---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 20-F

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

OR

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934For the Fiscal year endedDecember 31, 2004

OR

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

OR

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

Commission file number: 0-29862

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

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

Ontario, Canada(Jurisdiction of incorporation
or organization)

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

---

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

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

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

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

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

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

As of December 31, 2004 Common Shares without par value:5,144,661

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

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

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

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

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

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

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

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

(2)

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FORUM NATIONAL INVESTMENTS LTD.TABLE OF CONTENTS

PART I

|ITEM I    | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS   | 7 
|--------- | ------------------------------------------------------- | --
|A)        | DIRECTORS AND SENIOR MANAGEMENT                         | 7 
|B)        | AUDITORS                                                | 7 
|ITEM II   | OFFER STATISTICS AND EXPECTED TIMETABLE                 | 7 
|ITEM III  | KEY INFORMATION                                         | 8 
|A)        | SELECTED FINANCIAL DATA                                 | 8 
|B)        | CAPITALIZATION AND INDEBTEDNESS                         | 9 
|C)        | REASON FOR THE OFFER AND USE OF PROCEEDS                | 9 
|D)        | RISK FACTORS                                            | 9 
|ITEM IV   | INFORMATION ON THE COMPANY                              | 14
|A)        | HISTORY AND DEVELOPMENT OF THE COMPANY                  | 14
|B)        | BUSINESS OVERVIEW                                       | 18
|C)        | ORGANIZATIONAL STRUCTURE                                | 23
|ITEM V    | OPERATING AND FINANCIAL REVIEW AND PROSPECTS            | 24
|A)        | OPERATING RESULTS                                       | 24
|B)        | LIQUIDITY AND CAPITAL RESERVES                          | 28
|C)        | RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC     | 30
|D)        | TREND INFORMATION                                       | 30
|E)        | OFF-BALANCE SHEET ARRANGEMENTS                          | 31
|F)        | TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS           | 31
|ITEM VI   | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES              | 32
|A)        | DIRECTORS AND SENIOR MANAGEMENT                         | 32
|B)        | COMPENSATION                                            | 33
|C)        | BOARD PRACTICES                                         | 33
|D)        | EMPLOYEES                                               | 33
|E)        | SHARE OWNERSHIP                                         | 34
|ITEM VII  | MAJOR SHAREHOLDERS AND RELATED PART TRANSACTIONS        | 35
|A)        | MAJOR SHAREHOLDERS                                      | 35
|B)        | RELATED PARTY TRANSACTIONS                              | 36
|ITEM VIII | FINANCIAL INFORMATION                                   | 37
|A)        | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION | 37
|B)        | SIGNIFICANT CHANGES                                     | 37
|ITEM IX   | THE OFFER AND LISTING                                   | 38
|A)        | PRICE RANGE AND VOLUME OF SHARES OF COMMON STOCK        | 38
|B)        | PLAN OF DISTRIBUTION                                    | 39
|C)        | MARKETS                                                 | 39
|D)        | SELLING SHAREHOLDERS                                    | 39
|E)        | DILUTION                                                | 39
|F)        | EXPENSES OF THE ISSUE                                   | 39
|ITEM X    | ADDITIONAL INFORMATION                                  | 39
|A)        | SHARE CAPITAL                                           | 39
|B)        | MEMORANDUM AND ARTICLES OF ASSOCIATION                  | 39
|C)        | MATERIAL CONTRACTS                                      | 40
|D)        | EXCHANGE CONTROLS                                       | 41

(3)

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|E)                              | TAXATION                                                                           | 41                                                                         
|------------------------------- | ---------------------------------------------------------------------------------- | ---------------------------------------------------------------------------
|F)                              | DIVIDENDS AND PAYING AGENTS                                                        | 49                                                                         
|G)                              | STATEMENT BY EXPERTS                                                               | 49                                                                         
|H)                              | DOCUMENTS ON DISPLAY                                                               | 49                                                                         
|I)                              | SUBSIDIARY INFORMATION                                                             | 49                                                                         
|ITEM XI                         | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                          | 50                                                                         
|ITEM XII                        | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                             | 50                                                                         
|                                |                                                                                    |                                                                            
|PART II                         |                                                                                    |                                                                            
|                                |                                                                                    |                                                                            
|ITEM XIII                       | DEFAULTS, DIVIDENDS, ARREARS AND DELINQUENCIES                                     | 50                                                                         
|ITEM XIV                        | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
      AND USE OF PROCEEDS | 50                                                                         
|ITEM XV                         | CONTROLS AND PROCEDURES                                                            | 51                                                                         
|ITEM
      XVI                  | (A)                                                                                | AUDIT COMMITTEE FINANCIAL EXPERT                                           
|ITEM
      XVI                  | (B)                                                                                | CODE OF ETHICS                                                             
|ITEM
      XVI                  | (C)                                                                                | PRINCIPAL ACCOUNT FEES AND SERVICE                                         
|ITEM
      XVI                  | (D)                                                                                | EXEMPTIONS FROM THE LISITNGS
      STANDARD FOR AUDIT COMMITTEES           
|ITEM
      XVI                  | (A)                                                                                | PURCHASE OF EQUITY SECURITIES BY THE ISSUER
      AND AFFILIATED PURCHASERS
|                                |                                                                                    |                                                                            
|PART III                        |                                                                                    |                                                                            
|                                |                                                                                    |                                                                            
|ITEM XVII FINANCIAL STATEMENTS  | 53                                                                                
|ITEM XVIII FINANCIAL STATEMENTS | 53                                                                                
|ITEM XIX EXHIBITS               | 54                                                                                
|INDEX TO FINANCIAL STATEMENTS   | 55                                                                                
|SIGNATURE                       |                                                                                    | 56                                                                         
|CERTIFICATIONS                  | 54                                                                                

(4)

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GENERAL

In this Annual Report on Form 20-F, all references to Forum,
or the Company refer to Forum National Investments, Ltd. and its subsidiaries
and affiliated companies. References to this Form 20-F and this Annual
Report mean references to this Annual Report on Form 20-F for the year ended
December 31, 2004.

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

NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

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

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

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

other statements related to our business and results of
operations.

(5)

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

(6)

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PART I

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

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

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


Advisors Principal Bankers of the Company:

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


Legal Counsel of the Company:

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


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

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

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

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

(7)

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

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

Set forth below is certain selected financial data for the Company
  for the year-end fiscal periods 2000 to 2004. The following information must
  be read in conjunction with the more detailed financial information contained
  in the accompanying audited financial statements prepared in accordance to Canadian
  GAAP. Unless otherwise stated, all references to dollars herein are to Canadian
  dollars. As at December 31, 2004, one United States Dollar was equal to 1.2036
  Canadian Dollar and that value is used in the calculations herein, unless otherwise
  indicated.

TABLE OF SELECTED CONSOLIDATED FINANCIAL DATA

(Stated in Canadian Dollars)

|                       |     |   |             |   |   | Year Ended December 31 |   |   |             |  
|---------------------- | --- | - | ----------- | - | - | ---------------------- | - | - | ----------- | -
|                       |     |   | 2004        |   |   | 2003                   |   |   | 2002        |  
|Current Assets         | (2) | $ | 831,123     |   | $ | 852,855                |   | $ | 938,659     |  
|Capital Assets         |     |   | 3,928,818   |   |   | 3,760,853              |   |   | 3,817,556   |  
|Total Assets           | (2) |   | 7,268,071   |   |   | 8,893,775              |   |   | 10,073,096  |  
|Current Liabilities,   | (2) |   | 1,341,520   |   |   | 1,581,890              |   |   | 1,955,794   |  
|Excluding Deferred     |     |   |             |   |   |                        |   |   |             |  
|Revenue                |     |   |             |   |   |                        |   |   |             |  
|Deferred Revenue       |     |   | 4,643,163   |   |   | 9,755,212              |   |   | 13,478,076  |  
|Convertible Debentures |     |   | 40,486      |   |   | 172,615                |   |   | 53,887      |  
|Share Capital          |     |   | 15,512,797  |   |   | 15,028,187             |   |   | 15,028,187  |  
|Shares Subscribed      |     |   | -           |   |   | -                      |   |   | -           |  
|Deficit                |     |   | (14,316,794 | ) |   | (17,981,846            | ) |   | (21,242,625 | )

|                       |     |   |           |  |   | Year Ended December 31 |  |   |            | 
|---------------------- | --- | - | --------- |  | - | ---------------------- |  | - | ---------- | 
|                       |     |   | 2004      |  |   | 2003                   |  |   | 2002       | 
|Net Revenue from       |     | $ | 9,186,444 |  | $ | 9,758,380              |  | $ | 11,837,153 | 
|Operations             |     |   |           |  |   |                        |  |   |            | 
|Net Income (Loss) from |     |   | 3,662,784 |  |   | 3,663,047              |  |   | 1,273,629  | 
|Operations             |     |   |           |  |   |                        |  |   |            | 
|Earnings (Loss) per    | (1) |   | 0.75      |  |   | 2.36                   |  |   | 0.92       | 
|Share from Operations  |     |   |           |  |   |                        |  |   |            | 
|Fully Diluted Earnings | (1) |   | 0.72      |  |   | 2.36                   |  |   | 0.92       | 
|(Loss) per Share       |     |   |           |  |   |                        |  |   |            | 
|Weighted Average       |     |   | 4,899,949 |  |   | 1,384,771              |  |   | 1,381,964  | 
|number of shares for   |     |   |           |  |   |                        |  |   |            | 
|calculating basic and  |     |   |           |  |   |                        |  |   |            | 
|diluted Earning (Loss) |     |   |           |  |   |                        |  |   |            | 
|per share              |     |   |           |  |   |                        |  |   |            | 

(8)

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|(1) | Effective July 5, 2002 the Companys shares were
      consolidated on a ten (10) old for one (1) new basis. The prior years
      numbers have been changed to reflect the reverse split.                                                                                                                                                                                                                                                                          
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(2) | The Companys financial statements for 2002, 2001 and
      2000 have been retroactively restated. The Company previously followed the
      practice of excluding from the balance sheet the amounts receivable from
      the sale of memberships that were not due until future years. In 2003 the
      Company changed the policy and now reports long-term receivables net of
      estimated uncollectible, deferred interest and potential GST
    accruals.

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

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

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

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

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

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

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

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

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

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

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

(9)

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Governmental Regulations

In May 2002, the Government of Alberta introduced new consumer
regulations on the licensing, sale, and the marketing of lifetime travel club
memberships in that Province. Management is unable to predict but considers it
likely similar consumer regulations will be introduced in other provinces. The
resulting effect of these regulations could affect the Companys ability to
market its Snowbird vacations travel club memberships.

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

Terrorism

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

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

The Company May Require Additional Capital

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

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

(10)

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and liabilities, which might be necessary should the Company be
unable to continue as a going concern.

Market for the Companys Securities

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

The Company Does Not Pay Dividends.

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

Price Fluctuations: Share Price Volatility

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

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

Common Share Dilution

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

Control Lies in the Hands of Existing Management

The Companys officers and board of directors control
approximately 50% of the Companies issued and outstanding stock. The
concentration of such a large percentage of the Companies

(11)

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stock in the hands of relatively few shareholders may cause a
disproportionate effect on minority shareholders in all matters presented to the
companys shareholders.

Company Relies Heavily on Current Management and
Directors

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

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

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

Ability to Attract and Retain Successful Licensees or
Operators.

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

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

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

(12)

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Snowbird Must Develop and Maintain a Distinctive Brand
Identity.

The Company believes brand identity is important to attracting
and expanding the membership base. The Company believes the significance of
brand and name recognition will intensify should the number of competing
companies increase. The Company cannot assure shareholders that it will be able
to continue developing a distinctive brand identity that will ensure significant
market recognition. Without market recognition, the Company may be unable to
sell memberships, which failure would cause no growth of the Travel Club
operations.

System Failures May Adversely Affect the Company's
Business.

The Company's ability to facilitate trade successfully and provide
  high quality customer service depends on the efficient and uninterrupted operation
  of its computer and communications systems. These systems and operations are
  vulnerable to damage or interruption from earthquakes, floods, fires, power
  loss, telecommunication failures, break-ins, sabotage, intentional acts of vandalism
  and similar events. The Company does not have a formal disaster recovery plan
  or alternative providers of hosting services, and does not carry business interruption
  insurance to compensate it for losses that may occur. Despite any precautions
  taken, or planned to be taken, by the Company, the occurrence of a natural disaster
  or other unanticipated problems could result in interruptions in the services
  provided by the Company.

In addition, system failures to provide the data communications
  capacity required by the Company, as a result of human error, natural disasters,
  or other operational disruption, could result in interruptions to its service
  and sales. Any damage to, or failure of, the Company's systems could result
  in reductions in, or terminations of, services that could have a material adverse
  effect on its business, results of operations and financial condition. In the
  case of frequent or persistent system failures, the Company's reputation could
  be materially adversely affected. Although it has implemented certain network
  security measures, the Company is also vulnerable to computer viruses, physical
  or electronic break-ins and similar disruptions, which could lead to interruptions,
  delays, loss of data or the inability to complete customer transactions. The
  occurrence of any and all of these events could have a material adverse effect
  on its business, results of operations and financial condition.

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

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

If any such compromise of the Company's security were to occur,
it could have a material adverse effect on its reputation and, therefore, on its
business, results of operations and financial condition. Furthermore, a party
who is able to circumvent the Company's security measures could misappropriate
proprietary information or cause interruptions in its operations. The Company
may be required to expend significant capital and other resources to protect
against such security breaches or to alleviate problems caused by such breaches.
Concerns over the security of transactions conducted on the Internet and other
online services, and the privacy of users, may also inhibit the growth of the
Internet and other online services generally,

(13)

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and the World Wide Web in particular, especially as a means of
conducting commercial transactions. To the extent that the Company's activities
involve the storage and transmission of proprietary information, such as credit
card numbers, security breaches could damage its reputation and expose it to a
risk of loss, or litigation and possible liability. There can be no assurance
that the Company's security measures will prevent security breaches, or that
failure to prevent such security breaches will not have a material adverse
effect on its business, results of operations and financial condition.

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

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

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

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

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

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

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

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

The Defendants to the Ontario Action (the "FVC Defendants"),
and as applicable, their officers, directors, shareholders, agents, servants,
employees, successors, assigns and those in privity with or controlled by the
FVC Defendants, will not, directly or indirectly: solicit existing members of
Forum's Snowbird Travel Club in any manner and by any means to cancel their
memberships in the Snowbird Travel Club and/or to convert their memberships in

(14)

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the Snowbird Travel Club to memberships in any travel club operated
  or represented by the Defendants;

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

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

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

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

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

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

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

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

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

(15)

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

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

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

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

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

the shares being returned are all of the shares of Forum in which
  the declarant has any legal or beneficial interest; the declarant has no interest
  in any option or warrant to acquire additional shares of Forum;

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

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

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

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

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

During 2003 the Registrant incorporated a wholly owned
subsidiary in the Province of Ontario: Intravelnet Limited. As required by
Ontario legislation specifically relating to travel, the new entity incorporated
and domiciled in Ontario was created to handle the Ontario travel club

(16)

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business for the Ontario members. Subsequent to December 31,
2003 the sole director of Intravelnet Inc. resigned and a replacement has yet to
be found. Given the circumstances management has instructed the new Ontario
Corporation Intravelnet Limited to handle servicing all travel Club members. The
assets of Intravelnet Inc. were sold to Intravelnet Limited on June
30th, 2004 and all existing employees were offered continuous
employment in the new Company. It is unknown at this time as to the future
status of Intravelnet Inc. It is highly unlikely that the Registrant as the
parent company will recoup inter-company loans and advances made to Intravelnet
Inc over the last several years totaling approximating $4.4 million.

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

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

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

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

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

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

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

The Company expects to complete the refit on its 120 feet motor
  vessel MV Spirit of Two Thousand and Ten in spring of 2007. In spring of 2005
  Sheerline Yachts completed their component of the refit and Platinum Marine
  Services was retained to complete the almost $9.0 million refit project. The
  Company has a credit facility with Caterpillar Financial Services for up

(17)

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

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

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

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

|                 |      |   | 2004      |  |   | 2003      |  |   | 2002       |  | 
|---------------- | ---- | - | --------- |  | - | --------- |  | - | ---------- |  | 
|Membership Sales | (1 ) | $ | 4,951,541 |  | $ | 5,482,008 |  | $ | 8,397,285  |  | 
|                 |      |   |           |  |   |           |  |   |            |  | 
|Membership Dues  | (1 ) | $ | 1,856,883 |  | $ | 2,211,120 |  | $ | 2,360,214  |  | 
|                 |      |   |           |  |   |           |  |   |            |  | 
|Total            | (1 ) | $ | 6,808,424 |  | $ | 7,693,128 |  | $ | 10,757,499 |  | 

For the fiscal year 2004, a total of 298 (2003  67, 2002 -
1,968) travel club memberships were sold for a mean average non-refundable
purchase price of $ 3,722 (2003 - $ 3,134, 2002 - $1,264) with a standard
deviation of $ 1,215 (2003 - $ 1,641, 2002 - $1,729). As a result of the
judgment obtained against the Ontario defendants, membership increased by an
additional 437 familys.

Travel club memberships are due in full at the time of sale,
and may either be paid in cash or financed by the Company (see Travel Club -
this section). Travel club membership costs to the member range from $995 for a
trial membership to $7,995 for a lifetime membership.

Continued membership is dependent on the member paying a
monthly fee of $19.95 to $29.95. If the member has not paid his/her monthly
dues, the member has no entitlements.

(18)

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Entitlements are restored once arrears of monthly fees are
paid, at the sole discretion of the club.

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

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

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

Travel Club

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

The Company has sold the following travel club memberships:

|                                                                     |   | 2004    |   |   | 2003    |   |   | 2002      |  
|-------------------------------------------------------------------- | - | ------- | - | - | ------- | - | - | --------- | -
|                                                                     |   |         |   |   |         |   |   |           |  
|Travel Club Memberships entered into
      during the year           | $ | 763,665 |   | $ | 135,810 |   | $ | 2,488,346 |  
|Amount recognized as revenue during the year                         |   | (87,240 | ) |   | (27,162 | ) |   | (471,206  | )
|                                                                     |   |         |   |   |         |   |   |           |  
|Future years revenue to be earned from current year                  |   |         |   |   |         |   |   |           |  
|membership agreements                                                |   | 676,425 |   |   | 108,648 |   |   | 2,017,140 |  
|Cash collected during the year related to future years
      revenue |   | 332,730 |   |   | 79,487  |   |   | 1,563,222 |  

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

(19)

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Shuswap Lake

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

Industry Overview

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

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

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

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

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

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

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

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

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

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

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

(20)

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

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

Growth Strategy

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

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

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

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

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

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

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

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

(21)

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

The Company is also researching the link between the business
travel and leisure travel sectors. The Company traditionally serving the leisure
travel segment believes an opportunity exists to offer first-rate traditional
business travel services to the large number of corporations who require
business travel service. In addition the Company believes a large opportunity
exists to offer these same corporations leisure travel for their employees and
their families. The added benefit of wholesale leisure travel for the employee
and his family continue to be researched. Following this direction Intravelnet
Limited seeks to move physical office locations upon the expiry of existing
office leases to areas of high business concentration.

Increasing membership based operations in the active lifestyles
market

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

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

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

Government Regulations

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

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

Accordingly, certain marketing methods used by the Company or
its agents are effected by such regulations as well as other laws and
regulations. On October 1, 2003 the United States federal governments no call
registry went into effect. The new law allows consumers who do not wish to be
solicited and receive telemarketing calls to register on the federal
governments nationwide list. The no call list is receiving millions of
registrants. Management is unable to

(22)

---

predict if a similar law will be successfully introduced by
Canadian governments, but considers the likelihood of proposed legislation been
accepted probable within the next two years. This law in Canada depending on its
final wording could effect the companys operations and would result in a higher
marketing cost which could effect the profitability of the Companys Snowbird
Vacations travel club memberships sales. (See Item 3 - Risk Factors, Government
Regulations). In addition, the applicability to the Internet and commercial
online services of existing laws in various jurisdictions governing issues such
as property ownership, sales and other taxes, libel and personal privacy, is
uncertain and may take years to resolve. For example, tax authorities in a
number of jurisdictions are currently reviewing the appropriate tax treatment of
companies engaged in online e-commerce, and new tax regulations may subject the
Company to additional sales and income taxes.

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

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

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

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

Properties

Office Leases

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

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

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

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

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

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

(23)

---

Motor Vessels

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

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

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

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

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

The following discussion of the financial condition, changes in
financial condition and results of operations of the Company for the years ended
December 31, 2004, 2003, and 2002 should be read in conjunction with the
Consolidated Financial Statements of the Company for the years ended December
31, 2004, 2003, and 2002. Except as otherwise indicated, all dollar amounts
contained in this discussion and analysis and the Consolidated Financial
Statements are in Canadian dollars. The financial information presented in the
Consolidated Financial Statements was prepared in accordance with generally
accepted accounting principles (GAAP) in Canada. Note 22 of these Consolidated
Financial Statements of the Company sets forth the material differences between
Canadian and U.S. GAAP.

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

Critical Accounting Policies

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

(24)

---

The detailed accounting policies are listed in Note 4 to the
Financial Statements for the year ended December 31, 2004. Included below is a
discussion of the accounting policies that are affected by the most significant
judgments and estimates used in the preparation of the financial statements, how
such policies are applied and how results differing from the estimates and
assumptions would affect the amounts presented in the financial statements.
Other accounting policies also have a significant effect on our financial
statements, and some of these policies also require the use of estimates and
assumptions.

Going concern

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

While these accompanying financial statements have been prepared
  on the assumption that we are a going concern and will be able to realize our
  assets and discharge our liabilities in the normal course of business, certain
  events and conditions cast substantial doubt on this assumption. As of December
  31, 2005 the Company had a working capital deficit of $721,170 and a shareholders’
  equity of $2,487,808.

Management has continued to take steps to try to improve our
financial results and cash flows. These steps include pursuing debt and/or
equity financing to fund working capital requirements. Management believes that
we will be able to generate sufficient revenues and secure any necessary
financing; however, there is no assurance that management will be successful in
achieving these objectives.

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

Revenue Recognition

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

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

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

The Company previously excluded from the balance sheet the
amounts receivable from the sale of memberships that were not due until future
years (note 6). In 2003 the Company changed its accounting policy to include
these long-term receivables net of estimated uncollectible, deferred interest
and potential GST accruals.

(25)

---

Asset Impairments

Management evaluates the carrying value of intangible assets
for impairment whenever indicators of impairment exist. If it is determined that
such indicators are present, then an undiscounted future net cash flow
projection for the asset is prepared. In preparing this projection, assumptions
must be made concerning future financial performance after considering
historical trends, business plans and likely external factors. If projections of
future net cash flows are in excess of the carrying value of the recorded asset,
no impairment is recorded. If the carrying value of the asset exceeds the
projected undiscounted net cash flows, an impairment is recorded. The amount of
the impairment charge is determined as the deficiency of the discounted
projected net cash flows to the carrying value.

Accounts Receivable

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

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

The restatement has the following effect on accounts
receivable, total assets and shareholders` deficiency at December 31, 2004:

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

Total liabilities are increased in the same amount at December
31, 2002.

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

|                                    |   | Year End December 31 | 
|----------------------------------- | - | -------------------- | 
|                                    |   | 2004                 | 
|Travel Club Memberships Sold        | $ | 763,665              | 
|Amount Recognized as Revenue during |   | 87,240               | 
|the year see Note # 11              |   |                      | 
|Membership Dues                     | $ | 1,856,883            | 
|# Travel Club Memberships Sold (1)  |   | 268                  | 
|Mean Average Membership Price (1)   | $ | 3,134                | 

(26)

---

|                                       |   | Year End December 31 | 
|-------------------------------------- | - | -------------------- | 
|                                       |   | 2004                 | 
|Standard Deviation from Mean (1)       |   | 1,215                | 
|Net Income (Loss) for the year (2)     |   | 3,662,784            | 
|Income (Loss) per Share (2 )
      (3) | $ | 0.75                 | 
|Basic Income (Loss) per Share (2 ) (3) | $ | 0.72                 | 

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

2004 year-end Travel Club Memberships sales totals were up 462%
to $ 763,665 ($ 135,810 - 2003 and $2,488,346  2002), with amount recognized as
revenue during the year was up 221% to $ 87,240 ($27,162  2003 and $471,206 -
2002) and corresponding total revenue decrease of 5.9% to $ 9,573,112
($9,758,380  2003 and $11,837,153  2002).

In 2004 gross cash flow from operations declined 2.2% to $
2,859,910 with a net cash outflow from operations of $79,921, compared to gross
cash flows of $2,924,095 with a net cash outflow from operations of $174,990 in
2003, and gross cash flow of $4,976,540 with a net cash outflow from operations
of $286,466 in 2002.

The Company had revenues from membership dues of approximately
  $1,856,000 for the year ended December 31, 2004, $2,211,000 in 2003, $2,360,000
  in 2002, and expects dues to approximate the $1.8 million level for the year
  ended December 31, 2006.

For the fiscal year 2004, a total of 268 travel club
memberships were sold, increase of 300% (2003  67, 2002  1,968) The mean
average non-refundable travel club membership purchase price increased 42% to
$3,134 ($2,207  2003 and $1,264 2002). Standard deviation from the mean
purchase price has decreased 24% to $ 1,215 ($ 1,614  2003 and $1,729  2002).

Net Income for the year increased to a $ 3,662,784 ($3,263,047
  – 2003, and $1,273,629 – 2002). Basic earnings per share were $0.72
  for the year ($2.36 – 2003, and ($0.92 – 2002).

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

Expenses decreased by 17.5% or $1,113,406 in 2004 due mainly as
a result of the continued effects of the divesture of the sales and marketing
operations and the operating costs associated with their operations. Income was
decreased by the loss on disposal of houseboats during 2004.

The largest expense is the amortization of commissions from the
  sale of memberships during the fiscal year. Total commissions costs in 2004
  totaled $1,564,724 compared to $1,589,766 in 2003 and $1,597,220 in 2002. Commissions
  are deferred over a five-year period. In 2004 the commissions expense included
  one-fifth of commissions paid out in 2000, 2001, 2002, 2003 and 2004.

(27)

---

The largest decrease in expenses of $343,160 occurred in condominium
  rentals. Condominium rentals amounted to $137,076 in 2004 compared with $480,236
  in 2003. The reorganizing of the department and securing of new suppliers increased
  our costs in 2003.

The second largest decrease in expenses of $255,528 occurred in
Legal and Accounting Fees. Professional fees in 2004 totaled $232,312 compared
to $497,840 in 2003 and $452,454 in 2002. The decrease was the result of reduced
legal fees after completion of the case against the Associate operations in
Ontario and lesser audit work as result of the corporate reorganization and
closure of divesture of outlets.

The third largest decrease in expenses of $121,789 occurred in
Wages and salary expenses. Wages and salary expenses in 2004 totaled $1,374,234
compared to $1,496,023 in 2003 and $2,359,301 in 2002. The Company continues to
see the effects of the divesture of the sales and marketing operations.

Consulting fees in 2004 totaled $124,008 compared to $135,879
in 2003 and $345,574 in 2002. The consulting fees in 2004 decreased as we
completed the research and development phase of projects.

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

Liquidity

In 2002, the working capital deficit increased to $ 5,703,227
primarily due to a decrease in cash and an increase in accounts payable and
accrued liabilities.

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

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

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

The Company continues to operate within the new travel and
economic environment by continuously adjusting its operations accordingly. The
Company plans to generate sufficient operating capital through operations in the
short-term. For long-term growth additional capital is required. The 120-foot
motor vessel is continuing a refit with an estimated completion date of spring
2007. The motor vessel did not contribute to revenue in 2005 or 2006.

The work on the vessell has been from cash provided from operations
  and the proceeds of the construction loan form Caterpillar Financial Services.
  In September of 2005 the company was successful in attaining a credit facility
  with Caterpillar Financial Services Corporation for $3.0 million USD. This credit
  facility was increased to $3.9 million USD in October of 2006.

There can be no assurances the Company will be able to generate
sufficient investment from borrowing, the sale of equity, or a combination
thereof. There is no certainty it will be available when and to the extent
required or that if available, it will be on acceptable terms. If adequate funds
are not available on acceptable terms, the Company may not be able to fund
existing operations in their current state, fund business expansion, develop or
enhance its products or services, or respond to competitive pressures. This
could have a material adverse effect on the

(28)

---

Company's existing operations and planned growth. (See Item 3
Risk Factors, The Company may require Additional Capital).

The Companys total Revenues for 2004 decreased $ 571,936 to $
9,186,444. This decrease was largely caused by the reduction in sales of $
857,714 and membership dues of $ 354,236 offset by an increase of $ 753,275 in
miscellaneous revenue compared to 2003. Other factors included the increase of
the Companys sales activities after a positive outcome of the lawsuit with the
former manager and employees in Ontario. Net Income increased in 2004 by $
399,737 in large part to the amortization of over-accruals for un-collectable
receivables, deferred interest and potential GST as reflected in a change in
estimates.

Capital Resources

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

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

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

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

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

The Company's access to capital is always dependent upon
general financial market conditions. The Company has no agreements with
Management, investors, shareholders or anyone else respecting additional
financing at this time. Because of the nature of the Company's business, there
are no trends in the nature of its capital resources that could be considered
predictable. To date, the Company's capital resources have consisted of the
private issuance of common shares and convertible securities and a credit
facility form Caterpillar Financial Services Corporation.

Quantitative and Qualitative Disclosures about Market
Risk

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

(29)

---

debt portfolio is subject to interest rate risk and will cost
more in the event market interest rates increase. The Company does not currently
hedge against foreign exchange or interest rate fluctuations.

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

The Companys research and development expenses for the last
three fiscal years have been limited to the development of its Internet
e-commerce site. For fiscal years ended 2004, 2003, and 2002 the Company
expended $ Nil, $ Nil, and $ Nil respectively, for expenses related to its
e-commerce site.

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

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

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

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

In January of 2004, the Company entered into a Commission
Agreement with 42260584 Canada Inc., for the operation of the Companys London
Ontario sales and marketing operations. 4226054 Canada Inc. took control of the
offices and marketed the Companys Snowbird Vacations Travel Club Membership
until September of 2004. In November of 2005 the principal of 42260584 Ontario
Ltd entered into a Commission Agreement to market the Companys Snowbird
Vacations Travel Club Membership in the Barrie Ontario area. The Agreement with
1617165 Ontario Inc was terminated in March of 2005 and at this time no new
memberships are actively been marketed in the Barrie Ontario area. In January of
2006 the Company acquired the members of an upstart Ontario Travel Club called
Embassy Vacation Club. The members were offered to have their members serviced
by the Companys travel service provider Intravelnet Canada Ltd and the 110 of
the Embassy Vacation Club members continue to do so.

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

(30)

---

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

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

Operating costs of the company have declined for the last three
  years (2005 - $4,227,789, 2004 - $5,229,932, 2003 - $6,343,338. Expenses decreased
  by 19.6% or $1,002,143 in 2005 due mainly as a result of the continued effects
  of the divesture of the sales and marketing operations and the operating costs
  associated with their operations.

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

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

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

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

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

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

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

(31)

---

|Purchase Obligations        |  |   | -         |  |   | -       |  |   | -       |  |   | -       |  |   | -       | 
|--------------------------- |  | - | --------- |  | - | ------- |  | - | ------- |  | - | ------- |  | - | ------- | 
|Other Long Term Obligations |  |   | -         |  |   | -       |  |   | -       |  |   | -       |  |   | -       | 
|Total                       |  | $ | 1,876,372 |  | $ | 309,202 |  | $ | 476,046 |  | $ | 254,897 |  | $ | 836,227 | 

FORWARD LOOKING STATEMENTS

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

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

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

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

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


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

(32)

---

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

During the year ended December 31, 2004, the Company paid $
Nil, (2003  $ Nil, 2002- $ Nil) in management fees and $44,000  2004, (2003 -
$114,827, 2002, $120,339) in consulting fees to directors. The Company also
reimbursed $185,535 2004, (2003 - $156,321, 2002 - $138,802) to directors for
expenditures made on behalf of the Company.

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

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

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

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

Audit Committee

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

Compensation Committee

The Company does not have a Compensation Committee.

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

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

(33)

---

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

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

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

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

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

Incentive Share Purchase Plan

The registrant had no Incentive Share Purchase Plan or Stock
Option Plan during 2004 and as of October 31, 2005.

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

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

In 2002, 2,810 (2001  155,000) common shares were issued under
the Purchase Plan relating to subscriptions received during 2001. Accordingly,
no value (2001 - $65,115) was assigned to the 2002 issuance of shares previously
subscribed for under the Purchase Plan As at October 31, 2005, there were no
employee or management incentive options outstanding.

Warrants

There are no warrants outstanding.

Other Dilutive Elements

All convertible debentures totaling $53,887 issued prior to
2003 are fully matured as of December 31, 2002. The debentures during their term
carried a rate of interest of eight percent per annum payable semi-annually. The
conversion feature of the debenture allows for the debenture holders to convert
his capital at a rate of $6.00 US to $12.50 US per share. The Company would have
4,622 shares issued if 100% of the debentures were to be converted. During 2005,
$ -, (2004-$7,619, 2003- $5,782) of convertible debentures was repaid. There
were no conversions during 2005, 2004, or 2003.

During 2003 the Company issued convertible debentures in the
amount of $124,510 to officers, directors and shareholders of the company. The
debentures carry a rate of interest of ten

(34)

---

percent per annum payable semi-annually. The conversion feature
of the debentures allows for the debenture holders to convert their capital at a
rate of $0.03 CDN per share. The debentures were not secured by general mortgage
on the Registrants assets. The conversion privilege to convert to common shares
was ratified by shareholders at the Annual General Meeting June 2, 2004.

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

Conflicts of Interest

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

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

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

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

The following persons hold, of record or beneficially, directly
  or indirectly, or are known by the Company to own beneficially, directly or
  indirectly, more than 5% of the issued shares of the Company as at December
  31, 2005:

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

There has been a reduction in the number of issued common
shares of the Registrant from January 1 to October 31, 2006. A total of 500,000
common shares of the company have been

(35)

---

returned to treasury during this time. This has resulted in the
following notable changes in percentage ownership held

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

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

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

Except as set out below or otherwise disclosed in this report
or in our audited financial statements attached hereto, no executive officer or
senior management of the Registrant, nor any spouse, relative, associate or
affiliate of the foregoing persons, has any interest in any material
transactions which occurred during the Company's last full fiscal year and
involved the Registrant or any of its subsidiaries; or any presently proposed
transaction involving the Registrant or any of its subsidiaries.

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

During the year ended December 31, 2005, the Company paid $
Nil, (2004  $ Nil, 2003- $ Nil) in management fees and $14,430  2005, (2004 -
$44,000, 2003, $114,827) in consulting fees to directors. The Company also
reimbursed $228,483  2005, (2004 - $185,535, 2002 - $156,321) to directors for
expenditures made on behalf of the Company.

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

Indebtedness to Company of Directors and Senior
Management

Amounts due to shareholders during fiscal year 2005 were $
39,693. No directors or senior management of the Company are indebted to the
Company or have been indebted to the Company since the beginning of the last
completed financial year of the Company other than as listed below. The Company
reimburses Directors and Senior Management for expenses incurred in connection
with Companys ordinary course of business. To the extent these advances and
expenses are offset, their exists an indebtedness to the Company of a net $Nil
as of December 31, 2005 (2004 - $ nil, 2003 - $1,680, 2002 - $56,873).

Interests of Experts and Counsel

Not applicable, filing as an annual report.

(36)

---

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

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

This Annual Report contains the consolidated financial statements
  for the Company for the fiscal years ended December 31, 2004, 2003 and 2002
  which contain an Auditors’ Report dated April 13, 2006, Consolidated Balance
  Sheets as at December 31, 2004 and 2003, Consolidated Statements of Loss and
  Deficit, and Consolidated Statements of Cash Flows for the years ended December
  31, 2004, 2003 and 2002, and Notes to Consolidated Financial Statements.

Indebtedness to Company of Directors and Senior
Management

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

Legal or Arbitration Proceedings

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

Dividend Distribution Policy

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

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

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

(37)

---

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

During 2003 the Registrant incorporated a wholly owned subsidiary
  in the Province of Ontario: Intravelnet Limited. As required by Ontario legislation
  specifically relating to travel, the new entity incorporated and domiciled in
  Ontario was created to handle the Ontario travel club business for the Ontario
  members. Subsequent to December 31, 2003 the sole director of Intravelnet Inc.
  resigned and a replacement has yet to be found. Given the circumstances management
  has instructed the new Ontario Corporation Intravelnet Limited to handle servicing
  all travel Club members. The assets of Intravelnet Inc. were sold to Intravelnet
  Limited on June 30th, 2004 and all existing employees were offered continuous
  employment in the new Company. It is unknown at this time as to the future status
  of Intravelnet Inc. It is highly unlikely that the Registrant as the parent
  company will recoup inter-company loans and advances made to Intravelnet Inc
  over the last several years totaling approximating $4.4 million. The financial
  statements as presented are consolidated statements. All significant inter-company
  balances and transactions have been eliminated.

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

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

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

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

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

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

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

| |     |     | 2006 |     |      |      |     |     | 2005 |     |     |    
| | --- | --- | ---- | --- | ---- | ---- | --- | --- | ---- | --- | --- | ---
| | Nov | Oct | Sept | Aug | July | June | May | Apr | Mar  | Feb | Jan | Dec

(38)

---

|High | $2.50 | 3.00 | 1.80 | 1.75 | 1.10 | 1.10 | 1.10 | 0.80 | 0.50 | 0.50 | 0.50 | 0.50
|---- | ----- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ----
|Low  | $1.90 | 1.65 | 1.70 | 1.35 | 1.00 | 1.00 | 0.60 | 0.40 | 0.25 | 0.30 | 0.25 | 0.25

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(39)

---

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

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

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

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

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

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

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

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

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

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

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

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

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

(40)

---

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

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

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

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

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

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

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

Canadian Federal Income Tax Considerations

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

This summary is based on the current provisions of the Income
Tax Act (Canada) and regulations thereunder (the ITA) and all specific
proposals to amend the ITA publicly announced prior to the date hereof by the
Minister of Finance (Canada) and the current administrative practices of the
Canada Revenue Agency. It has been assumed that all specific proposals to amend
the ITA will be enacted in substantially their present form and that no other
relevant amendments to the ITA will come into force. However, no assurance can
be given to this effect. Except for the foregoing, this summary does not take
into account or anticipate any

(41)

---

changes in law, whether by legislative, administrative or
judicial decision or action, nor does it take into account provincial,
territorial or foreign income tax legislation or considerations which may differ
from those described herein. See United States Federal Income Tax Consequences
below.

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

Dividends

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

Capital Gains

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

However, under the Treaty, a Non-Resident Holder to whom our
  common shares represent taxable Canadian property will not be liable to tax
  in Canada in respect of a capital gain realized on the disposition of such shares
  unless:

the value of such shares is derived principally from real property
  situated in Canada (including mineral properties in Canada and rights in relation
  thereto), or

the Non-Resident Holder was a resident of Canada for 120 months
  during any period of 20 consecutive years preceding the disposition of such
  shares and was a resident of Canada at any time during the 10 years immediately
  preceding such disposition and owned such shares (or property for which such
  shares were substituted) at the time the Non-Resident Holder ceased to be a
  resident of Canada.

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U.S. Federal Income Tax Consequences

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

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

Scope of this Disclosure

Authorities

This summary is based on the Internal Revenue Code of 1986, as
amended (the Code), Treasury Regulations (whether final, temporary, or
proposed), published rulings of the Internal Revenue Service (IRS), published
administrative positions of the IRS, the Convention Between Canada and the
United States of America with Respect to Taxes on Income and on Capital, signed
September 26, 1980, as amended (the Canada-U.S. Tax Convention), and U.S.
court decisions that are applicable and, in each case, as in effect and
available, as of the date of this Annual Report. Any of the authorities on which
this summary is based could be changed in a material and adverse manner at any
time, and any such change could be applied on a retroactive basis. This summary
does not discuss the potential effects, whether adverse or beneficial, of any
proposed legislation that, if enacted, could be applied on a retroactive basis.

U.S. Holders

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

Non-U.S. Holders

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

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

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

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

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

Distributions on Common Shares

General Taxation of Distributions

A U.S. Holder that receives a distribution, including a
constructive distribution, with respect to the Common Shares will be required to
include the amount of such distribution in gross income as a dividend (without
reduction for any Canadian income tax withheld from such distribution) to the
extent of our current or accumulated earnings and profits. To the extent that
a distribution

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exceeds our current and accumulated earnings and profits,
such distribution will be treated (a) first, as a tax-free return of capital to
the extent of a U.S. Holders tax basis in the Common Shares and, (b)
thereafter, as gain from the sale or exchange of such Common Shares. (See more
detailed discussion at Disposition of Common Shares below).

Reduced Tax Rates for Certain Dividends

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

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

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

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

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Distributions Paid in Foreign Currency

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

Dividends Received Deduction

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

Disposition of Common Shares

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

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

Foreign Tax Credit

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

Complex limitations apply to the foreign tax credit, including
the general limitation that the credit cannot exceed the proportionate share of
a U.S. Holders U.S. federal income tax liability that such U.S. Holders
foreign source taxable income bears to such U.S. Holders worldwide taxable
income. In applying this limitation, a U.S. Holders various items of income and

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deduction must be classified, under complex rules, as either
foreign source or U.S. source. In addition, this limitation is calculated
separately with respect to specific categories of income (including passive
income, high withholding tax interest, financial services income, general
income, and certain other categories of income). Dividends paid by us generally
will constitute foreign source income and generally will be categorized as
passive income or, in the case of certain U.S. Holders, financial services
income. However, for taxable years beginning after December 31, 2006, the
foreign tax credit limitation categories are reduced to passive income and
general income (and the other categories of income, including financial
services income are eliminated). The foreign tax credit rules are complex, and
each U.S. Holder should consult its own financial advisor, legal counsel, or
accountant regarding the foreign tax credit rules.

Information Reporting; Backup Withholding Tax

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

Additional Rules that May Apply to U.S. Holders

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

Controlled Foreign Corporation

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

If we are a CFC, a 10% Shareholder generally will be subject to
current U.S. federal income tax with respect to (a) such 10% Shareholders pro
rata share of our subpart F income (as defined in Section 952 of the Code) and
(b) such 10% Shareholders pro rata share of our earnings invested in United
States property (as defined in Section 956 of the Code). In addition, under
Section 1248 of the Code, any gain recognized on the sale or other taxable
disposition of Common Shares by a U.S. Holder that was a 10% Shareholder at any
time during the five-year period ending with such sale or other taxable
disposition generally will be treated as a dividend to the extent of our
earnings and profits that are attributable to such Common Shares. If we

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are both a CFC and a passive foreign investment company (as
defined below), we generally will be treated as a CFC (and not as a passive
foreign investment company) with respect to any 10% Shareholder.

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

Passive Foreign Investment Company

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

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

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

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

A U.S. Holder that makes a QEF Election generally will not be
subject to the rules of Section 1291 of the Code discussed above. However, a
U.S. Holder that makes a QEF Election generally will be subject to U.S. federal
income tax on such U.S. Holders pro rata share of (a) our net capital gain,
which will be taxed as long-term capital gain to such U.S. Holder, and (b) our
ordinary earnings, which will be taxed as ordinary income to such U.S. Holder.
A U.S. Holder that makes a QEF Election will be subject to U.S. federal income
tax on such amounts

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for each taxable year in which we are a PFIC, regardless of
whether such amounts are actually distributed to such U.S. Holder by us.

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

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

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

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

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

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

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

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

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

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

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

ENFORCEABILITY OF CIVIL LIABILITIES

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

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

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

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

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

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

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

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

PART II

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

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

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

Material modification to the rights of security holders

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

Use of proceeds

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

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

Evaluation and disclosure controls and procedures

Under the supervision and with the participation of the
Companys management, including the Companys Chief Executive Officer and Chief
Financial Officer, the Company evaluated the effectiveness of the design and
operation of its disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934, as amended) as of a date
(the Evaluation Date) being December 31, 2004. Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that, as of the
Evaluation Date, the Companys disclosure controls and procedures were effective
in timely alerting them to the material information relating to the Company (or
the Companys consolidated subsidiaries) required to be included in the
Companys SEC filings.

Changes in internal controls over Financial Reporting

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

Management, including our Chief Executive Officer and Chief
Financial Officer, do not expect that our disclosure controls and procedures or
internal controls and procedures will prevent all error and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the control. The design of any
system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions;
over time, control may become inadequate because of changes in conditions, or
the degree of compliance with the policies or procedures may deteriorate.
Because of the inherent limitations in a cost-effective control system,
misstatements due to error or fraud may occur and not be detect.

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

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

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

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

(51)

---

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

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

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

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

For the years ended December 31, 2004 and 2002, the Registrant
was invoiced by KPMG, the Company's independent auditors, for audit fees,
audit-related fees, tax fees and all other fees as set forth below:

|                     | Year Ended December | Year Ended December | 
|-------------------- | ------------------- | ------------------- | 
|                     | 31, 2004            | 31, 2003            | 
|Audit fees (1)       | 41,000              | 41,000              | 
|Audit  related fees | -                   |                     | 
|Tax fees             | -                   | -                   | 
|All other fees       | -                   |                     | 
|Total                | 41,000              | 41,000              | 

(1) "Audit Fees" represent fees for the audit of the Company's
annual financial statements, review of the Company's interim financial
statements and review in connection with the Company's statutory and regulatory
filings The Audit Committee has adopted procedures requiring Audit Committee
review and approval in advance of all particular engagements for services to be
provided by SmytheRatcliffe.

Consistent with applicable laws, the procedures permit limited
amounts of services, other than audit, review and attest services, to be
approved by one or more members of the Audit Committee pursuant to authority
delegated by the Audit Committee, provided the Audit Committee is informed of
each particular service. The Audit Committee approved all of the engagements and
fees during the year ended December 31, 2004. The Audit Committee reviews with
SmytheRatcliffe whether the non-audit services to be provided are compatible
with maintaining the auditors' independence. The Board has determined that,
beginning with January 1, 2004, fees paid to the independent auditors for
non-audit related services in any year will not exceed the fees paid for audit
services during the year. Permissible non-audit services

(52)

---

will be limited to fees for tax services, accounting assistance
or audits in connection with acquisitions, and other services specifically
related to accounting or audit matters such as registration statements filings
or private placements or public offerings.

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

Not Applicable.

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

Not Applicable.

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

See the Financial Statements and Exhibits listed in Item XIX
hereof and filed as part of this Annual Report. Included are audited
consolidated balance sheets as at December 31, 2004 and 2003, and the
consolidated statements of operations and deficit and cash flows for each of the
years ended December 31, 2004, 2003 and 2002, including the Auditors Report to
Shareholders.

These financial statements were prepared in accordance with
Canadian GAAP and are expressed in Canadian dollars. Such financial statements
have been reconciled to U.S. GAAP (see note 22 therein). For a history of
exchange rates in effect for Canadian dollars as against U.S. dollars, see Item
III - Key Information, Selected Financial Data  Exchange Rate Data.

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

Not applicable.

(53)

---

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

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

| | (i)   | Auditors’ Report dated April 13, 2006.                                                                                                                                                                                                                                                                                                             
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | Consolidated Balance Sheets as at December 31, 2004
        and 2003.                                                                                                                                                                                                                                                                              
| | (iii) | Consolidated Statements of Operations and Deficit for
        the years ended December 31, 2004, 2003 and 2002.                                                                                                                                                                                                                                    
| | (iv)  | Consolidated Statements of Cash Flows for the years
        ended December 31, 2004, 2003 and 2002.                                                                                                                                                                                                                                                
| | (v)   | Notes to the Consolidated Financial Statements for the
        years ended December 31, 2004, 2003 and 2002 Financial Statements Schedules
        are omitted because they are not applicable, not required or because the
        required information is included in the consolidated financial statement
        or notes thereto filed within.

|Exhibit  |  | Description                                                                                         
|-------- |  | ----------------------------------------------------------------------------------------------------
|         |  |                                                                                                     
|1.1      |  | Registered Incorporation Memorandum. (1).                                                           
|         |  |                                                                                                     
|1.2      |  | Articles of Continuance into Ontario. (1).                                                          
|         |  |                                                                                                     
|1.3      |  | Articles of Amendment, Change of Name. (1).                                                         
|         |  |                                                                                                     
|2b.1     |  | Convertible Debentures for $124,510, issued September
      2003. To be filed upon request.         
|         |  |                                                                                                     
|4.1      |  | Court Ordered Settlement by Ontario Superior Court,
      dated October 14, 2003. (1).              
|         |  |                                                                                                     
|4.2      |  | 4226054 Canada Inc., Commissison Agreement Janaury
      1, 2004. (1).                              
|         |  |                                                                                                     
|4.3      |  | 1617165 Ontario Inc., Commissison Agreement November
      1, 2005. (1).                            
|         |  |                                                                                                     
|4.4      |  | 2094711 Ontario Limited., Commissison Agreement
      January 1, 2006. (1).                         
|         |  |                                                                                                     
|4.5      |  | Loan Agreement, dated September 21, 2005. To be
      filed upon request.                           
|         |  |                                                                                                     
|4.5.(i)  |  | First Ammendment to Loan Agreement, dated October
      11, 2005. To be filed upon request.         
|         |  |                                                                                                     
|4.5.(ii) |  | Second Ammendment to Loan Agreement, dated November
      6, 2006. To be filed upon request.        
|         |  |                                                                                                     
|8.1      |  | List of Subsidiaries.
      Filed herewith.                                                         
|         |  |                                                                                                     
|11.1     |  | Code of Ethics, January 1, 2003. (1).                                                               
|         |  |                                                                                                     
|12.1     |  | Section 302 Certification
      of Chief Executive Officer, dated December 15, 2006. Filed herewith.
|         |  |                                                                                                     
|12.2     |  | Section 302 Certification
      of Chief Financial Officer, dated December 15, 2006. Filed herewith.
|         |  |                                                                                                     
|13.1     |  | Section 906 Certification
      of Chief Executive Officer, dated December 15, 2006. Filed herewith.
|         |  |                                                                                                     
|13.2     |  | Section 906 Certification
      of Chief Financial Officer, dated December 15, 2006. Filed herewith.

(1) Previously Filed

(54)

---

INDEX TO FINANCIAL STATEMENTS

|                                                                                                          | page     
|--------------------------------------------------------------------------------------------------------- | ---------
|                                                                                                          |          
|Managements Responsibility to Financial
      Reporting dated December 22, 2006                          | 56       
|                                                                                                          |          
|Auditors’ Report dated April 13, 2006                                                                     | F-i      
|                                                                                                          |          
|Consolidated Balance Sheets as at December
      31, 2004, 2003                                           | F-1      
|                                                                                                          |          
|Consolidated Statements of Income and
      Deficit for the years ended December 31, 2004, 2003 and 2002  | F-2      
|                                                                                                          |          
|Consolidated Statements of Cash Flows
      for the years ended December 31, 2004, 2003 and 2002          | F-3      
|                                                                                                          |          
|Notes to the Consolidated Financial Statements
      for the years ended December 31, 2004, 2003 and 2002 | F-4 to 19

(55)

---

December 22, 2006

Management's Responsibility for Financial Reporting

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

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

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

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

SIGNATURES

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

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

(56)

---

**REPORT OF INDEPENDENT AUDITORS**

**TO THE SHAREHOLDERS OF FORUM NATIONAL INVESTMENTS LTD.**

We have audited the consolidated balance sheets of Forum National
  Investments Ltd. as at December 31, 2004 and 2003 and the consolidated statements
  of operations and deficit and cash flows each of the years ended December 31,
  2004, and 2003. These financial statements are the responsibility of the Company’s
  management. Our responsibility is to express an opinion on these financial statements
  based on our audits.

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

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

In our opinion, these consolidated financial statements present
  fairly, in all material respects, the financial position of the Company as at
  December 31, 2004 and 2003 and the results of its operations and its cash flows
  for the years ended December 31, 2004, and 2003 in accordance with accounting
  principles generally accepted in Canada.

Chartered Accountants

/s/ SmytheRatcliffe

Vancouver, Canada 
  April 13, 2006, except for note 21 which is of December 22, 2006

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

In the United States, reporting standards for auditors requires
  the addition of an explanatory paragraph (following the opinion paragraph) when
  the financial statements are affected by conditions and events that cast substantial
  doubt on the Company’s ability to continue as a going-concern, such as
  those described in note 3 to the consolidated financial statements. Our report
  to the shareholders dated April 13, 2006 is expressed in accordance with Canadian
  reporting standards, which do not permit a reference to such events and conditions
  in the auditors’ report when these are adequately disclosed in the notes
  to the financial statements.

Chartered Accountants

/s/ SmytheRatcliffe LLP

Vancouver, Canada 
  December 22, 2006

F-i

---



FORUM NATIONAL INVESTMENTS LTD.

December 31, 2004, 2003, 2002

Consolidated Financial Statements (Expressed in Canadian dollars)



---

FORUM NATIONAL INVESTMENTS LTD.Consolidated Balance Sheets 
  (Expressed in Canadian dollars) 
  December 31

|                                                                           |   | 2004        |   |   | 2003        |  
|-------------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|Assets                                                                     |   |             |   |   |             |  
|                                                                           |   |             |   |   |             |  
|Current                                                                    |   |             |   |   |             |  
|Cash                                                                       | $ | 213,065     |   | $ | 137,882     |  
|Short term
      investments                                               |   | 3,500       |   |   | 13,000      |  
|Accounts and notes receivable
      (notes 2 and 6)                        |   | 517,562     |   |   | 663,816     |  
|Prepaid expenses                                                           |   | 28,286      |   |   | 14,832      |  
|Inventory  condos                                                         |   | 15,627      |   |   | 21,627      |  
|Amounts due from related
      parties (notes 11 and 18)                   |   |            |   |   | 1,680       |  
|                                                                           |   | 831,123     |   |   | 852,855     |  
|                                                                           |   |             |   |   |             |  
|Other Receivables(note 7)                                                  |   | 299,018     |   |   | 669,216     |  
|Long-Term Receivables(notes 2 and 6)                                       |   | 285,478     |   |   | 856,243     |  
|Property, Plant and Equipment(note 8)                                      |   | 3,928,818   |   |   | 3,760,853   |  
|Deferred Costs, net ( note 9)                                              |   | 1,911,134   |   |   | 2,739,608   |  
|Intangibles, net(note 9)                                                   |   | 12,500      |   |   | 15,000      |  
|                                                                           |   |             |   |   |             |  
|                                                                           | $ | 7,268,071   |   | $ | 8,893,775   |  
|                                                                           |   |             |   |   |             |  
|Liabilities and Shareholders Equity/(Deficiency)                          |   |             |   |   |             |  
|                                                                           |   |             |   |   |             |  
|Current                                                                    |   |             |   |   |             |  
|Accounts
      payable and accrued liabilities                             | $ | 898,278     |   | $ | 977,252     |  
|Deferred revenue, current
      portion (note 10)                          |   | 3,139,519   |   |   | 5,072,583   |  
|Amounts due
      to related parties (notes 11 and 18)                     |   | 151,093     |   |   |            |  
|Current portion of advances
      against future revenue streams (note 12) |   | 138,555     |   |   | 243,322     |  
|Current portion
      of deferred gain (note 7)                            |   | 113,108     |   |   | 250,211     |  
|Convertible debentures (note 13)                                           |   | 40,486      |   |   | 48,105      |  
|                                                                           |   | 4,481,039   |   |   | 6,591,473   |  
|                                                                           |   |             |   |   |             |  
|Deferred Revenue(note 10)                                                  |   | 1,503,644   |   |   | 4,682,629   |  
|Advances Against Future Revenue Streams(note 12)                           |   | 74,694      |   |   | 27,549      |  
|Deferred Gain(note 7)                                                      |   | 117,696     |   |   | 419,005     |  
|Convertible Debentures(note 13)                                            |   |            |   |   | 124,510     |  
|Loans from Related Parties(notes 11 and 18)                                |   | 254,995     |   |   |            |  
|                                                                           |   | 6,432,068   |   |   | 11,845,166  |  
|                                                                           |   |             |   |   |             |  
|                                                                           |   |             |   |   |             |  
|Shareholders Equity (Deficiency)                                          |   |             |   |   |             |  
|Capital Stock(note
      15)                                               |   | 15,152,797  |   |   | 15,028,187  |  
|Deficit                                                                    |   | (14,316,794 | ) |   | (17,979,578 | )
|Total Shareholders Equity/(Deficiency)                                    |   | 836,003     |   |   | (2,951,391  | )
|                                                                           |   |             |   |   |             |  
|                                                                           | $ | 7,268,071   |   | $ | 8,893,775   |  
|                                                                           |   |             |   |   |             |  
|Continuing operations (note 3)                                             |   |             |   |   |             |  
|Commitment and Contingencies (note 17)                                     |   |             |   |   |             |  

Approved on behalf of the Board:

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

See accompanying notes to consolidated financial statements.

F-1

---

FORUM NATIONAL INVESTMENTS LTD.Consolidated Statement of Operations and Deficit 
  (Expressed in Canadian dollars) 
  Year ended December 31

|                                                     |   | 2004        |   |   | 2003        |   |   | 2002        |  
|---------------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
|                                                     |   |             |   |   |             |   |   | Restated    |  
|Revenues                                             |   |             |   |   |             |   |   |             |  
|Membership sales and travel                          | $ | 5,632,938   |   | $ | 6,490,652   |   | $ | 8,572,527   |  
|Membership
      dues                                |   | 1,856,883   |   |   | 2,211,120   |   |   | 2,360,214   |  
|Interest                                             |   | 129,765     |   |   | 184,318     |   |   | 556,518     |  
|Miscellaneous                                        |   | 1,566,858   |   |   | 872,290     |   |   | 347,894     |  
|                                                     |   | 9,186,444   |   |   | 9,758,380   |   |   | 11,837,153  |  
|                                                     |   |             |   |   |             |   |   |             |  
|Expenses                                             |   |             |   |   |             |   |   |             |  
|                                                     |   |             |   |   |             |   |   |             |  
|Wages                                                |   | 1,374,234   |   |   | 1,496,023   |   |   | 2,359,301   |  
|Bad debts                                            |   | 427,944     |   |   | 613,505     |   |   | 1,512,568   |  
|Legal and accounting                                 |   | 242,312     |   |   | 497,840     |   |   | 452,454     |  
|Direct selling                                       |   | 232,439     |   |   | 55,454      |   |   | 215,615     |  
|Office and related                                   |   | 206,991     |   |   | 306,533     |   |   | 711,193     |  
|Bank charges
      and interest                      |   | 177,253     |   |   | 265,465     |   |   | 309,362     |  
|Travel                                               |   | 151,985     |   |   | 131,562     |   |   | 107,676     |  
|Rent                                                 |   | 148,406     |   |   | 132,074     |   |   | 201,153     |  
|Condominium rentals                                  |   | 137,076     |   |   | 480,236     |   |   | 493,110     |  
|Consulting
      fees                                |   | 124,008     |   |   | 135,897     |   |   | 345,574     |  
|Automotive                                           |   | 102,012     |   |   | 121,205     |   |   | 120,008     |  
|Other                                                |   | 75,613      |   |   | 61,078      |   |   | 78,699      |  
|Parts and maintenance                                |   | 54,927      |   |   | 169,150     |   |   | 154,079     |  
|Postage,
      copying and printing                  |   | 46,699      |   |   | 60,442      |   |   | 125,970     |  
|Equipment leases                                     |   | 36,726      |   |   | 81,504      |   |   | 109,922     |  
|Insurance                                            |   | 30,261      |   |   | 33,509      |   |   | 63,086      |  
|Advertising and promotion                            |   | 28,854      |   |   | 6,242       |   |   | 22,204      |  
|Investor
      relations                             |   | 2,480       |   |   | 21,720      |   |   | 27,044      |  
|Marketing                                            |   |            |   |   | 16,088      |   |   |            |  
|Amortization
      of property, plant, equipment     |   | 64,988      |   |   | 68,045      |   |   | 141,487     |  
|Amortization of deferred commission costs            |   | 1,564,724   |   |   | 1,589,766   |   |   | 1,597,220   |  
|                                                     |   | 5,229,932   |   |   | 6,343,338   |   |   | 9,147,725   |  
|                                                     |   |             |   |   |             |   |   |             |  
|Income Before the Following                          |   | 3,956,512   |   |   | 3,415,042   |   |   | 2,689,428   |  
|                                                     |   |             |   |   |             |   |   |             |  
|Gain on disposal of International Fitness            |   |             |   |   |             |   |   |             |  
|Vacations Inc.(note 6)                               |   |            |   |   |            |   |   | 445,157     |  
|Gain on Sale of Offices(note 7)                      |   |            |   |   |            |   |   | 279,418     |  
|Write-Down of Goodwill and Membership Contract Costs |   |            |   |   |            |   |   | (311,890    | )
|Write-Down of Investment and Other Receivables       |   |            |   |   | (106,557    | ) |   |            |  
|Write-Down of property, plant and equipment(note 8)  |   | (291,931    | ) |   |            |   |   |            |  
|                                                     |   |             |   |   |             |   |   |             |  
|Income Before Income Taxes                           |   | 3,664,581   |   |   | 3,308,485   |   |   | 1,308,876   |  
|Income Taxes(note 14)                                |   | 1,797       |   |   | 45,438      |   |   | 35,247      |  
|                                                     |   |             |   |   |             |   |   |             |  
|Net Income for Year                                  |   | 3,662,784   |   |   | 3,263,047   |   |   | 1,273,629   |  
|Deficit, Beginning of Year                           |   | (17,979,578 | ) |   | (21,242,625 | ) |   | (22,516,254 | )
|Deficit, End of Year                                 | $ | (14,316,794 | ) | $ | (17,979,578 | ) | $ | (21,242,625 | )
|                                                     |   |             |   |   |             |   |   |             |  
|Basic earnings (loss) per share (note 17)            | $ | 0.75        |   | $ | 2.36        |   | $ | 0.92        |  
|Diluted earnings (loss) per share (note 17)          | $ | 0.72        |   | $ | 2.36        |   | $ | 0.92        |  

See accompanying notes to consolidated financial statements.

F-2

---

FORUM NATIONAL INVESTMENTS LTD.Consolidated Statement of Cash Flows 
  (Expressed in Canadian dollars) 
  Years ended December 31

|                                                           |   | 2004       |   |   | 2003       |   |   | 2002       |  
|---------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
|                                                           |   |            |   |   |            |   |   | Restated   |  
|Operating Activities                                       |   |            |   |   |            |   |   |            |  
|Net income                                                 | $ | 3,662,784  |   | $ | 3,263,047  |   | $ | 1,273,629  |  
|Items not
      involving cash:                            |   |            |   |   |            |   |   |            |  
|Deferred revenue                                           |   | (3,518,248 | ) |   | (5,530,073 | ) |   | (8,239,026 | )
|Miscellaneous revenue                                      |   | (1,566,858 | ) |   | (813,583   | ) |   | (347,894   | )
|Deferred commission costs                                  |   | 1,515,329  |   |   | 1,517,766  |   |   | 1,100,356  |  
|Amortization of property, plant, equipment,                |   |            |   |   |            |   |   |            |  
|membership
      contracts and intangibles                 |   | 64,988     |   |   | 68,045     |   |   | 141,487    |  
|Gain on sale of International Fitness Vacations
      Inc. |   |           |   |   |           |   |   | (445,157   | )
|Gain on disposal of offices                                |   |           |   |   |           |   |   | (279,418   | )
|Write-down of goodwill and membership costs                |   |           |   |   |           |   |   | 311,890    |  
|Write-down of property, plant and equipment                |   | 291,931    |   |   |           |   |   | 1,793,237  |  
|Write-down of investment                                   |   |           |   |   | 56,500     |   |   |           |  
|Accretion of discount on advances against                  |   |            |   |   |            |   |   |            |  
|future
      revenue streams                               |   | 116,190    |   |   | 137,162    |   |   | 119,652    |  
|Revenue recognized on advances against                     |   |            |   |   |            |   |   |            |  
|future
      revenue streams                               |   | (475,359   | ) |   | (577,015   | ) |   | (534,351   | )
|Operating Cash Flow                                        |   | 90,757     |   |   | (1,878,151 | ) |   | (5,195,595 | )
|                                                           |   |            |   |   |            |   |   |            |  
|Changes in non-cash operating
      working capital:       |   |            |   |   |            |   |   |            |  
|Accounts receivable and other receivables                  |   | 501,279    |   |   | (11,534    | ) |   | (192,691   | )
|Prepaid expenses                                           |   | (13,454    | ) |   | (5,172     | ) |   | 69,338     |  
|Inventory  condos                                        |   | 6,018      |   |   | (21,645    | ) |   |           |  
|Decrease (increase) of long term receivables               |   | 570,765    |   |   | (402,326   | ) |   | 2,743,578  |  
|Deferred costs                                             |   | (686,854   | ) |   | (2         | ) |   |           |  
|Accounts payable and accrued liabilities                   |   | (83,073    | ) |   | (625,579   | ) |   | 260,338    |  
|Deferred revenue                                           |   | (26,947    | ) |   | 2,620,794  |   |   | 1,507,975  |  
|Deferred
      gain                                        |   | (438,412   | ) |   | 148,625    |   |   | 520,591    |  
|                                                           |   | (170,678   | ) |   | 1,703,161  |   |   | 1,703,161  |  
|                                                           |   |            |   |   |            |   |   |            |  
|Cash Used in Operating Activities                          |   | (79,921    | ) |   | (174,990   | ) |   | (286,466   | )
|                                                           |   |            |   |   |            |   |   |            |  
|Investing Activities                                       |   |            |   |   |            |   |   |            |  
|Proceeds on sale of property,
      plant and equipment    |   | 160,500    |   |   |           |   |   | 170,000    |  
|Purchase
      of property, plant and equipment            |   | (716,693   | ) |   | (8,843     | ) |   | (20,815    | )
|Redemption(acquisition) of short term
      investments    |   | 9,500      |   |   | (3,000     | ) |   | (66,500    | )
|Cash Used in Investing Activities                          |   | (546,693   | ) |   | (11,843    | ) |   | 82,683     |  
|                                                           |   |            |   |   |            |   |   |            |  
|Financing Activities                                       |   |            |   |   |            |   |   |            |  
|Repayment of convertible
      debentures                  |   | (7,618     | ) |   | (5,782     | ) |   | (20,571    | )
|Proceeds
      from advances against future revenue        |   |            |   |   |            |   |   |            |  
|streams
      (note 12)                                    |   | 301,547    |   |   | 126,751    |   |   | 163,381    |  
|Amounts
      due to related parties                       |   | 152,773    |   |   | 7,018      |   |   | (43,362    | )
|Loans from related parties                                 |   | 254,995    |   |   |           |   |   |           |  
|Proceeds from convertible debentures                       |   | 100        |   |   | 124,510    |   |   |           |  
|Cash Provided by Financing Activities                      |   | 701,797    |   |   | 252,496    |   |   | 99,448     |  
|                                                           |   |            |   |   |            |   |   |            |  
|Increase (decrease) in Cash                                |   | 75,183     |   |   | 65,663     |   |   | (104,333   | )
|Cash, Beginning of Year                                    |   | 137,882    |   |   | 72,219     |   |   | 176,553    |  
|                                                           |   |            |   |   |            |   |   |            |  
|Cash, End of Year                                          | $ | 213,065    |   | $ | 137,882    |   | $ | 72,220     |  

Supplemental cash flow information (note 19)

See accompanying notes to consolidated financial statements.

F-3

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|1. | Incorporation and Nature of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company was incorporated on September 22, 1995,
        under the Business Corporation Act of British Columbia and commenced operations
        on that date. On October 2, 1997, the Company was continued under the
        laws of the Province of Ontario. Effective February 26, 1999, the Company
        changed its name from Snowbird Vacations International Inc. to inTRAVELnet.com
        inc. and on April 17, 2002, the Companys name was changed to Forum
        National Investments Ltd. The Company earns dues from members of its travel
        club, who are entitled to the full-travel services of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2. | Change in Accounting Policy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company previously excluded from the balance sheet
        the amounts receivable from the sale of memberships that were not due
        until future years (note 4(e) and 6). In 2003 the Company changed its
        accounting policy to include these long-term receivables net of estimated
        uncollectible, deferred interest and potential GST accruals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3. | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | For the year ended December 31, 2004 the Company had
        net income of $3,662,784 compared to net income of $3,263,047 and $1,273,629
        for the years ended December 31, 2003 and 2002 respectively. In 2004,
        the Company consumed net cash in operating activities of $79,921 and used
        $174,990 and $286,466 in 2003 and2002 respectively and at December 31,
        2004 had a working capital deficiency of $3,649,916 (2003 - $5,738,618;
        2002 - $5,866,547) and shareholders equity of $836,003 ( deficit
        2003 - $2,951,391) and (deficit 2002 - $6,214,438). These financial statements
        have been prepared on a going-concern-basis, which contemplates the realization
        of assets and satisfaction of liabilities in the normal course of business.
        Accordingly, these financial statements do not include any adjustments
        to the specific amounts and classifications of assets and liabilities,
        which might be necessary should the Company be unable to continue as a
        going concern.

F-4

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|4. | Significant Accounting policies
|-- | -------------------------------
|   |                                
|   | (a)                            
|   |                                
|   |                                

Incorporating
      Date of acquisitionSubsidiary
      jurisdiction
      or incorporationinTRAVELnet Inc.
      Alberta, Canada
      November 9, 1999Intravelnet Ltd
      Ontario, Canada
      July 25, 2003ATM Travel Group Ltd. (ATM)
      British Columbia, Canada
      April 3, 2000


| |     | All significant inter-company balances and transactions
        have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | As described in note 22, Canadian GAAP differ in certain
        material aspects from accounting principles generally accepted in the
        United States (US GAAP)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (b) | Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | The company generates revenues from the sale of memberships,
        dues and charter sales. The portion of revenue received by 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 overt the
        term of the members entitlements. For lifetime memberships, revenue
        is is recognized over a period of five years, which is managements
        best estimate of the period over which performance will be required.                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (c) | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | The Company follows the recommendations of the CICA
        for stock-based compensation and other stock-based payments. Under the
        amended recommendations, 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 earnings over the
        vesting period with a corresponding increase in contributed surplus. Upon
        exercise of the stock options, consideration received together with the
        amount previously recognized in contributed surplus is recorded as an
        increase to capital stock.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | No stock options were granted to either employees or
        non-employees during the year ended December 31, 2004 or 2003 or 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

F-5

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|4. | Significant Accounting Policies (continued)
|-- | -------------------------------------------
|   |                                            
|   | (d)                                        
|   |                                            
|   |                                            
|   |                                            
|   |                                            

| | Asset                  | Basis         | Rate   
| | ---------------------- | ------------- | -------
| |                        |               |        
| | Motor vessels          | Straight-line | 4%     
| | Houseboats             | Straight-line | 4%     
| | Service boats          | Straight-line | 10%    
| | Equipment              | Straight-line | 20%    
| | Computers              | Straight-line | 30%    
| | Leasehold improvements | Term of lease | 5 years
| |                        |               |        

| | (e) | Deferred costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Sales commissions are deferred and amortized to operations
        on the same basis as the related membership sales are recognized as revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (f) | Purchased intangibles:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | The Company defers and amortizes the cost of purchased
        intangibles, which consists of a license that allows ATM to purchase airline
        tickets for the Companys travel service business. Amortization is
        provided on a straight-line basis over a period of ten years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | In August 2001, the Canadian Institute of Chartered
        Accountants (CICA) issued recommendations whereby tangible
        assets acquired in a business combination should be identified and recognized
        apart from goodwill when they arise from either contractual enterprise
        and sold, transferred, licensed, rented or exchanged, either individually
        or with a group of related assets or liabilities. Goodwill and intangible
        assets having indefinite lives are not amortized, but are tested for impairment
        at least annually. Intangible assets with definite lives are amortized
        over their estimated useful lives. When the carrying amount of goodwill
        exceeds the implied fair value of the goodwill, an impairment loss is
        recognized in the statement of operations. Goodwill is tested for impairment
        on a reporting unit basis. The Company has identified one reporting unit.

F-6

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|4. | Significant Accounting Policies (continued)
|-- | -------------------------------------------

| |     | Purchased intangibles (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | The Companys other intangible assets are all determined
        to have finite useful life and are amortized according to the policies
        in effect before January 1, 2002. This policy includes a periodic review
        of the recoverability of intangibles.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (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 income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (h) | Advances against future revenue streams                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | 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
        (note 12), which is credited to the gross value through a charge to interest
        expense over the term of the membership contracts. The related revenue
        is recorded as a reduction of the liability to reflect the membership
        services rendered by the Company with the resulting reduction in the Companys
        potential obligation, in accordance with its revenue recognition policy
        (note 4(b)).
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (i) | Earnings (loss) per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | Earnings (loss) per share is calculated based on the
        weighted average number of common shares outstanding during the period.
        Diluted earnings (loss) per share is calculated using the treasury stock
        method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (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 bases and operating loss carry forwards. Future income tax assets
        and liabilities are measured using substantially enacted or 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 substantial 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 provided for
        the excess.                                                                                                                                                                  

F-7

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|4. | Significant Accounting Policies (continued)
|-- | -------------------------------------------
|   |                                            
|   | (k)                                        
|   |                                            
|   |                                            
|   |                                            
|5. | Financial Instruments                      

(a)      Fair
  value

Carrying amounts of certain of the Companys
  financial instruments, including cash and cash equivalents, short-term investments,
  accounts and notes receivable, accounts payable and accrued liabilities and
  income taxes payable approximate fair values due to their short maturities.
  The fair value of the convertible debentures is not readily determinable as
  these instruments were issued to related parties and comparable market rates
  are not available. The fair value of long-term receivables has been determined
  to approximate their carrying value at December 31, 2004 and 2003 and 2002.

(b)      Credit
  risk

The distribution of the Companys
  customers and suppliers and the business risk management procedures in place
  has the effect avoiding any significant concentration of credit risk.

(c)      Interest
  rate risk

Interest rate risk consists of two components:

(i) To
  the extend that payments made or received on the Companys monetary assets
  and liabilities are affected by changes in the prevailing market interest rates,
  the Company is exposed to interest rate risk

(ii) To
  the extend that changes in prevailing market interest rates differ from the
  interest rates in the Companys monetary assets and liabilities, the company
  is exposed to interest rate fluctuations.

(d)      Currency
  risk

The Company purchases the majority of
  goods and services in Canadian Dollars and accordingly, has minimal exposure
  to foreign exchange risk.

|6. | Long-Term Receivables                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                            
|   | Long-term receivables represent the non-current portion
        of amounts due to the Company in conjunction with membership and travel
        club sales. These receivables are evidenced by promissory notes bearing
        interest at an average rate of 8% per annum and are repayable over periods
        not exceeding 60 months.

F-8

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|7. | Judgment Obtained in Ontario Litigation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On October 14, 2003 the Company obtained judgment in
        the Superior Court of Justice. The judgment was by way of settlement agreement.
        The Company had filed suit against former employees and agents and shareholders
        of the company: REMO LORENZETTO, WALTER VERBETIC, 1508812 ONTARIO INC,
        FAMILY VACATION CENTERS LTD, SNOWBIRD SALES AND MARKETING INC, and 849092
        ALBERTA LTD, et al. The suit had alleged breach of contract, breach of
        fiduciary duty, and further, that the defendants had engaged in a pattern
        of misconduct aimed at destroying the Companys relationship with
        its Snowbird Travel Club members and fundamentally undermining the viability
        of the Companys business operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | As a result, $669,216 pursuant to the promissory notes
        (the "Promissory Notes") executed after March 1, 2002 by members of the
        Companys travel club which, on their face, are stated to be held
        by any of the Company, Intravelnet.com, Snowbird Vacations International,
        Snowbird Vacations or either Snowbird Marketing or 1508812 Ontario Inc.
        as agent for any of the foregoing, are to be paid to and received by the
        Company.                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The FVC Defendants and all other Applicants to the case
        will deliver up to the Company for cancellation all share certificates
        of the Company in which he, she or it has a beneficial or legal interest.
        A total of 300,110 common shares of the Company will be placed in escrow
        and cancelled when all issues are settled.                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|8. | Property, Plant and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                        |   |           |  |   | Accumulated  |  |   | Net book  | 
| | ---------------------- | - | --------- |  | - | ------------ |  | - | --------- | 
| | 2004                   |   | Cost      |  |   | amortization |  |   | value     | 
| |                        |   |           |  |   |              |  |   |           | 
| | Motor vessel           | $ | 3,566,694 |  | $ |             |  | $ | 3,566,694 | 
| | Houseboats             |   | 350,000   |  |   |             |  |   | 350,000   | 
| | Service boats          |   | 49,979    |  |   | 43,709       |  |   | 6,270     | 
| | Equipment              |   | 185,246   |  |   | 181,815      |  |   | 4,004     | 
| | Computers              |   | 124,445   |  |   | 122,596      |  |   | 1,849     | 
| | Leasehold improvements |   | 27,601    |  |   | 27,600       |  |   | 1         | 
| |                        |   |           |  |   |              |  |   |           | 
| |                        | $ | 4,304,538 |  | $ | 375,720      |  | $ | 3,928,818 | 

F-9

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|8. | Property, Plant and Equipment (continued)
|-- | -----------------------------------------

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

|   | At December 31, 2004, the Companys motor vessel
        is under construction and is therefore not being amortized.
|-- | --------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                     
|9. | Intangibles                                                                                                         

| |                          |   | 2004      |  |   | 2003      | 
| | ------------------------ | - | --------- |  | - | --------- | 
| |                          |   |           |  |   |           | 
| | Purchased intangibles    | $ | 25,000    |  | $ | 25,000    | 
| | Accumulated amortization |   | 12,500    |  |   | 10,000    | 
| |                          | $ | 12,500    |  | $ | 15,000    | 
| |                          |   |           |  |   |           | 
| | Deferred Costs           | $ | 3,426,463 |  | $ | 4,257,374 | 
| | Accumlated amortization  |   | 1,515,329 |  |   | 1,517,766 | 
| |                          | $ | 1,911,134 |  | $ | 2,739,608 | 

|10. | Deferred Revenue
|--- | ----------------

| |                           |   | 2004      |  |   | 2003      | 
| | ------------------------- | - | --------- |  | - | --------- | 
| |                           |   |           |  |   |           | 
| | Deferred membership sales | $ | 4,643,163 |  | $ | 9,755,201 | 
| | Less: Current portion     |   | 3,139,519 |  |   | 5,072,583 | 
| |                           | $ | 1,503,644 |  | $ | 4,682,629 | 

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

During the year 2004, the Company entered
  into travel club membership agreements with a total value of $763,665 (2003
  - $135,810; 2002 - $2,488,346). The following table reconciles the total value
  of these travel club memberships entered into during the year to the amounts
  due to be received in future years from these agreements. As described in note
  4(b), the revenue from these memberships are recognized evenly over the term
  of the membership.

F-10

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|10. | Deferred Revenue (continued)
|--- | ----------------------------

| |                                                |   | 2004     |   |   | 2003    |   |   | 2002       |  
| | ---------------------------------------------- | - | -------- | - | - | ------- | - | - | ---------- | -
| |                                                |   |          |   |   |         |   |   |            |  
| | Travel club memberships entered                |   |          |   |   |         |   |   |            |  
| | into during the year                           | $ | 763,665  |   | $ | 135,810 |   | $ | 2,488,346  |  
| | Amount recognized as revenue                   |   |          |   |   |         |   |   |            |  
| | during the year                                |   | (87,240  | ) |   | (27,162 | ) |   | (471,206   | )
| |                                                |   |          |   |   |         |   |   |            |  
| | Future years revenue to be earned from        |   |          |   |   |         |   |   |            |  
| | current year membership agreements             |   | 676,425  |   |   | 108,648 |   |   | 2,017,140  |  
| | Cash collected during the year related to      |   |          |   |   |         |   |   |            |  
| | future years revenues                         |   | (332,163 | ) |   | (79,487 | ) |   | (1,563,222 | )
| |                                                |   |          |   |   |         |   |   |            |  
| | Amounts due to be received in subsequent years |   |          |   |   |         |   |   |            |  
| | from current year membership agreements        | $ | 344,262  |   | $ | 29,161  |   | $ | 453,918    |  

|11. | Amounts Due from/to Related Parties                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                               
|    | The amounts from directors and officers are unsecured,
        non-interest bearing and repayable on demand and relate primarily to advances
        made by the Company, net of expenditures.
|    |                                                                                                                                                                                               
|12. | Advances Against Future Revenue Streams                                                                                                                                                       
|    |                                                                                                                                                                                               
|    | During the years ended December 31, 2004 and 2003, the
        Company sold future streams of revenue as described in note 4(h). The
        activity is summarized as follows:               

| |                                                           |   | 2004     |   |   | 2003     |  
| | --------------------------------------------------------- | - | -------- | - | - | -------- | -
| |                                                           |   |          |   |   |          |  
| |                                                           |   |          |   |   |          |  
| | Balance, January 1                                        | $ | 270,871  |   | $ | 583,973  |  
| | Proceeds from sale of future revenue streams, net of      |   |          |   |   |          |  
| | discount, reserve and buybacks                            |   | 301,547  |   |   | 126,751  |  
| | Accretion of discount to interest expense during the year |   | 116,190  |   |   | 137,162  |  
| | Recognition of membership revenues during the year        |   | (475,359 | ) |   | (577,015 | )
| |                                                           |   |          |   |   |          |  
| | Balance, December 31                                      |   | 213,249  |   |   | 270,871  |  
| | Current portion                                           |   | 138,555  |   |   | 243,322  |  
| |                                                           |   |          |   |   |          |  
| | Long-term portion                                         | $ | 74,694   |   | $ | 27,549   |  

F-11

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|13. | Convertible Debentures                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | During 2004, $ 7,619 (2003 - $5,782) of 8% convertible
        debentures was repaid. The conversion privilege to convert to common shares
        of the Company in the amount of $124,510 (2003 - $0) of convertible debentures
        issued to officers, directors and shareholders of the Company were exercised
        and 4,060,000 common shares were issued after approval by shareholders
        at the Annual General Meeting (held June 2, 2004).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|14. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The effective income tax rate differs from the Canadian
        statutory income tax rate. The principal factor causing the different
        rates is shown below:                                                                                                                                                                                                                                                                                             

| |                                                          |   | 2004       |   |   | 2003     |   |   | 2002       |  
| | -------------------------------------------------------- | - | ---------- | - | - | -------- | - | - | ---------- | -
| |                                                          |   |            |   |   |          |   |   |            |  
| | Statutory income tax rate                                |   | 33.6%      |   |   | 33.6%    |   |   | 39.1%      |  
| |                                                          |   |            |   |   |          |   |   |            |  
| | Statutory rate applied to income (loss) from             |   |            |   |   |          |   |   |            |  
| | operations before income taxes                           | $ | 1,228,864  |   | $ | 845,605  |   | $ | 511,770    |  
| | Permanent differences                                    |   | 47,550     |   |   | 64,257   |   |   | 421,628    |  
| | Large corporations tax and other                         |   | 1,797      |   |   | 45,438   |   |   | 35,247     |  
| | Non-capital losses not previously recognized             |   |           |   |   |         |   |   |           |  
| | Tax effect of depreciation and amortization in excess of |   |            |   |   |          |   |   |            |  
| | capital cost allowance                                   |   | (1,276,410 | ) |   | (909,862 | ) |   | (1,361,517 | )
| |                                                          |   |            |   |   |          |   |   |            |  
| |                                                          | $ | 1,797      |   | $ | 45,438   |   | $ | 35,247     |  

The tax effects of the significant temporary
  differences, which comprise the deferred tax assets and liabilities at December
  31, 2005 and 2004, are as follows:

| |                                                               |   | 2004       |   |   | 2003       |  
| | ------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                                               |   |            |   |   |            |  
| | Future income tax assets:                                     |   |            |   |   |            |  
| | Non-capital loss carry forwards                               | $ | 1,509,270  |   | $ | 1,188,040  |  
| | Capital loss
      carry forwards                             |   | 28,850     |   |   | 28,595     |  
| | Property, plant and equipment
       un-depreciated tax cost |   |            |   |   |            |  
| | in excess of net book value                                   |   | 2,367,400  |   |   | 1,423,931  |  
| | Intangibles                                                   |   | 1,281,200  |   |   | 1,269,743  |  
| |                                                               |   |            |   |   |            |  
| | Total gross future income tax assets                          |   | 5,186,720  |   |   | 3,910,309  |  
| |                                                               |   |            |   |   |            |  
| | Valuation allowance                                           |   | (5,186,720 | ) |   | (3,910,309 | )
| |                                                               |   |            |   |   |            |  
| |                                                               | $ |           |   | $ |           |  

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

F-12

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|14. | Income Taxes (continued)some portion or all of the future tax assets will be realized. Where
        management does not believe that realization is more likely than not,
        a valuation allowance is provided.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                      
|    | The Company has non-capital income tax loss
        carry forwards of approximately $1,509,000 available to reduce future
        years taxable income expiring between 2007 and 2014                                
|    |                                                                                                                                                                                                                      
|    | The Company has a capital loss carry forward
        of $277,800 which can be carried forward indefinitely.                                                                                                          
|    |                                                                                                                                                                                                                      
|15. | Capital Stock                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                      
|    | (a)                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | (b)                                                                                                                                                                                                                  

| |                                                             |  | Number    |   |   |            | 
| | ----------------------------------------------------------- |  | --------- | - | - | ---------- | 
| |                                                             |  | of shares |   |   | Amount     | 
| | Issued and outstanding, December 31, 2002                   |  | 1,384,771 |   | $ | 15,028,187 | 
| |                                                             |  |           |   |   |            | 
| | Issued during the year ended December 31, 2003              |  | -         |   |   | -          | 
| | Issued and outstanding, December 31, 2003                   |  | 1,384,771 |   |   | 15,028,187 | 
| |                                                             |  |           |   |   |            | 
| | Less: Shares in escrow (note 7)                             |  | (300,110  | ) |   |           | 
| | Issued during the year upon conversion of denture (note 13) |  | 4,060,000 |   |   | 124,610    | 
| |                                                             |  |           |   |   |            | 
| | Issued and outstanding, December 31, 2004                   |  | 5,144,661 |   | $ | 15,152,797 | 

| |     | Shares issued for non-cash consideration have been recorded
        at the market value of the shares at the date of agreement.
| | --- | -------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                
| | (c) | Options:                                                                                                                       
| |     |                                                                                                                                
| |     | The Company has no outstanding employee and director
        stock options to purchase common shares of the Company.           

|16. | Earnings (Loss) per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Basic earnings (loss) per share is calculated based
        upon the weighted average number of voting common shares outstanding during
        the year, which was 4,899,949 in 2004 (2003 - 1,384,771; 2002 –
        1,381,964). Diluted earnings (loss) per share reflects the dilutive effect
        of the convertible debentures outstanding at the end of the year or those
        items exercised or converted during the year, as if they had been exercised
        at the beginning of the year or the date issued, if later. Where the impact
        of conversion or exercise is anti-dilutive, the conversions are not included
        in the calculation of diluted per share amounts.

F-13

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|17. | Commitments and Contingencies
|--- | -----------------------------

| | (a) | The Company has commitments in respect of operating
        leases with total aggregate payments due of approximately $145,159 (2003
        $136,792). Payments due in each of the next five years are as follows:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2005 | $ | 94,473 | 
| | ---- | - | ------ | 
| | 2006 |   | 43,730 | 
| | 2007 |   | 6,956  | 
| | 2008 |   |       | 
| | 2009 |   |       | 

| | (b) | The Company has commitments in respect of office leases
        with total aggregate payments due of approximately $385,441 (2003 - $409,704).
        Payments due in each of the next five years are as follows:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2005 | $ | 174,460 | 
| | ---- | - | ------- | 
| | 2006 |   | 109,863 | 
| | 2007 |   | 47,795  | 
| | 2008 |   | 30,470  | 
| | 2009 |   | 22,853  | 

|18. | Related party Transactions                                                                                                                            
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                       
|    | In addition to related party transactions
        disclosed elsewhere in these financial statements, the following transactions
        have occurred:
|    |                                                                                                                                                       
|    | (a)                                                                                                                                                   
|    |                                                                                                                                                       
|    | (b)                                                                                                                                                   
|    |                                                                                                                                                       
|    | (c)                                                                                                                                                   

F-14

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|19. | Supplementary Information
|--- | -------------------------
|    |                          
|    | Cash flow information:   

| |                                                       |   | 2004    |  |   | 2003   |  |   | 2002    | 
| | ----------------------------------------------------- | - | ------- |  | - | ------ |  | - | ------- | 
| |                                                       |   |         |  |   |        |  |   |         | 
| |                                                       |   |         |  |   |        |  |   |         | 
| | Interest paid                                         | $ | 36,987  |  | $ | 23,347 |  | $ | 4,704   | 
| |                                                       |   |         |  |   |        |  |   |         | 
| | Non-cash financing and investing activities:          |   |         |  |   |        |  |   |         | 
| | Common shares in the company issued for:              |   |         |  |   |        |  |   |         | 
| | Exercise
      of convertible debentures              |   | 124,510 |  |   |       |  |   |        | 
| | Common shares in the company received for:            |   |         |  |   |        |  |   |         | 
| | Disposal of International Fitness
      Vacations Inc |   |        |  |   |       |  |   | 191,648 | 
| | Sale of property, plant and equipment                 |   |        |  |   |       |  |   | 204,604 | 
| |                                                       |   |         |  |   |        |  |   |         | 

|20. | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | In addition to subsequent events disclosed
        elsewhere in these financial statements the following occurred subsequent
        to year-end:                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|21. | United States generally accepted accounting
        principles (U.S. GAAP) reconciliation:                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | These financial statements have been prepared
        in accordance with accounting principles generally accepted in Canada
        (Canadian GAAP) which differ in certain respects from those
        principles and practices that the Company would have followed had its
        consolidated financial statements been prepared in accordance with generally
        accepted accounting principles in the United Sates (U.S. GAAP)
        as summarized below:

F-15

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|21. | United States generally accepted accounting principles
        (U.S. GAAP) reconciliation (continued):
|--- | --------------------------------------------------------------------------------------------------------

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

F-16

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|21. | United States generally accepted accounting principles
        (U.S. GAAP) reconciliation (continued):
|--- | --------------------------------------------------------------------------------------------------------

| |                          |  | 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
  share capital of $ Nil (2004 - $ nil; 2003 - $ nil) and would be a cumulative
  amount of $684,664 from the year of adoption of FAS No. 123 to December 31,
  2004.

| | (b) | Valuation of stock issued for assets and services:
| | --- | --------------------------------------------------
| |     |                                                   
| |     | (i)                                               
| |     |                                                   
| |     |                                                   
| |     |                                                   
| |     | (ii)                                              
| |     |                                                   
| |     | (iii)                                             
| |     |                                                   
| | (c) | Recent accounting pronouncements:                 

F-17

---

|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

21.
      **United States generally** **accepted**
        accounting principles (U.S. GAAP)
        **reconciliation (continued):**


| | (i)     | In April 2002, the FASB issued SFAS No. 145, Rescission
        of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13
        and Technical Corrections. As a result of the rescission of Statement
        of Financial Accounting Standards No. 4 and 64, gains and losses from
        extinguishments of debt are to be accounted for under the provisions of
        Accounting Principles Board Opinion No. 30, Reporting the Results of Operations
        -- Reporting the Effect of Disposal of a Segment of a Business, and Extraordinary,
        Unusual and Infrequently Occurring Events and Transactions. SFAS No. 145
        also rescinds SFAS No. 44, Accounting for Intangible Assets of Motor Carriers.
        SFAS No. 145 amends SFAS No. 13, Accounting for Leases, to eliminate an
        inconsistency between the required accounting for sale-leaseback transactions
        and the required accounting for certain lease modifications that have
        economic effects that are similar to sale-leaseback transactions. SFAS
        No. 145 also amends other existing authoritative pronouncements to make
        various technical corrections, clarify meanings or describe their applicability
        under changed conditions. SFAS No. 145 is effective for fiscal years beginning
        after May 15, 2002.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |         | In April 2002, the FASB issued SFAS No. 145, Rescission
        of FASB Statements No. 4, 44 and 64, The Company has early adopted SFAS
        No. 145 which did not have a material impact on its financial condition
        or results of operations with the exception that gains and losses from
        extinguishments of debt are no longer disclosed as an extraordinary item.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (ii)    | In June 2002, the FASB issued SFAS No. 146, Accounting
        for Costs Associated with Exit or Disposal Activities. SFAS No. 146
        addresses financial accounting and reporting for costs associated with
        exit or disposal activities and nullifies Emerging Issues Task Force Issue
        No. 94-3, Liability Recognition for Certain Employee Termination Benefits
        and Other Costs to Exit an Activity (including Certain Costs Incurred
        in a Restructuring).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |         | SFAS No. 146 requires that a liability for a cost associated
        with an exit or disposal activity be recognized when the liability is
        incurred. SFAS No. 146 also establishes that fair value is the objective
        for initial measurement of the liability. SFAS No. 146 was effective for
        exit or disposal activities that are initiated after December 31, 2002.
        The adoption of, FAS No. 146 had no material impact on financial condition
        or results of operations of the company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | *(iii)* | In January 2003 the FASB issued Interpretation No.
        46 (‘FIN46”), “Consolidation of Variable Interest Entitles”,
        an Interpratation of Accounting Reasearch Bulletin No. 51 “Consolidated
        Financial Statements”. FIN 46 estblishes accounting guidance for
        consolidation of varibale interest entites that function to support the
        activites of the primary beneficiary. In December 2003 the FASB revised
        FIN 46 and issued FIN 46 (revised December 2003) (“FIN 46R”).
        In addition to conforming to previously issued FASB staff positions. FIN
        No 46R deferred the implementation date for certain variable interest
        entities. This revised interpretation is effective for all entities no
        later than the end of the first reporting period that ends after March
        15, 2004. (The Company does not have any investments in or contractual
        relationship or other business relationship with a variable interest entity
        an therefore the adoption of this interpretation will not have any impact
        on the companies consolidated results of operations, consolidated financial
        position of consolidated cash flows).                                                                                                                                  
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | *(iv)*  | In December 2004, the FASB issued a revised Statement
        123 (“SFAS 123R”), “Accounting for Stock-Based Compensation”
        requiring public entities to measure the cost of employee servicesd received
        in exchange for an award of equity instruments based on grant date fair
        value. The cost will be recognized over the period during which an employee
        is required to provide the service in exchange for the award-usually the
        vesting period. The effective date for this statement is as of the first
        interim period that begins after June 15, 2005 (after December 15, 2005
        for small business filers). (We do not anticipate that the adoption of
        this standard will have a material impact on our financial statements.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | *(v)*   | In December 2004, the FASB issued SFAS No. 152 “Accounting
        for real Estate Time sharing transactions- an amendment of FASV statements
        No. 66 and 67” (“SFAS 152”). SAS 152 amends SFAS 66
        and 67 to reference the financial accounting and reporting guidance for
        real estate timesharing transactions that is provided in AICPA statement
        of position (SOP) 04-2,, Accounting for Real Estate Time-Sharing Transactions.
        SAS 152 is effective for financial statement for fiscal years beginning
        after June 15, 2005. (We do not anticipate that the adoption of this standard
        will have a material impact on our financial statements.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | *(vi)*  | In May 2005, the FASB issued FASB Statement No. 154,
        “Accounting Changes and Error Corrections (“SFAS 154”).
        SFAS 154 replaces Accounting Principles Board Opinion No. 20 “Accounting
        Changes” and FASB Statement No. 3 “Reporting Accounting Changes
        in interim Financial Statements,” and requires the direct effects
        of accounting principle changes to be retrospectively applied. The existing
        guidance with respect to accounting estimate changes and corrections of
        errors is carried forward in SFAS 154. SFAS 154 is effective for accounting
        changes and corrections of errors made in fiscal years beginning after
        December 15, 2005. (The company does not expect the adoption of SFAS 154
        to have a material effect on its financial statements.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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

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

F-18

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|FORUM NATIONAL INVESTMENTS LTD.           
|------------------------------------------
|                                          
|Notes to Consolidated Financial Statements
|(Expressed in Canadian dollars)           
|Year ended December
      31, 2004        

|21. | United States generally accepted accounting principles
        (U.S. GAAP) reconciliation (continued):
|--- | --------------------------------------------------------------------------------------------------------

| |                                                                            |   | 2004       |  |   | 2003       | 
| | -------------------------------------------------------------------------- | - | ---------- |  | - | ---------- | 
| |                                                                            |   |            |  |   |            | 
| | Share capital, under Canadian GAAP                                         | $ | 15,152,797 |  | $ | 15,152,797 | 
| | Adjustment for stock based compensation for non-employees (a)              |   | 684,664    |  |   | 684,664    | 
| | Adjustment for acquisition of International
      Fitness Vacations (b(i)) |   | 1,217,705  |  |   | 1,217,705  | 
| | Adjustment for accounts payable settled by share issuances                 |   |            |  |   |            | 
| | (b(ii))                                                                    |   | 695,681    |  |   | 695,681    | 
| |                                                                            |   |            |  |   |            | 
| | Share capital, under U.S. GAAP                                             | $ | 17,750,847 |  | $ | 17,750,847 | 

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

| |                                                                            |   | 2004        |   |   | 2003        |  
| | -------------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                                            |   |             |   |   |             |  
| | Deficit, under Canadian GAAP                                               | $ | (14,316,794 | ) | $ | (17,979,578 | )
| | Adjustment for stock based compensation for non-employees (a)              |   | (684,664    | ) |   | (684,664    | )
| | Adjustment for acquisition of International
      Fitness Vacations (b(i)) |   | (1,217,705  | ) |   | (1,217,705  | )
| | Adjustment for accounts payable settled by share issuances                 |   |             |   |   |             |  
| | (b(ii)                                                                     |   | (695,681    | ) |   | (695,681    | )
| |                                                                            |   |             |   |   |             |  
| | Deficit, under U.S. GAAP                                                   | $ | (16,914,844 | ) | $ | (20,577,628 | )

| | (iii) | Net income (loss) and earnings (loss) per share for
        the year:
| | ----- | ---------------------------------------------------------------------

| |                                                  |   | Years ended December 31, | 
| | ------------------------------------------------ | - | ------------------------ | 
| |                                                  |   | 2004                     | 
| | Net Income for the year, under Canadian          |   |                          | 
| | GAAP                                             | $ | 3,662,784                | 
| |                                                  |   |                          | 
| | Net Income for the
      year, under U.S. GAAP   | $ | 3,662,784                | 
| | Basic Earnings (loss) per share, under U.S. GAAP | $ | 0.75                     | 

F-19

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