 15, 2007   |
| Spirit Yacht Charters Ltd.           | 100%      | British Columbia,  Canada | August 7, 2008      |

Properties

Office Leases 

The Company isheadquartered at Suite 180, 13040, No 2 Road, Richmond, B.C. Canada V7E 2G1whereit rents approximately 1000 sq. ft. office space housing its principalcorporate, accounting, and yacht charter operations. 

The Companybelieves that its current facilities are adequate for its currentadministrative operations for the Spirit Yacht Charters and Life Settlementoperations.

Motor Vessels 

The Company ownsa 120-foot Tri Level motor vessel called the MV Spirit of Two Thousand and Ten.

| **Item**                       | **Qty** | **Description**                                                                                    |
|--------------------------------|---------|----------------------------------------------------------------------------------------------------|
| Spirit of Two Thousand and Ten | 1       | Type: 120 ft. motor vessel Overnight Accommodation:  12 passengers  Dinner cruise - 100 passengers |

The Company ownsand a 120 foot passenger carrying motor vessel MV Spirit ofTwo-Thousand-and-Ten. The vessel is for charter cruises to the PacificNorthwest, and Baja Mexico in addition to day and evening dinner cruises fromits summer home port in Vancouver, B.C., and winter home port of Cabo SanLucas, Mexico. 

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Approximately 40% of the custom yacht cruise market are fullyacht charters by a single entity for a corporate retreat, corporate awardsprogram and family retreats etc. The Company is marketing and promoting to manytourism based organizations the cruise experience in Sea of Cortez for Winterseason and the Pacific Northwest for Summer Season and has a web site www.spirityachtcharters.com to present the vessel and provide an overview of the yachtoffering. The Company had established an initial construction credit facilitywith Caterpillar Financial Services for up to $3 million USD which had providedfunding for the project. The Company subsequently had the credit facilityincreased to $4.3 million USD in spring of 2007. The construction loan has beenconverted to a 5 year term loan facility of $5 million USD with an interestrate of 7%. The Company incurred additional capital expenditures of $410,872 inthe fiscal year ending September 30, 2010, and $Nil in fiscal year endingSeptember 30, 2011.

**ITEM V. OPERATING AND FINANCIALREVIEW AND PROSPECTS**

The followingdiscussion of the financial condition, changes in financial condition andresults of operations of the Company for the years ended September 30, 2011 andSeptember 30, 2010 and years ended September 30, 2009 and should be read inconjunction with the Consolidated Financial Statements of the Company for theyears ended September 30, 2011 and September 30, 2010 and the year endedSeptember 30, 2009. Except as otherwise indicated, all dollar amounts containedin this discussion and analysis and the Consolidated Financial Statements arein Canadian dollars. The financial information presented in the ConsolidatedFinancial Statements was prepared in accordance with generally acceptedaccounting principles (GAAP) in Canada. Note 22 of these Consolidated FinancialStatements of the Company set forth the material differences between Canadianand U.S. GAAP.

**A) OPERATING RESULTS**

CriticalAccounting Policies

The preparationof our financial statements requires that we adopt and follow certainaccounting policies. Amounts presented in the financial statements have beendetermined in accordance with such policies, certain of which incorporateestimates and assumptions. Although management believes that the estimates andassumptions are reasonable, actual results may differ. 

The detailedaccounting policies are listed in Note 2 to the Financial Statements for theyear ended September 30, 2011. Included below is a discussion of the accountingpolicies that are affected by the most significant judgments and estimates usedin the preparation of the financial statements, how such policies are appliedand how results differing from the estimates and assumptions would affect theamounts presented in the financial statements. Other accounting policies alsohave a significant effect on our financial statements, and some of thesepolicies also require the use of estimates and assumptions.

RevenueRecognition 

The  Company historically generated revenues from yacht charter operations and the  sale of memberships and dues. In accordance with CICA HB 3400, Revenue, 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 member’s entitlements. For  lifetime memberships, revenue is recognized over a period of five years, which  is management’s best estimate of the period over which performance will be  required.  Gains from matured life  insurance policies and revaluation of life settlement investments are recorded  as Other Income and are excluded from Operating Income.

During the year  ended September 30, 2008, the Company entered into the life settlement  industry. The Company records investments in the life settlement contracts at  fair value on each balance sheet date. Any changes to fair value will be  recognized in the Other Income in the period in which the changes occur. Gains  from matured life insurance policies and revaluation of life settlement  investments are recorded as Other Income and are excluded from Operating  Income.

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Impairmentsof Long Lived Assets

Long-livedassets are reviewed for impairment whenever events or circumstances indicate thatthe carrying value of an asset may not be recoverable. An impairment loss isrecognized when the carrying value of a long-lived asset intended for useexceeds the sum of the undiscounted cash flows is expected from its use andeventual disposition. The impairment loss is measured as the excess of thecarrying value of the asset over its fair value. 

AccountsReceivable

The Companygenerates a portion of revenue and related accounts receivable from travelmemberships. Management evaluates the collectability of our accounts receivablebased on a combination of factors. In circumstances where we are aware of aspecific customer's inability to meet its financial obligations, a specificreserve for bad debts against amounts due is recorded to reduce the recognizedreceivable to the net amount we reasonably believe will be collected. For allother customers, reserves are recognized for bad debts based on past write-offhistory and the length of time the receivables are past due. 

FinancialInstruments

Financialinstruments are initially recognized at fair value. The fair value of afinancial instrument is the amount of consideration that would be agreed uponin an arm’s-length transaction between knowledgeable, willing parties who areunder no compulsion to act. Fair values of financial instruments are based onindependent prices quoted in active markets. In the absence of an activemarket, fair values are determined based on valuation models such as discountedcash flows, which require the use of assumptions concerning the amount oftiming of estimated future cash flows and discount rates. Subsequentmeasurement depends on management’s classification of the financial assets asheld-for-trading, available –for-sale, held-to-maturity or loans andreceivables, and financial liabilities as held-for-trading or otherliabilities. The classification of financial instruments depends on the natureof and the purpose of the financial instruments, management’s choice and insome circumstances, management’s intentions. 

Held-for-trading

Financialinstruments classified as held-for-trading are measured at fair value with therealized and unrealized changes in fair value recognized each reporting periodthrough interest and financing costs, net on the consolidated statement ofearnings. 

Available-for-sale

Financial assetsclassified as available-for-sale are measured at fair value with the unrealizedchanges in fair value recorded each reporting period in OCI. Investments inequity instruments classified as available-for-sale do not have the quotedprice in an active market are recorded at cost. Each reporting period,available-for-sale assets are written down to fair value through interest andfinancing costs, net on the consolidated statement of earnings to reflectimpairments that are considered to be other than temporary. 

Held-to-maturity,loans and receivables and other liabilities

Financialinstruments classified as held-to-maturity, loans and receivables and otherliabilities are measured at amortized cost using the effective interest method 

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The followingtable summarizes the Company’s selected financial instrument classificationsbased on its intentions: 

| Financial instrument                        | Classification        |
|---------------------------------------------|-----------------------|
|                                        |                  |
| Cash and cash equivalents                   | Held-for-trading      |
| Funds held in trust                         | Held-for-trading      |
| Short-term deposits                         | Held-to-maturity      |
| Marketable securities                       | Held-for-trading      |
| Amounts and notes receivable                | Loans and receivables |
| Life settlement contract receivable         | Loans and receivables |
| Other receivables and related party advance | Loans and receivables |
| Investment in life settlement contracts     | Held for trading      |
| Accounts payable and accrued liabilities    | Other liabilities     |
| Accounts payable - other                    | Other  liabilities    |
| Convertible debentures                      | Other  liabilities    |
| Secured borrowings and due to broker        | Other  liabilities    |
| Promissory note payable                     | Other  liabilities    |
| Long term debt                              | Other  liabilities    |
| Convertible Debentures                      | Other  liabilities    |
| Loan from related parties                   | Other  liabilities    |

SelectedAnnual Information

The followingdepicts some of the Company’s significant operating results: 

|                             |   |      |   |   | **Year End** |   |   |       |   |
|----------------------------------|--------|-----------|--------|--------|--------------|--------|--------|------------|--------|
|                             |   | **2011**  |   |   | **2010**     |   |   | **2009**   |   |
| Travel Club Memberships Sold     | $      | –   |   | $      | –      |   | $      | –    |   |
|                             |   |      |   |   |         |   |   |       |   |
| Amount Recognized as             |   | –   |   |   | –      |   |   | –    |   |
| Revenue during the year          |   |      |   |   |         |   |   |       |   |
| Membership Dues                  | $      | 1,642,253 |   | $      | 2,181,920    |   | $      | 2,358,067  |   |
| # Travel Club Memberships        |   | –   |   |   | –      |   |   | –    |   |
| Sold                             |   |      |   |   |         |   |   |       |   |
| Mean Average Membership          | $      | –   |   | $      | –      |   | $      | –    |   |
| Price                            |   |      |   |   |         |   |   |       |   |
| Net Income (Loss) for the period | $      | (946,072  | )      | $      | (3,464,951   | )      | $      | (5,344,283 | )      |
| Basic Income (Loss) per Share    | $      | (0.03     | )      | $      | (0.12        | )      | $      | (0.19      | )      |
| Diluted Income (Loss) per Share  | $      | (0.03     | )      | $      | (0.12        | )      | $      | (0.19      | )      |

For the  year ended September 30, 2011 Travel Club Memberships sales remained at $Nil  compared to ($Nil – September 30, 2010, $Nil –September 30, 2009), with amount recognized  as revenue during the year ended September 30, 2011 remaining at $Nil ($Nil  September 30, 2010, $Nil September 30, 2009). Total revenue during the year  ended September 30, 2011 decreased to $3,380,691 ($3,941,297 – year ended September  30, 2010, $3,516,417 –September 30, 2009) as a result of disposing of the  Company’s wholly-owned subsidiary International Fitness Vacations during the  year.

For the  year ended September 30, 2011, cash flow used in operations decreased $731,431 to  $66,103 due mainly to the decrease in net loss as a result of cost cutting  measures during the year, compared to cash flows used in operating activities  of $797,534 for the year ended September 30, 2010 and cash flows used in operating  activities of $672,440 for the year ended September 30, 2009.

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The  Company recorded revenues from membership dues and travel club membership sold  of $ 3,110,511 for the year ended September 30, 2011 compared to $3,821,772 for  the year ended September 30, 2010 and $3,294,162 for the year ended September  30, 2009. Subsequent to fiscal year end, the Company sold the marketing sales  and service operations as the membership faced natural attrition. 

For the  year ended September 30, 2011 a total of Nil travel club memberships were sold  or acquired, (nil for year ended September 30, 2010, 123 for year ended  September 30, 2009). For the year ended September 30, 2011 the mean average  non-refundable travel club membership purchase price remained at $Nil ($Nil for  year ended September 30, 2010, and $Nil for year ended September 30, 2009).

A net  loss of $946,072 was recorded for the year ended September 30, 2011, as  compared to the net loss of $3,464,951 for the year ended September 30, 2010,  and a net loss of $5,344,283 for year ended September 30, 2009. The net loss of  $946,072 was due largely as result of an impairment on the motor vessel  recognized as at years’ end of $500,000. Basic loss-per-share was $0.03 for the  year ended September 30, 2011 compared to a loss per share of $0. 12 for the  year ended September 30, 2010; loss per share of $0.19 – for the year ended  September 30, 2009. 

There were32,515,984 shares issued as of September 30, 2011 and 29,140,984 issued as ofSeptember 30, 2010 and 28,856,984 at September 30, 2009. In April 2007 thecompany completed a 3-for-1 forward split increasing the outstanding shares by9,240,578 to 13,860,867. On June 29, 2007, the Company completed a private placement and issued 11,000,000 common shares of the Companyat US $0.50 per share for gross proceeds of $5,773,918 (US $5,500,000). On July4, 2007, the Company completed a private placement and issued 3,500,000 commonshares at US $1.00 per share for gross proceeds of $3,650,396 (US $3,500,000)increasing the issued and outstanding shares to 28,409,611 at September 30,2007. On July 13, 2011, the Company completed a private placement issuing2,000,000 common shares at $0.05 per share for gross proceeds of $100,000.Basic earnings-per-share is calculated using the weighted average number ofcommon shares outstanding during the year.

The Series “A” preferenceconvertible shares and the Series “B” preference convertible shares are notincluded in the calculation of basic earnings per share, because managementconsiders these shares to have barriers to conversion, excluding them from thecalculation of basic earnings per share.

For the yearended September 30, 2011, the weighted average number of shares outstanding was29,990,231. The fully diluted weighted average number of shares outstanding,which assumes the conversion of all Series “A” preference convertible sharesand Series “B” preference convertible shares was 89,880,427. However, in a lossyear, common shares equivalents are excluded from the calculation of dilutedearnings (loss) per share as the effect would be anti-dilutive.

For the yearended September 30, 2011 expenses decreased by 28% or $1,024,648 due tocorporate cost cutting measures. The largest expense decrease was general and administrationof $489,055 (2010 - $420,428) due to corporate restructuring and cost cuttingmeasures.

For the yearended September 30, 2011, the second largest decrease in expenses of $427,752 occurredin wages expense to $1,070,953, (2010 - $1,498,705, 2009 - $1,689,385). Thedecrease was a direct result of streamlining the company’s staffing levels anddisposing of the Company’s wholly-owned subsidiary, International FitnessVacations Ltd. during the year.

For the yearended September 30, 2011, the third largest decrease in operating expenses of $72,341occurred in bad debts expense to $8,954, (2010 - $81,295, 2009 – $212,364). Thedecrease was the result of recoveries of previous provisions for the allowancefor doubtful accounts. The Company recognized an impairment of $500,000 on themotor vessel during the year ended September 30, 2011 ($825,000 – 2010,$2,348,595 – 2009).

For the  year ended September 30, 2010 expenses decreased by 19% or $1,067,326 due to  corporate cost cutting measures. The largest expense increase was amortization  of property and equipment to $649,508 (2009 - $337,256) due to the full year of  amortization of the 120 foot Motor Vessel .

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General andAdministration expense decreased 16% or $420,428 to $2,206,216 during fiscal2010, compared to $2,626,644in fiscal 2009.

For the yearended September 30, 2010, the largest decrease in expenses of $684,738 occurredin amortization of purchased memberships to $nil, (2009 - $1,751,700, 2008 -$3,060,503). The decrease was a direct result of the impairment of theintangible asset acquired in the purchase of Family Vacations Center in aprevious fiscal year. 

**B) LIQUIDITY AND CAPITAL RESOURCES**

Liquidity

As of December31, 2011 the Company had in excess of $90,873 cash on deposit. 

In 2011 theworking capital deficiency decreased to $3,722,506 primarily due to the reductionof current deferred revenue during the year, which decreased $200,903 to $876,165as at September 30, 2011. 

In 2010  the working capital surplus decrease to a deficiency of $3,366,191 primarily  due to the sales the company’s marketable securities portfolio, which decreased  $2,240,324 to $51 as at September 30, 2010.

For continuation and long-term growth specifically the developmentof the Life Settlement operations additional capital is required. The Company’s120-foot motor vessel is completed and the vessel contributed some revenue infiscal 2011. 

Financing thework on the vessel to date had been from operations, a credit facility fromCaterpillar Financial Services, and funds raised. The credit facility withCaterpillar Financial Services Corporation was created in September of 2005 for$3.0 million USD. This credit facility was subsequently increased to a total of$4.3 million USD in spring of 2007. The construction loan has been converted toa 5 year term loan facility of $5 million USD with an interest rate of 7%. TheCompany incurred additional capital expenditures of $410,872 in the fiscal yearending September 30, 2010, and $2,025 in fiscal year ending September 30, 2011.The Company does not currently hedge against foreign exchange or interest ratefluctuations. 

The Company’stotal Revenues for the year ended September 30, 2011 decreased by $560,606 to $3,380,691(2010 - $3,941,297, 2009 - $3,516,417). The decrease was the result of the disposalof the Company’s wholly-owned subsidiary International Fitness Vacations Ltd.during the year. Fair value changes on the investment in life settlements wasrecorded under “Other Income (expenses)”, totaling $(369,132) (2010 - $(1,582,464),2009 - $775,207).

CapitalResources

The Company'scapital resources are comprised primarily of financial institutions and privateinvestors (including members of management) who are either existing contacts ofthe Company's management, or who came to the attention of the Company throughbrokers, financial institutions and other intermediaries.

For the yearended September 30, 2011, cash flow used in operations decreased $774,973 or 97%to $22,561 due to an corporate restructurings, dispositions of assets, and costcutting measures, compared to cash flows used in operating activities of $797,534for the year ended September 30, 2010 and cash flows used in operatingactivities of $672,440 for the year ended September 30, 2009.

Financing thework on the vessel to date had been from operations, a credit facility fromCaterpillar Financial Services, and funds raised. The credit facility withCaterpillar Financial Services Corporation was created in September of 2005 for$3.0 million USD. This credit facility was subsequently increased to a total of$4.3 million USD in spring of 2007. The construction loan has been converted toa 5 year term loan facility of $5 million USD 

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with an interest rate of 7%. TheCompany incurred additional capital expenditures of $410,872 in the fiscal yearending September 30, 2010, and $Nil in fiscal year ending September 30, 2011.The Company does not currently hedge against foreign exchange or interest ratefluctuations. 

The Companyestimates that its cash and cash equivalents will not be sufficient to meet itscapital requirements  given its current business structure in the next year.However, its forecast of the period of time through which its financialresources will be adequate to support its operations is a forward-lookingstatement that involves risks and uncertainties, and actual results could varymaterially. If the Company is unable to raise additional capital when requiredor on acceptable terms, it may have to liquidate, delay, and or scale back onsome planned initiatives.

The Company'saccess to capital is always dependent upon general financial market conditions.Because of the nature of the Company's business, there are no trends in thenature of its capital resources that could be considered predictable. To date,the Company's capital resources have consisted of the private issuance ofcommon shares, convertible securities and a credit facility from CaterpillarFinancial Services Corporation.

Quantitative and Qualitative Disclosures about Market Risk

The Company doesnot have any derivative financial instruments. The exposure to market risk islimited to interest and exchange rate sensitivity. The Company’s long term debtis denominated in US dollars with a fixed interest rate of 7%. The Company istherefore affected by changes in the Canadian dollar exchange rate. The primarystrategy of the Company’s borrowing activities was to preserve principal bykeeping funds in US dollars and converting to Canadian dollars when required. Giventhe fluctuation of the US Dollar for the year ended September 30, 2011 theCompany did not receive any additional earnings related to exchange ratefluctuations. The Company does not currently hedge against either foreignexchange. 

**C) RESEARCH AND DEVELOPMENT,PATENTS AND LICENSES, ETC.**

The Company’shas expended no material research and development expenses for the last threefiscal years. 

**D) TREND INFORMATION**

The Company’shistorical business was providing travel services for the members of its travelclubs. Subsequent to year end, the Company disposed if its travel clubmarketing and service operations. 

The operating costs of the company decreased $1,024,648 for the yearended September 30, 2011 to $3,490,396, compared to the $4,515,044 for the yearended September 30, 2010, and $5,582,370 for the year ended September 30, 2009.The decrease in operating costs has been a direct result of managements’ costsavings measures and the disposal of the Company’s wholly-owned subsidiaryInternational Fitness Vacations Ltd during the year.

The Company hasentered the Life Settlement market. The Company believes successful developmentand capture of market share in this capital intensive emerging industry willdominate the future Company direction and the allocation of resources.

The Company iscurrently sourcing Life Settlement policies through “Business to Business”(B2B) Channels and expects to launch a “Business to Consumer” (B2C) Channelsubject to funding. To operate the “Business to Consumer” (B2C) Channel, theCompany formed “American Life Settlement Society LLC” duly formed under thelaws of the state of Delaware on the 15th day of November 2007.

The Company usesan industry standard Milliman Report (consultants for the health care insuranceindustry) along with recent purchases and sales of similar life insurancepolicies, financial standing of the insurer, changes in general economicconditions, standard, actuarially developed VBT mortality tables, industry lifeexpectancy reports and CDC reports on nationwide mortality statistics todetermine an acceptable purchase price. In fiscal 2008, the 

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Company entered theLife Settlement industry with the initial purchase of $30,930 thousand USD facevalue of Life Insurance policies. The Company paid $1,788,567 ($1,742,817 USD)which was funded by the recent Private Placements completed by the Company inJuly of 2007. During the third quarter of 2008 a $5 Million USD policy maturedresulting in a portfolio face value of $25,930 thousand USD at a cost of$1,548,070 ($1,506,473 USD) at the end of the 2008 financial year 2009.

To expand beyondis present financial capabilities in the Life Settlement market, additionalfinancing will be sought. There can be no assurances the Company will be ableto generate sufficient investment from borrowing, the sale of equity, or acombination thereof to rapidly grow its life Settlement division. If additionalfinancing is required, there is no certainty it will be available when and tothe extent required or that if available, it will be on acceptable terms. Ifadequate funds are not available on acceptable terms, the Company may not beable to grow and expand its business at an accelerated rate. This could have amaterial adverse effect on the Company's planned growth. This and other risksrelated to operating in the Life Settlement industry could have a materialadverse effect on the Company's operations and planned growth. (See Item 3 Riskfactors, The Company May Require Additional Capital). 

The Company ownsand a 120 foot passenger carrying motor vessel MV Spirit ofTwo-Thousand-and-Ten. The vessel is for charter cruises to the PacificNorthwest, and Baja Mexico in addition to day and evening dinner cruises fromits summer home port in Vancouver, B.C., and winter home port of Cabo SanLucas, Mexico. Approximately 40% of the custom yacht cruise market are fullyacht charters by a single entity for a corporate retreat, corporate awardsprogram and family retreats etc.. The Company is marketing and promoting tomany tourism based organizations the cruise experience in Seat of Cortez forWinter season and the Pacific Northwest for Summer Season and has a web site www.spirityachtcharters.com to present the vessel and provide an overview of the yachtoffering. The Company has begun the marketing and promotion to many tourismbased organizations and has a web site www.spirityachtcharters.com to present the vessel and provide an overview of the yachtoffering. As a new business venture the Company generated $340,136 charterrevenue from the marketing of the yacht in fiscal 2011 (2010 - $69,642, 2009 -$175,331) and is unable at this time to accurately project any revenue amountsto be generated in 2012 season.

The Companybelieves the existing travel club membership will have minimal growth if anywhile projecting some growth in revenue from charter sales operations. Thecorporate growth is anticipated to arise from development and implementation ofits business plan for the Life Settlement market.

Forward looking statements are made based on management’s reasonablebeliefs, estimates and opinions on the date the statements are made. However,these forward-looking statements involve known and unknown risks, uncertaintiesand other factors that may cause our actual results, performance orachievements or industry results to be materially different from any futureresults, performance or achievements expressed or implied by suchforward-looking statements. 

**E) OFF-BALANCE SHEET ARRANGEMENTS**

The Company hasno off-balance sheet arrangements that have or are reasonably likely to have acurrent or future effect on our financial condition, changes in financialcondition, revenues or expenses, results of operations, liquidity, capitalexpenditures or capital resources that are material to investors. 

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**F) TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS**

The followingtable is a summary of our contractual obligations as of September 30, 2011: 

|                                     |   | Within 1 year | 1-2 years   | 2-3 years     | 3-4 years   | 4-5 years   | 5 + years     | Total          |
|------------------------------------------|--------|---------------|-------------|---------------|-------------|-------------|---------------|----------------|
| Accounts payable and accrued liabilities | $      | 567,439       | –     | –       | –     | –     | –       | 567,439        |
| Secured borrowing                        |   | 51,064        | –     | –       | –     | –     | –       | 51,064         |
| Loans from related parties ***           |   | 137,872       | –     | –       | –     | –     | –       | 137,872        |
| Life settlement premiums**               |   | 466,890       | 490,235     | 514,747       | 540,484     | 567,508     | 2,590,806     | 5,170,670      |
| Long-term debt *                         |   | 141,276       | 149,584     | 4,598,158     | –     | –     | –       | 4,889,018      |
| Lease and Contracts                      |   | 90,489        | 85,772      | 20,667        | –     | –     | –       | 196,928        |
| **TOTAL**                                | **$**  | **1,455,030** | **725,591** | **5,133,572** | **540,484** | **567,508** | **2,590,806** | **11,012,991** |

*****Contractual long term debt obligations do not include interest. InJanuary 2009 the Company’s long term debt was converted to a $5.0 million termloan in US funds with Caterpillar Financial Services Corporations having a 5year bearing interest at fixed rate of 7% per annum. 

**Life insurancepremiums are future payments required to keep the insurance policies in goodstanding.

*** The amountsadvanced by related parties are unsecured, non-interest bearing and does notform part of contractual obligations.

**G) SAFE HARBOR**

This discussionincludes certain statements that may be deemed "forward-lookingstatements". All statements in this discussion, other than statements ofhistorical facts, that address future operation activities, growth and eventsor developments that the Company expects, are forward-looking statements. 

Although theCompany believes the expectations expressed in such forward-looking statementsare based on reasonable assumptions, such statements are not guarantees offuture performance and actual results or developments may differ materiallyfrom those in the forward-looking statements. Factors that could cause actualresults to differ materially from those in forward-looking statements include:the tourism demand, market prices, government regulation, continuedavailability of capital and financing, and general economic, market or businessconditions. Investors are cautioned that any such statements are not guaranteesof future performance and that actual results or developments may differ materiallyfrom those projected in the forward-looking statements. 

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**ITEM VI. DIRECTORS, SENIORMANAGEMENT AND EMPLOYEES**

**A) DIRECTORS AND SENIOR MANAGEMENT**

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

| **Name and****City of Residence**             | **Date of Birth** | **Principal Occupation****For  the Past Five Years**                                                                                                                                                                                                                                                                                                                                | **Position****Held**                             |
|-----------------------------------------------|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|
| Daniel Clozza  Vancouver, B.C.   Canada       | Feb. 9, 1960      | Since  September 1995, employed full-time by the Company.                                                                                                                                                                                                                                                                                                                           | President, CEO and Director since September 1995 |
| Martin Tutschek  Vancouver, B.C.   Canada     | May 24, 1960      | Since August  2001, employed full-time by the Company.                                                                                                                                                                                                                                                                                                                              | CFO and Director since August 2001               |
| Jeff Teeny  Portland, Oregon.   USA           | April 30, 1967    | Property and  Real Estate developer for various projects including the 400 acre Villages at  Cascade Head located on the Pacific Coast of Oregon, USA                                                                                                                                                                                                                               | Director since July 2007                         |
| Scott McManus  Las Vegas, Nevada,   USA       | June 21,1962      | CEO, Chairman:  Ganix Biotechnologies, Inc. 2002 – present, an Ecological Science Company.  Financier, Net Branch: North American Funding August 2004 – present, a  Commercial Finance Company. Various resort property real estate developments.                                                                                                                       | Director since July 2007                         |
| Chris Yergensen Esq  Las Vegas, Nevada,   USA | March 13, 1967    | President and  General Counsel, Panorama Towers Group, Las Vegas Nevada 2002 to present.  President of Show Media LLC Las Vegas Nevada 2001 to present                                                                                                                                                                                                                              | Director since June 2008                         |
| Mike Barrett  Portland, Oregon,   USA         | November 13, 1963 | President of  Pounce Consulting, an IT consulting company based in Orange County. Vice  President of Sales and Marketing for Xavient Information Systems, Simi  Valley, California and Noida, India.2006-2008 Sr. Business Development  Manager, Tata Consultancy Services, Mumbai, India 2004- 2006. Executive VP,  Sales & Marketing, Centerlogic, Portland Oregon 2002-2004. | Director since June 2008                         |
| Kazunari Kohno  Tokyo, Japan                  | December 19, 1963 | Member of the  Board of Directors for Aegis Capital Co., Ltd 2007 to present. Associate  Professor Graduate School of Media and Governance, Keio University 2002 to  present.                                                                                                                                                                                                       | Director since June 2008                         |

FamilyRelationships

There are nofamily relationships between any directors or executive officers and any otherdirector or executive officer. Each Director serves for a term of one year oruntil the next annual meeting of the shareholders at which Directors areelected and qualified. 

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Arrangements

Messrs. Teenyand McManus were appointed to the Board of Directors concurrent with privateplacements raising an aggregate total of US$ 9,000,000 completed in July 2007with companies related to Messrs. Teeny and McManus. Other than the foregoing,there are no arrangements or understandings between of our directors orexecutive officers, and with our major shareholders, customers, suppliers orothers pursuant to which any director or officer was or is to be selected as adirector or officer. In addition, there are no agreements or understandings forthe officers or directors to resign at the request of another person and theabove-named officers and directors are not acting on behalf of nor acting atthe direction of any other person. 

**B)COMPENSATION**

ExecutiveCompensation and Compensation of Directors

During 2011, theCompany paid $nil (September 30, 2010 $nil and September 30, 2009 $nil) inconsulting fees to directors or companies controlled by directors of theCompany. The Company also reimbursed $146,118 ($216,683 –September 30, 2010,September 30, 2009 - $138,717) to directors for expenditures made on behalf ofthe Company. 

The Company hasan employee extended medical / dental plan acquired with the purchase of FamilyVacation Centers on October 18th 2007. No directors or officers areparticipating in the plan. The Company has no pension, retirement, or othersimilar benefits for directors or officers pursuant to any existing planprovided by, or contributed to by, the Company or its subsidiaries. 

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

Stock Options

The informationon stock options required by this item is set forth in Item 6.E of this annualreport. 

**C) BOARD PRACTICES**

The Board ofDirectors communicates formally approximately 4 to 6 times per year on an asneeded basis to deal matters relating to the Company. Each Director serves fora term of one year or until the next annual meeting of the shareholders atwhich Directors are elected and qualified. The Company's last annual generalmeeting was held on March 25, 2010 and the next meeting will be held subject toBoard approval as specified in the Company's Articles. The Company's executiveofficers are appointed by and serve at the pleasure of the Board of Directors.

AuditCommittee

The Company's Audit Committee is composed of threeindividuals all present directors. The Audit Committee members of the Companyas at December 31, 2011 are Mr. Mike Barrett, Mr. Chris Yergensen, and Mr.Kazunari Kohno. Messrs. Barrett, Yergensen, and Kohno during fiscal year 2011 andcurrently:

- are considered an "independent"     director as defined in Section 803A(2) of the American Stock Exchange     Company Guide; 
- meets the criteria for independence as defined by Rule 10A-3     adopted by the SEC; 
- have not participated in the preparation of our financial     statements or the financial statements of any of our current subsidiaries     at any time during the past three years; and 
- is able to read and understand fundamental financial     statements. 

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Our Board ofDirectors has determined that the audit committee has at least one member, Mr.Barrett who qualifies as an Audit Committee Financial Expert, as defined byrelevant SEC rules. As previously stated, Mr. Barrett is an independentdirector. The Audit Committee is responsible for reviewing the Company'sfinancial reporting procedures, internal controls, and the performance of theCompany's external auditors. The functions of the Audit Committee also includesselecting, appointing, retaining, compensating and overseeing our independentauditors, deciding upon and approving in advance the scope of audit andnon-audit assignments and related fees, reviewing accounting principles we usein financial reporting, and reviewing the adequacy of our internal controlprocedures, including the internal audit function. The committeeis also responsible for reviewing the annual financial statements prior totheir approval by the Board of Directors. The Board has adopted a charter forthe Audit Committee in the fall of 2007. 

RemunerationCommittee

The Company doesnot have a Compensation Committee. 

ServiceContracts

The Company andits subsidiaries do not have any service agreements with any of the directorsof the Company providing for benefits upon termination of employment. 

**D) EMPLOYEES**

The following isa breakdown of Company employees as at December 31, 2011 and for the yearsended September 30 2011, and 2010, and 2009. 

|                                 |   | **2011*** |   |   | **2011** |   |   | **2010** |   |   | **2009** |   |
|--------------------------------------|--------|-----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| **Management**                       |   | 2         |   |   | 2        |   |   | 3        |   |   | 2        |   |
| **Administrative Staff**             |   | 2         |   |   | 2        |   |   | 9        |   |   | 7        |   |
| **Customer Service Representatives** |   | 6         |   |   | 6        |   |   | 6        |   |   | 10       |   |
| **IT / e-Commerce Personnel**        |   | 0         |   |   | 0        |   |   | 1        |   |   | 1        |   |
| **Fitness Club Personnel**           |   | 0         |   |   | 7        |   |   | 8        |   |   | 8        |   |
| **Yacht Charter Personnel**          |   | 2         |   |   | 2        |   |   | 4        |   |   | -        |   |

Notes: (*) as at January 15, 2012.

**E) SHARE OWNERSHIP OF MANAGEMENT**

The followingtable sets forth the share ownership of management as of December 31, 2011: 

| Name             |   | Common    |   |   | Percent of |   |   | "A"       |   |   | Percent of |   |   | "B"       |   |   | Percent of |   |
|------------------|--------|-----------|--------|--------|------------|--------|--------|-----------|--------|--------|------------|--------|--------|-----------|--------|--------|------------|--------|
|             |   | Shares(1) |   |   | Class      |   |   | Preferred |   |   | Class      |   |   | Preferred |   |   | Class      |   |
|             |   |      |   |   |       |   |   | Shares(4) |   |   |       |   |   | Shares(5) |   |   |       |   |
| Scott McManus(2) |   | 9,000,000 |   |   | 27.67      |   |   | 1,393,398 |   |   | 10.00      |   |   | 1,393,398 |   |   | 10.00      |   |
| Jeffery Teeny(3) |   | 6,250,000 |   |   | 19.22      |   |   | 1,393,398 |   |   | 10.00      |   |   | 1,393,398 |   |   | 10.00      |   |
| Daniel Clozza    |   | 5,430,000 |   |   | 16.69      |   |   | 5,305,500 |   |   | 38.07      |   |   | 5,305,500 |   |   | 38.07      |   |
| Martin Tutschek  |   | 1,620,789 |   |   | 4.98       |   |   | 1,399,500 |   |   | 10.04      |   |   | 1,399,500 |   |   | 10.94      |   |
| Mike Barrett     |   | 100,000   |   |   | 0.30       |   |   | -         |   |   | -          |   |   | -         |   |   | -          |   |
| Chris Yergensen  |   | 100,000   |   |   | 0.30       |   |   | -         |   |   | -          |   |   | -         |   |   | -          |   |
| Kazunari Kohno   |   | -         |   |   | -          |   |   | -         |   |   | -          |   |   | -         |   |   | -          |   |

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Notes: 

(1) Does not include options owned by directors orofficers. Options are disclosed in table below. (2) Shares beneficially owned or held by Mr McManus are registered to AliyaLife Settlement, LLC.(3) Shares beneficially owned or held by Mr Teeny are registered to TeenyAcquisitions, LLC (4) On June 27, 2007 the record date, the Company issued 13,933,983 Series ”A”Preferred shares to all the existing registered and beneficial commonshareholders on a one (1) for one (1) PRO RATA basis. The Series “A’ Preferredshares are convertible, as a Series into common shares of the Company provideda majority of the Series “A” Preferred shareholders vote in favour ofconverting the entire Series. The Series will convert into a number of commonshares that will represent 50% of the number of fully diluted common sharesafter conversion. (5) On June 27, 2007 the record date, the Company issued 13,933,983 Series ”B”Preferred Shares to all the existing registered and beneficial commonshareholders on a one (1) for one (1) PRO RATA basis. The Series “B” Preferredshares are convertible into common shares of the Company on a one for one basisby shareholders of record as of June 27, 2007.

IncentiveShare Purchase Plan

On July 5th2007, the Company has executed a Stock Option plan reserving 2,850,000 sharesin the common stock of the Corporation to provide its officers, directors,employees and consultants with an incentive to use their best efforts toadvance the business affairs of the Corporation. The plan allows optionees toexercise the purchase of stock options at the price of $1.00 per common sharewhich will be executable for a period of five years from the date of grant.

The followingtable sets out detail regarding stock option grants made to our Named ExecutiveOfficers issued in our 2007 fiscal year. 

| **Name**         | **Number of****Securities****Underlying Options** | **% of Total Options****Granted to****Employees in****Fiscal Year** | **Exercise  Price****($/Sh)** | **Expiration****Date** |
|------------------|---------------------------------------------------|---------------------------------------------------------------------|-------------------------------|------------------------|
| Jeff Teeny(1)    | 1,250,000                                         | 43.85                                                               | 1.00                          | July  5, 2012          |
| Scott McManus(2) | 315,000                                           | 11.05                                                               | 1.00                          | July  5, 2012          |
| Martin Tutschek  | 300,000                                           | 10.52                                                               | 1.00                          | July  5, 2012          |

Notes: 

(1) Options beneficially owned or held by Mr Teeny areregistered to Teeny Acquisitions, LLC. 

(2) Options beneficially owned or held by Mr McManusare registered to Aliya Life Settlement, LLC. 

Warrants

There are nowarrants outstanding. 

OtherDilutive Elements

All convertibledebentures totaling $40,486 issued prior to 2003 are fully matured as ofDecember 31, 2002. The debentures during their term carried a rate of interestof eight percent per annum payable semi-annually. The conversion feature of thedebenture allowed for the debenture holders to convert his capital at a rate of$6.00 US to $12.50 US per share. The Company would have 4,622 shares issued if100% of the debentures were to be converted. For the year ending September 30, 2011,$Nil, (December 31, 2006 $Nil, December 31, 2005 $Nil) of convertibledebentures was repaid. There were no conversions during the year endedSeptember 30, 2011, 2010, or 2009. 

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During the year, the Company offered a secured convertible debenture with a face value of up to $9,000,000 USD, secured by a 100% interest in two US Irrevocable Life Insurance Trusts (ILIT) with death benefits totaling $9,000,000 USD, and are subject to an escrow agreement. The Company issued seven units for a total face value of $3,150,000 USD, for cash proceeds of $253,541 plus common shares of the company valued at $134,101.

The debenture holders have the right to convert at any time in whole or in part, any outstanding amount paid to date on the debenture, into Common Shares of the Company at a 20% discount to the market trading price immediately prior to conversion. The fair value of these conversion rights was calculated using the Black-Scholes method. At issuance assumptions included the stock price of $0.17 with a maturity date of 9.3 years and an interest rate of 1.76%. At September 30, 2011 assumptions included a stock price of $0.48 with a maturity date of 8.7 years and an interest rate of 1.76%.

The fair value of the $3,150,000 convertible debentures was estimated by discounting the payments due at the time of maturity of the two underlying ILIT’s. This debt discount will be amortized as interest expense over the life of the debt. During the year ended September 30, 2011, the company recognized $188,572 of accretion interest expense on the debt.

Ten years from the date of subscription, the debenture is redeemable and/or callable by the holder or the Company, at 75% of the total face value of the debenture. The Company, or debenture holder, can force the Company to convert the debt and take the option of either receiving payment in cash or a conversion to common shares of the Company, at the stated conversion rate. The option of receiving either common shares or cash is at the sole discretion of the debenture holder.

Conflicts of Interest

Certain of theCompany's directors and officers may serve as directors or officers of othercompanies or have significant shareholdings in other companies and, to theextent that such other companies may participate in ventures in which theCompany may participate, the directors of the Company may have a conflict ofinterest in negotiating and concluding terms respecting the extent of suchparticipation. In the event that such a conflict of interest rises at a meetingof the Company's directors, a director who has such a conflict will abstainfrom voting for or against the approval of such participation or such terms. Itmay occur that a particular company will assign all or a portion of itsinterest in a particular asset to another of these companies due to thefinancial position of the company making the assignment. In accordance with theCompany 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 whetheror not the Company will acquire a particular asset, the directors willprimarily consider the degree of risk to which the Company may be exposed andits financial position at that time.

**ITEM VII. MAJOR SHAREHOLDERS ANDRELATED PARTY TRANSACTIONS**

**A) MAJOR SHAREHOLDERS**

The informationas to shares beneficially owned, not being within the knowledge of the Company,has been furnished by the respective individuals. The Company’s majorshareholders do not have different voting rights. There are no arrangementsknown to the Company which may, at a subsequent date, result in a change incontrol of the Company. 

The followingpersons hold, of record or beneficially, directly or indirectly, or are knownby the Company to own beneficially, directly or indirectly, more than 5% of theissued shares of the Company as at December 31, 2011: 

| **Identity of Person or****Group** | **Common****Shares**(1) | **Percent of****Class** | **"A"****Preferred****Shares**(4) | **Percent of****Class** | **"B"****Preferred****Shares**(5) | **Percent of****Class** |
|------------------------------------|-------------------------|-------------------------|-----------------------------------|-------------------------|-----------------------------------|-------------------------|
| Jeffery Teeny(2)                   | 6,250,000               | 27.67                   | 1,393,398                         | 10.00                   | 1,393,398                         | 10.00                   |
| Scott McManus(3)                   | 9,000,000               | 19.24                   | 1,393,398                         | 10.00                   | 1,393,398                         | 10.00                   |
| Daniel Clozza,                     | 5,430,000               | 16.69                   | 5,305,500                         | 38.07                   | 5,430,000                         | 38.07                   |

Notes: 

(1) Does not include optionsowned by directors or officers. Options are disclosed previously.(2) Shares beneficially ownedor held by Mr Teeny are registered to Teeny Acquisitions, LLC

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(3) Shares beneficially ownedor held by Mr McManus are registered to Aliya Life Settlement, LLC.(4) On June 27, 2007 therecord date, the Company issued 13,933,983 Series ”A” Preferred shares to allthe existing registered and beneficial common shareholders on a one (1) for one(1) PRO RATA basis. The Series “A’ Preferred shares are convertible, as aSeries into common shares of the Company provided a majority of the Series “A”Preferred shareholders vote in favour of converting the entire Series. TheSeries will convert into a number of common shares that will represent 50% ofthe number of fully diluted common shares after conversion.(5) On June 27, 2007 therecord date, the Company issued 13,933,983 Series ”B” Preferred Shares to allthe existing registered and beneficial common shareholders on a one (1) for one(1) PRO RATA basis. The Series “B” Preferred shares are convertible into commonshares of the Company on a one for one basis by shareholders of record as ofJune 27, 2007.

The nature andextent of principal non-United States trading market is approximately 50% ofall outstanding securities, which are held outside the United States andapproximately 50% of all outstanding securities are held within the UnitedStates as of December, 2011. The Company is not owned or controlled, directlyor indirectly, by another corporation or by any foreign government. 

**B) RELATED PARTY TRANSACTIONS**

Except as setout below or otherwise disclosed in this report or in our audited financialstatements attached hereto, no executive officer or senior management of theCompany, nor any spouse, relative, associate or affiliate of the foregoingpersons, has any interest in any material transactions which occurred during theCompany's last full fiscal year and involved the Company or any of itssubsidiaries; or any presently proposed transaction involving the Company orany of its subsidiaries.

Canadian GAAP requires that any assets or liabilities acquired in anon-arms length transaction be recorded in the Company records at the carryingvalue of the vendor. 

During 2011, theCompany paid $Nil (September 30, 2010 – $Nil and September 30, 2009 – $Nil) inconsulting fees to directors or companies controlled by directors of theCompany. The Company also reimbursed $146,118 ($216,683 –September 30, 2010,September 30, 2009 - $138,717) to directors for expenditures made on behalf ofthe Company. 

From time totime during the year, the Company has made property and equipment, when not inuse, available to management and employees for which management and employeesreimburses the Company for all direct charges and sundry costs.

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

Indebtednessto Company of Directors and Senior Management

Amounts due toshareholders at the end of the fiscal period September 30, 2011 were $137,872(2010 – 92,033). Directors of the Company are indebted to the Company in theamount of $nil and no director or senior management or have been indebted tothe Company since the beginning of the last completed financial year of theCompany other than as listed below. The Company reimburses Directors and SeniorManagement for expenses incurred in connection with Company’s ordinary courseof business. To the extent these advances and expenses are offset, there existsan indebtedness to the Company of a net $nil as of September 30, 2011 (2010 - $nil, 2009 - $nil). 

Interests of Experts and Counsel

This Form 20-Fis been filed as an annual report under the Exchange Act and, as such; there isno requirement to provide information under this item. 

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**ITEM VIII. FINANCIAL INFORMATION**

**A) CONSOLIDATED STATEMENTS ANDOTHER FINANCIAL INFORMATION**

This AnnualReport contains the consolidated financial statements for the Company for thefiscal year ended September 30, 2011, fiscal year ended September 30, 2010, andfiscal year ended September 30, 2009 which contain an Auditors' Report dated JanuaryXX, 2012 in connection with the fiscal year ended September 30, 2011,Consolidated Balance Sheets as at September 30, 2010 and September 30, 2009,Consolidated Statements of Operations, Comprehensive Income (Loss) and Deficit,and Consolidated Statements of Cash Flows for the fiscal year ended September30, 2011 and year ended September 30, 2010 and fiscal year ended September 30, 2009,and Notes to Consolidated Financial Statements. 

Indebtednessto Company of Directors and Senior Management

No directors orsenior management of the Company are indebted to the Company or have beenindebted to the Company since the beginning of the last completed financialyear of the Company other than as noted in ITEM VII - Major Shareholders andRelated Party Transactions.

Legal orArbitration Proceedings

From time totime, the Company may become subject to claims and litigation generallyassociated with any business venture. In addition, the operations of theCompany are subject to risks of accident and injury, possible violations ofother regulations and some of which cannot be covered by insurance or otherrisk reduction strategies. Since the Company is a Canadian corporation and theofficers, directors and certain of the persons involved with the Company asprofessional advisors are resident in Canada, it may be difficult to effectservice within the United States upon such persons or to realize on anyjudgment by a court of the United States which is predicated on civil liabilitiesunder the 1933 Act. The Company's Canadian counsel have advised that there isdoubt as to the enforceability in Canada, either in original actions or throughenforcement of United States judgments, of liabilities predicated solely uponviolations of the 1933 Act or the rules and regulations promulgated thereunder. 

DividendDistribution Policy

The Company hasnot paid any cash dividends on its Common Stock and has no present intention ofpaying any dividends. The current policy of the Company is to retain earnings,if any, for use in operations and in the development of its business. The Boardof Directors will determine the future dividend policy of the Company from timeto time. 

**B) SIGNIFICANT CHANGES**

There has notbeen any significant change that has occurred since the date of the annualfinancial statements, and/or since the most recent interim financialstatements, if any, included in the document.

**ITEM IX. THE OFFER AND LISTING**

**A) PRICE RANGE AND VOLUME OFSHARES OF COMMON STOCK**

The followingtable sets forth the price ranges of the Company’s shares when listed on the onthe 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 mostcurrent six months: 

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For the fivemost recent full financial years, the annual high and low market prices for theCompany’s common stock were as follows (US dollar figures): 

|     |   | **2011** |   |   | **2010** |   |   | **2009** |   |   | **2008** |   |   | **2007** |   |
|----------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| **High** | $      | 0.70     |   |   | 1.39     |   |   | 4.26     |   |   | 18.00    |   |   | 17.30    |   |
| **Low**  | $      | 0.11     |   |   | 0.17     |   |   | 0.75     |   |   | 1.75     |   |   | 0.50     |   |

For the two mostrecent full financial years, the high and low market prices for each fullfinancial quarter for the Company’s common stock were as follows (US dollarfigures):

|     |   |   |   |   | **2011** |   |   |   |   |   |   |   |   |   |   |   | **2010** |   |   |   |   |   |   |   |
|----------|--------|--------|--------|--------|----------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|----------|--------|--------|--------|--------|--------|--------|--------|
|     |   | **Q1** |   |   | **Q2**   |   |   | **Q3** |   |   | **Q4** |   |   | **Q1** |   |   | **Q2**   |   |   | **Q3** |   |   | **Q4** |   |
| **High** | $      | 0.40   |   |   | 0.70     |   |   | 0.70   |   |   | 0.48   |   | $      | 1.39   |   |   | 1.00     |   |   | 0.90   |   |   | 0.65   |   |
| **Low**  | $      | 0.17   |   |   | 0.20     |   |   | 0.48   |   |   | 0.131  |   | $      | 0.66   |   |   | 0.750    |   |   | 0.50   |   |   | 0.17   |   |

For the mostrecent six months, the high and low market prices for each month for theCompany’s common stock were as follows (US dollar figures): 

|     |   | **2012** |   |   | **2012** |   |   | **2011** |   |   | **2011** |   |   | **2011** |   |   | **2011** |   |
|----------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
|     |   | **Feb**  |   |   | **Jan**  |   |   | **Dec**  |   |   | **Nov**  |   |   | **Oct**  |   |   | **Sep**  |   |
| **High** | $      | 0.15     |   |   | 0.22     |   |   | 0.23     |   |   | 0.30     |   |   | 0.48     |   |   | 0.48     |   |
| **Low**  | $      | 0.15     |   |   | 0.15     |   |   | 0.13     |   |   | 0.11     |   |   | 0.30     |   |   | 0.48     |   |

Note: (1) TheCompany’s shares were forward split on a three for one basis April 16th,2007. 

**B) PLANOF DISTRIBUTION**

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

**C) MARKETS**

As of March  1, 2012 the shares of Forum National Investments Ltd. are publicly traded on  the OTCBB under the trading symbol FMNL CUSIP Number 3498452067. The nature and  extent of principal non-United States trading market is approximately 50% of  all outstanding securities, which are held outside the United States and  approximately 50% of all outstanding securities are held within the United  States as of January 15, 2012. 

**D) SELLING SHAREHOLDERS**

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

**E) DILUTION**

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

**F) EXPENSES OF THE ISSUE**

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

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**ITEM X. ADDITIONAL INFORMATION**

**A) SHARE CAPITAL**

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

**B) MEMORANDUM AND ARTICLES OFINCORPORATION**

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

1. The Company’sMemorandum and Articles are on file with the Office of the British ColumbiaRegistrar of Companies under Certificate of Incorporation No. 504791. TheCompany was continued into the province of Ontario November 12, 1997. TheCompany’s Memorandum and Articles are on file with the Office of the OntarioRegistrar of Companies under Articles of Continuance No. 1264549 (“Articles ofContinuance”). Under the provisions of the Ontario Business Corporations Act,the Company has the power and capacity of a natural person, there are norestrictions in the Company’s Articles of Continuance, on the business that theCompany can carry on nor on the powers the Company can exercise.

2. Article 4.19of the Company’s Articles sets out the circumstances whereby a director mustnot vote on a proposal, arrangement or contract in which the director ismaterially interested, Article 4.20 sets out the directors’ powers to determinetheir compensation, Part 3 of the Company’s Articles outlines the Company’sborrowing powers exercisable by the directors and Article 4.2 sets out that noshares are required to be held for director’s qualification. 

3. Article 9 ofthe Company’s Articles of Continuance sets out two class of shares: unlimitednumber of common shares without par value and unlimited number of preferredshares without par value.  Two series of preferred shares have been designatedSeries “A Convertible Preferred Shares and Series “B” Convertible PreferredShares.

   Article 10 ofthe Company’s Articles of Continuance  sets out the rights, privileges,restrictions and conditions (if any) attaching to each class of shares anddirectors’ authority with respect to any class of shares which may be issued inseries.  The Company’s common shares rank equally as to dividend rights, votingrights, rights to share in the Company’s profits andliquidation rights. The Company’s common shares are not, under the Company’smemorandum and articles, subject to redemption or sinking fund provisions,liability to further capital calls, nor any provisions discriminating againstany existing or prospective holder of such shares as a result of suchshareholder owning a substantial number of shares. 

The Company’sSeries “A” Convertible Preferred Shares without par value have no rights as todividend rights, voting rights, rights to share in the Company’s profits and orliquidation rights. The Series “A” Convertible Preferred Shares are not, underthe Company’s memorandum and articles, subject to redemption or sinking fundprovisions, liability to further capital calls, nor any provisionsdiscriminating against any existing or prospective holder of such shares as aresult of such shareholder owning a substantial number of shares. 

The Series ”A”Preferred shares are convertible, as a Series into common shares of the Companyprovided a majority of the Series “A” Preferred shareholders vote in favor ofconverting the entire Series. The Series will convert into a number of commonshares that will represent 50% of the number of fully diluted common sharesafter conversion. 

A majority ofthe shares of the Series “A” Preferred Shares outstanding must vote in favor ofconverting the entire Series “A” Preferred Shares outstanding into commonshares before the shares of the Series “A” Preferred Shares may convert intoCommon Shares. On receipt of the requisite affirmative vote, the Series “A”Preferred Shares, in the aggregate shall be converted into that number of fullypaid and non-assessable Common Shares that will represent 50% of the number offully diluted common shares after conversion. Each Share of Series “A”Preferred Shares shall be convertible into Common Shares PRO RATA to itsportion of the Series “A” Preferred Shares. 

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The Company’sSeries “B” Convertible Preferred Shares without par value have no rights as todividend rights, voting rights, rights to share in the Company’s profits and orliquidation rights. The Company’s Series “B” Convertible Preferred Shares areconvertible into common shares of the Company on one common share for eachpreferred share held. The Series “B” Convertible Preferred Shares are not,under the Company’s memorandum and articles, subject to redemption or sinkingfund provisions, liability to further capital calls, nor any provisionsdiscriminating against any existing or prospective holder of such shares as aresult of such shareholder owning a substantial number of shares. 

The Company’sconversion rights relate to  secured debentures which are convertible at anytime in whole or in part, any outstanding amount paid to date on the debenture,into common shares of the Company at a 20% discount to the market trading priceimmediately prior to conversion. The Debenture is redeemable and callable bythe holder or the Company after ten years from the date of Subscriptions at 75%of the Total face value of the debenture. Ten years from the date ofsubscription, the Company or debenture holder can force the Company to convertthe debt and take the option of either receiving payment in cash or aconversion to Common Shares of the Company, at the stated conversion rate. Theoption of receiving either common shares or cash is at the sole discretion ofthe debenture holder.

4. To theCompany’s knowledge, there are no conditions imposed by the memorandum andarticles of the Company governing changes in the rights of holders of stock. 

5. Section 10 ofthe Company’s Articles together with applicable corporate and securities lawscontains the conditions governing the manner in which annual and extraordinarygeneral meetings of shareholders are called including Notice of Meeting/ProxySolicitation requirements. Part 10 of the Company’s Articles deals withproceedings at such meetings including quorum requirements. 

At the Company’sAGM on June 26, 2008, shareholders were asked to consider, and if deemedadvisable, to pass with or without variation, a special resolution to approvean amendment to Article No. 10.3 of the Corporation to increase the quorumrequirement for shareholders meetings to 2 shareholders in person or by proxyrepresenting not less than 33.33% of the outstanding shares of the Corporation.The resolution was passed and the directors have yet to enact the Amendment. 

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

7. There are noprovisions of the Company’s Articles of Continuance or Articles that would havean effect of delaying, deferring or preventing a change in control of theCompany and that would operate only with respect to a merger, acquisition orcorporate restructuring involving the Company or any of its subsidiaries. 

8. There are nobylaws provisions governing the ownership threshold above which shareholderownership must be disclosed. 

9. There are noconditions imposed by the Articles of Continuance and Articles of the Companygoverning changes in the capital of the Company that are more stringent than isrequired by law. 

**C)MATERIAL CONTRACTS  **

Subsequent to fiscal year end 2011, theCompany’s travel clubs, related marketing and servicing operations were sold.The directors would like the core operations of the Company to be in the LifeSettlement industry and the various opportunities within the industry. 

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In fiscal 2009, the Company converted its construction loan facilitywith Caterpillar Financial Services Corporation to a 5 year term loan facilityof $5 million USD at a fixed APR rate of 7% with an 18 year amortization. TheCompany does not currently hedge against foreign exchange or interest ratefluctuations. 

**D) EXCHANGE CONTROLS**

There are nogovernmental laws, decrees or regulations in Canada restricting the import orexport of capital or affecting the remittance to the United States of interest,dividends or other payments to nonresident holders of our shares. However, thepayment or crediting of interest or dividends to United States residents may besubject to applicable withholding taxes at a rate prescribed by the Income TaxAct (Canada) and modified by the provisions of the Canada-United States IncomeTax Convention, 1980 (see commentary in the section entitled “Taxation” below).

Except asprovided in the Investment Canada Act (the “ICA”), there are no limitationsunder the laws of Canada, the Province of Ontario or in our Memorandum orArticles on the right of foreigners to hold and/or votethe shares of our capital stock. 

The ICA hasapplication where a “non-Canadian” individual or entity or controlled group ofentities proposes to make an investment to acquire control of a Canadianbusiness enterprise, either directly or indirectly, by way of purchase ofvoting shares of a corporation or of substantially all of the assets used inthe Canadian business enterprise. An investment to acquire voting shares of acorporation is deemed to be an acquisition of control where more than one-halfof the voting shares are acquired. An acquisition of less than one-third of thevoting shares of a corporation is deemed not to be an acquisition of controland an acquisition of between one-third and one-half of the voting shares of acorporation is presumed to be an acquisition of control unless it can beestablished that the acquisition does not in fact result in control of thecorporation by the investor. 

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

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

**E) TAXATION**

Material Canadian FederalIncome TaxConsequences

Through consultation with counsel, our management believesthat the following general summary accurately describes all material Canadianfederal income tax consequences applicable to a holder of our common shares whois a resident of the United States, that qualifies for benefits under theCanada-United States Convention (1980), as amended (the “Treaty”) and who isnot a resident of Canada and who does not use or hold, and is not deemed to useor hold, his common shares of us in connection with carrying on a business inCanada (a "non-resident holder"). 

This summary is based upon the current provisions of theIncome Tax Act (Canada) (the "ITA"), the regulations thereunder (the"Regulations"), the current publicly announced administrative andassessing policies of Canada, Customs and Revenue Agency and all specificproposals (the "Tax Proposals") to amend the ITA and Regulations announcedby the Minister of Finance (Canada) prior to the date hereof.  Thissummary assumes that the Tax Proposals will be enacted in their form as of thedate of this Annual Report.  This description, except for the TaxProposals, does not take into account or anticipate any changes in law, whetherby legislative, government or judicial action, nor does it take into accountprovincial, territorial, or foreign tax considerations which may differsignificantly from those discussed herein.

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*Dividends*

Dividends paid on our common shares to a non-residentholder will be subject to withholding tax.  The Treaty provides that thenormal 25% withholding tax rate under the ITA is reduced to 15% on dividendspaid on shares of a corporation resident in Canada (such as our company) tobeneficial owners of the dividends who are residents of the United States, andmay also provide for a further reduction of this rate to 5% where thebeneficial owner of the dividends is a corporation that is a resident of theUnited States which owns at least 10% of the voting shares of the corporationpaying the dividend.  

No dividends have ever been paid by us.

*Capital Gains*

Under the ITA, a taxpayer's capital gain or capital lossfrom a disposition of a share of our company is the amount, if any, by whichhis proceeds of disposition exceed (or are exceeded by) the aggregate of hisadjusted cost base of the share and reasonable expenses of disposition. One half of a capital gain (the "taxable capital gain") is includedin income, and one half of a capital loss in a year (the "allowablecapital loss") is deductible from taxable capital gains realized in thesame year.  The amount by which a shareholder's allowable capital lossexceeds his taxable capital gains in a year may be deducted from a taxablecapital gain realized by the shareholder in the three previous or anysubsequent year, subject to certain restrictions in the case of a corporateshareholder.

A non-resident holder is not subject to tax under the ITAin respect of a capital gain realized upon the disposition of a share of apublic corporation unless the share represents "taxable Canadianproperty" to the holder thereof.  We are a public corporation forpurposes of the ITA and a common share of our company will be taxable Canadianproperty to a non-resident holder if, at any time during the 60 month periodimmediately preceding the disposition, the non-resident holder, persons withwhom the non-resident holder did not deal at arm's length, or the non-residentholder and persons with whom he did not deal at arm's length together owned notless than 25% of the issued shares of any class of our shares.  Our sharesmay also be taxable Canadian property to a holder if the holder acquired thempursuant to certain tax-deferred "rollover" transactions whereby theholder exchanged property that was taxable Canadian property for our shares.

Where a non-resident holder who is an individual ceased tobe resident in Canada, he will be subject to Canadian tax on any capital gainrealized on disposition of our shares at that time.  

Where a non-resident holder realizes a capital gain on adisposition of our shares that constitute taxable Canadian property, the Treatyrelieves the non-resident shareholder from liability for Canadian tax on suchcapital gains unless:

(a)

          the non-resident holder isan individual who was resident in Canada for not less than 120 months duringany period of 20 consecutive years preceding, and at any time during the 10years immediately preceding, the disposition and the shares were owned by himwhen he ceased to be resident in Canada or are property substituted forproperty that was owned at that time, or

(b)

          the shares formed part ofthe business property of a "permanent establishment" or pertained toa fixed base used for the purpose of performing independent personal servicesthat the shareholder has or had in Canada within the 12 months preceding thedisposition. 

Material United States Federal Income TaxConsequences 

The following is a discussion of materialU.S. federal income tax consequences that may be relevant with respect to theacquisition, ownership and disposition of our common shares by a U.S. Holder(as hereinafter defined).  This discussion does not address allpotentially relevant federal income tax matters and it does not addressconsequences peculiar to persons subject to special provisions of federalincome tax law, such as those described below as excluded from the definitionof a U.S. Holder.  In addition, this discussion does not cover any state,local or foreign 

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tax consequences.  Accordingly, holders and prospectiveholders of our common shares are urged to consult their own tax advisors aboutthe specific federal, state, local and foreign tax consequences to them ofacquiring, holding and disposing of our common shares, based upon theirindividual circumstances. 

The following discussion is based upon thesections of the Code, Treasury Regulations, published Internal Revenue Service(“*IRS*”) rulings, published administrative positions of the IRS and courtdecisions that are currently applicable, any or all of which could bematerially and adversely changed, possibly on a retroactive basis, at any timeand which are subject to differing interpretations. This discussion does notconsider the potential effects, both adverse and beneficial, of any proposedlegislation which, if enacted, could be applied, possibly on a retroactivebasis, at any time. 

*U.S. Holders*

As used in this annual report, a “*U.S.Holder*” means a holder of our common shares who is (i) a citizen orindividual resident of the United States, (ii) corporation, or other entitytreated as a corporation for U.S. tax purposes, created or organized in orunder the laws of the United States or any state thereof (including the Districtof Columbia), (iii) an estate the income of which is subject to U.S. federalincome taxation regardless of its source, or (iv) a trust if such trust was inexistence on August 20, 1996 and validly elected to be treated as a UnitedStates person for U.S. federal income tax purposes or if (1) a court within theU.S. is able to exercise primary supervision over its administration and (2)one or more U.S. persons have the authority to control all of the substantialdecisions of such trust.   This summary does not address the taxconsequences to, and the term U.S. Holder does not include, persons subject tospecific provisions of federal income tax law, such as tax-exemptorganizations, qualified retirement plans, individual retirement accounts andother tax-deferred accounts, financial institutions, insurance companies, realestate investment trusts, regulated investment companies, broker-dealers,non-resident alien individuals, persons or entities that have a “*functionalcurrency*” other than the U.S. dollar, shareholders subject to thealternative minimum tax, shareholders who hold common shares as part of astraddle, hedging or conversion transaction and shareholders who acquired theircommon shares through the exercise of employee stock options or otherwise ascompensation for services.  This summary is limited to U.S. Holders whoown common shares as capital assets, within the meaning of Section 1221 of theCode, and who own (directly and indirectly, pursuant to applicable rules ofconstructive ownership) no more than 10% of the value of our total outstandingstock.  This summary does not address the consequences to a person of theownership, exercise or disposition of any options, warrants or other rights toacquire common shares. 

If a partnership (or any other entity treatedas a partnership for U.S. federal income tax purposes) holds our common shares,the tax treatment of a partner in such partnership will generally depend on thestatus of the partner and the activities of the partnership. Such a partnershould consult its own tax advisors as to the U.S. tax consequences of being apartner in a partnership that acquires, holds, or disposes of our commonshares.

*Distributions on Our Common Shares*

Subject to the discussion below under “*PassiveForeign Investment Company*,” U.S. Holders receiving dividend distributions(including constructive dividends) with respect to our common shares generallyare required to include in gross income for U.S. federal income tax purposesthe gross amount of such distributions (without reduction of any Canadianincome or other tax withheld from such distributions), equal to the U.S. dollarvalue of such distributions on the date of receipt (based on the exchange rateon such date), to the extent that we have current or accumulated earnings andprofits.  Such Canadian tax withheld may be credited, subject to certainlimitations, against the U.S. Holder’s federal income tax liability or,alternatively, may be deducted in computing the U.S. Holder’s federal taxableincome by those who itemize deductions (See more detailed discussion at “*ForeignTax Credit*” below). Dividends paid on our common shares will not generallybe eligible for the dividends received deduction provided to corporationsreceiving dividends from certain U.S. corporations. 

For taxable years beginning before January 1,2011, dividends received by U.S. Holders that are individuals, estates ortrusts from “qualified foreign corporations,” as defined in Section 1(h)(11) ofthe Code, generally are taxed at the 

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same preferential tax rates applicable tolong-term capital gains. Although not free from doubt, it appears that we are a“qualified foreign corporation,” as defined in Section 1(h)(11) of the Code ifwe are not, and have not been, a PFIC, as described below under “*PassiveForeign Investment Company*.” We have not determined whether or not we meetthe definition of a PFIC for the current tax year and any prior tax years. Acorporation that is a PFIC, along with other foreign corporations given specialstatus under the Code, for its taxable year during which it pays a dividend, orfor its immediately preceding taxable year, will not be treated as a“qualifying foreign corporation” and dividends received by U.S. Holders thatare individuals, estates or trusts generally will be subject to U.S. federalincome tax at ordinary income tax rates (and not at the preferential tax ratesapplicable to long-term capital gains). 

In the case of foreign currency received as adividend that is not converted by the recipient into U.S. dollars on the dateof receipt, a U.S. Holder will have a tax basis in the foreign currency equalto its U.S. dollar value on the date of receipt.  Generally any gain orloss recognized upon a subsequent sale or other disposition of the foreign currency,including the exchange for U.S. dollars, will be ordinary income or loss. 

*Disposition of Our Common Shares*

Subject to the discussion below under “*PassiveForeign Investment Company*,” U.S. Holders will recognize gain or loss uponthe sale of our common shares equal to the difference, if any, between (i) theamount of cash plus the fair market value of any property received and (ii) theshareholder’s tax basis in our common shares.  Preferential tax ratesapply to long-term capital gains of U.S. Holders that are individuals, estatesor trusts.  In general, gain or loss on the sale of our common shares willbe long-term capital gain or loss if our common shares are a capital asset inthe hands of the U.S. Holder and are held for more than one year. Deductions for net capital losses are subject to significant limitations.

*Passive Foreign Investment Company*

We have not determined whether or not we meetthe definition of PFIC, within the meaning of Sections 1291 through 1298 of theCode for the current tax year and any prior tax years.  We may or may notqualify as a PFIC in subsequent years due to changes in our assets and businessoperations.  A U.S. Holder who holds stock in a foreign corporation duringany year in which such corporation qualifies as a PFIC is subject to numerousspecial U.S. federal income taxation rules.  The following is a discussionof these special rules as they apply to U.S. Holders of our common shares. 

Section 1297 of the Code defines a PFIC as acorporation that is not formed in the U.S. if, for any taxable year, either (i)75% or more of its gross income is “*passive income*,” which includesinterest, dividends and certain rents and royalties or (ii) the averagepercentage, by fair market value (or, if the corporation is not publicly tradedand either is a controlled foreign corporation or makes an election, byadjusted tax basis), of its assets that produce or are held for the productionof passive income is 50% or more.

U.S. Holders owning shares of a PFIC aresubject to a special tax and to an interest charge based on the value ofdeferral of U.S. tax attributable to undistributed earnings of a PFIC for theperiod during which the shares of the PFIC are owned.  This special taxwould apply to any gain realized on the disposition of shares of a PFIC. In addition, the gain is subject to U.S. federal income tax as ordinaryincome, taxed at top marginal rates, rather than as capital gain income. The special tax would also be payable on receipt of excess distributions(any distributions received in the current year that are in excess of 125% ofthe average distributions received during the 3 preceding years or, if shorter,the shareholder’s holding period).  However, if the U.S. Holder makes forany tax year a timely election to treat a PFIC as a qualified electing fund (“*QEF*”)with respect to such shareholder’s interest therein, the above-described rulesgenerally will not apply.  Instead, the electing U.S. Holder would includeannually in his gross income his pro rata share of the PFIC’s ordinary earningsand any net capital gain regardless of whether such income or gain was actuallydistributed.  Special rules apply to U.S. Holders who own their interestsin a PFIC through intermediate entities or persons.  Generally, shareholdersdo not make a QEF election unless they have sufficient information to determinetheir proportionate share of a corporation’s net capital gain and ordinaryearnings. We have not calculated these amounts for any shareholder, and do notanticipate making these calculations

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 in the foreseeable future. **Therefore,U.S. Holders of our common shares should consult their own financial advisor,legal counsel or accountant regarding the QEF election before making thiselection.**   

U.S. Holders who hold, actually orconstructively, marketable stock of a foreign corporation that qualifies as aPFIC may elect to mark such stock to the market (a “*mark-to-market election*”). If such an election is made, such U.S. Holder will not be subject to thespecial taxation rules of PFIC described above for the taxable years for whichthe mark-to-market election is made.  A U.S. Holder who makes such anelection will include in income for the taxable year an amount equal to theexcess, if any, of the fair market value of our common shares as of the closeof such tax year over such U.S. Holder’s adjusted basis in such shares. In addition, the U.S. Holder is allowed a deduction for the lesser of (i)the excess, if any, of such U.S. Holder’s adjusted tax basis in the shares overthe fair market value of such shares as of the close of the tax year or (ii)the excess, if any of (A) the mark-to-market gains for our common sharesincluded by such U.S. Holder for prior tax years, including any amount whichwould have been included for any prior year but for Section 1291 interest ontax deferral rules discussed above with respect to a U.S. Holder, who has notmade a timely QEF election during the year in which he holds (or is deemed tohave held) our common shares and we are a PFIC (“*Non-Electing U.S. Holder*”)over (B) the mark-to-market losses for shares that were allowed as deductionsfor prior tax years.  A U.S. Holder’s adjusted tax basis in our commonshares will be increased or decreased to reflect the amount included ordeducted as a result of mark-to-market election.  A mark-to-marketelection will apply to the tax year for which the election is made and to alllater tax years, unless the PFIC stock ceases to be marketable or the IRSconsents to the revocation of the election. 

The IRS has issued proposed regulations that,subject to certain exceptions, would treat as taxable certain transfers of PFICstock by a Non-Electing U.S. Holder that are generally not otherwise taxed,such as gifts, exchanges pursuant to corporate reorganizations and transfers atdeath. Generally, in such cases, the basis of our common shares in the hands ofthe transferee and the basis of any property received in the exchange for thoseshares would be increased by the amount of gain recognized.  A U.S. Holderwho has made a timely QEF election (as discussed above) would not be taxed oncertain transfers of PFIC stock, such as gifts, exchanges pursuant to corporatereorganizations and transfers at death.  The transferee’s basis in thiscase will depend on the manner of the transfer. The specific tax effect to theU.S. Holder and the transferee may vary based on the manner in which the commonshares are transferred.  Each U.S. Holder should consult a tax advisorwith respect to how the PFIC rules affect their tax situation. 

**The PFIC and QEF election rules arecomplex.  U.S. Holders should consult a tax advisor regarding theavailability and procedure for making the QEF election as well as theapplicable method for recognizing gains or earnings and profits under the foregoingrules.** 

*Foreign Tax Credit*

A U.S. Holder who pays (or has withheld fromdistributions) Canadian or other foreign income tax with respect to theownership of our common shares  may be entitled, at the option of the U.S.Holder, to either receive a deduction or a tax credit for U.S. federal incometax purposes with respect to such foreign tax paid or withheld. Complexlimitations apply to the foreign tax credit, including the general limitationthat 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” taxableincome bears to such U.S. Holder’s worldwide taxable income. In applying thislimitation, a U.S. Holder’s various items of income and deduction must beclassified, under complex rules, as either “foreign source” or “U.S. source.”In addition, this limitation is calculated separately with respect to specificcategories of income including “passive category income” and “general categoryincome.”  Gain or loss recognized by a U.S. Holder on the sale or othertaxable disposition of our common shares generally will be treated as “U.S.source” for purposes of applying the foreign tax credit rules.  Dividendsreceived by U.S. Holders on our common shares generally will be treated as“foreign source” and generally will be categorized as “passive income” forpurposes of applying the foreign tax credit rules.  **The availability ofthe foreign tax credit and the application of the limitations with respect tothe foreign tax credit are fact specific, and each U.S. Holder of our commonshares should consult their own financial advisor, legal counsel or accountantregarding the foreign tax credit rules.**

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*Controlled Foreign Corporation*

If more than 50% of the total voting power orthe total value of our outstanding shares is owned, directly or indirectly, bycitizens or residents of the U.S., U.S. partnerships or corporations, or U.S.estates or trusts (as defined by Section 7701(a)(30) of the Code), each ofwhich own, directly or indirectly, 10% or more of the total voting power of theour outstanding shares (each a “10% Shareholder”), we could be treated as a“Controlled Foreign Corporation” (“CFC”) under Section 957 of the Code. 

Our classification as a CFC would effect manycomplex results, including that 10% Shareholders would generally (i) be treatedas having received a current distribution of our “Subpart F income” and (ii)would also be subject to current U.S. federal income tax on their pro ratashare of our earnings invested in “U.S. property.” The foreign tax credit mayreduce the U.S. federal income tax on these amounts for such 10% Shareholders(See more detailed discussion at “Foreign Tax Credit” above). In addition,under Section 1248 of the Code, gain from the sale or other taxable dispositionof our common shares by a U.S. Holder that is or was a 10% Shareholder at anytime during the five-year period ending with the sale is treated as a dividendto the extent of our earnings and profits attributable to the common sharessold or exchanged. 

If we are classified as both a PFIC and aCFC, we generally will not be treated as a PFIC with respect to 10%Shareholders. This rule generally will be effective for taxable years of 10%Shareholders beginning after 1997 and for its taxable years ending with orwithin such taxable years of 10% Shareholders. 

We have not determined whether we meet thedefinition of a CFC, and there can be no assurance that we will not beconsidered a CFC for the current or any future taxable year. 

The CFC rules are very complicated, and U.S.Holders should consult their own financial advisor, legal counsel or accountantregarding the CFC rules and how these rules may impact their U.S. federalincome tax situation.

*Information Reporting; Backup Withholding*

Certain information reporting and backupwithholding rules may apply with respect to certain payments related to ourcommon shares.  In particular, a payor or middleman within the U.S., or incertain cases outside the U.S., will be required to withhold at a current rateof 28% (which rate is scheduled for periodic adjustment) of any payments to aU.S. Holder regarding dividends paid by us, or proceeds from the sale of, suchcommon shares within the U.S., if a U.S. Holder fails to furnish its correcttaxpayer identification number (generally on Form W-9) or otherwise fails tocomply with, or establish an exemption from, the backup withholding taxrequirements.   Any amounts withheld under the U.S. backupwithholding tax rules will be allowed as a refund or a credit against the U.S.Holder’s U.S. federal income tax liability, provided the required informationis furnished to the IRS.  We do not assume responsibility for thewithholding of tax at source.  **U.S. Holders should consult their ownfinancial advisor, legal counsel or accountant regarding the informationreporting and backup withholding rules applicable to our common shares.**

**F) DIVIDENDS AND PAYING AGENTS**

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

**G) STATEMENTS BY EXPERTS**

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

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**H) DOCUMENTS ON DISPLAY**

Any documentsreferred to in this document may be inspected at the head office of theCompany, #180, 13040 No. 2 Road, Richmond, British Columbia, Canada, V7E 2G1during normal business hours.

You may alsoreview a copy of the Company’s filings with the SEC, including exhibits andschedules filed with it, in the SEC's Public Reference Room at 100 F Street NE,Washington, D.C. 20549. You may call the SEC at 1-800-SEC-0330 or theConventional Reading Rooms’ Headquarters Office at 212-551-8090 for furtherinformation on the public reference rooms. The SEC maintains a web site(www.sec.gov) that contains reports, proxy and information statements and otherinformation regarding registrants that file electronically with the SEC. 

**I) SUBSIDIARY INFORMATION**

There is noinformation relating to the Company’s subsidiaries which must be provided inCanada and which is not otherwise called for by the body of generally acceptedaccounting principles used in preparing the consolidated financial statements. 

**ITEM XI. QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET RISK**

Other thandescribed below, we are not a party to any market risk sensitive instrumentsother than instruments evidencing interest-bearing debt obligations asdescribed in “Item 4 – History and Development of the Company, Material Events”and in Note 5 and Note 12 to our audited financial statements for the yearended September 30, 2010 entitled “Financial Instruments” and “Long Term Debt”,respectively. 

***Financialinstruments***

***               Fairvalue of financial instruments***

The fair valueof cash and cash equivalents, accounts receivable, bank indebtedness, andaccounts payable and accrued liabilities corresponds to their carrying valuedue to their short-term nature. The carrying value of long-term debtapproximates its fair value based upon the discount rates applied. 

***               Concentrationof credit risk***

We grant creditto our members in the normal course of our sales and marketing of travel clubmemberships. The financial statements take into account an allowance for baddebts. Receivables from the proceeds of our Life Settlement operations aresubstantial.

***               Interestrate risk***

The Company hasno short term bank credit facilities. Our long term debt bears interest at afixed rate. This is described in further detail in “Item 4 – History andDevelopment of the Company” of this annual report and in Note 13 to ourfinancial statements. We do not use derivative instruments to manage ourexposure to interest rate risk. 

***               Foreignexchange rate risk***

A majority ofour revenues are earned and premium costs incurred in the United States.However, certain selling, general and administration costs are incurred inCanada and we are therefore subject to risk due to fluctuations in exchangerates. We do not use derivative instruments to manage our exposure to foreignexchange rate risk.

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**ITEMXII. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

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

**PART II**

**ITEM XIII. DEFAULTS, DIVIDENDS,ARREARS AND DELINQUENCIES**

There has notbeen a material default in the payment of principal, interest, a sinking fundor purchase fund installment, or any other material default not cured withinthirty days, relating to indebtedness of the Company. There are no payments ofdividend by the Company in arrears, nor has there been any other materialdelinquency relating to any class of preference shares of the Company. 

**ITEM XIV. MATERIAL MODIFICATIONSTO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

**MATERIAL MODIFICATION TO THERIGHTS OF SECURITY HOLDERS**

At the Company’sAGM on June 26, 2008, shareholders were asked to consider, and if deemedadvisable, to pass with or without variation, a special resolution to approvean amendment to Article No. 10.3 of the Corporation to increase the quorumrequirement for shareholders meetings to 2 shareholders in person or by proxyrepresenting not less than 33.33% of the outstanding shares of the Corporation.The resolution was passed and the directors have yet to enact an Amendment. 

**USE OF PROCEEDS**

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

**ITEM XV.CONTROLS AND PROCEDURES**

**DISCLOSURECONTROLS 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 reevaluated 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 September 30, 2011. Based on that evaluation, the management has  concluded that there was a material weakness affecting our internal control  over financial reporting, and as a result, our disclosure controls and  procedures were not effective as of September 30, 2011. 

**MANAGEMENT’S ANNUAL REPORT ONINTERNAL CONTROLS OVER FINANCIAL REPORTING**

Our managementis responsible for establishing and maintaining adequate internal control overfinancial reporting for the Company. The Company’s internal control overfinancial reporting is designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statementsfor external purposes in accordance with generally accepted accountingprinciples and includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded 

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as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples, and that receipts and expenditures of the Company are being madeonly in accordance with authorizations of management and directors of theCompany; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition, use or disposition of the Company’sassets that could have a material effect on the financial statements.

 The Company’s management is responsible for  establishing and maintaining adequate internal control over financial reporting  for the company.  The Company’s internal control over financial reporting  is a process to provide reasonable assurance regarding the reliability of our  financial reporting for external purposes in accordance with accounting  principles generally accepted in the United States of America.  Internal  controls over financial reporting includes maintaining records that in  reasonable detail accurately and fairly reflect our transactions; providing  reasonable assurance that transactions are recorded as necessary for  preparation of our financial statements; providing reasonable assurance that  receipts and expenditures of company assets are made in accordance with  management authorization; and providing reasonable assurance that unauthorized  acquisition, use or disposition of company assets that could have material  effect on our financial statements would be prevented or detected on a timely  basis.  Because of its inherent limitations, internal control over  financial reporting is not intended to provide absolute assurance that a  misstatement of our financial statements would be prevented or detected. 

This annualreport does not include an attestation report of the company’s registeredpublic accounting firm regarding internal control over financial reporting.Management’s report was not subject to attestation by the company’s registeredpublic accounting firm pursuant to temporary rules of the Securities andExchange Commission that permit the Company to provide only management’s reportin this annual report. 

 Management conducted an assessment of the  effectiveness of the Company’s internal control over financial reporting as of  September 30, 2011 based on the criteria for effective internal control over  financial reporting established in “Internal Control - Integrated Framework,”  issued by the Committee of Sponsoring Organizations (COSO) of the Treadway  Commission.  In its evaluation, Management evaluated whether the Company  had sufficient “preventative controls” which are controls that have the  objective of preventing the occurrence of errors or fraud that could result in  a misstatement of the financial statements.  In its evaluation, Management  considered whether there were sufficient internal controls over financial  reporting, in the context of the Company’s control environment, financial risk  assessment, internal control activities, monitoring, and communication to  determine whether sufficient controls are present and functioning effectively. 

 Based upon this assessment, we have determined  that there was a material weakness affecting our internal control over  financial reporting and, as a result of that weakness, our internal control  over financial reporting procedures was not effective as of September 30, 2011.   The material weakness which has been disclosed to and reviewed with, our  independent auditor, is as follows: 

 The  Company initially filed a Form 20-F for the year ended September 30, 2011,  without an audit report for the comparative income statement and statement of  cash flows for the year ended September 30, 2009.  Such failure to  disclose an audit report for all financial statements presented impacted its  conclusions regarding the effectiveness of internal controls and procedures as  of the end of fiscal year 2011, with a resulting weakness.  The failure to  disclose an audit report for all periods presented within the Form 20-F became  apparent to the Company, since the Company does not maintain a sufficient  complement of personnel with an appropriate level of accounting knowledge,  experience and training in the application of generally accepted accounting  principles commensurate with our financial reporting requirements. 

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**REMEDIATION STEPS TO ADDRESSMATERIAL WEAKNESS**

Management had dedicatedsignificant resources to correct the previous accounting error relating to ourrevenue recognition policy and to ensure that we take proper steps to improveour internal controls and remedy our material weakness in our financialreporting and disclosure controls in previous fiscal years. Management iscommitted to continually improve control policies and procedures. 

 The Company recognizes the importance of  implementing and maintaining disclosure controls and procedures and internal  controls over financial reporting and is working to implement an effective  system of controls.  Management is currently evaluating avenues for  mitigating our internal controls weaknesses, but mitigating controls that are  practical and cost effective based on the size, structure, and future existence  of our organization.  The Company is committed to identifying cost  effective options for remediation efforts, therefore management, within the  confines of its budgetary resources, will continue to develop & improve the  Company’s internal controls over financial reporting on an on-going basis. 

 Because  of the inherent limitations in all control systems, no evaluation of controls  can provide absolute assurance that misstatements due to error or fraud will  not occur or that all control issues and instances of fraud, if any, within the  Company 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.  The design of any system of  controls is based in part on 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.  Projections of  any evaluation of controls effectiveness to future periods are subject to  risks.  This annual report does not include an attestation report of the  Company’s registered public accounting firm regarding internal control over  financial reporting.  Management’s report was not subject to attestation  by the Company’s registered public accounting firm pursuant to temporary rules  of the Securities and Exchange Commission that permit the company to provide  only management’s report in this annual report. 

**ITEM XVI. AUDIT COMMITTEEFINANCIAL EXPERT**

**AUDIT COMMITTEE FINANCIAL EXPERT**

The Company hasan Audit Committee established by the Board of Directors. Our board has determinedthat we have a financial expert serving on our audit committee as defined byItem 401(h) of Regulation S-K of the Exchange Act.

We believe thatthe combined knowledge, skills and experience of the members of our AuditCommittee enables them, as a group, to act effectively in the fulfillment oftheir tasks and responsibilities, including those under the Sarbanes-Oxley Actof 2002. Mr. Michael Barrett is chairman of the audit committee and is a memberwho would qualify as an audit committee financial expert. 

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CODE OF ETHICS

We have adopteda code of ethics for our Chief Executive Officer, Chief Financial Officer,principal accounting officer, controller and other persons performing similarfunctions. Our code of ethics complies with the SEC rules. The code of ethicsaddresses the following:

- Honest and ethical conduct, including handlingof corporate opportunities and conflicts of interest;
- Full, fair, accurate, timely and quality publicdisclosure filed with the SEC and otherwise publicly made by us;
- Compliance with applicable the laws andregulations;
- Prompt internal reporting of violations of thecode of ethics; and
- Accountability for adherence to the code ofethics.

There have beenno waivers to the code of ethics as of the date of this report 

**PRINCIPAL ACCOUNTANT FEES ANDSERVICES**

The independentauditors of the Company are the firm of MNP LLP, Chartered Accountants andAdvisors, located at 2300 – 1055 Dunsmuir Street, Vancouver, British Columbia,Canada V7X 1J1. 

For the periods ended September30, 2011 the Company was invoiced by MNP LLP, for audit fees, audit-relatedfees, tax fees and all other fees as set forth below: 

|                                                                                           |   | Year Ended |   |   | Year Ended |   |
|------------------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|
|                                                                                           |   | September  |   |   | September  |   |
|                                                                                           |   | 30, 2011   |   |   | 30, 2010   |   |
|                                                                                           |   |       |   |   |       |   |
| Audit fees - auditing of our annual financial  statements and preparation of auditors' report. | $      | 70,000     |   | $      | 85,000     |   |
|                                                                                           |   |       |   |   |       |   |
|                                                                                           |   |       |   |   |       |   |
| Audit-related fees - review of each of the quarterly  financial statements.                    |   | -          |   |   | -          |   |
|                                                                                           |   |       |   |   |       |   |
| Tax fees - preparation and filing of three major  tax-related forms and tax planning.          |   | -          |   |   | -          |   |
|                                                                                           |   |       |   |   |       |   |
| All other fees - other services provided by our  principal accountants.                        |   | -          |   |   | -          |   |
|                                                                                           |   |       |   |   |       |   |
| Total fees paid or accrued to our principal  accountants                                       | $      | 70,000     |   | $      | 85,000     |   |

Note: (1)"Audit Fees" represent fees for the audit of the Company's annualfinancial statements, review of the Company's interim financial statements andreview in connection with the Company's statutory and regulatory filings 

The AuditCommittee has adopted procedures requiring Audit Committee review and approvalin advance of all particular engagements for services to be provided by MeyersNorris Penny LLP. Consistent with applicable laws, the procedures permitlimited amounts of services, other than audit, review and attest services, tobe approved by one or more members of the Audit Committee pursuant to authoritydelegated by the Audit Committee, provided the Audit Committee is informed ofeach particular service. The Audit Committee approved all of the engagementsand fees during the period ended September 30, 2011. The Audit Committeereviews with Meyers Norris Penny LLP whether the non-audit services to beprovided are compatible with maintaining the auditors' independence. The Boardhas determined that, beginning with January 1, 2006, fees paid to theindependent auditors for non-audit related services in any year will not exceedthe fees paid for audit services during the year. Permissible non-auditservices will be limited to fees for tax services, accounting assistance oraudits in connection with acquisitions, and other services specifically relatedto accounting or audit matters such as registration statements filings orprivate placements or public offerings. 

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**EXEMPTIONS FROM THE LISTING STANDARDSFOR AUDIT COMMITTEES**

Not Applicable. 

**PURCHASES OF EQUITY SECURITIES BYTHE ISSUER AND AFFILIATED PURCHASERS**

Not Applicable. 

**PART III**

**ITEM XVII. FINANCIAL STATEMENTS**

See theFinancial Statements and Exhibits listed in Item XIX hereof and filed as partof this Annual Report. Included are audited consolidated balance sheets as atSeptember 30, 2011 and September 30, 2010 and the consolidated statements ofoperations and deficit and cash flows for each of the year ended September 30, 2011,year ended September 30, 2010 and the year ended September 30, 2009 includingthe Auditors’ Report to Shareholders. 

These financialstatements were prepared in accordance with Canadian GAAP and are expressed inCanadian Dollars. Such financial statements have been reconciled to U.S. GAAP (seenote 22 therein). For a history of exchange rates in effect for Canadiandollars as against U.S. dollars, see “Item III - Key Information, SelectedFinancial Data – Exchange Rate Data”. 

**ITEM XVIII. FINANCIAL STATEMENTS**

Not applicable. 

**ITEM XIX. EXHIBITS**

Exhibitsattached to this Form 20-F are as follows: 

**FINANCIAL STATEMENTS**

(i) Management’sResponsibility to Financial Reporting. 

(ii) Auditors’  Report dated March 2, 2012.

(iii)Consolidated Balance Sheets as at September 30, 2011, and 2010. 

(iv)Consolidated Statements of Operations and Deficit for the year ended September30, 2011, year ended September 30, 2010 and year ended September 30, 2009. 

(v) ConsolidatedStatements of Cash Flows for the year ended September 30, 2011, year endedSeptember 30, 2010 and the year ended September 30, 2009. 

(vi) Notes tothe Consolidated Financial Statements for the year ended September 30, 2011, yearended September 30, 2010 and the year ended September 30, 2009. FinancialStatements Schedules are omitted because they are not applicable, not requiredor because the required information is included in the consolidated financialstatement or notes thereto filed within. 

43

----

 
| **Exhibit** | **Description**                                                                                                                                          |
|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.1         | Registered Incorporation Memorandum(1)                                                                                                                   |
| 1.2         | Articles of Continuance into Ontario(2)                                                                                                                  |
| 1.3         | Articles of Amendment, Change of Name(2)                                                                                                                 |
| 1.4         | Articles of  Amendment, Authorization of Preferred Shares including Designation of Series  “A” and Series “B” Preferred Share(3) |
| 4.1         | 2094711  Ontario Limited., Commission Agreement January 1, 2006(3)                                                                                       |
| 4.2         | Loan Agreement, dated September 21, 2005(4)                                                                                                              |
| 4.2.(i)     | First Amendment to Loan Agreement, dated October 11, 2005(4)                                                                                             |
| 4.2.(ii)    | Second Amendment to Loan Agreement, dated November 6, 2006(4)                                                                                            |
| 4.2.(iii)   | Third Amendment to Loan Agreement, dated May 2, 2007(4)                                                                                                  |
| 4.3         | Purchase Agreement. International Fitness Vacations (BC) Ltd.,  December 31, 2006(4)                                                                     |
| 4.4         | Letter of Intent. Gala Travels, February 19, 2007(4)                                                                                                     |
| 4.5         | Servicing Agreement. Vision 200 travel, dated October 15, 2007(3)                                                                                        |
| 4.5         | Purchase Agreement. Family Vacation Centers and 1508812 Ontario  Inc., October 18, 2007(4)                                                               |
| 4.6         | Addendum to Purchase Agreement. Family Vacation Centers and  1508812 Ontario Inc., November 2, 2007(4)                                                   |
| 4.7         | Subscription Agreement, Colorado River Resorts, LLC, January 1,  2008                                                                                    |
| 4.8         | Amended and Restated Loan Agreement, Caterpillar Financial  Services Corporation, February 6, 2009                                                       |
| 4.9         | Sales  Agreement. International Fitness Vacations (BC) Ltd., date January 31, 2011(5)                                                                    |
| 4.10        | Sales  Agreement.  Travel Club Purchase  Agreement, dated December 1, 2011(5)                                                                       |
| 9.1         | Audited  Financial Statements for the year ended September 30, 2009                                                                                      |
| 8.1         | List of Subsidiaries                                                                                                                                     |
| 11.1        | Code of Ethics, January 1, 2003(3)                                                                                                                       |
| 12.1        | Section 302 Certification of  Chief Executive Officer                                                                                                    |
| 12.2        | Section 302 Certification of  Chief Financial Officer                                                                                                    |
| 13          | Section 906 Certification of  Chief Executive Officer  and Chief Financial Officer                                                                       |

**Notes**: (1) Incorporated by reference to Form 20-Ffiled with the SEC on November 3, 1998. (2) Incorporated by reference to Form20-F filed with the SEC on August 15, 2003. (3) Incorporated by reference toForm 20-F filed with the SEC on August 29, 2007. (4) Incorporated by referenceto Form 20-F filed with the SEC on December 29, 2006. (5) To be filed upon  request.

**SIGNATURES**

The registranthereby certifies that it meets all of the requirements for filing on Form 20-Fand that it has duly caused and authorized the undersigned to sign this annualreport on its behalf. 

| Date: October 26, 2012 | **FORUM NATIONAL INVESTMENTS LTD.**                  |
|------------------------|------------------------------------------------------|
|                   |                                                 |
|                   | /s/ Daniel Clozza                                    |
|                   | Daniel Clozza, President and Chief Executive Officer |
|                   |                                                 |
|                   | /s/ Martin Tutschek                                  |
|                   | Martin Tutschek, Chief Financial Officer             |

44

----

 

**INDEX TOFINANCIAL STATEMENTS**

|                                                                                                                                | Page   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                |   |
| Management’s Responsibility  for Financial Reporting                                                                          | F-2    |
| Auditors’ Report dated March 2, 2012                                                                                          | F-3    |
| Consolidated Balance Sheets as  at September 30, 2011 and September 30, 2010.                                                       | F-4    |
| Consolidated Statements of Loss and Deficit for the years  ended September 30, 2011 and 2010 and the year ended September 30, 2009. | F-5    |
| Consolidated Statements of Cash Flows for the years ended  September 30, 2011 and 2010 and the year ended September 30, 2009.       | F-6    |
| Notes to the Consolidated Financial Statements for years  ended September 30, 2011 and 2010 and the year ended September 30, 2009.  | F-7    |

----

 

**FORUM NATIONAL INVESTMENTS LTD.**

September 30, 2011and 2010 and 2009 

ConsolidatedFinancial Statements (Expressed in Canadian dollars) 

----

 
|                                                           |
|----------------------------------------------------------------|
|                                                           |
| **Management’s  Responsibility for Financial Reporting** |
|                                                           |

The consolidatedfinancial statements of Forum National Investments Ltd. are the responsibilityof the Company’s management. The consolidated financial statements are preparedin accordance with Canadian generally accepted accounting principles andreflect management’s best estimates and judgment based on information currentlyavailable.

Management hasdeveloped and is maintaining a system of internal controls to ensure that theCompany’s assets are safeguarded, transactions are authorized and properlyrecorded, and financial information is reliable. 

The Board ofDirectors is responsible for ensuring management fulfills its responsibilities.The Audit Committee reviews the results of the audit and the annualconsolidated financial statements prior to their submission to the Board ofDirectors for approval.

The consolidated financial statements as at  September 30, 2011 and for the year then ended have been audited by Myers  Norris Penny, LLP Chartered Accountants, and their report outlines the scope of  their examination and gives their opinion on the financial statements. The  consolidated statements of operations, comprehensive income (loss) and deficit  and cash flows for the year ended September 30, 2009 were audited by other  auditors, who expressed an opinion without reservation on those statements in  their report , and are attached as an exhibit to this Form 20-F/A annual report. 

*“Dan Clozza”(signed)*

Dan Clozza President 

 October 11, 2012 

F-2

 

----

**REPORT OF INDEPENDENT REGISTERED  PUBLIC ACCOUNTING FIRM**

To the Shareholders of FORUM  NATIONAL INVESTMENTS LTD.:

We have audited the accompanying  consolidated financial statements of Forum National Investments Ltd. and its  subsidiaries, which comprise the consolidated balance sheet as at September 30, 2011 and  2010,  and the consolidated statements of operations, comprehensive  income (loss) and deficit and cash flows for the years then ended, and a  summary of significant accounting policies and other explanatory information.

*Management’s Responsibility for the Consolidated  Financial Statements*  Management is responsible for the  preparation and fair presentation of these consolidated financial statements in  accordance with Canadian generally accepted accounting principles, and for such  internal control as management determines is necessary to enable the  preparation of consolidated financial statements that are free from material  misstatement, whether due to fraud or error.

*Auditors’ Responsibility*  Our responsibility is to express  an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian auditing  standards and the standards of the Public Company Accounting Oversight Board  (United States). Those standards require that we comply with ethical  requirements and plan and perform the audit to obtain reasonable assurance  about whether the consolidated financial statements are free from material  misstatement.

An  audit involves performing procedures to obtain audit evidence about the amounts  and disclosures in the consolidated financial statements. The procedures  selected depend on the auditors’ judgment, including the assessment of the  risks of material misstatement of the consolidated financial statements,  whether due to fraud or error. In making those risk assessments, the auditor  considers internal control relevant to the entity’s preparation and fair  presentation of the consolidated financial statements in order to design audit  procedures that are appropriate in the circumstances, but not for the purpose  of expressing an opinion on the effectiveness of the entity’s internal control.  An audit also includes evaluating the appropriateness of accounting policies  used and the reasonableness of accounting estimates made by management, as well  as evaluating the overall presentation of the consolidated financial  statements. 

We  believe that the audit evidence we have obtained in our audit is sufficient and  appropriate to provide a basis for our audit opinion.

*Opinion*  In our opinion, the consolidated  financial statements present fairly, in all material respects, the financial  position of Forum National Investments Ltd. and its subsidiaries as at September  30, 2011 and 2010, and the results of their operations and their cash  flows for the years then ended in accordance with Canadian generally accepted  accounting principles.

*Emphasis of Matter*  Without qualifying our  opinion, we draw attention to Note 1 to these financial statements, which  states that Forum National Investments Ltd. incurred significant losses from  operations, negative cash flows from operating activities and has an  accumulated deficit. This, along with other matters as described in Note 1 indicate  the existence of a material uncertainty which may cast doubt about the ability  of Forum National Investments Ltd. to continue as a going concern.  Our opinion is not qualified in respect of this matter.

*Other Matter*  The financial statements of Forum  National Investments Ltd. for the year ended September 30, 2009 were audited by  another auditor who expressed an unmodified opinion on those statements in  their report, dated May 14, 2010.

 Chartered  Accountants

Vancouver, CanadaMarch 2, 2012

|  | **ACCOUNTING  ›   CONSULTING  ›  TAX**      2300, 1055 DUNSMUIR STREET,  BOX 49148, VANCOUVER, BC  V7X 1J1      1.877.688.8408  P: 604.685.8408  F: 604.685.8594  mnp.ca |
|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

F-3

----

 

**FORUM NATIONAL INVESTMENTS LTD.**ConsolidatedBalance Sheets (Expressed in Canadian dollars) 

|                                                                        |   | September  30, |   |   | September  30, |   |
|-----------------------------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|
|                                                                        |   | 2011           |   |   | 2010           |   |
| **Assets**                                                                  |   |           |   |   |           |   |
|                                                                        |   |           |   |   |           |   |
| **Current**                                                                 |   |           |   |   |           |   |
|      Cash and cash equivalents                     | $      | 62,772         |   | $      | 376,103        |   |
|      Short-term deposits                           |   | 14,756         |   |   | 14,700         |   |
|      Marketable securities (note 3)                |   | -              |   |   | 51             |   |
|      Amounts and notes receivable (notes 5 and 19) |   | 81,527         |   |   | 85,515         |   |
|      Other receivables                             |   | 5,144          |   |   | 14,360         |   |
|      Prepaid expenses                              |   | 26,932         |   |   | 17,803         |   |
|      Discontinued current assets                   |   | -              |   |   | 692            |   |
| **Total Current Assets**                                                    |   | 191,131        |   |   | 509,224        |   |
|                                                                        |   |           |   |   |           |   |
| **Amounts and notes  receivable**(notes 5 and  19)                          |   | 208,729        |   |   | 109,226        |   |
| **Investment in Life  Settlement contracts**(notes  5 and 6)                |   | 2,832,972      |   |   | 2,670,070      |   |
| **Property and Equipment**(note 7)                                          |   | 7,767,783      |   |   | 8,994,166      |   |
| **Intangible assets**(note 8)                                               |   | 91,384         |   |   | 116,307        |   |
| **Discontinued plant,  property and equipment**                             |   | -              |   |   | 107,227        |   |
|                                                                        |   |           |   |   |           |   |
| **Total Assets**                                                            | $      | 11,091,999     |   | $      | 12,506,220     |   |
|                                                                        |   |           |   |   |           |   |
| **Liabilities and  Shareholders’ Equity**                             |   |           |   |   |           |   |
|                                                                        |   |           |   |   |           |   |
| **Current**                                                                 |   |           |   |   |           |   |
|      Accounts payable and accrued liabilities      | $      | 567,439        |   | $      | 552,664        |   |
|      Due to broker (note 3)                        |   | -              |   |   | 97,146         |   |
|      Secured borrowing (note 10)                   |   | 51,064         |   |   | 106,341        |   |
|      Deferred revenue, current portion (note 9)    |   | 876,166        |   |   | 1,077,068      |   |
|      Current portion of long-term debt (note 12)   |   | 140,968        |   |   | 177,128        |   |
|      Future Income taxes (note 14)                 |   | 1,712,000      |   |   | 1,712,000      |   |
|      Convertible debentures (note 11)              |   | 40,486         |   |   | 40,486         |   |
|      Loans from related parties (note 18)          |   | 137,872        |   |   | 92,033         |   |
|      Conversion rights (note 11)                   |   | 387,642        |   |   | -              |   |
|      Discontinued current liabilities              |   | -              |   |   | 20,549         |   |
| **Total Current Liabilities**                                               |   | 3,913,637      |   |   | 3,875,415      |   |
|                                                                        |   |           |   |   |           |   |
| **Deferred Revenue**(note 9)                                                |   | 182,472        |   |   | 751,868        |   |
| **Convertible Debentures** (note 11)                                        |   | 188,572        |   |   | -              |   |
| **Long-Term Debt**(note 12)                                                 |   | 4,748,054      |   |   | 4,846,198      |   |
| **Total Liabilities**                                                       |   | 9,032,735      |   |   | 9,473,481      |   |

| **Shareholders’ Equity**                        |   |        |   |   |        |   |
|-------------------------------------------------------|--------|-------------|--------|--------|-------------|--------|
|                                                  |   |        |   |   |        |   |
| **Capital Stock**(note 13)                            |   | 25,782,966  |   |   | 25,810,369  |   |
| **Contributed Surplus**(note 13(e))                   |   | 2,757,581   |   |   | 2,757,581   |   |
| **Deficit**                                           |   | (26,481,283 | )      |   | (25,535,211 | )      |
| **Total Shareholders’  Equity**                 |   | 2,059,264   |   |   | 3,032,739   |   |
| **Total Liabilities and  Shareholders’ Equity** | $      | 11,091,999  |   | $      | 12,506,220  |   |

Nature of operations and ability to continueas going concern (note 1)Commitments (note 16)Subsequent events (note 22) Approved on behalf of the Board: 

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

F-4

----

 

**FORUM NATIONAL INVESTMENTS LTD.**Consolidated Statements ofOperations, Comprehensive Income (Loss) and Deficit (Expressed in Canadian dollars) 

|                                                                                                                     |   | Year  Ended    |   |   | Year  Ended    |   |   | Year  Ended    |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|--------|----------------|--------|
|                                                                                                                     |   | September  30, |   |   | September  30, |   |   | September  30, |   |
|                                                                                                                     |   | 2011           |   |   | 2010           |   |   | 2009           |   |
|                                                                                                                     |   |           |   |   |           |   |   |           |   |
| **Revenues**                                                                                                             |   |           |   |   |           |   |   |           |   |
|           Membership and travel                                        | $      | 3,110,511      |   | $      | 3,821,772      |   | $      | 3,294,162      |   |
|           Interest                                                     |   | 25,990         |   |   | 49,883         |   |   | 46,924         |   |
|           Other                                                        |   | 244,190        |   |   | 69,642         |   |   | 175,331        |   |
|                                                                                                                     |   | 3,380,691      |   |   | 3,941,297      |   |   | 3,516,417      |   |
|                                                                                                                     |   |           |   |   |           |   |   |           |   |
| **Expenses**                                                                                                             |   |           |   |   |           |   |   |           |   |
|           Wages (note 13)                                              |   | 1,070,953      |   |   | 1,498,705      |   |   | 1,689,385      |   |
|           General and administration (note 12)                         |   | 1,717,161      |   |   | 2,206,216      |   |   | 2,626,644      |   |
|           Bad debt expense (note 5(a))                                 |   | 8,954          |   |   | 81,295         |   |   | 212,364        |   |
|           Commission costs                                             |   | 72,202         |   |   | 75,309         |   |   | 31,983         |   |
|           Amortization of property and equipment                       |   | 596,203        |   |   | 649,508        |   |   | 337,256        |   |
|           Amortization of intangible assets (note 8)                   |   | 24,923         |   |   | 4,011          |   |   | 684,738        |   |
|                                                                                                                     |   | 3,490,396      |   |   | 4,515,044      |   |   | 5,582,370      |   |
|      Loss before other income  (expenses)                                                       |   | (109,705       | )      |   | (573,747       | )      |   | (2,065,953     | )      |
|                                                                                                                     |   |           |   |   |           |   |   |           |   |
| **Other income (expenses)**                                                                                              |   |           |   |   |           |   |   |           |   |
|           Net gain on investment in life settlement contracts (note 6) |   | (412,673       | )      |   | (1,582,464     | )      |   | 775,207        |   |
|           Gain on settlement of debt by guarantor (note 18)            |   | –        |   |   | 484,225        |   |   | –        |   |
|           Other expenses                                               |   | (3,768         | )      |   |           |   |   |           |   |
|           Foreign exchange gain (loss)                                 |   | (2,532         | )      |   | (139,100       | )      |   | 977,041        |   |
|           Gain  (loss) on disposal of capital assets                   |   | 49,987         |   |   | (41,319        | )      |   | –        |   |
|           Gain  on the sale of International Fitness Vacations         |   | 89,144         |   |   | –        |   |   | –        |   |
|           Loss  from discontinued operations                           |   | (56,525        | )      |   | (80,822        | )      |   | (94,576        | )      |
|           Gain (loss) on marketable securities                         |   | –        |   |   | (698,537       | )      |   | 361,887        |   |
|           Unrealized  gain (loss) on marketable securities             |   | –        |   |   | (8,187         | )      |   | –        |   |
|           Impairment of intangible assets (note 8)                     |   | –        |   |   | –        | )      |   | (1,233,324     | )      |
|           Impairment of property, plant & equipment (note 7)       |   | (500,000       | )      |   | (825,000       | )      |   | (2,348,595     | )      |
|      Total Non-operating  Income (Expense)                                                      |   | (836,367       | )      |   | (2,891,204     | )      |   | (1,562,360     | )      |
|                                                                                                                     |   |           |   |   |           |   |   |           |   |
| **Income (Loss) Before Tax**                                                                                             |   | (946,072       | )      |   | (3,464,951     | )      |   | (3,628,313     | )      |
| **Income Tax Recovery  (Expense)** (note 14)                                                                             |   | –        |   |   | –        |   |   | (1,715,970     | )      |
|                                                                                                                     |   |           |   |   |           |   |   |           |   |
| **Net Income (Loss) and  Comprehensive Income (loss) for Period**                                                        |   | (946,072       | )      |   | (3,464,951     | )      |   | (5,344,283     | )      |
|                                                                                                                     |   |           |   |   |           |   |   |           |   |
|                                                                                                                     |   |           |   |   |           |   |   |           |   |
| **Deficit, Beginning of  Period**                                                                                        |   | (25,535,211    | )      |   | (22,070 ,260   | )      |   | (16,725,977    | )      |
|                                                                                                                     |   |           |   |   |           |   |   |           |   |
| **Deficit, End of Period**                                                                                               | $      | (26,481,283    | )      | $      | (25,535,211    | )      | $      | (22,070,260    | )      |
|                                                                                                                     |   |           |   |   |           |   |   |           |   |
| Basic earnings (loss) per  share                                                                                         | $      | (0.03          | )      | $      | (0.12          | )      | $      | (0.19          | )      |
| Diluted earnings (loss) per  share                                                                                       | $      | (0.03          | )      | $      | (0.12          | )      | $      | (0.19          | )      |
|                                                                                                                     |   |           |   |   |           |   |   |           |   |
| Weighted average number of  common shares outstanding (note 13 (b))                                                      |   |           |   |   |           |   |   |           |   |

See accompanying notes to consolidated financial  statements. 

F-5

----

 

**FORUM NATIONAL INVESTMENTS LTD.**Consolidated Statements of Cash Flows(Expressed in Canadian dollars) 

|                                                                                                                                                              |   |           |   |   |           |   |   |           |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|--------|----------------|--------|
|                                                                                                                                                              |   | Year  Ended    |   |   | Year  Ended    |   |   | Year  Ended    |   |
|                                                                                                                                                              |   | September  30, |   |   | September  30, |   |   | September  30, |   |
|                                                                                                                                                              |   | 2011           |   |   | 2010           |   |   | 2009           |   |
| **Operating Activities**                                                                                                                                          |   |           |   |   |           |   |   |           |   |
|      Net income/(loss)                                                                                                                   | $      | (946,072       | )      | $      | (3,464,951     | )      | $      | (5,344,283     | )      |
|      Adjustments to reconcile net  income (loss) to net cash        Provided by (used in) operating activities: |   |           |   |   |           |   |   |           |   |
|      Net  gain on life settlement contracts                                                                                              |   | 139,308        |   |   | 1,582,464      |   |   | (775,207       | )      |
|      Income  tax expense                                                                                                                 |   | –        |   |   | –        |   |   | 1,712,000      |   |
|      Accretion  of interest expense on convertible debentures                                                                            |   | 188,572        |   |   | –        |   |   | –        |   |
|      Deferred vacation membership revenue                                                                                                |   | (770,299       | )      |   | (1,092,996     | )      |   | (404,303       | )      |
|      Amortization of property and equipment                                                                                              |   | 596,203        |   |   | 729,452        |   |   | 406,785        |   |
|      Amortization of intangible assets                                                                                                   |   | 24,923         |   |   | 4,011          |   |   | 684,738        |   |
|      Impairment on tangible assets                                                                                                       |   | 500,000        |   |   | 825,000        |   |   | 2,348,595      |   |
|      Impairment on intangible assets                                                                                                     |   | –        |   |   | –        |   |   | 1,233,324      |   |
|      Related  party advance                                                                                                              |   | –        |   |   | (20,000        | )      |   | 20,000         |   |
|      Loss on  disposal of plant, property and equipment                                                                                  |   | 49,987         |   |   | 41,319         |   |   | –        |   |
|      Gain on  sale of International Fitness Vacations Ltd.                                                                               |   | 89,144         |   |   | –        |   |   | –        |   |
|      Gain on  settlement of debt                                                                                                         |   | –        |   |   | (484,225       | )      |   | –        |   |
|      Loss  (gain) on marketable securities                                                                                               |   | –        |   |   | 698,537        |   |   | (361,887       | )      |
|      Unrealized  Loss (gain) on marketable securities                                                                                    |   | –        |   |   | 8,187          |   |   | –        |   |
|      Unrealized foreign exchange gain                                                                                                    |   | 215,630        |   |   | 144,447        |   |   | –        |   |
|      Increase (decrease) in accounts, notes and other receivables                                                                        |   | (98,130        | )      |   | 174,070        |   |   | 371,253        |   |
|      Increase in short-term deposits                                                                                                     |   | –        |   |   | (15            | )      |   | (475           | )      |
|      Increase (decrease) in prepaid expenses                                                                                             |   | (8,604         | )      |   | 101,351        |   |   | (113,940       | )      |
|      Increase (decrease) in accounts payable and accrued liabilities                                                                     |   | 3,223          |   |   | (44,185        | )      |   | (283,109       | )      |
|      Increase (decrease) in deferred revenue                                                                                             |   | –        |   |   | –        |   |   | (165,931       | )      |
|                                                                                                                                                              |   |           |   |   |           |   |   |           |   |
| **Cash Used in Operating  Activities**                                                                                                                            |   | (66,103        | )      |   | (797,534       | )      |   | (672,440       | )      |
|                                                                                                                                                              |   |           |   |   |           |   |   |           |   |
| **Investing Activities**                                                                                                                                          |   |           |   |   |           |   |   |           |   |
|      Purchase of property and equipment                                                                                                  |   | (29,640        | )      |   | (1,134,843     | )      |   | (2,070,200     | )      |
|      Payments for intangible property                                                                                                    |   | –        |   |   | (48,150        | )      |   | (72,168        | )      |
|      Proceeds from the disposal of International Fitness Vacations Ltd.                                                                  |   | 12,000         |   |   | –        |   |   | –        |   |
|      Proceeds from disposal of property, plant and equipment                                                                             |   | 150,000        |   |   | –        |   |   | –        |   |
|      Proceeds from life settlement                                                                                                       |   | –        |   |   | –        |   |   | 5,371,606      |   |
|      Payment of life insurance premiums                                                                                                  |   | (551,980       | )      |   | (344,761       | )      |   | (18,020        | )      |
|      Realized proceeds on marketable securities                                                                                          |   | 51             |   |   | 9,961,726      |   |   | 121,512        |   |
|      Purchase of marketable securities                                                                                                   |   | –        |   |   | (8,428,126     | )      |   | (2,000,000     | )      |
| **Cash Used in Investing  Activities**                                                                                                                            |   | (419,569       | )      |   | 5,846          |   |   | 1,332,730      |   |
|                                                                                                                                                              |   |           |   |   |           |   |   |           |   |
| **Financing Activities**                                                                                                                                          |   |           |   |   |           |   |   |           |   |
|      Net proceeds received on share issuance                                                                                             |   | 106,698        |   |   | –        |   |   | 195,344        |   |
|      Funds held in trust                                                                                                                 |   | –        |   |   | –        |   |   | 79,493         |   |
|      Amounts due to (from) related parties (note 18)                                                                                     |   | 45,839         |   |   | 314,879        |   |   | (827,653       | )      |
|      Borrowings (repayments) of Long-term debt                                                                                           |   | (122,304       | )      |   | (345,072       | )      |   | (62,544        | )      |
|      Proceeds from Long-term debt                                                                                                        |   | –        |   |   | –        |   |   | 855,472        |   |
|      Secured borrowing                                                                                                                   |   | (55,277        | )      |   | (157,353       | )      |   | 126,373        |   |
|      Due to broker                                                                                                                       |   | (97,146        | )      |   | (472,850       | )      |   | 569,996        |   |
|      Proceeds from debenture issuance                                                                                                    |   | 253,541        |   |   | –        |   |   | –        |   |
| **Cash Provided by  Financing Activities**                                                                                                                        |   | 131,351        |   |   | (660,396       | )      |   | 936,481        |   |
|                                                                                                                                                              |   |           |   |   |           |   |   |           |   |
| **Increase (Decrease) in  Cash**                                                                                                                                  |   | (310,779       | )      |   | (1,452,084     | )      |   | 1,596,771      |   |
| **Cash and Cash  Equivalents, Beginning of Period**                                                                                                               |   | 373,551        |   |   | 1,825,635      |   |   | 228,864        |   |
|                                                                                                                                                              |   |           |   |   |           |   |   |           |   |
| **Cash and Cash  Equivalents, End of Period**                                                                                                                     | $      | 62,772         |   | $      | 373,551        |   | $      | 1,825,635      |   |

Supplemental cash flow information (note 21) See accompanying notes to consolidated financial statements

F-6

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **1.** | **Nature of Operations and Ability to Continue as a  Going Concern** |
|--------|----------------------------------------------------------------------|

|   | The Company was incorporated on September 22, 1995    under the*Business Corporations Act*(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 income from its investments in life settlement contracts, the sale of travel services and monthly dues from the members of its travel clubs. As at    September 30, 2011, the Company has an accumulated deficit of $26,481,283 and    a working capital deficit of $3,722,506. The Company anticipates incurring    substantial expenditures to further develop its life settlement and yacht    charter lines of business. Although, the Company has cash on hand of $62,772,    the Company’s cash flow from operating activities may not be sufficient to    satisfy its obligations as they come due as well as meeting the requirements    of its capital investment programs and covenants on its long term debt. These    factors cast substantial doubt about the Company’s ability to continue as a    going concern. The continued existence of the Company is dependent upon its    ability to generate profit from its life settlement investment and yacht    charter operations to meet its obligations as they become due. If additional    cash is needed, the Company intends to finance the future capital required to    acquire life settlement contracts and continued operations from a combination    of traditional debt and equity markets. However, there is no assurance that    (a) traditional debt and equity markets may be accessible as required, or if    so, on acceptable terms and, or (b) the demand for and selling prices of the    Company’s services, may not be sufficient to meet cash flow expectation. The    outcome of these matters cannot be predicted with certainty and therefore the    Company may not be able to continue or expand operations as planned. These    consolidated financial statements do not include any adjustments to the    amounts and classification of assets and liabilities that may be necessary    should the Company be unable to continue as a going concern. |

| **2.** | **Significant Accounting Policies** |
|--------|-------------------------------------|

|   | (a)    | Basis of presentation                                                                                                                                                                                                                    |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                     |
|   |   | These consolidated financial statements are prepared    in accordance with Canadian generally accepted accounting principles    (“Canadian GAAP”) and include the accounts of the Company and the following    subsidiaries: |

|   |                                      |      | Incorporating            | Date of Acquisition |
|--------|-------------------------------------------|-----------|--------------------------|---------------------|
|   | Subsidiaries                              | Ownership | Jurisdiction             | or Incorporation    |
|   |                                      |      |                     |                |
|   | Intravelnet Ltd.                          | 100%      | Ontario, Canada          | July 25, 2003       |
|   | ATM Travel Group Ltd. (“ATM”) | 100%      | British Columbia, Canada | April 3, 2000       |
|   | Spirit Yacht Charters Ltd.                | 100%      | British Columbia, Canada | August 7, 2008      |
|   | American Life Settlement Society LLC      | 100%      | State of Delaware, USA   | November 15, 2007   |

F-7

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **2.** | **Significant Accounting Policies (continued)** |
|--------|-------------------------------------------------|

|   | (a)    | Basis of presentation (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   | All significant intercompany balances and  transactions have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   | As described in note 22, Canadian GAAP differs in    certain material aspects from accounting principles generally accepted in the    United States (“US GAAP”).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (b)    | Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   | The Company generates revenues from yacht charter    operations and recognizes revenue at the time the charters are provided. In    accordance with CICA HB 3400,*Revenue*, 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 member’s entitlements.  For lifetime memberships,    revenue is recognized over a period of five years, which is management’s best    estimate of the period over which performance will be required. Revenue from    yacht charter operations is recognized at the time the charters are provided.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (c)    | Other income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   | Net gain on life settlement contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   | The Company    records investments in the life settlement contracts at fair value on each    balance sheet date. Any changes to fair value will be recognized in the    statements of operations in the period in which the changes occur. The    Company recognizes in other income the difference between the death benefits    and the carrying value of the policy when the Company determined that    settlement and ultimate collection is reasonably assured.  Other income    includes both recognized and un-recognized amounts and is presented net of    related costs including premium costs.       Cash flows    relating to the acquisition of the Company’s investments in life settlement    contract and premiums are recognized as investing activities in the statement    of cash flows. Proceeds from the maturity of a life settlement contract will    be shown as cash in-flows from investing activities, with realized gain on    maturity of life settlement policies as a reconciling item in the    determination of net cash provided by operating activities.    Interest income    is recognized as it is received.    Security    transactions are recorded on a trade-date basis. Realized gains and losses on    disposal of investments and unrealized gains and losses in the value of    investments, are reflected in other income and are calculated on an average    cost basis. Upon disposal of an investment, previously recognized unrealized    gains or losses are reversed, so as to recognize the full realized gain or    loss in the period of disposition. |

F-8

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **2.** | **Significant Accounting Policies (continued)** |
|--------|-------------------------------------------------|

|   | (d)    | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   | The Company follows the recommendations of the    Canadian Institute of Chartered Accountants (“CICA) for stock-based    compensation and other stock-based payments. The Company accounts for stock    options granted to directors, employees and consultants using the fair value    method. The fair value of each option granted is estimated on the date of    grant using the Black-Scholes option pricing model and charged to operations    over the vesting period with a corresponding increase in contributed surplus.    Upon exercise of the stock options, the consideration received together with    the amount previously recognized in contributed surplus is recorded as an    increase to capital stock.  Options that are forfeited or expire that    were previously recognized in contributed surplus are recorded as an increase    to retained earnings. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | (e)    | Property and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   | Property and equipment are stated at cost.    Amortization is provided on a straight-line basis in order to amortize the    cost of depreciable assets over their estimated useful lives. For assets    constructed internally, amortization is charged once the asset is complete    and brought into use.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   | The annual rates applied are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

|   |   | Asset                        | Basis         | Rate    |
|--------|--------|------------------------------|---------------|---------|
|   |   |                         |          |    |
|   |   | Motor vessels                | Straight-line | 6%      |
|   |   | Vehicles                     | Straight-line | 25%     |
|   |   | Vehicles under capital lease | Straight-line | 33%     |
|   |   | Equipment                    | Straight-line | 20%     |
|   |   | Computers                    | Straight-line | 30%     |
|   |   | Leasehold improvements       | Term of lease | 5 years |

|   | (f)    | Intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   | Intangible    assets acquired in a business combination are identified and recognized at    their fair values apart from goodwill when they arise from either contractual    or other rights and may be sold, transferred, licensed, rented or exchanged,    either individually or with a group of related assets or liabilities. 

 Indefinite life      intangible assets are subjected to impairment tests on an annual basis or      when events or circumstances indicate a potential impairment. If the carrying      value of such assets exceeds the fair values, the assets are written down to      fair value.      Intangible assets      with definite lives are amortized over their estimated useful lives.

 Intangible assets with indefinite lives are initially recognized at cost.      Once an intangible asset’s expected useful life is determined to no longer be      indefinite, it will be amortized over its remaining expected useful life.      

The intangible      asset is the membership database, which has an estimated useful life of 5    years. The database was completed and entered service during fiscal 2010. |

F-9

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **2.** | **Significant Accounting Policies (continued)** |
|--------|-------------------------------------------------|

|   | (g)    | Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | Monetary    assets and liabilities denominated in foreign currency have been translated    into Canadian dollars at exchange rates in effect at the balance sheet date    and non-monetary items are translated at rates of exchange in effect when the    assets were acquired or obligations incurred. Revenues and expenses are    translated at the rates in effect at the time of the transaction. Foreign    exchange gains and losses are included in the determination of net income or    loss for the period.    

Assets and      liabilities of self-sustaining operations conducted in foreign currencies are      translated into Canadian dollars at the exchange rate in effect at the      balance sheet date.  Revenues and expenses are translated at average      exchange rates for the year.  Unrealized gains or losses on translation      of self-sustaining operations conducted in foreign currencies are shown as      currency translation adjustments, a component of other comprehensive      earnings.      

The Company’s      integrated operations, translate monetary assets and liabilities denominated      in foreign currencies at exchange rates in effect at the balance sheet date      and non-monetary items at historical rates. Revenues and expenses are      translated at the exchange rate at the date of the transactions.  Gains      and losses on translation are included in the income statement. The Company      has determined that all of its subsidiaries are integrated foreign    operations. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (h)    | Factoring of note receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | The Company has entered into arrangements whereby    future streams of certain financed membership cash flows are sold to a third    party (“Lender”) while the Company is committed to provide the future    services under these membership contracts. The Company receives cash proceeds    on the sale at a discount to the future proceeds that the Lender is expected    to receive from the customers. The Lender has recourse against the Company    should the amounts become uncollectible, and the Company establishes a    reserve for such amounts. For accounting purposes, the discounted proceeds    have been recorded as a liability at the time of the transaction (notes 5 and    19), which is accreted to the gross value through a charge to interest    expense over the term of the membership contracts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (i)    | Earnings (loss) per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | Basic earnings-per-share is calculated using the weighted average number of common shares outstanding during the year and assumes conversion of all outstanding Series “B” Preference convertible shares. The Series “B” preferred convertible shares are included in the calculation of basic earnings (loss) per share because management considers these shares substantially equivalent to common stock. Management believes the Series “B” preferred shares are not “contingently issuable shares” and considers conversion at the option of the Series “B” holder does not constitute a barrier to conversion. Series “B” preferred convertible shares are without par value, are convertible to one common share for each preferred share held, have no rights to dividends, voting, profit sharing, or liquidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

F-10

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **2.** | **Significant Accounting Policies (continued)** |
|--------|-------------------------------------------------|

|   | (i)    | Earnings (loss) per share (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | Series “A”    preference convertible shares are not included in the calculation of basic    earnings per share. Management believes the Series “A” preferred shares are    “contingently issuable shares” and considers conditions for conversion of the    Series “A” preferred shares to constitute a barrier to conversion as some    target performance or event has not been met or occurred.    

Under the      treasury stock method, diluted earnings (loss)-per-share is calculated based      upon the weighted average number of shares issued and outstanding during the      year, adjusted by the total of the additional common shares that would have      been outstanding assuming exercise of all stock options and conversion of all      Series “A” Preference convertible shares without par value convertible to 50%      of the outstanding common shares after conversion. See note 13(b) for      calculation of weighted average share outstanding for calculation of diluted    earnings per share. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | (j)    | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | Income taxes are  accounted for under the asset and liability method. Future income tax assets  and liabilities are recognized for future tax consequences attributable to  differences between the financial statement carrying amounts of existing assets  and liabilities and their respective tax basis and loss carry-forwards. Future  income tax assets and liabilities are measured using substantively-enacted tax  rates expected to apply to taxable income in the years in which those temporary  differences are expected to be recovered or settled. The effect on future  income tax assets and liabilities of a change in tax rates is recognized in  income in the period that includes the substantive enactment date. To the  extent that it is more likely than not those future income tax assets will not  be realized, a valuation allowance is recorded for the excess.                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | (k)    | Impairment of long lived assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | Long-lived assets are tested for impairment whenever    circumstances indicate that the carrying value may not be recoverable. When    events or circumstances indicate that the carrying amount of long-lived    assets, other than indefinite life intangibles, are not recoverable, the    long-lived assets are tested for impairment by comparing the estimate of    future expected cash flows to the carrying amount of the assets or groups of    assets. If the carrying value is not recoverable from future expected cash    flows, any loss is measured as the amount by which the asset's carrying value    exceeds fair value and recorded in the period. Recoverability is assessed    relative to undiscounted cash flows from the direct use and disposition of    the asset or group of assets.                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | For assets that are under construction, the Company    evaluates recoverability when circumstances indicate that the carrying value    of an asset may not be recoverable. Estimates of recoverability are based on    undiscounted cash flows that is expected from the use and eventual    disposition of the assets or when there is no undiscounted cash flows, the    fair value of the asset on the reporting date. When impairment in value is    noted, the carrying value of the property and equipment is reduced by a    charge to operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

F-11

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **2.** | **Significant Accounting Policies (continued)** |
|--------|-------------------------------------------------|

|   | (l)    | Use of estimates and measurement uncertainty                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | The preparation of financial statements in    conformity with Canadian GAAP requires management to make estimates and    assumptions that affect the reported amounts of assets and liabilities and    disclosure of contingent assets and liabilities at the date of the financial    statements, and the reported amounts of revenues and expenses during the    reporting period. Significant areas requiring the use of estimates include    the valuation of amounts and notes receivable, impairment of assets,    including intangible assets, rates for amortization and revenue recognition,    balances of accrued liabilities, income taxes provision, valuation allowance    for future income tax assets, and the determination of the variables used in    the calculation of fair value of life settlement contracts and stock-based    compensation. While management believes the estimates used are reasonable,    actual results could differ from those estimates and could impact future    results of operations and cash flows. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (m)    | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | Securities with original maturities of three months    or less are considered cash equivalents, at cost. The securities are highly    liquid and can be converted to known amounts of cash at any time, and are    held at major financial institutions. Accrued interest on the guaranteed    investment certificates, included as cash equivalents, is at the stated    interest rate over the term of the instrument and included in amounts    receivable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (n)    | Accounts receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | The Company maintains reserves for potential credit losses on    accounts receivable. Management reviews the composition of accounts    receivable and analyzes historical bad debts, customer concentrations,    customer credit worthiness, current economic trends and changes in customer    payment patterns to evaluate the adequacy of the reserve.    Accounts receivable will be considered delinquent if    payment is not received before the due dates established in the sales    agreement with customers. Delinquent account balances are written-off after    management has determined that the likelihood of collection is not probable,    and known bad debts are written off against allowance for doubtful accounts    when identified.                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (o)    | Comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | Comprehensive income includes both net earnings and    other comprehensive income. Other comprehensive income (“OCI”) includes    holding gains and losses on available for sale investments, gains and losses    on certain derivative financial instruments and foreign currency gains and    losses relating to self-sustaining foreign operations, all of which are not    included in the calculation of net earnings until realized. The Company does    not have any differences between net income (loss) and comprehensive income    (loss) items for the periods presented.                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (p)    | Financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | Financial instruments are initially recognized at    fair value. The fair value of a financial instrument is the amount of    consideration that would be agreed upon in an arm’s-length transaction    between knowledgeable, willing parties who are under no compulsion to act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

F-12

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **2.** | **Significant Accounting Policies (continued)** |
|--------|-------------------------------------------------|

|   | (p) | Financial instruments (continued) |
|--------|-----|-----------------------------------|

|   | Subsequent measurement  depends on management’s classification of the financial assets as  held-for-trading, available –for-sale, held-to-maturity or loans and  receivables, and financial liabilities as held-for-trading or other  liabilities. The classification of financial instruments depends on the nature  of and the purpose of the financial instruments, management’s choice and in  some circumstances, management’s intentions. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Held-for-trading |
|--------|------------------|

|   | Financialinstruments classified as held-for-trading are measured at fair value with therealized and unrealized changes in fair value recognized each reporting periodthrough interest and financing costs, net on the consolidated statement ofearnings.  Transaction costs for held-for-trading financial assets are expensedas incurred. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Available-for-sale

Financial        assets classified as available-for-sale are measured at fair value with the        unrealized changes in fair value recorded each reporting period in OCI,        Investments in equity instruments classified as available-for-sale that do        not have the quoted price in an active market are recorded at cost. Each        reporting period, available-for-sale assets are written down to fair value        through interest and financing costs, net on the consolidated statement of        operations to reflect impairments that are considered to be other than        temporary.  Transaction costs for available-for-sale financial assets        are expensed as incurred. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | Held-to-maturity, loans and receivables and other  liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | Financial instruments classified as    held-to-maturity, loans and receivables and other liabilities are measured at    amortized cost using the effective interest method adding transaction costs    that are directly attributable to the acquisition or issue of a financial    asset or financial liability to the amount.                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | The following table summarizes the Company’s    selected financial instrument classifications:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

|   |   | Financial instrument                              | Classification        |
|--------|--------|---------------------------------------------------|-----------------------|
|   |   |                                              |                  |
|   |   | Cash and cash equivalents and funds held in trust | Held-for-trading      |
|   |   | Short-term deposits                               | Held-to-maturity      |
|   |   | Marketable securities                             | Held-for-trading      |
|   |   | Amounts and notes receivable                      | Loans and receivables |
|   |   | Life settlement contract receivable               | Loans and receivables |
|   |   | Other receivables                                 | Loans and receivables |
|   |   | Investment in life settlement contracts           | Held-for-trading      |
|   |   | Accounts payable and accrued liabilities          | Other liabilities     |
|   |   | Accounts payable - other                          | Other liabilities     |
|   |   | Convertible debentures                            | Other liabilities     |
|   |   | Secured borrowing and due to broker               | Other liabilities     |
|   |   | Long term debt and promissory note payable        | Other liabilities     |
|   |   | Loan from related parties                         | Other liabilities     |

F-13

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **2.** | **Significant Accounting Policies (continued)** |
|--------|-------------------------------------------------|

|   | (q)    | Comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   | Comprehensive income includes both net earnings and    other comprehensive income. Other comprehensive income (“OCI”) includes    holding gains and losses on available for sale investments, gains and losses    on certain derivative financial instruments and foreign currency gains and    losses relating to self-sustaining foreign operations, all of which are not    included in the calculation of net earnings until realized. The Company does    not have any comprehensive income items for the periods presented.                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | (r)    | Business Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   | The Company operates in one reporting segment of hospitality    and tourism.  The Company’s hospitality and tourism operations, assets    and employees are located in Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   | The Company also invests in life settlement    contracts in the United States. As at September 30, 2011, the investment life    settlements does not constitute a clearly identifiable business segment.                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | (s)    | Adoption of new accounting standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   | **i.  Financial Instruments –      Disclosures – Revised section 3862**        The amendments      to CICA HB 3862 expand the disclosures required in respect of fair value      measurements and liquidity risk.  The Company has not provided      comparative information for these expanded disclosures in the current year in      accordance with the transitional relief offered in these amendments.       The result of the expanded disclosures required the Company to identify the      degree to which the fair value is observable.  The Company’s analysis is    included in Note 5(d). |

|   | (t) | Adoption of future accounting standards |
|--------|-----|-----------------------------------------|

|   |   | **i.  Business Combinations – 1582**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   | In January 2009, the CICA issued Section 1582 –    Business Combinations, which replaces Section 1581 – Business Combinations,    and Section 1601 – Consolidated Financial Statements and Section 1602 –    Non-Controlling Interests, which replace Section 1600 – Consolidated    Financial Statements. These new sections are effective for years beginning on    or after January 1, 2011 with earlier adoption permitted.  Sections 1582    and 1602 will require net assets, non-controlling interests and goodwill    acquired in a business combination to be recorded at fair value and    non-controlling interests will be reported as a component of equity. In    addition, the definition of a business is expanded and is described as an    integrated set of activities and assets that are capable of being managed to    provide a return to investors or economic benefits to owners. As well    acquisition costs are not part of the consideration and are to be expensed    when incurred. |

F-14

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **2.** | **Significant Accounting Policies (continued)** |
|--------|-------------------------------------------------|
|   |                                            |   |
|   | (t)                                             | Adoption of future accounting standards (continued) |
|   |                                            |   |
|   |                                            | **ii. Accounting changes – 1506** |
|   |                                            |   |
|   |                                            | In June 2009, the CICA issued amendments to CICA    Handbook Section 1506, Accounting Changes. Section 1506 was amended to    exclude from its scope changes in accounting policies upon the complete    replacement of an entity’s primary basis of accounting. The amendments were    effective for annual and interim financial statements relating to fiscal    years beginning on or after July 1, 2009. The adoption of International    Financial Reporting Standards (“IFRS”) is not expected to qualify as an    accounting change under CICA 1506. |
|   |                                            |   |
|   |                                            | **iii. International Financial Reporting Standards  ("IFRS")** |
|   |                                            |   |
|   |                                            | In 2006, the Canadian Accounting Standards Board    ("AcSB") published a new strategic plan that will significantly    affect financial reporting requirements for Canadian companies. The AcSB    strategic plan outlines the convergence of Canadian GAAP with IFRS over an    expected five year transitional period. In February 2008 the AcSB announced    that 2011 is the changeover date for publicly-listed companies to use IFRS,    replacing Canada's own GAAP. The date is for interim and annual financial    statements relating to fiscal years beginning on or after January 1, 2011.    The transition date of October 1, 2011 will require the restatement for    comparative purposes of amounts reported by the Company for the year ended    September 30, 2011. While the Company has begun assessing the adoption of    IFRS for fiscal 2011, the financial reporting impact of the transition to    IFRS cannot be reasonably estimated at this time. |
|   |                                            |   |
|   | (u)                                             | Comparative balances |
|   |                                            |   |
|   |                                            | Balances presented in comparative year’s financial    statements may have been adjusted to conform with the current year’s    presentation. |

| **3.** | **Marketable Securities** |
|--------|---------------------------|

|   | **Balances as at September 30, 2011** |   | Number of shares held |   |   | Cost   |   |   | Quoted Market price  per share |   |   | Fair Value |   |
|--------|---------------------------------------|--------|-----------------------|--------|--------|--------|--------|--------|--------------------------------|--------|--------|------------|--------|
|   |                                  |   |                  |   |   |   |   |   |                           |   |   |       |   |
|   | -                                     |   | -                     |   | $      | -      |   | $      | -                              |   | $      | -          |   |
|   |                                  |   |                  |   |   |   |   |   |                           |   |   |       |   |
|   | **Total**                             |   | -                     |   | $      | -      |   | $      | -                              |   | $      | -          |   |

|   | **Balances as at September 30, 2010** |
|--------|---------------------------------------|

|   | **Balances as at September 30, 2010** |   | Number of shares held |   |   | Cost   |   |   | Quoted Market price  per share |   |   | Fair Value |   |
|--------|---------------------------------------|--------|-----------------------|--------|--------|--------|--------|--------|--------------------------------|--------|--------|------------|--------|
|   |                                  |   |                  |   |   |   |   |   |                           |   |   |       |   |
|   | SUNC2 Network Corp.                   |   | 10,000                |   | $      | 8,238  |   | $      | 0.005                          |   | $      | 51         |   |
|   |                                  |   |                  |   |   |   |   |   |                           |   |   |       |   |
|   | **Total**                             |   | 10,000                |   | $      | 8,238  |   |   |                           |   | $      | 51         |   |

|   | Investments in shares of public companies traded on  a recognized securities exchange are recorded at the closing bid prices on  the last day the security traded on, or prior to, the consolidated balance  sheet date. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Due to broker consists of margin borrowings less  cash advanced collateralized by the Company’s investments held at the broker.  In the normal course of business, the Company utilizes the margin borrowings  to finance some of its marketable securities activities. At September 30, 2011  the Company owed $Nil (2010: $97,146). The margin account is due on demand  and is subject to margin calls. All securities held by the broker are pledged  in relation to the brokers account. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

F-15

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **4.** | **Segment reporting**       |
|--------|-------------------------------------------------|

|   | The Company operates in one business segment being  hospitality and tourism. |
|--------|------------------------------------------------------------------------------|

|   |                        |   | September 30, 2011 |   |   | September 30, 2010 |   |
|--------|-----------------------------|--------|--------------------|--------|--------|--------------------|--------|
|   | **Identifiable Assets**     |   |               |   |   |               |   |
|   | Canada                      | $      | 8,259,027          |   | $      | 9,833,600          |   |
|   | United States of America    |   | 2,832,972          |   |   | 2,670,070          |   |
|   | **Total Assets**            | **$**  | **11,091,999**     |   | **$**  | **12,503,670**     |   |
|   | **Revenue**                 |   |               |   |   |               |   |
|   | Canada                      | $      | 3,380,691          |   | $      | 3,941,297          |   |
|   | United States of America    |   | –            |   |   | –            |   |
|   | **Total Revenue**           | **$**  | **3,380,691**      |   | **$**  | **3,941,297**      |   |
|   | **Net Income (loss)**       |   |               |   |   |               |   |
|   | Canada                      | $      | (533,399           | )      | $      | (1,882,487         | )      |
|   | United States of America    |   | (412,673           | )      |   | (1,582,464         | )      |
|   | **Total net income (loss)** | **$**  | **(946,072**       | )      | **$**  | **(3,464,951**     | )      |

|   | All membership and  travel revenues are earned in Canada during the year ended September 30, 2011  (2010 – 100%, 2009 – 100%). There are no major customers that account  for 10% or more of the Company’s revenue (2010: nil; 2009: nil).  All losses on the investment in life settlement  contracts are derived from life insurance policies held in the USA during the  year ended September 30, 2011 (2010: 100%, 2009: 100%). |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **5.** | **Financial Instruments** |
|--------|---------------------------|

|   | The Company’s financial instruments and the types of  risks to which their carrying values are exposed are as follows: |
|--------|------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                    |   | Risks     |             |
|--------|-------------------------------------------------------------------------|--------|-----------|------------------|
|   |                                                                    | Credit | Liquidity | Foreign Exchange |
|   | Measured at amortized cost:                                             |   |      |             |
|   |      Accounts & notes  receivable          | X      |      |             |
|   |      Other receivables                         | X      |      |             |
|   |      Accounts payable and  accrued liabilities |   | X         |             |
|   |      Convertible debentures                    |   | X         |             |
|   |      Secured borrowings                        |   | X         | X                |
|   |      Long term debt                            |   | X         | X                |
|   |      Loans from related  parties               |   | X         |             |
|   |      Long-term Convertible  debentures         |   | X         |             |
|   | Measured at fair value:                                                 |   |      |             |
|   |      Cash and cash equivalents                 | X      |      | X                |
|   |      Funds held in trust                       | X      |      | X                |
|   |      Short- term deposits                      | X      |      |             |
|   |      Marketable securities                     | X      |      |             |
|   |      Investment in life  settlement contracts  | X      |      | X                |
|   |      Conversion rights                         |   |      | X                |

F-16

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **5.** | **Financial Instruments (continued)** |
|--------|---------------------------------------|

|   | There was no change to the risks faced by the  Company for the year ended September 30, 2011. |
|--------|-----------------------------------------------------------------------------------------------|

|   | (a) | Credit risk |
|--------|-----|-------------|

|   |   | Credit risk is the risk that a party to one of the    Company’s financial instruments will cause a financial loss to the Company by    failing to discharge an obligation. The carrying values of the Company’s    financial assets, which represent the maximum exposure to credit risk, are as    follows: |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                    |   | September 30, |   |   | September 30, |   |
|--------|-----------------------------------------|--------|---------------|--------|--------|---------------|--------|
|   |                                    |   | 2011          |   |   | 2010          |   |
|   |                                    |   |          |   |   |          |   |
|   | Cash and cash equivalents               | $      | 62,772        |   | $      | 373,551       |   |
|   | Short-term deposits                     |   | 14,756        |   |   | 14,700        |   |
|   | Marketable securities                   |   | –       |   |   | 51            |   |
|   | Amounts and notes receivable            |   | 290,256       |   |   | 194,910       |   |
|   | Investment in life settlement contracts |   | 2,832,972     |   |   | 2,670,070     |   |
|   | Other receivables                       |   | 5,144         |   |   | 14,360        |   |
|   | **Total**                               | $      | 3,205,900     |   | $      | 3,267,642     |   |

|   | (a)    | Credit risk (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   | *Cash and cash equivalents and short term      deposits:*Credit risk associated with these      assets is minimized substantially by ensuring that these financial assets are    placed in debt instruments of well-capitalized financial institutions.                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   | *Amounts and notes receivable and other      receivables:*Credit risk associated with these      assets is minimized due to their nature. All notes receivable are carried at      net after allowing for bad debts and unearned interest. The provision for      doubtful amounts receivable is an estimate based on an assessment of individual      accounts and the length of time balances have been outstanding. As of      September 30, 2011 the allowance for doubtful amounts and note receivables    totaled $31,444 (2010 - $56,002). |

|   |   | Allowance for doubtful amounts, beginning of the  year: | $ | 56,002  |   |   |
|--------|--------|---------------------------------------------------------|---|---------|--------|--------|
|   |   | Net bad debts provisions (recovery)                     | $ | (24,558 | )      |   |
|   |   | Allowance for doubtful amounts, end of year:            | $ | 31,444  |   |   |

|   | (b)    | Liquidity risk                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | Liquidity risk is the risk that the Company will    encounter difficulty in meeting obligations associated with its financial    liabilities. The Company manages liquidity risk by regularly monitoring    forecast and actual cash flows as well as maturity profiles of financial    assets and financial liabilities. The Company expects the following    maturities of its financial liabilities (including interest) and operating    leases and contracts: |

F-17

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **5.** | **Financial Instruments (continued)** |
|--------|---------------------------------------|

|   | (b)    | Liquidity risk (continued) |
|--------|--------|----------------------------|
|   |   |                       |

Expected payments by period as at September30, 2011

|                                     |   | Within 1 year | 1-2 years   | 2-3 years     | 3-4 years   | 4-5 years   | 5 + years     | Total          |
|------------------------------------------|--------|---------------|-------------|---------------|-------------|-------------|---------------|----------------|
| Accounts payable and accrued liabilities | $      | 567,439       | –     | –       | –     | –     | –       | 567,439        |
| Secured borrowing                        |   | 51,064        | –     | –       | –     | –     | –       | 51,064         |
| Loans from related parties               |   | 137,872       | –     | –       | –     | –     | –       | 137,872        |
| Life settlement premiums*                |   | 466,890       | 490,235     | 514,747       | 540,484     | 567,508     | 2,590,806     | 5,170,670      |
| Long-term debt                           |   | 141,276       | 149,584     | 4,598,158     | –     | –     | –       | 4,889,018      |
| Lease and Contracts                      |   | 90,489        | 85,772      | 20,667        | –     | –     | –       | 196,928        |
| **TOTAL**                                | **$**  | **1,455,030** | **725,591** | **5,133,572** | **540,484** | **567,508** | **2,590,806** | **11,012,991** |

|   |   |   | * Life    insurance premiums are future payments required to keep the insurance policy    in good standing.    Operating    leases and contracts include property leases for the Company’s travel    operations. The Company believes that it will not encounter difficulty in    meeting the obligations associated with its’ financial liabilities and    further believes that if necessary, it would be able to access the capital    markets for additional financial resources at prevailing market rates. |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c)    | Market risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   | Market risk is the risk that fair value or future    cash flows of financial instrument will fluctuate because of changes in    interest rates, other market prices, and/or foreign currency exchange rates.    The carrying amounts of the Company’s financial instruments are not subject    to interest rate risk. In 2009 the construction loan was converted to a loan    having a fixed interest rate (note 12). Life settlement contracts are    measured at fair value on each balance sheet date. Market risks associated    with the financial standing of the issuer and changes in economic conditions    affecting the issuer may affect the fair value of such financial instruments. |

F-18

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **5.** | **Financial Instruments (continued)** |
|--------|---------------------------------------|

|   | (c)    | Market risk (continued)                                                                                                                                                                                                                                                                                                 |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                    |
|   |   | The following table sets out a sensitivity analysis    of the effect of the Company’s financial instruments that are subject to    foreign currency risk by applying reasonable possible changes in the USD    foreign currency rates relative to the Company’s functional currency, the    Canadian dollar |

|   |                                    |   | **Foreign Currency  Risk(1)** |   |
|--------|-----------------------------------------|--------|-------------------------------|--------|
|   |                                    |   |                          |   |   | -10%(1) |   |   | +10%(1) |   |
|   |                                    |   | Carrying amount               |   |   | Netearnings |   |   | Netearnings |   |
|   |                                    |   | **September 30,****2011**     |   |   |  |   |   |  |   |
|   | **Financial assets**                    |   |                          |   |   |   |   |   |   |   |
|   | Cash and cash equivalents               | $      | 31                            |   | $ | (3 | ) | $ | 3 |   |
|   | Investment in life settlement contracts |   | 2,832,972                     |   |   | (283,297 | ) |   | 283,297 |   |
|   | **Financial liabilities**               |   |                          |   |   |   |   |   |   |   |
|   | Long term debt – current          |   | 140,968                       |   |   | 14,097 |   |   | (14,097 | ) |
|   | Long term debt – non current      |   | 4,748,054                     |   |   | 474,805 |   |   | (474,805 | ) |
|   | **Total (decrease) increase**           |   |                          |   | $ | 205,602 |   | $ | (205,602 | ) |

|   |                                    |   | **Foreign Currency  Risk(1)** |   |
|--------|-----------------------------------------|--------|-------------------------------|--------|
|   |                                    |   |                          |   |   | -10%(1) |   |   | +10%(1) |   |
|   |                                    |   | Carrying amount               |   |   | Netearnings |   |   | Netearnings |   |
|   |                                    |   | **September 30,****2010**     |   |   |  |   |   |  |   |
|   | **Financial assets**                    |   |                          |   |   |   |   |   |   |   |
|   | Cash and cash equivalents               | $      | (475                          | )      | $ | 48 |   | $ | (48 | ) |
|   | Marketable securities                   |   | 51                            |   |   | (5 | ) |   | 5 |   |
|   | Investment in life settlement contracts |   | 2,670,070                     |   |   | (267,007 | ) |   | 267,007 |   |
|   | **Financial liabilities**               |   |                          |   |   |   |   |   |   |   |
|   | Due to Broker                           |   | 97,146                        |   |   | 9,715 |   |   | (9,715 | ) |
|   | Long term debt – current          |   | 131,685                       |   |   | 13,169 |   |   | (13,169 | ) |
|   | Long term debt – non current      |   | 4,846,198                     |   |   | 484,620 |   |   | (484,620 | ) |
|   | **Total (decrease) increase**           |   |                          |   | $ | 240,540 |   | $ | (240,540 | ) |

|   | (1)    | Displayed is the effects on the Company’s US dollar    denominated financial assets and liabilities if the value of the US $    increases or decreases by 10%:                                                                                                                        |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                        |
|   |   | The Company is exposed to currency risk in relation    to their US dollar financing referred to in note 12 and the investment in    life settlement contracts (note 6) denominated in US dollars. The Company has    not entered into any foreign currency contracts to mitigate this risk. |

F-19

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **5.** | **Financial Instruments (continued)** |
|--------|---------------------------------------|

|   | d) | Fair value |
|--------|----|------------|

|   |   | Carrying    amounts of certain of the Company’s financial instruments, including amounts    and notes receivable, other receivables, related party advance, accounts    payable, accounts payable – other, accrued liabilities, due to broker,    secured borrowing, loans from related parties and convertible debentures    approximate fair values due to their short-term maturities. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   | The fair value of other financial instruments are as  follows:                                                                                                                                                                                                                                                                                                                                        |

|   |           |   | Carrying Value |   |   | Fair Value |   |
|--------|----------------|--------|----------------|--------|--------|------------|--------|
|   | Long-term debt | $      | 4,889,023      |   | $      | 5,123,119  |   |

* Fair values forlong-term debt are determined with reference to market interest rates atSeptember 30, 2011.

|   |   | Fair Value Analysis |
|--------|--------|---------------------|

|   |   | The following table provides an analysis of financial instruments    that are measured subsequent to initial recognition at fair value, grouped    into levels 1 to 3 based on the degree to which fair value is observable: Level 1 fair value measurements are those derived from quoted    prices (unadjusted ) in active markets for identical assets or liabilities; Level 2 fair value measurements are those derived from inputs    other than quoted prices included within Level 1 that are observable for the    asset or liability, either directly (i.e. as prices) or indirectly (i.e.    derived from prices); andLevel 3 fair value measurements are those derived from valuation    techniques that include inputs for the asset or liability that are not based    on observable market data (unobservable inputs). |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |                                    |   | Level 1 |   |   | Level 2 |   |   | Level 3   |   |
|--------|--------|-----------------------------------------|--------|---------|--------|--------|---------|--------|--------|-----------|--------|
|   |   | Held-for-trading financial assets       |   |    |   |   |    |   |   |      |   |
|   |   | Cash and cash equivalents               |   | 62,772  |   |   | – |   |   | –   |   |
|   |   | Short term deposits                     |   | 14,756  |   |   | – |   |   | –   |   |
|   |   | Investment in life settlement contracts |   | – |   |   | – |   |   | 2,832,972 |   |

|   |   | There were no significant transfers between Level 1 and 2 in the  period.Reconciliation of Level 3 fair value measurements of financial  assets:Unquoted life settlement policies |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Opening balance                                             | $      | 2,670,070 |   |
|--------|--------|-------------------------------------------------------------|--------|-----------|--------|
|   |   | Total gains or losses                                       |   |      |   |
|   |   |      In profit or loss (Note 6)    |   | 162,902   |   |
|   |   |      In other comprehensive income |   | –   |   |
|   |   | Purchases                                                   |   | –   |   |
|   |   | Sales                                                       |   | –   |   |
|   |   | Transfers out of level 3                                    |   | –   |   |
|   |   | Closing balance                                             | $      | 2,832,972 |   |

F-20

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **5.** | **Financial Instruments (continued)** |
|--------|---------------------------------------|

|   | Fair Value Analysis (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Unquoted life    settlement policies include holdings in unlisted life settlement policies    which are measured at fair value.  Fair value is estimated using a    discounted cash flow model, which includes some assumptions that are not    supportable by observable market prices or rates.  In determining the    fair value, a life expectancy, premium growth factor of 5.0% (2010: 5.0%) and    a discount factor of 12% (2010: 12%) are used.  If the life expectancies    were increased or decreased by 10 months, discount factors were increased or    decreased by 2%, premium growth rates were increased and decreased by 1%,    while all other variables are held constant, the carrying value of the    investment in life settlement policies would increase (decrease) by: |

|                           | Life  Expectancy | Discount Rate | Premium  Growth |
|--------------------------------|------------------|---------------|-----------------|
|                           | +10 Months       | (10 Months)   | +2%             | (2%) | +1% | (1%) |
| Investment in life settlements | $ 2,251,105      | $ 3,567,373   | $ 2,606,192     | $ 3,117,253 | $2,782,245 | $2,880,894 |
| Increase (Decrease)            | $ (581,867)      | $ 734,401     | $ (226,780)     | $ 284,281 | $(50,727) | $ 47,922 |

| **6.** | **Investments in life settlement contracts** |
|--------|----------------------------------------------|

|   | The Company purchases life settlement contracts for  long term investment purposes and accounts for these investments under CICA  HB 3855. The Company designated the investments in life settlement contracts  as held-for-trading that are recorded at fair value on each reporting date.  As of September 30, 2011 and 2010 the Company has the following investment in  life settlement contracts: The table below summarizes the attributes of  outstanding life settlement contracts at September 30, 2011 and 2010: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Number of |   | Estimated Fair |   |   | Face        |   |   | Face        |   |
|--------|--------|-----------|--------|----------------|--------|--------|-------------|--------|--------|-------------|--------|
|   | Year   | contracts |   | value          |   |   | value (CAD) |   |   | value (USD) |   |
|   |   |      |   |           |   |   |        |   |   |        |   |
|   | 2010   | 4         | $      | 2,670,070      |   | $      | 16,309,972  |   | $      | 15,838,000  |   |
|   | 2011   | 4         | $      | 2,832,972      |   | $      | 16,454,098  |   | $      | 15,838,000  |   |

|   | For the years ended September 30, 2011, 2010 and 2009,  the investments experienced the following gains: |
|--------|----------------------------------------------------------------------------------------------------------|

|   |   |   | Realized       |   |   | Unrealized     |   |
|--------|--------|--------|----------------|--------|--------|----------------|--------|
|   | Year   |   | Gains (Losses) |   |   | Gains (Losses) |   |
|   |   |   |           |   |   |           |   |
|   | 2009   | $      | –        |   | $      | 775,207        |   |
|   | 2010   | $      | –        |   | $      | (1,582,464     | )      |
|   | 2011   | $      | –        |   | $      | (369,132       | )      |

F-21

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **6.** | **Investments in life settlement contracts  (continued)** |
|--------|-----------------------------------------------------------|

|   | Fair value is estimated in good-faith based on  information available to the Company on those dates. The Company considers  the following factors in its fair value estimates: cost at date of purchase;  recent purchases and sales of similar investments, financial standing of the  issuer, changes in economic conditions affecting the issuer; standard  actuarially developed mortality tables and industry life expectancy reports. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Assumptions : The      fair value of life settlement contracts are estimated using present value      calculations, with the following weighted average assumptions. These      assumptions are by their nature inherently uncertain and the effect of      changes in estimates may be significant. Information about the extent to      which the fair value could reasonably vary in the near term, is disclosed in      note 5 d), by disclosing the effect of changes in significant underlying    assumptions used to estimate the amount. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                           |   | September 30, 2011             |   |   | September 30, 2010             |   |
|--------|--------------------------------|--------|--------------------------------|--------|--------|--------------------------------|--------|
|   |                           |   |                           |   |   |                           |   |
|   | Average age of insured         |   | 83 years                       |   |   | 82 years                       |   |
|   | Average life expectancy        |   | 9 years                        |   |   | 10 years                       |   |
|   | Expected premium growth        |   | 5%                             |   |   | 5%                             |   |
|   | Average maturity value         | $      | 4,113,525                      |   | $      | 4,077,493                      |   |
|   | Mortality rates  Discount rate |   | Standard Life  Expectancy  12% |   |   | Standard Life  Expectancy  12% |   |

| **7.** | **Property and Equipment** |
|--------|----------------------------|

|   |                   |   |       |   |   | Accumulated  |   |   |       |   |   | Net Book  |   |
|--------|------------------------|--------|------------|--------|--------|--------------|--------|--------|------------|--------|--------|-----------|--------|
|   | **September 30, 2011** |   | Cost       |   |   | Amortization |   |   | Impairment |   |   | Value     |   |
|   |                   |   |       |   |   |         |   |   |       |   |   |      |   |
|   | Motor vessels          | $      | 14,641,625 |   | $      | 1,480,570    |   | $      | 5,473,595  |   | $      | 7,687,460 |   |
|   | Vehicles               |   | 57,000     |   |   | 14,250       |   |   | –    |   |   | 42,750    |   |
|   | Equipment              |   | 32,933     |   |   | 14,954       |   |   | –    |   |   | 17,980    |   |
|   | Computers              |   | 2,610      |   |   | 1,104        |   |   | –    |   |   | 1,506     |   |
|   | Leasehold improvements |   | 35,415     |   |   | 17,327       |   |   | –    |   |   | 18,088    |   |
|   |                   |   |       |   |   |         |   |   |       |   |   |      |   |
|   |                   | $      | 14,769,583 |   | $      | 1,528,205    |   | $      | 5,473,595  |   | $      | 7,767,783 |   |

|   |                   |   |       |   |   | Accumulated  |   |   |       |   |   | Net Book  |   |
|--------|------------------------|--------|------------|--------|--------|--------------|--------|--------|------------|--------|--------|-----------|--------|
|   | September 30, 2010     |   | Cost       |   |   | Amortization |   |   | Impairment |   |   | Value     |   |
|   |                   |   |       |   |   |         |   |   |       |   |   |      |   |
|   | Motor vessels          | $      | 14,762,773 |   | $      | 917,601      |   | $      | 4,973,595  |   | $      | 8,871,576 |   |
|   | Vehicles               |   | 132,000    |   |   | 60,417       |   |   | –    |   |   | 71,583    |   |
|   | Equipment              |   | 32,933     |   |   | 8,364        |   |   | –    |   |   | 24,569    |   |
|   | Computers              |   | 1,823      |   |   | 552          |   |   | –    |   |   | 1,271     |   |
|   | Leasehold improvements |   | 35,415     |   |   | 10,247       |   |   | –    |   |   | 25,167    |   |
|   |                   |   |       |   |   |         |   |   |       |   |   |      |   |
|   |                   | $      | 14,964,943 |   | $      | 997,182      |   | $      | 4,973,595  |   | $      | 8,994,166 |   |

F-22

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **7.** | **Property and Equipment****(continued)** |
|--------|-------------------------------------------|

|   | The value of property, plant & equipment not in  use at September 30, 2011 are Motor Vessel $424,900 (2010: $398,073).   Assets that are not in use have not been depreciated during the year.The carrying value  of items of Property Plant and Equipment that are under capital leases are  vehicles with a carrying value of $Nil (2010: $14,583).  The cost and  accumulated amortization for the vehicles is $Nil and $Nil respectively  (2010: $75,000 and $60,417).From time to  time during the year, the Company has made property, plant and equipment,  when not in use, available to management and employees for which management  and employees reimburses the Company for all direct charges and sundry costs. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company  recognized an impairment loss on the carrying value of the motor vessel  during the year, in the amount of $500,000 (2010: $825,000, 2009: $2,348,595).  Due to the current economic environment, the Company concluded that the  vessel had a market value of $7,300,000 (2010: $8,250,000). The Company was  unable to prepare a discounted cash flow analysis to determine the value in  use, as an alternative the fair value of the motor vessel was determined  based on the amortized replacement cost. Under the amortized replacement cost  method, the replacement costs for significant components of the motor vessel  were obtained, and depreciated to current market values. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **8.** | **Intangible Assets** |
|--------|-----------------------|

|   | As of September 30, 2011, the Company had finite-lived intangible assets    which totaled $91,384 (2010 – $116,307), net of accumulated amortization of $28,934    (2010 - $4,011). At September 30, 2011, the Company had one finite-lived    intangible asset which consisted of a proprietary database for managing its    membership and travel operations |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Intangible assets                             |   | September 30, |   |   | September 30, |   |
|--------|-----------------------------------------------|--------|---------------|--------|--------|---------------|--------|
|   |                                          |   | 2011          |   |   | 2010          |   |
|   |                                          |   |          |   |   |          |   |
|   | Computerized membership database              | $      | 120,318       |   | $      | 72,168        |   |
|   | Additions to computerized membership database |   | –       |   |   | 48,150        |   |
|   | Accumulated amortization                      |   | (28,934       | )      |   | (4,011        | )      |
|   | **Total intangible assets**                   | $      | 91,384        |   | $      | 116,307       |   |

| **9.** | **Deferred Revenue** |
|--------|----------------------|

|   |                        |   | September 30, |   |   | September 30, |   |
|--------|-----------------------------|--------|---------------|--------|--------|---------------|--------|
|   |                        |   | 2011          |   |   | 2010          |   |
|   | Deferred membership sales   | $      | 751,869       |   | $      | 1,482,092     |   |
|   | Additional deferred revenue |   | 306,768       |   |   | 346,844       |   |
|   | Current portion             |   | (876,165      | )      |   | (1,077,068    | )      |
|   |                        | $      | 182,472       |   | $      | 751,868       |   |

|   | 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. Management’s best estimate for life time    memberships is that they are active for 5 years (2010 – 5 years, 2009 – 5 years).     Management’s best estimate is based on historical data for all travel    memberships. The revenue is recognized as indicated in note 2(b). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | During 2011, the Company entered into travel club membership    agreements with a total value of $Nil (2010 – $Nil, 2009 – $Nil).  As    described in note 2(b), the revenue from these memberships are recognized in    the year of purchase evenly over the term of the membership.    Commission costs are expensed as incurred.                                                                                                                                              |

F-23

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **10.** | **Secured Borrowing** |
|---------|-----------------------|

|   | The Company has entered an agreement whereby it factors the  promissory note receivables to a third party.  Under the terms of the  factorization agreement, the risk of default by the note receivable holder  remains with the Company, and the Company is obligated to repurchase any note  receivables that do not perform to the satisfaction of the third party.   Therefore the transaction does not qualify the Company to derecognize the  notes receivable.The factorization transaction is collateralized against the notes  receivable. The effective interest rate of the secured borrowing is 15% (2010  – 15%).   As at  September 30, 2011 the Company had an outstanding liability to the third  party as set out below: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                          |   | September 30, |   |   | September 30, |   |
|--------|-----------------------------------------------|--------|---------------|--------|--------|---------------|--------|
|   |                                          |   | 2011          |   |   | 2010          |   |
|   |                                          |   |          |   |   |          |   |
|   | Balance, beginning of period                  | $      | 106,341       |   | $      | 263,694       |   |
|   | Amortization of discount                      |   | 21,393        |   |   | –       |   |
|   | Collection of note receivable during the year |   | (76,670       | )      |   | (157,353      | )      |
|   |                                          |   |          |   |   |          |   |
|   | Balance, end of period                        | $      | 51,064        |   | $      | 106,341       |   |

| **11.** | **Convertible Debentures** |
|---------|----------------------------|

|   | Between April 19 and December 15, 2000, the Company    issued unsecured convertible debentures in the aggregate amount of    approximately $98,000 to friends and family of former officers and directors    of the Company. The debentures matured between April 19 and December 15,    2002, are no longer convertible, no longer continue to bear interest and    $34,310 remained unpaid since that date. The Company has been unable to    contact the debenture holders. The holder of a debenture had the right at any    time after the issuance until maturity to voluntarily convert to common    shares of the issuer at a rate of US $6.00 to US $12.50 per common share per    share. The debentures are fully matured as of 2002. As of September 30, 2011    and 2010, accrued interest on the debentures amounted to approximately    $6,176.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | During the year, the Company offered a secured    convertible debenture with a face value of up to $9,000,000 USD, secured by a    100% interest in two US Irrevocable Life Insurance Trusts (ILIT) with death    benefits totaling $9,000,000 USD, and are subject to an escrow agreement. The    Company issued seven units for a total face value of $3,150,000 USD, for cash    proceeds of $253,541 plus common shares of the company valued at $134,101.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The debenture holders have the right to convert at any time in    whole or in part, any outstanding amount paid to date on the debenture, into    Common Shares of the Company at a 20% discount to the market trading price    immediately prior to conversion. The fair value of these conversion rights    was calculated using the Black-Scholes method. At issuance assumptions    included the stock price of $0.17 with a maturity date of 9.3 years and an    interest rate of 1.76%. At September 30, 2011 assumptions included a stock    price of $0.48 with a maturity date of 8.7 years and an interest rate of    1.76%. The fair value of the $3,150,000 convertible    debentures was estimated by discounting the payments due at the time of maturity    of the two underlying ILIT’s. This debt discount will be amortized as    interest expense over the life of the debt. During the year ended September    30, 2011, the company recognized $188,572 of accretion interest expense on    the debt.      Ten years from the date of subscription, the debenture    is redeemable and/or callable by the holder or the Company, at 75% of the    total face value of the debenture. The Company, or debenture holder, can    force the Company to convert the debt and take the option of either receiving    payment in cash or a conversion to common shares of the Company, at the    stated conversion rate. The option of receiving either common shares or cash    is at the sole discretion of the debenture holder. |

F-24

----

| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **12.** | **Long-Term Debts** |
|---------|---------------------|

|   | The Company has a long-term loan related to the motor  vessel. |
|--------|----------------------------------------------------------------|

|   |                                  |   | September 30, |   |   | September 30, |   |
|--------|---------------------------------------|--------|---------------|--------|--------|---------------|--------|
|   |                                  |   | 2011          |   |   | 2010          |   |
|   | Loan in US funds for vessel           |   |          |   |   |          |   |
|   | at 7% per annum for a 5 year term     | $      | 4,889,022     |   | $      | 4,977,883     |   |
|   | Lease financing against motor vehicle |   | -             |   |   | 45,443        |   |
|   | Less: current portion                 |   | (140,968      | )      |   | (177,128      | )      |
|   | Long-term portion                     | $      | 4,748,054     |   | $      | 4,846,198     |   |

|   | The Company has a loan with Caterpillar Financial    Services for $5 million US dollar with a 5 year term and a fixed interest    rate of 7% per annum. The loan is secured by the motor vessel and by a    personal guarantee from two of the directors of the Company up to the value    of the permanent loan. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                              |
|   | Interest expense of $348,335 related to long-term    debt is included in General and administration during the year (2010 -    $364,389, 2009 – $346,300).                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                              |
|   | The expected repayments of long term debt for the    five following twelve month periods ended September 30, 2011 are as follows:                                                                                                                                                                                 |

|   |                 |   | Total     |   |
|--------|----------------------|--------|-----------|--------|
|   | 2012                 | $      | 140,968   |   |
|   | 2013                 |   | 149,584   |   |
|   | 2014                 |   | 4,598,161 |   |
|   | 2015                 |   | –   |   |
|   | 2016                 |   | –   |   |
|   | Thereafter           |   | –   |   |
|   |                 |   |      |   |
|   | Total long term debt | $      | 4,889,022 |   |

| **13.** | **Capital Stock** |
|---------|-------------------|

|   | (a) | The authorized capital stock: |
|--------|-----|-------------------------------|

|   |   | Unlimited - Common shares without par value                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | Unlimited - Series “A” - Preference non-dilutive    convertible shares without par value (convertible to 100% of outstanding    common shares at the time of conversion).  Series “A” preference share    holders are not entitled to notice of or to attend any meetings of the common    shareholders of the Company.  Each Series A preference shareholder is    entitled to one vote for each series “A” preference share held for any    matters submitted to holders of preference shareholders for    consideration.  Series “A” preference shares are convertible to 50% of    the outstanding share common share capital after the date of    conversion.  The Company considers the series “A” shares to be    contingently issuable shares, as the approval from100% of the series “A”    shareholders must approve of the transaction before the shares can be issued    has not been made. |

F-25

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **13.** | **Capital Stock****(continued)** |
|---------|----------------------------------|

|   | (a) | The authorized capital stock: |
|--------|-----|-------------------------------|

|   |   | Unlimited - Series “B” - Preference convertible    shares without par value (convertible to one common share for each preferred    share held).  Series “B” preference shareholders are not entitled to    notice or to attend any meetings of common shareholders of the Company. Each    Series “B” preference shareholder is entitled to one vote for each series A    preference share held for any matters submitted to holders of preference    shareholders for consideration.  Series “B” preference shareholders are    entitled to convert the shares  into 13,649,983 shares at the holders    discretion. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | The issued capital stock of the Company is as    follows: 13,933,983 Series “A” preferred shares convertible for no    consideration and 13,649,983 Series “B” preferred shares convertible for no    consideration (2010 – 13,649,983) and common shares as follows: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                      |   | Number of  |   |   |       |   |   |        |   |
|--------|-------------------------------------------|--------|------------|--------|--------|------------|--------|--------|-------------|--------|
|   |                                      |   | Common     |   |   | Share      |   |   | Contributed |   |
|   |                                      |   | Shares     |   |   | Capital    |   |   | Surplus     |   |
|   |                                      |   |       |   |   |       |   |   |        |   |
|   | Balance, September 30, 2009               |   | 28,856,984 |   | $      | 25,810,369 |   | $      | 2,757,581   |   |
|   | Conversion of Series B Preference shares  |   | 284,000    |   |   | –    |   |   | –     |   |
|   |                                      |   |       |   |   |       |   |   |        |   |
|   | Balance, September 30, 2010               |   | 29,140,984 |   | $      | 25,810,369 |   | $      | 2,757,581   |   |
|   | Common shares subscribed                  |   | 20,000     |   |   | 6,698      |   |   | –     |   |
|   | Conversion  of Series B Preference shares |   | 1,355,000  |   |   | –    |   |   | –     |   |
|   | Private placement                         |   | 2,000,000  |   |   | 100,000    |   |   | –     |   |
|   | Common shares receivable                  |   | –    |   |   | (134,101   | )      |   | –     |   |
|   |                                      |   |       |   |   |       |   |   |        |   |
|   | Balance, September 30, 2011               |   | 32,515,984 |   | $      | 25,872,966 |   | $      | 2,757,581   |   |

|   | During the year ended September 30, 2011, the    company completed an equity offering to members of its travel clubs, issuing    20,000 common shares for gross proceeds of $6,698.                                                                                         |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                        |
|   | During the year ended September 30, 2011, the    company completed a non-brokered private placement issuing 2,000,0000 common    shares priced at $0.05 per common share, for gross proceeds of $100,000. No    warrants or options were attached to the private placement. |

|   | Weighted average outstanding common stock for the    calculation of earnings (loss) per share for each of the period presented: |
|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   |                                        |   | Year ended    |   |   | Year ended    |   |   | Year ended    |   |
|--------|---------------------------------------------|--------|---------------|--------|--------|---------------|--------|--------|---------------|--------|
|   |                                        |   | September 30, |   |   | September 30, |   |   | September 30, |   |
|   |                                        |   | 2011          |   |   | 2010          |   |   | 2009          |   |
|   | Weighted average common shares              |   | 29,990,231    |   |   | 28,645,113    |   |   | 28,553,321    |   |
|   | Series B preferred shares conversion        |   | 12,294,983    |   |   | 13,649,983    |   |   | 13,933,983    |   |
|   | Weighted average fully diluted common stock |   | 89,880,427    |   |   | 90,507,518    |   |   | 90,524,608    |   |

F-26

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **13.** | **Capital Stock (continued)** |
|---------|-------------------------------|

|   | For the years ended September 30, 2011, September    30, 2010 September 30, 2009, outstanding stock options and preferred shares    were not included in the calculation of diluted earnings (loss) per share as    their effect would be anti-dilutive.                                                                                                                  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                      |   |
|   | Diluted weighted average common stock includes    common stock issuable if Series A and Series B preferred shares are converted    and 2,655,000 (2010: 2,655,000, 2009: 2,655,000) stock options outstanding    that are in the money are exercised assuming that any proceeds would be used    to purchase common stocks at the average market price during the period. |

|   | (c)    | Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   | On July 5, 2007, the Company’s board of directors    adopted a stock option plan, subsequently approved by shareholders and    adopted by the Company, under which the Company is authorized to grant    options to directors, employees and consultants to acquire up to 10% of the    issued and outstanding common stock. The exercise price of each option shall    not be less than 80% of the market price of the Company’s stock on the date    of grant. The options can be granted for a maximum term of five years and    vest as determined by the board of directors. The Company’s shares are traded    in United States dollars, and options granted to date have been denominated    in Unites States funds or the Canadian equivalent thereof. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   | The Company did not expand the stock option plan    during the year under review after reserving 2,850,000 shares in the common    stock of the Company for the nine month period ended September 30, 2007. The    options vested immediately, exercisable at $1 per share and will expire in June    2012. No options were granted during the years ended September 30, 2011 and 2010.                                                                                                                                                                                                                                                                                                                                                                                          |

|   | (d)    | Stock-based compensation                                                                                                               |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                   |
|   |   | There was $Nil Stock-based compensation cost    included in wages for the year ended September 30, 2011 (2010 - $Nil, 2009 -    $Nil). |

|   | (d) | Stock-based compensation |
|--------|-----|--------------------------|

|   |   | The table below summarizes the outstanding and  exercisable stock options as at September, 30 2011 and 2010: |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   |                        |   | Number     |   |   | Exercise     |   |
|--------|-----------------------------|--------|------------|--------|--------|--------------|--------|
|   |                        |   | of Options |   |   | Price (US $) |   |
|   |                        |   |       |   |   |         |   |
|   | Balance, September 30, 2009 |   | 2,655,000  |   | $      | 1.00         |   |
|   |                        |   |       |   |   |         |   |
|   | Balance, September 30, 2010 |   | 2,655,000  |   | $      | 1.00         |   |
|   |                        |   |       |   |   |         |   |
|   | Balance, September 30, 2011 |   | 2,655,000  |   | $      | 1.00         |   |

F-27

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **13.** | **Capital Stock (continued)** |
|---------|-------------------------------|

|   | (d) | Stock-based compensation (continued) |
|--------|-----|--------------------------------------|

|   | The table below summarizes the attributes of the  outstanding stock options as at September 30, 2011: |
|--------|-------------------------------------------------------------------------------------------------------|

|   |   |   | Options Outstanding |   | Options Exercisable |       |
|--------|--------|--------|---------------------|--------|---------------------|------------|
|   |   |   | Exercise            |   |                | Number     |   | Remaining |   | Number |   |   | Exercise |   |
|   |   |   | Price (US $)        |   |                | of Options |   | Contractual Life |   | of Options |   |   | Price (US $) |   |
|   |   |   |                |   |                |       |   |   |   |   |   |   |   |   |
|   |   | $      | 1.00                |   |                | 2,655,000  |   | 0.75 years  Expiry June 30, 2012 |   | 2,655,000 |   | $ | 1.00 |   |

|   |   | The fair value of stock options used to calculate  stock-based compensation is estimated using the Black-Scholes option pricing  model with the following weighted average assumptions: |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |                |   | September 30, 2007 |   |
|--------|--------|---------------------|--------|--------------------|--------|
|   |   |                |   |               |   |
|   |   | Dividend rate       |   | –            |   |
|   |   | Expected volatility |   | 209%               |   |
|   |   | Interest rate       |   | 4.88%              |   |
|   |   | Expected life       |   | 5 years            |   |

|   | The weighted average grant date fair value was $1.04. |
|--------|-------------------------------------------------------|

|   | (e) | Contributed surplus |
|--------|-----|---------------------|

|   |   | Balance, September 30, 2009 |   | 2,757,581 |   |
|--------|--------|-----------------------------|--------|-----------|--------|
|   |   |                        |   |      |   |
|   |   | Balance, September 30, 2010 | $      | 2,757,581 |   |
|   |   |                        |   |      |   |
|   |   | Balance, September 30, 2011 | $      | 2,757,581 |   |

|   | (f) | Common Shares Receivable |
|--------|-----|--------------------------|

|   |   | The table below summarizes the common shares  receivable as at September, 30 2011 and 2010: |
|--------|--------|---------------------------------------------------------------------------------------------|

|   |   | Balance, September 30, 2010     | $      | –          |   |
|--------|--------|---------------------------------|--------|------------------|--------|
|   |   |                            |   |             |   |
|   |   | **Balance, September 30, 2011** | **$**  | **(134,101****** | **)**  |

Common shares receivable are common shares of the   Company expected to be received in connection with subscriptions to Secured   Debentures as described in Note 11, and are shown as a deduction from the   Company’s share capital, as at September 30, 2011. 

F-28

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **14.** | **Income Taxes** |
|---------|------------------|

|   | The reconciliation of income tax provision computed    at statutory rates to the reported income tax provision is as follows: |
|--------|-------------------------------------------------------------------------------------------------------------------------------|

|   |                                                      |   | Year ended     |   |   | Year ended     |   |   | Year ended     |   |
|--------|-----------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|--------|----------------|--------|
|   |                                                      |   | September  30, |   |   | September  30, |   |   | September  30, |   |
|   |                                                      |   | 2011           |   |   | 2010           |   |   | 2009           |   |
|   |                                                      |   |           |   |   |           |   |   |           |   |
|   | Statutory income tax rate                                 |   | 27.6%          |   |   | 29.1%          |   |   | 30.1%          |   |
|   |                                                      |   |           |   |   |           |   |   |           |   |
|   | Statutory rate applied to income (loss) from              |   |           |   |   |           |   |   |           |   |
|   |       operations before income  taxes | $      | (193,000       | )      | $      | (1,009,000     | )      | $      | (1,086,500     | )      |
|   | Permanent differences                                     |   | 35,000         |   |   | 2,500          |   |   | 2,800          |   |
|   | Difference in tax rates between foreign jurisdiction      |   | –        |   |   | –        |   |   | 61,000         |   |
|   | Sale  of subsidiary                                       |   | 76,000         |   |   | –        |   |   | –        |   |
|   | Investment in life settlement contracts                   |   | 38,000         |   |   | 460,900        |   |   | 327,800        |   |
|   | Effect of reduction in statutory tax rate                 |   | 14,000         |   |   | 77,000         |   |   | 199,900        |   |
|   | Expense due to differences in tax jurisdictions           |   | –        |   |   | –        |   |   | 1,086,100      |   |
|   | Others                                                    |   | –        |   |   | 52,600         |   |   | 105,370        |   |
|   | Increase (decrease) in valuation allowance                |   | 30,000         |   |   | 416,000        |   |   | 1,019,500      |   |
|   |                                                      |   |           |   |   |           |   |   |           |   |
|   | Income tax expense                                        | $      | –        |   | $      | –        |   | $      | 1,715,970      |   |
|   | Comprising:                                               |   |           |   |   |           |   |   |           |   |
|   |                                                      |   |           |   |   |           |   |   |           |   |
|   | Income taxes (recovery) expense – current           | $      | –        |   | $      | 1,715,970      |   | $      | 1,715,970      |   |
|   | Income taxes – future                               | $      | –        |   | $      | –        |   | $      | –        |   |

|   | The significant components of the Company’s future  income tax assets and liabilities are as follows: |
|--------|-------------------------------------------------------------------------------------------------------------|

|   |                                                                           |   | September 30, |   |   | September 30, |   |
|--------|--------------------------------------------------------------------------------|--------|---------------|--------|--------|---------------|--------|
|   |                                                                           |   | 2011          |   |   | 2000          |   |
|   |                                                                           |   |          |   |   |          |   |
|   | Future income tax assets (liabilities):                                        |   |          |   |   |          |   |
|   |      Non-capital loss  carry forwards                 | $      | 2,668,000     |   | $      | 2,577,000     |   |
|   |      Cumulative  eligible capital                     |   | 346,000       |   |   | 372,000       |   |
|   |      Capital loss carry  forwards                     |   | 240,000       |   |   | 196,000       |   |
|   |      Excess  (deficiency) of tax cost over book value |   |          |   |   |          |   |
|   |      of property  and equipment                       |   | 1,000         |   |   | 82,000        |   |
|   |      Excess  (deficiency) of tax cost over book value |   |          |   |   |          |   |
|   |      of  intangible assets                            |   | 651,000       |   |   | 651,000       |   |
|   |      Marketable  securities                           |   | –       |   |   | (2,000        | )      |
|   |                                                                           |   |          |   |   |          |   |
|   |                                                                           |   | 3,906,000     |   |   | 3,880,000     |   |
|   | Valuation allowance                                                            |   | (3,906,000    | )      |   | (3,880,000    | )      |
|   |                                                                           |   |          |   |   |          |   |
|   | Future income taxes, net                                                       | $      | –       |   | $      | –       |   |

F-29

----

| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **14.** | **Income Taxes****(continued)** |
|---------|---------------------------------|

|   | 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 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 is in arrears with filing its corporate tax returns since 2006. The Company has estimated  Canadian non-capital income tax loss carry forwards of approximately $10,671,000  (2010 - $10,311,000, 2009 - $8,970,000) available to reduce future years’  taxable income expiring between 2012 and 2030.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | The  Company has estimated capital loss carry-forwards of approximately $962,000 (2010  - $783,000, 2009: $614,000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | The accounting estimates related to the liability    for uncertain tax positions require the Company to make judgments regarding    the sustainability of each uncertain tax position based on its technical    merits. If the Company determines it is more likely than not a tax position    will be sustained based on its technical merits, the Company records the    impact of the position in its consolidated financial statements at the    largest amount that is greater than 50% likely of being realized upon    ultimate settlement. These estimates are updated at each reporting date based    on the facts, circumstance and information available. Changes in estimates    are recognized in current and future periods as appropriate. |

|   | Actual income tax expense, income tax assets and    liabilities could vary significantly due to future changes in income tax    laws, significant changes in the taxability of certain proceeds received by    the Company particularly between Canadian and US jurisdictions, or unpredicted    results from the final assessment of each year’s liability, if any, by    various taxing authorities. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **15** | **Capital Management Policy** |
|--------|-------------------------------|

|   | Management determines the Company’s capital structure and makes adjustments to it based on funds available to the Company, in order to support the Company’s business and investments.  Management has not established quantitative return on capital criteria for capital management.                                                                                                                                                                                                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The Company will be dependent in the future upon external financing to fund future acquisitions and its administrative costs.  The Company will spend existing working capital and raise additional amounts as needed.                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Management reviews its capital management approach on an ongoing basis and believes that its approach, given the relative size of the Company, is reasonable.                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The Company considers the items included in shareholders’ equity as capital.  The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.  In order to maintain or adjust the capital structure, the Company may issue new shares through private placements, sell assets to reduce debt or return capital to shareholders.  The Company is not subject to externally imposed capital requirements. There have been no changes made to the capital management policy during the year. |

F-30

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **16.** | **Commitments** |
|---------|-----------------|

|   | In addition to other obligations disclosed  elsewhere: |
|--------|--------------------------------------------------------|

|   | (a) | The Company has commitments in respect of operating    leases with total aggregate payments due of approximately $196,928 (2010 – 102,000).    Payments due in each of the next five years are as follows: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | 2012   | $      | 90,489  |   |
|--------|--------|--------|--------|---------|--------|
|   |   | 2013   |   | 85,772  |   |
|   |   | 2014   |   | 20,667  |   |
|   |   | 2015   |   | – |   |
|   |   | 2016   |   | – |   |
|   |   |   |   |    |   |
|   |   | Total  | $      | 196,928 |   |

|   | (b) | The Company has commitments in respect of office    leases with total aggregate payments due of approximately $Nil (2010 - $Nil). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| **17.** | **Related Party Transactions** |
|---------|--------------------------------|

|   | In addition to related party transactions disclosed    elsewhere in these financial statements, the following transactions have    occurred: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a)    | The Company reimbursed $146,118 (2010 – $216,683, 2009    - $138,717) to directors for expenditures made on behalf of the Company. Included    in automotive expense is an amount of $24,000 (2010 - $24,000, 2009 - $22,185)    for use of company assets by directors and officers of the Company. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                       |
|   | (b)    | At September 30, 2011, directors and officers    advanced $137,872 (2010 – $92,033, 2009 - $486,379) to the Company in the    form of loans and short-term financing. The amounts advanced from directors    and officers are unsecured, non-interest bearing and repayable on demand.               |

|   | All of the above transactions and balances are  measured at the exchange amount, which is the amount of consideration  established and agreed to by the related parties. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **18.** | **Amounts and Notes Receivable** |
|---------|----------------------------------|

|   | The Company receives promissory note receivables    from the sale of travel memberships to third parties.  The promissory    notes have an average rate of interest of 9.9%per annum (2010 – 9.9%) and an    average maturity of 13 months (2010 – 25 months, 2009 – 37 months).  The    promissory notes are unsecured. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                  |   | **2011** |   |   | **2010** |   |   | **2009** |   |
|--------|---------------------------------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
|   | Current                               | $      | 81,527   |   | $      | 85,683   |   | $      | 160,920  |   |
|   | Non-Current                           | $      | 208,729  |   | $      | 109,226  |   | $      | 205,136  |   |
|   |                                  | $      | 290,256  |   | $      | 194,909  |   | $      | 366,056  |   |
|   |                                  |   | **2011** |   |   | **2010** |   |   | **2009** |   |
|   | Past due Amounts and Notes Receivable | $      | 28,619   |   | $      | 44,016   |   | $      | 61,194   |   |

|   | As of September 30, 2011 the allowance for doubtful    amounts and note receivables totaled $31,444 (2010 – $56,002, 2009 - $210,923).     At September 30, 2011 promissory note receivables of $29,671 (2010 – $106,341,    2009: $236,694) have been provided as security for the secured borrowing (see    note 10). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

F-31

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **19.** | **Acquisitions and dispositions** |
|---------|-----------------------------------|

| (a) | On January 31, 2011, the Company sold its  wholly-owned subsidiary International Fitness Vacations Ltd. which operated a  health and fitness center located in Richmond, British Columbia, for Gross  proceeds of $200,000.   The disposition of the subsidiary consisted of the  following:   Sales price of International Fitness Vacations Ltd.             $136,946 (net of $63,054 discount)Less:      Net book value, International Fitness Vacations  Ltd.      $  53,993  Plus:  Accrued liabilities paid for by the  Company                         6,191Gain on  disposal                                                               $    89,144   Miscellaneous closing costs of $16,957 associated  with sale International Fitness Vacations Ltd. have been included in  discontinued operations for the year ended September, 30, 2011.    |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **20.** | **Supplemental Cash Flow Information** |
|---------|----------------------------------------|

|   | Cash flow information: |
|--------|------------------------|

|   |                                               |   | Year ended    |   |   | Year ended    |   |   | Year ended    |   |
|--------|----------------------------------------------------|--------|---------------|--------|--------|---------------|--------|--------|---------------|--------|
|   |                                               |   | September 30, |   |   | September 30, |   |   | September 30, |   |
|   |                                               |   | 2011          |   |   | 2010          |   |   | 2009          |   |
|   |                                               |   |          |   |   |          |   |   |          |   |
|   | Interest paid                                      | $      | 407,579       |   | $      | 391,529       |   | $      | 303,875       |   |
|   |                                               |   |          |   |   |          |   |   |          |   |
|   | Taxes paid                                         | $      | 3,761         |   | $      | 3,678         |   | $      | 3,675         |   |
|   |                                               |   |          |   |   |          |   |   |          |   |
|   | Derecognition of financial liability (note  20(b)) | $      | –       |   | $      | –       |   | $      | 7,602,530     |   |

|   | Included in amounts and notes receivable is an amount receivable  to be settled in common shares of the Company, in lieu of proceeds for the  subscription to convertible debentures units issued during the year ended  September 30, 2011. Three debenture units with a face value totaling $1,350,000  USD, were issued with the same terms as described in Note 12, with the initial  purchase price valued at $134,101. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **21.** | **Subsequent Events** |
|---------|-----------------------|

|   | (a)    | Subsequent to the year ended September 30, 2011, the    Company sold its travel company operations, consisting of its travel clubs,    websites, membership database, for net proceeds of $500,000.                                                                                                         |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                        |
|   | (b)    | Subsequent to the year ended September, 30, 2011,    the Company negotiated a loan modification arrangement where as the Company    would pay interest only of $25,000 USD per month for the first six months,    and then pay an additional monthly principal of $4,610 until the maturity of    the loan. |

F-32

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **22.** | **United States Generally Accepted Accounting  Principles Reconciliation** |
|---------|----------------------------------------------------------------------------|

|   | These financial statements have been prepared in    accordance with 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 US GAAP as    summarized below: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   |   | (i)    | Under US GAAP, the issue of stock options and    warrants to non-employees is accounted for under FASB Statement No. 123R    (“SFAS 123R”), “*Share-based Payment*”, and related interpretations. 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.    Prior to the adoption of SFAS 123R, the Company had accounted for stock    options issued to non- employees at fair value under FSAB Statement No 123    (“SFAS 123), *“Accounting for Stock-based Compensation”*therefore, the    adoption of SFAS 123R had no effect on the Company’s accounting policy.    During the year ended December 31, 2002, the Company adopted the new    recommendations of the CICA Handbook section related to stock-based    compensation payments (note 2(d)). Under this policy, stock options issued to    non- employees after December 31, 2001 are accounted for consistently with US    GAAP. Under Canadian GAAP, stock options issued to non-employees prior to    December 31, 2001 were not valued and no stock–based compensation expense was    recorded. Therefore, for the year ended December 31, 2002, the measurement    difference for non-employee stock options relate to options granted prior to    January 01, 2002. |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |   | 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:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

|   |   |   |                     |   | 2001      |   |   | 2000      |   |
|--------|--------|--------|--------------------------|--------|-----------|--------|--------|-----------|--------|
|   |   |   |                     |   |      |   |   |      |   |
|   |   |   | Expected volatility      |   | 1.73      |   |   | 1.98      |   |
|   |   |   | Risk-free rate           |   | 5.48%     |   |   | 4.23%     |   |
|   |   |   | Dividend yield           |   | 0%        |   |   | 0%        |   |
|   |   |   | Expected life of options |   | 0.6 years |   |   | 1.6 years |   |

|   |   |   | Accounting for the non-employee options on this    basis would result in recording additional compensation expense and capital    stock of $684,664 from the year of adoption of FAS No. 123R to September 30, 2011. |
|--------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

F-33

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **22.** | **United States Generally Accepted Accounting  Principles Reconciliation (continued)** |
|---------|----------------------------------------------------------------------------------------|

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

|   |   | (i)    | During the year ended December 31, 2000, the Company    acquired Fitness Vacations 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 US GAAP purposes, the acquisition would be valued    based on the market value of the shares given. Accordingly, as at September    30, 2011 and 2010, the application of US GAAP would result in an increase in    capital stock of $1,217,705.                                                                                                                                  |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |   | During the year ended December 31, 2001, goodwill    relating to the acquisition of Fitness Vacations was written down, and as    such, the additional goodwill recorded on the acquisition under US GAAP was    written off. Accordingly, for the years ended at September 30, 2011 ,2010,    and 2009, the application of US GAAP would result in a corresponding increase    in deficit of $1,217,705.                                                                                                                                                                                                                          |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | (ii)   | During the years ended December 31, 2001 and 2000,    the Company settled a number of accounts payable by the issuance of stock    options and common shares. For Canadian GAAP purposes, the transactions were    recorded at the carrying value of services received. For US GAAP purposes,    the transactions would be valued based on the market value of the options or    shares issued. Accordingly, as at September 30, 2011 and 2010, the    application of US GAAP would result in an increase in capital stock and an    increase in deficit of $695,681 for the years ended at September 30, 2011, 2010,    and 2009. |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | (iii)  | During the years ended September 30, 2011, 2010, and    2009, the Company did not issue shares under its incentive share purchase    plan (note 2(d)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

|   | (c) | Income Taxes |
|--------|-----|--------------|

|   |   | In July 2006, the FASB issued Interpretation No. 48    (“FIN 48”), “*Accounting for Uncertainty in Income Taxes - an      interpretation of FASB Statement No. 109*”, which clarifies the accounting    for uncertainty in income taxes recognized in accordance with FASB ASC 740,    “Income Taxes”, FIN 48 clarifies the application of SFAS 109 by defining    criteria that an individual tax position must meet for any part of benefit of    that position to be recognized in the financial statements. The evaluation of    a tax position in accordance with this interpretation is a two-step process.    In the first step, recognition, the Company determines whether it is    more-likely-than-not that a tax position will be sustained upon examination,    including resolution of any related appeals or litigation processes, based on    the technical merits of the position. The second step addresses measurement    of a tax position that meets the more-likely-than-not criteria. The tax    position is measured at the largest amount of benefit that is greater than 50    percent likely of being realized upon ultimate settlement. Differences    between tax positions taken in a tax return and amounts recognized in the    financial statements will generally result in a) an increase in a liability    for income taxes payable or a reduction of an income tax refund receivable,    b) a reduction in a deferred tax asset or an increase in a deferred tax    liability or c) both a and b. Tax positions that previously failed to meet    the more-likely-than-not recognition threshold should be recognized in the    first subsequent financial reporting period in which that threshold is met.    Previously recognized tax positions that no longer meet the    more-likely-than-not recognition threshold should be de-recognized in the    first subsequent financial reporting period in which that threshold is no    longer met. Use of a valuation allowance as described in ASC 740 is not an    appropriate substitute for the de-recognition of a tax position. The    requirement to assess the need for a valuation allowance for deferred tax    assets based on sufficiency of future taxable income is unchanged by this    interpretation. This Interpretation is effective for fiscal years beginning    after December 15, 2006. The Company determined that as at September 30, 2011    and 2010 and 2009, its tax position will more likely than not be sustained    upon examination. The validity of any tax position is a matter of tax law,    the body of statutory, regulatory and interpretive guidance on the    application of the law is complex and often ambiguous. Because of this,    whether a tax position will ultimately be sustained may be uncertain. Interest    and penalties are recognized as part of income tax expense. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

F-34

----

| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **22.** | **United States Generally Accepted Accounting  Principles Reconciliation (continued)** |
|---------|----------------------------------------------------------------------------------------|

|   | (d) | Life settlement contracts |
|--------|-----|---------------------------|

|   |   | On March 27, 2006, FASB Staff Position No. FTB    85-4-1*Accounting for Life Settlement Contracts by Third-Party Investors*    (FSP FTB 85-4-1) was issued, which amends FTB 85-4. The FASB Staff Position    states that an investor may elect to account for its investments in life    settlement contracts using either the investment method or the fair value    method. The election shall be made on an instrument-by instrument basis and    is irrevocable. Under the investment method, an investor shall recognize the    initial investment at the purchase price plus all initial direct costs.    Continuing costs (policy premiums and direct external costs, if any) to keep    the policy in force shall be capitalized. Under the fair value method, an    investor shall recognize the initial investment at the purchase price. In    subsequent periods, the investor shall re-measure the investment at fair    value in its entirety at each reporting period and shall recognize change in    fair value earnings (or other performance indicators for entities that do not    report earnings) in the period in which the changes occur. FSP FTB 85-4-1 is    required to be applied to fiscal years beginning after June 15, 2006. The    Company uses the Fair Value method to calculate its Life Settlement Portfolio. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Derivative liability |
|--------|-----|----------------------|

|   |   | On October    1, 2009, the Company adopted the provisions of Emerging Issues Task Force    (“EITF”) 07-5 (now known as ASC 815-40), “Determining whether an instrument    (or embedded feature) is indexed to an entity’s own stock”. The Company’s    functional currency is the Canadian dollar and it had issued instruments that    have an exercise price denominated in U.S. dollars and has determined that    these instruments cannot be classified as equity-based on the evaluation of    the instruments’ settlement provisions as they were not indexed to the    Company’s common shares. As a result, these instruments are treated as    derivative liabilities carried at fair value as determined by the    Black-Scholes option pricing model, for U.S. GAAP purposes with changes in    fair values recorded as gains or losses in the statements of operations.          On adoption    of ASC 815-40, the Company would have recorded a liability of $4,495,240, a    reduction of contributed surplus of $2,757,581 and a charge to deficit of    $1,737,659 to reflect the fair value of the options at October 1, 2009,    determined in accordance with the Black-Scholes option pricing model.  At    September 30, 2010, the Company would have recognized a gain of $2,153,766    based on the decline in fair value of the options and the related derivative    liability. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | Recent accounting pronouncements |
|--------|-----|----------------------------------|

|   |   | (i) | In January 2010, the FASB issued Accounting    Standards Update ("ASU") 2010-06*Fair Value Measurement and      Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.*This guidance provides for the following new required disclosures related    to fair value measurements: 1) the amounts of and reasons for significant    transfers in and out of level one and level two inputs and 2) separate    presentation of purchases, sales, issuances, and settlements on a gross basis    rather than as one net number for level three reconciliations. The guidance    also clarifies the existing disclosures as follows: 1) provide fair value    measurement disclosures for each class of assets and liabilities and 2)    provide disclosures about the valuation techniques and inputs used for both    recurring and nonrecurring level two or level three inputs. The Company has    adopted this standard, but it did not have a material effect on the Company's    consolidated balance sheet or required financial statement disclosures. |
|--------|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

F-35

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **22.** | **United States Generally Accepted Accounting  Principles Reconciliation (continued)** |
|---------|----------------------------------------------------------------------------------------|

|   | (f) | Recent accounting pronouncements (continued) |
|--------|-----|----------------------------------------------|

|   |   | (ii) | In    April 2010, the FASB issued ASU 2010-13,*Compensation-Stock Compensation      (Topic 718): Effect of Denominating the Exercise Price of a Share-Based      Payment Award in the Currency of the Market in Which the Underlying Equity      Security Trades*. This update provides amendments to Topic 718 to clarify    that an employee share-based payment award with an exercise price denominated    in currency of a market in which a substantial porting of the entity‟s equity securities    trades should not be considered to contain a condition that is not a market,    performance or service condition. Therefore, an entity would not classify    such an award as a liability if it otherwise qualifies as equity. The    amendments in this ASU are effective for fiscal years, and interim periods    within those fiscal years, beginning on or after December 15, 2010. The    Company‟s adoption of this ASU did not have a material impact on    its consolidated financial statements.      |
|--------|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | (iii) | In December 2010, the FASB issued Accounting    Standard Update 2010-28,*Intangibles—Goodwill and Other (Topic 350): When      to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with      Zero or Negative Carrying Amounts*. This ASU modified Step 1 of the    goodwill impairment test for reporting units with zero or negative carrying    amounts. For those reporting units, an entity is required to perform Step 2    of the goodwill impairment test if it is more likely than not that a goodwill    impairment exists. For public entities, the amendments in the ASU are    effective for fiscal years, and interim periods within those years, beginning    after December 15, 2010. The Company`s adoption of this ASU is not expected    to have a material impact on its consolidated financial statements. |
|--------|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | (iv) | In December 2010, the FASB issued Accounting    Standard Update 2010-29,*Business Combinations*(Topic 805): Disclosure    of Supplementary Pro Forma Information for Business Combinations. This ASU    specifies that, if a public entity presents comparative financial statements,    the entity should disclose revenue and earnings of the combined entity as    though the business combination(s) that occurred during the current year had    occurred as of the beginning of the comparable prior annual reporting period    only. ASU 2010-29 is effective prospectively for business combinations where    the acquisition date is on or after the beginning of the first annual    reporting period beginning on or after December 15, 2010. The Company`s    adoption of this ASU is not expected to have a material impact on its    consolidated financial statements. |
|--------|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | Reconciliation |
|--------|-----|----------------|

|   |   | The effect of the differences between Canadian GAAP    and US GAAP (including practices proscribed by the SEC) on the consolidated    balance sheets and statements of operations and deficit are summarized as    follows: |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | (i) | Total Assets |
|--------|--------|-----|--------------|

|   |   |                             |   | September 30, |   |   |   | September 30, |   |   | September 30, |   |
|--------|--------|----------------------------------|--------|---------------|--------|--------|--------|---------------|--------|--------|---------------|--------|
|   |   |                             |   | 2011          |   |   |   | 2010          |   |   | 2009          |   |
|   |   | Total Assets under Canadian GAAP | $      | 11,091,999    |   | $      |   | 12,506,220    |   |   | 18,475,423    |   |
|   |   | Deferred costs, net (note 23(f)) |   | –       |   |   |   | 378,534       |   |   | 875,250       |   |
|   |   |                             |   |          |   |   |   |          |   |   |          |   |
|   |   | Total Assets under US GAAP       | $      | 11,091,999    |   | $      |   | 12,127,686    |   |   | 19,350,673    |   |

F-36

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **22.** | **United States Generally Accepted Accounting  Principles Reconciliation (continued)** |
|---------|----------------------------------------------------------------------------------------|

|   | (g) | Reconciliation (continued) |
|--------|-----|----------------------------|

|   |   | (ii) | Total Liabilities |
|--------|--------|------|-------------------|

|   |                                   |   | September 30, |   |   | September 30, |   |   | September 30, |   |
|--------|----------------------------------------|--------|---------------|--------|--------|---------------|--------|--------|---------------|--------|
|   |                                   |   | 2011          |   |   | 2010          |   |   | 2009          |   |
|   | Total Liabilities, under Canadian GAAP | $      | 9,032,735     |   | $      | 9,473,481     |   |   | 11,977,733    |   |
|   | Derivative liability (note 23 (e))     |   | 2,341,474     |   |   | 2,341,474     |   |   | –       |   |
|   |                                   |   |          |   |   |          |   |   |          |   |
|   | Total Liabilities, under US GAAP       | $      | 11,374,209    |   | $      | 11,814,955    |   |   | 11,977,733    |   |

|   |   | (iii) | Capital stock |
|--------|--------|-------|---------------|

|   |                                                             |   | September 30, |   |   | September 30, |   |   | September 30, |   |
|--------|------------------------------------------------------------------|--------|---------------|--------|--------|---------------|--------|--------|---------------|--------|
|   |                                                             |   | 2011          |   |   | 2010          |   |   | 2009          |   |
|   |                                                             |   |          |   |   |          |   |   |          |   |
|   | Capital stock, under Canadian GAAP                               | $      | 25,782,966    |   | $      | 25,810,369    |   |   | 25,810,369    |   |
|   | Contributed surplus                                              |   | 2,757,581     |   |   | 2,757,581     |   |   | 2,757,581     |   |
|   | Adjustment for stock-based compensation                          |   |          |   |   |          |   |   |          |   |
|   | for non-employees (note 23(a))                                   |   | 684,664       |   |   | 684,664       |   |   | 684,664       |   |
|   | Adjustment for acquisition of Fitness Vacations  (note 23(b)(i)) |   | 1,217,705     |   |   | 1,217,705     |   |   | 1,217,705     |   |
|   | Adjustment for accounts payable settled by share  issuances      |   |          |   |   |          |   |   |          |   |
|   | (notes 23(b)(ii) and (iii))                                      |   | 695,681       |   |   | 695,681       |   |   | 695,681       |   |
|   | Adjustment for derivative liability (note 23 (e))                |   | (2,757,581    | )      |   | (2,757,581    | )      |   | (2,757,581    | )      |
|   |                                                             |   |          |   |   |          |   |   |          |   |
|   | Capital stock, under US GAAP                                     | $      | 28,381,016    |   | $      | 28,408,419    |   |   | 28,408,419    |   |

|   |   | (iv) | Deficit |
|--------|--------|------|---------|

|   |                                                       |   | Year ended    |   |   | Year ended    |   |   | Year ended    |   |
|--------|------------------------------------------------------------|--------|---------------|--------|--------|---------------|--------|--------|---------------|--------|
|   |                                                       |   | September 30, |   |   | September 30, |   |   | September 30, |   |
|   |                                                       |   | 2011          |   |   | 2010          |   |   | 2009          |   |
|   |                                                       |   |          |   |   |          |   |   |          |   |
|   | Deficit, under Canadian GAAP                               | $      | (26,415,198   | )      | $      | (25,582,731   | )      | $      | (22,070,260   | )      |
|   | Adjustment for stock-based compensation                    |   |          |   |   |          |   |   |          |   |
|   | for non-employees (note 23(a))                             |   | (684,664      | )      |   | (684,664      | )      |   | (684,664      | )      |
|   | Adjustment for acquisition of Fitness                      |   |          |   |   |          |   |   |          |   |
|   | Vacations (note 23(b)(i))                                  |   | (1,217,705    | )      |   | (1,217,705    | )      |   | (1,217,705    | )      |
|   | Adjustment for accounts payable settled                    |   |          |   |   |          |   |   |          |   |
|   | by share issuances (notes 23(b)(ii) and (iii))             |   | (695,681      | )      |   | (695,681      | )      |   | (695,681      | )      |
|   |                                                       |   |          |   |   |          |   |   |          |   |
|   | Adjustment to opening balance for deferred costs           |   | 1,341,034     |   |   | 1,341,034     |   |   | 1,341,034     |   |
|   | Adjustment for adoption of ASC 815-40   (note 23 (e)) |   | (1,737,659    | )      |   | (1,737,659    | )      |   | –       |   |
|   | Adjustment for change in fair value of derivative          |   | 2,153,766     |   |   | 2,153,766     |   |   | –       |   |
|   | Adjustment for amortization of deferred costs              |   |          |   |   |          |   |   |          |   |
|   | (note 23(f))                                               |   | (1,310,102    | )      |   | (931,568      | )      |   | (465,784      | )      |
|   |                                                       |   |          |   |   |          |   |   |          |   |
|   | Deficit, under US GAAP                                     | $      | (28,566,209   | )      | $      | (27,355,208   | )      | $      | (23,793,060   | )      |

F-37

----

 
| **FORUM NATIONAL    INVESTMENTS LTD.**               |
|------------------------------------------------------|
|                                                 |
| Notes    to Consolidated Financial Statements        |
| Year    ended September 30, 2011, and 2010, and 2009 |
| (Expressed    in Canadian dollars)                   |
|                                                 |

| **22.** | **United States Generally Accepted Accounting  Principles Reconciliation (continued)** |
|---------|----------------------------------------------------------------------------------------|

|   | (f) | Reconciliation (continued) |
|--------|-----|----------------------------|

|   |   | (v) | Net income (loss) and earnings (loss) per share for: |
|--------|--------|-----|------------------------------------------------------|

|   |                                                        |   | Year ended    |   |   | Year ended    |   |   | Year ended    |   |
|--------|-------------------------------------------------------------|--------|---------------|--------|--------|---------------|--------|--------|---------------|--------|
|   |                                                        |   | September 30, |   |   | September 30, |   |   | September 30, |   |
|   |                                                        |   | 2011          |   |   | 2010          |   |   | 2009          |   |
|   |                                                        |   |          |   |   |          |   |   |          |   |
|   | Net income (loss) for the year,                             |   |          |   |   |          |   |   |          |   |
|   | under Canadian GAAP                                         | $      | (946,072      | )      | $      | (3,464,951    | )      | $      | (5,344,283    | )      |
|   | Adjustment for amortization of deferred costs (note  23(f)) |   | (378,534      | )      |   | (465,784      | )      |   | (465,784      | )      |
|   | Adjustment for change in fair value of derivative           |   | –       |   |   | 2,153,766     |   |   | –       |   |
|   | Adjustment for Intangibles, net                             |   | –       |   |   | –       |   |   | –       |   |
|   | Net income (loss) for the year,                             |   |          |   |   |          |   |   |          |   |
|   | under US GAAP                                               | $      | (1,324,606    | )      | $      | (1,776,969    | )      | $      | (5,810,067    | )      |
|   |                                                        |   |          |   |   |          |   |   |          |   |
|   | Basic earnings (loss) per share, under US GAAP              | $      | (0.04         | )      | $      | (0.06         | )      | $      | (0.20         | )      |
|   | Diluted earnings per share, under US GAAP                   | $      | (0.04         | )      | $      | (0.06         | )      | $      | (0.20         | )      |

----