----

United StatesSECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 

Form 20-F

| **(Mark   One)** |   |
|------------------|--------|
|             |   |   | **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 1934**   **For   the fiscal year ended__December 31, 2006_____________________________**   **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 1934**   Date of   event requiring this shell company report . . . . . . . . . . . . . . . . . .   .       **For   the transition period from** ________________ to ______________________       Commission file number **000-29862**      **Forum National Investments Ltd.
(Exact name of registrant as specified in this charter)**Province of 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 **Not Applicable  
(1)

 
Securities   registered or to be registered pursuant to Section 12(g) of the Act: **Common Shares Without Par Value  
(Title of Class) Securities   registered or to be registered pursuant to Section 15(D) of the Act: **None  
(Title of Class)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 the annual report.**4,644,661  Indicate by   check mark if the registrant is a well-known seasoned issuer, as defined in   Rule 405 of the Securities Act. 
Yes  
No**XIf this report   is an annual or transitional report, indicate by check mark if the registrant   is not required to file reports pursuant to Section 13 or 15(d) of the   Securities Exchange Act of 1934. 
Yes  
No**X  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. See definition of "accelerated   filer and large accelerated filer" on Rule 12b-2 of the Exchange Act. (Check   One): 
Large accelerated filer  
Accelerated filer  
Non-accelerated filer**X Indicate by   check mark which financial statement item the registrant has elected to   follow.  
Item 17**X 
Item 18  If this is an   annual report, indicate by check mark whether the registrant is a shell   company (as defined in Rule 12b-2 of the Exchange Act). 
Yes  
No**X****
(2)
**FORUM NATIONAL INVESTMENTS LTD.**
TABLE OF CONTENTS

 

 

 GENERAL *5 NOTE   REGARDING FORWARD-LOOKING STATEMENTS *5
**PART I***7 ITEM   I.IDENTITY OF   DIRECTORS, SENIOR MANAGEMENT AND ADVISORS *7 ITEM II.OFFER STATISTICS AND EXPECTED TIMETABLE *7 ITEM   III.KEY   INFORMATION *7  
A)SELECTED FINANCIAL DATA *7  
B)CAPITALIZATION AND INDEBTEDNESS *9  
C)REASONS FOR THE OFFER AND USE OF PROCEEDS *9  
D)RISK FACTORS *9 ITEM IV.INFORMATION ON THE COMPANY *15  
A)HISTORY AND DEVELOPMENT OF THE COMPANY *15  
B)BUSINESS OVERVIEW *18  
C)ORGANIZATIONAL STRUCTURE *24 ITEM V.OPERATING AND FINANCIAL REVIEW AND PROSPECTS *25  
A)OPERATING RESULTS *26  
B)LIQUIDITY AND CAPITAL RESOURCES *29  
C)RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES,   ETC. *31  
D)TREND INFORMATION *31  
E)OFF-BALANCE SHEET ARRANGEMENTS *32  
F) TABULAR   DISCLOSURE OF CONTRACTUAL OBLIGATIONS *32  
G) SAFE HARBOR   *33 ITEM VI.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES *33  
A)DIRECTORS AND SENIOR MANAGEMENT *33  
B)   COMPENSATION *34  
C)BOARD PRACTICES *35  
D)EMPLOYEES *35  
E)SHARE OWNERSHIP OF MANAGEMENT *36 ITEM VII.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS *38  
A)MAJOR SHAREHOLDERS *38  
B)RELATED PARTY TRANSACTIONS *39 ITEM   VIII.   FINANCIAL INFORMATION *40  
A)CONSOLIDATED STATEMENTS AND OTHER FINANCIAL   INFORMATION *40  
B)SIGNIFICANT CHANGES *41 ITEM IX.THE OFFER AND LISTING *42  
A)PRICE RANGE AND VOLUME OF SHARES OF COMMON STOCK   *42  
B)PLAN OF DISTRIBUTION *42  
C)MARKETS *42  
D)SELLING SHAREHOLDERS *43  
E)DILUTION *43
(3)

 

  F)EXPENSES OF THE ISSUE *43 ITEM   X.ADDITIONAL   INFORMATION *43  
A)SHARE CAPITAL *43  
B)MEMORANDUM AND ARTICLES OF INCORPORATION *43  
C)MATERIAL CONTRACTS *45  
D)EXCHANGE CONTROLS *46  
E)TAXATION *47  
F) DIVIDENDS   AND PAYING AGENTS *55  
G) STATEMENTS   BY EXPERTS *55  
H)DOCUMENTS ON DISPLAY *55  
I)SUBSIDIARY INFORMATION *55 ITEM   XI.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK *55 ITEM XIIDESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES   *55
**PART II***56 ITEM XIIIDEFAULTS, DIVIDENDS, ARREARS AND DELINQUENCIES *56 ITEM   XIVMATERIAL   MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS *56 ITEM XVCONTROLS AND PROCEDURES *56 ITEM   XVIAUDIT   COMMITTEE FINANCIAL EXPERT *57
**PART III***59 ITEM   XVIIFINANCIAL   STATEMENTS *59 ITEM XVIIIFINANCIAL STATEMENTS *59 ITEM   XIX.EXHIBITS   *59
**INDEX TO   FINANCIAL STATEMENTS***61
 

 
** 

 

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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 andaffiliated 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 December31, 2006.

We use the Canadian dollar as our reporting currency. All references in thisAnnual Report to "dollars" or "$" are expressed in Canadian dollars, unlessotherwise indicated. See also "Item 3. Key Information" for more detailedcurrency and conversion information. Our consolidated financial statements,which form part of the annual report are presented in Canadian dollars and areprepared in accordance with accounting principles generally accepted in Canada("Canadian GAAP") which differ in certain respects from accounting principlesgenerally accepted in the United States ("U.S. GAAP"). The differences betweenCanadian GAAP and U.S. GAAP, as they relate to our business, are explained inthe notes to our consolidated financial statements.
**NOTE REGARDING FORWARD-LOOKING STATEMENTS**
This Annual Report contains forward-looking statements (within the meaning ofthe United States Private Securities Litigation Reform Act of 1995) concerningour business strategies, market conditions, outlook and other matters. Thesestatements relate to analyses and other information that are based on forecastsof future results, estimates of amounts not yet determinable and assumptions ofmanagement including, but not limited to, certain statements and projectionsconcerning our plans, intentions, strategies, expectations, predictions,financial projections, assumptions and estimates related to accounting policies,concerning the our future activities and results of operations and other futureevents or conditions. Any statements that express or involve discussions withrespect to predictions, expectations, beliefs, plans, projections, objectives,assumptions or future events or performance (often, but not always, using wordsor phrases such as "expects" or "does not expect", "is expected", "anticipates"or "does not anticipate", "plans", "estimates" or "intends", or stating thatcertain actions, events or results "may", "could", "would", "might" or "will" betaken, occur or be achieved) are not statements of historical fact and may be"forward-looking statements." Forward-looking statements contained in thisreport are based on current facts and analyses and include, but are not limitedto, the following: 

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

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

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

our ability to successfully enter the Life Settlement marketplace and sourceadequate amounts of Life Settlement policies.

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

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

other statements related to our business and results of operations.

Forward looking statements are made based on management's reasonable beliefs,estimates and opinions on the date the statements are made. However, theseforward-looking statements involve known and unknown risks, uncertainties andother factors that may cause our actual results, performance or achievements orindustry results to be materially different from any future results, performanceor achievements expressed or implied by such forward-looking statements. Suchrisk factors include, but are not limited to, general economic conditions, ourability to generate sufficient cash flows to support capital expansion plans andgeneral operating activities; changing travel and lifestyle trends of consumers;competition; pricing and availability of services; insurance laws andregulations and changes thereto that may affect the way our services aremarketed, provided and sold; and political and economic uncertainties includingexchange controls, currency fluctuations, taxation and other laws orgovernmental economic, fiscal, monetary or political policies of Canada and theUnited States affecting foreign travel, investment and taxation and otherfactors beyond our reasonable control, which, in turn, could affect our currentor future operations. See "Key Information - Risk Factors". Should one or moreof these risks and uncertainties materialize, or should underlying assumptionsprove incorrect, actual results may vary materially from those described inforward-looking statements. The reader is cautioned not to place undue relianceon forward-looking statements. We undertake no obligation to publicly revisethese forward-looking statements to reflect events or circumstances that ariseafter the date of this filing. Readers should carefully review the cautionarystatements and risk factors contained in this and other documents that we filefrom time to time with the Securities and Exchange Commission. 

 

(6)
**PART I**** 

ITEM I. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT ANDADVISORS**
This Form 20-F is beenfiled as an annual report under the Exchange Act and, as such; there is norequirement to provide information under this item.****ITEM II. OFFER STATISTICS AND EXPECTEDTIMETABLE**
This Form 20-F is been filed as an annual report under the Exchange Act and,as such; there is no requirement to provide information under this item.
**ITEM III. KEY INFORMATION

A) SELECTED FINANCIALDATA**
Set forth below is certain selected financial data for the Company for theyear-end fiscal periods 2002 to 2006. The following information must be read inconjunction with the more detailed financial information contained in theaccompanying audited financial statement. Unless otherwise stated, allreferences to dollars herein are to Canadian dollars. As at December 31, 2006,one United States Dollar was equal to 1.1659 Canadian dollars and that value isused in the calculations herein, unless otherwise indicated.

TABLE OF SELECTED CONSOLIDATED FINANCIAL DATA

(Stated in Canadian Dollars)
** **Year Ended December 31  **2006**2005**2004**2003**2002**Current Assets**
(2)
         $    1,431,310 
             $  1,707,562
$  831,123
              $  852,855
$  938,659**Capital Assets** 
7,276,372 
4,591,964
3,928,818
3,760,853
3,817,556**Total Assets**
(2)
8,715,182
7,948,618
7,268,071
8,893,775
10,073,096**Current   Liabilities, Excluding Deferred Revenue**
(2)
784,084
1,331,598
1,341,520
1,518,890
1,955,794**Deferred Revenue** 
-
2,560,525
4,463,163
9,755,212
13,478,076**Convertible   Debentures** 
40,486
40,486
40,486
175,615
53,887**Long Term Debt** 
4,029,516
1,324,991
-
-
-**Share Capital** 
14,802,797
15,152,797
15,152,797
15,028,187
15,028,187**Shares Subscribed** 
-
-
-
-
-**Deficit** 
(11,231,814)
(12,664,990)
(14,316,794)
(17,979,578)
(21,242,625)       **Net Revenue from   Operations** 
          $   6,097,780
              $ 5,923,516
              $ 9,186,444
    $ 9,758,380
$ 11,837,153
 

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** **Year Ended December 31  **2006**2005**2004**2003**2002**Net Income (Loss)   from Operations** 
1,644,160
1,651,804
3,662,784
3,263,047
1,273,629**Earnings (Loss)   per Share from Operations**
(1) 
0.35
0.30
0.75
2.36
0.92**Fully Diluted   Earnings (Loss) per Share**
(1)
0.32 
0.30
0.72
2.36
0.92**Weighted Average   number of shares for calculating basic Earnings (Loss) per share**
(1)
5,098,086
5,444,661
4,899,949
1,384,771
1,381,964
Notes:- Effective July 5, 2002 the Company's shares were consolidated on a ten (10) old for one (1) new basis. On April 16, 2007, the Company's common shares were forward split on a three new for one old basis. 
- The Company's financial statements for 2002 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 June 30, 2007, the exchange rate for Canadian dollars was $1.00 (US) for$1.0634 (CAD), as posted by the Bank of Canada. 

The high and low buying rate figures are selected from monthly figures foreach month of the previous six-month period ending June 30, 2007. Daily averagefigures are not available from any major Canadian chartered bank.
**June**May**April**March**February**January**High**
1.0580
1.0699
1.1067
1.1529
1.1585
1.1649**Low**
1.0730
1.1135
1.1584
1.1811
1.1853
1.1824
Historical exchange rates for $1.00 (US) expressed in Canadian dollars overthe past five years are as follows:
**2006**2005**2004**2003**2002**Period End**
1.1653
1.1659
1.2036
1.2924
1.5756**Average**
1.1340
1.2116
1.3015
1.4014
1.5702**High**
1.0990
1.1507
1.1774
1.2924
1.5710**Low**
1.1726
1.2704
1.3968
1.5747
1.6132
The above information was obtained from the Bank of Canada and is believed bythe Company to closely approximate the rates certified for customs purposes bythe Federal Reserve Bank in New York.

(8)
**B) CAPITALIZATION ANDINDEBTEDNESS**
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 OFFERAND 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. Prospectiveinvestors, prior to making an investment in the Company, should carefullyconsider, among others, the following risk factors: 
The Company's businesses are heavily regulated and changes inregulations, changes in interpretation of existing regulations or failure toobtain required regulatory approvals or licenses could adversely affect theCompany's ability to operate or compete effectively.

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'snationwide list. The "no call list" is receiving millions of registrants. Asimilar law is under review for Canada. At this time it is anticipated this lawwill take effect in the fall of 2007. This law in Canada will affect thecompany's operations and result in a higher marketing cost, which could affectthe profitability of the Company's Snowbird Vacations Travel Club membershipsales.

The market for Life Settlements in the United States is regulated by theState. There currently exists government regulation in 26 states is to ensurefair practices and protect consumers particularly from fraud, largeincommensurate middleman commissions and transaction costs. Some States and theUnited States Securities and Exchange Commission treat Life Settlements assecurities under state and federal securities law when viewed as a structuredproduct.

The Life Settlement secondary market provides consumers with an alternativeto the cash surrender value offered by their underwriting insurance company andfacilitates consumer choice and competition. Legitimate Life Settlementcompanies provide a socially responsible service to seniors whose future welfareis an important social policy issue at all levels of society and government.However, there can be no assurances that future changes in Consumer, Securitiesor Insurance regulations at Federal or State level will not have a materiallyadverse effect on the industry and the Company's results.
The Company may require additional capital; if we are unable to obtainfinancing necessary to support our operations, we may be unable to continue as agoing concern.

The Company has a credit facility from Caterpillar Financial Services tocomplete the refit to the 120" Yacht in the amount of $4.3 million USD of which$4.2 million has been drawn down as of June 30, 2007, with construction slatedfor completion in the fall of 2007. In addition the 

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Company has completed private placements of $9 million USD in July of 2007 todevelop its Life Settlement division. As of December 31, 2006 the Company had aworking capital surplus of $647,227. The Company continues to operate within thecontinually evolving and volatile travel industry. The Company believes it willgenerate sufficient operating capital through operations. There can be noassurances the Company will be able to generate sufficient investment fromborrowing, the sale of equity, or a combination thereof. If additional financingis required, there is no certainty it will be available when and to the extentrequired or that if available, it will be on acceptable terms. If adequate fundsare not available on acceptable terms, the Company may not be able to fundexisting operations in their current state, fund business expansion, develop orenhance its products or services, or respond to competitive pressures. Thiscould have a material adverse effect on the Company's existing operations andplanned growth. 

These financial statements have been prepared on a going-concern-basis, whichcontemplates the realization of assets and satisfaction of liabilities in thenormal course of business. See Note 2****"Going Concern" Notes to theConsolidated Financial Statements. Accordingly, these financial statements donot include any adjustments to the specific amounts and classifications ofassets and liabilities, which might be necessary should the Company be unable tocontinue as a going concern.

Because of daily price and volume limitations associated with being a PinkSheet quoted company, you may not be able to sell your shares of our commonstock at a particular price on any particular trading day, or at all. 

The Company's common stock is vulnerable to pricing and purchasing actions inthe "Pink Sheet" market that are beyond its control and therefore personsholding or acquiring shares may be unable to resell their shares at a profit asa result of this volatility. It is the intention of management to reinstate thelisting of the Company's shares on the Over-the-Counter Bulletin Board or othermore senior exchange. Should the Company be unable to reinstate a listing forthe securities on the Over-the-Counter Bulletin Board or other exchange, theywould continue to trade on the "Pink Sheets" Market and there would be no publicmarket for trading of the company's common shares.

The Company does not expect to pay dividends in thefuture. Any return on investment may be limited to the value of the Company'sstock. 
The Company does not anticipate paying cash dividends on itsstock in the foreseeable future. The payment of dividends on the Company's stockwill depend on its earnings, financial condition and other business and economicfactors affecting the Company at such time as the board of directors mayconsider relevant. If the Company does not pay dividends, its stock may be lessvaluable because a return on your investment will only occur if the Company'sstock price appreciates. 

The market price for our common shares has been and isexpected to continue to be volatile; and as a result the value of yourinvestment in the Company may decrease.

The trading price of the Company's securities has been subject to widefluctuations in response to variations in its operating results, itsannouncements of business developments, or new services by the Company or itscompetitors, and other events and factors. The securities markets themselveshave from time to time experienced significant price and volume fluctuationsthat may be unrelated to the operating performance of any particular companies.

(10)

Announcements of delays in the Company's business plans or online commerceoperations, technological innovations or new services by the Company, or itscompetitor's developments, could have a significant and adverse impact on suchmarket prices. Also, economic and other external factors, as well asperiod-to-period fluctuations in its financial results, may have a significantimpact on the market price of the Company's securities. 

There can be no assurance that the continual fluctuations in price will notoccur. In particular, subsequent to the financial year ended December 31, 2006,the price per share of the Company's common shares fluctuated (US dollarfigures) from a low of $0.55 to a current high of $5.00.

We may issue additional shares in the Company thereby further diluting thetotal shares issued and outstanding. As well, a substantial number of our sharesof common stock will be eligible for future sale, and the sale of these sharesmay cause our stock price to decline, even if our business is doing well.

Situations may arise which could require the issuance of additional shares ofthe Company. In addition to the three (3) for one (1) split in the Company'scommon shares subsequent to the date of the annual financial statements therehas been an increase in the number of issued and outstanding common shares ofthe Company. As of July 15, 2007 the Company completed private placements for atotal of $9 million USD and correspondingly issued 14,500,000 restricted commonshares of the company.

On June 27, 2007 the record date, the Company issued 13,933,983 Series "A"Preferred Non-Dilutive shares to all the existing registered and beneficialcommon shareholders on a one (1) for one (1) PRO RATA basis. The Series "A'Preferred Non-Dilutive shares are convertible, as a Series into common shares ofthe Company provided a majority of the Series "A" Preferred shareholders vote in favor of converting the entire Series. The Series will convert into a number ofcommon shares that will represent 50% of the number of fully diluted commonshares after conversion.

On June 27, 2007 the record date, the Company issued 13,933,983 Series "B"Preferred Shares to all the existing registered and beneficial commonshareholders on a one (1) for one (1) PRO RATA basis. The Series "B" Preferredshares are convertible into common shares of the Company on a one for one basisby shareholders of record as of June 27, 2007.

On July 5th 2007, the Company has executed a Stock Option plan reserving2,850,000 shares in the common stock of the Corporation to provide its officers,directors, employees and consultants with an incentive to use their best effortsto advance the business affairs of the Corporation. The plan allows optionees toexercise the purchase of stock options at the price of $1.00 per common sharewhich will be executable for a period of five years from the date of grant.

Furthermore future equity financings, property transactions, issuance ofstock options among other things may require the subsequent issuance and furtherdilution of the Company's securities.

 

Our significant shareholders and management personnel havepotential conflicts of interest with us, which may result in their takingcorporate actions which you may not believe to be in your best 

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interests or in the bestinterests of the Company.
The Company's officers and board of directors control more than 50% of theCompany's issued and outstanding stock. The concentration of such a largepercentage of the Company's stock in the hands of relatively few shareholdersmay cause a disproportionate effect on minority shareholders in all matterspresented to the company's shareholders. The Company's officers and board ofdirectors as majority shareholders have the power to take corporate actionswhich other shareholders may not believe are in their best interests or in thebest interests of the Company. There can be no assurance that the Company'sofficers and Board of Directors as will not cause the Company to take suchcorporate actions.

We rely on our founders, Messrs. Dan Clozza and Martin Tutschek, the loss ofeither could have a material adverse effect on our business.

Our success will depend to a significant extent on the efforts and abilitiesof our Chief Executive Officer, Mr. Dan Clozza and our Chief Financial Officer,Mr. Martin Tutschek. Messrs. Clozza and Tutschek are actively engaged in ourmanagement and together determine our strategic direction, especially withregard to business development activity. While we are in the process ofestablishing a management structure designed to reduce our dependence on Messrs.Clozza and Tutschek, the sudden departure or reduced attention of either Messrs.Clozza or Tutschek to us could have a material adverse effect on our operations,financial condition and operating results. The Company does not maintain "keyman" insurance in respect of any of its management.

For our business to be successful wewill need to attract and retain qualified personnel, licensees or operators,brokers or life settlement providers. Failure to attract and retain such partiescould have a material adverse effect on our business.

The Company's future success depends, in significant part, upon thecontinuing service and performance of its senior management and other keypersonnel, with whom it does not have employment agreements at this time. If itloses the services of any of these individuals, its ability to effectivelydeliver services to its customers and manage its business effectively, could beimpaired. Furthermore, companies seeking to develop similar business strategiesmay hire away some of our key employees. 

The Company's historical core growth depends, in significant part, upon thecontinuing traditional method of sales and marketing of its Travel Clubproducts. If the Company is unable to secure an Operator or hire qualified salesand marketing staff, its ability to effectively grow and expand its businesscould be impaired. In addition to the risk of securing an Operator orcontracting a Licensee, the Company's growth is dependent upon the success ofthe entities.

We have begun to develop our network of financial planning professional,insurance brokers, and Life Settlement provider companies. Our ability toinitiate, build and grow these relationships is dependent on many factorsincluding the purchase volume and amount of commissions received fromtransactions with the Company. The relationship with these individuals isfundamental to operating in this market. We have no contractual arrangementswith financial planners, insurance brokers or Life Settlement providers.

The Company believes that its future success will depend in large part uponits ability to attract and retain qualified personnel, Licensees or operators,and brokers or Life Settlement providers 

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for its operations. The failure to attract or retain such persons or entitiescould materially adversely affect the Company's business, financial conditionand results of operations.

The markets in which the Companycompetes are highly competitive. If the Company cannot successfully compete, itsgrowth rate may stagnate or revenues may decline.

The market in which the Company competes is intensely competitive in all itsphases. It is expected that competition will intensify and increase in thefuture as more vacation and travel-related companies engage in e-commerce and ortravel clubs. The Company anticipates that it will compete for customers andexperienced personnel with a number of companies having significantly greaterfinancial, technical and marketing resources than it has. Established brandedcompanies may have some marketing advantage due to their market identities andthis is likely to have serious ramifications for the remaining companies. Pricecompetition may be instituted and sustained further reducing the profit margins,resulting in a reduction of the Company's market share, and revenues. 

There exists one publicly listed company operating in the brokering ofinsurance policies in the life Settlement market and has an estimated 3% marketshare. Since the civil suit filed by the Attorney general of New York againstthe largest operator in the Life Settlement market, it is estimated the marketis divided among several companies having no more than a 10% share. The Companymust compete against established competitors in this market and there can be noassurances of success in obtaining market share. The Life Settlement market is arelatively new market within the financial services sector. Its growth andprecise direction is unclear. The ability of the Company to not only compete butreact to market changes as the Life Settlement market grows could result in anunsuccessful attempt to enter into the Life Settlement market. 

We may be unable to develop and maintain a distinctive brand identity, whichcould damage our reputation, reduce market penetration and reduce sales.

The Company believes brand identity is important to attracting and expandingthe membership base and Life Settlement portfolio. The Company believes thesignificance of brand and name recognition will intensify should the number ofcompeting companies increase. The Company cannot assure shareholders that itwill be able to continue developing a distinctive brand identity that willensure significant market recognition. Without market recognition, the Companymay be unable to sell memberships or source settlement policies, which failurewould affect growth and operating results of the Company's operations. 

Estimates of longevity in the Life Settlement market areuncertain and any material underestimation will materially affect the cost andlower the anticipated returns.

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

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It is impossible to predict with accuracy of an insured's exact lifeexpectancy. An underestimation will result in lower returns than projected beenrealized. An underestimation also increases the amount of money necessary to beallocated for premium payments. An overestimation will result in highercalculated projected returns. 

System failures or flaws in our computer and communicationssystems could decrease market acceptance of our sales and services, which wouldreduce our revenues and profitability.

The Company's ability to facilitate trade successfully and provide highquality customer service depends on the efficient and uninterrupted operation ofits computer and communications systems. These systems and operations arevulnerable to damage or interruption from earthquakes, floods, fires, powerloss, telecommunication failures, break-ins, sabotage, intentional acts ofvandalism and similar events. The Company does not have aformal disaster recovery plan or alternativeproviders of hosting services, and does not carry business interruptioninsurance to compensate it for losses that may occur. Despite any precautionstaken, or planned to be taken, by the Company, the occurrence of a naturaldisaster or other unanticipated problems could result in interruptions in theservices provided by the Company.
In addition, system failures to provide the data communications capacityrequired by the Company, as a result of human error, natural disasters, or otheroperational disruption, could result in interruptions to its service and sales.Any damage to, or failure of, the Company's systems could result in reductionsin, or terminations of, services that could have a material adverse effect onits business, results of operations and financial condition. In the case offrequent or persistent system failures, the Company's reputation could bematerially adversely affected. Although it has implemented certain networksecurity measures, the Company is also vulnerable to computer viruses, physicalor electronic break-ins and similar disruptions, which could lead tointerruptions, delays, loss of data or the inability to complete customertransactions. The occurrence of any and all of these events could have amaterial adverse effect on its business, results of operations and financialcondition.

It may not be possible for investors to effect service of process within theUnited States upon us or our Directors or corporate auditors or to enforceagainst us or these persons judgments obtained in United States courtspredicated upon the civil liability provisions of the federal securities laws ofthe United States.

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

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

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

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

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to bring an original action in a Canadian court to enforce liabilitiesagainst 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 Statesjudgments obtained in the U.S. courts against any of our directors and executiveofficers or us, including actions under the civil liability provisions of theU.S. securities laws. 

In summary, the realization of any of the risks described in these "RiskFactors" 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 involverisks and uncertainties. Our actual results could differ materially from theresults discussed in the forward-looking statements as a result of certain risksset forth herein and elsewhere in this Form 20-F. 

 
**A) HISTORY ANDDEVELOPMENT 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 tothe Province of Ontario on November 12, 1997. The name of the Company waschanged to Intravelnet.com Inc. on February 26, 1999. Further to shareholderapproval on April 17, 2002, the Company's name was changed to Forum NationalInvestments Ltd., with a consolidation of the share capital on a ten old for aone new basis, effective July 5, 2002. On April 16 of 2007 the share capital ofthe Company was forward split of a 3 new for 1 old basis.

The Company's principal office is Suite 180A - 13040 # 2 Road, Richmond,British Columbia, Canada V7E 2G1, the telephone number is (604) 275 - 2170 andfax number is (604) 275-8745. The Company's agent in Canada is Kornfeld MackoffSilber, 1100 One Bentall Center, 505 Burrard Street, Box 11, Vancouver, B.C.,V7X 1M5. The Company has the following web addresses: www.foruminvestments.com, www.snowbirdvacations.com, www.SpiritOfTwoThousandTen.com, www.spirityachtcharters.com, www.fitnessvacation.cawww.americanlifesettlementsociety.com, www.priceshieldsystems.com.

 

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

During 2003 the Company incorporated a wholly owned subsidiaryin the Province of Ontario: Intravelnet Limited. As required by Ontariolegislation specifically relating to travel, the new entity incorporated anddomiciled in Ontario was created to handle the Ontario travel club business forthe Ontario members. Subsequent to December 31, 2003 the sole director of 

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Intravelnet Inc. resigned anda replacement has yet to be found. Given the circumstances management instructedthe new Ontario Corporation Intravelnet Limited to handle servicing all travelClub members. The assets of Intravelnet Inc. were sold to Intravelnet Limited onJune 30th, 2004 and all existing employees were offered continuousemployment in the new Company. In the first quarter of 2007 the Company enteredinto an agreement with an Ontario registered travel wholesaler to assist inservicing the Snowbird Vacations Travel Club membership. The operators' industryknowledge and experience in the wholesale travel market combined with theircentralized call center and on-line presence have been valuable in assisting thecontinued serving and growth of the Travel Club membership. 
With the recent new affiliation and contracting out of our travel services,it is unknown at this time as to the future status of the company's subsidiary's Intravelnet Inc., Intravelnet LTD., and ATM Travel. It is highly unlikely thatthe Company as the parent company will recoup inter-company loans and advancesmade to Intravelnet Inc and or other subsidiaries over the last several yearstotaling approximating $4.4 million. Any tax loss as result of the abovementioned losses will be carried forward and applied to offset future year's taxobligations.

In January of 2004, the Company entered into a Commission Agreement with42260584 Canada Inc., for the operation of the Company's London Ontario salesand marketing operations. 4226054 Canada Inc. took control of the offices andmarketed the Company's Snowbird Vacations Travel Club Membership until Septemberof 2004. 

In November of 2005 the principal of 42260584 Canada Inc. entered into aCommission Agreement with the Company to market the Company's Snowbird VacationsTravel Club Membership in the Barrie Ontario area. The Agreement with 1617165Ontario Inc was terminated in March of 2006 and at this time no new membershipsare actively been marketed in the Barrie Ontario area. 

In January of 2006 the Company acquired the members of an upstart OntarioTravel Club called Embassy Vacation Club. The members were offered to have theirmembers serviced by the Company's travel service provider Intravelnet Ltd and110 of Embassy Vacation Club members agreed to our terms. 

Effective December 31, 2006, the Company completed the purchase of 100% ofthe outstanding capital stock of International Fitness Vacations (BC) Ltd.("Fitness Vacations") from an officer and director of the Company in the amountof $550,000. The newly acquired company is a full service gym and also marketsgym memberships with a travel component.

In January of 2007, the Company acquired all the outstanding shares of PriceShield Systems Inc., a Washington State Corporation. Price Shields Systems Inc.,sole business is a contract which facilitates the ongoing supply of resort andCondominium inventory which is marketed to the travel club membership. 

In the first quarter of 2006, the Company signed a Commission Agreement with2094711 Ontario Limited to secure an office location to market Travel Clubmemberships in the greater Toronto, Ontario area. The new office location inPickering, Ontario commenced operations In October 2006. 

The Company's core growth depends, in significant part, upon the continuingtraditional method of sales and marketing of its Travel Club products. If theCompany is unable to secure an Operator or is unable to contract a Licensee, itsability to effectively grow and expand its 

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business could be impaired. In addition to the risk of securing an Operatoror contracting a Licensee, the Company's growth is dependent upon the success ofthe entities. (See Item 3 Risk factors, Ability to Attract and retain SuccessfulLicensees or Operators).

The Company will complete the refit on its 120 feet motor vessel *MV Spiritof Two Thousand and Ten*in fall of 2007. In spring of 2005 Sheerline Yachtscompleted their component of the refit and Platinum Marine Services was retainedto complete the almost $10.0 million refit project. The Company had establishedan initial credit facility with Caterpillar Financial Services for up to $3million USD which has provided funding for the project. The Company subsequentlyhad the credit facility increased to $4.3 million USD in spring of 2007. TheCompany continues to refit the 120 foot motor vessel with Platinum MarineServices. In 2005 the Company spent $685,964 during 2005, 2,753,788 during 2006and another $911,463 to June 30, 2007. The Motor Vessel has an appraised marketvalue of $12 million upon completion.

With the increasing age of baby boomers we are anticipating growth of leisureand lifestyle opportunities. Given our history of membership based organizationsand servicing, the company is actively entering and test marketing travelservices combined with health club services. The two combine are referred to asa "Resort Lifestyle" offering. The desire to travel coupled with the desire tophysically enjoy an active lifestyle creates an opportunity to align twomembership based businesses. 

On December 31, 2006, the Company completed the purchase of InternationalFitness Vacations (BC) Ltd. ("Fitness Vacations"), by obtaining 100% of theoutstanding shares held by an officer and director of the Company forconsideration.  The wholly-owned subsidiary is involved in the marketing of gymand travel club memberships.  

In 2005, Forum began to investigate the businessopportunities in the secondary Life Insurance market also known as *"LifeSettlements"*. The Company is entering into the business of purchasing lifeinsurance policies from consumers actively interested in selling their policies.Forum will invests in the purchasing of Life Insurance policies issued in theUnites States sold by the policy holders with life expectancies of 6 to 12years. The Company becomes the irrevocable beneficiary of these policies.

Although relatively new, the Life Settlement market is the fastest growingsegment of the financial services industry. The life insurance industry is a"double digit" trillion dollar industry and the Life Settlement market isprojected to grow significantly within the next few years. The senior and thebaby boomer markets are the fastest growing segments of the population,resulting in billions of dollars in policies rolling into the Life Settlementpolicy industry annually. Expected growth of the Life Settlement market willparallel the aging population boom.

The significant, additional money that many policy holdersreceive from life settlement companies in the secondary****market represents"found money"; turning unrealized assets into cash. In general, this windfallsignificantly improves the lifestyle of the policy holder when most seniors needit, i.e. -- allowing them to afford long-term health care or maintain theircurrent standard of living for many more additional years. Legitimate LifeSettlement companies have been described as providing a "socially responsible"service.

The Company began to research the Life Settlement industry in2005 and has completed a substantial amount of due-diligence and investedcapital to create large channels of Life Settlement "policy flow". The Companyis currently sourcing Life Settlement policies through "Business to Business"(B2B) Channels and expects to launch a "Business to Consumer" (B2C) Channel inthe near future. 

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To expand beyond is present financial capabilities in the Life Settlementmarket and other business ventures, additional financing will be required. Thereis no certainty this financing will be available when and to the extentrequired, or that if available it will be on acceptable terms. If adequate fundsare not available on acceptable terms, the Company may not be able to fundbusiness expansion, develop or enhance its products or services, or respond tocompetitive pressures. This and other risks related to operating in the LifeSettlement industry could have a material adverse effect on the Company'soperations and planned growth. (See Item 3 Risk factors, The Company May RequireAdditional Capital).
** 

B) BUSINESS OVERVIEW**
The Company's historical business is providing travel services for themembers of its "Snowbird Vacations International" travel club. A travel clubmembership entitles the member to access wholesale travel at rates marginallyabove the cost to the travel agency as well as vacation condominium rentals atwholesale rates through the Company's wholesale network affiliation with theCooperative Association of Resort Exchangers (C.A.R.E.) and other strategicrelationships in the travel industry. The Company continues to develop productsand services for its members, and seeks to expand its membership by securing andcontracting licensed marketing agents throughout Canada. The Company presentlymarkets new memberships in the Province of Ontario:
**2006****2005****2004****Membership Sales 
$

3,319,381 

      $ 3,367,167
      $ 4,951,541 **Membership Dues
1,648,637

1,690,200

1,856,883

 

 

 
**Total**
$ 

4,968,017

     $  5,057,367
      $ 6,808,424
For the fiscal year 2006, a total of 202 (2005 - 311, 2004 - 268) travel clubmemberships were sold for a mean average non-refundable purchase price of $3,215 (2005 - $3,722, 2004 - $3,134) with a standard deviation of $ 1,298 (2005- $1,289, 2004 - $1,125).

Travel club memberships are due in full at the time of sale, and may eitherbe 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 trialmembership 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 memberhas no entitlements. Entitlements are restored once arrears of monthly fees arepaid, at the sole discretion of the club.

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Travel Club

The Snowbird Vacations travel club membership entitles the Snowbird Vacationstravel club members to wholesale travel at rates marginally above the cost tothe travel agency, and vacation condominium rentals at wholesale rates throughthe Company's wholesale network affiliation with the Cooperative Association ofResort Exchangers ("C.A.R.E."), The Company has sold the following travel clubmemberships:
**2006****2005****2004**Travel Club Memberships entered into during the year
         $ 649,486
         $ 990,645
       $ 763,665**Amount recognized as revenue during the year
(649,486) 

(110,384) 

(87,240) 
**Future years revenue to be earned from current year**membership agreements
-

880,261

676,425
**Cash collected during the year related to future years   revenue
-
690,317

332,163

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

Shuswap Lake

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

Industry Overview

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

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

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Areas of growth within the North American Leisure travel market by age groupinclude 15 - 24 year olds and all ages over 45. The most rapidly growing agegroup of Americans is 55 - 64 year olds. Between 2000 and 2005 this aged groupincreased in size by 10 million, creating a boom for the industry as this agegroup spends more on their leisure travel than any other age group. This agegroup 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 revolutionizedevery decade that they have lived in, are especially active people used to doingthings and going places. They're intent on being able to continue to live asthey've always lived. They want to keep active, busy and involved. These peoplelook to the fitness industry to provide them with ideas for how to fill theirtime.

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

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

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

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

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

* Between 1987 and 1998, the number of fitness club members over the age of55 increased by more than 200 percent.

The Company believes the opportunity created by the demographic changes is tobe positioned in both the "Travel" and the "Heath Club" industry. By nottargeting this market, membership based organizations risk losing active agingadults to those organizations that will cater to their needs. 

Despite encouraging enrollment statistics, fitness clubs have only scratchedthe surface of the profitable older market. Clubs have captured only 10 to 12percent of the total population, and only 9 percent of people over the age of55. There are a lot of people out there who are not members of clubs but whohave more time, disposable income and motivation.

The Company believes the ability to provide both travel and health clubservices in efficient upscale facilities providing exceptional service will be aprimary driver of the Company's future growth. The Company is beginning todevelop and implement its vision of integrating "Travel Club" and "Health Club'membership offerings. 

Following the theme of older adults and the growth of the group as apercentage of the population, the Company is entering the Life Settlementmarket. The exact size of the market is difficult to accurately quantify. In2005, Sanford C. Bernstein & Co., LLC, a research unit of Allainace BernsteinL.P. estimated the market to be approximately $13 billion in face value ofpolicies purchased from 1998 through 2005. The growth is expected to continue inthe next few decades with the increase in the number of older Americans.American seniors consider selling their policies in the secondary LifeSettlement market for a variety of reasons including:

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

Income... Many companies have encountered financial trouble and thereforepensions have been reduced or wiped out. In 2003, 1,197 companies eliminatedtheir pensions reported the American Federation of Labor jeopardizing theretirement of thousands who presumed these funds were guaranteed.

Debt Crisis... Many seniors do not adequately save or plan financially forretirement. USA Today, Jan/07 "seniors are becoming the face of the indebted andthe fastest population group seeking bankruptcy, many are having extremedifficulty paying mortgage, food and medical costs... we are just seeing the tipof the iceberg".

Social Security in Trouble**...** A looming large risk for seniors isgovernment social security -- a critical source of income - which could gobankrupt and not be able to support the growing seniors market. At aminimum, social security benefit payments are estimated to be reduced. 

Skyrocketing Medical Costs... As reported in Business Week "Seniors PushingMedicaid to Breaking Point" (Feb/05) "as 70 million baby boomers age, theirdemand for care threatens to crush Medicaid". In 2004 alone, medicalinsurance payments, co-pays and deductibles increased 40%. Medical costs areestimated to continue to rise and fixed income seniors will have to find someway to pay for this large, unbudgeted but essential cost of retirement.

Real risks exist in relation to operating in the Travel and Life Settlementindustry and they could have a material adverse effect on the Company'soperations and planned entrance to the Life Settlement market. (See Item 3 Riskfactors, The Markets in Which the Company Competes is Highly Competitive. If theCompany Cannot Successfully Compete, its Growth Rate May Stagnate or RevenuesMay Decline).

Growth Strategy

The Company recognizes that it needs to be innovative and pioneer new avenuesfor business development. A key to the Company's future development is theexpansion and retention of its existing Travel Club membership base, addingother "Membership" based service and or product offerings to specificdemographic groups. Additionally new opportunities have encouraged the Companyto expand and position itself for entry into the Life Settlement market. 

For its existing travel operations, the Company plans to achieve continuedgrowth of its travel club memberships through five key areas:

1) Licensing Snowbird vacation travel club sales and marketing agents inCanada and the investigation of potential US market penetration.

As part of the strategy to increase memberships, the Company has shifted fromCompany owned and operated marketing operations to licensed sales and marketingoperations in Canada. With a limited growth potential in Canada investigation ofopportunities in other countries is necessary. This shift in the Company'smethod of generating sales will require less capital resources and management.The goal is to focus on the management and development of the travel club'sproducts and services. The Company continues to seek out those potentialindependent marketing agents with "know how' and financing to market theCompany's Snowbird vacations travel club memberships in the Province of Ontarioand beyond. There can be no assurances that the Company will be able to attackand retain successful licensees or operators. (See Item 3 Risk factors, Abilityto Attract and retain Successful Licensees or Operators). 

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2) Diversification of its travel services to include varying types of travelproducts. 

By tailoring its travel service offerings to include a broader productportfolio of more affordable vacation packages including exclusive club memberexcursions the Company hopes to maintain and grow the Snowbird vacations travelclub membership. These packages are designed to appeal to different age groups,both younger and particularly the high growth aging "boomer" market, withvarying income levels. There can be no assurances that the Company will be ableto successfully diversify and market travel related products. 

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

3) Affiliating with existing affinity groups to provide travel service totheir membership

In addition to the traditional marketing efforts, other referral programs,strategic relationships, and affinity programs are continually been evaluated.In the first quarter of 2007 the Company contracted with an Ontario based travelwholesaler with an on-line and retail presence in Ontario to service ourmembership through its centralized call center.

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

4) Increasing membership based operations in the active lifestyles market 

With the increasing age of baby boomers we are anticipating growth of leisureand lifestyle opportunities. Given our history of membership based organizationsand servicing, the company is actively investigating and test marketing travelservices combined with health club services. The two combine are referred to asa "Resort Lifestyle" offering. The desire to travel coupled with the desire tophysically enjoy an active lifestyle creates an opportunity to align twomembership based businesses.

Each facet of the Company's travel and membership based developments areinterconnected. With growth in membership the Company's requirements forinventory and vacation options including maritime product offerings will beincreased. The Company's primary goal is to increase memberships by marketing,its secondary goal being to increase the number of product offerings availableto its members for vacations, and its tertiary goal being to expand its otherholdings. The Company believes promoting the "Resort Lifestyle" concept indesirable locations with value pricing are foundations for corporate growth.

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In 2005, Forum began to investigate the businessopportunities in the secondary Life Insurance market also known as *"LifeSettlements"*. The Company is entering into the business of purchasing lifeinsurance policies from consumers actively interested in selling their policies.Forum will invests in the purchasing of Life Insurance policies issued in theUnites States sold by the policy holders with life expectancies of 6 to 12years. The Company becomes the irrevocable beneficiary of these policies.

Although relatively new, the Life Settlement market is the fastest growingsegment of the financial services industry. The life insurance industry is a"double digit" trillion dollar industry and the Life Settlement market isprojected to grow significantly within the next few years. The senior and thebaby boomer markets are the fastest growing segments of the population,resulting in billions of dollars in policies rolling into the Life Settlementpolicy industry annually. Expected growth of the Life Settlement market willparallel the aging population boom.

The significant, additional money that many policy holdersreceive from life settlement companies in the secondary****market represents"found money"; turning unrealized assets into cash. In general, this windfallsignificantly improves the lifestyle of the policy holder when most seniors needit, i.e. -- allowing them to afford long-term health care or maintain theircurrent standard of living for many more additional years. Legitimate LifeSettlement companies have been described as providing a "socially responsible"service.

The Company began to research the Life Settlement industry in2005 and has completed a substantial amount of due-diligence and investedcapital to create large channels of Life Settlement "policy flow". The Companyis currently sourcing Life Settlement policies through "Business to Business"(B2B) Channels and expects to launch a "Business to Consumer" (B2C) Channel inthe near future.

To expand beyond is present financial capabilities in the Life Settlementmarket and other business ventures, additional financing will be required. Thereis no certainty this financing will be available when and to the extentrequired, or that if available it will be on acceptable terms. If adequate fundsare not available on acceptable terms, the Company may not be able to fundbusiness expansion, develop or enhance its products or services, or respond tocompetitive pressures. This and other risks related to operating in the LifeSettlement industry could have a material adverse effect on the Company'soperations and planned growth. (See Item 3 Risk factors, The Company May RequireAdditional Capital).

Government 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'snationwide list. The "no call list" is receiving millions of registrants. Asimilar law is under review for Canada. At this time it is anticipated this lawwill take effect in the fall of 2007. This law in Canada will affect thecompany's operations and result in a higher marketing cost, which could affectthe profitability of the Company's Snowbird Vacations Travel Club membershipsales.

The market for Life Settlements in the United States is regulated by theState. There currently exists government regulation in 26 states is to ensurefair practices and protect consumers particularly from fraud, largeincommensurate middleman commissions and transaction costs. Some States and theUnited States Securities and Exchange Commission treat Life Settlements assecurities under state and federal securities law when viewed as a structuredproduct.

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The Life Settlement secondary market provides consumers with an alternativeto the cash surrender value offered by their underwriting insurance company andfacilitates consumer choice and competition. Legitimate Life Settlementcompanies provide a socially responsible service to seniors whose future welfareis an important social policy issue at all levels of society and government.However, there can be no assurances that future changes in Consumer, Securitiesor Insurance regulations at Federal or State level will not have a materiallyadverse effect on the industry and the Company's results. 

In addition, the applicability to the Internet and commercial online servicesof existing laws in various jurisdictions governing issues such as propertyownership, sales and other taxes, libel and personal privacy, is uncertain andmay take years to resolve. For example, tax authorities in a number ofjurisdictions are currently reviewing the appropriate tax treatment of companiesengaged in online e-commerce, and new tax regulations may subject the Company toadditional sales and income taxes. 

There can be no assurance that unforeseen developments or introduction oflegislation, laws, and other factors will not alter the Company's ability toachieve it growth targets for marketing and selling Travel Club programs orentering and operating in the Life Settlement market. (See Item 3 Risk factors,Government Regulations) 
**C) ORGANIZATIONALSTRUCTURE**
As of June 30, 2007, the following is a list of all the Company'ssubsidiaries, all of which are wholly owned and over which the Company holds100% voting control: 
**Subsidiary****Incorporating Jurisdiction**Intravelnet Limited.Ontario, CanadaInTRAVELnet Inc.Alberta, CanadaATM Travel Group   Ltd.Alberta, CanadaInternational   Fitness Vacations (BC) Ltd.British Columbia,   CanadaPrice Shield Systems   Inc.Washington, USA
Properties
*Office Leases*
The Company is headquartered at 180A - 13040 Number 2 Road, Richmond BritishColumbia Canada where it rents 11,881 sq. ft. office space housing its principaladministrative, customer services, its IT department and International FitnessVacations. The Company believes that its current facilities are adequate for itscurrent and near future operations. 

The Company's subsidiary, Intravelnet Limited, leases an office in Calgary,situated at suite 1520 - 324 8th Avenue S.W. Calgary, Alberta T2P 2Z2. TheCompany's lease for this 1638 sq. ft. space expires on September 30, 2008.

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Intravelnet Limited has a second office in Calgary located at Suite 140, 2727th Ave S.W. Calgary, Alberta T2P 3H6. The Company leasesapproximately 1000 square feet. The lease expires September 30, 2009. 

Intravelnet Limited leases an office in London, Ontario, situated at #102 -920 Commissioner Street East, London, Ontario, this lease expires on October 31,2007. 

Motor Vessels

The Company owns and is currently refitting a 120-foot motor vessel cal the*MV Spirit of Two Thousand and Ten*. 
**Item****Qty****Description**Spirit of Two   Thousand and Ten1Type: 120 ft. motor   vessel   Overnight Accommodation: 12 passengers|   Dinner cruise - 100 passengers
 

The Company will complete the refit on its 120 feet motor vessel *MV Spiritof Two Thousand and Ten*in fall of 2007. In spring of 2005 Sheerline Yachtscompleted their component of the refit and Platinum Marine Services was retainedto complete the almost $10.0 million refit project. The Company had establishedan initial credit facility with Caterpillar Financial Services for up to $3million USD which has provided funding for the project. The Company subsequentlyhad the credit facility increased to $4.3 million USD in spring of 2007. TheCompany continues to refit the 120 foot motor vessel with Platinum MarineServices. In 2005 the Company spent $685,964 during 2005, 2,753,788 during 2006and another $911,463 to June 30, 2007. The Motor Vessel has an appraised marketvalue of $12 million upon completion.

If additional financing is required, there is no certainty this financingwill be available when and to the extent required, or that if available it willbe on acceptable terms. If adequate funds are not available on acceptable terms,the Company may not be able to fund business expansion, develop or enhance itsproducts or services, or respond to competitive pressures. This and other risksrelated to operating in the Life Settlement industry could have a materialadverse effect on the Company's operations and planned growth. (See Item 3 Riskfactors, The Company May Require Additional Capital).
**ITEM V. OPERATING AND FINANCIAL REVIEW AND PROSPECTS**
The following discussion of the financial condition, changes in financialcondition and results of operations of the Company for the years ended December31, 2006, 2005, and 2004 should be read in conjunction with the ConsolidatedFinancial Statements of the Company for the years ended December 31, 2006, 2005,and 2004. Except as otherwise indicated, all dollar amounts contained in thisdiscussion and analysis and the Consolidated Financial Statements are inCanadian dollars.  The financial information presented in the ConsolidatedFinancial Statements was prepared in accordance with generally acceptedaccounting principles (GAAP) in Canada. Note 21 of these Consolidated FinancialStatements of the Company set forth the material 

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differences between Canadian and U.S. GAAP.  
**A) OPERATING RESULTS**
Critical Accounting Policies

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

The detailed accounting policies are listed in Note 3 to the FinancialStatements for the year ended December 31, 2006. Included below is a discussionof the accounting policies that are affected by the most significant judgmentsand estimates used in the preparation of the financial statements, how suchpolicies are applied and how results differing from the estimates andassumptions would affect the amounts presented in the financial statements.Other accounting policies also have a significant effect on our financialstatements, and some of these policies also require the use of estimates andassumptions. 

Going Concern

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

While these accompanying financial statements have been prepared on theassumption that the Company is a going concern and will be able to realize ourassets and discharge our liabilities in the normal course of business, certainevents and conditions cast substantial doubt on this assumption. As of December31, 2006 the Company had a working capital surplus of $647,227 and ashareholders' equity of $3,570,984. 

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

These financial statements do not reflect adjustments to the carrying valueof assets and liabilities, the reported revenues and expenses and balance sheetclassifications used that would be necessary if the going concern assumptionwere not appropriate. Such adjustments could be material.

Revenue Recognition

The Company generates revenues from the sale of memberships, dues and chartersales. The portion of revenue received from members, which entitles members touse the Company's vacation and travel club privileges at a future date, isrecognized in income during the year when the membership is sold and the memberpays more than 10% of the purchase price. Prior to 2006 the membership revenuewas deferred and recognized in income evenly over the term of the members'entitlements. 

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Prior to 2006 the revenue related to three and five-year memberships wererecognized evenly over the term of the contract. For lifetime memberships,revenue was recognized over a period of five years, which is the best estimateover which the performance of services will be required. The service period oflifetime memberships was based on a combination of factors such as the estimatedlength of service required, and historical membership cancellations and refunds.Management regularly reassess the appropriateness of the estimated serviceperiod of lifetime memberships and will revise it prospectively if futureevents, which are generally outside of our control, indicate that the serviceperiod is shorter or longer than five years. 

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

Asset Impairments

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

Accounts Receivable

The Company generates a significant portion of revenue and related accountsreceivable from travel memberships. Management evaluates the collectability ofour accounts receivable based on a combination of factors. In circumstanceswhere we are aware of a specific customer's inability to meet its financialobligations, a specific reserve for bad debts against amounts due is recorded toreduce the recognized receivable to the net amount we reasonably believe will becollected. For all other customers, reserves are recognized for bad debts basedon past write-off history and the length of time the receivables are past due.

Selected Annual Information

The following depicts some of the Company's significant operating results:
** **Year End December 31  **2006**2005**2004**Travel Club   Memberships Sold
Amount Recognized as Revenue during the   year see Note # 10 
                   $ 649,486

                      649,486
                   $ 990,645

                      110,384
                 $ 763,665

                      87,240**Membership Dues** 
$ 1,648,637
$ 1,690,200
$ 1,856,883**# Travel Club   Memberships Sold (1)** 
202
311
268**Mean Average   Membership Price (1)** 
$ 3,215
$ 3,723
$ 3,134**Standard   Deviation from Mean (1)** 
1,298
1,289
1,215
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** **Year End December 31  **2006**2005**2004**Net Income (Loss)   for the year (2)** 
1,644,160
1,651,804
3,662,784**Income (Loss) per   Share (2) (3)** 
$ 0.35
$ 0.30
$ 0.75
2006 year-end Travel Club Memberships sales decreased totals were down 34.4%to $649,486 compared to ($990,645 - 2005, and $763,665 - 2004), with amountrecognized as revenue during the year increased by 488.4% to $649,486 ($110,384- 2005, $87,240 - 2004) and corresponding total revenue increased by 2.9% to$6,097,780 ($5,923,516 - 2005, $9,186,444 - 2004). 

In 2006 gross cash flow from operations decreased 11.0% to $ 2,639,347 with anet cash outflow from operations of $ 82,228,compared to gross cash flows of $2,966,897with a net cash inflow from operations of $394,102 in 2005, and gross cash flowof $2,859,910 with a net cash outflow from operations of $79,921 in 2004.
The Company had revenues from membership dues of approximately $1,648,637 forthe year ended December 31, 2006, $1,690,200 in 2005, and $1,856,883 in 2004,and expects dues to approximate the level obtained in 2006 for the year endedDecember 31, 2007.

For the fiscal year 2006, a total of 202 travel club memberships were sold, adecrease of 53.9% (2005 - 311, 2004 - 268) The mean average non-refundabletravel club membership purchase price decreased 13.6% to $ 3,215 ($3,723 - 2005,and $3,134- 2004). Standard deviation from the mean purchase price has increased1% to $1,298 ($ 1,289 - 2005, and $1215 - 2004).

Net Income for the year decreased to $1,644,160 ($1,651,804 - 2005, and$3,662,784 - 2004). Earnings per share were $0.35 for the year ($0.30 - 2005,and $0.75 - 2004).

There were 4,644,661 shares outstanding as of December 31, 2006 and 5,444,661in 2005, with 5,444,661 in 2004. In spring of 2004 the debenture holdersexercised a conversion privilege on debentures they owned. The result was theissuance of 4,060,000 shares of the Company. In July of 2007 the Companycompleted a series of private placements and issued a total of 14,500,000 sharesfrom treasury as a result. 

Expenses increased by 5.3% or $225,377 in 2006 due mainly as a result of thechange in revenue recognition to account for all commissions payable off set bythe continued effects of the divesture of the sales and marketing operations andthe operating costs associated with those operations. 

The largest expense was commissions from the sale of memberships during thefiscal year. Total commissions costs in 2006 amounted to $1,939,061 compared to$1,277,223 in 2005 and $1,564,724 in 2004. All deferred commissions andcommissions on sales for 2006 were recognized during the year while commissionsprior to 2006 were deferred over a five-year period. In 2005 the commissionexpense included one-fifth of commissions paid out in 2001, 2002, 2003, 2004 and2005.

The largest decrease in expenses of $252,516 occurred in Bad Debts to($14,007) in 2006, (2005 - $238,509) compared to $427,944 in 2004. The decreasewas the result of an 

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overestimate of the reserve for Bad Debt for 2005 and increased recovery onBad Debts as compared to previous years. 

The second largest decrease in expenses of $110,475 occurred in Legal andAccounting expenses to $163,756 in 2006. Legal and accounting related expensesin 2005 totaled $274,231 and $242,312 in 2004 respectively. The Companycontinues to see the effects of the divesture of Company owned Sales andMarketing operations. 

The third largest decrease in expenses of $98,576 occurred in Wage expensesof $1,081,049 in 2006. Wage related expenses in 2005 totaled $1,179,624 and$1,374,234 in 2004 respectively. The Company continues to see the effects of thedivesture of Company owned Sales and Marketing operations. 

Consulting fees in 2006 totaled $53,423, an increase of $19,623 compared to$33,800 in 2005 and $124,008 in 2004. Consulting fees in 2006 increased as adirect consequence of a cost recognition of a 2005 advance.
**B) LIQUIDITY AND CAPITALRESOURCESLiquidity
Beginning in 2004, the working capital deficit was $ 3,649,916 primarily dueto a decrease in the current portion of the deferred revenue.

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

In 2006, the working capital surplus increased to $ 647,227 primarily due tothe acceleration in revenue amortization in 2006. 

The Company continues to operate within the new travel and economicenvironment by continuously adjusting its operations accordingly. The Companyplans to generate sufficient operating capital through operations in theshort-term. For long-term growth additional capital is required. The 120-footmotor vessel will complete its refit with an estimated completion date of fall2007. The motor vessel did not contribute to revenue in 2005 or 2006.

The work on the vessel has been from cash provided from operations and theproceeds of the construction loan form Caterpillar Financial Services. InSeptember of 2005 the company was successful in attaining a credit facility withCaterpillar Financial Services Corporation for $3.0 million USD. This creditfacility was increased to $4.3 million USD in March of 2007 and the Company hasdrawn down $4.2 million USD as of June 30, 2007. 

The Company's total Revenues for2006 increased $174,263 to $6,097,779. This increase was largely caused by thereduction in sales of $239,146 and a reduction in membership dues of $41,563 anda decrease of $ 22,509 in Interest received and off-set by an increase of$477,482 in miscellaneous revenue compared to 2005 results. Other factorsincluded the accelerated recognition of the amortization of deferred revenue andcommission, over-accruals for un-collectable receivables, deferred interest andpotential GST as reflected in a change in estimates.

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Capital Resources

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

In 2006 gross cash flow from operations decreased 11.0% to $ 2,639,347 with anet cash outflow from operations of $ 82,228,compared to gross cash flows of $2,966,897with a net cash inflow from operations of $394,102 in 2005, and gross cash flowof $2,859,910 with a net cash outflow from operations of $79,921 in 2004.
In September of 2005 the company gained a credit facility with CaterpillarFinancial Services Corporation for $3.0 million USD. This credit facility wasincreased to $4.3 million USD in March of 2007. The credit facility is availablein United States Dollars with a floating interest rate set to the 30-day LIBORrate plus 3.25%. The Company does not currently hedge against foreign exchangeor interest rate fluctuations.

The Company has utilized $2,753,788 during 2006 on the refit of the vesseland another $911,463 to June 30, 2007.

The Company estimates that its cash and cash equivalents will be sufficientto meet its capital requirements for at least the next 6 months. However, itsforecast of the period of time through which its financial resources will beadequate to support its operations is a forward-looking statement that involvesrisks and uncertainties, and actual results could vary materially. If theCompany is unable to raise additional capital when required or on acceptableterms, it may have to significantly delay, scale back or discontinue one or moreof its present operations. 

The Company's access to capital is always dependent upon general financialmarket 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 thenature of its capital resources that could be considered predictable. To date,the Company's capital resources have consisted of the private issuance of commonshares, convertible securities and a credit facility from Caterpillar FinancialServices Corporation. 

In July 2007, the Company completed a series of private placements totalingUS$9,000,000. In connection with the private placements a total of 14,500,000common shares of the Company were issued.

Quantitative and Qualitative Disclosures about Market Risk

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

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**C) RESEARCH ANDDEVELOPMENT, PATENTS AND LICENSES, ETC.**
The Company's has expended no material research and development expenses forthe last three fiscal years.
**D) TREND INFORMATION**
The Company is affected by the sales and marketing trends and uncertaintiesin 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'snationwide list. The "no call list" is receiving millions of registrants. Asimilar law is under review for Canada. At this time it is anticipated this lawwill take effect in the fall of 2007. This law in Canada will affect thecompany's operations and result in a higher marketing cost, which could affectthe profitability of the Company's Snowbird Vacations Travel Club membershipsales.

Given the legal environment the Company and its agents must focus its effortsmore heavily in telephone hardware and software and other marketing channelsincluding direct mail, traditional media advertising and Internet basedmarketing. New advances in technology have allowed for marketing to largeamounts of potential members at lower costs. Presently e-mail and directmarketing campaigns are been reviewed with media companies to further evaluatethe potential opportunities of these new marketing methods for our product

In January of 2004, the Company entered into a Commission Agreement with42260584 Canada Inc., for the operation of the Company's London, Ontario salesand marketing operations. 4226054 Canada Inc. took control of the offices andmarketed the Company's Snowbird Vacations Travel Club Membership until Septemberof 2004. In November of 2005 the principal of 42260584 Ontario Ltd entered intoa Commission Agreement to market the Company's Snowbird Vacations Travel ClubMembership in the Barrie, Ontario area. The Agreement with 1617165 Ontario Incwas terminated in March of 2006 and at this time no new memberships are activelybeen marketed in the Barrie, Ontario area. In January of 2006 the Companyacquired the members of an upstart Ontario Travel Club called Embassy VacationClub. The members were offered to have their members serviced by the Company'stravel service provider Intravelnet Ltd and the 110 of the Embassy Vacation Clubmembers. 

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

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

As of July 15, 2007, the Company has 6,272 active family memberships, with5,905 current and 367 in arrears in monthly membership dues or payments. Theunit volume of new memberships of its vacation Travel Club memberships in 2006was 202, 2005 - 311, in 2004 - 268 memberships and 2003 - 504 memberships. TheCompany estimates the unit volume of new 

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memberships of its vacation Travel Club memberships for the fiscal year 2007to approximate 325. The mean average price of a membership sold was decreased to$3,215 from $3722 in 2005 and $2,207 in 2004. The Company is unable to projectsales totals for 2007 at this time. Sales totals for 2006 were $649,486, 2005 -$990,645 and $769,665 for 2004.

Operating costs of the company have increased slightly in 2006 after adecline for the previous three years (2006 - $4,453,166, 2005 - $4,227,789, 2004- $5,229,932. Expenses increased by 5.3% or $225,377 in 2006 due mainly as aresult of the accelerated amortization of commission payable on sales offset bycontinued effects of the divesture of the sales and marketing operations and theoperating costs associated with their operations. 

With the increasing age of baby boomers we are anticipating growth of leisureand lifestyle opportunities. Given our history of membership based organizationsand servicing, the company is actively investigating and test marketing travelservices combined with health club services. The two combine are referred to asa "Resort Lifestyle" offering. The desire to travel coupled with the desire tophysically enjoy an active lifestyle creates an opportunity to align twomembership based businesses. In addition to the core travel business the Companyis seeking entry into the socially responsible industry of assisting seniorsliquidating their life insurance policies in the Secondary Life Insurance marketcalled the Life Settlement market.

The Company believes it has taken, and will continue to take, the necessarysteps to develop and provide service to its travel club members. The Companybelieves the implementation of necessary measures will allow the continuedgrowth of the travel club with a corresponding reduction in operating costswhile focusing on membership service and travel products. 
**E) OFF-BALANCE SHEETARRANGEMENTS**
The Company has no off-balance sheet arrangements that have or are reasonablylikely to have a current or future effect on our financial condition, changes infinancial condition, revenues or expenses, results of operations, liquidity,capital expenditures or capital resources that are material to investors.
**F) TABULAR DISCLOSURE OFCONTRACTUAL OBLIGATIONS**
The following table is a summary of our contractual obligations as ofDecember 31, 2006:
** **Payments due by period** ** **Less than**More than**Contractual Obligations**Total**1 year**1 - 3 years**3 - 5 years**5 years**Long-Term Debt Obligations
$ 4,078,779
$49,262
$431,288 
$511,632 
$3,086,595**Operating Lease Obligations
325,359
181,477
143,882
-
-**Purchase Obligations
-
-
-
-
-**              Other Long Term Obligations   
-
-
-
-
-**                                                    Total
$ 4,404,138
$ 230,739
$ 575,170
$511,632
$3,086,595
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**G) SAFE HARBOR**
This discussion includes certain statements that may be deemed"forward-looking statements".  All statements in this discussion, other thanstatements of historical facts, that address future operation activities, growthand events or developments that the Company expects, are forward-lookingstatements.  Although the Company believes the expectations expressed in suchforward-looking statements are based on reasonable assumptions, such statementsare not guarantees of future performance and actual results or developments maydiffer materially from those in the forward-looking statements.  Factors thatcould cause actual results to differ materially from those in forward-lookingstatements include: the tourism demand, market prices, government regulation,continued availability of capital and financing, and general economic, market orbusiness conditions.  Investors are cautioned that any such statements are notguarantees of future performance and that actual results or developments maydiffer materially from those projected in the forward-looking statements.
**ITEM VI. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A) DIRECTORS AND SENIORMANAGEMENT**
The names and municipality of residence of each of the directors and officersof the Company, the principal occupations in which each has been engaged duringthe immediately preceding five years, and their respective ownership of theCompany's common shares as at the date herein, are as follows:

 

 

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**Name   and    City of Residence****Date   of Birth****Principal Occupation   For the Past Five Years****Position   Held**Daniel Clozza
   Vancouver, B.C. CanadaFeb. 9, 1960Since September   1995, employed full-time by the Company. President, CEO and   Director since September 1995Martin Tutschek
   Vancouver, B.C. CanadaMay 24, 1960Since August 2001,   employed full-time by the Company.CFO and Director   since August 2001Jeff Teeny   Portland, Oregon. USAApril 30, 1967Property and Real   Estate developer for various projects including the 400 acre Villages at   Cascade Head located on the Pacific Coast of Oregon, USA..Director since July   2007
 Scott McManus
Las   Vegas, Nevada, USAJune 21,1962CEO, Chairman:    Ganix   Biotechnologies, Inc. 2002 - present, an Ecological Science Company.   Financier, Net Branch:  North American Funding  August 2004 - present, a   Commercial Finance Company. Various resort property real estate developments.Director since July   2007
 
Family Relationships

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

Arrangements

Messrs. Teeny and McManus were appointed to the Board of Directors concurrentwith private placements raising an aggregate total of US$ 9,000,000 completed inJuly 2007 with companies related to Messrs. Teeny and McManus. Other than theforegoing, there are no arrangements or understandings between of our directorsor executive officers, and with our major shareholders, customers, suppliers orothers pursuant to which any director or officer was or is to be selected as adirector or officer. In addition, there are no agreements or understandings forthe officers or directors to resign at the request of another person and theabove-named officers and directors are not acting on behalf of nor acting at thedirection of any other person.
**B) COMPENSATION**
Executive Compensation and Compensation of Directors 

During the year ended December 31, 2006, the Company paid $ Nil, (2005 - $Nil, 2004- $ Nil) in management fees and $nil - 2006, (2005 - $14,430, 2004,$44,000) in consulting fees to directors. The Company also reimbursed $159,715-2006, (2005 - $220,625, 2004 - $185,535) to directors for expenditures made onbehalf of the Company.

The Company has no medical, extended medical, dental, pension, retirement, orother similar benefits for directors or officers pursuant to any existing planprovided by, or contributed to by, the Company or its subsidiaries.

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Directors and senior management are entitled to reimbursement for reasonabletravel and other out-of-pocket expenses incurred in connection with corporatematters pertaining to the Company.  The Board of Directors may award specialremuneration to any director or senior management undertaking any specialservices on behalf of the Company other than services ordinarily required of adirector or senior management.

Stock Options

The information on stock options required by this item is set forth in Item6.E of this annual report.
**C) BOARD PRACTICES**
The Board of Directors meets formally approximately 6 to 8 times per year onan as needed basis to deal matters relating to the Company. Each Director servesfor a term of one year or until the next annual meeting of the shareholders atwhich Directors are elected and qualified. The Company's last annual generalmeeting was held on March 05, 2007 and the next meeting will be held subject toBoard approval as specified in the Company's Articles.  The Company's executiveofficers are appointed by and serve at the pleasure of the Board of Directors.  

Audit Committee

The Company's Audit Committee is composed of three individuals including oneformer director and one present director.  The Audit Committee members of theCompany at June 30, 2007 are Mike Parsonson, Hendrik Van der Walt, and MartinTutschek. The committee is responsible for reviewing the Company's financialreporting procedures, internal controls, and the performance of the Company'sexternal auditors.  The committee is also responsible for reviewing the annualfinancial statements prior to their approval by the Board of Directors. TheBoard is in the process of adopting a charter for the Audit Committee.

Remuneration Committee

The Company does not have a Compensation Committee.

Service Contracts

The Company and its subsidiaries do not have any service agreements with anyof the directors of the Company providing for benefits upon termination ofemployment.
**D) EMPLOYEES**
The following is a breakdown of Company employees as at June 30, 2007 and forthe years ended December 31st, 2006, 2005, 2004:

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 **June 30,**December 31, **2007**2006**2005**2004**Administrative   Staff**
6
10
11
10**Customer Service   Representatives**
3
16
19
28**IT /   e-Commerce Personnel**
1
1
1
1**Fitness Club Personnel**
8
-
-
-
The decrease in the number of Customer ServiceRepresentatives was due to the outsourcing of travel fulfillment and servicingof the travel club members to an Ontario based travel wholesaler.

 
**E) SHARE OWNERSHIP OF MANAGEMENT**
The following table sets forth the share ownership of management as of July15, 2007:
**Name****Common Shares(1)**Percent of Class**"A" Preferred Shares(4)**Percent of Class**"B" Preferred Shares(5)**Percent of ClassScott   McManus(2)
6,250,000
21.98
0
0
0
0JefferyTeeny(3)
6,250,000
21.98
0
0
0
0Daniel   Clozza
5,430,000
19.09
5,430,000
38.96
5,430,000
38.96Martin   Tutschek
1,524,000
5.36
1,524,000
10.94
1,524,000
10.94**Notes:
- Does not include options owned by directors or officers. Options are disclosed in table below .   Shares beneficially owned or held by Mr McManus are registered to Aliya Life Settlement, LLC.
Shares beneficially owned or held by Mr Teeny are registered to Teeny Acquisitions, LLC
On June 27, 2007 the record date, the Company issued 13,933,983 Series "A" Preferred Non-Dilutive shares to all the existing registered and beneficial common shareholders on a one (1) for one (1) PRO RATA basis. The Series "A' Preferred Non-Dilutive shares are convertible, as a Series into common shares of the Company provided a majority of the Series "A" Preferred shareholders vote in favor of converting the entire Series. The Series will convert into a number of common shares that will represent 50% of the number of fully diluted common shares after conversion.
On June 27, 2007 the record date, the Company issued 13,933,983 Series "B" Preferred Shares to all the existing registered and beneficial common shareholders on a one (1) for one (1) PRO RATA basis. The Series "B" Preferred shares are convertible into common shares of the Company on a one for one basis by shareholders of record as of June 27, 2007. 
 
Incentive Share Purchase Plan

On July 5th 2007, the Company has executed a Stock Optionplan reserving 2,850,000 shares in the common stock of the Corporation toprovide its officers, directors, employees and 
 
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consultants with an incentive to use their best efforts toadvance the business affairs of the Corporation. The plan allows optionees toexercise the purchase of stock options at the price of $1.00 per common sharewhich will be executable for a period of five years from the date of grant. 

The following table sets out detail regarding stock option grants made to ourNamed Executive Officers subsequent to our 2006 fiscal year.
  **Name****Number of**Securities****Underlying Options****% of Total Options**Granted to****Employees in****Fiscal Year****Exercise Price**($/Sh)****Expiration**Date**Jeff Teeny (1)
1,250,000 
43.85 
1.00 
July 5, 2012 Scott McManus    (2)
315,000 
11.05 
1.00 
July 5, 2012 Martin Tutschek   
300,000 
10.52 
1.00 
July 5, 2012
Notes:
- Options beneficially owned or held by Mr Teeny are registered to Teeny Acquisitions, LLC.
- Options beneficially owned or held by Mr McManus are registered to Aliya Life Settlement, LLC.

Warrants

There are no warrants outstanding.

Other Dilutive Elements

All convertible debentures totaling $53,887 issued prior to 2003 are fullymatured as of December 31, 2002. The debentures during their term carried a rateof interest of eight percent per annum payable semi-annually. The conversionfeature of the debenture allows for the debenture holders to convert his capitalat a rate of $6.00 US to $12.50 US per share. The Company would have 4,622shares issued if 100% of the debentures were to be converted. During 2006, $ -,(2005 -, 2004- $7,619) of convertible debentures was repaid. There were noconversions during 2006, 2005, or 2004.

Conflicts of Interest

Certain of the Company's directors and officers may serve as directors orofficers of other companies or have significant shareholdings in other companiesand, to the extent that such other companies may participate in ventures inwhich the Company may participate, the directors of the Company may have aconflict of interest in negotiating and concluding terms respecting the extentof such participation. In the event that such a conflict of interest rises at ameeting of the Company's directors, a director who has such a conflict willabstain from voting for or against the approval of such participation or suchterms. It may occur that a particular company will assign all or a portion ofits interest in a particular asset to another of these companies due to thefinancial position of the company making the assignment. In accordance with theCompany Act (Ontario), the directors of the Company are required to acthonestly, in good faith and in the best interests of the Company. In determiningwhether or not the Company will acquire a particular asset, the directors willprimarily consider the degree of risk to which the 

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Company may be exposed and its financial position at that time. 
**ITEM VII. MAJOR SHAREHOLDERS AND RELATED PARTYTRANSACTIONS

A) MAJOR SHAREHOLDERS**
The information as to shares beneficially owned, not being within theknowledge of the Company, has been furnished by the respective individuals.  TheCompany's major shareholders do not have different voting rights.  There are noarrangements known to the Company which may, at a subsequent date, result in achange in control of the Company.

The following persons hold, of record or beneficially, directly orindirectly, or are known by the Company to own beneficially, directly orindirectly, more than 5% of the issued shares of the Company as at July 15,2007:
**Identity of Person or Group****Common Shares (1)**Percent of Class**"A" Preferred Shares (4)**Percent of Class**"B" Preferred Shares (5)**Percent of ClassJeffery   Teeny(3)
6,250,000
21.98Scott   McManus(2)
6,250,000
21.98Daniel   Clozza,
5,430,000
19.09
5,430,000
38.96
5,430,000
38.96Martin   Tutschek
1,524,000
5.35
1,524,000
10.94
1,524,000
10.94Jackie   Dawydiuk
1,500,000
5.27
1,500,000
10.76
1,500,000
10.76****
Notes:
- Does not include options owned by directors or officers. Options are disclosed previously .   Shares beneficially owned or held by Mr McManus are registered to Aliya Life Settlement, LLC.
Shares beneficially owned or held by Mr Teeny are registered to Teeny Acquisitions, LLC
On June 27, 2007 the record date, the Company issued 13,933,983 Series "A" Preferred Non-Dilutive shares to all the existing registered and beneficial common shareholders on a one (1) for one (1) PRO RATA basis. The Series "A' Preferred Non-Dilutive shares are convertible, as a Series into common shares of the Company provided a majority of the Series "A" Preferred shareholders vote in favor of converting the entire Series. The Series will convert into a number of common shares that will represent 50% of the number of fully diluted common shares after conversion.
On June 27, 2007 the record date, the Company issued 13,933,983 Series "B" Preferred Shares to all the existing registered and beneficial common shareholders on a one (1) for one (1) PRO RATA basis. The Series "B" Preferred shares are convertible into common shares of the Company on a one for one basis by shareholders of record as of June 27, 2007. 
 
The nature and extent of principal non-United States trading market isapproximately 45% of all outstanding securities, which are held outside theUnited States and approximately 55% of all 
 
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outstanding securities are held within the United States as of July, 2007.The Company is not owned or controlled, directly or indirectly, by anothercorporation or by any foreign government.
**B) RELATED PARTYTRANSACTIONS**
Except as set out below or otherwise disclosed in this report or in ouraudited financial statements attached hereto, no executive officer or seniormanagement of the Company, nor any spouse, relative, associate or affiliate ofthe foregoing persons, has any interest in any material transactions whichoccurred during the Company's last full fiscal year and involved the Company orany of its subsidiaries; or any presently proposed transaction involving theCompany or any of its subsidiaries. 

In July 2007, the Company closed a private placement of 11,000,000 shares ofcommon stock at a purchase price of US$ 0.50 per share for gross proceeds to theCompany of US$ 5.5 million USD. The two corporate investors to this offering arebeneficially owned or controlled by two individuals who subsequent to theoffering became directors of the Company. These investors were arms length tothe Company prior to the July offerings.

In July 2007 the company announced that it closed a private placement of3,500,000 shares of common stock at a purchase price of US$ 1.00 per share forgross proceeds to the Company of US$ 3.5 million USD. The corporate investor tothis offering is beneficially owned or controlled by an individual whosubsequent to the offering became a director of the Company. This investor wasarms length to the Company prior to the July offerings.

Subsequent to the year ended December 31, 2005, in April of 2006 a motorvessel was disposed of for 500,000 common shares of the Company for submissionto treasury at a cost of $350,000 resulting in no gain or loss on the purchaseand sale of the asset.

During the year ended December 31, 2006, the Company paid $ Nil, (2005 - $Nil, 2004- $ Nil) in management fees and $nil - 2006, (2005 - $14,430, 2004,$44,000) in consulting fees to directors. The Company also reimbursed $159,715 -2006, (2005 - $220,625, 2004 - $185,535) to directors for expenditures made onbehalf of the Company.

Effective December 31, 2006, the Company completed the purchase of 100% ofthe outstanding capital stock of Fitness Vacations from an officer and directorof the Company in the amount of $550,000. The newly acquired company is a fullservice gym and also markets gym memberships with a travel component.Consideration given was settlement of $441,260 of advances by the Company to theowner of the shares of Fitness Vacations (who are also a shareholder of theCompany including the President and Director), and settlement of $108,740 ofadvances to Fitness Vacations

The assets and liabilities of Fitness Vacations at the time of acquisitionwere.
   Purchase price    $   550,000   Purchase Price Allocation   Equipment   $   206,798   Leasehold improvements   150,000   Accounts payable   (17,782)  
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   Net identifiable assets acquired   339,016     Excess of purchase price over net identifiable assets acquired    210,984   Total   $   550,000
Canadian GAAP requires that any assets or liabilities acquired in a non-armslength transaction be recorded in the Company records at the carrying value ofthe vendor. The amounts above attributed to net identifiable assets approximatetheir carrying value in the records of Fitness Vacations. The amount attributedto "excess of purchase price over net identifiable assets acquired" has beencharged to deficit.

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

Indebtedness to Company of Directors and Senior Management

Amounts due to shareholders during fiscal year 2006 were $330,599. Directorsof the Company are indebted to the Company in the amount of $nil and no directoror senior management or have been indebted to the Company since the beginning ofthe last completed financial year of the Company other than as listed below. TheCompany reimburses Directors and Senior Management for expenses incurred inconnection with Company's ordinary course of business. To the extent theseadvances and expenses are offset, there exists an indebtedness to the Company ofa net $nil as of December 31, 2006 (2005 - $ nil, 2004 - $nil).

Interests of Experts and Counsel

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

A) CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION**
This Annual Report contains the consolidated financial statements for theCompany for the fiscal years ended December 31, 2006, 2005 and 2004 whichcontain an Auditors' Report dated _________________, Consolidated Balance Sheetsas at December 31, 2006 and 2005, Consolidated Statements of Loss and Deficit,and Consolidated Statements of Cash Flows for the years ended December 31, 2006,2005 and 2004, 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 Companyor have been indebted to the Company since the beginning of the last completedfinancial year of the Company other than as noted in ITEM VII - MajorShareholders and Related Party

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Transactions. 
Legal or Arbitration Proceedings

As of the date hereof, the Company is a named party to a legal claim againstit in the Province of Ontario. This action purports to represent and individualwho fell while attending a presentation at the office of a Licensee of theCompany marketing vacations travel club memberships. 

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

Dividend Distribution Policy

The Company has not paid any cash dividends on its Common Stock and has nopresent intention of paying any dividends.  The current policy of the Company isto retain earnings, if any, for use in operations and in the development of itsbusiness.  The Board of Directors will determine the future dividend policy ofthe Company from time to time.
**B) SIGNIFICANT CHANGES**
In addition to the three (3) for one (1) split in the Company's common sharessubsequent to the date of the annual financial statements there has been anincrease in the number of issued and outstanding common shares of the Company.As of July 15, 2007 the Company completed private placements for a total of $9million USD and correspondingly issued 14,500,000 restricted common shares ofthe company.

On June 27, 2007 the record date, the Company issued 13,933,983 Series "A"Preferred Non-Dilutive shares to all the existing registered and beneficialcommon shareholders on a one (1) for one (1) PRO RATA basis. The Series "A'Preferred Non-Dilutive shares are convertible, as a Series into common shares ofthe Company provided a majority of the Series "A" Preferred shareholders vote in favor of converting the entire Series. The Series will convert into a number ofcommon shares that will represent 50% of the number of fully diluted commonshares after conversion.

On June 27, 2007 the record date, the Company issued 13,933,983 Series "B"Preferred Shares to all the existing registered and beneficial commonshareholders on a one (1) for one (1) PRO RATA basis. The Series "B" Preferredshares are convertible into common shares of the Company on a one for one basisby shareholders of record as of June 27, 2007.

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On July 5th 2007, the Company has executed a Stock Option plan reserving2,850,000 shares in the common stock of the Corporation to provide its officers,directors, employees and consultants with an incentive to use their best effortsto advance the business affairs of the Corporation. The plan allows optionees toexercise the purchase of stock options at the price of $1.00 per common sharewhich will be executable for a period of five years from the date of grant.
**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 Company's shares whenlisted on the on the OTCBB and the Pink Sheet Exchange for each of the mostcurrent five years, each of the quarters for the most current two years and eachof the most current six months:

For the five most recent full financial years, the annual high and low marketprices for the Company's common stock were as follows (US dollar figures):
  **2006**2005**2004**2003**2002**High**$
3.00
1.00
1.85
2.40
1.75**Low**$
0.24
0.17
0.15
0.07
0.01
For the two most recent full financial years, the high and low market pricesfor each full financial quarter for the Company's common stock were as follows(US dollar figures): 
**2006****2005****Q1****Q2****Q3****Q4****Q1****Q2****Q3****Q4****High**
$ 0.90 

1.25

1.80

3.00

$1.00 

0.51

0.50

0.50
**Low**$ 0.240.601.15 1.75$ 0.170.250.250.65
For the two most recent six months, the high and low market prices for eachmonth for the Company's common stock were as follows (US dollar figures):
**2006****Jun****May****Apr (1)**Mar****Feb****Jan****High**
$1.00 

0.80

2.60

2.50

2.50

2.50
**Low**$ 0.800.500.502.402.402.40
Note: (1) The Company's shares were forward split on a three for one basisApril 16th, 2007.
**B) PLAN OF DISTRIBUTION**
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.
**C) MARKETS**
As of July 13, 2007 the shares of Forum National Investments Ltd. arepublicly traded on the Pink Sheets Exchange under the trading symbol FMNLF CUSIPNumber 3498452067. The  

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nature and extent of principal non-United States tradingmarket is approximately 45% of all outstanding securities, which are heldoutside the United States and approximately 55% of all outstanding securitiesare held within the United States as of July 13, 2007. The share price hastraded at a high of $5.20 USD in 2007 and a low of $0.15 USD in 2004.
**D) SELLING SHAREHOLDERS**
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.
**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 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.
**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 theCompany's Registration Statement on form 20-F filed with the Commission November3, 1998 and Exhibits filed herewith. In particular:

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

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

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3. The Company's common shares rank equally as to dividend rights, votingrights, rights to share in the Company's profits and liquidation rights.  TheCompany's common shares are not, under the Company's memorandum and articles,subject to redemption or sinking fund provisions, liability to further capitalcalls, nor any provisions discriminating against any existing or prospectiveholder of such shares as a result of such shareholder owning a substantialnumber of shares.

The Company's Series "A" Non-Dilutive Convertible Preferred Shares withoutpar value have no rights as to dividend rights, voting rights, rights to sharein the Company's profits and or liquidation rights. The Series "A" ConvertiblePreferred Shares are not, under the Company's memorandum and articles, subjectto redemption or sinking fund provisions, liability to further capital calls,nor any provisions discriminating against any existing or prospective holder ofsuch shares as a result of such shareholder owning a substantial number ofshares.

The Series "A" Preferred Non-Dilutive shares are convertible, as a Seriesinto common shares of the Company provided a majority of the Series "A"Preferred shareholders vote in favor of converting the entire Series. The Serieswill convert into a number of common shares that will represent 50% of thenumber of fully diluted common shares after conversion.

A majority of the shares of the Series "A" Non-Dilutive Preferred Sharesoutstanding must vote in favor of converting the entire Series "A" PreferredShares outstanding into common shares before the shares of the Series "A"Preferred Shares may convert into Common Shares. On receipt of the requisiteaffirmative vote, the Series "A" Preferred Shares, in the aggregate shall beconverted into that number of fully paid and non-assessable Common Shares thatwill represent 50% of the number of fully diluted common shares afterconversion. Each Share of Series "A" Preferred Shares shall be convertible intoCommon Shares PRO RATA to its portion of the Series "A" Preferred Shares.

The Company's Series "B" Convertible Preferred Shares without par value haveno rights as to dividend rights, voting rights, rights to share in the Company'sprofits and or liquidation rights. The Company's Series "B" ConvertiblePreferred Shares are convertible into common shares of the Company on one commonshare for each preferred share held. The Series "B" Convertible Preferred Sharesare not, under the Company's memorandum and articles, subject to redemption orsinking fund provisions, liability to further capital calls, nor any provisionsdiscriminating against any existing or prospective holder of such shares as aresult of such shareholder owning a substantial number of shares.

4. To the Company's knowledge, there are no conditions imposed by thememorandum and articles of the Company governing changes in the rights ofholders of stock.

5. Section 10 of the Company's articles together with applicable corporateand securities laws contain the conditions governing the manner in which annualand extraordinary general meetings of shareholders are called including Noticeof Meeting/Proxy Solicitation requirements.  Part 10 of the Company's articlesdeals with proceedings at such meetings including quorum requirements.

6. To the Company's knowledge, there are no limitations on the rights to ownsecurities.

7. There are no provisions of the Company's memorandum or articles that wouldhave an effect of delaying, deferring or preventing a change in control of theCompany and that would 

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operate only with respect to a merger, acquisition or corporate restructuringinvolving the Company or any of its subsidiaries.

8. There are no bylaws provisions governing the ownership threshold abovewhich shareholder ownership must be disclosed.

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

**C) MATERIAL CONTRACTS**
In September of 2005, the Company secured a credit facility with CaterpillarFinancial Services for up to $3 million USD. The Company in March of 2007 hadthe credit facility increased to $4.3 million USD.

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

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

In April of 2006 a motor vessel was disposed of for 500,000 common shares ofthe Company for submission to treasury at a cost of $350,000 resulting in nogain or loss on the transaction.

Effective December 31, 2006, the Company completed the purchase of 100% ofthe outstanding capital stock of Fitness Vacations from an officer and directorof the Company in the amount of $550,000. The newly acquired company is a fullservice gym and also markets gym memberships with a travel component.Consideration given was settlement of $441,260 of advances by the Company to theowner of the shares of Fitness Vacations (who are also a shareholder of theCompany including the President and Director), and settlement of $108,740 ofadvances to Fitness Vacations

The assets and liabilities of Fitness Vacations at the time of acquisitionwere.
   Purchase price    $   550,000   Purchase Price Allocation   Equipment   $   206,798   Leasehold improvements   150,000   Accounts payable   (17,782)   Net identifiable assets acquired   339,016     Excess of purchase price over net identifiable assets acquired    210,984   Total   $   550,000
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Canadian GAAP requires that any assets or liabilities acquired in a non-armslength transaction be recorded in the Company records at the carrying value ofthe vendor. The amounts above attributed to net identifiable assets approximatetheir carrying value in the records of Fitness Vacations. The amount attributedto "excess of purchase price over net identifiable assets acquired" has beencharged to deficit. 

In July 2007 the company announced that it closed a private placement of11,000,000 shares of common stock at a purchase price of US$ 0.50 per share forgross proceeds to the Company of US$ 5.5 million USD. The private placement wasmade to two accredited investors. 

In July 2007 the company announced that it closed a private placement of3,500,000 shares of common stock at a purchase price of US$ 1.00 per share forgross proceeds to the Company of US$ 3.5 million USD. The private placement wasmade to an accredited investor. 
**D) EXCHANGE CONTROLS**
There are no governmental laws, decrees or regulations in Canada restrictingthe import or export of capital or affecting the remittance to the United Statesof interest, dividends or other payments to non-resident holders of our shares.However, the payment or crediting of interest or dividends to United Statesresidents may be subject to applicable withholding taxes at a rate prescribed bythe *Income Tax Act* (Canada) and modified by the provisions of theCanada-United States Income Tax Convention, 1980 (see commentary in the sectionentitled "Taxation" below).

Except as provided in the *Investment Canada Act* (the "ICA"), there areno limitations under the laws of Canada, the Province of Ontario or in ourMemorandum or Articles on the right of foreigners to hold and/or vote the sharesof our capital stock.

The ICA has application where a "non-Canadian" individual or entity orcontrolled group of entities proposes to make an investment to acquire controlof a Canadian business enterprise, either directly or indirectly, by way ofpurchase of voting shares of a corporation or of substantially all of the assetsused in the Canadian business enterprise. An investment to acquire voting sharesof a corporation is deemed to be an acquisition of control where more thanone-half of the voting shares are acquired. An acquisition of less thanone-third of the voting shares of a corporation is deemed not to be anacquisition of control and an acquisition of between one-third and one-half ofthe voting shares of a corporation is presumed to be an acquisition of controlunless it can be established that the acquisition does not in fact result incontrol of the corporation by the investor.

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

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

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**E) TAXATION

Canadian Federal Income Tax Considerations 

The following is a general discussion of the material Canadian federal incometax consequences applicable to a holder of our common shares who is a residentof the United States and who is not, and is not deemed to be, a resident ofCanada, who holds such common shares as capital property and who does not use orhold such common shares in carrying on a business in Canada (a "Non-ResidentHolder").

This summary is based on the current provisions of the Income Tax Act(Canada) and regulations there under (the "ITA") and all specific proposals toamend the ITA publicly announced prior to the date hereof by the Minister ofFinance (Canada) and the current administrative practices of the Canada RevenueAgency. It has been assumed that all specific proposals to amend the ITA will beenacted in substantially their present form and that no other relevantamendments to the ITA will come into force. However, no assurance can be givento this effect. Except for the foregoing, this summary does not take intoaccount or anticipate any changes in law, whether by legislative, administrativeor judicial decision or action, nor does it take into account provincial,territorial or foreign income tax legislation or considerations which may differfrom those described herein. See "United States Federal Income Tax Consequences"below.

This summary is not exhaustive of all possible Canadian federal income taxconsequences to all Non-Resident Holders and in particular will not beapplicable where the Non-Resident Holder is a non-resident insurer carrying onan insurance business in Canada in respect of which our common shares are heldor used in Canada. Nor should these comments be interpreted as legal or taxadvice to any particular Non-Resident Holder; each of whom should consult theirown tax advisors with respect to their particular circumstances.

Dividends 

Dividends (including deemed dividends) paid or credited on our common sharesto a Non-Resident Holder will be subject to withholding tax in Canada. TheCanada-United States Income Tax Convention, 1980, as amended (the "Treaty")provides that the normal 25% rate of withholding tax on the gross amount of suchdividends is reduced to 15% if paid to a resident of the United States. TheTreaty provides for a further reduction of the withholding tax rate to 5% if thebeneficial owner of such dividends is a company (any entity which is treated asa body corporate for purposes of the ITA) which is a resident of the UnitedStates 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 ofa capital gain realized upon the disposition or deemed disposition (such aswould arise on the death of an individual Non-Resident Holder) of a common shareunless such share is "taxable Canadian property" to the Non-Resident Holder. Acommon share in the capital of our company will be taxable Canadian property toa Non-Resident Holder if (i) at any time during the five year period ending atthe time of disposition of such share, the Non-Resident Holder, persons withwhom the Non-Resident Holder did not deal at arm's length, or the Non-ResidentHolder together with all such persons owned (or had an option to acquire) 25% ormore of the issued shares of any  

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class or series of our capital stock; or (ii)the Non-Resident Holder elected under the ITA to treat such common shares astaxable Canadian property upon ceasing to be a resident of Canada prior toOctober 2, 1996.

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

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

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

U.S. Federal Income Tax Consequences 

The following is a summary of the anticipated material U.S. federal incometax consequences to a U.S. Holder (as defined below) arising from and relatingto the acquisition, ownership, and disposition of our common shares ("CommonShares").

This summary is for general information purposes only and does not purport tobe a complete analysis or listing of all potential U.S. federal income taxconsequences 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 nottake into account the individual facts and circumstances of any particular U.S.Holder that may affect the U.S. federal income tax consequences of theacquisition, ownership, and disposition of Common Shares. Accordingly, thissummary 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. Holdershould consult its own financial advisor, legal counsel, or accountant regardingthe U.S. federal, U.S. state and local, and foreign tax consequences of theacquisition, 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), publishedrulings of the Internal Revenue Service ("IRS"), published administrativepositions of the IRS, the Convention Between Canada and the United States ofAmerica 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 decisionsthat are applicable and, in each case, as in effect and available, as of thedate of this Annual Report. Any of the authorities on which this summary isbased could be changed in a material and adverse manner at any time, and anysuch change could be applied on a retroactive basis. This summary does notdiscuss the potential effects, whether adverse or beneficial, of any proposedlegislation that, if enacted, could be applied on a retroactive basis.

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 U.S. Holders
For purposes of this summary, a "U.S. Holder" is a beneficial owner of CommonShares that, for U.S. federal income tax purposes, is (a) an individual who is acitizen or resident of the U.S., (b) a corporation, or any other entityclassified as a corporation for U.S. federal income tax purposes, that iscreated 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 estateis 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 toexercise primary supervision over the administration of such trust and one ormore U.S. persons have the authority to control all substantial decisions ofsuch trust.

Non-U.S. Holders

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

U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed

This summary does not address the U.S. federal income tax consequences of theacquisition, ownership, and disposition of Common Shares to U.S. Holders thatare subject to special provisions under the Code, including the following U.S.Holders: (a) U.S. Holders that are tax-exempt organizations, qualifiedretirement plans, individual retirement accounts, or other tax-deferredaccounts; (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 currenciesthat elect to apply a mark-to-market accounting method; (d) U.S. Holders thathave a "functional currency" other than the U.S. dollar; (e) U.S. Holders thatare liable for the alternative minimum tax under the Code; (f) U.S. Holders thatown Common Shares as part of a straddle, hedging transaction, conversiontransaction, constructive sale, or other arrangement involving more than oneposition; (g) U.S. Holders that acquired Common Shares in connection with theexercise of employee stock options or otherwise as compensation for services;(h) U.S. Holders that hold Common Shares other than as a capital asset withinthe meaning of Section 1221 of the Code; or (i) U.S. Holders that own, directlyor 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, includingU.S. Holders described immediately above, should consult their own financialadvisor, legal counsel or accountant regarding the U.S. federal, U.S. state andlocal, and foreign tax consequences of the acquisition, ownership, anddisposition of Common Shares.

If an entity that is classified as partnership (or "pass-through" entity) forU.S. federal income tax purposes holds Common Shares, the U.S. federal incometax consequences to such partnership (or "pass-through" entity) and the partnersof such partnership (or owners of such "pass-through" entity) generally willdepend on the activities of the partnership (or "pass-through" entity) and thestatus of such partners (or owners). Partners of entities that are classified aspartnerships (or owners of "pass-through" entities) for U.S. federal income taxpurposes should consult their own financial advisor, legal counsel or accountantregarding the

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U.S. federal income tax consequences of the acquisition, ownership, anddisposition 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 estateand gift, or foreign tax consequences to U.S. Holders of the acquisition,ownership, and disposition of Common Shares. Each U.S. Holder should consult itsown financial advisor, legal counsel, or accountant regarding the U.S. state andlocal, U.S. federal estate and gift, and foreign tax consequences of theacquisition, ownership, and disposition of Common Shares. (See"Taxation-Canadian Federal Income Tax Considerations" above).

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

Distributions on Common Shares

 General Taxation of Distributions

A U.S. Holder that receives a distribution, including a constructivedistribution, with respect to the Common Shares will be required to include theamount of such distribution in gross income as a dividend (without reduction forany Canadian income tax withheld from such distribution) to the extent of ourcurrent or accumulated "earnings and profits." To the extent that a distributionexceeds our current and accumulated "earnings and profits," such distributionwill be treated (a) first, as a tax-free return of capital to the extent of aU.S. Holder's tax basis in the Common Shares and, (b) thereafter, as gain fromthe 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 taxrates applicable to long-term capital gains if (a) we are a "qualified foreigncorporation" (as defined below), (b) the U.S. Holder receiving such dividend isan individual, estate, or trust, and (c) such dividend is paid on Common Sharesthat have been held by such U.S. Holder for at least 61 days during the 121-dayperiod beginning 60 days before the "ex-dividend date" (i.e., the first datethat a purchaser of such Common Shares will not be entitled to receive suchdividend). 

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 inthe U.S. However, even if we satisfies one or more of such requirements, we willnot be treated as a QFC if we are a "passive foreign investment company" (asdefined below) for the taxable year during which we pay a dividend or for thepreceding taxable year. In 2003, the U.S. Department of the Treasury (the"Treasury") and the IRS announced that they intended to issue TreasuryRegulations providing procedures for a foreign corporation to certify that it isa QFC. Although these Treasury Regulations were not issued in 2004, the Treasuryand the IRS have confirmed their intention to issue these Treasury Regulations.It is expected that these Treasury Regulations will obligate persons required tofile information returns to report a distribution with respect to a foreignsecurity issued by a foreign  

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corporation as a dividend from a QFC if the foreigncorporation has, among other things, certified under penalties of perjury thatthe foreign corporation was not a "passive foreign investment company" for thetaxable year during which the foreign corporation paid the dividend or for thepreceding taxable year.

As discussed below, we do not believe that we were a "passive foreigninvestment company" for the taxable year ended December 31, 2006, and we do notexpect that we will be a "passive foreign investment company" for the taxableyear ending December 31, 2007. (See more detailed discussion at "AdditionalRules that May Apply to U.S. Holders" below). However, there can be no assurancethat the IRS will not challenge our determination concerning our "passiveforeign investment company" status or that we will not be a "passive foreigninvestment 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 theIRS 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 wewill be able to certify that we are a QFC in accordance with the certificationprocedures 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 atordinary income tax rates (and not at the preferential tax rates applicable tolong-term capital gains). The dividend rules are complex, and each U.S. Holdershould consult its own financial advisor, legal counsel, or accountant regardingthe dividend rules.

Distributions Paid in Foreign Currency

The amount of a distribution paid to a U.S. Holder in foreign currencygenerally will be equal to the U.S. dollar value of such distribution based onthe exchange rate applicable on the date of receipt. A U.S. Holder that does notconvert foreign currency received as a distribution into U.S. dollars on thedate of receipt generally will have a tax basis in such foreign currency equalto the U.S. dollar value of such foreign currency on the date of receipt. Such aU.S. Holder generally will recognize ordinary income or loss on the subsequentsale or other taxable disposition of such foreign currency (including anexchange 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 receiveddeduction is subject to complex limitations that are beyond the scope of thisdiscussion, and a U.S. Holder that is a corporation should consult its ownfinancial advisor, legal counsel, or accountant regarding the dividends receiveddeduction.

Disposition of Common Shares

A U.S. Holder will recognize gain or loss on the sale or other taxabledisposition of Common Shares in an amount equal to the difference, if any,between (a) the amount of cash and the fair market value of any propertyreceived and (b) such U.S. Holder's tax basis in the Common Shares sold orotherwise disposed of. Any such gain or loss generally will be capital gain orloss, which will be long-term capital gain or loss if the Common Shares are heldfor more than one year. Gain or loss recognized by a U.S. Holder on the sale orother 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 moredetailed discussion at "Foreign Tax Credit" below).

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Preferential tax rates apply to long-term capital gains of a U.S. Holder thatis an individual, estate, or trust. There are currently no preferential taxrates 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 complexlimitations. For a U.S. Holder that is an individual, estate, or trust, capitallosses may be used to offset capital gains and up to U.S.$3,000 of ordinaryincome. 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, untilsuch 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 lossgenerally may be carried back three years and carried forward five years fromthe year in which such net capital loss is recognized. 

Foreign Tax Credit

A U.S. Holder who pays (whether directly or through withholding) Canadianincome tax with respect to dividends paid on the Common Shares generally will beentitled, at the election of such U.S. Holder, to receive either a deduction ora credit for such Canadian income tax paid. Generally, a credit will reduce aU.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. federalincome tax. This election is made on a year-by-year basis and applies to allforeign taxes paid (whether directly or through withholding) by a U.S. Holderduring a year. 

Complex limitations apply to the foreign tax credit, including the generallimitation 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 "foreignsource" taxable income bears to such U.S. Holder's worldwide taxable income. Inapplying this limitation, a U.S. Holder's various items of income and deductionmust be classified, under complex rules, as either "foreign source" or "U.S.source." In addition, this limitation is calculated separately with respect tospecific categories of income (including "passive income," "high withholding taxinterest," "financial services income," "general income," and certain othercategories of income). Dividends paid by us generally will constitute "foreignsource" income and generally will be categorized as "passive income" or, in thecase of certain U.S. Holders, "financial services income." However, for taxableyears beginning after December 31, 2006, the foreign tax credit limitationcategories are reduced to "passive income" and "general income" (and the othercategories of income, including "financial services income" are eliminated). Theforeign tax credit rules are complex, and each U.S. Holder should consult itsown financial advisor, legal counsel, or accountant regarding the foreign taxcredit rules. 

Information Reporting; Backup Withholding Tax

Payments made within the U.S., or by a U.S. payor or U.S. middleman, ofdividends on, and proceeds arising from certain sales or other taxabledispositions of, Common Shares generally will be subject to informationreporting 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 identificationnumber, (c) is notified by the IRS that such U.S. Holder has previously failedto properly report items subject to backup withholding tax, or (d) fails tocertify, under penalty of perjury, that such U.S. Holder has furnished itscorrect U.S. taxpayer identification number and that the IRS has not notifiedsuch U.S. Holder that it is subject to backup withholding tax. However, U.S.Holders that are corporations generally are excluded from these informationreporting 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'sU.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 shouldconsult its

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own financial advisor, legal counsel, or accountant regarding the informationreporting 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 investmentcompany" (each as defined below), the preceding sections of this summary may notdescribe the U.S. federal income tax consequences to U.S. Holders of theacquisition, ownership, and disposition of Common Shares.

Controlled Foreign Corporation

We generally will be a "controlled foreign corporation" under Section 957 ofthe Code (a "CFC") if more than 50% of the total voting power or the total valueof our outstanding shares is owned, directly or indirectly, by citizens orresidents of the U.S., domestic partnerships, domestic corporations, domesticestates, or domestic trusts (each as defined in Section 7701(a)(30) of theCode), each of which own, directly or indirectly, 10% or more of the totalvoting 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 ofour "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 Statesproperty" (as defined in Section 956 of the Code). In addition, under Section1248 of the Code, any gain recognized on the sale or other taxable dispositionof Common Shares by a U.S. Holder that was a 10% Shareholder at any time duringthe five-year period ending with such sale or other taxable dispositiongenerally will be treated as a dividend to the extent of our "earnings andprofits" that are attributable to such Common Shares. If we are both a CFC and a"passive foreign investment company" (as defined below), we generally will betreated as a CFC (and not as a "passive foreign investment company") withrespect 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 orany future taxable year. 

Passive Foreign Investment Company**
We generally will be a "passive foreign investment company" under Section1297 of the Code (a "PFIC") if, for a taxable year, (a) 75% or more of our grossincome for such taxable year is passive income or (b) 50% or more of the assetsheld by us either produce passive income or are held for the production ofpassive income, based on the fair market value of such assets (or on theadjusted tax basis of such assets, if we are not publicly traded and either area "controlled foreign corporation" or makes an election). "Passive income"includes, for example, dividends, interest, certain rents and royalties, certaingains from the sale of stock and securities, and certain gains from commoditiestransactions. 

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

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

If we are a PFIC, the U.S. federal income tax consequences to a U.S. Holderof the acquisition, ownership, and disposition of Common Shares will depend onwhether such U.S. Holder makes an election to treat us as a "qualified electingfund" or "QEF" under Section 1295 of the Code (a "QEF Election") or amark-to-market election under Section 1296 of the Code (a "Mark-to-MarketElection"). A U.S. Holder that does not make either a QEF Election or aMark-to-Market Election will be referred to in this summary as a "Non-ElectingU.S. Holder." 

Under Section 1291 of the Code, any gain recognized on the sale or othertaxable disposition of Common Shares, and any "excess distribution" (as definedin Section 1291(b) of the Code) paid on the Common Shares, must be ratablyallocated to each day in a Non-Electing U.S. Holder's holding period for theCommon Shares. The amount of any such gain or excess distribution allocated toprior years of such Non-Electing U.S. Holder's holding period for the CommonShares generally will be subject to U.S. federal income tax at the highest taxapplicable 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 eachsuch prior year, calculated as if such tax liability had been due in each suchprior year. 

A U.S. Holder that makes a QEF Election generally will not be subject to therules of Section 1291 of the Code discussed above. However, a U.S. Holder thatmakes a QEF Election generally will be subject to U.S. federal income tax onsuch U.S. Holder's pro rata share of (a) our "net capital gain," which will betaxed as long-term capital gain to such U.S. Holder, and (b) our "ordinaryearnings," 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 onsuch amounts for each taxable year in which we are a PFIC, regardless of whethersuch 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 besubject to the rules of Section 1291 of the Code discussed above. A U.S. Holdermay make a Mark-to-Market Election only if the Common Shares are "marketablestock" (as defined in Section 1296(e) of the Code). A U.S. Holder that makes aMark-to-Market Election will include in gross income, for each taxable year inwhich we are a PFIC, an amount equal to the excess, if any, of (a) the fairmarket 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 aMark-to-Market Election will, subject to certain limitations, be allowed adeduction in an amount equal to the excess, if any, of (a) such U.S. Holder'sadjusted tax basis in the Common Shares over (b) the fair market value of suchCommon 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 endingDecember 31, 2006. There can be no assurance, however, that the IRS will notchallenge our determination concerning its PFIC status or that we will not be aPFIC for the current or any future taxable year. 

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

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**F) DIVIDENDS AND PAYING AGENTS**
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.
**G) STATEMENTS BY EXPERTS**
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.
**H) DOCUMENTS ON DISPLAY**
Any documents referred to in this document may be inspected at the headoffice of the Company, #180A - 13040 No 2 Road, Richmond, British Columbia,Canada, V7E 2G1 during normal business hours. 

You may also review a copy of the Company's filings with the SEC, includingexhibits and schedules filed with it, in the SEC's Public Reference Room at 100F Street NE, Washington, D.C. 20549. You may call the SEC at 1-800-SEC-0330 orthe Conventional Reading Rooms' Headquarters Office at 212-551-8090 for furtherinformation on the public reference rooms. The SEC maintains a web site (www.sec.gov)that contains reports, proxy and information statements and other informationregarding registrants that file electronically with the SEC.
**I) SUBSIDIARY INFORMATION**
There is no information relating to the Company's subsidiaries which must beprovided in Canada and which is not otherwise called for by the body ofgenerally accepted accounting principles used in preparing the consolidatedfinancial statements.
**ITEM XI. QUANTITATIVE   AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**
The Company has no financial instrument about which disclosure ofquantitative or qualitative market risk exposure is required. 
**ITEM XII. DESCRIPTION   OF SECURITIES OTHER THAN EQUITY SECURITIES**
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.

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**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 notcured within thirty days, relating to indebtedness of the Company.  There are nopayments of dividend by the Company in arrears, nor has there been any othermaterial delinquency relating to any class of preference shares of the Company.
**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 holdersduring the most current fiscal year.  

Use of proceeds

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.
**ITEM XV. CONTROLS AND   PROCEDURES**
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, theCompany evaluated the effectiveness of the design and operation of itsdisclosure controls and procedures (as defined in Rule 13a-15(e) under theSecurities Exchange Act of 1934, as amended) as of a date (the "EvaluationDate") being December 31, 2006.  Based upon that evaluation, the Chief ExecutiveOfficer and Chief Financial Officer concluded that, as of the Evaluation Date,the Company's disclosure controls and procedures were effective in timelyalerting them to the material information relating to the Company (or theCompany's consolidated subsidiaries) required to be included in the Company'sSEC filings.

Management's annual report on internal controls over financial reporting

Our management is responsible for establishing and maintaining adequateinternal control over financial reporting for the Company. The Company'sinternal control over financial reporting is designed to provide reasonableassurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with generallyaccepted accounting principles and includes those policies and procedures that(1) pertain to the maintenance of records that in reasonable detail accuratelyand fairly reflect the transactions and dispositions of the assets of theCompany; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of 

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the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition, use ordisposition of the Company's assets that could have a material effect on thefinancial statements. 

Because of its inherent limitations, internal control over financialreporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk thatcontrols may become inadequate because of changes in conditions or because thedegree of compliance with policies or procedures may deteriorate. 

Our management, including our Chief Executive Officer and Chief FinancialOfficer, assessed the effectiveness of internal control over financial reportingas of December 31, 2006. Based on that assessment, our management concluded thatour internal control over financial reporting was effective as of December 31,2006. 

There was no change in the Company's internal control over financialreporting (as required by the Exchange Act) during the last fiscal year that hasmaterially affected, or is reasonably likely to materially affect, the Company'sinternal control over financial reporting. There were no significantdeficiencies or material weaknesses, and therefore no corrective actions weretaken or may occur and not be detected.

This annual report does not include an attestation report of the company'sregistered public accounting firm regarding internal control over financialreporting. Management's report was not subject to attestation by the company'sregistered public accounting firm pursuant to temporary rules of the Securitiesand Exchange Commission that permit the Company to provide only management'sreport in this annual report.
**ITEM XVI. AUDIT COMMITTEE FINANCIAL EXPERT**
Audit Committee Financial Expert

The Company has an Audit Committee established by the Board of Directors. Ourboard has determined that we do not have a financial expert serving on our auditcommittee 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 membersof our Audit Committee enables them, as a group, to act effectively in thefulfillment of their tasks and responsibilities, including those under theSarbanes-Oxley Act of 2002, without appointing a member who would qualify as anaudit committee financial expert.

Code of Ethics

We have adopted a code of ethics for our Chief Executive Officer, principalfinancial officer, principal accounting officer, controller and other personsperforming 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 andconflicts of interest; 

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Full, fair, accurate, timely and quality public disclosure filed with the SECand 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 thisreport

Principal Accountant Fees and Services

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

For the years ended December 31,2006 and 2005, the Company was invoiced by SmytheRatcliffe, the Company'sindependent auditors, for audit fees, audit-related fees, tax fees and all otherfees as set forth below:
 

Year Ended December 31, 2006

Year Ended    December    31, 2005

Audit fees (1)
41,000-

41,000

Audit - related fees

-

-

Tax fees

-

-

All other fees

-
-

Total
41,000-

41,000

 
 
 
Note: 

"Audit Fees" represent fees for the audit of the Company's annual financialstatements, review of the Company's interim financial statements and review inconnection with the Company's statutory and regulatory filings

The Audit Committee has adopted procedures requiring Audit Committee reviewand approval in advance of all particular engagements for services to beprovided by SmytheRatcliffe.  Consistent with applicable laws, the procedurespermit limited amounts of services, other than audit, review and attestservices, to be approved by one or more members of the Audit Committee pursuantto authority delegated by the Audit Committee, provided the Audit Committee isinformed of each particular service.  The Audit Committee approved all of theengagements and fees during the year ended December 31, 2006.  The AuditCommittee reviews with SmytheRatcliffe whether the non-audit services to beprovided are compatible with maintaining the auditors' independence.  The Boardhas determined that, beginning with January 1, 2006, fees paid to theindependent auditors for non-audit related services in any year will not exceedthe fees paid for audit services during the year. Permissible non-audit serviceswill be limited to fees for tax services, accounting assistance or audits inconnection with 

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acquisitions, and other services specifically related to accounting or auditmatters such as registration statements filings or private placements or publicofferings.

Exemptions from the Listing Standards for Audit Committees

Not Applicable.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Not Applicable.

 
**PART III

 

ITEM XVII. FINANCIAL   STATEMENTS**
See the Financial Statements and Exhibits listed in Item XIX hereof and filedas part of this Annual Report. Included are audited consolidated balance sheetsas at December 31, 2006 and 2005, and the consolidated statements of operationsand deficit and cash flows for each of the years ended December 31, 2006, 2005and 2004, including the Auditors' Report to Shareholders.

These financial statements were prepared in accordance with Canadian GAAP andare expressed in Canadian dollars.  Such financial statements have beenreconciled to U.S. GAAP (see note 22 therein).  For a history of exchange ratesin effect for Canadian dollars as against U.S. dollars, see "Item III - KeyInformation, Selected Financial Data - Exchange Rate Data".
**ITEM XVIII. FINANCIAL   STATEMENTS**
Not applicable.
**ITEM XIX. EXHIBITS**
Exhibits attached to this Form 20-F are as follows:

Financial Statements

(i) Management's Responsibility to Financial Reporting. (ii) Auditors' Report dated July 31, 2007. (iii) Consolidated Balance Sheets as at December 31, 2006 and 2005. (iv) Consolidated Statements of Operations and Deficit for the years ended December 31, 2006, 2005 and 2004. (v) Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004. 

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(vi) Notes to the Consolidated Financial Statements for the years ended December 31, 2006, 2005 and 2004 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(2)**1.3 Articles of  Amendment, Change of Name(2)**1.4 Articles of  Amendment, Authorization of Preferred Shares including Designation of Series  "A" and Series "B" Preferred Share**4.1 4226054 Canada Inc.,  Commission Agreement Janaury 1, 2004(3)**4.2 1617165 Ontario Inc.,  Commission Agreement May 1, 2004(3)**4.3 2094711 Ontario  Limited., Commission Agreement January 1, 2006(3)**4.5 Loan Agreement, dated  September 21, 2005(4)**4.5.(i) First Amendment to  Loan Agreement, dated October 11, 2005(4)**4.5.(ii) Second Amendment to  Loan Agreement, dated November 6, 2006(4)**4.6 Purchase Agreement.  International Fitness Vacations (BC) Ltd., December 31, 2006(5)**4.7 Letter of Intent.  Gala Travels, February 19, 2007(4)**8.1 List of Subsidiaries**11.1 Code of Ethics,  January 1, 2003(3)**12.1 Section 302  Certification of Chief Executive Officer**12.2 Section 302  Certification of Chief Financial Officer**13.1 Section 906  Certification of Chief Executive Officer and Chief Financial Officer
Note:
- Incorporated by reference to Form 20-F filed with the SEC on November 3, 1998.
- Incorporated by reference to Form 20-F filed with the SEC on August 15, 2003.
- Incorporated by reference to Form 20-F filed with the SEC on December 29, 2006.
- To be filed on request. 
- Incorporated by reference to Form 20-F filed with the SEC on July 8, 2002

 

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**FORUM NATIONAL INVESTMENTS LTD.**
December 31, 2006, 2005, 2004

Consolidated Financial Statements(Expressed in Canadian dollars)

 

 

 

 

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**INDEX TO FINANCIAL STATEMENTS**
                                                                                                                                                                                                                                            Page
  Auditors' Report dated July 31, 2007F-2Consolidated Balance  Sheets as at December 31, 2006, 2005F-3Consolidated  Statements of Loss and Deficit for the years ended December 31, 2006, 2005 and 2004F-4Consolidated  Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004F-5Notes to the  Consolidated Financial Statements for the years ended December 31, 2006, 2005  and 2004F-6 to 28
 

**
 

 

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE SHAREHOLDERS OF FORUM NATIONAL INVESTMENTS LTD.**
We have audited the consolidated balance sheets of Forum National InvestmentsLtd. as at December 31, 2006 and 2005 and the consolidated statements ofoperations and deficit and cash flows for each of the years in the three yearperiod ended December 31, 2006. These financial statements are the responsibility ofthe Company's management. Our responsibility is to express an opinion on thesefinancial statements based on our audits. 

We conducted our audits in accordance with Canadian generally acceptedauditing standards and the standards of the Public Company Accounting OversightBoard (United States). Those standards require that we plan and perform an auditto obtain reasonable assurance whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statementpresentation.

In our opinion, these consolidated financial statements present fairly, inall material respects, the financial position of the Company as at December 31,2006 and 2005 and the results of its operations and its cash flows for each ofthe years in the three-year period ended December 31, 2006 in accordance with accounting principles generally accepted in Canada. 

Chartered Accountants 

/s/ SmytheRatcliffe LLP

Vancouver, Canada July 31, 2007

 

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

In the United States, reporting standards for auditors requires the additionof an explanatory paragraph (following the opinion paragraph) when the financialstatements are affected by conditions and events that cast substantial doubt onthe Company's ability to continue as a going-concern, such as those described innote 2 to the consolidated financial statements. Our report to the shareholdersdated July 31, 2007 is expressed in accordance with Canadian reportingstandards, which do not permit a reference to such events and conditions in theauditors' report when these are adequately disclosed in the notes to thefinancial statements. 

Chartered Accountants 

/s/ SmytheRatcliffe LLP

Vancouver, Canada July 31, 2007

F-1

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**FORUM NATIONAL INVESTMENTS LTD.Consolidated Balance SheetsDecember 31(Expressed in Canadian dollars)
   
2006 
2005**Assets**          **Current**     Cash
$641,253
$940,218 Short-term   investments 14,210 3,500 Accounts and notes   receivable 440,358 475,983 Other receivables 323,281 60,935 Prepaid expenses 12,208 23,808 Inventory - condos - 3,433 Amounts due from related parties (notes 10 and   18) - 199,684      1,431,310    1,707,561      **Other   Receivables** - 116,355**Property and Equipment**(note 7)    7,276,372    4,591,964**Deferred Costs, net**(note 9) -    1,522,737**Intangibles, net**(note 8) 7,500 10,000
$8,715,182
$7,948,617**Liabilities and Shareholders' Equity**    **Current**     Accounts payable and   accrued liabilities
$669,014
$   1,121,408 Deferred revenue,   current portion (note 9) -    1,097,135 Advances against   future revenue streams (note 11) 25,321 93,001Current portion of   deferred gain (note 6)-76,702Current portion of   long-term debt (note 14)49,263-Convertible debentures (note 12)40,48640,486784,084   2,428,732      **Deferred Revenue** (note 9)-   1,463,390**Deferred Gain**(note 6)-4,320**Long-Term Debt**(note 14)   4,029,516   1,324,991**Loans from Related Parties**(notes 10 and   18)330,599239,3775,144,1995,460,810**Shareholders' Equity****Capital Stock**   (note 15)   14,802,797   15,152,797**Deficit**(11,231,814)(12,664,990)3,570,9842,487,807$8,715,182$7,948,617Going-concern (note 2)Commitments (note 17)       Approved on Behalf of the Board:     /s/ Dan Clozza  Director  /s/ Martin TutschekDan ClozzaMartin Tutschek  DirectorSee accompanying notes to   consolidated financial statements.
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**FORUM NATIONAL INVESTMENTS LTD.Consolidated Statements of Operations andDeficitYear ended December 31(Expressed in Canadian dollars)
   2006 2005 2004        **Revenues**        Membership sales and    travel$    3,918,410$    4,157,556$    5,632,938 Membership dues     1,648,637     1,690,200     1,856,883 Miscellaneous     477,482 -     1,566,858 Interest 53,251 75,760 129,765   6,097,780 5,923,516 9,186,444        **Expenses**                Wages     1,081,049     1,179,624     1,374,234 Office and related     238,216     175,666     206,991 Rent     186,550     200,792     148,406 Condominium rentals     185,969     261,768     137,076 Legal and accounting     163,756     274,231     242,312 Automotive     157,075     117,048     102,012 Travel     142,105 88,384     151,985 Direct selling 93,147 84,575     232,439 Bank charges and    interest 85,223     101,538     177,253 Consulting fees 53,423 33,800     124,008 Postage, copying and    printing 41,526 48,269 46,669 Insurance 25,935 34,819 30,261 Investor relations 16,771 1,299 2,480 Equipment leases 16,700 33,651 36,261 Advertising and    promotion 13,826 9,573 28,854 Parts and    maintenance 13,106 42,984 54,927 Other 5,906 16,717 75,613 Bad debts/(recovery)     (14,007)     238,509     427,944 Amortization of    property and equipment 7,830 7,319 64,988 Amortization of deferred commission costs 1,939,061 1,277,223 1,564,724   4,453,167 4,227,789 5,229,932        **Income Before the Following**     1,644,613     1,695,727     3,956,512**Loss on Disposal of Houseboats** - - (291,931)        **Income Before Income Taxes**     1,644,613     1,695,727     3,664,581**Income Taxes**(note 13) 453 43,923 1,797        **Net    Income for Year**     1,644,160     1,651,804     3,662,784**Deficit, Beginning of Year**     (12,664,990)     (14,316,894)     (17,979,578)**Adjustment on acquisition of subsidiary (note    4)** (210,984) - -**Deficit, End of Year**$(11,231,814)$(14,316,894)$(14,316,794)        Basic    earnings per share (note 16)$0.35$0.30$0.75Diluted earnings per share (note 16)$0.32$0.30$0.72        Weighted average number of common shares    outstanding - Basic 5,098,086 5,444,661 4,899,949       See    accompanying notes to consolidated financial statements      
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**FORUM NATIONAL INVESTMENTS LTD.Consolidated Statements of Cash FlowsYear ended December 31(Expressed in Canadian dollars)
200620052004**Operating    Activities**Net income$    1,644,160$    1,651,804$    3,662,784Items not involving    cash:Deferred revenue    (2,560,525)    (3,367,166)    (3,518,248)Miscellaneous revenue--    (1,556,858)Deferred commission costs    1,939,061    1,239,223    1,515,329Amortization of property and    equipment, membership contracts and intangibles    7,830    7,319    64,988Write-down of property and    equipment--    291,931Accretion of discount on advances    against future revenue streams-    46,508    116,190Revenue recognized on advances against future revenue streams(67,680)(209,177)(475,359)962,846(631,48990,757Changes in non-cash    operating capital:Accounts receivable and other    receivables    (110,366)    216,389    501,279Prepaid expenses    11,600    4,478    (13,454)Inventory - condos    3,433    12,194    6,018Long-term receivables-    285,478    570,765Deferred costs    (416,324)    388,397    (686,854)Accounts payable and accrued    liabilities    (452,395)    223,130    (83,073)Deferred revenue-    45,307    (26,947)Deferred gain(81,022)(149,782)(438,412)(1,045,074)1,025,591(170,678)**Cash Generated From (Used in) Operating Activities** (82,228) 394,102 (79,921)**Investing    Activities**      Proceeds on sale of    property and equipment--    160,500Short-term investment    (10,710)--Purchase of property    and equipment    (2,689,738)    (667,965)    (716,693) Redemption of short-term investments - - 9,500**Cash Used in Investing Activities**(2,700,448)(667,965)(546,693)**Financing    Activities**Repayment of    convertible debentures--    (7,618)Proceeds from    advances against future revenue streams (note 11)-    42,422    301,547Amounts due to (from)    related parties    199,684    (350,779)    152,773Loans from related    parties    91,223    (15,618)    254,995Current portion of    long-term debt    49,263--Long-term debt    2,704,525    1,324,991-Reduction in capital    stock on disposal of asset    (350,000)-100Adjustment to accumulated deficit (note 4)(210,984)--**Cash Provided by Financing Activities**2,483,7111,001,016701,797**Increase    (Decrease) in Cash**    (298,895)    727,153    75,183**Cash, Beginning of Year**940,218213,065137,882**Cash, End of Year**$641,253$940,218$213,065Supplemental cash    flow information (note 19)See accompanying    notes to consolidated financial statements
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**FORUM NATIONAL INVESTMENTS LTD.**
Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)
**1. Incorporation and Nature of Operations

The Company was incorporated on September 22, 1995, under the *Business Corporations Act* (British Columbia) and commenced operations on that date. On October 2, 1997, the Company was continued under the laws of the Province of Ontario. Effective February 26, 1999, the Company changed its name from Snowbird Vacations International Inc. to inTRAVELnet.com inc. and on April 17, 2002, the Company's name was changed to Forum National Investments Ltd.

The Company earns dues from members of its travel club, who are entitled to the full-travel services of the Company. The Company has purchased and operates a full-service gym from the end of December 2006 to increase memberships and marketing opportunities. 
**2. Going-Concern

For the year ended December 31, 2006, the Company had net income of $1,644,160 compared to net income of $1,651,804 and $3,662,784 for the years ended December 31, 2005 and 2004, respectively. In 2006, the Company used cash in operating activities of $82,228 and generated cash of $394,102 in 2005 and used cash of $79,921 in 2004 and at December 31, 2006 had a working capital surplus of $647,227 (deficiency of - $721,171 for 2005 and shareholders' equity of $3,781,967 (2005 - $2,487,807). 

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.
**3. Significant Accounting Policies**
(a)  Basis of presentation 

These consolidated financial statements are prepared in  accordance with Canadian generally accepted accounting principles ("Canadian  GAAP") and include the accounts of the Company and the following wholly owned  subsidiaries:
SubsidiaryIncorporating   jurisdictionDate of acquisition   or incorporationinTRAVELnet Inc.Alberta, CanadaNovember 9, 1999Intravelnet Ltd.Ontario, CanadaJuly 25, 2003ATM Travel Group Ltd. ("ATM")British Columbia,   CanadaApril 3, 2000International Fitness Vacations   (BC) Ltd. (note 4)British Columbia,   CanadaDecember 31, 2006All significant   inter-company balances and transactions have been eliminated.As described in note   21, Canadian GAAP differ in certain material aspects from accounting   principles generally accepted in the United States ("US GAAP").
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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)

3. Significant Accounting Policies (continued)

 (b)  Revenue recognition 

The Company generates revenues from the sale of  memberships, dues and charter sales. The Company accounts for the full  membership contract value in the year sold if more than 10% of the face value  was received during that financial year. Prior to 2006, the portion of revenue  received from members, which entitles members to use the Company's vacation  and travel club privileges at a future date, was deferred and recognized in  income evenly over the term of the member's entitlements. For lifetime  memberships, revenue was 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 Canadian  Institute of Chartered Accountants ("CICA) for stock-based compensation and  other stock-based payments. The Company accounts for stock options granted to  directors, employees and consultants using the fair value method. The fair  value of each option granted is estimated on the date of grant using the  Black-Scholes option pricing model and charged to 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 years ended December 31, 2006, 2005 and 2004. 

(d)  Property and equipment 

Property and equipment are stated at cost. Amortization is  provided on a straight-line basis in order to amortize the cost of depreciable  assets over their estimated useful lives. For assets constructed internally,  amortization is charged once the asset is complete and brought into use. The  Company periodically evaluates the recoverability of its in-use property and  equipment based on expected undiscounted future cash flows and recognizes  impairments, if any, when the undiscounted future cash flows are expected to  be less than the carrying value of the asset. For assets that are under  construction, the Company evaluates recoverability based on the fair value of  the asset on the reporting date. When impairment in value is noted, the  carrying value of the property and equipment is reduced by a charge to  operations.

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**3. Significant**Accounting Policies (continued)**
(d) Property and equipment (continued) 

The annual rates applied are as follows: 
AssetBasisRate   Motor vesselStraight-line4%HouseboatsStraight-line4%Service boatsStraight-line10%EquipmentStraight-line20%ComputersStraight-line30%Leasehold improvementsTerm of lease5 years   
 

(e)  Deferred costs 

Sales commissions deferred were amortized to operations on  the same basis as the related membership sales were 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. 

Tangible assets acquired in a business combination are  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.

(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.

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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)

3. Significant**Accounting Policies (continued)**

(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 11), 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 3(b)).

(i)  Earnings per share 

Basic earnings per share is calculated based on the  weighted average number of common shares outstanding during the period. 

(j)  Income taxes 

Income taxes are accounted for under the asset and  liability method. Future income tax assets and liabilities are recognized for  future tax consequences attributable to differences between the financial  statement carrying amounts of existing assets and liabilities and their  respective tax basis and operating loss carry-forwards. Future income tax  assets and liabilities are measured using enacted or substantially 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.

(k)  Use of estimates

The preparation of financial statements in conformity with  Canadian GAAP requires management to make estimates and assumptions that  affect the reported amounts of assets and liabilities and disclosure of  contingent assets and liabilities at the date of the financial statements, and  the reported amounts of revenues and expenses during the reporting period.  Significant areas requiring the use of estimates include the valuation of  accounts receivable, impairment of assets, including intangible assets, rates  for amortization and revenue recognition estimates and estimated balances of  accounts payable and accrued liabilities. While management believes the  estimates used are reasonable, actual results could differ from those  estimates.

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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)

4. Acquisitions

Effective December 31, 2006, the Company completed the purchase of 100% of the outstanding capital stock of International Fitness Vacations (BC) Ltd. ("Fitness Vacations") from an officer and director of the Company in the amount of $550,000. The newly acquired company is a full service gym and also markets gym memberships with a travel component. Consideration given was settlement of $441,260 of advances by the Company to the owner of the shares of Fitness Vacations (who are also a shareholder of the Company including the President and Director), and settlement of $108,740 of advances to Fitness Vacations

The assets and liabilities of Fitness Vacations at the time of acquisition were.
   Purchase price$550,000    Purchase Price Allocation   Equipment$206,798 Leasehold improvements 150,000 Accounts payable (17,782)    Net identifiable assets acquired 339,016Excess of purchase price over net identifiable assets acquired 210,984    Total$550,000    
Canadian GAAP requires that any assets or liabilities acquired in a non-arms length transaction be recorded in the Company records at the carrying value of the vendor. The amounts above attributed to net identifiable assets approximate their carrying value in the records of Fitness Vacations. The amount attributed to "excess of purchase price over net identifiable assets acquired" has been charged to deficit, beginning of year. 
**5. Financial Instruments

(a) Fair value

Carrying amounts of certain of the Company's financial  instruments, including cash, short-term investments, accounts and notes  receivable and accounts payable and accrued liabilities approximate fair  values due to their short-term 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. 

(b) Credit risk

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

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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)

5. Financial Instruments (continued)

(c) Interest rate risk**Interest rate risk consists of two components:

(i) To the extent 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 cash  flow 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 price risk. 

(d) Currency risk 

The Company is exposed to currency risk in relation to  their US dollar financing referred to in note 14.
**6. 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, were 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.

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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)

7. Property and Equipment
**2006** Cost Accumulated   amortization Net book    value       Motor vessel$6,915,556$-$6,915,556Service boats 49,979 49,979 -Equipment 210,592 2,097 208,495Computers 7,737 1,671 6,066Leasehold improvements 147,794 1,539 146,255        $7,331,658$55,286$7,276,372              **2005** Cost Accumulated amortization Net Book   value       Motor vessel$4,234,549$-$4,234,549Houseboat 350,000 - 350,000Service boats 49,979 46,886 3,093Equipment 185,246 182,215 3,031Computers 124,348 123,058 1,290Leasehold improvements 27,601 27,600 1        $4,971,723$379,759$4,591,964              At December 31,   2006, the Company's motor vessel is under construction and its cost is   therefore not being amortized. The houseboat was sold in 2006 in return for   capital stock issued in a prior year.
 

8. Intangibles
**    **2006** **2005       Purchased intangibles  $25,000$25,000Accumulated amortization   (17,500) (15,000)   $7,500$10,000       The premium on acquisition was   determined by evaluating the membership and marketing potential.
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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)

9. Deferred Revenue
  2006 2005           $-$2,560,525  - 1,097,135      $-$1,463,390           $-$2,761,960  - 1,239,223      $-$1,522,737     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 up to December 31, 2005. The revenue is recognized as indicated in note   3(b).     During 2006, the   Company entered into travel club membership agreements with a total value of   $649,486 (2005 - $990,645; 2004 - $763,665). 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 3(b), the revenue from these memberships are recognized in   the year of purchase and prior to 2006 evenly over the term of the   membership.**  2006 2005 2004       Travel club memberships entered into during   the year$649,486$990,645$763,665Amount recognized as revenue during the year (649,486) (110,384) (87,240)       Future years' revenue to be earned from   current year membership agreements - 880,261 676,425Cash collected during the year related to   future years' revenues - (690,317) (332,730)  -    Amounts due to be received in subsequent years from current   year membership agreements$ $189,944$343,695       
10. Amounts Due from Related Parties

The amounts due from directors and officers are unsecured, non-interest bearing and repayable on demand and relate primarily to advances made by the Company, net of expenditures. To the extent that these advances and expenses are offset, there exists a net indebtedness to the Company of $nil as of December 31, 2006 (2005 - $nil; 2004 - $nil). 

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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)

11. Advances Against Future Revenue Streams

During the years ended December 31, 2006 and 2005, the Company sold future streams of revenue as described in note 3(h). The activity is summarized as follows:
   2006 2005            Balance, January 1$93,001$213,249Proceeds from sale   of future revenue streams, net of discount, reserve and buybacks 17,940 42,422Accretion of   discount to interest expense during the year    23,747 46,507Recognition of membership revenues during the year (109,367) (209,177)          Balance, December 31 25,321 93,001     **12. Convertible Debentures

The conversion feature of the debenture allows for the debenture holder to convert the capital at a rate of US$6.00 to U$12.50 per common share of the Company. The Company would have to issues 4,622 common shares if 100% of the debentures were converted. During 2006, $nil (2005 - $nil and 2004 - $7,619) convertible debentures were converted to common shares.
** 

13. Income Taxes

The effective income tax rate differs from the Canadian statutory income tax rate. The principal factors causing the different rates are shown below:
  2006 2005 2004Statutory income tax rate 34.12% 33.6% 33.6%       Statutory rate applied to income (loss) from operations   before   income taxes$501,841$557,815$1,228,860Permanent differences20,05811,36647,550Large corporations tax and other -43,9231,797Non-capital losses not previously recognized   48,85723,383-Use of losses not previously recognized(553,744)(444,812)-Tax effect of depreciation and amortization in excess of capital cost   allowance (16,443) (147,752) (1,276,410)Income tax expense$569$45,923$1,797
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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)

13. Income Taxes (continued)

The tax effects of the significant temporary differences, which comprise the deferred tax assets and liabilities at December 31, 2006, 2005 and 2004, are as follows:
   2006 2005 2004        Future income tax assets:       Non-capital loss carry forwards$1,640,145$2,151,524$1,509,270 Capital loss carry forwards 419,431 419,431 28,850 Property and equipment - un-depreciated tax   cost in excess of net book value  296,537 444,651 2,367,400 Intangibles - 1,292,657 1,281,200        Total gross future income tax   assets 2,356,117 3,015,608 5,186,720        Valuation allowance (2,356,117) (3,015,608) (5,186,720)          $   -$   -$   -        The ultimate   realization of the future tax assets is dependent upon the generation of   future taxable income during the periods in which those temporary differences   become deductible. In assessing the reliability of future tax assets,   management considers whether it is more likely than not that some or all of   the future tax assets will be realized. Where management does not believe   that realization is more likely than not, a valuation allowance is provided.        The Company has   non-capital income tax loss carry forwards of approximately $5,043,000   available to reduce future years' taxable income expiring between 2007 and   2026.        The Company has a   capital loss carry-forward of approximately $1,240,000 which can be carried   forward indefinitely.         **14. Long-Term Debt

During the year ended December 31, 2006, the Company secured a long-term loan to complete the refit project of the vessel.
  2006 2005          Balance, January 1 $-$-Construction loan in US Funds to complete vessel refit   project, convertible into a permanent loan at completion, amortizing over 10   years bearing interest at the per annum LIBOR plus 3.25% monthly published   rate (US$3,500,000) 4,078,779 1,324,991     Balance, December 31 4,078,779 1,324,991Less: Current portion 49,263 -     Long-term portion$4,029,516$1,324,991     
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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)

15. Capital Stock

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

(b) The issued capital stock of the Company is as follows:
 Number   of sharesAmount   Issued and outstanding, December 31, 2005 and   20045,444,661$    15,152,797   Returned to treasury in 2006 (note 7)(800,000)(350,000)      Issued and outstanding, December 31, 20064,644,661$    14,802,797      
(c) Options

The Company has no outstanding employee and director stock  options to purchase common shares of the Company. 
**16. Earnings per Share**
Basic earnings per share is calculated based upon the weighted average number of voting common shares outstanding during the year, which was 5,098,086 in 2006 (2005 - 5,144,661; 2004 - 4,899,949). Diluted earnings per share reflects the dilutive effect of the conversion of the stock options and 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. 
**17. Commitments**
(a) The Company has commitments in respect of operating  leases with total aggregate payments due of approximately $148,712 (2005 -  $152,876). Payments due in each of the next three years are as follows:
   2007$90,5222008 47,7932009 10,397   Total$148,712   
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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)

17. Commitments (continued)

(b) The Company has commitments in respect of office leases  with total aggregate payments due of approximately $176,647 (2005 - $335,664).  Payments due in each of the next three years are as follows:
   2007$90,9552008 62,8402009    22,852   Total$   176,647   **18. Related Party Transactions

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

(a)  During 2006, the Company paid $nil (2005 -  $21,736; 2004 - $172,500) as settlement and $nil (2005 - $14,430; 2004 -  $44,000) in consulting fees to directors or companies controlled by directors  of the Company. The Company also reimbursed $159,715 (2005 - $220,625; 2004 -  $185,535) to directors for expenditures made on behalf of the Company.

(b)  At December 31, 2006, directors and officers advanced $257,706  (2005 - $107,629; 2004 - $406,088) to the Company in the form of loans and  short-term financing. The amounts advanced from directors and officers are  unsecured, non-interest bearing and repayable on demand.

(c)  During 2006, the Company wrote-off an amount of  $37,396 (2005 - $8,555; 2004 - $68,069) being advances in lieu of expenses due  from former officers and employees of the Company. 

All of the above transactions and balances are in the normal course of operations and measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.
**19. Supplemental Cash Flow Information

Cash flow information:
  2006 2005 2004   
     Interest paid$30,950$89,656$36,987       Taxes paid$453$43,923$47,503       Excess of purchase price - gym acquisition   $210,984$-$-        
   
     
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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)

 

20. Subsequent Events

In addition to subsequent events disclosed elsewhere in these financial statements the following occurred subsequent to year-end: 

(a) In February 2007, the Company acquired 100% of the  issued and outstanding capital stock of a Washington State company, Price  Shield Systems Inc.

(b) In February 2007, the Company signed a letter of intent  with an Ontario-based travel wholesaler for travel fulfillment.

(c) On April 16, 2007, the Company's common shares were  forward split on a three new for one old basis.

(d) On June 27, 2007, the Company issued 13,933,983 Class  "A" preferred shares and 13,933,983 Class "B' preferred shares to existing  shareholders. The Class "A" preferred shares are convertible, in whole but not  in part, into such number of common shares as would equal 50% of the number of  fully diluted common shares upon conversion. The Class "B" Preferred shares  are convertible into common shares of the Company on a one-for -one basis.

(e) On July 5, 2007, the Company executed a stock option  plan reserving 2,850,000 shares in the common stock of the Company. The plan  allows optionees to exercise the purchase of stock options at the price of  $1.00 per common share for a period of five years from the date of grant.

(f) In July 2007, the Company completed a series of private  placements totaling US$9,000,000. In connection with the private placements a  total of 14,500,000 common shares of the Company were issued.

 

 

 

 

 

 

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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)
**21. United States generally accepted accounting principles ("U.S. GAAP") reconciliation**
These financial statements have been prepared in accordance with Canadian GAAP, which differ in certain respects from those principles and practices that the Company would have followed had its consolidated financial statements been prepared in accordance with US GAAP as summarized below: 

(a) Stock-based compensation
*(i) Under US GAAP, the issue of stock options and   warrants to non-employees is accounted for under Financial Accounting   Standards Board ("FASB") Statement No 123R ("SFAS 123R"), "*Accounting for   Stock Issued to Employees*" and related interpretations. As such,   compensation expense under fixed plans is recorded on the grant date only if   the market price of the Company's stock at that date exceeds the exercise   price. Variable accounting is required to be applied if the exercise price of   outstanding fixed stock options is reduced. Under variable accounting, the   compensations expensed is re-measured based on the option's intrinsic value   at each reporting date until the date the award is exercised, forfeited or   expires unexercised with changes in the intrinsic value recorded in the   measurement of net income. For Canadian GAAP purposes, the Company accounts   for the issuance of stock options, whether made under a fixed or variable   plan, to employees and directors by the settlement method which results in no   compensation expense for the Company's stock-based employee compensation   awards. Consideration paid by employees or directors on the exercise of stock   options is recorded as capital stock. 

For the year ended December 31, 2006, nil employee stock   options were granted. Accounting for employee stock options under US GAAP   would not result in additional compensation expense for fiscal 2006, 2005 or   2004.

(*ii)* Under US GAAP, the issue of stock options and   warrants to non-employees is accounted for under Financial Accounting   Standards Board ("FASB") Statement No 123 ("SFAS 123"), *"Accounting for   Stock-Based Compensation"*. The Company recognizes compensation expense   for stock options, issued to non-employees for services received based upon   the fair value of the services received or the equity instruments issued,   whichever is more reliably determined. During the year ended December 31,   2002, the Company adopted the new recommendations of the CICA Handbook   section related to stock-based compensation payments (note 3(c)). Under this   policy, stock options issued to non-employees after December 31, 2001 are   accounted for consistently with US GAAP. Therefore, for the year ended   December 31, 2002, the only measurement difference for non-employees are   those carried forward from the prior years as noted below.

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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)
**21. United States generally accepted accounting principles reconciliation (continued)**
(a) Stock-based compensation (continued)
*(ii) (continued)

The fair value of the stock options and warrants granted   to non-employees during the years ended December 31, 2001 and 2000 were   estimated on the date of grant using the Black-Scholes option pricing model   and the following weighted-average assumptions: 
 20012000   Expected volatility1.731.98Risk-free rate5.48%4.23%Dividend yield0%0%Expected life of options0.6 years1.6 years      
Accounting for the non-employee options on this basis   would result in recording additional compensation expense and capital stock   of $684,664 from the year of adoption of FAS No 123 to December 31, 2006.

(b) Valuation of stock issued for assets and services

(*i*) During the year ended December 31, 2000, the   Company acquired International Fitness Vacations for 992,000 common shares of   the Company. Under Canadian GAAP, the acquisition was valued based on the   estimated fair value of the assets acquired. For US GAAP purposes, the   acquisition would be valued based on the market value of the shares given.   Accordingly, as at December 31, 2000, the application of US GAAP would result   in an increase in capital stock of $1,217,705, an increase in goodwill of   $1,105,346 and an increase in the deficit of $112,359.

During the year ended December 31, 2001, goodwill relating   to the acquisition of International Fitness Vacations was written down, and   as such, the additional goodwill recorded on the acquisition under US GAAP   was written off. Accordingly as at December 31, 2006 and 2005, the   application of US GAAP would result in an increase in capital stock and   deficit of $1,217,705.

(*ii*) During the years ended December 31, 2001 and   2000, the Company settled a number of accounts payable by the issuance of   stock options and common shares. For Canadian GAAP purposes, the transactions   were recorded at the carrying value of services received. For US GAAP   purposes, the transactions would be valued based on the market value of the   options or shares issued. Accordingly, for the years ended December 31, 2006   and 2005, the application of US GAAP would result in an increase in capital   stock and deficit of $695,681.

(iii)  During the years ended December 31, 2006, 2005 and   2004, the Company did not issue shares under its incentive share purchase   plan (note 3(c)).

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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)
**21. United States generally accepted accounting principles reconciliation (continued)**
(c) Recent accounting pronouncements
*(i) In December 2004, the FASB issued a revised   Statement No 123 ("SFAS 123R"), "*Accounting for Stock-Based Compensation*"   requiring public entities to measure the cost of employee services 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). The adoption of this standard does not have a   material impact on the Company's financial statements.

(ii)  In December 2004,   the FASB issued SFAS No 152 ("SFAS 152), "Accounting for Real Estate Time   Sharing Transactions - an amendment of FASB Statements No 66 and 67". SFAS   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". SFAS 152 is effective for financial statements, for fiscal   years beginning after June 15, 2005. The adoption of this standard does not   have a material impact on the Company's financial statements.

(iii)  In December 2004, FASB issued Statement No 153 ("SFAS   153'), "Exchange of Non-monetary Assets". SFAS 153 addressed the   measurement of exchanges of non-monetary assets and eliminates the exception   from fair value measurement for non-monetary exchanges of similar productive   assets and replaces it with an exception for exchanges that do not have   commercial substance. A non-monetary exchange has commercial substance if the   future cash flows of the entity are expected to change significantly as a   result of the exchange. SFAS 153 is effective for periods beginning after   June 15, 2005. The adoption of this standard does not have a material impact   on the Company's financial statements.

(iv)  In May 2005, the FASB issued Statement No 154 ("SFAS   154"), "Accounting Changes and Error Corrections". SFAS 154 replaces   APB Opinion No 20 "Accounting Changes" and FASB Statement No 3 ("SFAS   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 adoption of this   standard does not have a material impact on the Company's financial   statements. 

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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)

21. United States generally accepted accounting principles reconciliation (continued)

(c) Recent accounting pronouncements (continued)

*(v) *In June 2006, the FASB issued FASB interpretation No 48   ("FIN 48"), "*Accounting for Uncertainty in Income Taxes- an interpretation   of FASB Statement No 109*", which clarifies the accounting for uncertainty   in income taxes recognized in accordance with FASB Statement No 109 ("SFAS   109"), "*Accounting for Income Taxes.*" FIN 48 clarifies the application   of SFAS 109 by defining criteria that an individual tax position must meet   for any part of benefit of that position to be recognized in the financial   statements. Additionally FIN 48 provides guidance on the measurement of   de-recognition, classification and disclosure of tax positions along with   accounting for the related interest and penalties. The provisions of FIN 48   are effective for the fiscal years beginning after December 15, 2006 with the   cumulative effect of the change in accounting principle recorded as an   adjustment to opening retained earnings. The adoption of this interpretation   does not have a material impact on the Company's financial statements.

*(vi) *On September 13, 2006, the Securities and Exchange   Commission ("SEC") issued Staff Accounting Bulletin No 108 ("SAB 108") which   provides interpretive guidance on how the effects of the carryover or   reversal of prior year misstatements should be considered in quantifying a   current year misstatement. SAB 108 is effective for the first fiscal year   ending after November 15, 2006. The adoption of this standard does not have a   material impact on the Company's financial statements.

 

 

 

 

 

 

 

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**FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements Years ended December 31, 2006 and 2005 (Expressed in Canadian dollars)
**21. United States generally accepted accounting principles reconciliation (continued)

(d) Reconciliation

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

(*i*) Capital stock
  2006 2005Capital stock, under Canadian GAAP$   14,802,797$   15,152,797Adjustment for stock-based   compensation for non-employees (a)   684,664   684,664Adjustment for acquisition of   International Fitness Vacations (b)(*i)*)   1,217,705   1,217,705Adjustment for accounts payable settled by share issuances (b*(ii*)   and *(iii)*) 695,681 695,681Capital stock, under US GAAP$17,400,847$17,750,847
(*ii*) Deficit
  2006 2005Deficit, under Canadian GAAP$   (11,231,814)$   (12,664,990)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*)   and *(iii)*) (695,681) (695,681)Deficit, under US GAAP $(13,829,864)$(15,263,040)
(*iii*) Net income and earnings per share for the year
 Years ended December 31,  2006 2005 2004       Net Income for the year, under Canadian GAAP$1,644,160$1,651,804$3,662,784              Net Income for the year, under US GAAP$1,644,160$1,651,804$3,662,784Basic earnings (loss) per share,   under US GAAP$0.35$0.30$0.75Diluted earnings (loss) per share,   under US GAAP$0.32$0.30$0.72
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