---

FORUM
NATIONAL INVESTMENTS LTD.

September 30, 2009 and 2008 and 2007

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, 2009 and 2008 and for the years then ended have
  been audited by BDO Canada LLP, Chartered Accountants, and their report
  outlines the scope of their examination and gives their opinion on the
  financial statements. The consolidated statements of operations, comprehensive
  income (loss) and deficit and cash flows for the nine-month period ended
  September 30, 2007 were audited by other auditors, who expressed an opinion
  without reservation on those statements in their report.

“Dan Clozza” (signed)

Dan Clozza 
  President

May, 14 2010

F-2

---



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, 2009 and 2008,
  and the consolidated statements of operations, comprehensive income (loss) and
  deficit and cash flows for the years then ended. These financial statements are
  the responsibility of the Company’s management. Our responsibility is to
  express an opinion on these consolidated 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. We believe
  that our audit approach provides a reasonable basis for our audit opinion.

In our opinion, these
  consolidated financial statements present fairly, in all material respects, the
  financial position of the Company as at September 30, 2009 and 2008 and the
  consolidated operations and cash flows for the years ended September 30, 2009
  and 2008, in accordance with Canadian generally accepted accounting principles.

The consolidated financial
  statements as at September 30, 2007 and for the nine-month period ended
  September 30, 2007 were audited by other auditors, who expressed an opinion
  without reservation on those statements in their report, dated March 12, 2008,
  except for note 4(a) which is as of March 2, 2009 and note 4(b) which is as of
  October 28, 2009.

/s/ BDO Canada LLP

Chartered Accountants

Vancouver, Canada 
  May  14, 2010

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 1 and by changes in accounting  policy, such as those described in note 2 to the consolidated financial  statements. Our report to the shareholders dated May 14, 2010 is expressed in  accordance with Canadian reporting standards, which do not permit a reference  to such events and conditions in the auditors’ report when these are adequately  disclosed in the notes to the consolidated financial statements

/s/ BDO Canada LLP

Chartered Accountants

Vancouver, Canada 
  May  14, 2010

F-3

---



**REPORT OF INDEPENDENT  REGISTERED PUBLIC ACCOUNTING FIRM**

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

We have audited the consolidated  balance sheet of Forum National Investments Ltd. as at September 30, 2007 and  the consolidated statements of operations and deficit and cash flows for the  nine month period ended September 30, 2007, and the year ended December 31,  2006. 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 the results of its operations and its cash flows for the period ended  September 30, 2007, and the year ended December 31, 2006 in accordance with  Canadian generally accepted accounting principles.

*“Smythe  Ratcliffe LLP” (signed)*

Chartered Accountants

Vancouver, Canada
  March 12,  2008

Except as to note  4(a) which is as of March 2, 2009  and  note 4 (b) which is as of October 28, 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, 2008 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.

As discussed in Note 4 to the consolidated financial  statements, the Company has restated its September 30, 2007 and December 31,  2006 consolidated financial statements

*“Smythe  Ratcliffe LLP” (signed)*

Chartered Accountants

Vancouver, CanadaMarch 12,  2008

Except as to note  4(a) which is as of March 2, 2009  and  note 4 (b) which is as of October 28, 2009



F-4

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

|                                                       |   | September 30, |  |   | September 30,                              | 
|------------------------------------------------------ | - | ------------- |  | - | ------------------------------------------ | 
|                                                       |   | 2009          |  |   | 2008 
      (restated) 
      (note  2(r)) | 
|                                                       |   |               |  |   |                                            | 
|Assets                                                 |   |               |  |   |                                            | 
|                                                       |   |               |  |   |                                            | 
|Current                                                |   |               |  |   |                                            | 
|Cash and cash equivalents                              | $ | 1,825,635     |  | $ | 228,864                                    | 
|Funds held in trust                                    |   | –             |  |   | 79,493                                     | 
|Short-term deposits                                    |   | 14,685        |  |   | 14,210                                     | 
|Marketable securities (note 3)                         |   | 2,240,375     |  |   | –                                          | 
|Amounts and notes receivable (notes
      5 and 19)    |   | 160,920       |  |   | 345,579                                    | 
|Life settlement contract receivable
      (note 6)     |   | –             |  |   | 5,371,606                                  | 
|Other receivables                                      |   | 17,285        |  |   | 4,982                                      | 
|Prepaid expenses                                       |   | 119,678       |  |   | 5,738                                      | 
|Total Current Assets                                   |   | 4,378,578     |  |   | 6,050,471                                  | 
|                                                       |   |               |  |   |                                            | 
|Amounts and notes receivable(notes 5 and 19)           |   | 205,136       |  |   | 404,033                                    | 
|Investment in Life Settlement contracts(notes 5 and 6) |   | 4,052,220     |  |   | 3,258,993                                  | 
|Related party advance (note 18)                        |   | 205,000       |  |   | -                                          | 
|Property and Equipment(note 7)                         |   | 9,562,321     |  |   | 17,850,031                                 | 
|Intangible assets(note 8)                              |   | 72,168        |  |   | 1,918,062                                  | 
|                                                       |   |               |  |   |                                            | 
|Total Assets                                           | $ | 18,475,423    |  | $ | 29,481,590                                 | 
|                                                       |   |               |  |   |                                            | 
|Liabilities and Shareholders’ Equity                   |   |               |  |   |                                            | 
|                                                       |   |               |  |   |                                            | 
|Current                                                |   |               |  |   |                                            | 
|Accounts payable and accrued
      liabilities         | $ | 614,847       |  | $ | 897,956                                    | 
|Accounts payable – other (note 20(a))                  |   | –             |  |   | 1,203,277                                  | 
|Due to broker (note 3)                                 |   | 569,996       |  |   | –                                          | 
|Secured borrowing (note 10)                            |   | 263,694       |  |   | 137,321                                    | 
|Promissory note payable (note 20(b))                   |   | –             |  |   | 7,602,530                                  | 
|Deferred revenue, current portion
      (note 9)       |   | 1,439,840     |  |   | 1,088,003                                  | 
|Current portion of long-term debt
      (note 12)      |   | 145,625       |  |   | 363,756                                    | 
|Convertible debentures (note 11)                       |   | 40,486        |  |   | 40,486                                     | 
|Loans from related parties (note
      18)             |   | 486,379       |  |   | 1,089,031                                  | 
|Total Current Liabilities                              |   | 3,560,867     |  |   | 12,422,360                                 | 
|                                                       |   |               |  |   |                                            | 
|Deferred Revenue(note 9)                               |   | 1,482,092     |  |   | 2,404,163                                  | 
|Long-Term Debt(note 12)                                |   | 5,222,774     |  |   | 4,211,715                                  | 
|Future income tax payable (note 14)                    |   | 1,712,000     |  |   | –                                          | 
|Total Liabilities                                      |   | 11,977,733    |  |   | 19,038,238                                 | 
|                                                       |   |               |  |   |                                            | 

|Shareholders’ Equity                       |   |             |   |   |             |  
|------------------------------------------ | - | ----------- | - | - | ----------- | -
|                                           |   |             |   |   |             |  
|Capital Stock(note 13)                     |   | 25,810,369  |   |   | 24,255,952  |  
|Contributed Surplus(note 13(e))            |   | 2,757,581   |   |   | 2,913,377   |  
|Deficit                                    |   | (22,070,260 | ) |   | (16,725,977 | )
|Total Shareholders’ Equity                 |   | 6,497,690   |   |   | 10,443,352  |  
|Total Liabilities and Shareholders’ Equity | $ | 18,475,423  |   | $ | 29,481,590  |  

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

See accompanying notes to
  consolidated financial statements.

F-5

---



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

|                                                                         |   |               |   |   |                       |   |   | Nine-month            |  
|------------------------------------------------------------------------ | - | ------------- | - | - | --------------------- | - | - | --------------------- | -
|                                                                         |   | Year Ended    |   |   | Year Ended            |   |   | Period Ended          |  
|                                                                         |   | September 30, |   |   | September 30,         |   |   | September 30,         |  
|                                                                         |   | 2009          |   |   | 2008
      (restated) |   |   | 2007
      (restated) |  
|                                                                         |   |               |   |   | (note  2r)            |   |   | (note  2r)            |  
|Revenues                                                                 |   |               |   |   |                       |   |   |                       |  
|Membership and travel                                                    | $ | 3,514,525     |   | $ | 3,593,847             |   | $ | 2,320,916             |  
|Interest                                                                 |   | 50,702        |   |   | 106,364               |   |   | 149,275               |  
|Other                                                                    |   | 175,331       |   |   | 16,943                |   |   | 102,447               |  
|                                                                         |   | 3,740,558     |   |   | 3,717,154             |   |   | 2,572,638             |  
|                                                                         |   |               |   |   |                       |   |   |                       |  
|Expenses                                                                 |   |               |   |   |                       |   |   |                       |  
|Wages (note 13)                                                          |   | 1,751,700     |   |   | 3,060,503             |   |   | 3,437,026             |  
|General and administration (note
      12)                               |   | 2,813,517     |   |   | 2,367,823             |   |   | 1,171,197             |  
|Bad debt expense (note 5(a))                                             |   | 212,364       |   |   | 394,386               |   |   | –                     |  
|Commission costs                                                         |   | 31,983        |   |   | 169,247               |   |   | 656,842               |  
|Amortization of property and
      equipment                             |   | 406,785       |   |   | 86,078                |   |   | 68,106                |  
|Amortization of intangible assets
      (note 8)                         |   | 684,738       |   |   | 684,738               |   |   | –                     |  
|                                                                         |   | 5,901,087     |   |   | 6,762,775             |   |   | 5,333,171             |  
|Loss before other income (expenses)                                      |   | (2,160,529    | ) |   | (3,045,621            | ) |   | (2,760,533            | )
|                                                                         |   |               |   |   |                       |   |   |                       |  
|Other income (expenses)                                                  |   |               |   |   |                       |   |   |                       |  
|Net gain on investment in life
      settlement contracts (note 6)       |   | 775,207       |   |   | 5,447,464             |   |   | –                     |  
|Gain on settlement of debt by
      guarantor                            |   | –             |   |   | 46,673                |   |   | –                     |  
|Foreign exchange gain (loss)                                             |   | 977,041       |   |   | (585,119              | ) |   | 259,611               |  
|Loss on sale-lease back of vehicle                                       |   | –             |   |   | (45,040               | ) |   | –                     |  
|Write off of access rights to
      wholesale priced                     |   |               |   |   |                       |   |   |                       |  
|condo
      accommodation (note 8)                                       |   | –             |   |   | (27,052               | ) |   | –                     |  
|Write-down of Needles project (note
      7 and 20(b))                   |   | –             |   |   | (1,619,163            | ) |   | –                     |  
|Gains on marketable securities                                           |   | 361,887       |   |   | –                     |   |   | –                     |  
|Impairment of intangible assets
      (note 8)                           |   | (1,233,324    | ) |   | –                     |   |   | –                     |  
|Impairment of property, plant &
      equipment (note 7)                 |   | (2,348,595    | ) |   | (1,800,000            | ) |   |                       |  
|Total Non-operating Income (Expense)                                     |   | (1,467,784    | ) |   | 1,417,763             |   |   | 259,611               |  
|                                                                         |   |               |   |   |                       |   |   |                       |  
|Income (Loss) Before Tax                                                 |   | (3,628,313    | ) |   | (1,627,858            | ) |   | (2,500,922            | )
|Income Tax Recovery (Expense) (note 14)                                  |   | (1,715,970    | ) |   | 9,401                 |   |   | –                     |  
|                                                                         |   |               |   |   |                       |   |   |                       |  
|Net Income (Loss) before Non-controlling interest                        |   | (5,344,283    | ) |   | (1,618,457            | ) |   | (2,500,927            | )
|Net (Loss) attributable to Non-controlling Interest                      |   | –             |   |   | (746,817              | ) |   | –                     |  
|Net Income (Loss) and Comprehensive Income (loss) for Period             |   | (5,344,283    | ) |   | (871,640              | ) |   | (2,500,922            | )
|                                                                         |   |               |   |   |                       |   |   |                       |  
|                                                                         |   |               |   |   |                       |   |   |                       |  
|Deficit, Beginning of Period                                             |   | (16,725,977   | ) |   | (15,854,337           | ) |   | (13,353,415           | )
|                                                                         |   |               |   |   |                       |   |   |                       |  
|Deficit, End of Period                                                   | $ | (22,070,260   | ) | $ | (16,725,977           | ) | $ | (15,854,337           | )
|                                                                         |   |               |   |   |                       |   |   |                       |  
|Basic earnings (loss) per share                                          | $ | (0.13         | ) | $ | (0.02                 | ) | $ | (0.13                 | )
|Diluted earnings (loss) per share                                        | $ | (0.13         | ) | $ | (0.02                 | ) | $ | (0.13                 | )
|                                                                         |   |               |   |   |                       |   |   |                       |  
|Weighted average number of common
      shares outstanding (note 13 (b)) |   |               |   |   |                       |   |   |                       |  

See accompanying notes to
  consolidated financial statements.

F-6

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

|                                                                                                                            |   |               |   |   |                              |   |   | Nine-month            |  
|--------------------------------------------------------------------------------------------------------------------------- | - | ------------- | - | - | ---------------------------- | - | - | --------------------- | -
|                                                                                                                            |   | Year Ended    |   |   | Year Ended                   |   |   | Period Ended          |  
|                                                                                                                            |   | September 30, |   |   | September 30,                |   |   | September 30,         |  
|                                                                                                                            |   | 2009          |   |   | 2008
      (restated
      ) |   |   | 2007
      (restated) |  
|Operating Activities                                                                                                        |   |               |   |   |                              |   |   |                       |  
|Net income/(loss)                                                                                                           | $ | (5,344,283    | ) | $ | (871,640                     | ) | $ | (2,500,922            | )
|Adjustments to reconcile net income (loss) to net cash
            
            Provided by (used in) operating activities: |   |               |   |   |                              |   |   |                       |  
|Net gain on life settlement contracts                                                                                       |   | (775,207      | ) |   | (5,447,464                   | ) |   | –                     |  
|Future income tax expense                                                                                                   |   | 1,712,000     |   |   | –                            |   |   | –                     |  
|Non-controlling interest                                                                                                    |   | –             |   |   | (746,817                     | ) |   | –                     |  
|Deferred vacation membership revenue                                                                                        |   | (404,303      | ) |   | (973,426                     | ) |   | (829,254              | )
|Amortization of property and equipment                                                                                      |   | 406,785       |   |   | 86,078                       |   |   | 68,106                |  
|Amortization of intangible assets                                                                                           |   | 684,738       |   |   | 687,962                      |   |   | –                     |  
|Gains on marketable securities                                                                                              |   | (361,887      | ) |   | –                            |   |   | –                     |  
|Impairment on tangible assets                                                                                               |   | 2,348,595     |   |   | 1,800,000                    |   |   | –                     |  
|Impairment on intangible assets                                                                                             |   | 1,233,324     |   |   | 27,052                       |   |   | –                     |  
|Related party advance compensation (note 18)                                                                                |   | 20,000        |   |   | –                            |   |   | –                     |  
|Loss on sale-lease back of vehicle                                                                                          |   | –             |   |   | 45,040                       |   |   | –                     |  
|Write down on Needles project                                                                                               |   | –             |   |   | 1,619,163                    |   |   | –                     |  
|Accrued interest on loan from related party                                                                                 |   | –             |   |   | 53,820                       |   |   | –                     |  
|Gain on settlement of debt                                                                                                  |   | –             |   |   | (46,673                      | ) |   | –                     |  
|Revenue recognized on advances
      against future revenue streams                                                         |   | –             |   |   | –                            |   |   | (17,139               | )
|Stock-based compensation                                                                                                    |   | –             |   |   | –                            |   |   | 2,944,536             |  
|Unrealized foreign exchange gain                                                                                            |   | –             |   |   | –                            |   |   | (644,350              | )
|Increase (decrease) in accounts, notes and other
      receivables                                                          |   | 371,253       |   |   | 321,290                      |   |   | 171,663               |  
|Increase in short-term deposits                                                                                             |   | (475          | ) |   | –                            |   |   | –                     |  
|Increase (decrease) in prepaid expenses                                                                                     |   | (113,940      | ) |   | (5,738                       | ) |   | 12,208                |  
|Increase (decrease) in accounts payable and
      accrued liabilities                                                       |   | (283,109      | ) |   | 398,523                      |   |   | (177,763              | )
|Increase (decrease) in deferred revenue                                                                                     |   | (165,931      | ) |   | 2,400,019                    |   |   | 739,386               |  
|                                                                                                                            |   |               |   |   |                              |   |   |                       |  
|Cash Used in Operating Activities                                                                                           |   | (672,440      | ) |   | (652,811                     | ) |   | (233,529              | )
|                                                                                                                            |   |               |   |   |                              |   |   |                       |  
|Investing Activities                                                                                                        |   |               |   |   |                              |   |   |                       |  
|Cash on-hand upon acquisition                                                                                               |   | –             |   |   | 814,003                      |   |   | –                     |  
|Purchase of property and equipment                                                                                          |   | (2,070,200    | ) |   | (5,183,301                   | ) |   | (1,882,212            | )
|Purchase of intangible property                                                                                             |   | (72,168       | ) |   | –                            |   |   | (32,425               | )
|Purchase of Family Vacation Centers                                                                                         |   | –             |   |   | (1,849,589                   | ) |   | –                     |  
|Purchase of life settlement
      investments                                                                               |   | –             |   |   | (1,788,567                   | ) |   | –                     |  
|Proceeds from life settlement                                                                                               |   | 5,371,606     |   |   | –                            |   |   | –                     |  
|Payment of life insurance premiums                                                                                          |   | (18,020       | ) |   | (1,118,127                   | ) |   | –                     |  
|Realized proceeds on marketable
      securities                                                                            |   | 121,512       |   |   | –                            |   |   | –                     |  
|Purchase of marketable securities                                                                                           |   | (2,000,000    | ) |   | –                            |   |   | –                     |  
|Cash Used in Investing Activities                                                                                           |   | 1,332,730     |   |   | (9,125,581                   | ) |   | (1,914,637            | )
|                                                                                                                            |   |               |   |   |                              |   |   |                       |  
|Financing Activities                                                                                                        |   |               |   |   |                              |   |   |                       |  
|Net proceeds received on share
      issuance                                                                               |   | 195,344       |   |   | 30,000                       |   |   | 9,391,996             |  
|Additional contribution in Colorado
      River Resorts LLC                                                                 |   | –             |   |   | 79,493                       |   |   | –                     |  
|Funds held in trust                                                                                                         |   | 79,493        |   |   | (79,493                      | ) |   | –                     |  
|Amounts due to (from) related
      parties (note 18)                                                                       |   | (827,653      | ) |   | 685,137                      |   |   | (42,047               | )
|Borrowings (repayments) of Long-term
      debt                                                                             |   | (62,544       | ) |   | 132,991                      |   |   | 178,304               |  
|Proceeds from Long-term debt                                                                                                |   | 855,472       |   |   | 226,882                      |   |   | 602,866               |  
|Secured  borrowing                                                                                                          |   | 126,373       |   |   | 137,321                      |   |   | –                     |  
|Due to broker                                                                                                               |   | 569,996       |   |   | –                            |   |   | –                     |  
|Cash Provided by Financing Activities                                                                                       |   | 936,481       |   |   | 1,212,331                    |   |   | 10,131,119            |  
|                                                                                                                            |   |               |   |   |                              |   |   |                       |  
|Effect of foreign exchange on cash                                                                                          |   | -             |   |   | 170,720                      |   |   | –                     |  
|Increase (Decrease) in Cash                                                                                                 |   | 1,596,771     |   |   | (8,395,341                   | ) |   | 7,982,952             | )
|Cash and Cash Equivalents, Beginning of Period                                                                              |   | 228,864       |   |   | 8,624,205                    |   |   | 641,253               |  
|                                                                                                                            |   |               |   |   |                              |   |   |                       |  
|Cash and Cash Equivalents, End of Period                                                                                    | $ | 1,825,635     |   | $ | 228,864                      |   | $ | 8,624,205             |  

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

F-7

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | The Company was incorporated on
      September 22, 1995 under the Business Corporations Act(British
      Columbia) and commenced operations on that date. On October 2, 1997, the
      Company was continued under the laws of the Province of Ontario. Effective
      February 26, 1999, the Company changed its name from Snowbird Vacations
      International Inc. to inTRAVELnet.com inc. and on April 17, 2002, the
      Company’s name was changed to Forum National Investments Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | The  Company earns income from investments in life settlement contracts, the sale of  travel and fitness club memberships and monthly dues from the members of its  travel and fitness clubs. As at September 30, 2009, the Company has an accumulated  deficit of $22,070,260 and working capital of $817,711. The Company anticipates  incurring substantial expenditures to further develop its life settlement and  yacht charter lines of business. Although, the Company has cash on hand of $1.8  million and a working capital surplus as at September 30, 2009, the Company’s  cash flow from operating activities may not be sufficient to satisfy its  obligations as they come due as well as meeting the requirements of its capital  investment programs and covenants on its long term debt. These factors cast  substantial doubt about the Company’s ability to continue as a going concern. The  continued existence of the Company is dependent upon its ability to generate  profit from its life settlement investment and vacation club business to meet  its obligations as they become due. If additional cash is needed, the Company  intends to finance the future capital required to acquire life settlement  contracts and continued operations from a combination of traditional debt and  equity markets. However, there is no assurance that (a) traditional debt and  equity markets may be accessible as required, or if so, on acceptable terms  and, or (b) the demand for and selling prices of the Company’s products, may  not be sufficient to meet cash flow expectation. The outcome of these matters  cannot be predicted with certainty and therefore the Company may not be able to  continue or expand operations as planned. These consolidated financial  statements do not include any adjustments to the amounts and classification of  assets and liabilities that may be necessary should the Company be unable to  continue as a going concern.

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

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

| |                                           |           | Incorporating            | Date of Acquisition
| | ----------------------------------------- | --------- | ------------------------ | -------------------
| | Subsidiaries                              | Ownership | Jurisdiction             | or Incorporation   
| |                                           |           |                          |                    
| | inTRAVELnet.com inc.                      | 100%      | Alberta, Canada          | November 9, 1999   
| | Intravelnet Ltd.                          | 100%      | Ontario, Canada          | July 25, 2003      
| | ATM Travel Group Ltd. (“ATM”)             | 100%      | British Columbia, Canada | April 3, 2000      
| | International Fitness Vacations (BC) Ltd. | 100%      | British Columbia, Canada | December 31, 2006  
| | Price Shield Systems Inc.                 | 100%      | Washington State, USA    | February 27, 2007  
| | American Life Settlement Society LLC      | 100%      | State of Delaware, USA   | November 15, 2007  
| | Colorado River Resorts LLC                | 54%       | California, USA          | January 1, 2008    

F-8

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|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | (a) | Basis of presentation
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | All significant intercompany
      balances and transactions have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | As described in note 23,
      Canadian GAAP differs in certain material aspects from accounting principles
      generally accepted in the United States (“US GAAP”).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (b) | Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | The Company generates revenues
      from yacht charter operations, and the sale of travel memberships and dues.
      In accordance with CICA HB 3400, Revenue, the portion of revenue received
      from members, which entitles members to use the Company’s vacation and travel
      club privileges at a future date, is deferred and recognized in income evenly
      over the term of the member’s entitlements. 
      For lifetime memberships,
      revenue is recognized over a period of five years, which is management’s best
      estimate of the period over which performance will be required. Revenue from
      yacht charter operations is recognized at the time the charters are provided.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (c) | Other income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | Net gain on life settlement
      contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | During the year ended
      September 30, 2008, the Company entered into the life settlement industry.
      The Company records investments in the life settlement contracts at fair
      value on each balance sheet date. Any changes to fair value will be
      recognized in the statements of operations in the period in which the changes
      occur. The Company recognizes in other income the difference between the
      death benefits and the carrying value of the policy when the Company determined
      that settlement and ultimate collection is reasonably assured.  Other income
      includes both recognized and un-recognized amounts and is presented net of
      related costs including premium costs.
        Cash flows relating to the
          acquisition of the Company’s investments in life settlement contract and
          premiums are recognized as investing activities in the statement of cash
          flows. Proceeds from the maturity of a life settlement contract will be shown
          as cash in-flows from investing activities, with realized gain on maturity of
          life settlement policies as a reconciling item in the determination of net
          cash provided by operating activities.
      Interest income is
        recognized as it is received.
      Security transactions are
        recorded on a trade-date basis. Realized gains and losses on disposal of
        investments and unrealized gains and losses in the value of investments, are
        reflected in other income and are calculated on an average cost basis. Upon
        disposal of an investment, previously recognized unrealized gains or losses
        are reversed, so as to recognize the full realized gain or loss in the period
        of disposition.

F-9

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

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

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

| | (f) | Intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | Intangible assets acquired in a
      business combination are identified and recognized at their fair values apart
      from goodwill when they arise from either contractual or other rights and may
      be sold, transferred, licensed, rented or exchanged, either individually or
      with a group of related assets or liabilities.
        Indefinite life intangible
          assets are subjected to impairment tests on an annual basis or when events or
          circumstances indicate a potential impairment. If the carrying value of such
          assets exceeds the fair values, the assets are written down to fair value.
      Intangible assets with definite lives are amortized over  their estimated useful lives. Intangible assets with indefinite lives are  initially recognized at cost. Once an intangible asset’s expected useful life  is determined to no longer be indefinite, it will be amortized over its  remaining expected useful life.
      The intangible asset under
        construction is the membership database, will be evaluated to determine the
        estimated useful life upon completion. The database is expected to be
        completed and enter service during fiscal 2010.

F-10

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|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | (f) | Intangibles (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | The membership database
      acquired in the Family Vacations Centre business acquisition is amortized on
      a straight-line basis over the remaining term of the memberships acquired up
      to a maximum of 5 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (g) | Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | Monetary assets and liabilities
      denominated in foreign currency have been translated into Canadian dollars at
      exchange rates in effect at the balance sheet date and non-monetary items are
      translated at rates of exchange in effect when the assets were acquired or
      obligations incurred. Revenues and expenses are translated at the rates in
      effect at the time of the transaction. Foreign exchange gains and losses are
      included in the determination of net income or loss for the period.
        Assets and liabilities of self-sustaining operations  conducted in foreign currencies are translated into Canadian dollars at the  exchange rate in effect at the balance sheet date.  Revenues and expenses are translated at  average exchange rates for the year.   Unrealized gains or losses on translation of self-sustaining operations  conducted in foreign currencies are shown as currency translation adjustments,  a component of other comprehensive earnings.
      The Company’s integrated
        operations, translate monetary assets and liabilities denominated in foreign
        currencies at exchange rates in effect at the balance sheet date and
        non-monetary items at historical rates. Revenues and expenses are translated
        at the exchange rate at the date of the transactions.  Gains and losses on
        translation are included in the income statement.
        The Company has determined that
        all of its subsidiaries are integrated foreign operations.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (h) | Factoring of note receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | The Company has entered into
      arrangements whereby future streams of certain financed membership cash flows
      are sold to a third party (“Lender”) while the Company is committed to
      provide the future services under these membership contracts. The Company
      receives cash proceeds on the sale at a discount to the future proceeds that
      the Lender is expected to receive from the customers. The Lender has recourse
      against the Company should the amounts become uncollectible, and the Company
      establishes a reserve for such amounts. For accounting purposes, the
      discounted proceeds have been recorded as a liability at the time of the
      transaction (notes 5 and 19), which is accreted to the gross value through a
      charge to interest expense over the term of the membership contracts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-11

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|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | (i) | Earnings (loss) per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Basic earnings-per-share is
      calculated using the weighted average number of common shares outstanding
      during the year and assumes conversion of all outstanding Series “B”
      Preference convertible shares. The Series “B” preferred convertible shares
      are included in the calculation of basic earnings (loss) per share because
      management considers these shares substantially equivalent to common stock.
      Management believes the Series “B” preferred shares are not “contingently
      issuable shares” and considers conversion at the option of the Series “B”
      holder does not constitute a barrier to conversion. Series “B” preferred
      convertible shares are without par value, are convertible to one common share
      for each preferred share held, have no rights to dividends, voting, profit
      sharing, or liquidation.
        Series “A” preference
          convertible shares are not included in the calculation of basic earnings per
          share. Management believes the Series “A” preferred shares are “contingently
          issuable shares” and considers conditions for conversion of the Series “A”
          preferred shares to constitute a barrier to conversion as some target
          performance or event has not been met or occurred.
      Under the treasury stock
        method, diluted earnings (loss)-per-share is calculated based upon the
        weighted average number of shares issued and outstanding during the year,
        adjusted by the total of the additional common shares that would have been
        outstanding assuming exercise of all stock options and conversion of all
        Series “A” Preference convertible shares without par value convertible to 50%
        of the outstanding common shares after conversion. See note 13(b) for
        calculation of weighted average share outstanding for calculation of diluted
        earnings per share.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (j) | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Income taxes are accounted for
      under the asset and liability method. Future income tax assets and
      liabilities are recognized for future tax consequences attributable to
      differences between the financial statement carrying amounts of existing
      assets and liabilities and their respective tax basis and operating loss
      carry-forwards. Future income tax assets and liabilities are measured using
      enacted or substantially enacted tax rates expected to apply to taxable
      income in the years in which those temporary differences are expected to be
      recovered or settled. The effect on future income tax assets and liabilities
      of a change in tax rates is recognized in income in the period that includes
      the substantial enactment date. To the extent that it is more likely than not
      those future income tax assets will not be realized, a valuation allowance is
      recorded for the excess.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-12

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|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | (k) | Impairment of long lived assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Long-lived assets are tested
      for impairment whenever circumstances indicate that the carrying value may
      not be recoverable. When events or circumstances indicate that the carrying amount
      of long-lived assets, other than indefinite life intangibles, are not
      recoverable, the long-lived assets are tested for impairment by comparing the
      estimate of future expected cash flows to the carrying amount of the assets
      or groups of assets. If the carrying value is not recoverable from future
      expected cash flows, any loss is measured as the amount by which the asset's
      carrying value exceeds fair value and recorded in the period. Recoverability
      is assessed relative to undiscounted cash flows from the direct use and
      disposition of the asset or group of assets.                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | For assets that are under
      construction, the Company evaluates recoverability when circumstances
      indicate that the carrying value of an asset may not be recoverable.
      Estimates of recoverability are based on undiscounted cash flows that is
      expected from the use and eventual disposition of the assets or when there is
      no undiscounted cash flows, the fair value of the asset on the reporting
      date. When impairment in value is noted, the carrying value of the property
      and equipment is reduced by a charge to operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (l) | Use of estimates and measurement uncertainty                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | The preparation of financial
      statements in conformity with Canadian GAAP requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of the financial statements, and the reported amounts of revenues and
      expenses during the reporting period. Significant areas requiring the use of
      estimates include the valuation of amounts and notes receivable, impairment
      of assets, including intangible assets, rates for amortization and revenue
      recognition, balances of accrued liabilities, income taxes provision, valuation
      allowance for future income tax assets, and the determination of the
      variables used in the calculation of fair value of life settlement contracts
      and stock-based compensation. While management believes the estimates used
      are reasonable, actual results could differ from those estimates and could
      impact future results of operations and cash flows.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (m) | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Securities with original
      maturities of three months or less are considered cash equivalents, at cost.
      The securities are highly liquid and can be converted to known amounts of
      cash at any time, and are held at major financial institutions. Accrued
      interest on the guaranteed investment certificates, included as cash
      equivalents, is at the stated interest rate over the term of the instrument
      and included in amounts receivable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (n) | Comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Comprehensive income includes
      both net earnings and other comprehensive income. Other comprehensive income
      (“OCI”) includes holding gains and losses on available for sale investments,
      gains and losses on certain derivative financial instruments and foreign
      currency gains and losses relating to self-sustaining foreign operations, all
      of which are not included in the calculation of net earnings until realized.
      The Company does not have any differences between net income (loss) and comprehensive
      income (loss) items for the periods presented.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-13

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | (o) | Financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Financial instruments are
      initially recognized at fair value. The fair value of a financial instrument
      is the amount of consideration that would be agreed upon in an arm’s-length
      transaction between knowledgeable, willing parties who are under no
      compulsion to act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Subsequent measurement depends
      on management’s classification of the financial assets as held-for-trading,
      available –for-sale, held-to-maturity or loans and receivables, and financial
      liabilities as held-for-trading or other liabilities. The classification of
      financial instruments depends on the nature of and the purpose of the
      financial instruments, management’s choice and in some circumstances,
      management’s intentions.
        Held-for-trading
      Financial instruments
        classified as held-for-trading are measured at fair value with the realized
        and unrealized changes in fair value recognized each reporting period through
        interest and financing costs, net on the consolidated statement of earnings. 
        Transaction costs for held-for-trading financial assets are expensed as
        incurred.
      Available-for-sale
      Financial assets classified as
        available-for-sale are measured at fair value with the unrealized changes in
        fair value recorded each reporting period in OCI, Investments in equity
        instruments classified as available-for-sale that do not have the quoted
        price in an active market are recorded at cost. Each reporting period,
        available-for-sale assets are written down to fair value through interest and
        financing costs, net on the consolidated statement of operations to reflect
        impairments that are considered to be other than temporary.  Transaction
        costs for available-for-sale financial assets are expensed as incurred.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Held-to-maturity, loans and
      receivables and other liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Financial instruments
      classified as held-to-maturity, loans and receivables and other liabilities
      are measured at amortized cost using the effective interest method adding
      transaction costs that are directly attributable to the acquisition or issue
      of a financial asset or financial liability to the amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

F-14

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | (o) | Financial instruments
      (continued)                                                          
| | --- | -------------------------------------------------------------------------------------------------
| |     |                                                                                                  
| |     | The following table summarizes
      the Company’s selected financial instrument classifications:

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

| | (p) | Comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | Comprehensive income includes
      both net earnings and other comprehensive income. Other comprehensive income
      (“OCI”) includes holding gains and losses on available for sale investments,
      gains and losses on certain derivative financial instruments and foreign
      currency gains and losses relating to self-sustaining foreign operations, all
      of which are not included in the calculation of net earnings until realized.
      The Company does not have any comprehensive income items for the periods
      presented.                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (q) | Business Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The Company operates in one reporting segment, the travel and
      vacation club.  All of the Company’s operations, assets and employees are
      located in Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The Company also invests in life settlement contracts in the United
      States. However, as at September 30, 2009, the life settlement business does
      not constitute a clearly identifiable business segment.                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (r) | Adoption of new accounting
      standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | i.  Financial Instruments – Disclosures – Revised section 3862 
        The amendments to CICA HB 3862 expand the disclosures required in
          respect of fair value measurements and liquidity risk.  The Company has not
          provided comparative information for these expanded disclosures in the
          current year in accordance with the transitional relief offered in these
          amendments.  The result of the expanded disclosures required the Company to
          identify the degree to which the fair value is observable.  The Company’s
          analysis is included in Note 5(d).

F-15

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | (r) | Adoption of new accounting
      standards (continued)
| | --- | ------------------------------------------------------

| |  | ii. Goodwill and Intangible Assets – Section 3064 and Financial
      Statement Concept – Section 1000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | As  at October 1, 2008 the Company adopted CICA HB 3064 and the revised HB 1000 on  a retrospective basis, with restatement, and as a result has recorded an  adjustment of $1,599,590 to deficit previously reported as at September 30,  2008.  Whereas previously the Company deferred commission costs related to  the sale of travel memberships and amortized these costs straight-line to  income over a 5 year term these amounts no longer meet the criteria for asset  recognition.  The Company also previously capitalized costs relating to  the set up of future businesses.  As per the transitional requirements of  the standards, the effects of adoption have been recorded on a retrospective  basis.  Accordingly, the Company has reflected an increase of $228,455 to  previously reported net loss for the fiscal period ended September 30, 2008, a  $1,122,147 decrease in previously reported income for the period ended  September 30, 2007, and a reduction to deficit at October 1, 2006 of $1,352,796.  The impact on the balance sheet was to reduce  total assets in 2008 by $1,599,590 (2007: $1,641,251) and increase the retained  deficit by $1,599,590 (2007: $1,641,251).   There were no income tax impact from these changes.

| |                                                                         |   | Previously          |   |   |             |   |   |                     |  
| | ----------------------------------------------------------------------- | - | ------------------- | - | - | ----------- | - | - | ------------------- | -
| |                                                                         |   | Reported
      2008 |   |   | Adjustments |   |   | Restated
      2008 |  
| | Assets                                                                  |   |                     |   |   |             |   |   |                     |  
| | Deferred Organization Costs                                             | $ | 258,556             |   | $ | (258,556    | ) | $ | –                   |  
| | Deferred Costs, net                                                     |   | 1,341,034           |   |   | (1,341,034  | ) |   | –                   |  
| | Total Assets                                                            |   | 31,081,180          |   |   | (1,599,590  | ) |   | 29,481,590          |  
| |                                                                         |   |                     |   |   |             |   |   |                     |  
| | Shareholders’ Equity                                                    |   |                     |   |   |             |   |   |                     |  
| | Deficit                                                                 |   | (15,126,387         | ) |   | (1,599,590  | ) |   | (16,725,977         | )
| | Total Shareholders’ Equity                                              |   | 12,042,942          |   |   | (1,599,590  | ) |   | 10,443,352          |  
| | Total Liabilities and Shareholders’ Equity                              | $ | 31,081,180          |   | $ | (1,599,590  | ) | $ | 29,481,590          |  
| |                                                                         |   |                     |   |   |             |   |   |                     |  
| | Expenses                                                                |   |                     |   |   |             |   |   |                     |  
| | General and administration                                              | $ | 2,340,578           |   | $ | 27,245      |   | $ | 2,367,823           |  
| | Commission cost                                                         |   | 319,488             |   |   | (150,241    | ) |   | 169,247             |  
| | Total Expenses                                                          |   | 6,885,771           |   |   | (122,996    | ) |   | 6,762,775           |  
| | Foreign exchange gain (loss)                                            |   | (503,784            | ) |   | (81,335     | ) |   | (585,119            | )
| | **Total Non-operating Income (Loss)**                                   |   | 1,499,098           |   |   | (81,335     | ) |   | 1,417,763           |  
| | **Net Income (Loss) before non-controlling  interest and income taxes** |   | (1,669,519          | ) |   | 41,661      |   |   | (1,627,858          | )
| | **Net Income (Loss)**                                                   | $ | (913,301            | ) | $ | 41,661      |   | $ | (871,640            |  
| | Basic earnings (loss) per share                                         | $ | (0.02               | ) | $ | 0.00        |   | $ | (0.02               | )
| | Diluted earnings (loss) per share                                       | $ | (0.02               | ) | $ | 0.00        |   | $ | (0.02               | )

F-16

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | (r) | Adoption of new accounting
      standards (continued)
| | --- | ------------------------------------------------------

| |  | ii. Goodwill and Intangible Assets – Section 3064 and Financial
      Statement Concept – Section 1000 (continued)
| |  | ------------------------------------------------------------------------------------------------------------------

| |                                                                    |   | Previously          |   |   |             |   |   |                     |  
| | ------------------------------------------------------------------ | - | ------------------- | - | - | ----------- | - | - | ------------------- | -
| |                                                                    |   | Reported
      2007 |   |   | Adjustments |   |   | Restated
      2007 |  
| |                                                                    |   |                     |   |   |             |   |   |                     |  
| | Assets                                                             |   |                     |   |   |             |   |   |                     |  
| | Deferred Organization Costs                                        | $ | 149,976             |   | $ | (149,976    | ) | $ | –                   |  
| | Deferred Costs, net                                                |   | 1,491,275           |   |   | (1,491,275  | ) |   | –                   |  
| | Total Assets                                                       |   | 20,035,886          |   |   | (1,641,251  | ) |   | 18,394,635          |  
| |                                                                    |   |                     |   |   |             |   |   |                     |  
| | Shareholders’ Equity                                               |   |                     |   |   |             |   |   |                     |  
| | Deficit                                                            |   | (14,213,086         | ) |   | (1,641,251  | ) |   | (15,854,337         | )
| | Total Shareholders’ Equity (c)                                     |   | 12,926,243          |   |   | (1,641,251  | ) |   | 11,284,992          |  
| | Total Liabilities and Shareholders’ Equity                         | $ | 20,035,886          |   | $ | (1,641,251  | ) | $ | 18,394,635          |  
| |                                                                    |   |                     |   |   |             |   |   |                     |  
| | Expenses                                                           |   |                     |   |   |             |   |   |                     |  
| | General and administration (c)                                     | $ | 761,610             |   | $ | 409,587     |   | $ | 1,171,197           |  
| | Commission cost                                                    |   | 518,363             |   |   | 138,479     |   |   | 656,842             |  
| | Total Expenses                                                     |   | 4,785,105           |   |   | 548,066     |   |   | 5,333,171           |  
| | Net Income (loss) before non-controlling interest and income taxes |   | (2,212,467          | ) |   | (548,066    | ) |   | (2,760,533          | )
| | Foreign exchange loss                                              |   | –                   |   |   | 259,611     |   |   | 259,611             |  
| | **Net Loss**                                                       | $ | (2,212,467          | ) | $ | (288,455    | ) | $ | (2,500,922          | )
| | Basic earnings (loss) per share                                    | $ | (0.11               | ) | $ | (0.02       | ) | $ | (0.13               | )
| | Diluted earnings (loss) per share                                  | $ | (0.11               | ) | $ | (0.02       | ) | $ | (0.13               | )

| |  | iii.  Credit Risk and the Fair Value of Financial Assets and
      Liabilities – EIC 173
| |  | ----------------------------------------------------------------------------------------
| |  |                                                                                         

| |  | On January 20, 2009 the Company adopted EIC-173 – Credit risk and the
      fair value of financial assets and financial liabilities.  This EIC requires
      that the Company should consider both the Company’s own credit risk and the
      credit risk of the counterparty in determining the fair value of financial
      assets and financial liabilities, including derivative financial instruments,
      The Company reviewed the impact of EIC-173 and there was no impact on the
      financial statements.  The Company did not retrospectively apply this EIC.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-17

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

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

| |  | i.  Business Combinations – 1582
| |  | --------------------------------

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In January 2009, the CICA issued Section 1582 – Business
      Combinations, which replaces Section 1581 – Business Combinations, and
      Section 1601 – Consolidated Financial Statements and Section 1602 –
      Non-Controlling Interests, which replace Section 1600 – Consolidated
      Financial Statements. These new sections are effective for years beginning on
      or after January 1, 2011 with earlier adoption permitted.  Sections 1582 and
      1602 will require net assets, non-controlling interests and goodwill acquired
      in a business combination to be recorded at fair value and non-controlling
      interests will be reported as a component of equity. In addition, the
      definition of a business is expanded and is described as an integrated set of
      activities and assets that are capable of being managed to provide a return
      to investors or economic benefits to owners. As well acquisition costs are
      not part of the consideration and are to be expensed when incurred.
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | ii. Accounting changes –
      1506                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | In June 2009, the CICA issued amendments to CICA Handbook Section
      1506, Accounting Changes. Section 1506 was amended to exclude from its scope
      changes in accounting policies upon the complete replacement of an entity’s
      primary basis of accounting. The amendments were effective for annual and interim
      financial statements relating to fiscal years beginning on or after July 1,
      2009. The adoption of International Financial Reporting Standards (“IFRS”) is
      not expected to qualify as an accounting change under CICA 1506.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | iii. Multiple Deliverable Revenue Arrangements – EIC175                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | In December 2009, the CICA
      issued EIC175 – Multiple Deliverable Revenue Arrangements. This EIC required
      the Company to divide revenue arrangements with multiple deliverables to be
      divided into separate units accounting, with separate revenue recognition
      criteria. The Company does not expect the adoption of EIC175 to have a
      material impact on the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | iv. International Financial Reporting Standards
      ("IFRS")                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | In 2006, the Canadian
      Accounting Standards Board ("AcSB") published a new strategic plan
      that will significantly affect financial reporting requirements for Canadian
      companies. The AcSB strategic plan outlines the convergence of Canadian GAAP
      with IFRS over an expected five year transitional period. In February 2008
      the AcSB announced that 2011 is the changeover date for publicly-listed
      companies to use IFRS, replacing Canada's own GAAP. The date is for interim
      and annual financial statements relating to fiscal years beginning on or
      after January 1, 2011. The transition date of January 1, 2011 will require
      the restatement for comparative purposes of amounts reported by the Company
      for the year ended December 31, 2010. While the Company has begun assessing
      the adoption of IFRS for 2011, the financial reporting impact of the
      transition to IFRS cannot be reasonably estimated at this time.                                         

F-18

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| |                            | Number of shares held | Cost       | Quoted Market price per share | Fair Value
| | -------------------------- | --------------------- | ---------- | ----------------------------- | ----------
| |                            |                       |            |                               |           
| | HSE Integrated             | 1,339,500             | $622,625   | $0.700                        | $937,650  
| |                            |                       |            |                               |           
| | Huntington Bancshares Inc. | 250,000               | $1,144,580 | $5.0397                       | $1,259,925
| |                            |                       |            |                               |           
| | SUNC2 Network Corp.        | 50,000                | $77,242    | $0.856                        | $42,800   
| |                            |                       |            |                               |           
| | Total                      | 1,639,500             | $1,844,447 |                               | $2,240,375
| |                            |                       |            |                               |           

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

| | Due to
      broker consists of margin borrowings less cash advanced collateralized by the
      Company’s investments held at the broker. In the normal course of business,
      the Company utilizes the margin borrowings to finance some of its marketable
      securities activities. At September 30, 2009 the Company owed $569,996 (2008:
      $nil). The margin account is due on demand and is subject to margin calls. All
      securities held by the broker are pledged in relation to the brokers account.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

| |                          |   | September 30
      2009 |   | September 30
      2008
| | ------------------------ | - | ----------------------- | - | -----------------------
| | Identifiable Assets      |   |                         |   |                        
| | Canada                   | $ | 14,444,873              | $ | 20,850,991             
| | United States of America |   | 4,052,220               |   | 8,630,599              
| | Total Assets             | $ | 18,497,093              | $ | $29,481,590            
| | Revenue                  |   |                         |   |                        
| | Canada                   | $ | 3,740,558               | $ | 3,717,154              
| | United States of America |   | –                       |   | –                      
| | Total Revenue            | $ | 3,740,558               | $ | 3,717,154              
| | Net Income (loss)        |   |                         |   |                        
| | Canada                   | $ | (6,024,092)             | $ | (4,242,830)            
| | United States of America |   | 701,479                 |   | 3,371190               
| | Total net income (loss)  | $ | (5,322,613)             | $ | (871,640)              

| | All membership and
      travel revenues are earned in Canada (2008 100%).  There are no major customers
      that account for 10% or more of the Company’s revenue (2008: nil).
        All gains on the
          investment in life settlement contracts are derived from life insurance
          policies held in the USA (2008: 100%).  There are no insured parties that
          account for 10% or more of the Company’s revenue (2008: 1 insured party).
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-19

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

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

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

| | There was no change to the risks faced by the Company
      for the year ended September 30, 2009.
| | --------------------------------------------------------------------------------------------------

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

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

| |                                                                                      |   | September 30, |  |   | September 30 | 
| | ------------------------------------------------------------------------------------ | - | ------------- |  | - | ------------ | 
| |                                                                                      |   | 2009          |  |   | 2008         | 
| |                                                                                      |   |               |  |   |              | 
| | Cash and cash equivalents                                                            | $ | 1,825,635     |  | $ | 228,864      | 
| | Funds held in Trust                                                                  |   | –             |  |   | 79,493       | 
| | Short-term deposits                                                                  |   | 14,685        |  |   | 14,210       | 
| | Marketable securities                                                                |   | 2,240,375     |  |   | –            | 
| | Amounts and notes receivable                                                         |   | 387,727       |  |   | 749,612      | 
| | Investment in life settlement contracts / life settlement contracts
      receivable |   | 4,052,220     |  |   | 8,883,245    | 
| | Other receivables                                                                    |   | 17,284        |  |   | 5,738        | 
| | Related party advance                                                                |   | 205,000       |  |   |              | 
| | Total                                                                                | $ | 8,742,926     |  | $ | 9,961,162    | 

F-20

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | (a) | Credit risk (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | Cash and cash equivalents
      and short term deposits:Credit risk associated with these assets is
      minimized substantially by ensuring that these financial assets are placed in
      debt instruments of well-capitalized financial institutions.                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | Amounts and notes receivable
      and other receivables:Credit risk associated with these assets is
      minimized due to their nature. All notes receivable are carried at net after
      allowing for bad debts and unearned interest. The provision for doubtful
      amounts receivable is an estimate based on an assessment of individual
      accounts and the length of time balances have been outstanding. As of
      September 30, 2009 the allowance for doubtful amounts and note receivables
      totaled $328,361 (2008 - $ 340,474).

| |  | Allowance for doubtful amounts, beginning of the year: | $ 340,474   | 
| |  | ------------------------------------------------------ | ----------- | 
| |  | Net bad debts provisions (recovery)                    | $  (12,113) | 
| |  | Allowance for doubtful amounts, end of year:           | $ 328,361   | 

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

Expected payments by period as at
  September 30, 2009

|                                               |   | Within 1
      year | 1-2 years | 2-3 years | 3-4 years | 4-5 years | 5 + years | Total     
|---------------------------------------------- | - | ------------------- | --------- | --------- | --------- | --------- | --------- | ----------
|Accounts payable and accrued
      liabilities | $ | 614,847             | –         | –         | –         | –         | –         | 614,847   
|Due to broker                                  |   | 569,996             | –         | –         | –         | –         | –         | 569,996   
|Secured borrowing                              |   | 263,694             | –         | –         | –         | –         | –         | 263,694   
|Loans from related parties                     |   | 486,379             | –         | –         | –         | –         | –         | 486,379   
|Convertible debentures                         |   | 40,486              | –         | –         | –         | –         | –         | 40,486    
|Life settlement premiums*                      |   | 248,734             | 563,454   | 591,626   | 620,969   | 656,269   | 4,270,596 | 6,951,648 
|Long-term debt                                 |   | 145,625             | 177,043   | 145,487   | 139,784   | 4,760,460 | -         | 5,368,399 
|Lease and Contracts                            |   | 154,397             | 76,007    | 7,508     | 4,803     | –         | –         | 242,715   
|TOTAL                                          | $ | 2,524,158           | 816,504   | 744,621   | 765,556   | 5,416,729 | 4,270,596 | 14,538,164

F-21

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

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

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

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

| |                                         |   |                          |  |   |          |   |   |          |  
| | --------------------------------------- | - | ------------------------ |  | - | -------- | - | - | -------- | -
| |                                         |   | Foreign Currency Risk(1) | 
| |                                         |   |                          |  |   | -10%(1)  |   |   | +10%(1)  |  
| |                                         |   | Carrying amount          |  |   | Net      |   |   | Net      |  
| |                                         |   | September 30, 2009       |  |   | earnings |   |   | earnings |  
| | Financial assets                        |   |                          |  |   |          |   |   |          |  
| | Cash and cash equivalents               | $ | 13,561                   |  | $ | (1,356   | ) | $ | 1,356    |  
| | Marketable securities                   |   | 1,302,725                |  |   | (130,273 | ) |   | 130,273  |  
| | Investment in life settlement contracts |   | 4,052,220                |  |   | (405,222 | ) |   | 405,222  |  
| | Financial liabilities                   |   |                          |  |   |          |   |   |          |  
| | Due to Broker                           |   | 569,996                  |  |   | 57,000   |   |   | (57,000  | )
| | Long term debt – current                |   | 138,525                  |  |   | 13,853   |   |   | (13,853  | )
| | Long term debt – non current            |   | 5,182,838                |  |   | 518,284  |   |   | (518,284 | )
| | Total (decrease) increase               | $ |                          |  | $ | 52,285   |   | $ | (52,285  | )

F-22

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | (c) | Market risk (continued)
| | --- | -----------------------

| |                                         |   |                          |  |   |          |   |   |          |  
| | --------------------------------------- | - | ------------------------ |  | - | -------- | - | - | -------- | -
| |                                         |   | Foreign Currency Risk(1) | 
| |                                         |   |                          |  |   | -10%(1)  |   |   | +10%(1)  |  
| |                                         |   | Carrying amount          |  |   | Net      |   |   | Net      |  
| |                                         |   | September 30, 2008       |  |   | earnings |   |   | earnings |  
| | Financial assets                        |   |                          |  |   |          |   |   |          |  
| | Cash and cash equivalents               | $ | 228,864                  |  | $ | (22,886  | ) | $ | 22,886   |  
| | Funds held in trust                     |   | 79,493                   |  |   | (7,949   | ) |   | 7,949    |  
| | Life Settlements contract receivable    |   | 5,371,606                |  |   | (537,161 | ) |   | 537,161  |  
| | Investment in life settlement contracts |   | 3,258,993                |  |   | (325,899 | ) |   | 325,899  |  
| | Financial liabilities                   |   |                          |  |   |          |   |   |          |  
| | Long term debt – current                |   | 363,756                  |  |   | 36,376   |   |   | (36,376  | )
| | Promissory note payable                 |   | 7,602,530                |  |   | 760,253  |   |   | (760,253 | )
| | Long term debt – non current            |   | 4,211,715                |  |   | 421,172  |   |   | (421,172 | )
| | Total (decrease) increase               | $ |                          |  | $ | 323,905  |   | $ | (323,905 | )

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

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

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

| |                | Carrying Value | Fair Value
| | -------------- | -------------- | ----------
| | Long-term debt | $5,222,774     | $5,352,673

* Fair values for long-term debt are determined with reference to market  interest rates at September 30, 2009.

F-23

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | d) | Fair value (continued)
| | -- | ----------------------

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

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

| |                                         | Level 1     | Level 2 | Level 3    
| | --------------------------------------- | ----------- | ------- | -----------
| | Held-for-trading financial assets       |             |         |            
| | Cash and cash equivalents               | $ 1,825,635 | -       | -          
| | Short term deposits                     | 14,685      | -       | -          
| | Marketable securities                   | 2,240,375   | -       | -          
| | Investment in life settlement contracts |             |         | $ 4,052,220

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

| | Opening balance               | $ | 3,258,993
| | ----------------------------- | - | ---------
| | Total gains or losses         |   |          
| | In profit or loss (Note 6)    |   | 775,207  
| | In other comprehensive income |   | -        
| | Purchases                     |   | 18,020   
| | Sales                         |   | -        
| | Transfers out of level 3      |   | -        
| | Closing balance               | $ | 4,052,220

F-24

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | Fair Value Analysis (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Unquoted life settlement policies  include holdings in unlisted life settlement policies which are measured at  fair value.  Fair value is estimated  using a discounted cash flow model, which includes some assumptions that are  not supportable by observable market prices or rates.  In determining the fair value, a life  expectancy, premium growth factor of 5.0% (2008: nil) and a discount factor of  12% (2008: 10%) are used.  If the life  expectancies were increased or decreased by 2 months, discount factors were  increased or decreased by 2%, premium growth rates were increased and decreased  by 1%, while all other variables are held constant, the carrying value of the  investment in life settlement policies would increase (decrease) by:

|                               | Life Expectancy | Discount Rate | Premium Growth
|------------------------------ | --------------- | ------------- | --------------
|                               | +10  Months     | (10  Months)  | +2%           
|Investment  in life settlement | $3,547,740      | $5,474,583    | $3,824,382    
|Increase / (Decrease)          | ($504,480)      | $1,422,363    | ($227,838)    

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

| | The Company purchases life
      settlement contracts for long term investment purposes and accounts for these
      investments under CICA HB 3855. The Company designated the investments in
      life settlement contracts as held-for-trading that are recorded at fair value
      on each reporting date. As of September 30, 2009 and 2008 the Company has the
      following investment in life settlement contracts:
      The table below summarizes the attributes of outstanding
      life settlement contracts at September 30, 2009 and 2008:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |      | Number of | Estimated Fair |  |  | Face         |  |  | Face         | 
| | ---- | --------- | -------------- |  |  | ------------ |  |  | ------------ | 
| | Year | contracts | value          |  |  | value (CAD)  |  |  | value (USD)  | 
| |      |           |                |  |  |              |  |  |              | 
| | 2008 | 5         | $ 3,258,993    |  |  | $ 27,483,207 |  |  | $ 25,930,000 | 
| | 2009 | 5         | $ 4,052,220    |  |  | $ 27,802,146 |  |  | $ 25,930,000 | 

F-25

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | For the years ended
      September 30, 2009 and 2008 and the nine months ended September 30, 2007, the
      investments experienced the following gains:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| |      |   | Realized       |   |  | Unrealized     | 
| | ---- | - | -------------- | - |  | -------------- | 
| | Year |   | Gains (Losses) |   |  | Gains (Losses) | 
| |      |   |                |   |  |                | 
| | 2007 | $ | –              | $ |  | –              | 
| | 2008 | $ | 3,736,541      | $ |  | 1,710,923      | 
| | 2009 | $ | –              | $ |  | 775,207        | 

| | At September 30, 2008 the
      Company had a life settlement contract receivable of $5,371,606 following the
      settlement of a life insurance policy in 2008. As a result of the settled
      contract, the company had recognized a gain of $3,736,541 in the year ended
      September 30, 2008. The Company received the proceeds from the settled life
      insurance policy during the year ended September 30, 2009.  No life insurance
      policies settled during the year ended September 30, 2009.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Fair value is estimated in
      good-faith based on information available to the Company on those dates. The
      Company considered the following factors in its fair value estimates: cost at
      date of purchase; recent purchases and sales of similar investments,
      financial standing of the issuer, changes in economic conditions affecting
      the issuer; standard actuarially developed mortality tables and industry life
      expectancy reports.  The Company has used the services of specialists to ensure
      the valuation model and assumptions contained within, are appropriate for
      determining the fair value of the life settlement investments.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Assumptions : The fair value of
      life settlement contracts are estimated using present value calculations,
      with the following weighted average assumptions. These assumptions are by
      their nature inherently uncertain and the effect of changes in estimates may
      be significant.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                              |  |                                          |  |                                          | 
| | -------------------------------------------- |  | ---------------------------------------- |  | ---------------------------------------- | 
| |                                              |  | September 30, 2009                       |  | September 30, 2008                       | 
| |                                              |  |                                          |  |                                          | 
| | Average age of insured                       |  | 80 years                                 |  | 79 years                                 | 
| |                                              |  |                                          |  |                                          | 
| | Average life expectancy                      |  | 10 years                                 |  | 10 years                                 | 
| | Expected premium growth                      |  | 5%                                       |  | 5%                                       | 
| | Average maturity value                       |  | $5,200,000                               |  | $5,200,000                               | 
| | Mortality rates
        
      Discount rate |  | Standard Life
      Expectancy
      12% |  | Standard Life
      Expectancy
      10% | 

F-26

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| |                        |   |            |  |   | Accumulated  |  |   |            |   | Net Book  | 
| | ---------------------- | - | ---------- |  | - | ------------ |  | - | ---------- | - | --------- | 
| | September 30, 2009     |   | Cost       |  |   | Amortization |  |   | Impairment |   | Value     | 
| |                        |   |            |  |   |              |  |   |            |   |           | 
| | Motor vessels          | $ | 13,726,249 |  | $ | 307,313      |  | $ | 4,148,595  | $ | 9,270,342 | 
| | Vehicles               |   | 75,000     |  |   | 35,417       |  |   | –          |   | 39,583    | 
| | Equipment              |   | 270,305    |  |   | 120,588      |  |   | –          |   | 149,717   | 
| | Computers              |   | 9,559      |  |   | 6,488        |  |   | –          |   | 3,071     | 
| | Leasehold improvements |   | 183,207    |  |   | 83,599       |  |   | –          |   | 99,608    | 
| |                        |   |            |  |   |              |  |   |            |   |           | 
| |                        | $ | 14,264,320 |  | $ | 553,405      |  | $ | 4,148,595  | $ | 9,562,321 | 

| |                        |   |            |  |   | Accumulated  |  |   |            |   | Net Book   | 
| | ---------------------- | - | ---------- |  | - | ------------ |  | - | ---------- | - | ---------- | 
| | September 30, 2008     |   | Cost       |  |   | Amortization |  |   | Impairment |   | Value      | 
| |                        |   |            |  |   |              |  |   |            |   |            | 
| | Motor vessel           | $ | 11,746,281 |  | $ | –            |  | $ | 1,800,000  | $ | 9,946,281  | 
| | Vehicles               |   | 75,000     |  |   | 10,417       |  |   | –          |   | 64,583     | 
| | Equipment              |   | 217,311    |  |   | 76,955       |  |   | –          |   | 140,356    | 
| | Computers              |   | 7,737      |  |   | 5,629        |  |   | –          |   | 2,108      | 
| | Leasehold improvements |   | 147,792    |  |   | 53,619       |  |   | –          |   | 94,173     | 
| | Land                   |   | 9,221,693  |  |   | –            |  |   | 1,619,163  |   | 7,602,530  | 
| |                        |   |            |  |   |              |  |   |            |   |            | 
| |                        | $ | 21,415,814 |  | $ | 146,620      |  | $ | 3,419,163  | $ | 17,850,031 | 

| | Accumulated amortization and
      write-downs includes a $2,348,595 (2008 - $1,800,000) impairment charge against
      motor vessels. For the year ended September 30, 2008, accumulated amortization
      and write-downs included impairment charge $1,619,163 against the Needles
      property.
        The value of property, plant
          & equipment not in use at September 30, 2009 are $nil (2008: Motor vessel $9,946,281). 
          Assets that are not in use have not been depreciated during the year.
      The carrying value of items
        of Property Plant and Equipment that are under capital leases are vehicles with
        a carrying value of $39,583 (2008: $64,583).  The cost and accumulated
        amortization for the vehicles is $75,000 and $35,417 respectively (2008:
        $75,000 and $10,417).
      From time to time during the year,  the Company has made property, plant and equipment, when not in use, available  to management and employees for which management and employees reimburses the  Company for all direct charges and sundry costs.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-27

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | The Company recognized an impairment loss on the carrying value
      of the motor vessel that was completed during the year, in the amount of $2,348,595
      (2008: $1,800,000).  Due to the current economic environment, and cost
      overruns associated with the construction of the vessel, the Company
      concluded that the vessel had a market value of $9,270,342 (2008: 9,946,281). 
      As the motor vessel has not been in use, the Company was unable to prepare a
      discounted cash flow analysis to determine the value in use, As an
      alternative the fair value of the motor vessel was determined based on the
      amortized replacement cost.  Under the amortized replacement cost method, the
      replacement costs for significant components of the motor vessel were
      obtained, and depreciated to current market value based on a review by an
      independent specialist marine surveyor.
        On January 15, 2009 the Needles Property held by Colorado River
          Resorts was foreclosed.  As a result of the foreclosure the land was returned
          to the promissory note holder in exchange for full and final settlement of
          the debt obligation.  The Company has derecognized the land in 2009 resulting
          in a decrease to property plant and equipment of $7,602,529 (2008: 1,619,163)
          (see note 20(b)).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | As of September 30, 2009, the Company had finite-lived intangible
      assets which totaled $ Nil (2008 – $1,918,062), net of accumulated
      amortization of $1,369,476 (2008 - $684,738) and impairment of $1,233,324
      (2008 - $nil). At September 30, 2008, the Company had one finite-lived
      intangible asset which consisted of vacation club memberships acquired from
      Family Vacation Centers on October 18, 2007 as discussed further in Note 20
      to these consolidated financial statements.
        During the year, the Company began to develop and create its own computerized
          membership database based on new technology, to replace the aging legacy
          membership database system the Company is currently employing. The database
          is expected to be completed & implemented in 2010.  The cost of
          developing the database during 2009 was $72,168 (2008: $nil).  The total
          unspent cost of developing the replacement database is approximately $30,000. 
          As the computerized membership database is not completed at balance date, no
          amortization has been recognized.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-28

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|8. | Intangible Assets
      (continued)
|-- | -----------------------------------

| | Intangible assets                                |   | September 30, |   |   | September 30, |  
| | ------------------------------------------------ | - | ------------- | - | - | ------------- | -
| |                                                  |   | 2009          |   |   | 2008          |  
| |                                                  |   |               |   |   |               |  
| | Purchased access rights to wholesale price condo | $ | –             |   | $ | 32,425        |  
| | Accumulated amortization                         |   | –             |   |   | (5,373        | )
| | Impairment write-down                            |   | –             |   |   | (27,052)      |  
| | Vacation club membership (note 20(a))            |   | 2,602,800     |   |   | 2,602,800     |  
| | Accumulated amortization                         |   | (1,369,476    | ) |   | (684,738      | )
| | Impairment write-down (i)                        |   | (1,233,324    | ) |   | –             |  
| |                                                  |   | –             |   |   | 1,918,062     |  
| |                                                  |   |               |   |   |               |  
| | Development of computerized membership database  | $ | 72,168        |   | $ | –             |  
| | Total intangible assets                          | $ | 72,168        |   | $ | 1,918,062     |  

| | (i) | During 2009 the Company identified that certain family vacation club
      members acquired were no longer maintaining active membership and were impaired
      and accordingly recognized an impairment of $1,233,324.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| |                             |   | September 30, |   |   | September 30, |  
| | --------------------------- | - | ------------- | - | - | ------------- | -
| |                             |   | 2009          |   |   | 2008          |  
| | Deferred membership sales   | $ | 2,404,163     |   | $ | 3,492,166     |  
| | Additional deferred revenue |   | 517,769       |   |   | –             |  
| | Current portion             |   | (1,439,840    | ) |   | (1,088,003    | )
| |                             | $ | 1,482,092     |   | $ | 2,404,163     |  

| | The deferred membership sales
      and dues relates to the portion of revenue, which entitles members to use the
      Company’s vacation and travel club privileges at a future date. Management’s
      best estimate for life time memberships is that they are active for 5 years
      (2008 – 5 years, 2007 – 5 years).  Management’s best estimate is based on
      historical data for all travel memberships. The revenue is recognized as
      indicated in note 2(b).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | During 2009, the Company
      entered into travel club membership agreements with a total value of $Nil
      (2008 - $2,400,019; 2007 - $739,788).  As described in note 2(b), the revenue
      from these memberships are recognized in the year of purchase evenly over the
      term of the membership.
        Commission costs are expensed
          as incurred.                                                                                                        

F-29

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

| | The Company has entered an agreement whereby it factors the
      promissory note receivables to a third party.  Under the terms of the
      factorization agreement, the risk of default by the note receivable holder
      remains with the Company, and the Company is obligated to repurchase any note
      receivables that do not perform to the satisfaction of the third party. 
      Therefore the transaction does not qualify the Company to derecognize the
      notes receivable.
        The factorization transaction is collateralized against the notes
          receivable. The effective interest rate of the secured borrowing is 15% (2008
          – 15%).
      As at September 30, 2009 the Company had an outstanding liability to
        the third party as set out below:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                               |   | September 30, |   |   | September 30, | 
| | --------------------------------------------- | - | ------------- | - | - | ------------- | 
| |                                               |   | 2009          |   |   | 2008          | 
| |                                               |   |               |   |   |               | 
| | Balance, beginning of period                  | $ | 137,321       |   | $ | -             | 
| | Sales of note receivables during the year     |   | 80,637        |   |   | 111,833       | 
| | Amortization of discount                      |   | 63,757        |   |   | 25,488        | 
| | Collection of note receivable during the year |   | (18,021       | ) |   | -             | 
| |                                               |   |               |   |   |               | 
| | Balance, end of period                        | $ | 263,694       |   | $ | 137,321       | 

|11. | Debentures
|--- | ----------

| | Between April 19 and December
      15, 2000, the Company issued unsecured convertible debentures in the
      aggregate amount of approximately $98,000 to friends and family of former
      officers and directors of the Company. The debentures matured between April
      19 and December 15, 2002, are no longer convertible, no longer continue to
      bear interest and $34,310 remained unpaid since that date. The Company has
      been unable to contact the debenture holders. The holder of a debenture had
      the right at any time after the issuance until maturity to voluntarily
      convert to common shares of the issuer at a rate of US $6.00 to US $12.50 per
      common share per share. The debentures are fully matured as of 2002. As of
      September 30, 2009 and 2008, accrued interest on the debentures amounted to
      approximately $6,176.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-30

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|12. | Long-Term Debt
|--- | --------------

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

| |                                       |   | September 30, |   |   | September 30, |  
| | ------------------------------------- | - | ------------- | - | - | ------------- | -
| |                                       |   | 2009          |   |   | 2008          |  
| | Loan in US funds for vessel           |   |               |   |   |               |  
| | at 7% per annum for a 5 year term     | $ | 5,312,048     |   | $ | 4,504,575     |  
| | Lease financing against motor vehicle |   | 56,351        |   |   | 70,896        |  
| | Less: current portion                 |   | (145,625      | ) |   | (363,756      | )
| | Long-term portion                     | $ | 5,222,774     |   | $ | 4,211,715     |  

| | The Company has secured a long-term loan to complete the refit
      project of the vessel.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | The construction loan was secured by the motor vessel and by a
      personal guarantee from two of the directors of the Company up to the value
      of the construction loan. Interest on the construction loan is capitalized in
      the Property and Equipment balance. The interest rate on the construction
      loan was LIBOR plus 3.25%.                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | In February 2009, the Company converted its construction loan with
      Caterpillar Financial Services to a loan facility of $5 million US dollar
      with a 5 year term and a fixed 7% per annum. The loan is secured by the motor
      vessel and by a personal guarantee from two of the directors of the Company
      up to the value of the permanent loan. Interest of $120,819  was capitalized
      on the construction during the year (2008 – $307,917;
       2007 – $361,376).  Capitalization of interest ceased in February
      2009.                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | The Company lease financed a motor vehicle during the year September
      30, 2008. The loan is in the form of a capital lease repayable in equal
      installments over 36 months and is secured by a guarantee over the motor
      vehicle. The minimum lease payment for the lease is $1,838 per month,
      interest rate at 8.5% per annum and the guaranteed residual value is $32,000. 
      The imputed interest rate for the capital lease is 9.2% per annum, and has a
      maturity date of June 5, 2011.   The carrying value of the motor vehicle is
      $39,583 (2008 – $64,583).
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Interest expense of $346,300 is included in General and
      administration during the year (2008 – $33,043;
       2007 – $34,268).                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | The expected repayments of long term debt for the five
      following twelve month periods ended September 30, 2009 are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                      |                |               |            
| | -------------------- | -------------- | ------------- | -----------
| |                      | Permanent loan | Vehicle lease | Total      
| | 2010                 | $ 129,210      | $ 16,415      | $ 145,625  
| | 2011                 | 137,107        | 39,936        | 177,043    
| | 2012                 | 145,487        | –             | 145,487    
| | 2013                 | 139,784        | –             | 139,784    
| | 2014                 | 4,760,460      | –             | 4,760,460  
| | Thereafter           | –              | –             | –          
| |                      |                |               |            
| | Total long term debt | $ 5,312,048    | $ 56,351      | $ 5,368,399

F-31

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

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

| |  | Unlimited - Common shares
      without par value                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | Unlimited - Series “A” -
      Preference non-dilutive convertible shares without par value (convertible to
      100% of outstanding common shares at the time of conversion).  Series “A”
      preference share holders are not entitled to notice of or to attend any
      meetings of the common shareholders of the Company.  Each Series A preference
      shareholder is entitled to one vote for each series “A” preference share held
      for any matters submitted to holders of preference shareholders for
      consideration.  Series “A” preference shares are convertible to 50% of the
      outstanding share common share capital after the date of conversion.  The
      Company considers the series “A” shares to be contingently issuable shares,
      as the approval from100% of the series “A” shareholders must approve of the
      transaction before the shares can be issued has not been made.
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | Unlimited - Series “B” -
      Preference convertible shares without par value (convertible to one common
      share for each preferred share held).  Series “B” preference shareholders are
      not entitled to notice or to attend any meetings of common shareholders of
      the Company. Each Series “B” preference shareholder is entitled to one vote
      for each series A preference share held for any matters submitted to holders
      of preference shareholders for consideration.  Series “B” preference
      shareholders are entitled to convert the shares  into 13,933,983 shares at
      the holders discretion.                                                                                                                                                                                                                                                                                        

| | (b) | The issued capital stock of the
      Company is as follows: 13,933,983 Series “A” preferred shares convertible for
      no consideration and 13,933,983 Series “B” preferred shares convertible for
      no consideration (2008, 2007 – 13,933,983) and common shares as follows:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                     |  | Number of  |  |   |            |   |            
| | --------------------------------------------------- |  | ---------- |  | - | ---------- | - | -----------
| |                                                     |  | Common     |  |   | Share      |   | Contributed
| |                                                     |  | Shares     |  |   | Capital    |   | Surplus    
| |                                                     |  |            |  |   |            |   |            
| | Balance, September 30, 2007                         |  | 28,360,867 |  | $ | 24,194,793 | $ | 2,944,536  
| | Stock options exercised                             |  | 30,000     |  |   | 61,159     |   | (31,159)   
| |                                                     |  |            |  |   |            |   |            
| | Balance, September 30, 2008                         |  | 28,390,867 |  | $ | 24,255,952 | $ | 2,913,377  
| | Stock options exercised                             |  | 150,000    |  |   | 351,238    |   | (155,796)  
| | Shares issued for business acquisition (note 20(a)) |  | 267,373    |  |   | 1,203,179  |   | –          
| |                                                     |  |            |  |   |            |   |            
| | Balance, September 30, 2009                         |  | 28,808,240 |  | $ | 25,810,369 | $ | 2,757,581  

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

F-32

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

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

| |                                       |  | Year ended    |  |  | Year ended    |  |  | Nine months     | 
| | ------------------------------------- |  | ------------- |  |  | ------------- |  |  | --------------- | 
| |                                       |  | September 30, |  |  | September 30, |  |  | ended September | 
| |                                       |  | 2009          |  |  | 2008          |  |  | 30, 2007        | 
| | Weighted  average common shares       |  | 28,808,240    |  |  | 28,449,898    |  |  | 19,794,768      | 
| | Series  B preferred shares conversion |  | 13,933,983    |  |  | 13,933,983    |  |  | –               | 
| | Basic  and diluted common stock       |  | 42,742,223    |  |  | 42,383,881    |  |  | 19,794,768      | 

| | For the years ended September
      30, 2009, September 30, 2008 and the nine month period ended September 30,
      2007, outstanding stock options and preferred shares were not included in the
      calculation of diluted earnings (loss) per share as their effect would be
      antidilutive.                                                              
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                     
| | Diluted weighted average common
      stock includes common stock issuable if Series A and Series B preferred
      shares are converted and 2,655,000 (2008: 2,805,000) stock options outstanding
      that are in the money are exercised assuming that any proceeds would be used
      to purchase common stocks at the average market price during the period.

| | (c) | Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | On July 5, 2007, the Company’s board of directors adopted a stock
      option plan, subsequently approved by shareholders and adopted by the
      Company, under which the Company is authorized to grant options to directors,
      employees and consultants to acquire up to 10% of the issued and outstanding
      common stock. The exercise price of each option shall not be less than 80% of
      the market price of the Company’s stock on the date of grant. The options can
      be granted for a maximum term of five years and vest as determined by the
      board of directors. The Company’s shares are traded in United States dollars,
      and options granted to date have been denominated in Unites States funds or
      the Canadian equivalent thereof.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | The Company did not expand the
      stock option plan during the year under review after reserving 2,850,000
      shares in the common stock of the Company for the nine month period ended
      September 30, 2007. The options vested immediately, exercisable at $1 per share
      and will expire in July 2012. No options were granted during the year ended
      September 30, 2009 and 2008.                                                                                                                                                                                                                                                                                                                                                                                 

| | (d) | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                            
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                     
| |     | There was $Nil Stock-based
      compensation cost included in wages for the year ended September 30, 2009
      (2008 - $Nil, nine-month period ended September 30, 2007 - $2,944,536). In
      the nine month period ended September 30, 2007, is stock-based compensation was
      recognized for options granted to directors, employees and consultants of the
      Company.

F-33

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

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

| |  | The table below summarizes the
      outstanding and exercisable stock options as at September, 30 2009 and 2008:
| |  | -----------------------------------------------------------------------------------------------------------------

| |                                                    |  | Number     |   |   | Exercise     | 
| | -------------------------------------------------- |  | ---------- | - | - | ------------ | 
| |                                                    |  | of Options |   |   | Price (US $) | 
| |                                                    |  |            |   |   |              | 
| | Balance, October 1, 2007                           |  | 2,835,000  |   | $ | 1.00         | 
| | Exercised during the year ended September 30, 2008 |  | (30,000    | ) | $ | 1.00         | 
| |                                                    |  |            |   |   |              | 
| | Balance, September 30, 2008                        |  | 2,805,000  |   | $ | 1.00         | 
| | Exercised during the year ended September 30, 2009 |  | (150,000   | ) | $ | 1.00         | 
| |                                                    |  |            |   |   |              | 
| | Balance, September 30, 2009                        |  | 2,655,000  |   | $ | 1.00         | 

| | The table below summarizes the attributes of the outstanding stock
      options as at September 30, 2009:
| | ----------------------------------------------------------------------------------------------------------

| |                     |  |            |                     | 
| | ------------------- |  | ---------- | ------------------- | 
| | Options Outstanding |  |            | Options Exercisable | 
| | Exercise            |  | Number     |                     | 
| | Price (US $)        |  | of Options |                     | 
| |                     |  |            |                     | 
| | $1.00               |  | 2,655,000  |                     | 

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

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

The weighted average grant date fair value was $1.04.

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

| | Balance, October 1, 2008    | $ | 2,944,536 |  
| | --------------------------- | - | --------- | -
| | Stock-options exercised     |   | (31,159)  |  
| | Balance, September 30, 2008 |   | 2,913,377 |  
| | Stock-options exercised     |   | (155,796  | )
| | Balance, September 30, 2009 | $ | 2,757,581 |  

F-34

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(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:
| | --------------------------------------------------------------------------------------------------------------------------------------

| |                                                      |   |               |   |   |               |   |   | Nine month    |  
| | ---------------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------- | -
| |                                                      |   | Year ended    |   |   | Year ended    |   |   | period ended  |  
| |                                                      |   | September 30, |   |   | September 30, |   |   | September 30, |  
| |                                                      |   | 2009          |   |   | 2008          |   |   | 2007          |  
| |                                                      |   |               |   |   | (Restated)    |   |   | (Restated)    |  
| | Statutory income tax rate                            |   | 30.1%         |   |   | 31.5%         |   |   | 33.9%         |  
| |                                                      |   |               |   |   |               |   |   |               |  
| | Statutory rate applied to income (loss) from         |   |               |   |   |               |   |   |               |  
| | operations before income taxes                       | $ | (1,086,500    | ) | $ | 512,775       |   | $ | (847,813      | )
| | Permanent differences                                |   | 2,800         |   |   | (1,484,509    | ) |   | 1,007,468     |  
| | Difference in tax rates between foreign jurisdiction |   | 61,000        |   |   | –             |   |   | –             |  
| | Non-capital losses not previously recognized         |   | –             |   |   | 859,047       |   |   | –             |  
| | Investment in life settlement contracts              |   | 327,800       |   |   | –             |   |   | –             |  
| | Effect of reduction in statutory tax rate            |   | 199,900       |   |   | –             |   |   | –             |  
| | Expense due to differences in tax jurisdictions      |   | 1,086,100     |   |   | –             |   |   | –             |  
| | Others                                               |   | 105,370       |   |   | (96,845       | ) |   | (112,163      | )
| | Increase (decrease) in valuation allowance           |   | 1,019,500     |   |   | 218,933       |   |   | (47,492       | )
| |                                                      |   |               |   |   |               |   |   |               |  
| | Income tax expense                                   | $ | 1,715,970     |   | $ | 9,401         |   | $ | –             |  
| | Comprising:                                          |   |               |   |   |               |   |   |               |  
| |                                                      |   |               |   |   |               |   |   |               |  
| | Income taxes (recovery) expense – current            | $ | 3,970         |   | $ | 9,401         |   | $ | –             |  
| | Income taxes – future                                | $ | 1,712,000     |   | $ | –             |   | $ | –             |  

F-35

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

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

| |                                                       |   | September 30, |   |   | September 30, |  
| | ----------------------------------------------------- | - | ------------- | - | - | ------------- | -
| |                                                       |   | 2009          |   |   | 2008          |  
| |                                                       |   |               |   |   |               |  
| | Future income tax assets (liabilities):               |   |               |   |   |               |  
| | Non-capital loss carry forwards                       | $ | 2,243,000     |   | $ | 1,857,000     |  
| | Cumulative eligible capital                           |   | 400,000       |   |   | 430,000       |  
| | Capital loss carry forwards                           |   | 154,000       |   |   | 154,000       |  
| | Excess (deficiency) of tax cost
      over book value |   |               |   |   |               |  
| | of property and equipment                             |   | 107,000       |   |   | 383,000       |  
| | Excess (deficiency) of tax cost
      over book value |   |               |   |   |               |  
| | of intangible assets                                  |   | 1,051,000     |   |   | 601,000       |  
| | Marketable securities                                 |   | (91,000       | ) |   | –             |  
| | Investment in Life settlement
      contracts         |   | (1,712,000    | ) |   | –             |  
| |                                                       |   | 1,906,000     |   |   | 2,995,000     |  
| | Valuation allowance                                   |   | (3,464,000    | ) |   | (2,995,000    | )
| |                                                       |   |               |   |   |               |  
| | Future income taxes, net                              | $ | (1,712,000    | ) | $ | –             |  

| | 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 Canadian non-capital income tax loss carry forwards of  approximately $8,970,000 available to reduce future years’ taxable income  expiring between 2009 and 2028. The tax benefits and the associated valuation  allowance was decreased by $550,500, representing the tax effect of losses and  other assets which were impacted by the foreclosure of the Needles Property  held by Colorado River Resorts LLC (Note 7).                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | The Company has a capital loss
      carry-forward of approximately $614,000 (2008: $614,000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | The  accounting estimates related to the liability for uncertain tax positions  require the Company to make judgments regarding the sustainability of each  uncertain tax position based on its technical merits. If the Company determines  it is more likely than not a tax position will be sustained based on its  technical merits, the Company records the impact of the position in its consolidated  financial statements at the largest amount that is greater than 50% likely of  being realized upon ultimate settlement. These estimates are updated at each  reporting date based on the facts, circumstance and information available.  Changes in estimates are recognized in current and future periods as  appropriate.

F-36

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

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

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

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

|    | Management determines the Company’s
      capital structure and makes adjustments to it based on funds available to the
      Company, in order to support the Company’s business and investments.  Management
      has not established quantitative return on capital criteria for capital
      management.
        The Company will be dependent in the
          future upon external financing to fund future acquisitions and its
          administrative costs.  The Company will spend existing working capital and
          raise additional amounts as needed.
      Management reviews its capital management
        approach on an ongoing basis and believes that its approach, given the relative size of the Company, is reasonable.
      The Company’s objective when managing capital is to
        safeguard the Company’s ability to continue as a going concern, so that it
        can continue to provide returns for shareholders and benefits for other
        stakeholders.
      The Company considers the items included
        in shareholders’ equity as capital.  The Company manages the capital
        structure and makes adjustments to it in the light of changes in economic
        conditions and the risk characteristics of the underlying assets.  In order
        to maintain or adjust the capital structure, the Company may issue new shares
        through private placements, sell assets to reduce debt or return capital to
        shareholders.  The Company is not subject to externally imposed capital
        requirements. There have been no changes made to the capital management
        policy during the year.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|16. | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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

| | (a) | The Company has commitments in
      respect of operating leases with total aggregate payments due of
      approximately $101,595 (2008 - $170,780). Payments due in each of the next
      five years are as follows:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2010  | $ | 67,277  | 
| | ----- | - | ------- | 
| | 2011  |   | 22,007  | 
| | 2012  |   | 7,508   | 
| | 2013  |   | 4,803   | 
| | 2014  |   | –       | 
| |       |   |         | 
| | Total | $ | 101,595 | 

F-37

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|16. | Commitments (continued)
|--- | -----------------------

| | (b) | The Company has commitments in
      respect of office leases with total aggregate payments due of approximately $141,120
      (2008 - $44,240). Payments due in each of the next two years are as follows:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2010  | $ | 87,120  | 
| | ----- | - | ------- | 
| | 2011  |   | 54,000  | 
| |       |   |         | 
| | Total | $ | 141,120 | 

|17. | Contingent liability
|--- | --------------------

| | The Company has been named as a
      defendant with respect to injuries sustained at a travel seminar organized by
      a person licensed to sell travel memberships on behalf of the Company. The
      Company in conjunction with its insurance company has defended the claim, on
      the basis that it neither conducted its business from the premises at issue
      nor organized the seminar at issue. The Company considers the above suit
      frivolous, a nuisance, and without merit. Accordingly, it is not possible at
      this time to assess the likelihood of recovery or to estimate the possible
      quantum of damages. The Company has liability insurance to mitigate any
      financial loss to the Company.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|18. | Related Party Transactions
|--- | --------------------------

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

| | (a) | The Company reimbursed $138,717
      (2008 - $112,565 and nine month period ended September 30, 2007 $113,297) to
      directors for expenditures made on behalf of the Company.                                                                                                     
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                        
| | (b) | At September 30, 2009,
      directors and officers advanced $486,379 (2008 - $1,089,031) to the Company
      in the form of loans and short-term financing. The amounts advanced from
      directors and officers are unsecured, non-interest bearing and repayable on
      demand.
| |     |                                                                                                                                                                                                                                                                                        
| | (c) | During fiscal 2008 and 2007, a
      SUV 7 passenger limousine owned by a director and officer of the Company was
      sold to the Company for $115,000. The Company subsequently lease- financed
      the vehicle.                                                                  
| |     |                                                                                                                                                                                                                                                                                        

| | (d)                                                                                                                                                                                      | Loans  from related parties totaling $602,652 (2008 - $Nil) were repaid during the  year.                                                                                                                                                                                                                                                                                                                                             
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (e)                                                                                                                                                                                      | The  Company advanced $225,000 to an Officer/ Director for the purchase of a 43’ motor  vessel.  However, as at September 30,  2009 the motor vessel ownership had not been transferred to the Company, and  accordingly the amount has been recognized as a related party advance in the  financial statements.  The related party advance  was fair valued at an interest rate of 9.9% at $205,000, with a $20,000 charge  to Wages.
| |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | All
      of the above transactions and balances are measured at the exchange amount,
      which is the amount of consideration established and agreed to by the related
      parties.

F-38

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|19. | Amounts and Notes Receivable
|--- | ----------------------------

| | The Company receives promissory note receivables from the
      sale of travel memberships to third parties.  The promissory notes have an
      average rate of interest of 9.9%pa (2008: 9.9%) and an average maturity of 37
      months (2008: 49 months).  The promissory notes are unsecured.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                       | 2009     | 2008    
| | ------------------------------------- | -------- | --------
| | Current                               | $182,590 | $345,579
| | Non-Current                           | $205,136 | $404,033
| |                                       | $387,726 | $749,612
| |                                       | 2009     | 2008    
| | Past due Amounts and Notes Receivable | $61,194  | $30,762 

| | As of September 30,
      2009 the allowance for doubtful amounts and note receivables totalled $210,923
      (2008 - $ 150,557).  At September 30, 2009 promissory note receivables of $236,637
      (2008: $137,321) have been provided as security for the secured borrowing (see
      note 10).
        During the year
          ended September 30, 2009 the Company entered into an agreement to purchase note
          receivables from a third party with a face value of $146,700 for cash
          consideration of $89,081.  In accordance with HB 3855 these notes were
          initially recognized at a fair value of $141,516 with an initial gain
          recognized in interest income of $44,144.  The notes receivable acquired are
          subsequently measured as loans and receivables at amortized cost.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|20. | Acquisitions
|--- | ------------

|(a) | Family Vacation Centers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | Effective October 18, 2007, the
      Company completed a business acquisition of Family Vacation Centers (“The
      Vendor”), consisting of the notes receivable and vacation club memberships for
      an amount of $3,052,866. The Company did not purchase the outstanding capital
      stock of the Vendor and no debt or obligations of the Vendor were assumed.
        Consideration given was cash
          payment in the amount of $1,849,589 and an amount $1,203,277 payable in the
          form of a fixed number of shares (267,373 shares) was to be issued in capital
          stock of the Company and had been accrued in accounts payable as at September
          30, 2008. The Company settled the obligation in full by issuing 267,373 shares
          of the Company, by September 30, 2009.
      Given the present
        economic condition, the Company has ceased actively selling new travel club
        memberships from this location in 2008. The Company continues to operate the
        vacation club and derive cash flow from the notes receivable.

F-39

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|20. | Acquisition (continued)
|--- | -----------------------

| | The assets of Family Vacation
      Centers at the time of acquisition were:
| | ----------------------------------------------------------------------------

| |                           |   |           | 
| | ------------------------- | - | --------- | 
| | Purchase price            | $ | 3,052,866 | 
| |                           |   |           | 
| | Purchase price allocation |   |           | 
| | Notes receivable          |   | 450,066   | 
| | Vacation club membership  |   | 2,602,800 | 
| |                           |   |           | 
| | Total                     | $ | 3,052,866 | 

| | Purchased memberships were
      considered an intangible asset, and are amortized over the remaining term of
      the membership up to a maximum of 5 years. During the year ended September 30,
      2009 the Company recognized an impairment of $422,074 (2008 - $Nil) and amortization
      of $512,455 (2008 - 684,738) in its statements of operations related to the
      acquired intangible assets.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Investment in Colorado River
      Resorts LLC
|--- | ----------------------------------------------

| | During the year ended September
      30, 2008, the Company acquired a 54% interest in the Colorado River Resorts,
      LLC, (the “LLC”) a real estate development project in Needles, California, in
      January 2008 for cash consideration of US $1.0 million. The project was for the
      acquisition of the property, the preparation, design and engineering studies
      for the subdivision and sale of paper lots.                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | At the date of the acquisition, the net financial position of the LLC
      was a deficit; net liabilities were comprised substantially of cash and a
      deposit on the proposed property acquisition offset by a loan payable.  As
      the LLC was in a net deficit position, the purchase price adjustment of $77,059
      representing cumulative general and administrative expenses of the LLC was
      written off. As the LLC failed to secure the additional investment financing
      required to complete the project, the Company’s ownership interest in the LLC
      was 54%, resulting in the requirement to consolidate the LLC by including the
      land $9,221,692 and promissory note payable secured by the land $7,602,530.

| | Subsequent to the investment by the Company and others, the LLC
      entered into a sale and purchase agreement to acquire land for future
      development.  The acquisition was financed through cash of $2,108,032
      (US$1,988,897), and a five year vendor take-back promissory note payable of
      $7,331,196 (US $6,916,875).                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | The promissory note payable was an interest only note, payable
      quarterly and was secured solely by a first priority charge on the property. 
      The note interest rate was 5% annually for years 1 to 4, and 7.5% in year 5,
      with no prepayment penalty for early repayment. During the year ended
      September 30, 2009, the Company received a ‘Notice of Default’ from the note
      holder, wherefore the note holder proceeded with foreclosure on the property
      in settlement of the note payable, which was approximately $7.3 million USD
      at the time of foreclosure.

F-40

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|20. | Acquisitions (continued)
|--- | ------------------------

|(b) | Investment in Colorado River
      Resorts LLC (continued)
|--- | ----------------------------------------------------------

| | The deterioration of the real estate market in the southern United
      States by the end of fiscal 2008 triggered an impairment analysis of the
      investment in the property.  The asset group included the property and the
      related mortgage for which the property was the only source of cash flow to
      pay the liability.  The fair value of the property, based on an independent
      appraisal, had deteriorated below the value of the outstanding mortgage and
      therefore the fair value of the asset group was determined to be zero,  
      Accordingly a write down of the property of $1,619,163 was recognized in
      2008. The deterioration of the real estate market in the southern United
      States continued into 2009 resulted in the LLC not able to secure additional
      investment financing as required to complete the transaction. During the year
      ended September 30, 2009, the lender foreclosed on the Needles property
      resulting in property being fully impaired. An impairment charge of the
      remaining balance of $7,602,529 was recognized in the year ended September
      30, 2009 in the statements of operations.  The impairment loss was offset by
      the derecognition of the promissory note payable to the same value upon the
      foreclosure of the property.
       
      Included in Loans from Related Parties at September 30, 2009, is $484,169
      (2008 – $491,031) for funds advanced by a director of the Company, directly
      to Colorado River Resorts, LLC.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21. | Supplemental Cash Flow
      Information
|--- | ----------------------------------------

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

| |                                                   |   |               |  |   |               |  |   | Nine month    | 
| | ------------------------------------------------- | - | ------------- |  | - | ------------- |  | - | ------------- | 
| |                                                   |   | Year ended    |  |   | Year ended    |  |   | period ended  | 
| |                                                   |   | September 30, |  |   | September 30, |  |   | September 30, | 
| |                                                   |   | 2009          |  |   | 2008          |  |   | 2007          | 
| |                                                   |   |               |  |   |               |  |   |               | 
| | Interest paid                                     | $ | 303,875       |  | $ | 34,268        |  | $ | 9,496         | 
| |                                                   |   |               |  |   |               |  |   |               | 
| | Taxes paid                                        | $ | 3,675         |  | $ | –             |  | $ | 6,468         | 
| |                                                   |   |               |  |   |               |  |   |               | 
| | Derecognition of financial liability (note 20(b)) | $ | 7,602,530     |  | $ | 1,619,163     |  | $ | –             | 

| | During the year, the Company
      has derecognized the land in 2009 resulting in a decrease to property plant
      and equipment of $7,602,530 (2008 – $1,619,163) (see note 20(b)).                         
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                
| | During the year, the Company
      issued 267,373 common shares for a value of $1,203,179 in settlement of the
      full obligation accrued in the acquisition of the assets of Family Vacation
      Centers.

F-41

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|22. | Subsequent Events
|--- | -----------------

| | (a) | Subsequent to the year end, the
      Company paid $166,592 in connections with servicing premium expenses in
      connection with its life settlement contracts.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|23. | United States Generally
      Accepted Accounting Principles Reconciliation
|--- | ---------------------------------------------------------------------------

| | These financial statements have
      been prepared in accordance with Canadian GAAP, which differ in certain
      respects from those principles and practices that the Company would have
      followed had its consolidated financial statements been prepared in accordance
      with US GAAP as summarized below:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| |  | (i) | Under US GAAP, the issue of
      stock options and warrants to non-employees is accounted for under FASB
      Statement No. 123R (“SFAS 123R”), “Share-based Payment”, and related
      interpretations. The Company recognizes compensation expense for stock
      options issued to non-employees for services received based upon the fair
      value of the services received or the equity instruments issued, whichever is
      more reliably determined. Prior to the adoption of SFAS 123R, the Company had
      accounted for stock options issued to non- employees at fair value under FSAB
      Statement No 123 (“SFAS 123), “Accounting for Stock-based Compensation”therefore,
      the adoption of SFAS 123R had no effect on the Company’s accounting policy.
      During the year ended December 31, 2002, the Company adopted the new
      recommendations of the CICA Handbook section related to stock-based
      compensation payments (note 2(d)). Under this policy, stock options issued to
      non- employees after December 31, 2001 are accounted for consistently with US
      GAAP. Under Canadian GAAP, stock options issued to non-employees prior to
      December 31, 2001 were not valued and no stock–based compensation expense was
      recorded. Therefore, for the year ended December 31, 2002, the measurement
      difference for non-employee stock options relate to options granted prior to
      January 01, 2002.
| |  | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |     | The fair value of the stock
      options and warrants granted to non-employees during the years ended December
      31, 2001 and 2000 were estimated on the date of grant using the Black-
      Scholes option pricing model and the following weighted average assumptions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

| | Accounting for
      the non-employee options on this basis would result in recording additional
      compensation expense and capital stock of $684,664 from the year of adoption of
      FAS No. 123R to September 30, 2009.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-42

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|23. | United States Generally
      Accepted Accounting Principles Reconciliation (continued)
|--- | ---------------------------------------------------------------------------------------

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

| |  | (i)   | During the year ended December
      31, 2000, the Company acquired Fitness Vacations for 992,000 common shares of
      the Company. Under Canadian GAAP, the acquisition was valued based on the
      estimated fair value of the assets acquired. For US GAAP purposes, the
      acquisition would be valued based on the market value of the shares given.
      Accordingly, as at September 30, 2009 and 2008, the application of US GAAP
      would result in an increase in capital stock of $1,217,705.                                                                                                                                                                                   
| |  | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  |       | During the year ended December
      31, 2001, goodwill relating to the acquisition of Fitness Vacations was
      written down, and as such, the additional goodwill recorded on the
      acquisition under US GAAP was written off. Accordingly, for the year ended at
      September 30, 2009 and 2008, and the nine month period ended September 30,
      2007, the application of US GAAP would result in a corresponding increase in
      deficit of $1,217,705.                                                                                                                                                                                                                            
| |  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | (ii)  | During the years ended December
      31, 2001 and 2000, the Company settled a number of accounts payable by the
      issuance of stock options and common shares. For Canadian GAAP purposes, the
      transactions were recorded at the carrying value of services received. For US
      GAAP purposes, the transactions would be valued based on the market value of
      the options or shares issued. Accordingly, as at September 30, 2009 and 2008,
      the application of US GAAP would result in an increase in capital stock and
      an increase in deficit of $695,681 for the year ended at September 30, 2009
      and 2008, and the nine month period ended September 30, 2007.
| |  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | (iii) | During the year ended September
      30, 2009 and 2008, and the nine-month period ended September 30, 2007, the
      Company did not issue shares under its incentive share purchase plan (note
      2(d)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| | (c) | Uncertain tax position
| | --- | ----------------------

| |  | In July 2006,
      the FASB issued Interpretation No. 48 (“FIN 48”), “Accounting for
        Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109”,
      which clarifies the accounting for uncertainty in income taxes recognized in
      accordance with FASB Statement No. 109 (“SFAS 109”), “Accounting for Income
        Taxes.” FIN 48 clarifies the application of SFAS 109 by defining criteria
      that an individual tax position must meet for any part of benefit of that
      position to be recognized in the financial statements. .The evaluation of a tax
      position in accordance with this interpretation is a two-step process. In the
      first step, recognition, the Company determines whether it is
      more-likely-than-not that a tax position will be sustained upon examination,
      including resolution of any related appeals or litigation processes, based on
      the technical merits of the position. The second step addresses measurement of
      a tax position that meets the more-likely-than-not criteria. The tax position
      is measured at the largest amount of benefit that is greater than 50 percent
      likely of being realized upon ultimate settlement. Differences between tax
      positions taken in a tax return and amounts recognized in the financial
      statements will generally result in a) an increase in a liability for income taxes
      payable or a reduction of an income tax refund receivable, b) a reduction in a
      deferred tax asset or an increase in a deferred tax liability or c) both a and
      b. Tax positions that previously failed to meet the more-likely-than-not
      recognition threshold should be
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-43

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|23. | United States Generally
      Accepted Accounting Principles Reconciliation (continued)
|--- | ---------------------------------------------------------------------------------------

| | (c) | Uncertain tax position
      (continued)
| | --- | ----------------------------------------

| |  | recognized in the first subsequent  financial reporting period in which that threshold is met. Previously  recognized tax positions that no longer meet the more-likely-than-not  recognition threshold should be de-recognized in the first subsequent financial  reporting period in which that threshold is no longer met. Use of a valuation  allowance as described in FAS No. 109 is not an appropriate substitute for the  de-recognition of a tax position. The requirement to assess the need for a  valuation allowance for deferred tax assets based on sufficiency of future  taxable income is unchanged by this interpretation. This Interpretation is  effective for fiscal years beginning after December 15, 2006. The Company  determined that as at September 30, 2009 and 2008 and 2007, its tax position  will more likely than not be sustained upon examination. However, a tax provision  of $1,712,000 was accrued as at September 30, 2009 based on estimated  probabilities. The validity of any tax position is a matter of tax law, the  body of statutory, regulatory and interpretive guidance on the application of  the law is complex and often ambiguous. Because of this, whether a tax position  will ultimately be sustained may be uncertain.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | Purchased intangibles
| | --- | ---------------------

| |  | During the nine
      month 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
      10 years. For US GAAP purposes, the acquisition of the license would be
      expensed in the year incurred. During the year ended September 30, 2008, the
      Company wrote-off the investment. The application of US GAAP would result in a
      decrease in Total Assets as at September 30, 2009 and 2008 of $Nil, a increase
      in net income for the year ended September 30, 2008 of $30,276 (for the
      nine-month ended September 30, 2007 – increase in net loss of $30,256) and an
      increase in deficit of $nil for the year ended 2008 (2007 - $ 30,276).
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e) | Life settlement contracts
| | --- | -------------------------

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

F-44

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|23. | United States Generally
      Accepted Accounting Principles Reconciliation (continued)
|--- | ---------------------------------------------------------------------------------------

| | (e) | Life settlement contracts
      (continued)
| | --- | -------------------------------------------

| | (i)  | SFAS 157, “Fair Value
      Measurements”. The provisions of this standard are to provide guidance
      for using fair value to measure assets and liabilities. The standard
      clarifies methods for measuring items not actively traded and the principles
      that fair value should be based upon when pricing an asset or liability. SFAS
      157 is effective for financial statements for fiscal years beginning after
      November 15, 2007 and interim periods within those fiscal years. Earlier
      application is encouraged, provided that the reporting entity has not issued
      financial statements for that fiscal year. The adoption of this standard is
      not expected to have a material impact on the Company’s consolidated
      financial statements.                                                                                                                                                                                                                                                                           
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (ii) | In February 2007, the FASB
      issued Statement No. 159 (“SFAS 159”), “The Fair Value Option for
        Financial Assets and Financial Liabilities – an Amendment of FASB Statement
        115”, which permits entities to choose to measure many financial
      instruments and certain items at fair value. The fair value option
      established by SFAS 159 permits all entities to choose to measure eligible
      items at fair value at specified election dates. A business entity shall
      report unrealized gains and losses on items for which the fair value option
      has been elected in earnings at each subsequent reporting date. Adoption is
      required for fiscal years beginning after November 15, 2007. Early adoption
      is permitted as of the beginning of the fiscal year that begins on or before
      November 15, 2007 provided the entity also elects to apply the provisions of
      SFAS 157. The adoption of this standard did not have a material impact on the
      Company’s consolidated financial statements.

| | (f) | Deferred costs, net
| | --- | -------------------

| |  | As  disclosed in note 2(r), the Company adopted CICA HB 3064 and the revised HB  1000as at October 1, 2008 the on a retrospective basis, with restatement, and  as a result has recorded an adjustment of $1,599,590 to deficit previously  reported as at September 30, 2008.  Of  which, $258,556 relates to deferred organization costs associated with setting  up its Life Settlement business and $1,341,034 relates to deferred commission  costs for membership sales. These commission costs were deferred as the related  membership revenue has not met the recognition criteria in accordance with  Company’s accounting policy (note 2 (b)). This change in accounting policy in  accordance with Canadian GAAP does not have corresponding change in standards  under US GAAP. The Company decided to continue to account for deferred  organization costs and deferred commission costs as it had been in prior periods;  Deferred organization costs are expensed as incurred in accordance with ASC 720-15  (previously Statement of Position  (SOP) No. 98-5, “*Reporting on the Costs of Start-Up Activities”*) and membership sales commission costs are deferred and amortize to operations on the same  basis as the related membership sales are recognized as revenue. Thus, the adjustments  to the opening deficit related to deferred commission costs as a result of the  change in accounting policy under Canadian GAAP was reversed and corresponding  amortization expense of deferred sales commissions are recognized in the table  below.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-45

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|23. | United States Generally
      Accepted Accounting Principles Reconciliation (continued)
|--- | ---------------------------------------------------------------------------------------

| | (g) | Recent accounting
      pronouncements
| | --- | --------------------------------------

| | (i) | December 2007, the FASB issued SFAS
      No. 141(R), “Business Combinations”(SFAS 141(R)), which replaces SFAS
      141. SFAF 141(R) requires assets and liabilities acquired in a business
      combination, contingent consideration and certain acquired contingencies to
      be measured at their fair values as of the date of acquisition. SFAS 141(R)
      also requires that acquisition-related costs and restructuring costs be
      recognized separately from the business combination. SFAS 141(R) is effective
      for fiscal years beginning after December 15, 2008 and will be effective for
      business combinations entered into after January 1, 2009.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | In December 2007, the FASB
      issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial
        Statements”, an Amendment of ARB No. 51 (SFAS 160). SFAS 160 clarifies the
      accounting for non-controlling interests and establishes accounting and
      reporting standards for the non-controlling interests in a subsidiary,
      including classification as a component of equity. SFAS 160 is effective for
      fiscal years beginning after December 15, 2008. The Company does not
      currently have any minority interests.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (h) | Reconciliation
| | --- | --------------

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

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

| |                                  |   | September 30, |  |   | September 30, | 
| | -------------------------------- | - | ------------- |  | - | ------------- | 
| |                                  |   | 2009          |  |   | 2008          | 
| | Total Assets under Canadian GAAP | $ | 18,475,423    |  | $ | 29,481,590    | 
| | Deferred costs, net (note 22(f)) |   | 875,250       |  |   | 1,341,034     | 
| | Intangibles, net (note 22(d))    |   | –             |  |   | –             | 
| |                                  |   |               |  |   |               | 
| | Total Assets under US GAAP       | $ | 19,350,673    |  | $ | 30,822,624    | 

F-46

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|23. | United States Generally
      Accepted Accounting Principles Reconciliation (continued)
|--- | ---------------------------------------------------------------------------------------

| | (h) | Reconciliation  (continued)
| | --- | ---------------------------

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

| |                                                                  |   | September 30, |  |   | September 30, | 
| | ---------------------------------------------------------------- | - | ------------- |  | - | ------------- | 
| |                                                                  |   | 2009          |  |   | 2008          | 
| |                                                                  |   |               |  |   |               | 
| | Capital stock, under Canadian GAAP                               | $ | 25,810,369    |  | $ | 24,255,952    | 
| | Contributed surplus                                              |   | 2,757,581     |  |   | 2,913,377     | 
| | Adjustment for stock-based compensation                          |   |               |  |   |               | 
| | for  non-employees (note 23(a))                                  |   | 684,664       |  |   | 684,664       | 
| | Adjustment  for acquisition of Fitness Vacations (note 23(b)(i)) |   | 1,217,705     |  |   | 1,217,705     | 
| | Adjustment for accounts payable settled by share issuances       |   |               |  |   |               | 
| | (notes  23(b)(ii) and (iii))                                     |   | 695,681       |  |   | 695,681       | 
| |                                                                  |   |               |  |   |               | 
| | Capital stock, under US GAAP                                     | $ | 31,166,000    |  | $ | 29,767,379    | 

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

| |                                                  |   |               |   |   |               |   |   | Nine-month    |  
| | ------------------------------------------------ | - | ------------- | - | - | ------------- | - | - | ------------- | -
| |                                                  |   | Year ended    |   |   | Year ended    |   |   | period ended  |  
| |                                                  |   | September 30, |   |   | September 30, |   |   | September 30, |  
| |                                                  |   | 2009          |   |   | 2008          |   |   | 2007          |  
| |                                                  |   |               |   |   |               |   |   |               |  
| | Deficit, under Canadian GAAP                     | $ | (22,070,260   | ) | $ | (16,725,977   | ) | $ | (15,854,337   | )
| | Adjustment for Intangibles, net                  |   | –             |   |   | –             |   |   | (30,276)      |  
| | Adjustment for stock-based                       |   |               |   |   |               |   |   |               |  
| | compensation for non-employees                   |   |               |   |   |               |   |   |               |  
| | for non-employees (note 23(a))                   |   | (684,664      | ) |   | (684,664      | ) |   | (684,664      | )
| | Adjustment for acquisition of Fitness            |   |               |   |   |               |   |   |               |  
| | Vacations (note 23(b)(i))                        |   | (1,217,705    | ) |   | (1,217,705    | ) |   | (1,217,705    | )
| | Adjustment for accounts payable settled          |   |               |   |   |               |   |   |               |  
| | by  share issuances (notes 23(b)(ii) and (iii))  |   | (695,681      | ) |   | (695,681      | ) |   | (695,681      | )
| | Adjustment to opening balance for deferred costs |   |               |   |   |               |   |   |               |  
| | (note 2(r))                                      |   | –             | ) |   | 1,341,034     |   |   | 1,491,275     |  
| | Adjustment for amortization of deferred costs    |   |               |   |   |               |   |   |               |  
| | (notes23(f))                                     |   | (875,250      | ) |   | (547,662      | ) |   | (416,063      | )
| |                                                  |   |               |   |   |               |   |   |               |  
| | Deficit, under US GAAP                           | $ | (25,543,560   | ) | $ | (18,530,655   | ) | $ | (17,407,451   | )

F-47

---



|**FORUM NATIONAL INVESTMENTS LTD.**                                    
|-----------------------------------------------------------------------
|                                                                       
|Notes to Consolidated Financial Statements                             
|Year ended September 30, 2009, and 2008 and the nine month period ended
|September 30, 2007                                                     
|(Expressed in Canadian dollars)                                        
|                                                                       

|23. | United States Generally
      Accepted Accounting Principles Reconciliation (continued)
|--- | ---------------------------------------------------------------------------------------

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

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

| |                                                             |   |               |   |   | Nine-month    |   |   |              |  
| | ----------------------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------ | -
| |                                                             |   | Year ended    |   |   | period ended  |   |   | Year ended   |  
| |                                                             |   | September 30, |   |   | September 30, |   |   | December 31, |  
| |                                                             |   | 2009          |   |   | 2008          |   |   | 2007         |  
| |                                                             |   |               |   |   |               |   |   |              |  
| | Net income (loss) for the period,                           |   |               |   |   |               |   |   |              |  
| | under Canadian GAAP                                         | $ | (5,322,613    | ) | $ | (871,640      | ) | $ | (2,500,922   | )
| | Adjustment for amortization of deferred costs (note  23(f)) |   | (875,250      | ) |   | (547,662      | ) |   | (416,063     | )
| | Adjustment for Intangibles, net                             |   | –             |   |   | (30,276       | ) |   | (30,276      | )
| | Net income (loss) for the period,                           |   |               |   |   |               |   |   |              |  
| | under US GAAP                                               | $ | (6,197,863    | ) | $ | (1,449,578    | ) | $ | (2,947,261   | )
| |                                                             |   |               |   |   |               |   |   |              |  
| | Basic earnings (loss) per share, under US GAAP              | $ | (0.15         | ) | $ | (0.03         | ) | $ | (0.15        | )
| | Diluted earnings per share, under US GAAP                   | $ | (0.15         | ) | $ | (0.03         | ) | $ | (0.15        | )

F-48

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