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

**Amendment
  No. 2**

FORM 20-F /A

(Mark One)

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

OR

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

[ X ]
  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****January 01, 2007** to September
  30, 2007**

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

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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. 28,433,983

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

If 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

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EXPLANATORY
  NOTE

Amendment
  No. 2

Forum
  National Investments Ltd. (we or the Company) is filing this
  Amendment No. 2 on Form 20-F/A (Amendment No. 2) to its annual report
  on Form 20-F for the transition year ended September 30, 2007 originally filed
  with the Securities and Exchange Commission on April 1, 2008 (the original
  filing)and the amended filing on April 15, 2008 (Amendment No. 2) to reflect
  the following amendments to the original filing, as amended:

| | 1)  | The cover page has been amended to indicate
      this Form 20-F is a Transition Report a the Company changed its fiscal
      year end from December 31stto September 30thof
      each year.                                                                                   
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2)  | Part I Item III  Selected Financial
      Data has been amended to reflect the adjustments made to the financial
      statements and to add a weighted average number of share calculation.                                                                                    
| | 3)  | Part I Item IV  Information About the
      Company has been amended to include an introductory paragraph of the Companys
      three lines of business and more information about these lines of business.                                                                    
| | 4)  | Part I Item V Operating Results has been amended
      to expand the disclosure on revenue recognition, amend the Selected Financial
      Data to reflect the adjustments made to the financial statements and to
      explain in more detail changes to our operating results.
| | 5)  | Part I Item V Liquidity has been amended to
      expand disclosure regarding private placements.                                                                                                                                                                                
| | 6)  | Part I Item V Tabular Disclosure has been
      amended to expand the notes for clarity.                                                                                                                                                                                         
| | 7)  | Part I Item X Other Information has been amended
      to expand the information provided on subsequent events.                                                                                                                                                                  
| | 8)  | Part I Item XV Controls and Procedures has
      been amended to revise our conclusion regarding the effectiveness of our
      internal controls over financial reporting and our disclosure controls
      and procedures as of the end of the period covered by this report.  
| | 9)  | Part I Item VIII The Companys consolidated
      audited financial statements have been amended as follows:                                                                                                                                                                     
| |     | a)                                                                                                                                                                                                                                                                               
| |     | b)                                                                                                                                                                                                                                                                               
| |     | c)                                                                                                                                                                                                                                                                               
| | 10) | New certifications of our principal executive
      and financial officer are included as exhibits to this amendment.                                                                                                                                                            

We
  undertook the restatement of our financial statements as a result of receipt
  of a comment letter from the Securities and Exchange Commission dated August
  22, 2008.

Amendment
  No. 1

The
  note directly following discuss the difference between the Companys Annual
  Report and Form 20-F for the nine months ended September 30, 2007, which was
  originally filed on April 01, 2008 (the Original Filing) and Amendment
  1 filed on April 15, 2008. Amendment No. 1 revises certain balances in Part
  I, Items V, VIII, Part II and the Consolidated Financial Statements and Notes.

Amendment
  No. 1 revised certain balances in Part I, Items V, VIII, Part II and the Consolidated
  Financial Statements and Notes. A few journal entries were reallocated at our
  auditors request which resulted in what we believe to be minor changes to our
  financial statements. In addition, final changes made to the financial statements
  were not recorded on the original filing. The changes were as follows:

| | 1) | Part I Item III  Selected Financial Data was amended
      to reflect the adjustments made to the financial statements.
| | -- | ------------------------------------------------------------------------------------------------------------------------
| | 2) | Part I Item V Operating Results was amended to reflect
      the adjustments made to the financial                      

3

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| |    | statements.                                                                                            
| | -- | -------------------------------------------------------------------------------------------------------
| | 3) | Part I Item V Liquidity was amended to reflect
      the adjustments made to the financial statements. 
| | 4) | Part I Item VIII The Companys consolidated
      audited financial statements were amended as follows:
| |    | a)                                                                                                     
| |    | b)                                                                                                     
| | 5) | New certifications of our principal executive
      and financial officer.                             

General

For
  the convenience of the reader, Amendment No, 2 sets forth the original Form
  20-F as amended in its entirety. However, this Amendment No. 2 only amends the
  items specifically described above. No other information in the original Form
  20-F is amended. In addition, pursuant to the rules of the SEC, the original
  Form 20-F has been amended to contain currently dated certifications from our
  Chief Executive Officer and Chief Financial Officer, as required by Sections
  302 and 906 of the Sarbanes-Oxley Act of 2002.

This
  Amendment does not reflect events that have occurred after April 1, 2008, the
  date the Annual Report on Form 20-F was originally filed. Information with respect
  to those events is set forth, as appropriate, in our subsequent Current Reports
  on Form 6-K.

4

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FORUM NATIONAL INVESTMENTS LTD.

TABLE OF CONTENTS

|GENERAL                                                                 | 7 
|----------------------------------------------------------------------- | --
|NOTE REGARDING FORWARD-LOOKING STATEMENTS                               | 7 
|PART
      I                                                            | 8 
|ITEM I. IDENTITY OF
      DIRECTORS, SENIOR MANAGEMENT AND ADVISORS     | 8 
|ITEM
      II. OFFER STATISTICS AND EXPECTED TIMETABLE                  | 8 
|ITEM III. KEY
      INFORMATION                                         | 8 
|A) SELECTED FINANCIAL DATA                                              | 8 
|B) CAPITALIZATION AND INDEBTEDNESS                                      | 10
|C) REASONS FOR THE OFFER AND USE OF
      PROCEEDS                      | 10
|D) RISK FACTORS                                                         | 10
|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                                      | 28
|C) RESEARCH AND DEVELOPMENT, PATENTS
      AND LICENSES, ETC            | 30
|D) TREND INFORMATION                                                    | 30
|E) OFF-BALANCE SHEET ARRANGEMENTS                                       | 32
|F) TABULAR DISCLOSURE OF
      CONTRACTUAL OBLIGATIONS                  | 32
|G) SAFE HARBOR                                                          | 32
|ITEM
      VI. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES               | 32
|A) DIRECTORS AND SENIOR MANAGEMENT                                      | 32
|B) COMPENSATION                                                         | 33
|C) BOARD PRACTICES                                                      | 34
|D) EMPLOYEES                                                            | 35
|E) SHARE OWNERSHIP OF MANAGEMENT                                        | 35
|ITEM
      VII. MAJOR SHAREHOLDERS AND RELATED PARTY
      TRANSACTIONS | 37
|A) MAJOR SHAREHOLDERS                                                   | 37
|B) RELATED PARTY TRANSACTIONS                                           | 37
|ITEM VIII. FINANCIAL
      INFORMATION                                  | 39
|A) CONSOLIDATED STATEMENTS AND OTHER
      FINANCIAL INFORMATION        | 39
|B) SIGNIFICANT CHANGES                                                  | 40
|ITEM
      IX. THE OFFER AND LISTING                                    | 40
|A) PRICE RANGE AND VOLUME OF SHARES OF
      COMMON STOCK               | 40
|B) PLAN OF DISTRIBUTION                                                 | 41
|C) MARKETS                                                              | 41
|>D) SELLING SHAREHOLDERS                                                | 41
|E)DILUTION                                                              | 41
|F) EXPENSES OF THE ISSUE                                                | 41
|ITEM X. ADDITIONAL
      INFORMATION                                    | 41
|A) SHARE CAPITAL                                                        | 41

5

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|B)
      MEMORANDUM AND ARTICLES OF INCORPORATION                                                  | 42
|-------------------------------------------------------------------------------------------------- | --
|C)
      MATERIAL CONTRACTS                                                                        | 43
|D)
      EXCHANGE CONTROLS                                                                         | 44
|E)
      TAXATION                                                                                  | 45
|F)
      DIVIDENDS AND PAYING AGENTS                                                               | 51
|G)
      STATEMENTS BY EXPERTS                                                                     | 52
|H)
      DOCUMENTS ON DISPLAY                                                                      | 52
|I)
      SUBSIDIARY INFORMATION                                                                    | 52
|ITEM
      XI. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                          | 52
|ITEM
      XII. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                             | 52
|PART
      II                                                                                      | 52
|ITEM
      XIII. DEFAULTS, DIVIDENDS, ARREARS AND DELINQUENCIES                                    | 52
|ITEM
      XIV. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE
      OF PROCEEDS | 52
|ITEM
      XV. CONTROLS AND PROCEDURES                                                             | 53
|ITEM
      XVI.AUDIT COMMITTEE FINANCIAL EXPERT                                                    | 54
|PART
      III                                                                                     | 56
|ITEM
      XVII. FINANCIAL STATEMENTS                                                              | 56
|ITEM
      XVIII. FINANCIAL STATEMENTS                                                             | 56
|ITEM
      XIX. EXHIBITS                                                                           | 56
|INDEX
      TO FINANCIAL STATEMENTS                                                                | 59

6

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GENERAL

In this Annual Report on Form 20-F, all references to Forum,
or the Company refer to Forum National Investments, Ltd. and its subsidiaries
and affiliated companies. References to this Form 20-F and this Annual
Report mean references to this Annual Report on Form 20-F for the period ended
September 30, 2007.

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

NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

- the effect of certain transactions, including marketing agreements on our
      revenues and results of operations in future periods;
- our discussions with potential new marketing agents or membership based
      organizations and the status of these discussions;
- our ability to secure additional financing and grow operating cash flow
      to allow it to continue as a going concern;
- our ability to successfully enter the Life Settlement marketplace and source
      adequate amounts of Life Settlement policies .
- application of critical accounting policies and the effect of accounting
      pronouncements on our results of operations;
- our focus on key long-term objectives, including diversifying our type
      of membership offerings, maintaining and expanding current membership levels,
      and improving its levels and areas of service ;
- other statements related to our business and results of operations.

Forward looking statements are made based on managements
reasonable beliefs, estimates and opinions on the date the statements are made.
However, these forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance
or achievements or industry results to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such risk factors include, but are not limited to,
general economic conditions, our ability to generate sufficient cash flows to
support capital

7

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

PART I

ITEM I. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
ADVISORS

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 II. OFFER STATISTICS AND EXPECTED TIMETABLE

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

ITEM III. KEY INFORMATION

A) SELECTED FINANCIAL DATA

Set forth below is certain selected financial data for the
Company for the year-end fiscal periods 2003 to 2007. The following information
must be read in conjunction with the more detailed financial information
contained in the accompanying audited financial statement. Unless otherwise
stated, all references to dollars herein are to Canadian dollars. As at
September 30, 2007, one United States Dollar was equal to 0.9963 Canadian
dollars and that value is used in the calculations herein, unless otherwise
indicated.

TABLE OF SELECTED CONSOLIDATED FINANCIAL DATA

(Stated in Canadian Dollars)

|                       |   | Year Ended December 31 |  
|---------------------- | - | ---------------------- | -
|                       |   |                        |  
|                       |   | Sep 30, 2007*          |  
|Current Assets         | $ | 9,264,232              |  
|Capital Assets         |   | 9,100,127              |  
|Total Assets           |   | 20,035,886             |  
|Current Liabilities,   |   | 1,056,037              |  
|Excluding Deferred     |   |                        |  
|Revenue                |   |                        |  
|Deferred Revenue       |   | 2,065,575              |  
|Convertible Debentures |   | 40,486                 |  
|Long Term Debt         |   | 3,988,031              |  
|Share Capital          |   | 24,194,793             |  
|Contributed surplus    |   | 2,944,536              |  
|Deficit                |   | (14,213,086            | )
|Net Revenue from       | $ | 2,572,638              |  

8

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Year Ended December 31Sep 30, 2007*
      
      
      2006
      
      
      2005
      
      
      2004
      
      
      2003OperationsNet Income (Loss) from
      
      (2,212,467
      )
      
      875,355
      
      
      1,651,804
      
      
      3,662,784
      
      
      3,263,047Operations


Year Ended December 31Sep 30, 2007
      
      
      2006
      
      
      2005
      
      
      2004
      
      
      2003Earnings (Loss) per
      
      (2
      )
      
      (0.20
      )
      
      0.17
      
      
      0.30
      
      
      0.75
      
      
      2.36Share from OperationsFully Diluted Earnings
      
      (2
      )
      
      -
      
      
      0.17
      
      
      0.30
      
      
      0.72
      
      
      2.36per ShareWeighted Average
      
      (2
      )
      
      11,140,573
      
      
      5,098,086
      
      
      5,444,661
      
      
      4,899,949
      
      
      1,384,771number of shares forcalculating basic anddiluted Earnings (Loss)per share


Notes:

(*)     
  The Company has changed its year end to September 30th effective for the year
  ended September 30, 2007. Fiscal period for September 30, 2007 includes 9 months
  for comparison and does not include the October 2007, purchase of Family Vacation
  Centers and associated increase in revenues.
  (2)     Effective April 16, 2007, the Company's common shares
  were forward split on a three new for one old basis.

On February 29, 2008, the exchange rate for Canadian dollars
was $1.00 (US) for $0.9798 (CAD), as posted by the Bank of Canada.

The high and low buying rate figures are selected from monthly
figures for each month of the previous six-month period ending February 29,
2008. Daily average figures are not available from any major Canadian chartered
bank.

February
    January
    December
    November
    October
    SeptemberHigh
    1.0190
    0.9686
    1.0217
    0.9992
    0.9996
    0.9466Low
    0.9719
    1.0096
    1.0220
    1.0905
    1.0905
    1.0069


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

2007
    2006
    2005
    2004
    2003Period End
    1.0905
    1.1653
    1.1659
    1.2036
    1.2965Average
    1.0747
    1.1340
    1.2116
    1.3015
    1.4014High
    1.0905
    1.0990
    1.1507
    1.1774
    1.5672Low
    0.9215
    1.1726
    1.2704
    1.3968
  1.2943


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

9

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B)      CAPITALIZATION AND
INDEBTEDNESS

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

C)      REASONS FOR THE OFFER
AND USE OF PROCEEDS

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

D)      RISK FACTORS

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

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

On October 1, 2003 the United States federal governments no
call registry went into effect. The new law allows consumers who do not wish to
be solicited and receive telemarketing calls to register on the federal
governments nationwide list. The no call list is receiving millions of
registrants. A similar law is under review for Canada. At this time it is
anticipated this law will take effect in the fall of 2007. This law in Canada
will affect the companys operations and result in a higher marketing cost,
which could affect the profitability of the Companys Snowbird Vacations Travel
Club membership sales.

In the 1990s with the growth of the Life Settlement industry
the federal government and various states introduced legislation. The state
legislative actions were designed to introduce consumer protection type
regulations for policy holders and purchasers while the federal government with
the Securities and Exchange Commission seeks to regulate the market for the
protection of a purchaser. There currently exists government regulation in 27
states to ensure fair practices and protect consumers particularly from fraud,
large incommensurate middleman commissions and transaction costs.

The United States Securities and Exchange Commission treat Life
Settlements as securities under state and federal securities law when viewed as
a structured product. No state federal or regulatory body or private litigant
has successfully asserted that our settlements transactions are under state or
federal law. As the purchaser or possible seller of policies we represent that
we are a sophisticated individual and have diminutive needs for protection
afforded by securities laws. We have utilized some exceptions and exemptions in
conducting our life settlement transactions.

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

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

The Company may require additional capital; if we are
unable to obtain financing necessary to support our operations, we may be unable
to continue as a going concern.

10

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The Company has a credit facility from Caterpillar Financial
  Services to complete the refit to the 120 Yacht in the amount of $4.3
  million USD of which $4.25 million has been drawn down as of February 29, 2008,
  with construction slated for completion in the spring of 2008. As of September
  30, 2007 the Company had a working capital surplus of $ 7,532,298 .
  The Company continues to operate within the continually evolving and volatile
  travel industry. The Company believes it will generate sufficient operating
  capital through operations. There can be no assurances the Company will be able
  to generate sufficient investment from borrowing, the sale of equity, or a combination
  thereof. If additional financing is required, there is no certainty it will
  be available when and to the extent required or that if available, it will be
  on acceptable terms. If adequate funds are not available on acceptable terms,
  the Company may not be able to fund existing operations in their current state,
  fund business expansion, develop or enhance its products or services, or respond
  to competitive pressures. This could have a material adverse effect on the Company's
  existing operations and planned growth.

These financial statements have been prepared on a
going-concern-basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. See Note 2 Going
Concern Notes to the Consolidated Financial Statements. Accordingly, these
financial statements do not include any adjustments to the specific amounts and
classifications of assets and liabilities, which might be necessary should the
Company be unable to continue as a going concern.

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

The Company's common stock is vulnerable to pricing and
purchasing actions in the ``OTCBB`` market that are beyond its control and
therefore persons holding or acquiring shares may be unable to resell their
shares at a profit as a result of this volatility.

The Company does not expect to pay dividends in the
future. Any return on investment may be limited to the value of the Companys
stock.

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

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

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

There can be no assurance that the continual fluctuations in
  price will not occur. In particular, subsequent to the financial period ended
  September 30, 2007, the price per share of the Companys common shares
  fluctuated (US dollar figures) from a low of $5.00 to a high of $18.00 and a
  current level of $ 10.00 .

11

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

Situations may arise which could require the issuance of
additional shares of the Company. In addition to the three (3) for one (1) split
in the Companys common shares April 16, 2007, there has been an increase in the
number of issued and outstanding common shares of the Company. In July, 2007 the
Company completed private placements for a total of $9 million USD and
correspondingly issued 14,500,000 restricted common shares of the company.

On June 27, 2007 the record date, as part of a restructuring
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, as part of a restructuring
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.

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

Furthermore future equity financings, property transactions,
issuance of stock options among other things may require the subsequent issuance
and further dilution of the Companys securities.

Our significant shareholders and management personnel
have potential conflicts of interest with us, which may result in their taking
corporate actions which you may not believe to be in your best interests or in
the best interests of the Company.

The Companys officers and board of directors control more than
50% of the Companys issued and outstanding stock. The concentration of such a
large percentage of the Companys stock in the hands of relatively few
shareholders may cause a disproportionate effect on minority shareholders in all
matters presented to the companys shareholders. The Companys officers and
board of directors as majority shareholders have the power to take corporate
actions which other shareholders may not believe are in their best interests or
in the best interests of the Company. There can be no assurance that the
Companys officers and Board of Directors as will not cause the Company to take
such corporate actions.

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

Our success will depend to a significant extent on the efforts
and abilities of our Chief Executive Officer, Mr. Dan Clozza and our Chief
Financial Officer, Mr. Martin Tutschek. Messrs. Clozza and Tutschek are actively
engaged in our management and together determine our strategic direction,
especially with regard to business development activity. While we are in the
process of establishing 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 key man insurance in respect of any of its management.

12

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

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

The Company's historical core growth depends, in significant
part, upon the continuing traditional method of sales and marketing of its
Travel Club products. If the Company is unable to secure an Operator or hire
qualified sales and marketing staff, its ability to effectively grow and expand
its business could be impaired. In addition to the risk of securing an Operator
or contracting a Licensee, the Companys growth is dependent upon the success of
the entities.

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

The Company believes that its future success will depend in
large part upon its ability to attract and retain qualified personnel, Licensees
or operators, and brokers or Life Settlement providers for its operations. The
failure to attract or retain such persons or entities could materially adversely
affect the Company's business, financial condition and results of operations.

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

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

The Life Settlement market is a relatively new market within
the financial services sector. Its growth and precise direction is unclear. As
the Life Settlement market grows it could result in the Companys unsuccessful
attempt to enter into the Life Settlement market for various reasons this
includes:

- The ability of the Company to compete with other Life Settlement companies;
- The ability of the Company to locate sufficient policy flow;
- The ability of the Company to successfully negotiate and close Life Settlement
      transactions ;
- Introduction of financially
      burdensome governmental regulation;

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

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The Company believes brand identity is important to attracting
and expanding the membership base and Life Settlement portfolio. The Company
believes the significance of brand and name recognition will intensify should
the number of competing companies increase. The Company cannot assure
shareholders that it will be able to continue developing a distinctive brand
identity that will ensure significant market recognition. Without market
recognition, the Company may be unable to sell memberships or source settlement
policies, which failure would affect growth and operating results of the
Companys operations.

Estimates of longevity in the Life Settlement market are
uncertain and any material underestimation will materially affect the cost and
lower the anticipated returns.

In the Life Settlement market, the price of a successful bid
for a settlement insurance policy is based upon several variables. The most
relevant been the face value of the policy, the continuing premium costs, and
the anticipated life expectancy of the insured. An insureds life expectancy is
estimated from a medical life expectancy report, medical history, genetic
history and actuarial data. Bids for policies are priced with this information
and seek to obtain competitive yields available for other financial products
with similar risk.

It is impossible to predict with accuracy of an insureds exact
life expectancy. An underestimation will result in lower returns than projected
been realized. An underestimation also increases the amount of money necessary
to be allocated for premium payments. An overestimation will result in higher
calculated projected returns.

Taking into account all available information, the Company
cannot assure that it will not err by underestimating or overestimating the
average life expectancy of an individual and the amounts required for future
premiums. Any associated losses could have a material adverse effect on our
business, financial condition, and operating results.

System failures or flaws in our computer and
communications systems could decrease market acceptance of our sales and
services, which would reduce our revenues and profitability.

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

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

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

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

- effect service of process within the United States upon any of our
  directors and executive officers or on us; or
- enforce in U.S. courts judgments obtained against any of our directors and
  executive officers or us in the U.S. courts in any action, including actions
  under the civil liability provisions of U.S. securities laws;
- enforce in U.S. courts judgments obtained against any of our directors and
  senior management or us in courts of jurisdictions outside the United States
  in any action, including actions under the civil liability provisions of U.S.
  securities laws; or
- to bring an original action in a Canadian court to enforce liabilities
  against any of our directors and executive officers or us based upon U.S.
  securities laws.

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

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

ITEM IV. INFORMATION ON THE COMPANY

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

A)      HISTORY AND DEVELOPMENT
OF THE COMPANY

The Company was incorporated in British Columbia, Canada on
September 22, 1995, under the name of Snowbird Vacations International Inc., and
was continued to the Province of Ontario on November 12, 1997. The name of the
Company was changed to Intravelnet.com Inc. on February 26, 1999. Further to
shareholder approval on April 17, 2002, the Companys name was changed to Forum
National Investments Ltd., with a consolidation of the share capital on a ten
old for a one new basis, effective July 5, 2002. On April 16 of 2007 the share
capital of the Company was forward split on 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 and fax number is (604) 275-8745. The Companys agent in
  Canada is Kornfeld Mackoff Silber, 1100 One Bentall Center, 505 Burrard Street,
  Box 11, Vancouver, B.C., V7X 1M5. The Company has the following web addresses:
  www.foruminvestments.com, www.snowbirdvacations.com, www.SpiritOfTwoThousandTen.com, www.spirityachtcharters.com, www.fitnessvacation.ca www.americanlifesettlementsociety.com, www.priceshieldsystems.com, www.thealss.com.

Forum National Investments Ltd. maintains a fiscal year ending
September 30. The Company's financial statements are stated in Canadian Dollars
and are prepared in accordance with Canadian Generally Accepted Accounting
Principles (GAAP), the application of which, in the case of the Company,
conforms in all material respects for periods presented with U.S. GAAP except as
noted in the notes to the Company's financial statements. See "Item XVII
Financial Statements".

During 2003 the Company incorporated a wholly owned subsidiary
in the Province of Ontario: Intravelnet Limited. As required by Ontario
legislation specifically relating to travel, the new entity incorporated and
domiciled in Ontario was created to handle the Ontario travel club business for
the Ontario members. Subsequent to December 31, 2003 the sole director of
Intravelnet Inc. resigned and a replacement has yet to be found. Given the
circumstances management instructed the new Ontario Corporation Intravelnet
Limited to handle servicing all travel Club members. The assets of Intravelnet
Inc. were sold to Intravelnet Limited on June 30th, 2004 and all
existing employees were offered continuous employment in the new Company. In the
first quarter of 2007 the Company entered into an agreement with an Ontario and
BC

15

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registered travel wholesaler to assist in servicing the
Snowbird Vacations Travel Club membership. The operators industry knowledge and
experience in the wholesale travel market combined with their centralized call
center and on-line presence have been valuable in assisting the continued
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 that the Company as the parent company will recoup inter-company
loans and advances made to Intravelnet Inc and or other subsidiaries over the
last several years totaling approximating $4.4 million. Any tax loss as result
of the above mentioned losses will be carried forward and applied to offset
future years tax obligations.

In November of 2005 the principal of 42260584 Canada Inc.
entered into a Commission Agreement with the Company to market the Companys
Snowbird Vacations Travel Club Membership in the Barrie Ontario area. The
Agreement with 1617165 Ontario Inc was terminated in March of 2006 and at this
time no new memberships are actively been marketed in the Barrie Ontario
area.

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

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

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

Subsequent to year end September 30, 2007, the Company
purchased the membership and assets of Family Vacation Centers from an Ontario
based Company for consideration of $4 million in cash and stock. The Company
continues to market the Family Vacation Centers membership from its Burlington
Ontario location.

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

The Company will complete the refit on its 120 feet motor vessel
  MV Spirit of Two Thousand and Ten in spring of 2008. In spring of 2005 Sheerline
  Yachts completed their component of the refit and Platinum Marine Services was
  retained to complete the almost $10.0 million refit project. The Company had
  established an initial credit facility with Caterpillar Financial Services for
  up to $3 million USD which has provided funding for the project. The Company
  subsequently had the credit facility increased to $4.3 million USD in spring
  of 2007. The Company continues to refit the 120 foot motor vessel with Platinum
  Marine Services. The Company spent $2,782,391 during 2006, $1,881,433 to September
  30, 2007 and another $1,402,467 to February 29, 2008.
  A survey completed in May of 2007 by Chris Small Marine Surveyors Ltd a member
  of N.A.M.S., a registered Marine Surveyor indicated the Motor Vessel
  has an appraised market value of $12 million upon completion.

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

On December 31, 2006, the Company completed the purchase of International
  Fitness Vacations (BC) Ltd. (Fitness Vacations), by obtaining 100%
  of the outstanding shares held by an officer and director of the Company for
  consideration (see VII(b)
  Related Party Transactions) . The wholly-owned subsidiary is involved
  in the marketing of gym and travel club memberships.

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In 2005, Forum began to investigate the business opportunities
  in the secondary Life Insurance market also known as Life Settlements.
  The Company is entering into the business of purchasing life insurance policies
  from consumers actively interested in selling their policies. Forum will invests
  in the purchasing of Life Insurance policies issued in the Unites States sold
  by the policy holders with life expectancies of 6 to 12 years. The Company
  then becomes the irrevocable beneficiary of these policies.

Although relatively new, the Life Settlement market is the
fastest growing segment of the financial services industry. The life insurance
industry is a double digit trillion dollar industry and the Life Settlement
market is projected to grow significantly within the next few years. The senior
and the baby boomer markets are the fastest growing segments of the population,
resulting in billions of dollars in policies rolling into the Life Settlement
policy industry annually. Expected growth of the Life Settlement market will
parallel the aging population boom. The significant, additional money that many
policy holders receive from life settlement companies in the secondarymarket represents found money; turning unrealized assets into cash. In
general, this windfall significantly improves the lifestyle of the policy holder
when most seniors need it, i.e. -- allowing them to afford long-term health care
or maintain their current standard of living for many more additional years.
Legitimate Life Settlement companies have been described as providing a
socially responsible service.

The Company began to research the Life Settlement industry in
2005 and has completed a substantial amount of due-diligence and invested
capital to create large channels of Life Settlement policy flow. The Company
is currently sourcing Life Settlement policies through Business to Business
(B2B) Channels and expects to launch a Business to Consumer (B2C) Channel in
the near future.

Subsequent
  to fiscal year end September 30, 2007 the Company entered the Life Settlement
  industry with the initial purchase of $30 million face value of Life Insurance
  policies. The Company uses an industry standard Milliman Report (consultants
  for the health care insurance industry) along with recent purchases and sales
  of similar life insurance policies, financial standing of the insurer, changes
  in general economic conditions, standard, actuarially developed mortality tables
  and industry life expectancy reports to determine an acceptable purchase price.
  The Company paid $2,900,029 which was funded by the recent Private Placements
  completed by the Company in July of 2007.

In addition
  the Company acquired a 25% interest in a mixed use development property in Needles
  California for US$1,000,000. The 22 acre property with 850 feet of waterfront
  on the Colorado River has a marina with a 20,000 square foot storage facility
  for marine based activity. As the property is developed to various stages differing
  options to include condo / townhomes for either full ownership, fractional ownership
  of timeshare intervals will be explored. The Canadian travel club membership
  would be offered a product in a southern United States location that has an
  extended season of favorable weather conditions. This purchase has been classified
  on our balance sheet as an investment in non-current assets. The project is
  controlled and/or operated by a director of the Company (see VII(b) Related
  Party Transactions).

To expand beyond is present financial capabilities in the Life
Settlement market and other business ventures, additional financing will be
required. There is no certainty this financing will be available when and to the
extent required, or that if available it will be on acceptable terms. If
adequate funds are not available on acceptable terms, the Company may not be
able to fund business expansion, develop or enhance its products or services, or
respond to competitive pressures. This and other risks related to operating in
the Life Settlement industry could have a material adverse effect on the
Company's operations and planned growth. (See Item 3 Risk factors, The Company
May Require Additional Capital).

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B)      BUSINESS OVERVIEW

The Company
  has three lines of business at this time:

- The Company owns and
    operates travel clubs under the name of Snowbird Vacationsand Family
    Vacations Centers.In addition to accessing a full service travel agency
    and other travel benefits, travel club members are entitled to rent vacation
    ownership rentals from a broad variety of participating resorts at wholesale
    rates.
- The company owns a passenger
    carrying yacht the 120 MV Spirit of 2010 which is continuing its refit.
    The vessel is for charter cruises to the Pacific Northwest, Alaska and Baja
    Mexico in addition to day cruises from its home port in Vancouver, B.C. Charters
    will be available to the general public in addition to the existing travel
    club membership.
- The Company has entered
    the Life Settlement market. A life settlement is the purchase of an existing
    life insurance policy by a third party. The third party then continues to
    make the premiums payments until the policy has matured and at that time receives
    the benefits. The Company sees this new market as a high growth opportunity
    in which to participate through its recently created American Life Settlement
    Society.

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

Travel Club

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

|           |   | 2007*     |  |  | 2006      |  |  | 2005      | 
|---------- | - | --------- |  |  | --------- |  |  | --------- | 
|Membership | $ | 829,254   |  |  | 1,299,300 |  |  | 3,367,167 | 
|Sales      |   |           |  |  |           |  |  |           | 
|Membership | $ | 1,050,116 |  |  | 1,648,637 |  |  | 1,690,200 | 
|Dues       |   |           |  |  |           |  |  |           | 
|Total      | $ | 1,879,370 |  |  | 2,947,937 |  |  | 5,057,367 | 

* Fiscal period for September 30, 2007 includes 9 months for
  comparison and does not include the October 2007, purchase of Family Vacation
  Centers.

For the fiscal period 2007, a total of 275 (2006 - 202, 2005
  - 311) travel club memberships were sold for a mean average non-refundable purchase
  price of $ 2,996 (2006 - $3,215, 2005 - $3,722).

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

Continued membership is dependent on the member paying a
monthly fee of $19.95 to $29.95. If the member has not paid his/her monthly
dues, the member has no entitlements. Entitlements are restored once arrears of
monthly fees are paid, at the sole discretion of the club.

The Snowbird Vacations travel club membership entitles the
Snowbird Vacations travel club members to wholesale travel at rates marginally
above the cost to the travel agency, and vacation condominium rentals

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at wholesale rates through the Companys wholesale network
affiliation with the Cooperative Association of Resort Exchangers (C.A.R.E.),
The Company has sold the following travel club memberships:

|                                                               |   | 2007*    |   |   | 2006     |   |   | 2005     |  
|-------------------------------------------------------------- | - | -------- | - | - | -------- | - | - | -------- | -
|                                                               |   |          |   |   |          |   |   |          |  
|Travel Club Memberships entered into for
      the period      | $ | 739,788  |   | $ | 784,845  |   | $ | 990,645  |  
|Amount recognized as revenue during the year                   |   | (63,401  | ) |   | (92,706  | ) |   | (110,384 | )
|                                                               |   |          |   |   |          |   |   |          |  
|Future years revenue to be earned from current year            |   |          |   |   |          |   |   |          |  
|Membership agreements                                          |   | 676,387  |   |   | 692,139  |   |   | 880,261  |  
|Cash collected during the year related to future years revenue |   | (503,947 | ) |   | (483,773 | ) |   | (690,317 | )
|                                                               | $ | 172,440  |   | $ | 208,366  |   | $ | 189,944  |  

* Fiscal year
  for September 30, 2007 includes 9 months for comparison and does not include
  the purchase of Family Vacation Centers in October of 2007 subsequent to the
  financial Statements.

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

The Company
  acquired a 25% interest in a mixed use development property in Needles California
  for US$1,000,000 subsequent to the fiscal year end of 2007. The 22 acre property
  with 850 feet of waterfront on the Colorado River has a marina with a 20,000
  square foot storage facility for marine based activity. As the property is developed
  to various stages differing options to include condo / townhomes for either
  full ownership, fractional ownership of timeshare intervals will be explored.
  The Canadian travel club membership would be offered a product in a southern
  United States location that has an extended season of favorable weather conditions.
  This purchase has been classified on our balance sheet as an investment in non-current
  assets. The project is controlled and/or operated by a director of the Company
  (see VII(b) Related Party Transactions).

Travel
  Industry Overview

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

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

The general industry trend for members of our Canadian based
travel clubs in 2007 saw same-day auto trips by Canadians to the US hit its
highest level in almost seven years as the Loonie surpassed parity with the
dollar. "At the same time, same-day car travel by U.S. residents to Canada hit a
record low," according to Statistics Canada. The site reports Canadian residents
took about 2.2 million same-day car trips to the US in a recent month, or 6%
more than in the previous month. With the average monthly value of the Canadian
dollar in October 2007 at US $1.03, it was the highest number of same-day car
trips to the US in one month since January 2001. "Overnight car travel to the
United States jumped 4.9% to 972,000 trips, the highest monthly level since
September 1993," says the site. The number of travel trips by Canadian residents
overseas rose 3.2% to 642,000 - the seventh record monthly high set in 2007.

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

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

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

- Today, three in 10 health club members are 50 and over; in 1988, this
  figure was two in 10.
- 27 percent of these members participated in fitness activities 100 or more
  times per year.
- 48 percent of those aged 50 and over participate in physical activity three
  times per week.
- 30 percent of those aged 50 and over participate in physical activity one
  to two times per week.
- Between 1987 and 1998, the number of fitness club members over the age of
  55 increased by more than 200 percent.

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

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

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

For its existing
  travel operations, the Company plans to achieve continued growth of its travel
  club memberships through four key areas:

1) Licensing
  Snowbird vacation travel club sales and marketing agents or acquiring existing
  travel clubs in Canada while investigation of potential US market penetration.

The Company
  continues to seek out those potential acquisitions or independent marketing
  agents with know how and financing to market the Companys
  Snowbird vacations travel club memberships in the Province of Ontario and beyond.
  The goal is to focus on the management and development of the travel clubs
  products and services. With a limited growth potential in Canada investigation
  of opportunities in other countries is necessary. There can be no assurances
  that the Company will be able to attack and retain successful licensees or operators
  or source acquisitions. (See Item 3 Risk factors, Ability to Attract and retain
  Successful Licensees or Operators).

20

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

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

The ability
  to offer members of the travel club Company owned product including charter
  yacht experiences such as the MV Spirit of Two Thousand and Ten and future real
  estate based projects such as the Colorado River Project that offers boating
  capabilities helps to segment and differentiates our program as unique. Not
  only offering the traditional travel club membership and its benefits we seek
  to attract and retain members through the availability of maritime themed vacation
  experiences. Penetrating and successfully operating in a given marketplace will
  cause the Company to investigate further pursue additional Company owned inventory.

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

In addition
  to the traditional marketing efforts, other referral programs, strategic relationships,
  and affinity programs are continually been evaluated. In 2007 the Company contracted
  with an Ontario and BC based travel suppliers with an on-line and call center
  presence in Ontario and BC to service our membership through their centralized
  service centers.

4) Increasing
  membership based operations in the active lifestyles market

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

Each facet
  of the Companys travel and membership based developments are interconnected.
  With growth in membership the Companys requirements for inventory and
  vacation options increases. For the Companys membership operations, the
  primary goal is to increase memberships by marketing, its secondary goal being
  to increase the number of product offerings available to its members for vacations,
  and its tertiary goal being to successfully expand its entrance into the Life
  Settlement market. The Company believes promoting the Resort Lifestyle
  concept in desirable options with value pricing are foundations for growth of
  its membership based operations.

Charter
  Cruises

The Company
  owns and is completing the refit on its 120 foot passenger carrying motor vessel
  MV Spirit of Two-Thousand-and-Ten. The vessel is for charter cruises to the
  Pacific Northwest, Alaska and Baja Mexico in addition to day cruises from its
  home port in Vancouver, B.C. Approximately 40% of the custom yacht cruise market
  are full yacht charters by a single entity for a corporate retreat, corporate
  awards program and family retreats etc. Charters will be available to the general
  public in addition to the existing travel club membership. The Company is beginning
  the marketing and promotion to many tourism based organizations and has a web
  site www.spirityachtcharters.com to present the vessel and provide an overview
  of the yacht offering.

In the spring
  of 2005 Sheerline Yachts completed their component of the refit and Platinum
  Marine Services was retained to complete the almost $10.0 million refit project.
  The Company had established an initial credit facility with Caterpillar Financial
  Services for up to $3 million USD which has provided funding for the project.
  The Company subsequently had the credit facility increased to $4.3 million USD
  in spring of 2007. The Company continues to refit the 120 foot motor vessel
  with Platinum Marine Services. Management foresees no undue delays in completion
  but projects of this magnitude do present challenges and complications that
  can be unforeseen and out of the control of management including delays in passenger
  carrying certification. The Company spent $2,782,391 during 2006, $1,881,433
  to September

21

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30, 2007 and
  another $1,402,467 to February 29, 2008. A survey completed in May of 2007 by
  Chris Small Marine Surveyors Ltd a member of N.A.M.S., a registered Marine Surveyor
  indicated the Motor Vessel has an appraised market value of $12 million CDN
  upon completion.

Life
  Settlements

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

Although relatively
  new, the Life Settlement market is the fastest growing segment of the financial
  services industry. The life insurance industry is a double digit
  trillion dollar industry and the Life Settlement market is projected to grow
  significantly within the next few years. The senior and the baby boomer markets
  are the fastest growing segments of the population, resulting in billions of
  dollars in policies rolling into the Life Settlement policy industry annually.

Expected growth
  of the Life Settlement market will parallel the aging population boom. The significant,
  additional money that many policy holders receive from life settlement companies
  in the secondarymarket represents found money; turning unrealized
  assets into cash. In general, this windfall significantly improves the lifestyle
  of the policy holder when most seniors need it, i.e. -- allowing them to afford
  long-term health care or maintain their current standard of living for many
  more additional years. Legitimate Life Settlement companies have been described
  as providing a socially responsible service.

The Company
  began to research the Life Settlement industry in 2005 and has completed a substantial
  amount of due-diligence and invested capital to create large channels of Life
  Settlement policy flow. The Company believes successful entrance
  and capture of market share in this emerging industry will dominate the future
  Company direction and the allocation of resources. The Company is currently
  sourcing Life Settlement policies through Business to Business (B2B)
  Channels and expects to launch a Business to Consumer (B2C) Channel
  in the near future.

Subsequent
  to fiscal year end September 30, 2007 the Company entered the Life Settlement
  industry with the initial purchase of $30 million face value of Life Insurance
  policies. The Company uses an industry standard Milliman Report (consultants
  for the health care insurance industry) along with recent purchases and sales
  of similar life insurance policies, financial standing of the insurer, changes
  in general economic conditions, standard, actuarially developed mortality tables
  and industry life expectancy reports to determine an acceptable purchase price.The Company paid $2,900,029 which was funded by the recent Private Placements
  completed by the Company in July of 2007.

Life
  Settlement Industry Overview

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

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

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

Debt Crisis Many seniors do not adequately save or plan
financially for retirement. USA Today, Jan/07

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seniors are becoming the face of the indebted and the fastest
population group seeking bankruptcy, many are having extreme difficulty paying
mortgage, food and medical costs we are just seeing the tip of the iceberg.

Social Security in Trouble A looming large risk for seniors is
government social security -- a critical source of income  which could go
bankrupt and not be able to support the growing seniors market. At a minimum,
social security benefit payments are estimated to be reduced.

Skyrocketing Medical Costs As reported in Business Week
Seniors Pushing Medicaid to Breaking Point (Feb/05) as 70 million baby
boomers age, their demand for care threatens to crush Medicaid. In 2004 alone,
medical insurance payments, co-pays and deductibles increased 40%. Medical costs
are estimated to continue to rise and fixed income seniors will have to find
some way to pay for this large, unbudgeted but essential cost of retirement.

The Company recognizes that it needs to be innovative
  and pioneer new avenues for business development. A key to the Companys
  future development is the expansion and retention of its existing Travel Club
  membership base, adding other Membership based service and or product
  offerings to specific demographic groups. Additionally new opportunities have
  encouraged the Company to expand and position itself for entry into the Life
  Settlement market.

Private
  Placements completed by the Company in July of 2007.

To expand beyond its present financial capabilities in
the Life Settlement market and other business ventures, additional financing
will be required. There is no certainty this financing will be available when
and to the extent required, or that if available it will be on acceptable terms.
If adequate funds are not available on acceptable terms, the Company may not be
able to fund business expansion, develop or enhance its products or services, or
respond to competitive pressures. This and other risks related to operating in
the Life Settlement industry could have a material adverse effect on the
Company's operations and planned growth. (See Item 3 Risk factors, The Company
May Require Additional 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s nationwide list. The no call list is receiving millions of
registrants. A similar law is under review for Canada. At this time it is
anticipated this law will take effect in the fall of 2008. This law in Canada
will affect the companys operations and result in a higher marketing cost,
which could affect the profitability of the Companys Snowbird Vacations Travel
Club membership sales.

In the 1990s with the growth of the Life Settlement industry
the federal government and various states introduced legislation. The state
legislative actions were designed to introduce consumer protection type
regulations for policy holders and purchasers while the federal government with
the Securities and Exchange Commission seeks to regulate the market for the
protection of a purchaser. There currently exists government regulation in 27
states to ensure fair practices and protect consumers particularly from fraud,
large incommensurate middleman commissions and transaction costs.

The United States Securities and Exchange Commission treat Life
Settlements as securities under state and federal securities law when viewed as
a structured product. No state federal or regulatory body or private litigant
has successfully asserted that our settlements transactions are under state or
federal law. As the purchaser or possible seller of policies we represent that
we are a sophisticated individual and have diminutive needs for protection
afforded by securities laws. We have utilized some exceptions and exemptions in
conducting our life settlement transactions.

23

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

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

There can be no assurance that unforeseen developments or
introduction of legislation, laws, and other factors will not alter the
Companys ability to achieve it growth targets for marketing and selling Travel
Club programs or entering and operating in the Life Settlement market. (See Item
3 Risk factors, Government Regulations)

C)      ORGANIZATIONAL STRUCTURE

As of February 29, 2008, the following is a list of all the
Companys subsidiaries, all of which are wholly owned and over which the Company
holds 100% voting control:

|Subsidiary                                | Incorporating Jurisdiction
|----------------------------------------- | --------------------------
|                                          |                           
|Intravelnet Limited.                      | Ontario, Canada           
|InTRAVELnet Inc.                          | Alberta, Canada           
|ATM Travel Group Ltd.                     | Alberta, Canada           
|International Fitness Vacations (BC) Ltd. | British Columbia, Canada  
|Price Shield Systems Inc.                 | Washington, USA           
|American Life Settlement Society LLC      | Deleware, USA             

Properties

Office Leases

The Company is headquartered at 180A  13040 Number 2 Road,
Richmond British Columbia Canada where it rents 11,881 sq. ft. office space
housing its principal administrative, customer services, its IT department and
International Fitness Vacations. The Company believes that its current
facilities are adequate for its current and near future operations.

The Company operates its Family Vacations travel club
membership sales from an office it leases in Burlington Ontario, situated at
suite 2279 Fairview Street, unit 2, Burlington, OntarioL7R 2E3. The Company's
lease for this 7,176 sq. ft. space expires on September 1, 2009.

The Company additionally markets its Family Vacations travel
club membership from an office it rents in Kitchener Ontario, situated at suite
2279 Fairview Street, unit 2, Kitchener, OntarioL7R 2E3. The Company's rents
6,000 sq. ft. on a month to month basis.

The Company tele-markets its Family Vacations travel club
membership from an office it rents in Windsor Ontario, situated at suite 2279
Fairview Street, unit 2, Burlington, OntarioL7R 2E3. The Company's rents 3,000
sq. ft. space on a month to month basis.

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Motor Vessels

The Company owns and is currently refitting a 120-foot Tri
Level motor vessel called the MV Spirit of Two Thousand and Ten.

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

The vessel
  is for charter cruises to the Pacific Northwest, Alaska and Baja Mexico in addition
  to day cruises from its home port in Vancouver, B.C. Approximately 40% of the
  custom yacht cruise market are full yacht charters by a single entity for a
  corporate retreat, corporate awards program and family retreats etc. Charters
  will be available to the general public in addition to the existing travel club
  membership. The Company is beginning the marketing and promotion to many tourism
  based organizations and has a web site www.spirityachtcharters.com to present
  the vessel and provide an overview of the yacht offering.

In the spring
  of 2005 Sheerline Yachts completed their component of the refit and Platinum
  Marine Services was retained to complete the almost $10.0 million refit project.
  The Company had established an initial credit facility with Caterpillar Financial
  Services for up to $3 million USD which has provided funding for the project.
  The Company subsequently had the credit facility increased to $4.3 million USD
  in spring of 2007. The Company continues to refit the 120 foot motor vessel
  with Platinum Marine Services. Management foresees no undue delays in completion
  but projects of this magnitude do present challenges and complications that
  can be unforeseen and out of the control of management including delays in passenger
  carrying certification. The Company spent $2,782,391 during 2006, $1,881,433
  to September 30, 2007 and another $1,402,467 to February 29, 2008. A survey
  completed in May of 2007 by Chris Small Marine Surveyors Ltd a member of N.A.M.S.,
  a registered Marine Surveyor indicated the Motor Vessel has an appraised market
  value of $12 million CDN upon completion.

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

ITEM V. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of the financial condition, changes
  in financial condition and results of operations of the Company for the period
  ended September 30, 2007 and the years ended December 31, 2006, and 2005 should
  be read in conjunction with the Consolidated Financial Statements of the Company
  for the period ended September 30, 2007 and the years ended December 31, 2006,
  and 2005. Except as otherwise indicated, all dollar amounts contained in this
  discussion and analysis and the Consolidated Financial Statements are in Canadian
  dollars. The financial information presented in the Consolidated Financial Statements
  was prepared in accordance with generally accepted accounting principles (GAAP)
  in Canada. Note 18
  of these Consolidated Financial Statements of the Company set forth the material
  differences between Canadian and U.S. GAAP.

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A)      OPERATING
RESULTS

Critical Accounting Policies

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

The detailed accounting policies are listed in Note 3 and 4  to
the Financial Statements for the period ended September 30, 2007. Included below
is a discussion of the accounting policies that are affected by the most
significant judgments and estimates used in the preparation of the financial
statements, how such policies are applied and how results differing from the
estimates and assumptions would affect the amounts presented in the financial
statements. Other accounting policies also have a significant effect on our
financial statements, and some of these policies also require the use of
estimates and assumptions.

Going Concern

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

While these
  accompanying financial statements have been prepared on the assumption that
  the Company is a going concern and will be able to realize our assets and discharge
  our liabilities in the normal course of business, certain events and conditions
  cast substantial doubt on this assumption. As of September 30, 2007 the Company
  had a working capital surplus of $7,532,298 and a shareholders equity
  of $12,926,243.

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

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

Revenue Recognition

The Company
  generates revenues from the sale of memberships, dues and charter sales. The
  portion of revenue received from members, which entitles members to use the
  Companys vacation and travel club privileges at a future date, is deferred
  and recognized in income evenly over the term of the members entitlements.
  For lifetime memberships, revenue is recognized over a period of 5 years, which
  is managements best estimate of the period over which performance will
  be required. Membership dues are allocated to the period to which they relate
  and recognized accordingly. Membership dues billed and received in advance are
  reflected as deferred revenues in the statement of financial position.

Asset Impairments

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

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Accounts Receivable

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

Selected Annual Information

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

|                               |   |            |   |   | Year End  |  |   |           | 
|------------------------------ | - | ---------- | - | - | --------- |  | - | --------- | 
|                               |   | 2007*      |   |   | 2006      |  |   | 2005      | 
|Travel Club Memberships Sold   | $ | 739,788    |   | $ | 784,845   |  | $ | 990,645   | 
|                               |   |            |   |   |           |  |   |           | 
|Amount Recognized as Revenue   |   | 63,401     |   |   | 92,706    |  |   | 110,384   | 
|during the year                |   |            |   |   |           |  |   |           | 
|Membership Dues                | $ | 1,050,116  |   | $ | 1,648,637 |  | $ | 1,690,200 | 
|# Travel Club Memberships Sold |   | 275        |   |   | 202       |  |   | 311       | 
|Mean Average Membership Price  | $ | 2,996      |   | $ | 3,215     |  | $ | 3,723     | 
|Net Income (Loss) for the year | $ | (2,212,467 | ) | $ | 875,355   |  | $ | 1,651,804 | 
|Income (Loss) per Share        | $ | (0.20      | ) | $ | 0.17      |  | $ | $0.30     | 

* Fiscal year
  for September 30, 2007 includes 9 months for comparison and does not include
  the October 2007, purchase of Family Vacation Centers.

For the period
  ended September 30, 2007 Travel Club Memberships sales decreased by 5.7% to
  $739,788 compared to ($784,845 - December 31, 2006, and $990,645 - December
  31, 2005), with amount recognized as revenue during the period ended September
  30, 2007 decreased by 31.6% to 63,401 ($92,706 - December 31, 2006, $110,384
  - December 31, 2005). The operating party conducting the sales encountered a
  declining economic environment and reported operating results for a 9 month
  period versus a 12 month period comparison. Increased sales of club memberships
  and corresponding total revenue decreased during the period September 30, 2007
  by 36.9% to $2,572,638 ($4,077,698 - December 31, 2006, $5,923,516 - December
  31, 2005) due to the shortened reporting period in 2007, remaining declining
  deferred revenue recognized in 2006 and over-accruals recognized in 2005 resulting
  in decline of other revenue in 2007.

For the period
  ended September 30, 2007 gross cash flow from operations decreased 3.2% to $
  2,565,348 with a net cash outflow from operations of $ 83,554 due to recognition
  of the 2007 stock option plan as disclosed in stock-based compensation $2,944,536
  (2006 - $nil, 2005 - $nil) reduced by unrealized foreign exchange adjustments
  ($644, 350) (2006 - $nil, 2005 - $nil), compared to gross cash flows of $2,639,347
  with a net cash outflow from operations of $82,228 December 31, 2006, and gross
  cash flow of $2,966,897 with a net cash inflow from operations of $394,102 December
  31, 2005.

The Company
  recorded reduced revenues from membership dues of approximately $1,050,116 for
  the 9 month period ended September 30, 2007 and $1,648,637 for the years ended
  December 31, 2006 and $1,690,200, December 31, 2005 The company anticipates
  dues to approximate double the level obtained in 2007 for the year ended September
  30, 2008 based on increased sales from independent sales operator and acquisition
  of Family Vacation Centers per Subsequent events - Note 18 (a) to the consolidated
  financial statements.

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For the period
  ended September 30, 2007 a total of 275 travel club memberships were sold, an
  increase of 36.1% (December 31, 2006 - 202, December 31, 2005 - 311). For the
  period September 30, 2007 the mean average non-refundable travel club membership
  purchase price decreased 6.8% to $ 2,996 ($3,215 - December 31, 2006, and $3,723
  - December 31, 2005 as result of minimal business interruptions.

A net loss
  of $2,212,467 occurred for the period ended September 30, 2007 due largely as
  result of the stock-based compensation charges $2,944,536 from issuance of stock
  options during the fiscal period, compared with net income of $875,355 - December
  31, 2006, and $1,651,804 - December 31, 2005). (Loss)/Earnings per share were
  ($0.20) for the period September 30, 2007 ($0.17 - December 31, 2006, and $0.30
  - December 31, 2005).

There were
  28,433,983 shares outstanding as of September 30, 2007 and 4,644,661 at December
  31, 2006, with 5,444,661 at December 31, 2005. In April 2007 the company completed
  a 3-for-1 forward split increasing the outstanding shares by 9,289,322. On June
  29, 2007, the Company completed a private placement and issued 11,000,000 common
  shares of the Company at US $0.50 per share for gross proceeds of $5,773,918
  (US $5,500,000). On July 4, 2007, the Company completed a private placement
  and issued 3,500,000 common shares at US $1.00 per share for gross proceeds
  of $3,650,396 (US $3,500,000) increasing the issued and outstanding shares from
  4,644,661 on December 31, 2006 to 28,433,983 at September 30, 2007.

For the period
  ended September 30, 2007 expenses increased by 49.5% or $1,583,215 due mainly
  as a result of the Stock-based compensation charge in the amount of $2,944,536
  (2006 - $nil, 2005 - $nil). Comparable expenses decreased by $1,361,321or 57.8%
  to $1,840,569 if the stock based compensation is eliminated. The dramatic decline
  in the US Dollar vs Canadian Dollar exchange rate affecting closing monetary
  balances reduced expenses for the period under review by $259,611 (2006 - $nil,
  2005 - $nil).

The largest
  expense was stock-based compensation $ 2,944,536 (2006 - $nil, 2005 - $nil)
  from issuance of stock options during the fiscal period.

For the period
  ended September 30, 2007 the largest decrease in expenses of $588,559 occurred
  in category Wage Expenses to $492,490. Wage related expenses December 31, 2006
  totaled $1,081,049 and $1,179,624 December 31, 2005 respectively. The decrease
  was the result of a shorter fiscal period and the realized effects of the divesture
  of Company owned Sales and Marketing operations as well as the effect of withholding
  tax refund amounting to $129,504 (2006 - $nil and 2005 - $nil).

For
  the period September 30, 2007, the second largest decrease in expenses
  of $169,421 occurred in Commission costs to $518,363, (December 31, 2006 - $687,784
  and $1,277,223 December 31, 2005). The decrease was the result of a shorter
  fiscal period and. All deferred commissions and commissions on sales are deferred
  over a five-year period. In 2006 the commission expense included one-fifth of
  commissions paid out in 2002, 2003, 2004, 2006 and 2006.

For the period
  ended September 30, 2007 the third largest decrease in expenses of $82,789
  occurred in Travel expenses to $59,436. Travel related expenses December 31,
  2006 totaled $142,105 and $88,384 December 31, 2005 respectively. The decrease
  was the result of a shorter fiscal period and the realized effects of the divesture
  of Company owned Sales and Marketing operations.

For the period ended
  September 30, 2007 consulting fees totaled $15,608, a decrease of $38,901 compared
  to $53,423 December 31, 2006 and $33,800 December 31 2005. The decrease was
  the result of a shorter fiscal period and the realized effects of internal resource
  utilization.

The Company
  changed separate disclosure of Direct Selling Expenses and Discounts from January
  01, 2007 in the Expense section of the Consolidated Statements of Operations
  and Deficit to Net Membership Sales for the period ended September
  30, 2007. Direct Selling Expenses amounting to $35,399 were offset against Membership
  Sales revenue. Prior year results were not restated.

B)      LIQUIDITY AND CAPITAL
RESOURCES

Liquidity

In 2007, the
  working capital surplus increased to $ 7,532,298 primarily due to the private
  placement

28

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investments
  in the Company undertaken to enter into the Life Settlement division. During
  the summer of 2007 the Company completed two private placements raising an aggregate
  total of $9 million USD and correspondingly issued 14,500,000 restricted common
  shares of the company. The terms of these private placement were as follows:

(i)
  On June 29, 2007, the Company completed a private placement and issued 11,000,000
  common shares of the Company at US $0.50 per share for gross proceeds of $5,773,918
  (US $5,500,000).

(ii)
  On July 4, 2007, the Company completed a private placement and issued 3,500,000
  common shares at US $1.00 per share for gross proceeds of $3,650,396 (US $3,500,000).

In 2006, the
  working capital deficit decreased to $ 415,386 primarily due to a decrease in
  the current portion of the deferred revenue and recognition of other deferred
  items in 2006 and reclassification of related party loans.

In 2005, the
  working capital deficit decreased to $ 960,548 primarily due to a decrease in
  the current portion of the deferred revenue and recognition of other deferred
  items in 2005 and reclassification of related party loans.

The Company continues to operate its travel club operations by
  continuously adjusting its operations accordingly and plans to generate sufficient
  operating capital for operations in the short-term. For long-term growth including
  the development of the Life Settlement operations additional capital is required.
  The Companys 120-foot motor vessel will
  is estimated to complete its refit in spring 2008 and the vessel has
  not contributed to revenue in 2005, 2006, or 2007.

Financing the work on the vessel has been to date has been from
operations, a credit facility from Caterpillar Financial Services, and funds
raised. The credit facility with Caterpillar Financial Services Corporation was
created in September of 2005 for $3.0 million USD. This credit facility was
subsequently increased to a total of $4.3 million USD. The Company has drawn
down a total of $4.2 million USD as of September 30, 2007. The credit facility
is denominated in United States Dollars with a floating interest rate set to the
30-day LIBOR rate. The Company does not currently hedge against foreign exchange
or interest rate fluctuations

The Companys
  total Revenues for the period September 30, 2007 decreased with $1,505,060 to
  $2,572,638. Categorically the decrease was the result of reduced Sales $627,528,
  reduced Membership Dues $598,521, reduced Miscellaneous Revenue $375,035, while
  off-set by an increase of $96,024 in Interest Received. In comparison to the
  December 31, 2006 results it must be noted the nine month reporting period in
  2007 played a significant factor. In addition, the completed amortization for
  the over-accruals for un-collectable receivables, deferred interest and estimates
  for potential GST in 2006 resulted in a further reduction.

Capital
  Resources

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

For the period
  September 30, 2007 gross cash flow from operations decreased 3.2% to $ 2,565,348
  with a net cash utilized in operations of $83,553, compared to gross cash flows
  of $2,639,347 with a net cash utilized in operations of $82,228 December 31,
  2006, and gross cash flow of $2,966,897 with a net cash provided by operations
  of $394,102 December 31, 2005.

29

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A credit facility with Caterpillar Financial Services
Corporation was created in September of 2005 for $3.0 million USD. This credit
facility was subsequently increased to a total of $4.3 million USD. The Company
has drawn down a total of $4.2 million USD as of September 30, 2007. The credit
facility is denominated in United States Dollars with a floating interest rate
set to the 30-day LIBOR rate. The Company does not currently hedge against
foreign exchange or interest rate fluctuations.

The Company has utilized $911,436 during 2007 on the refit of
the vessel and another $50,000 up to February 29, 2008 of the credit facility.

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

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

Quantitative
  and Qualitative Disclosures about Market Risk

The Company
  does not have any derivative financial instruments. The exposure to market risk
  is limited to interest and exchange rate sensitivity. The Companys long
  term debt is denominated in US dollars with a floating exchange rate set to
  the LIBOR 30-day rate. These two risks are affected by changes in the general
  level of LIBOR and Canadian dollar exchange rates. The primary strategy of the
  Companys borrowing activities was to preserve principal by keeping funds
  in US dollars and converting to Canadian dollars when required. Given the fluctuation
  of the US Dollar for the period September 31, 2007 the Company received additional
  earnings of $259,611. The long term debt portfolio is subject to interest rate
  risk and will cost additional in the event market interest rates increase and
  conversely cost less in the event market interest rates decrease. The Company
  does not currently hedge against either foreign exchange or interest rate fluctuations.

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

The Companys has expended no material research and development
expenses for the last three fiscal years.

D)      TREND
INFORMATION

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

On October 1, 2003 the United States federal governments no
call registry went into effect. The new law allows consumers who do not wish to
be solicited and receive telemarketing calls to register on the federal
governments nationwide list. The no call list is receiving millions of
registrants. A similar law is under review for Canada. At this time it is
anticipated this law will take effect in the fall of 2008. This law in Canada
will affect the companys operations and result in a higher marketing cost,
which could affect the profitability of the Companys Snowbird Vacations Travel
Club membership sales.

Given the legal environment the Company and its agents must
focus its efforts more heavily in telephone hardware and software and other
marketing channels including direct mail, traditional media advertising and
Internet based marketing. New advances in technology have allowed for marketing
to large amounts of potential members at lower costs. Presently e-mail and
direct marketing campaigns are been reviewed with media companies to further
evaluate the potential opportunities of these new marketing methods for our
product

30

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

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

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

Subsequent to year end September 30, 2007, the Company
purchased the membership and assets of Family Vacation Centers from an Ontario
based Company for consideration of $4 million in cash and stock. The Company
continues to market the Family Vacation Centers membership from its Burlington
Ontario location.

As of February 29, 2007, the Company has12,175 active family
  memberships, with 10,747 current and 1,428 in arrears in monthly membership
  dues or payments. The unit volume of new memberships of its vacation Travel
  Club memberships for the period September 30, 2007 was 275, December 31, 2006
  - 202, and December 31, 2005 - 311 memberships. The mean average price of a
  membership sold for the period September 30, 2007 was decreased to $2,996 from
  $3,215 December 31, 2006 and $3,722 December 31, 2005. The Company is unable
  to predict with accuracy sales totals for the period September 30, 2008 but
  estimates the volume to be 300 percent more due to the acquisition of Family
  Vacation Centers. Sales totals for the period September 30, 2007 were $739,788 ,
  December 31, 2006 - $784,845
  and $990,645 for December 31, 2005.

Operating
  costs of the company have increased for the period September 30, 2007 - $4,785,105,
  December 31, 2006 - $3,201,890, December 31, 2005 - $4,227,789). The 49.5% increase
  or $1,583,214 is due to the charge of $2,944,536 for options granted during
  the period and $259,611 net gain on Exchange Rate adjustments from the soaring
  Canadian Dollar.

In addition to the core travel business the Company is seeking
entry into the socially responsible industry of assisting seniors liquidating
their life insurance policies in the Secondary Life Insurance market called the
Life Settlement market. The Company began to research the Life Settlement
industry in 2005 and has completed a substantial amount of due-diligence and
invested capital to create large channels of Life Settlement policy flow. The
Company is currently sourcing Life Settlement policies through Business to
Business (B2B) Channels and expects to launch a Business to Consumer (B2C)
Channel in the near future.

Subsequent to fiscal year end September 30, 2007 the Company
the Company formed American Life Settlement Society LLC duly formed under the
laws of the state of Delaware on the 15th day of November 2007.

Additionally
  subsequent to fiscal year end September 30, 2007 the Company entered the Life
  Settlement industry with the initial purchase of $30 million face value of Life
  Insurance policies. The Company uses an industry standard Milliman Report (consultants
  for the health care insurance industry) along with recent purchases and sales
  of similar life insurance policies, financial standing of the insurer, changes
  in general economic conditions, standard, actuarially developed mortality tables
  and industry life expectancy reports to determine an acceptable purchase price.
  The Company paid $2,900,029 which was funded by the recent Private Placements
  completed by the Company in July of 2007.

31

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The Company believes the implementation of necessary measures
will allow the continued growth of the travel club with a corresponding
reduction in operating costs while focusing on development and implementation of
its business plan for the entry into the secondary market for life
insurance.

E)      OFF-BALANCE SHEET
ARRANGEMENTS

The Company has no off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to investors.

F)      TABULAR DISCLOSURE OF
CONTRACTUAL OBLIGATIONS

The following table is a summary of our contractual obligations
as of September 30, 2007:

Payments due by periodLess than
      
      
      
      
      
      
      
      
      More thanContractual Obligations
      
      Total
      
      
      1 year
      
      
      1 - 3 years
      
      
      3 - 5 years
      
      
      5 yearsLong-Term DebtObligations*
      $
      4,215,598
      
      $
      227,568
      
      $
      714,260
      
      $
      816,240
      
      $
      2,457,530Operating LeaseObligations
      
      296,698
      
      
      170,380
      
      
      126,318
      
      
      -
      
      
      -Purchase Obligations
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -Other Long TermObligations
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -Total
      $
      4,512,296
      
      $
      397,948
      
      $
      840,578
      
      $
      816,240
      
      $
      2,457,530


|* | Contractual long term debt obligations do not include
        interest. The Companys long term debt consists of a construction
        loan in US funds with Caterpillar Financial Services Corporations 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.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

G)      SAFE HARBOR

This discussion includes certain statements that may be deemed
"forward-looking statements". All statements in this discussion, other than
statements of historical facts, that address future operation activities, growth
and events or developments that the Company expects, are forward-looking
statements.

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

ITEM VI. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A)      DIRECTORS AND SENIOR
MANAGEMENT

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

32

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


Family Relationships

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

Arrangements

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

B)      COMPENSATION

Executive Compensation and Compensation of
Directors

During the period ended September 30, 2007, the Company paid $
Nil, (December 31, 2006  $ Nil, December 31, 2005- $ Nil) in management fees
and $nil - for the period September 30, 2007, (December 31, 2006 - $nil,
December 31, 2005, $14,430) in consulting fees to directors. The Company also
reimbursed $113,297  for the period September 30, 2007, (December 31, 2006 -
$159,715, December 31, 2005 - $220,625) to directors for expenditures made on
behalf of the Company.

The Company has an employee extended medical / dental plan
acquired with the purchase of Family Vacation Centers on October 18th
2007. No directors or officers are participating in the plan. The Company has no
pension, retirement, or other similar benefits for directors or officers
pursuant to any existing plan provided by, or contributed to by, the Company or
its subsidiaries.

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

33

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Stock Options

The information on stock options required by this item is set
forth in Item 6.E of this annual report.

C)      BOARD PRACTICES

The Board of Directors meets formally approximately 6 to 8
times per year on an as needed basis to deal matters relating to the Company.
Each Director serves for a term of one year or until the next annual meeting of
the shareholders at which Directors are elected and qualified. The Company's
last annual general meeting was held on March 05, 2007 and the next meeting will
be held subject to Board approval as specified in the Company's Articles. The
Company's executive officers are appointed by and serve at the pleasure of the
Board of Directors.

Audit Committee

The Company's Audit Committee is composed of three individuals
  all present directors. The Audit Committee members of the Company as at December
  31, 2007 are Jeff Teeny, Scott McManus, and
  Martin Tutschek . Messrs. Teeny and McManus during fiscal year 2007 and
  currently:

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

Our Board of Directors has determined that the audit committee
has at least one member, Mr. McManus who qualifies as an Audit Committee
Financial Expert, as defined by relevant SEC rules. As previously stated, Mr.
McManus is an independent director. The Audit Committee is responsible for
reviewing the Company's financial reporting procedures, internal controls, and
the performance of the Company's external auditors. The functions of the Audit
Committee also includes selecting, appointing, retaining, compensating and
overseeing our independent auditors, deciding upon and approving in advance the
scope of audit and non-audit assignments and related fees, reviewing accounting
principles we use in financial reporting, and reviewing the adequacy of our
internal control procedures, including the internal audit function. The
committee is also responsible for reviewing the annual financial statements
prior to their approval by the Board of Directors. The Board has adopted a
charter for the Audit Committee in the fall of 2007.

Remuneration Committee

The Company does not have a Compensation Committee.

Service Contracts

The Company and its subsidiaries do not have any service
agreements with any of the directors of the Company providing for benefits upon
termination of employment.

34

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D)      EMPLOYEES

The following is a breakdown of Company employees as at
February 29, 2008 and for the years ended September 30th 2007, and
December 31st, 2006, 2005:

2008 *
      2007 **
    2006
    2005Management
    4
    2
    2
    2Sales Representatives
    18Marketing Representatives
    75Administrative Staff
    13
    6
    10
    11Customer Service Representatives
    4
    3
    16
    19IT / e-Commerce Personnel
    1
    1
    1
    1Fitness Club Personnel
    8
    8
    -
    -


Notes: 
  (1) as at February
  29, 2008. 
  (2) as at September 30, 2007.

The increase in the overall number of personnel was due to the
acquisition of Family Vacation Centers in October of 2007.

E)      SHARE OWNERSHIP OF
MANAGEMENT

The following table sets forth the share ownership of
management as of February 15, 2008:

Name
    Common
    Percent
    "A"
    Percent
    "B"
    PercentShares(1)
    of Class
    Preferred
    of Class
    Preferred
    of ClassShares(4)
    
    Shares(5)Scott McManus(2)
    6,250,000
    21.98
    1,393,398
    10.00
    1,393,398
    10.00Jeffery Teeny(3)
    6,250,000
    21.98
    1,393,398
    10.00
    1,393,398
    10.00Daniel Clozza
    5,430,000
    19.09%
    5,305,500
    38.07
    5,305,500
    38.07Martin Tutschek
    1,524,000
    5.36
    1,399,500
    10.04
    1,399,500
    10.94


Notes:

(1) Does not include options owned by directors or officers.
Options are disclosed in table below.

(2) Shares beneficially owned or held by Mr McManus are
registered to Aliya Life Settlement, LLC.

(3) Shares beneficially owned or held by Mr Teeny are
registered to Teeny Acquisitions, LLC

(4) 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.

(5) On June 27, 2007 the record date, the Company issued
13,933,983 Series B Preferred Shares to all the existing registered and
beneficial 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.

35

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Incentive Share Purchase Plan

On July 5th
  2007, the Company has executed a Stock Option plan reserving 2,850,000 shares
  in the common stock of the Corporation to provide its officers, directors, employees
  and consultants with an incentive to use their best efforts to advance the business
  affairs of the Corporation. The plan allows optionees to exercise the purchase
  of stock options at the price of $1.00 per common share which 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 our Named 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 DateJeff Teeny
      (1)
    1,250,000
    43.85
    1.00
    July
      5, 2012Scott McManus
      (2)
    315,000
    11.05
    1.00
    July
      5, 2012Martin Tutschek
    300,000
    10.52
    1.00
    July
      5, 2012


Notes:

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

(2) 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 $ 40,486
  issued prior to 2003 are fully matured as of December 31, 2002. The debentures
  during their term carried a rate of interest of eight percent per annum payable
  semi-annually. The conversion feature of the debenture allowed
  for the debenture holders to convert his capital at a rate of $6.00 US to $12.50
  US per share. The Company would have 4,622 shares issued if 100% of the debentures
  were to be converted. For the period ending September 30, 2007, $ Nil, (December
  31, 2006 $Nil, December 31, 2005 $Nil) of convertible debentures was repaid.
  There were no conversions during 2007, 2006, or 2005.

Conflicts of Interest

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

36

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ITEM VII. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A) MAJOR SHAREHOLDERS

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

The following persons hold, of record or beneficially, directly
or indirectly, or are known by the Company to own beneficially, directly or
indirectly, more than 5% of the issued shares of the Company as at July 15,
2007:

Identity of Person or
    Common
    Percent of
    "A"
    Percent of
    "B"
    Percent ofGroup
    Shares(1)
    Class
    Preferred
    Class
    Preferred
    ClassShares(4)
    
    Shares(5)Jeffery Teeny(2)
    6,250,000
    21.98
    1,393,398
    10.00
    1,393,398
    10.00Scott McManus(3)
    6,250,000
    21.98
    1,393,398
    10.00
    1,393,398
    10.00Daniel Clozza,
    5,430,000
    21.77
    5,430,000
    38.07
    5,430,000
    38.07Martin Tutschek
    1,524,000
    5.35
    1,524,000
    10.04
    1,524,000
    10.04Jackie Dawydiuk
    1,500,000
    5.27
    1,500,000
    10.76
    1,500,000
    10.76


Notes:

(1) Does not include options owned by
directors or officers. Options are disclosed previously.

(2) Shares beneficially owned or held
by Mr Teeny are registered to Teeny Acquisitions, LLC

(3) Shares beneficially owned or held
by Mr McManus are registered to Aliya Life Settlement, LLC.

(4) 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 favour 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.

(5) On June 27, 2007 the record date,
the Company issued 13,933,983 Series B Preferred Shares to all the existing
registered and beneficial 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 is approximately 50% of all outstanding securities, which are held
outside the United States and approximately 50% of all outstanding securities
are held within the United States as of February, 2008. The Company is not owned
or controlled, directly or indirectly, by another corporation or by any foreign
government.

B)      RELATED PARTY
TRANSACTIONS

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

37

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proposed transaction involving the Company or any of its
subsidiaries.

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

Effective December 31, 2006, the Company completed the purchase
of 100% of the outstanding capital stock of 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                                     |   | 339,016 |   |  |  | 
|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-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.

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

In July 2007 the company announced that it closed a private
placement of 3,500,000 shares of common stock at a purchase price of US$ 1.00
per share for gross proceeds to the Company of US$ 3.5 million USD. The
corporate investor to this offering is beneficially owned or controlled by an
individual who subsequent to the offering became a director of the Company. This
investor was arms length to the Company prior to the July offerings.

Subsequent
  to fiscal year end September 30, 2007, the Company acquired a 25% interest in
  a resort multi use development property in Needles California for US$1,000,000.
  The property on the Colorado River has its own marina with a 20,000 square foot
  storage facility for marine based activity. It is anticipated in the long term
  to have a product offering for the travel membership in a location that has
  an extended season of favorable weather conditions. This purchase has been classified
  on our balance sheet as an investment in non-current assets. The project is
  controlled and/or operated by a director of the Company (see VII(b) Related
  Party Transactions).

38

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During the period ended September 30, 2007, the Company paid $
Nil, (December 31, 2006  $ Nil, December 31, 2005- $ Nil) in management fees
and $nil  2007, (December 31, 2006 - $nil, December 31, 2005, $14,430) in
consulting fees to directors. The Company also reimbursed $113,297 for the
period ended September 30, 2007, (December 31, 2006 - $159,715, December 31,
2005 - $220,625) to directors for expenditures made on behalf of the Company.

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

Indebtedness to Company of Directors and Senior
Management

Amounts due to shareholders at the end of the fiscal period
September 30, 2007 were $288,552. Directors of the Company are indebted to the
Company in the amount of $nil and no director or senior management or have been
indebted to the Company since the beginning of the last completed financial year
of the Company other than as listed below. The Company reimburses Directors and
Senior Management for expenses incurred in connection with Companys ordinary
course of business. To the extent these advances and expenses are offset, there
exists an indebtedness to the Company of a net $nil as of September 30, 2007
(December 30, 2006 - $ nil, December 30, 2005 - $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 the Company for the
  fiscal periods ended September 30, 2007(restated), and December 31, 2006(restated),
  and 2005 which contain an Auditors Report dated March 12, 2008, Consolidated
  Balance Sheets as at September 30, 2007(restated) and December 31, 2006(restated),
  Consolidated Statements of Loss and Deficit, and Consolidated Statements of
  Cash Flows for the fiscal periods ended September 30, 2007(restated) and December
  31, 2006(restated), and 2005, and Notes to Consolidated Financial Statements.

Indebtedness
  to Company of Directors and Senior Management

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

Legal
  or Arbitration Proceedings

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

From time to time, the Company may become subject to claims and
litigation generally associated with any business venture. In addition, the
operations of the Company are subject to risks of accident and injury, possible
violations of other regulations and some of which cannot be covered by insurance
or other risk reduction strategies. Since the Company is a Canadian corporation
and the officers, directors and certain of the persons involved with the Company
as professional advisors are resident in Canada, it may be difficult to effect
service within the United States upon such persons or to realize on any judgment
by a court of the United States which is predicated on civil liabilities under
the 1933 Act. The Company's

39

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Canadian counsel have advised that there is doubt as to the
enforceability in Canada, either in original actions or through enforcement of
United States judgments, of liabilities predicated solely upon violations of the
1933 Act or the rules and regulations promulgated there under.

Dividend Distribution Policy

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

B)      SIGNIFICANT CHANGES

In addition to the three (3) for one (1) in the Companys
common shares on April 16, 2007 there has been an increase 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 $9 million USD and
correspondingly issued 14,500,000 restricted common shares 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
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.

On July 5th
  2007, the Company has executed a Stock Option plan reserving 2,850,000 shares
  in the common stock of the Corporation to provide its officers, directors, employees
  and consultants with an incentive to use their best efforts to advance the business
  affairs of the Corporation. The plan allows optionees to exercise the purchase
  of stock options at the price of $1.00 per common share which 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 when listed on the on the OTCBB and the Pink Sheet Exchange for
each of the most current five years, each of the quarters for the most current
two years and each of the most current six months:

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

2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003High
    $
    17.30
    
    
    3.00
    
    
    1.00
    
    
    1.85
    
    
    2.40Low
    $
    0.50
    
    
    0.24
    
    
    0.17
    
    
    0.15
    
    
    0.07


40

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

2007
    
    
    
    2006Q1
    Q2
    Q3
    Q4
    Q1
    Q2
    Q3
    Q4High
    $ 0.83
    1.00
    5.20
    17.30
    $ 0.90
    1.25
    1.80
    3.00Low
    $ 0.80
    0.50
    0.75
    4.25
    $ 0.24
    0.60
    1.15
    1.75


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

2008
    2008
    2007
    2007
    2007
    2007Feb
    Jan
    Dec
    Nov
    Oct
    SepHigh
    $13.60
    18.00
    17.30
    10.50
    5.15
    5.10Low
    $12.00
    13.65
    11.25
    4.90
    4.40
    4.55


Note: (1) The Companys shares were forward split on a three
for one basis April 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 January 30, 2008 the shares of Forum National Investments
  Ltd. are publicly traded on the OTCBB under the trading symbol FMNLF
  CUSIP Number 3498452067. The nature and extent of principal non-United States
  trading market is approximately 50% of all outstanding securities, which are
  held outside the United States and approximately 50% of all outstanding securities
  are held within the United States as of January 30, 2008 .
  The share price has traded at a high of $18.00 USD in 2008 and a low of $0.17
  USD in 2005.

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

41

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requirement to provide any information under this section.

B)      MEMORANDUM AND ARTICLES
OF INCORPORATION

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

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

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

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

The Companys Series A Non-Dilutive Convertible Preferred
Shares without par value have no rights as to dividend rights, voting rights,
rights to share in the Companys profits and or liquidation rights. The Series
A Convertible Preferred Shares are not, under the Companys memorandum and
articles, subject to redemption or sinking fund provisions, liability to further
capital calls, nor any provisions discriminating against any existing or
prospective holder of such shares as a result of such shareholder owning a
substantial number of shares.

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.

A majority of the shares of the Series A Non-Dilutive
Preferred Shares outstanding must vote in favor of converting the entire Series
A Preferred Shares outstanding into common shares before the shares of the
Series A Preferred Shares may convert into Common Shares. On receipt of the
requisite affirmative vote, the Series A Preferred Shares, in the aggregate
shall be converted into that number of fully paid and non-assessable Common
Shares that will represent 50% of the number of fully diluted common shares
after conversion. Each Share of Series A Preferred Shares shall be convertible
into Common Shares PRO RATA to its portion of the Series A Preferred Shares.

The Companys Series B Convertible Preferred Shares without
par value have no rights as to dividend rights, voting rights, rights to share
in the Companys profits and or liquidation rights. The Companys Series B
Convertible Preferred Shares are convertible into common shares of the Company
on one common share for each preferred share held. The Series B Convertible
Preferred Shares are not, under the Companys memorandum and articles, subject
to redemption or sinking fund provisions, liability to further capital calls,
nor any provisions discriminating against any existing or prospective holder of
such shares as a result of such shareholder owning a substantial number of
shares.

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

42

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

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

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

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

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

C)      MATERIAL CONTRACTS

In September of 2005, the Company secured a credit facility
with Caterpillar Financial Services for up to $3 million USD. The Company
subsequently has had the credit facility increased to an amount of $4.3 million
USD.

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

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

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

Effective December 31, 2006, the Company completed the purchase
of 100% of the outstanding capital stock of 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                                     |   | 339,016 |  
|Excess of purchase
      price over net identifiable assets acquired |   | 210,984 |  
|                                                                     |   |         |  
|Total                                                                | $ | 550,000 |  

43

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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.

In July 2007 the company announced that it closed a private
placement of 11,000,000 shares of common stock at a purchase price of US$ 0.50
per share for gross proceeds to the Company of US$ 5.5 million USD. The private
placement was made to two accredited investors.

In July 2007 the company announced that it closed a private
placement of 3,500,000 shares of common stock at a purchase price of US$ 1.00
per share for gross proceeds to the Company of US$ 3.5 million USD. The private
placement was made to an accredited investor.

Subsequent to fiscal period ending September 30, 2007, the
company:

- Purchased the membership and all of the assets of Family Vacation Centers
      from an Ontario based Company for consideration of $ 4,000 ,000
      in cash and stock on the 18thday of October 2007.
- Formed American Life Settlement Society LLC duly formed under
      the laws of the state of Delaware in the 15thday of November
      2007.
- Completed contracts
      for the initial purchase of $30 million face value of Life Insurance policies.
      The Company uses an industry standard Milliman Report (consultants for the
      health care insurance industry) along with recent purchases and sales of
      similar life insurance policies, financial standing of the insurer, changes
      in general economic conditions, standard, actuarially developed mortality
      tables and industry life expectancy reports to determine an acceptable purchase
      price. The Company paid $2,900,029 which was funded by the recent Private
      Placements completed by the Company in July of 2007.
- Acquired a 25% interest
      in a resort multi use development property in Needles California for US$1,000,000.
      The property on the Colorado River has its own marina with a 20,000 square
      foot storage facility for marine based activity. It is anticipated in the
      long term to have a product offering for the travel membership in a location
      that has an extended season of favorable weather conditions. This purchase
      has been classified on our balance sheet as an investment in non- current
      assets. The project is controlled and/or operated by a director of the Company
      (see VII(b) Related Party Transactions).

D)      EXCHANGE CONTROLS

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

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

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

44

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

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

E)      TAXATION

Canadian Federal Income Tax Considerations

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

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

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

Dividends

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

Capital Gains

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

45

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

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

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

U.S. Federal Income Tax Consequences

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

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

Each U.S. Holder should consult its own financial advisor,
legal counsel, or accountant regarding the U.S. federal, U.S. state and local,
and foreign tax consequences of the acquisition, ownership, and disposition of
Common Shares.

Scope of this Disclosure

Authorities

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

U.S. Holders

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

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Non-U.S. Holders

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

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

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

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

Tax Consequences Other than U.S. Federal Income Tax
Consequences Not Addressed

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

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

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General Taxation of Distributions

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

Reduced Tax Rates for Certain Dividends

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

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

As discussed below, we do not believe that we were a passive
foreign investment company for the taxable year ended December 31, 2006, and we
do not expect that we will be a passive foreign investment company for the
taxable year ending December 31, 2007. (See more detailed discussion at
Additional Rules that May Apply to U.S. Holders below). However, there can be
no assurance that the IRS will not challenge our determination concerning our
passive foreign investment company status or that we will not be a passive
foreign investment company for the current or any future taxable year.
Accordingly, although we anticipate that we may be a QFC, there can be no
assurances that the IRS will not challenge the determination made by us
concerning our QFC status, that we will be a QFC for the current or any future
taxable year, or that we will be able to certify that we are a QFC in accordance
with the certification procedures issued by the Treasury and the IRS.

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

Distributions Paid in Foreign Currency

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

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dollars).

Dividends Received Deduction

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

Disposition of Common Shares

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

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

Foreign Tax Credit

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

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

Information Reporting; Backup Withholding Tax

Payments made within the U.S., or by a U.S. payor or U.S.
middleman, of dividends on, and proceeds arising from certain sales or other
taxable dispositions of, Common Shares generally will be subject to information
reporting and backup withholding tax, at the rate of 28%, if a U.S. Holder (a)
fails to furnish

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

Additional Rules that May Apply to U.S. Holders

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

Controlled Foreign Corporation

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

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

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

Passive Foreign Investment Company

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

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

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

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

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

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

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

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

F)      DIVIDENDS AND PAYING
AGENTS

This Form 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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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 head office 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, including exhibits and schedules filed with it, in the SEC's Public
Reference Room at 100 F Street NE, Washington, D.C. 20549. You may call the SEC
at 1-800-SEC-0330 or the Conventional Reading Rooms Headquarters Office at
212-551-8090 for further information on the public reference rooms. The SEC
maintains a web site (www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC.

I)      SUBSIDIARY INFORMATION

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

ITEM XI. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

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

ITEM XII. DESCRIPTION OF SECURITIES OTHER THAN EQUITY
SECURITIES

This Form 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.

PART II

ITEM XIII. DEFAULTS, DIVIDENDS, ARREARS AND DELINQUENCIES

There has not been a material default in the payment of
principal, interest, a sinking fund or purchase fund installment, or any other
material default not cured within thirty days, relating to indebtedness of the
Company. There are no payments of dividend by the Company in arrears, nor has
there been any other material 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 holders during the most current fiscal year.

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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, the
  Company reevaluated the effectiveness of the design and operation of its disclosure
  controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange
  Act of 1934, as amended) as of a date (the Evaluation Date) being
  September 30, 2007. Based on this evaluation these officers have concluded that
  as of the end of the period covered by this Annual Report on Form 20-F/A, our
  disclosure controls and procedures were ineffective and were not adequate to
  insure that the information required to be disclosed by the Company in reports
  it files or submits under the Exchange Act were recorded, processed, summarized
  and reported within the time period specified in the Commission's rules and
  forms.

The deficiencies
  in the Company's controls and procedures relates to the Company's income recognition
  policies. Previously, and during the period ended September 30, 2007, the Company
  recognized revenues when memberships were sold to customers. The Company determined
  that a portion of it its initial sale of memberships was deemed to fall under
  the SEC's Staff Accounting Bulletin No. 104, "Revenue Recognition" ("SAB 104")
  and Emerging Issues Task Force 00-21 ("EITF 00-21"), "Accounting for Revenue
  Arrangements with Multiple Deliverables". SAB 104 and EITF 00-21 require the
  initial sales price, including all up-front fees received from new membership
  sales, to be amortized over the expected term of the members entitlement
  to use the Companys vacation and travel club privileges at a future date.
  As discussed above, and in Note 4 to the financial statements, the financial
  statements contained in this amended Annual Report on Form 20-F have been restated
  to reflect these revenue recognition policies for the transition period ended
  September 30, 2007 and the year ended December 31, 2006.

Managements
  annual report on internal controls over financial reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting for the Company. The
Companys internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that (1) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of the
assets of the Company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Companys assets that could have a
material effect on the financial statements.

Our management,
  including our Chief Executive Officer and Chief Financial Officer, reassessed
  the effectiveness of internal control over financial reporting as of September
  30, 2007. Based on that assessment, our management concluded that there was
  a material weakness in our internal control over the interpretation and application
  of Statement of SAB No. 104 and EIC 141, as they apply to the calculation of
  our revenue. Specifically, the design of controls over the preparation and review
  of revenue did not detect that our method of accounting for membership revenue
  and dues was not in conformity with generally accepted accounting principles.
  The Company has subsequently determined that its revenue recognition policies
  were incorrect and it has restated its financial statements as discussed above.

Based on its
  assessment, including consideration of the aforementioned material weakness,
  and the criteria discussed above, management has revised its original conclusion
  relative to the effectiveness of

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our internal
  control over financial reporting as of September 30, 2007. Accordingly, management
  now concludes that our internal control over financial reporting was not effective
  at a reasonable assurance level as of September 30, 2007 or at December 31,
  2006.

This annual report does not include an attestation report of
the companys registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by the
companys registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
managements report in this annual report.

Remediation
  Steps to Address Material Weakness

Management
  has dedicated significant resources to correct the accounting error relating
  to our revenue recognition policy and to ensure that we take proper steps to
  improve our internal controls and remedy our material weakness in our financial
  reporting and disclosure controls. Management is committed to implementing effective
  control policies and procedures and will continually update our Audit Committee
  as to the progress and status of our remediation efforts to ensure that they
  are adequately implemented. We believe the following actions we have taken and
  are taking will be sufficient to remediate the material weakness described above:

- conduct a full review
      of our accounting methodology for revenue recognition policy;
- assess the technical
      accounting capabilities of the accounting and finance departments to ensure
      the proper knowledge, skills, and training; and
- finance and accounting
      personnel to attend training sessions, covering relevant topics, which include
      revenue recognition and related accounting concepts.

We believe
  the need to restate our consolidated financial statements was not the result
  of any fraud or intentional wrongdoing on the part of any of our directors,
  officers or other employees.

Management
  believes that the actions described above will remediate the material weakness
  we have identified and strengthen our internal control over financial reporting.
  We expect that the material weakness will be fully remediated prior to September
  30, 2009 year end. As we improve our internal control over financial reporting
  and implement remediation measures, we may supplement or modify the remediation
  measures described above. Further, we believe that, as a result of managements
  in-depth review of its accounting processes, the utilization of external resources
  and the additional procedures management has implemented, there are no material
  inaccuracies or omissions of material fact in this Form 20-F/A and, to the best
  of our knowledge, we believe that the consolidated financial statements in this
  Form 20-F/A fairly present in all material aspects the financial condition,
  results of operations and cash flows of Forum in conformity with generally accepted
  accounting principles.

ITEM XVI. AUDIT COMMITTEE FINANCIAL EXPERT

Audit
  Committee Financial Expert

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

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

Code
  of Ethics

We have adopted a code of ethics for our Chief Executive
Officer, Chief Financial Officer, principal

54

---

accounting officer, controller and other persons performing
similar functions. Our code of ethics complies with the SEC rules. The code of
ethics addresses the following:

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

There have been no waivers to the code of ethics as of the date
of this report

Principal
  Accountant Fees and Services

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

For the periods ended September 30, 2007 and December 31, 2006,
the Company was invoiced by SmytheRatcliffe, the Company's independent auditors,
for audit fees, audit-related fees, tax fees and all other fees as set forth
below:

|                                                                   |   | Period Ended |  |   | Year Ended | 
|------------------------------------------------------------------ | - | ------------ |  | - | ---------- | 
|                                                                   |   | September    |  |   | December   | 
|                                                                   |   | 30, 2007     |  |   | 31, 2006   | 
|                                                                   |   |              |  |   |            | 
|Audit fees - auditing of our annual financial statements and       |   |              |  |   |            | 
|preparation of auditors' report.                                   | $ | 89,090       |  | $ | 41,000     | 
|                                                                   |   |              |  |   |            | 
|                                                                   |   |              |  |   |            | 
|Audit-related fees - review of each of the quarterly financial     |   |              |  |   |            | 
|statements.                                                        |   | -            |  |   | -          | 
|                                                                   |   |              |  |   |            | 
|Tax fees - preparation and filing of three
      major tax-related |   |              |  |   |            | 
|forms and tax planning.                                            |   | -            |  |   | -          | 
|                                                                   |   |              |  |   |            | 
|All other fees - other services provided by our principal          |   |              |  |   |            | 
|accountants.                                                       |   | -            |  |   | -          | 
|                                                                   |   |              |  |   |            | 
|Total fees paid or accrued to our principal
      accountants      | $ | 89,090       |  | $ | 41,000     | 

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

The Audit Committee has adopted procedures requiring Audit
Committee review and approval in advance of all particular engagements for
services to be provided by SmytheRatcliffe. Consistent with applicable laws, the
procedures permit limited amounts of services, other than audit, review and
attest services, to be approved by one or more members of the Audit Committee
pursuant to authority delegated by the Audit Committee, provided the Audit
Committee is informed of each particular service. The Audit Committee approved
all of the engagements and fees during the period ended September 30, 2007. The
Audit Committee reviews with SmytheRatcliffe whether the non-audit services to
be provided are compatible with maintaining the auditors' independence. The
Board has determined that, beginning with January 1, 2006, fees paid to the
independent auditors for non-audit related services in any year will not exceed
the fees paid for audit services during the year. Permissible non-audit services
will be limited to fees for tax services, accounting assistance or audits in
connection with acquisitions, and other services specifically

55

---

related to accounting or audit matters such as registration
statements filings or private placements or public offerings.

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 filed as part of this
  Annual Report. Included are audited consolidated balance sheets as at September
  30, 2007 (restated) and December 31, 2006 (restated) and the consolidated statements
  of operations and deficit and cash flows for each of the period ended September
  30, 2007 (restated) and the years ended December 31, 2006 (restated) and 2005,
  including the Auditors Report to Shareholders.

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

ITEM XVIII. FINANCIAL STATEMENTS

Not applicable.

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 March 12, 2008, except as to Note 4 which is as of March 2, 2009

(iii) ******Consolidated
  Balance Sheets as at September 30, 2007(restated) and December 31, 2006(restated).

(iv) ******Consolidated
  Statements of Operations and Deficit for the period ended September 30, 2007(restated)
  and the years ended December 31, 2006(restated) and 2005.

(v) ******Consolidated
  Statements of Cash Flows for the period ended September 30, 2007(restated) and
  the years ended December 31, 2006(restated) and 2005

(vi) ******Notes to the Consolidated Financial Statements for the period
  ended September 30, 2007(restated) and the years ended December 31, 2006(restated)
  and 2005. Financial Statements Schedules are omitted because they are not applicable,
  not required or because the required information is included in the consolidated
  financial statement or notes thereto filed within.

56

---

|Exhibit   | Description                                                                                                                               
|--------- | ------------------------------------------------------------------------------------------------------------------------------------------
|1.1       | Registered Incorporation Memorandum(1)                                                                                                    
|1.2       | Articles of Continuance into Ontario(2)                                                                                                   
|1.3       | Articles of
    Amendment, Change of Name(2)                                                                                              
|1.4       | Articles of Amendment, Authorization
        of Preferred Shares including Designation of Series A and
    Series B Preferred Share(3)
|4.1       | 2094711 Ontario
    Limited., Commission Agreement January 1, 2006(3)                                                                     
|4.2       | Loan Agreement, dated September
    21, 2005(4)                                                                                           
|4.2.(i)   | First Amendment
    to Loan Agreement, dated October 11, 2005(4)                                                                          
|4.2.(ii)  | Second Amendment to Loan Agreement,
    dated November 6, 2006 (4)                                                                        
|4.2.(iii) | Third Amendment
    to Loan Agreement, dated May 2, 2007 (4)                                                                              
|4.3       | Purchase Agreement. International
    Fitness Vacations (BC) Ltd., December 31, 2006(4)                                                   
|4.4       | Letter of Intent.
    Gala Travels, February 19, 2007(4)                                                                                  
|4.5       | Servicing Agreement. Vision
        200 travel, dated October
    15, 2007                                                                
|4.5       | Purchase Agreement.
        Family Vacation Centers and 1508812 Ontario Inc., October 18, 2007(4)                                         
|4.6       | Addendum to Purchase Agreement.
        Family Vacation Centers and 1508812 Ontario Inc., November 2, 2007(4)                             
|4.7       | Disclosure Consent Chris Small Marine Surveyors Ltd., dated November 10, 2008                                                             
|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                                                                                  
|13.2      | Section
    906 Certification of Chief Financial Officer                                                                                  

Notes: (1) ******Incorporated by reference to Form 20-F filed with the SEC on
November 3, 1998. (2)******
Incorporated by reference to Form 20-F filed with the SEC on August 15, 2003.
(3) ******Incorporated by
reference to Form 20-F filed with the SEC on August 29, 2007.
(4) ******Incorporated by
reference to Form 20-F filed with the SEC on December 29, 2006.
(5) ******To be filed on
request. (6)******
Incorporated by reference to Form 20-F filed with the SEC on July 8, 2002

57

---

SIGNATURES

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

|Date: April 2, 2009 | FORUM NATIONAL INVESTMENTS LTD.                           
|------------------- | ----------------------------------------------------------
|                    |                                                           
|                    | /s/
      Daniel Clozza                                   
|                    | Daniel Clozza, President and Chief Executive
      Officer
|                    |                                                           
|                    | /s/
      Martin Tutschek                                 
|                    | Martin Tutschek, Chief Financial Officer                  

58

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INDEX TO FINANCIAL STATEMENTS



|                                                                                                                                                  | Page    
|------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|                                                                                                                                                  |         
|Managements Responsibility
      for Financial Reporting                                                                                         | 53      
|                                                                                                                                                  |         
|Auditors Report dated March
      12, 2008 except as to Note 4 which is as of March 2, 2009                                                      | 54      
|                                                                                                                                                  |         
|Consolidated Balance Sheets
      as at September 30, 2007 and December 31, 2006.                                                                 | 55      
|                                                                                                                                                  |         
|Consolidated Statements of
      Loss and Deficit for the period ended September 30, 2007 and the years
      ended December 31, 2006 and 2005.   | 56      
|                                                                                                                                                  |         
|Consolidated Statements of
      Cash Flows for the period ended September 30, 2007 and the years ended
      December 31, 2006 and 2005.         | 57      
|                                                                                                                                                  |         
|Notes to the Consolidated
      Financial Statements for the period ended September 30, 2007 and the years
      ended December 31, 2006 and 2005 | 58 to 79

59

---









FORUM NATIONAL INVESTMENTS LTD.

September 30, 2007 and December 31, 2006 and 2005

Consolidated Financial Statements (Expressed in
Canadian dollars)

---

Managements Responsibility for Financial
      Reporting




The consolidated financial statements of Forum National
Investments Ltd. are the responsibility of the Companys management. The
consolidated financial statements are prepared in accordance with Canadian
generally accepted accounting principles and reflect managements best estimates
and judgment based on information currently available.

Management has developed and is maintaining a system of
internal controls to ensure that the Companys assets are safeguarded,
transactions are authorized and properly recorded, and financial information is
reliable.

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

The consolidated financial statements as at September 30, 2007
and December 31, 2006 and for the period ended September 30, 2007, and the years
ended December 31, 2006 and 2005 have been audited by Smythe Ratcliffe LLP,
Chartered Accountants, and their report outlines the scope of their examination
and gives their opinion on the financial statements.

Dan Clozza (signed)

Dan Clozza President

March 12, 2008

61

---

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 Investments Ltd. as at September 30, 2007 and December
  31, 2006 and the consolidated statements of operations and deficit and cash
  flows for the period ended September 30, 2007 ,
  and the years ended December 31, 2006 and 2005. These financial statements are
  the responsibility of the Companys management. Our responsibility is to
  express an opinion on these financial statements based on our audits.

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

In our opinion, these consolidated financial
  statements present fairly, in all material respects, the financial position
  of the Company as at September 30, 2007 and December 31, 2006 and the
  results of its operations and its cash flows for the period ended September
  30, 2007, and the years ended December 31, 2006 and 2005 in accordance with
  Canadian generally accepted accounting principles.

Smythe
  Ratcliffe LLP (signed)

Chartered Accountants

Vancouver, Canada 
  March 12, 2008 
         except
  as to note 4 which is as of March 2, 2009.

COMMENTS BY AUDITORS FOR US READERS
ON CANADA  US REPORTING DIFFERENCES

In the United States, reporting standards
  for auditors requires the addition of an explanatory paragraph (following the
  opinion paragraph) when the financial statements are affected by conditions
  and events that cast substantial doubt on the Companys ability to continue
  as a going-concern, such as those described in note 2 to the consolidated financial
  statements. Our report to the shareholders dated March 12, 2009
  is expressed in accordance with Canadian reporting standards, which do not permit
  a reference to such events and conditions in the auditors report when
  these are adequately disclosed in the notes to the  financial statements.

Smythe
  Ratcliffe LLP (signed)

Chartered Accountants

Vancouver, Canada 
  March 12, 2008 
        except
  as to note 4 which is as of March 2, 2009.

|                                  |            |                     | 
|--------------------------------- | ---------- | ------------------- | 
|7thFloor, Marine Building         | Fax:       | 604.688.4675       
|355 Burrard Street, Vancouver, BC | Telephone: | 604.687.1231       
|Canada V6C 2G8                    | Web:       | SmytheRatcliffe.com | 

---

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

|                                                        |   | September 30,      |   |   | December
      31, |  
|------------------------------------------------------- | - | ------------------ | - | - | ------------------ | -
|                                                        |   | 2007               |   |   | 2006               |  
|                                                        |   | (Restated  note 4 | ) |   | (Restated  note 4 | )
|Assets                                                  |   |                    |   |   |                    |  
|                                                        |   |                    |   |   |                    |  
|Current                                                 |   |                    |   |   |                    |  
|Cash and cash equivalents                               | $ | 8,624,205          |   | $ | 641,253            |  
|Short-term investments                                  |   | 14,210             |   |   | 14,210             |  
|Accounts and notes
      receivable                     |   | 360,634            |   |   | 440,358            |  
|Other
      receivables                                 |   | 265,183            |   |   | 357,121            |  
|Prepaid expenses                                        |   |                   |   |   | 12,208             |  
|Total Current Assets                                    |   | 9,264,232          |   |   | 1,465,150          |  
|                                                        |   |                    |   |   |                    |  
|Deferred Organization Costs                             |   | 149,976            |   |   |                   |  
|Property and Equipment(note 7)                          |   | 9,100,127          |   |   | 7,276,372          |  
|Deferred Costs,net (note 9)                             |   | 1,491,275          |   |   | 1,352,796          |  
|Intangibles,net (note 8)                                |   | 30,276             |   |   | 7,500              |  
|                                                        |   |                    |   |   |                    |  
|Total Assets                                            | $ | 20,035,886         |   | $ | 10,101,818         |  
|                                                        |   |                    |   |   |                    |  
|Liabilities and Shareholders Equity                    |   |                    |   |   |                    |  
|                                                        |   |                    |   |   |                    |  
|Current                                                 |   |                    |   |   |                    |  
|Accounts
      payable and accrued liabilities          | $ | 491,250            |   | $ | 669,014            |  
|Current portion of
      deferred revenue (note 9)      |   | 675,897            |   |   | 765,854            |  
|Advances
      against future revenue streams (note 10) |   | 8,182              |   |   | 25,321             |  
|Current portion of
      long-term debt (note 12)       |   | 227,567            |   |   | 49,263             |  
|Convertible debentures (note 11)                        |   | 40,486             |   |   | 40,486             |  
|Loans from related parties (note 16)                    |   | 288,552            |   |   | 330,599            |  
|Total Current Liabilities                               |   | 1,731,934          |   |   | 1,880,537          |  
|                                                        |   |                    |   |   |                    |  
|Deferred Revenue(note 9)                                |   | 1,389,678          |   |   | 1,389,587          |  
|Long-Term Debt(note 12)                                 |   | 3,988,031          |   |   | 4,029,516          |  
|Total Liabilities                                       |   | 7,109,643          |   |   | 7,299,640          |  
|                                                        |   |                    |   |   |                    |  
|                                                        |   |                    |   |   |                    |  
|Shareholders Equity                                    |   |                    |   |   |                    |  
|                                                        |   |                    |   |   |                    |  
|Capital Stock(note 13)                                  |   | 24,194,793         |   |   | 14,802,797         |  
|Contributed Surplus(note 13(e))                         |   | 2,944,536          |   |   |                   |  
|Deficit                                                 |   | (14,213,086        | ) |   | (12,000,619        | )
|Total Shareholders Equity                              |   | 12,926,243         |   |   | 2,802,178          |  
|                                                        |   |                    |   |   |                    |  
|Total Liabilities and Shareholders Equity              | $ | 20,035,886         |   | $ | 10,101,818         |  
|                                                        |   |                    |   |   |                    |  
|Going-concern (note 2)                                  |   |                    |   |   |                    |  
|Commitments (note 15)                                   |   |                    |   |   |                    |  
|Subsequent events (note 18)                             |   |                    |   |   |                    |  

|Approved on behalf of the Board: |          |                            |         
|-------------------------------- | -------- | -------------------------- | --------
|                                 |          |                            |         
|                                 |          |                            |         
|Dan Clozza
      (signed)      | Director | Martin Tutschek (signed) | Director
|Dan Clozza                       |          | Martin Tutschek            |         

See accompanying notes to consolidated financial statements.

63

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FORUM NATIONAL INVESTMENTS LTD.Consolidated Statements of Operations and Deficit (Expressed
in Canadian dollars)

|                                                |   | Period Ended       |   |   |                          |   |   |             |  
|----------------------------------------------- | - | ------------------ | - | - | ------------------------ | - | - | ----------- | -
|                                                |   | September 30,      |   |   | Years Ended December 31, |  
|                                                |   | 2007               |   |   | 2006                     |   |   | 2005        |  
|                                                |   | (Restated  note 4 | ) |   | (Restated  note 4       | ) |   |             |  
|Revenues                                        |   |                    |   |   |                          |   |   |             |  
|Membership
      sales and travel               | $ | 1,270,800          |   | $ | 1,898,328                |   | $ | 4,157,556   |  
|Membership dues                                 |   | 1,050,116          |   |   | 1,648,637                |   |   | 1,690,200   |  
|Interest                                        |   | 149,275            |   |   | 53,251                   |   |   | 75,760      |  
|Miscellaneous                                   |   | 102,447            |   |   | 477,482                  |   |   |            |  
|                                                |   | 2,572,638          |   |   | 4,077,698                |   |   | 5,923,516   |  
|                                                |   |                    |   |   |                          |   |   |             |  
|Expenses                                        |   |                    |   |   |                          |   |   |             |  
|Commission costs                                |   | 518,363            |   |   | 687,784                  |   |   | 1,277,223   |  
|Wages                                           |   | 492,490            |   |   | 1,081,049                |   |   | 1,179,624   |  
|Legal and accounting                            |   | 220,814            |   |   | 163,756                  |   |   | 274,231     |  
|Office and
      related                        |   | 191,356            |   |   | 238,216                  |   |   | 175,666     |  
|Condominium rentals                             |   | 162,210            |   |   | 185,969                  |   |   | 261,768     |  
|Rent                                            |   | 130,196            |   |   | 186,550                  |   |   | 200,792     |  
|Automotive                                      |   | 98,370             |   |   | 157,075                  |   |   | 117,048     |  
|Amortization                                    |   | 68,106             |   |   | 7,830                    |   |   | 7,319       |  
|Travel                                          |   | 59,436             |   |   | 142,105                  |   |   | 88,384      |  
|Bank charges
      and interest                 |   | 46,330             |   |   | 85,223                   |   |   | 101,538     |  
|Bad debts (recovery)                            |   | 23,697             |   |   | (14,007                  | ) |   | 238,509     |  
|Consulting
      fees                           |   | 15,608             |   |   | 53,423                   |   |   | 33,800      |  
|Parts and maintenance                           |   | 15,422             |   |   | 13,106                   |   |   | 42,984      |  
|Insurance                                       |   | 14,649             |   |   | 25,935                   |   |   | 34,819      |  
|Other                                           |   | 12,092             |   |   | 5,906                    |   |   | 16,717      |  
|Equipment
      leases                          |   | 9,187              |   |   | 16,700                   |   |   | 33,651      |  
|Advertising and promotion                       |   | 8,957              |   |   | 13,826                   |   |   | 9,573       |  
|Investor
      relations                        |   | 6,865              |   |   | 16,771                   |   |   | 1,299       |  
|Postage, copying and printing                   |   | 6,032              |   |   | 41,526                   |   |   | 48,269      |  
|Direct selling                                  |   |                   |   |   | 93,147                   |   |   | 84,575      |  
|Foreign exchange gain                           |   | (259,611           | ) |   |                         |   |   |            |  
|Stock-based compensation (note 13)              |   | 2,944,536          |   |   |                         |   |   |            |  
|                                                |   | 4,785,105          |   |   | 3,201,890                |   |   | 4,227,789   |  
|                                                |   |                    |   |   |                          |   |   |             |  
|(Loss) Income Before Income Taxes               |   | (2,212,467         | ) |   | 875,808                  |   |   | 1,695,727   |  
|Income Taxes Recovery (Expense)(note 14)        |   |                   |   |   | (453                     | ) |   | (43,923     | )
|                                                |   |                    |   |   |                          |   |   |             |  
|Net (Loss) Income for Period                    |   | (2,212,467         | ) |   | 875,355                  |   |   | 1,651,804   |  
|Deficit, Beginning of Period                    |   | (12,000,619        | ) |   | (12,664,990              | ) |   | (14,316,794 | )
|Adjustment on Acquisition of Subsidiary(note 5) |   |                   |   |   | (210,984                 | ) |   |            |  
|Deficit, End of Period                          | $ | (14,213,086        | ) | $ | (12,000,619              | ) | $ | (12,664,990 | )
|                                                |   |                    |   |   |                          |   |   |             |  
|Basic and diluted (loss) earnings per share     | $ | (0.20              | ) | $ | 0.17                     |   | $ | 0.30        |  
|                                                |   |                    |   |   |                          |   |   |             |  
|Weighted average number of                      |   |                    |   |   |                          |   |   |             |  
|common shares outstanding  Basic and diluted   |   | 11,140,573         |   |   | 5,098,086                |   |   | 5,444,661   |  

See accompanying notes to consolidated financial statements.

64

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

|                                                      |   | Period Ended       |   |   |                          |   |   |            |  
|----------------------------------------------------- | - | ------------------ | - | - | ------------------------ | - | - | ---------- | -
|                                                      |   | September 30,      |   |   | Years Ended December 31, |  
|                                                      |   | 2007               |   |   | 2006                     |   |   | 2005       |  
|                                                      |   | (Restated  note 4 | ) |   | (Restated  note 4       | ) |   |            |  
|                                                      |   |                    |   |   |                          |   |   |            |  
|Operating Activities                                  |   |                    |   |   |                          |   |   |            |  
|Net (loss)
      income                               | $ | (2,212,467         | ) | $ | 875,355                  |   | $ | 1,651,804  |  
|Items not involving cash:                             |   |                    |   |   |                          |   |   |            |  
|Deferred revenue                                      |   | (829,254           | ) |   | (1,299,300               | ) |   | (3,367,166 | )
|Deferred commission costs                             |   | 416,063            |   |   | 687,784                  |   |   | 1,239,223  |  
|Amortization                                          |   | 68,106             |   |   | 7,830                    |   |   | 7,319      |  
|Accretion of discount on advances against             |   |                    |   |   |                          |   |   |            |  
|future revenue streams                                |   |                   |   |   |                         |   |   | 46,508     |  
|Revenue recognized on advances against                |   |                    |   |   |                          |   |   |            |  
|future revenue streams                                |   | (17,139            | ) |   | (67,680                  | ) |   | (209,177   | )
|Stock-based
      compensation                        |   | 2,944,536          |   |   |                         |   |   |           |  
|Unrealized
      foreign exchange gain                |   | (644,350           | ) |   |                         |   |   |           |  
|                                                      |   | (274,505           | ) |   | 203,989                  |   |   | (631,489   | )
|                                                      |   |                    |   |   |                          |   |   |            |  
|Changes in non-cash operating
      working capital:  |   |                    |   |   |                          |   |   |            |  
|Accounts, notes and other receivables                 |   | 171,663            |   |   | (144,206                 | ) |   | 216,389    |  
|Prepaid expenses                                      |   | 12,208             |   |   | 11,600                   |   |   | 4,478      |  
|Inventory - condos                                    |   |                   |   |   | 3,433                    |   |   | 12,194     |  
|Long-term receivables                                 |   |                   |   |   |                         |   |   | 285,478    |  
|Deferred costs                                        |   | (554,543           | ) |   | (517,843                 | ) |   | 388,397    |  
|Accounts payable and accrued liabilities              |   | (177,763           | ) |   | (452,395                 | ) |   | 223,130    |  
|Deferred revenue                                      |   | 739,386            |   |   | 894,216                  |   |   | 45,307     |  
|Deferred
      gain                                   |   |                   |   |   | (81,022                  | ) |   | (149,782   | )
|                                                      |   | 190,951            |   |   | (286,217                 | ) |   | 1,025,591  |  
|                                                      |   |                    |   |   |                          |   |   |            |  
|Cash (Used in) Generated from Operating Activities    |   | (83,554            | ) |   | (82,228                  | ) |   | 394,102    |  
|                                                      |   |                    |   |   |                          |   |   |            |  
|Investing Activities                                  |   |                    |   |   |                          |   |   |            |  
|Short-term investment                                 |   |                   |   |   | (10,710                  | ) |   |           |  
|Purchase
      of property and equipment              |   | (1,882,212         | ) |   | (2,689,738               | ) |   | (667,965   | )
|Purchase of intangible property                       |   | (32,425            | ) |   |                         |   |   |           |  
|Organization costs                                    |   | (149,976           | ) |   |                         |   |   |           |  
|Cash Used in Investing Activities                     |   | (2,064,613         | ) |   | (2,700,448               | ) |   | (667,965   | )
|                                                      |   |                    |   |   |                          |   |   |            |  
|Financing Activities                                  |   |                    |   |   |                          |   |   |            |  
|Net proceeds
      received on share issuance         |   | 9,391,996          |   |   |                         |   |   |           |  
|Proceeds from advances against
      future revenue   |   |                    |   |   |                          |   |   |            |  
|streams
      (note 8)                                |   |                   |   |   |                         |   |   | 42,422     |  
|Amounts due to (from) related
      parties           |   |                   |   |   | 199,684                  |   |   | (350,779   | )
|Loans from
      (to) related parties                 |   | (42,047            | ) |   | 91,223                   |   |   | (15,618    | )
|Current portion of long-term
      debt               |   | 178,304            |   |   | 49,263                   |   |   |           |  
|Long-term
      debt                                  |   | 602,866            |   |   | 2,704,525                |   |   | 1,324,991  |  
|Reduction in capital stock
      on disposal of asset |   |                   |   |   | (350,000                 | ) |   |           |  
|Adjustment to accumulated deficit                     |   |                   |   |   | (210,984                 | ) |   |           |  
|Cash Provided by Financing Activities                 |   | 10,131,119         |   |   | 2,483,711                |   |   | 1,001,016  |  
|                                                      |   |                    |   |   |                          |   |   |            |  
|Increase (Decrease) in Cash                           |   | 7,982,952          |   |   | (298,965                 | ) |   | 727,153    |  
|Cash and Cash Equivalents, Beginning of Period        |   | 641,253            |   |   | 940,218                  |   |   | 213,065    |  
|                                                      |   |                    |   |   |                          |   |   |            |  
|Cash and Cash Equivalents, End of Period              | $ | 8,624,205          |   | $ | 641,253                  |   | $ | 940,218    |  
|                                                      |   |                    |   |   |                          |   |   |            |  
|Supplemental cash flow information (note 17)          |   |                    |   |   |                          |   |   |            |  

See accompanying notes to consolidated financial statements

65

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the 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.

During the period, the Company changed its year-end to
September 30, 2007.

The Company earns dues from members of its travel club, who are
entitled to the full-travel services of the Company. The Company also operates a
full-service gym to increase memberships and marketing opportunities.

2.      Going-Concern

For the period ended September 30, 2007, the Company had a net
loss of $2,212,467 compared to net income of $875,355 and $1,651,804 for the
years ended December 31, 2006 and 2005, respectively. For the period ended
September 30, 2007, the Company used cash in operating activities in the amount
of $83,554 ($82,228 for the year ended December 31, 2006 and generated cash of
$394,102 for the year ended December 31, 2005) and at September 30, 2007 had a
working capital surplus of $7,532,298 (deficiency of $415,387 at December 31,
2006) and shareholders equity of $12,926,243 (December 31, 2006 
$2,802,178).

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 (GAAP)
      and include the accounts of the Company and the following wholly owned
      subsidiaries:

Incorporating
      Date of
        AcquisitionSubsidiaries
      Jurisdiction
      or IncorporationinTRAVELnet.com inc.
      Alberta, Canada
      November 9, 1999Intravelnet Ltd.
      Ontario, Canada
      July 25, 2003ATM Travel Group Ltd. (ATM)
      British Columbia, Canada
      April 3, 2000International Fitness Vacations (BC) Ltd.
      (note 5)
      British Columbia, Canada
      December 31, 2006Price Shield Systems Inc.
      (note 5)
      Washington State, USA
      February 27, 2007


All significant intercompany balances
and transactions have been eliminated.

---

|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

|3. | Significant Accounting Policies
  (continued)
|-- | ---------------------------------------------
|   |                                              
|   | (a)                                          
|   |                                              
|   |                                              
|   |                                              
|   | (b)                                          
|   |                                              
|   |                                              
|   |                                              
|   | (c)                                          
|   |                                              
|   |                                              
|   |                                              
|   | (d)                                          
|   |                                              
|   |                                              

67

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

|3. | Significant Accounting Policies
  (continued)
|-- | ---------------------------------------------
|   |                                              
|   | (d)                                          
|   |                                              
|   |                                              

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

| | (e) | Deferred organization costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | The Company defers and amortizes the costs associated
      with setting up its Life Settlement business. Amortization will be
      provided on a straight-line basis over five years and will commence once
      the Life Settlement business has begun operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (f) | Purchased intangibles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | The Company defers and amortizes the cost of purchased
      intangibles, which consists of a license to purchase condo accommodation
      at wholesale prices. 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 the determination of net loss for the
period.                                                                                                                                                                                                                                                                                                       

68

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

|3. | Significant Accounting Policies
  (continued)
|-- | ---------------------------------------------
|   |                                              
|   | (h)                                          
|   |                                              
|   |                                              
|   |                                              
|   | (i)                                          
|   |                                              
|   |                                              
|   |                                              
|   | (j)                                          
|   |                                              
|   |                                              
|   |                                              
|   | (k)                                          
|   |                                              
|   |                                              

69

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

|3. | Significant Accounting Policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (l)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4. | Change in Accounting Policy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The restatements to the September 30, 2007 and December
      31, 2006 consolidated financial statements as previously reported result
      from the following accounting miscalculation: The Company recognized
      revenue and the related commission costs erroneously on the sale of its
      vacation club memberships in fiscal 2006 and 2007. The Company had
      previously accounted for the full membership contract value in the year
      sold if more than 10% of the face value was received during those periods.
      Additionally, the related commissions were erroneously recognized on the
      same basis as the related membership revenues.                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company has amended the miscalculation and recognizes
      revenue on the sale of memberships and the related commission costs in
      accordance with the significant accounting policies described in notes
      3(b) and 3(m).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The change recognizes membership sales and related
      commission if less than 10% of face value was received in the period
      incurred and amortizes in accordance with the significant accounting
      policies described in notes 3(b) and 3(m) resulting in an increase in
      other receivables by $8,911 (December 31, 2006 - $33,840). The effect of
      this change was to increase deferred costs by $1,491,275 (December 31,
      2006 - $1,352,796) with a corresponding decrease in commission expense of
      $213,265 (December 31, 2006 - $1,251,277) and an increase to deferred
      revenue  current portion of $675,897 (December 31, 2006 - $765,854) and
      an increase in deferred revenue of $1,389,678 (December 31, 2006 -
      $1,389,587) with corresponding decrease in membership sales and travel
      revenue of $9,849 (December 31, 2006 - $ 2,020,081) and an increase to
      deficit at September 30, 2007 of $565,389 (increase at September 30, 2006
      - $768,805).

70

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

|4. | Change in Accounting Policy (continued)                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                               
|   | At September 30, 2007, the restatements resulted in
      changes to the previously reported carrying values of assets, liabilities
      and shareholders equity as follows:

| |                                     |   | Previously  |   |   |             |   |   |             |  
| | ----------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
| |                                     |   | Reported    |   |   | Adjustments |   |   | Restated    |  
| |                                     |   |             |   |   |             |   |   |             |  
| | Assets                              |   |             |   |   |             |   |   |             |  
| | Other receivables                   | $ | 256,272     |   | $ | 8,911       |   | $ | 265,183     |  
| | Deferred costs                      | $ |            |   | $ | 1,491,275   |   | $ | 1,491,275   |  
| |                                     |   |             |   |   |             |   |   |             |  
| | Liabilities                         |   |             |   |   |             |   |   |             |  
| | Current portion of deferred revenue | $ |            |   | $ | 675,897     |   | $ | 675,897     |  
| | Deferred Revenue                    | $ |            |   | $ | 1,389,678   |   | $ | 1,389,678   |  
| |                                     |   |             |   |   |             |   |   |             |  
| | Shareholders Equity                |   |             |   |   |             |   |   |             |  
| | Deficit                             | $ | (13,647,697 | ) | $ | (565,389    | ) | $ | (14,213,086 | )
| |                                     |   |             |   |   |             |   |   |             |  

The restatements resulted in changes to
the previously reported amounts in the consolidated statements of operations and
deficit for the period ended September 30, 2007, as follows:

| |                                  |   | Previously  |   |   |             |   |   |             |  
| | -------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
| |                                  |   | Reported    |   |   | Adjustments |   |   | Restated    |  
| | Revenue                          |   |             |   |   |             |   |   |             |  
| | Membership sales and travel      | $ | 1,280,649   |   | $ | (9,849      | ) | $ | 1,270,800   |  
| | Expenses                         |   |             |   |   |             |   |   |             |  
| | Commission costs                 | $ | 731,628     |   | $ | (213,265    | ) | $ | 518,363     |  
| | Net Loss for Period              | $ | (2,415,883  | ) | $ | 203,416     |   | $ | (2,212,467  | )
| | Deficit, End of Period           | $ | (13,647,697 | ) | $ | (565,389    | ) | $ | (14,213,086 | )
| |                                  |   |             |   |   |             |   |   |             |  
| |                                  |   |             |   |   |             |   |   |             |  
| | Basic and diluted loss per share | $ | (0.22       | ) | $ | 0.02        |   | $ | (0.20       | )

71

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

|4. | Change in Accounting Policy (continued)                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                              
|   | At December 31, 2006, the restatements resulted in
      changes to the previously reported carrying values of assets, liabilities
      and shareholders equity as follows:

| |                                    |   | Previously  |   |   |             |   |   |             |  
| | ---------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
| |                                    |   | Reported    |   |   | Adjustments |   |   | Restated    |  
| |                                    |   |             |   |   |             |   |   |             |  
| | Assets                             |   |             |   |   |             |   |   |             |  
| | Other receivables                  | $ | 323,281     |   | $ | 33,840      |   | $ | 357,121     |  
| | Deferred costs                     | $ |            |   | $ | 1,352,796   |   | $ | 1,352,796   |  
| |                                    |   |             |   |   |             |   |   |             |  
| | Liabilities                        |   |             |   |   |             |   |   |             |  
| | Deferred revenue - current portion | $ |            |   | $ | 765,854     |   | $ | 765,854     |  
| | Deferred Revenue                   | $ |            |   | $ | 1,389,587   |   | $ | 1,389,587   |  
| |                                    |   |             |   |   |             |   |   |             |  
| | Shareholders Equity               |   |             |   |   |             |   |   |             |  
| | Deficit                            | $ | (11,231,814 | ) | $ | (768,805    | ) | $ | (12,000,619 | )
| |                                    |   |             |   |   |             |   |   |             |  

The restatements resulted in changes to
the previously reported amounts in the consolidated statements of operations and
deficit for the year ended December 31, 2006, as follows:

| |                                                 |   | Previously  |   |   |             |   |   |             |  
| | ----------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
| |                                                 |   | Reported    |   |   | Adjustments |   |   | Restated    |  
| | Revenue                                         |   |             |   |   |             |   |   |             |  
| | Membership sales and travel                     | $ | 3,918,409   |   | $ | (2,020,081  | ) | $ | 1,898,328   |  
| | Expenses                                        |   |             |   |   |             |   |   |             |  
| | Amortization of deferred
      commission costs | $ | 1,939,061   |   | $ | (1,251,277  | ) | $ | 687,784     |  
| | Net Income for Year                             | $ | 1,644,160   |   | $ | (768,805    | ) | $ | 875,355     |  
| | Deficit, End of Year                            | $ | (11,231,814 | ) | $ | (768,805    | ) | $ | (12,000,619 | )
| |                                                 |   |             |   |   |             |   |   |             |  
| | Basic and diluted earnings per share            | $ | 0.32        |   | $ | (0.15       | ) | $ | 0.17        |  

|5. | Acquisitions
|-- | ------------
|   |             
|   | (a)         

72

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

|5. | Acquisitions (continued)
|-- | ------------------------
|   |                         
|   | (b)                     
|   |                         
|   |                         

| | 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 |  
| |                                                                      |   |         |  

Canadian GAAP requires that any assets
or liabilities acquired in a non-arms length transaction be recorded in the
Companys 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
period.

6.      Financial Instruments

During the period, the Company adopted a new standard, the CICA
Handbook Section 3855, Financial instruments  Recognition and
Measurement. Under the new standard, all financial instruments are
classified as one of the following: held-to-maturity, loans and receivables,
held-for-trading or available-for-sale. Financial assets and liabilities
held-for-trading are measured at fair value with gains and losses recognized in
net income. Financial assets held-to-maturity, loans and receivables, and
financial liabilities other than those held-for-trading, are measured at
amortized cost. Available-for-sale instruments are measured at fair value with
unrealized gains and losses recognized in other comprehensive income. The
standard also permits designation of any financial instrument as
held-for-trading upon initial recognition.

73

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

6.      Financial Instruments
(continued)

Also adopted by the Company was CICA Handbook Section 1530,
Comprehensive Income.As a result of adopting these standards, a new
category, Accumulated Other Comprehensive Income, is added to shareholders
equity on the consolidated balance sheets. Major components for the category
include unrealized gains and losses on financial assets classified as
available-for-sale, unrealized foreign currency translation amounts, net of
hedging arising from self-sustaining foreign operations and changes in fair
value of the effective portion of cash flow hedging amounts.

The adoption of these new standards had no effect in the
Companys consolidated financial statements.

|(a) | Fair value                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Carrying amounts of certain of the Companys financial
      instruments, including cash and cash equivalents, short-term investments,
      accounts and notes receivable, 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.                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(c) | Interest rate risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Interest rate risk consists of two components:                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Companys long-term debt is at annual market interest
        rates and, therefore, the Company is exposed to interest rate cash flow
        risk during the term of the debt. The Company is not exposed to
        significant interest rate price risk due to the short-term maturity of its
    monetary assets and liabilities.                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(d) | Currency risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company is exposed to currency risk in relation to
      their US dollar financing referred to in note 12. The Company has not
      entered into any foreign currency contracts to mitigate this
  risk.                                                                                                                                                                                                                                                                           

74

---

|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

7.      Property and Equipment

| |                              |   |           |  |   | Accumulated  |  |   | Net Book  | 
| | ---------------------------- | - | --------- |  | - | ------------ |  | - | --------- | 
| | September 30, 2007           |   | Cost      |  |   | Amortization |  |   | Value     | 
| |                              |   |           |  |   |              |  |   |           | 
| | Motor vessel                 | $ | 8,796,989 |  | $ |             |  | $ | 8,796,989 | 
| | Equipment                    |   | 211,373   |  |   | 35,595       |  |   | 175,778   | 
| | Computers                    |   | 7,737     |  |   | 4,692        |  |   | 3,045     | 
| | Leasehold
      improvements |   | 147,792   |  |   | 23,477       |  |   | 124,315   | 
| |                              |   |           |  |   |              |  |   |           | 
| |                              | $ | 9,163,891 |  | $ | 63,764       |  | $ | 9,100,127 | 

| |                        |   |           |  |   | Accumulated  |  |   | Net Book  | 
| | ---------------------- | - | --------- |  | - | ------------ |  | - | --------- | 
| | December 31, 2006      |   | Cost      |  |   | Amortization |  |   | Value     | 
| |                        |   |           |  |   |              |  |   |           | 
| | Motor vessel           | $ | 6,915,556 |  | $ |             |  | $ | 6,915,556 | 
| | Service boats          |   | 49,979    |  |   | 49,979       |  |   |          | 
| | Equipment              |   | 210,592   |  |   | 2,097        |  |   | 208,495   | 
| | Computers              |   | 7,737     |  |   | 1,671        |  |   | 6,066     | 
| | Leasehold improvements |   | 147,794   |  |   | 1,539        |  |   | 146,255   | 
| |                        |   |           |  |   |              |  |   |           | 
| |                        | $ | 7,331,658 |  | $ | 55,286       |  | $ | 7,276,372 | 

At September 30, 2007, the Companys motor vessel is under
construction and its cost is therefore not being amortized.

8.      Intangibles

| |                                |   | September 30, |  |   | December
      31, | 
| | ------------------------------ | - | ------------- |  | - | ------------------ | 
| |                                |   | 2007          |  |   | 2006               | 
| |                                |   |               |  |   |                    | 
| | Purchased intangibles          | $ | 32,425        |  | $ | 25,000             | 
| | Accumulated
      amortization |   | 2,149         |  |   | 17,500             | 
| |                                |   |               |  |   |                    | 
| |                                | $ | 30,276        |  | $ | 7,500              | 

9.      Deferred Revenue

| |                             |   | September 30, |  |   | December
      31, | 
| | --------------------------- | - | ------------- |  | - | ------------------ | 
| |                             |   | 2007          |  |   | 2006               | 
| |                             |   |               |  |   | Restated  note 4  | 
| |                             |   |               |  |   |                    | 
| | Deferred membership sales   | $ | 2,065,575     |  | $ | 2,155,441          | 
| | Less: Current
      portion |   | 675,897       |  |   | 765,854            | 
| |                             |   |               |  |   |                    | 
| |                             | $ | 1,389,678     |  | $ | 1,389,587          | 
| |                             |   |               |  |   |                    | 
| | Deferred costs              | $ | 1,907,338     |  | $ | 2,040,580          | 
| | Accumulated amortization    |   | 416,063       |  |   | 687,784            | 
| |                             |   |               |  |   |                    | 
| |                             | $ | 1,491,275     |  | $ | 1,352,796          | 

75

---

|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

9.      Deferred Revenue

The deferred membership sales and dues relates to the portion
of revenue that entitles members to use the Companys vacation and travel club
privileges at a future date up to September 30, 2012. The revenue is recognized
as indicated in note 3(b).

During 2007, the Company entered into travel club membership
agreements with a total value of $739,788 (year ended December 31, 2006 -
$784,845 and year ended December 31, 2005 - $990,645). The following table
reconciles the total value of these travel club memberships entered into during
the period 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 evenly over the term of the membership.

| |                                                |   | September 30, |   |   | December
      31, |   |   | December
      31, |  
| | ---------------------------------------------- | - | ------------- | - | - | ------------------ | - | - | ------------------ | -
| |                                                |   | 2007          |   |   | 2006               |   |   | 2005               |  
| |                                                |   |               |   |   |                    |   |   |                    |  
| |                                                |   |               |   |   |                    |   |   |                    |  
| | Travel club memberships entered                |   |               |   |   |                    |   |   |                    |  
| | into during the period                         | $ | 739,788       |   | $ | 784,845            |   | $ | 990,645            |  
| |                                                |   |               |   |   |                    |   |   |                    |  
| | Amount recognized as revenue                   |   |               |   |   |                    |   |   |                    |  
| | during the
      period                        |   | (63,401       | ) |   | (92,706            | ) |   | (110,384           | )
| |                                                |   |               |   |   |                    |   |   |                    |  
| |                                                |   |               |   |   |                    |   |   |                    |  
| | Future years revenue to be earned from        |   |               |   |   |                    |   |   |                    |  
| | current period membership agreements           |   | 676,387       |   |   | 692,139            |   |   | 880,261            |  
| |                                                |   |               |   |   |                    |   |   |                    |  
| | Cash collected during the period related to    |   |               |   |   |                    |   |   |                    |  
| | future years revenues                         |   | (503,947      | ) |   | (483,773           | ) |   | (690,317           | )
| |                                                |   |               |   |   |                    |   |   |                    |  
| |                                                |   |               |   |   |                    |   |   |                    |  
| | Amounts due to be received in subsequent years |   |               |   |   |                    |   |   |                    |  
| | from current period membership agreements      | $ | 172,440       |   | $ | 208,366            |   | $ | 189,944            |  

10.    Advances Against Future Revenue
Streams

During the year ended December 31, 2006, the Company sold
future streams of revenue as described in note 3(h). The activity is summarized
as follows:

| |                                                             |   | September 30, |   |   | December
      31, |  
| | ----------------------------------------------------------- | - | ------------- | - | - | ------------------ | -
| |                                                             |   | 2007          |   |   | 2006               |  
| |                                                             |   |               |   |   |                    |  
| | Balance, beginning of period                                | $ | 25,321        |   | $ | 93,001             |  
| | Proceeds from sale of future revenue streams, net of        |   |               |   |   |                    |  
| | discount, reserve and buybacks                              |   |              |   |   | 17,940             |  
| | Accretion of discount to interest expense during the period |   |              |   |   | 23,747             |  
| | Recognition of membership revenues during the period        |   | (17,139       | ) |   | (109,367           | )
| |                                                             |   |               |   |   |                    |  
| | Balance, end of period                                      | $ | 8,182         |   | $ | 25,321             |  

76

---

|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

11.    Convertible Debentures

The conversion feature of the debentures allows for the
debenture holder to convert the capital at a rate of US $6.00 to US $12.50 per
common share of the Company. The Company would have to issue 4,622 common
shares, if 100% of the debentures were converted. During 2007, $nil (December
31, 2006 - $nil) convertible debentures were converted to common shares.

12.    Long-Term Debt

The Company has secured a long-term loan to complete the refit
project of the vessel.

| |                                                                       |   | September 30, |  |   | December
      31, | 
| | --------------------------------------------------------------------- | - | ------------- |  | - | ------------------ | 
| |                                                                       |   | 2007          |  |   | 2006               | 
| |                                                                       |   |               |  |   |                    | 
| | 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                                          | $ | 4,215,598     |  | $ | 4,078,779          | 
| |                                                                       |   |               |  |   |                    | 
| | Less: Current portion                                                 |   | 227,567       |  |   | 49,263             | 
| |                                                                       |   |               |  |   |                    | 
| | Long-term portion                                                     | $ | 3,988,031     |  | $ | 4,029,516          | 

The loan is secured by the motor vessel and by a guarantee from
one of the directors of the Company.

13.    Capital Stock

| | (a) | The authorized capital stock:                                                                                                                                                                                                                                                                                                     
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                   
| |     | Unlimited - common shares without par value                                                                                                                                                                                                                                                                                       
| |     | Unlimited - Series A - Preference non-dilutive
      convertible shares without par value (convertible to 50% of outstanding
      common shares at the time of conversion) Unlimited - Series B -
      Preference convertible shares without par value (convertible to one common
      share for each preferred share held)

77

---

|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

13.    Capital Stock (continued)

| | (b) | The issued capital stock of the Company is as
    follows:                                                                             
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                        
| |     | 13,933,983 Series A preferred shares for no
      consideration
      13,933,983 Series B preferred shares for no
    consideration

| |                                   |  | Number
      of |   |   |            |  
| | --------------------------------- |  | --------------- | - | - | ---------- | -
| |                                   |  | Common          |   |   |            |  
| |                                   |  | Shares          |   |   | Amount     |  
| |                                   |  |                 |   |   |            |  
| | Balance, December 31, 2005        |  | 5,444,661       |   | $ | 15,152,797 |  
| | Returned to
      treasury        |  | (800,000        | ) |   | (350,000   | )
| |                                   |  |                 |   |   |            |  
| | Balance, December 31, 2006        |  | 4,644,661       |   |   | 14,802,797 |  
| | Forward share split - 3-for-1 (i) |  | 9,289,322       |   |   |           |  
| | Private placement (ii)            |  | 11,000,000      |   |   | 5,773,918  |  
| | Private placement (iii)           |  | 3,500,000       |   |   | 3,650,396  |  
| | Share issue costs                 |  |                |   |   | (32,318    | )
| |                                   |  |                 |   |   |            |  
| | Balance, September
      30, 2007 |  | 28,433,983      |   | $ | 24,194,793 |  

| | (i)   | On April 16, 2007, the Company's common shares were
      forward split on a three new for one old basis.                                                                                         
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                   
| | (ii)  | On June 29, 2007, the Company completed a private
      placement and issued 11,000,000 common shares of the Company at US $0.50
      per share for gross proceeds of $5,773,918 (US $5,500,000).
| |       |                                                                                                                                                                                                   
| | (iii) | On July 4, 2007, the Company completed a private
      placement and issued 3,500,000 common shares at US $1.00 per share for
      gross proceeds of $3,650,396 (US $3,500,000).                 

| | (c) | Options                                                                                                                                                                                                                                                          
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                  
| |     | The Company executed a stock option plan reserving
      2,850,000 shares in the common stock of the Company (year ended December
      31, 2006 - $nil and year ended December 31, 2005 - $nil).                                                                
| |     |                                                                                                                                                                                                                                                                  
| | (d) | Stock-based compensation                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                  
| |     | Stock-based compensation costs of $2,944,536 (year ended
      December 31, 2006 - $nil and year ended December 31, 2005 - $nil) were
      charged to income during the period for options granted to directors,
      employees and consultants of the Company.

78

---

|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

13.    Capital Stock (continued)

| | (d) | Stock-based compensation (continued)                                                                        
| | --- | ------------------------------------------------------------------------------------------------------------
| |     |                                                                                                             
| |     | The following summarizes the outstanding stock options as
      at September, 30 2007 and December 31, 2006:

| |                                     |  | Number           |  |   | Exercise           | 
| | ----------------------------------- |  | ---------------- |  | - | ------------------ | 
| |                                     |  | of
      Options |  |   | Price
      (US $) | 
| |                                     |  |                  |  |   |                    | 
| | Balance, December 31, 2006 and 2005 |  |                 |  | $ |                   | 
| | Granted                             |  | 2,835,000        |  | $ | 1.00               | 
| |                                     |  |                  |  |   |                    | 
| | Balance, September
      30, 2007   |  | 2,835,000        |  | $ | 1.00               | 

The table below summarizes the
attributes of the outstanding stock options as at September 30, 2007:

Options Outstanding
      Options
        ExercisableExercise
      Number
      Remaining
      Number
      ExercisePrice (US $)
      of
        Options
      Contractual Life
      of
        Options
      Price
        (US $)$1.00
      2,835,000
      4.75 years
      2,835,000
      $ 1.00


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

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

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

| | Balance, December 31, 2006 and 2005 | $ |          | 
| | ----------------------------------- | - | --------- | 
| | Stock-based
      compensation      |   | 2,944,536 | 
| |                                     |   |           | 
| | Balance, September
      30, 2007   | $ | 2,944,536 | 

79

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

14.    Income Taxes

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

| |                                              |   | Period Ended       |   |   |                          |   |   |          |  
| | -------------------------------------------- | - | ------------------ | - | - | ------------------------ | - | - | -------- | -
| |                                              |   | September 30,      |   |   | Years Ended December 31, |  
| |                                              |   | 2007               |   |   | 2006                     |   |   | 2005     |  
| |                                              |   | (Restated  note 4 | ) |   | (Restated  note 4       | ) |   |          |  
| |                                              |   |                    |   |   |                          |   |   |          |  
| | Statutory income tax rate                    |   | 33.9%              |   |   | 33.8%                    |   |   | 33.8%    |  
| |                                              |   |                    |   |   |                          |   |   |          |  
| | Statutory rate applied to income (loss) from |   |                    |   |   |                          |   |   |          |  
| | operations before income taxes               | $ | (750,026           | ) | $ | 296,023                  |   | $ | 558,815  |  
| | Permanent differences                        |   | 1,007,468          |   |   | 20,058                   |   |   | 11,366   |  
| | Large corporations tax and other             |   |                   |   |   |                         |   |   | 43,923   |  
| | Non-capital losses not previously recognized |   |                   |   |   |                         |   |   | 23,383   |  
| | Use of losses not previously recognized      |   | (145,279           | ) |   | (315,628                 | ) |   | (449,025 | )
| | Tax effect of depreciation and amortization  |   |                    |   |   |                          |   |   |          |  
| | in excess of capital cost allowance          |   | (112,163           | ) |   |                         |   |   | (144,539 | )
| |                                              |   |                    |   |   |                          |   |   |          |  
| | Income tax expense
      (recovery)          | $ |                   |   | $ | 453                      |   | $ | 43,923   |  

The significant components of the Companys future income tax
assets are as follows:

| |                                                         |   | September 30,      |   |   | December
      31, |  
| | ------------------------------------------------------- | - | ------------------ | - | - | ------------------ | -
| |                                                         |   | 2007               |   |   | 2006               |  
| |                                                         |   | (Restated  note 4 | ) |   | (Restated  note 4 | )
| | Future income tax assets:                               |   |                    |   |   |                    |  
| | Non-capital loss carry-forwards                         | $ | 1,397,920          |   | $ | 1,888,934          |  
| | Capital loss
      carry-forwards                       |   | 378,127            |   |   | 419,431            |  
| |                                                         |   | 178,155            |   |   | 296,537            |  
| |                                                         |   |                    |   |   |                    |  
| | Excess of tax
      basis over carrying value of assets |   |                    |   |   |                    |  
| |                                                         |   |                    |   |   |                    |  
| |                                                         |   | 1,954,202          |   |   | 2,604,902          |  
| | Valuation allowance                                     |   | (1,954,202         | ) |   | (2,604,902         | )
| |                                                         |   |                    |   |   |                    |  
| | Future income taxes, net                                | $ |                   |   | $ |                   |  

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 $4,544,000 available to reduce future years taxable income
expiring between 2008 and 2027.

The Company has a capital loss carry-forward of approximately
$1,243,000, which can be carried forward indefinitely.

80

---

|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

|15. | Commitments
|--- | -----------
|    |            
|    | (a)        

| |       |   |         | 
| | ----- | - | ------- | 
| | 2008  | $ | 95,018  | 
| | 2009  |   | 60,170  | 
| | 2010  |   | 35,679  | 
| |       |   |         | 
| | Total | $ | 190,867 | 

| | (b) | The Company has commitments in respect of office leases
      with total aggregate payments due of approximately $105,832 (December 31,
      2006  $176,647). Payments due in each of the next two years are as
      follows:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |       |   |         | 
| | ----- | - | ------- | 
| | 2008  | $ | 75,362  | 
| | 2009  |   | 30,470  | 
| |       |   |         | 
| | Total | $ | 105,832 | 

|16. | Related Party Transactions                                                                                                                        
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                   
|    | In addition to related party transactions disclosed
      elsewhere in these financial statements, the following transactions have
      occurred:
|    |                                                                                                                                                   
|    | (a)                                                                                                                                               
|    |                                                                                                                                                   
|    | (b)                                                                                                                                               
|    |                                                                                                                                                   
|    | (c)                                                                                                                                               

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.

81

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

17.    Supplemental Cash Flow Information

Cash flow information:

| |                                            |   | Period Ended  |  |   |                          |  |   |        | 
| | ------------------------------------------ | - | ------------- |  | - | ------------------------ |  | - | ------ | 
| |                                            |   | September 30, |  |   | Years Ended December 31, | 
| |                                            |   | 2007          |  |   | 2006                     |  |   | 2005   | 
| |                                            |   |               |  |   |                          |  |   |        | 
| | Interest paid                              | $ | 9,496         |  | $ | 30,950                   |  | $ | 89,656 | 
| |                                            |   |               |  |   |                          |  |   |        | 
| | Taxes paid                                 | $ | 6,468         |  | $ | 453                      |  | $ | 43,923 | 
| |                                            |   |               |  |   |                          |  |   |        | 
| | Excess of purchase price - gym acquisition | $ |              |  | $ | 210,984                  |  | $ |       | 

|18. | Subsequent Events
|--- | -----------------
|    |                  
|    | (a)              
|    |                  
|    | (b)              
|    |                  
|    | (c)              
|    |                  
|    | (d)              

19.    United States GAAP

These consolidated 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | 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), Share-Based Payment.The Company recognizes compensation expense for stock options issued
      to non-employees for services received based upon fair value of the
      services received or equity instruments issued, whichever is more reliably
      determined. Prior to the adoption of SFAS 123R, the Company had accounted
      for stock options issued to non-employees at fair value under FASB
      Statement No. 123 (SFAS 123), Accounting for Stock- based
      Compensationtherefore, the adoption of SFAS 123R had no effect on
      the Companys accounting policy as all options were granted to
      non-employees. During the year ended December 31, 2002, the Company
      adopted the new recommendations of the CICA
Handbook

82

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

19.    United States GAAP (continued)

| | (a) | Stock-based compensation (continued)
      sections 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. Under
      Canadian GAAP, stock options issued to non-employees prior to December 31,
      2001 were not valued and no stock- based compensation expense was
      recorded. Therefore, for the year ended December 31, 2002, the measurement
      difference for non-employee stock options relates to options granted prior
      to January 1, 2002.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The fair value of the stock options and warrants granted
      to non-employees during the years ended December 31, 2001 and 2000 were
      estimated on the date of grant using the Black-Scholes option pricing
      model and the following weighted average
assumptions:                                                                                                                                                                                                                                                                                                                                    

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

| |     | Accounting for the non-employee options on this basis
      would result in recording additional compensation expense and capital
      stock of $684,664 from the year of adoption of SFAS No. 123 to September
      30, 2007.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                 
| | (b) | Valuation of stock issued for assets and
  services                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                 
| |     | (i)                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                 

83

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

19.    United States Generally Accepted
Accounting Principles Reconciliation (continued)

| | (b) | Valuation of stock issued for assets and services
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (c) | Deferred organization costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | During the period ended September 30, 2007 the Company
      deferred costs associated with setting up its Life Settlement business. In
      April 1998, the American Institute of Certified Public Accountants
      (AICPA) issued Statement of Position (SOP) No. 98-5, Reporting on
      the Costs of Start-Up Activities. The SOP is intended to provide
      guidance on how organizations should report start-up and organization
      costs. SOP No. 98-5 requires that such costs be expensed, rather than
      capitalized, which has been the usual practice. The application of US GAAP
      would result in a decrease in total assets of $149,976 (year ended
      December 31, 2006- $nil) and an increase in deficit of $149,976 (year
      ended December 31, 2006 - $nil and year ended December 31, 2005 -
      $nil).
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (d) | Purchased intangibles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | During the period ended September 30, 2007, the Company
      acquired access rights to wholesale priced condo accommodation. For
      Canadian GAAP purposes, the license is treated as an intangible asset and
      amortized on a straight-line basis over ten years. For US GAAP purposes,
      the acquisition of the license would be expensed in the year incurred. The
      application of US GAAP would result in a decrease in total assets of
      $30,276 (December 31, 2006 - $nil) and an increase in deficit of $30,276
      (year ended December 31, 2006 - $nil and year ended December 31, 2005 -
      $nil).                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (e) | Recent accounting pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

84

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

19.    United States Generally Accepted
Accounting Principles Reconciliation (continued)

| | (e) | Recent accounting pronouncements (continued)
| | --- | --------------------------------------------
| |     |                                             
| |     | (ii)                                        
| |     |                                             
| |     | (iii)                                       
| |     |                                             
| |     | (iv)                                        
| |     |                                             
| |     | (v)                                         

85

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

19.    United States Generally Accepted
Accounting Principles Reconciliation (continued)

| | (e) | Recent accounting pronouncements (continued)                                                                                                                                                                                                             
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                          
| |     | (vi)                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                          
| | (f) | Reconciliation                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                          
| |     | The effect of the differences between Canadian GAAP and
      US GAAP (including practices proscribed by the SEC) on the consolidated
      balance sheets and statements of operations and deficit as restated (note
      4) are summarized as follows:
| |     |                                                                                                                                                                                                                                                          
| |     | (i)                                                                                                                                                                                                                                                      

| |                                                         |   | September 30, |   |   | December
      31, | 
| | ------------------------------------------------------- | - | ------------- | - | - | ------------------ | 
| |                                                         |   | 2007          |   |   | 2006               | 
| | Total Assets under Canadian GAAP                        | $ | 20,035,885    |   | $ | 10,101,818         | 
| | Adjustment for deferred organization costs (note 19(c)) |   | (149,796      | ) |   |                   | 
| | Intangibles, net (note 19(d))                           |   | (30,276       | ) |   |                   | 
| |                                                         |   |               |   |   |                    | 
| | Total Assets under US GAAP                              | $ | 19,855,813    |   | $ | 10,101,818         | 

| | (ii) | Capital stock
| | ---- | -------------

| |                                                                       |   | September 30, |  |   | December
      31, | 
| | --------------------------------------------------------------------- | - | ------------- |  | - | ------------------ | 
| |                                                                       |   | 2007          |  |   | 2006               | 
| |                                                                       |   |               |  |   |                    | 
| | Capital stock, under Canadian GAAP                                    | $ | 24,194,793    |  | $ | 14,802,797         | 
| | Contributed surplus                                                   |   | 2,944,536     |  |   |                   | 
| | Adjustment for stock-based compensation                               |   |               |  |   |                    | 
| | for non-employees (note 19(a))                                        |   | 684,664       |  |   | 684,664            | 
| | Adjustment for acquisition of Fitness
      Vacations (note 19(b)(i)) |   | 1,217,705     |  |   | 1,217,705          | 
| | Adjustment for accounts payable settled by share issuances            |   |               |  |   |                    | 
| | (notes 19(b)(ii) and (iii))                                           |   | 695,681       |  |   | 695,681            | 
| |                                                                       |   |               |  |   |                    | 
| | Capital stock, under US GAAP                                          | $ | 29,737,379    |  | $ | 17,400,847         | 

86

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|FORUM NATIONAL INVESTMENTS LTD.                                                     
|------------------------------------------------------------------------------------
|                                                                                    
|Notes to Consolidated Financial Statements                                          
|Period ended September 30, 2007 and the years ended December
      31, 2006 and 2005
|(Expressed in Canadian dollars)                                                     
|                                                                                    

19.    United States Generally Accepted
Accounting Principles Reconciliation (continued)

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

| | (iii) | Deficit
| | ----- | -------

| |                                         |   | Period ended  |   |   |                          |   |   |             |  
| | --------------------------------------- | - | ------------- | - | - | ------------------------ | - | - | ----------- | -
| |                                         |   | September 30, |   |   | Years Ended December 31, |  
| |                                         |   | 2007          |   |   | 2006                     |   |   | 2005        |  
| |                                         |   |               |   |   |                          |   |   |             |  
| | Deficit, under Canadian GAAP            | $ | (14,213,086   | ) | $ | (12,000,619              | ) | $ | (12,664,990 | )
| | Adjustment for deferred organization    |   |               |   |   |                          |   |   |             |  
| | costs (note 19(c))                      |   | (149,976      | ) |   |                         |   |   |            |  
| | Adjustment for intangibles (note 19(d)) |   | (30,276       | ) |   |                         |   |   |            |  
| | Adjustment for stock-based              |   |               |   |   |                          |   |   |             |  
| | compensation for non-employees          |   |               |   |   |                          |   |   |             |  
| | for non-employees (note 19(a))          |   | (684,664      | ) |   | (684,664                 | ) |   | (684,664    | )
| | Adjustment for acquisition of Fitness   |   |               |   |   |                          |   |   |             |  
| | Vacations (note 19(b)(i))               |   | (1,217,705    | ) |   | (1,217,705               | ) |   | (1,217,705  | )
| | Adjustment for accounts payable settled |   |               |   |   |                          |   |   |             |  
| | by share issuances (note 19(b)(ii))     |   | (695,681      | ) |   | (695,681                 | ) |   | (695,681    | )
| |                                         |   |               |   |   |                          |   |   |             |  
| | Deficit, under US GAAP                  | $ | (16,991,388   | ) | $ | (14,598,669              | ) | $ | (15,263,040 | )

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

| |                                            |   | Period Ended  |   |   |                          |  |   |           | 
| | ------------------------------------------ | - | ------------- | - | - | ------------------------ |  | - | --------- | 
| |                                            |   | September 30, |   |   | Years Ended December 31, | 
| |                                            |   | 2007          |   |   | 2006                     |  |   | 2005      | 
| |                                            |   |               |   |   |                          |  |   |           | 
| | Net income (loss) for the period,          |   |               |   |   |                          |  |   |           | 
| | under Canadian GAAP                        | $ | (2,212,467    | ) | $ | 875,355                  |  | $ | 1,651,804 | 
| | Adjustment for deferred organization costs |   |               |   |   |                          |  |   |           | 
| | (note 19(c))(149,976)                      |   | (149,976      | ) |   |                          |  |   |           | 
| | Adjustment for intangibles (note 19(d))    |   | (30,276       | ) |   |                         |  |   |          | 
| |                                            |   |               |   |   |                          |  |   |           | 
| | Net income (loss) for the period,          |   |               |   |   |                          |  |   |           | 
| | under US GAAP$                             |   | (2,392,719    | ) | $ | 875,355                  |  | $ | 1,651,804 | 
| |                                            |   |               |   |   |                          |  |   |           | 
| | Basic and diluted earnings (loss) per      |   |               |   |   |                          |  |   |           | 
| | share, under US GAAP                       | $ | (0.21         | ) | $ | 0.17                     |  | $ | 0.30      | 

87

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