---

UNITED
  STATESSECURITIES
    AND EXCHANGE COMMISSIONWashington, D.C. 20549

Form 20-F

(Mark One)

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

OR

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

September 30, 2009

OR

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

OR

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

Date of event requiring this
  shell company report

For the transition period from_______________________

Commission file number 000-29862

Forum National Investments Ltd.(Exact name of registrant as specified in this charter)

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

Suite
  200, 550 Denman Street, Vancouver, B.C. Canada V6G 3H1(Address of principal executive offices)

Martin TutschekTel: 778-588-7780 Fax 604-684-6139
    Info@foruminvestments.comSuite 200, 550 Denman Street,
    Vancouver, B.C. Canada V6G 3H1(Name, Telephone, E-mail and or Facsimile
  number and Address of Company Contact Person)

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

|Title of each Class | Name of each exchange on which
|------------------- | ------------------------------
|                    | registered                    
|                    |                               
|None                | Not Applicable                

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

Common
  Shares Without Par Value(Title of Class)

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

None(Title of Class)

Indicate the number  of outstanding shares of each of the issuer’s classes of capital or common  stock as of the close of the period covered by the annual report. **28,808,240**

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

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

Indicate by check mark whether
  the registrant (1) has filed all reports required to be filed by Section 13 or
  15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
  for such shorter period that the registrant was required to file such reports),
  and (2) has been subject to such filing requirements for the past 90 days.
  Yes XNo ___

Indicate by check mark whether
  the registrant has submitted electronically and posted on its corporate Web
  site, if any, every Interactive Data File required to be submitted and posted
  pursuant to Rule 405 of Regulation s-T (232.405 of this chapter) during the
  preceding 12 months (or for such shorter period that the registrant was
  required to submit and post such files). 
  Yes XNo ___

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

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

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

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

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

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

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FORUM
  NATIONAL INVESTMENTS LTD.

TABLE
  OF CONTENTS

|GENERAL                                                       | 1 
|------------------------------------------------------------- | --
|NOTE REGARDING FORWARD-LOOKING STATEMENTS                     | 1 
|PART I                                                        | 2 
|ITEM I. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS | 2 
|ITEM II. OFFER STATISTICS AND EXPECTED TIMETABLE              | 2 
|ITEM III. KEY INFORMATION                                     | 2 
|B) CAPITALIZATION AND INDEBTEDNESS                            | 3 
|C) REASONS FOR THE OFFER AND USE OF PROCEEDS                  | 3 
|D) RISK FACTORS                                               | 4 
|ITEM IV. INFORMATION ON THE COMPANY                           | 8 
|A) HISTORY AND DEVELOPMENT OF THE COMPANY                     | 9 
|B) BUSINESS OVERVIEW                                          | 11
|C) ORGANIZATIONAL STRUCTURE                                   | 16
|ITEM V. OPERATING AND FINANCIAL REVIEW AND PROSPECTS          | 17
|A) OPERATING RESULTS                                          | 17
|B) LIQUIDITY AND CAPITAL RESOURCES                            | 21
|C) RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.       | 23
|D) TREND INFORMATION                                          | 23
|E) OFF-BALANCE SHEET ARRANGEMENTS                             | 25
|F) TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS              | 25
|G) SAFE HARBOR                                                | 25
|ITEM VI. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES           | 26
|A) DIRECTORS AND SENIOR MANAGEMENT                            | 26
|B) COMPENSATION                                               | 27
|C) BOARD PRACTICES                                            | 27
|D) EMPLOYEES                                                  | 28
|E) SHARE OWNERSHIP OF MANAGEMENT                              | 28
|ITEM VII. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS   | 30
|A) MAJOR SHAREHOLDERS                                         | 30
|B) RELATED PARTY TRANSACTIONS                                 | 31
|ITEM VIII. FINANCIAL INFORMATION                              | 32
|A) CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION    | 32
|B) SIGNIFICANT CHANGES                                        | 33
|ITEM IX. THE OFFER AND LISTING                                | 33
|A) PRICE RANGE AND VOLUME OF SHARES OF COMMON STOCK           | 33
|B) PLAN OF DISTRIBUTION                                       | 33
|C) MARKETS                                                    | 33
|D) SELLING SHAREHOLDERS                                       | 34
|E) DILUTION                                                   | 34
|F) EXPENSES OF THE ISSUE                                      | 34
|ITEM X. ADDITIONAL INFORMATION                                | 34
|A) SHARE CAPITAL                                              | 34

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|B) MEMORANDUM AND ARTICLES OF INCORPORATION                                            | 34
|-------------------------------------------------------------------------------------- | --
|C) MATERIAL CONTRACTS                                                                  | 36
|D) EXCHANGE CONTROLS                                                                   | 36
|E) TAXATION                                                                            | 37
|F) DIVIDENDS AND PAYING AGENTS                                                         | 37
|G) STATEMENTS BY EXPERTS                                                               | 42
|H) DOCUMENTS ON DISPLAY                                                                | 42
|I) SUBSIDIARY INFORMATION                                                              | 42
|ITEM XI. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                    | 42
|ITEM XII. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       | 43
|PART II                                                                                | 43
|ITEM XIII. DEFAULTS, DIVIDENDS, ARREARS AND DELINQUENCIES                              | 43
|ITEM XIV. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 43
|MATERIAL MODIFICATION TO THE RIGHTS OF SECURITY HOLDERS                                | 43
|USE OF PROCEEDS                                                                        | 44
|ITEM XV. CONTROLS AND PROCEDURES                                                       | 44
|DISCLOSURE CONTROLS AND PROCEDURES                                                     | 44
|MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING               | 44
|REMEDIATION STEPS TO ADDRESS MATERIAL WEAKNESS                                         | 45
|ITEM XVI. AUDIT COMMITTEE FINANCIAL EXPERT                                             | 45
|AUDIT COMMITTEE FINANCIAL EXPERT                                                       | 45
|CODE OF ETHICS                                                                         | 45
|PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                 | 46
|EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                             | 46
|PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS                 | 47
|PART III                                                                               | 47
|ITEM XVII. FINANCIAL STATEMENTS                                                        | 47
|ITEM XVIII. FINANCIAL STATEMENTS                                                       | 47
|ITEM XIX. EXHIBITS                                                                     | 47
|FINANCIAL STATEMENTS                                                                   | 47
|SIGNATURES                                                                             | 48

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**GENERAL**

In this Annual Report on Form
  20-F, all references to “Forum”, or the “Company” refer to Forum National
  Investments, Ltd. and its subsidiaries and affiliated companies. References to
  this “Form 20-F” and this “Annual Report” mean references to this Annual Report
  on Form 20-F for the period ended September 30, 2009.

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

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

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

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

1

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**PART I**

**ITEM I. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
  AND ADVISORS**

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

**ITEM II. OFFER STATISTICS AND EXPECTED TIMETABLE**

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

A) SELECTED FINANCIAL DATA

Set forth below is certain
  selected financial data for the Company for the year-end fiscal periods 2005 to
  2009. The following information must be read in conjunction with the more
  detailed financial information contained in the accompanying audited financial
  statement. Unless otherwise stated, all references to dollars herein are to
  Canadian dollars. As at September 30, 2009, one United States Dollar was equal
  to 1.0599 Canadian dollars and that value is used in the calculations herein,
  unless otherwise indicated.

TABLE OF SELECTED CONSOLIDATED
  FINANCIAL DATA

(Stated in Canadian Dollars)

|                                  |   | Sep 30, 
      2009 |   |   | Sep 30,
      2008 |   |   | Sep 30, 
      2007* |   |   | Dec 31, 
      2006 |   |   | Dec 31, 
      2005 |  
|--------------------------------- | - | ------------------- | - | - | ------------------ | - | - | -------------------- | - | - | ------------------- | - | - | ------------------- | -
|Current Assets                    | $ | 4,378,578           |   | $ | 6,050,471          |   | $ | 9,264,232            |   | $ | 1,465,160           |   | $ | 1,707,562           |  
|Capital Assets                    |   | 9,562,321           |   |   | 17,850,031         |   |   | 9,100,127            |   |   | 7,276,372           |   |   | 4,591,964           |  
|Total Assets                      |   | 18,475,423          |   |   | 29,481,590         |   |   | 20,035,886           |   |   | 10,101,818          |   |   | 7,948,618           |  
|Current Liabilities, (1)          |   | 3,560,867           |   |   | 12,422,360         |   |   | 1,015,552            |   |   | 1,114,683           |   |   | 1,331,598           |  
|Deferred Revenue (1)              |   | 1,482,092           |   |   | 2,404,163          |   |   | 1,389,678            |   |   | 1,389,587           |   |   | 2,560,525           |  
|Convertible Debentures            |   | 40,486              |   |   | 40,486             |   |   | 40,486               |   |   | 40,486              |   |   | 40,486              |  
|Long Term Debt                    |   | 5,222,774           |   |   | 4,211,715          |   |   | 3,988,031            |   |   | 4,029,516           |   |   | 1,324,991           |  
|Share Capital                     |   | 25,810,369          |   |   | 24,255,952         |   |   | 24,194,793           |   |   | 14,802,797          |   |   | 15,152,797          |  
|Contributed surplus               |   | 2,757,581           |   |   | 2,913,377          |   |   | 2,944,536            |   |   | -                   |   |   | -                   |  
|Deficit                           |   | (22,070,260         | ) |   | (16,725,977        | ) |   | (15,854,337          | ) |   | (12,000,619         | ) |   | (12,664,990         | )
|Net Revenue from Operations       | $ | 3,740,558           |   | $ | 3,717,154          |   | $ | 2,572,638            | ) | $ | 3,984551            |   | $ | 5,838,941           |  
|Net Income (Loss) from Operations |   | (5,344,283          | ) |   | (871,640           | ) |   | (2,500,922           | ) |   | 875,355             |   |   | 1,651,804           |  

2

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|                        |     |  | Sep 30, 
      2009 |  |  | Sep 30,
      2008 |   |  | Sep 30,
      2007* |   |  | Dec 31, 
      2006 |  |  | Dec 31,
      2005 | 
|----------------------- | --- |  | ------------------- |  |  | ------------------ | - |  | ------------------- | - |  | ------------------- |  |  | ------------------ | 
|Earnings (Loss) per     | (2) |  | (0.13)              |  |  | (0.02              | ) |  | (0.11               | ) |  | 0.17                |  |  | 0.30               | 
|Share from Operations   |     |  |                     |  |  |                    |   |  |                     |   |  |                     |  |  |                    | 
|Fully Diluted Earnings  | (2) |  | (0.13)              |  |  | (0.02              | ) |  | (0.11               | ) |  | 0.17                |  |  | 0.30               | 
|per Share               |     |  |                     |  |  |                    |   |  |                     |   |  |                     |  |  |                    | 
|Weighted Average        | (2) |  | 42,487,304          |  |  | 42,359,509         |   |  | 23,377,239          |   |  | 5,098,086           |  |  | 5,444,661          | 
|number of shares for    |     |  |                     |  |  |                    |   |  |                     |   |  |                     |  |  |                    | 
|calculating basic and   |     |  |                     |  |  |                    |   |  |                     |   |  |                     |  |  |                    | 
|diluted Earnings (Loss) |     |  | 42,487,304          |  |  | 42,369,509         |   |  | 23,377,239          |   |  | 5,098,086           |  |  | 5,444,661          | 
|per share               |     |  |                     |  |  |                    |   |  |                     |   |  |                     |  |  |                    | 

Notes:

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

(1) Deferred Revenue – Current
  portion included in Current Liabilities

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

On February 1, 2010, the exchange
  rate for Canadian dollars was $1.00 (US) for $1.0653 (CAD), as posted by the
  Bank of Canada.

The high and low buying rate
  figures are selected from monthly figures for each month of the previous
  six-month period ending December 31, 2010. Daily average figures are not
  available from any major Canadian chartered bank.

|     |  | January |  |  | December |  |  | November |  |  | October |  |  | September |  |  | August | 
|---- |  | ------- |  |  | -------- |  |  | -------- |  |  | ------- |  |  | --------- |  |  | ------ | 
|High |  | 1.0657  |  |  | 1.0713   |  |  | 1.0774   |  |  | 1.0845  |  |  | 1.1065    |  |  | 1.1079 | 
|Low  |  | 1.0251  |  |  | 1.0405   |  |  | 1.0460   |  |  | 1.0292  |  |  | 1.0613    |  |  | 1.0686 | 

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

|           |  | 2009   |  |  | 2008   |  |  | 2007   |  |  | 2006   |  |  | 2005   | 
|---------- |  | ------ |  |  | ------ |  |  | ------ |  |  | ------ |  |  | ------ | 
|Period End |  | 1.0722 |  |  | 1.0599 |  |  | 1.0905 |  |  | 1.1653 |  |  | 1.1659 | 
|Average    |  | 1.1453 |  |  | 1.0660 |  |  | 1.0747 |  |  | 1.1340 |  |  | 1.2116 | 
|High       |  | 1.3066 |  |  | 1.2969 |  |  | 1.0905 |  |  | 1.0990 |  |  | 1.1507 | 
|Low        |  | 1.0251 |  |  | 0.9719 |  |  | 0.9215 |  |  | 1.1726 |  |  | 1.2704 | 

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

**B) CAPITALIZATION AND INDEBTEDNESS**

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

3

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**C) REASONS FOR THE OFFER AND USE OF PROCEEDS**

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

**D) RISK FACTORS**

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

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

On September 30, 2008 the
  Canadian governments “no call registry” went into effect. The new law allows
  consumers who do not wish to be “solicited” and receive telemarketing calls to
  register on the federal government’s nationwide list. The “no call list” is
  receiving millions of registrants. A similar law was enacted in the United
  States on October 1, 2003. These regulation effect the Companies historical
  method of direct marketing to consumers of its travel products.

In the 1990’s with the growth of
  the Life Settlement industry various states introduced legislation. The state
  legislative actions were designed to introduce consumer protection type
  regulations for policy holders and purchasers while the federal government with
  the Securities and Exchange Commission seeks to regulate the market for the
  protection of a purchaser. Many states require the licensing of life settlement
  brokers and providers, mandate disclosures to sellers or purchasers or both,
  require periodic reporting requirements, and set forth prohibited business
  practices. It is anticipated within the next 5 years that all states will have
  some form of regulation governing commerce in the Life Settlement industry.

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

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

There can be no assurance that
  unforeseen developments or introduction of legislation, laws, and other factors
  in Consumer, Securities or Insurance regulations at Federal or State level will
  not alter the Company’s ability to achieve it growth targets for marketing and
  selling Travel Club programs or entering and operating in the Life Settlement market.

The Company may require
  additional capital to grow its Life Settlement division; if we are unable to
  obtain financing necessary to support our operations, we may be unable
    to grow this segment of the Company.

As of September 30, 2009 the Company had a working capital
  surplus of $817,711. The Company continues to successfully operate within the
  continually evolving and volatile travel industry. The Company generates operating
  cash flow through its travel and charter operations. There can be no assurances
  the Company will be able to generate sufficient investment from borrowing, the
  sale of equity, or a combination thereof to rapidly grow its life Settlement

4

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division and other
  business developments. If additional financing is required, there is no certainty
  it will be available when and to the extent required or that if available, it
  will be on acceptable terms. If adequate funds are not available on acceptable
  terms, the Company may not be able to maintain and rapidly grow its business
  expansion. This could have a material adverse effect on the Company's planned
  growth.

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

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

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

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

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

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

There can be no assurance that
  the continual fluctuations in price will not occur. In particular, subsequent
  to the financial period ended September 30, 2009, the price per share of the
  Company’s common shares fluctuated (US dollar figures) from a low of $0.75 to a
  high of $1.79 and a current level of $1.01.

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

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

On June 27, 2007 the record date,
  as part of a restructuring the Company issued 13,933,983 Series ”A” Preferred
  shares to all the existing registered and beneficial common shareholders on a
  one (1) for one (1) PRO RATA basis. The Series “A’ Preferred shares are
  convertible, as a Series into common shares of the Company provided a majority
  of the Series “A” Preferred shareholders vote in favor of
  converting the entire Series. The Series will convert into a number of common
  shares that will represent 50% of the number of fully diluted common shares
  after conversion.

5

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

On July 5th 2007, the Company
  executed a Stock Option plan reserving 2,850,000 shares in the common stock of
  the Corporation to provide its officers, directors, employees and consultants
  with an incentive to use their best efforts to advance the business affairs of
  the Corporation.  The minimum exercise price of an option granted under
  the plan cannot be less than 80% of the market price of the common shares on
  the date of the grant.  The Board has full discretion at the time of
  granting an option with respect to the term and the vesting period of the
  options.  During the nine months ended September 30, 2007, the Company
  granted all 2,850,000 options available under the plan with an exercise price
  of $1.00, exercisable for a period of five years from the date of grant.

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

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

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

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

Our success will depend to a
  significant extent on the efforts and abilities of our Chief Executive Officer,
  Mr. Dan Clozza and our Chief Financial Officer, Mr. Martin Tutschek. Messrs.
  Clozza and Tutschek are actively engaged in our management and together
  determine our strategic direction, especially with regard to investment and
  business development activity. An audit committee has been established with
  three additional directors elected to the board, and we continue the process of
  establishing a management structure designed to reduce our dependence on
  Messrs. Clozza and Tutschek, the sudden departure or reduced attention of
  either Messrs. Clozza or Tutschek to us could have a material adverse effect on
  our operations, financial condition and operating results. The Company does not
  maintain “key man” insurance in respect of any of its management.

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

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

The Company's historical core
  growth depends, in significant part, upon the continuing sales and marketing of
  its Travel Club products. If the Company is unable to secure an Operator, is
  unable to contract a Licensee, or

6

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implement other non-traditional marketing
  efforts, its ability to effectively grow and expand its business could be
  impaired.

We continue to develop our
  network of Life Settlement provider companies and other
  industry affiliates. Our ability to initiate, build and grow these
  relationships is dependent on many factors including the purchase volume and
  amount of commissions received from transactions with the Company. The
  relationship with these individuals is fundamental to operating in this market.
  We have no contractual arrangements with financial planners, insurance brokers
  or Life Settlement providers. The Company believes that its future success will
  depend in large part upon its ability to attract and retain qualified
  personnel, Licensees or operators, and brokers or Life Settlement providers for
  its operations. The failure to continue to attract or retain such persons or
  entities could materially adversely affect the Company's business, financial
  condition and results of operations.

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

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

The Life Settlement market is a
  relatively new market within the financial services sector. Its continued
  growth and precise direction is unclear. Though the Company has been successful
  in Life Settlement industry to date the Company’s successful growth in the Life
  Settlement market may be slowed for various reasons this includes:

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

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

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

Estimates of life expectancy
  in the Life Settlement market are uncertain at best and any material underestimation
    will materially affect the cost, lower the anticipated returns, and effect the
    liquidity of the secondary marketplace.

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

7

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It is impossible to predict with
  accuracy an insured’s exact life expectancy. In September of 2008 one of the
  largest providers of life expectancy reports announced its lengthening of life
  expectancy tables by nearly 25% with others underwriters following suite with
  10% increases. An underestimation will result in lower returns than projected.
  An underestimation also increases the amount of capital necessary to be
  reserved for premium payments. Similarly an overestimation will result in
  higher returns and lower premium reserves.

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

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

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

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

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

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

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

8

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

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

**ITEM IV. INFORMATION ON
  THE COMPANY**

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

**A) HISTORY AND DEVELOPMENT OF THE COMPANY**

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

The  Company’s  principal office is
  Suite 200, 550 Denman Street, Vancouver, B.C. Canada V6G 3H1, the telephone number
  is (604) 778-588-7784 and fax number is (604) 684-6139. The Company’s agent in
  Canada is KMS Corporate Services Inc, 1100 One Bentall Center, 505 Burrard
  Street, Box 11, Vancouver, B.C., V7X 1M5. The Company has the following web
  addresses: www.foruminvestments.com, www.snowbirdvacations.com, www.SpiritOfTwoThousandTen.com, www.spirityachtcharters.com, www.fitnessvacation.ca www.americanlifesettlementsociety.com, www.thealss.com, www.condobargainclub.com; www.familyvacationcenters.net and www.snowbirdvacationcenter.com

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

In January of 2007, the Company
  acquired all the outstanding shares of Price Shield Systems Inc., a Washington
  State Corporation. Price Shields Systems Inc., sole business is a contract
  which facilitates the ongoing supply of resort and Condominium inventory which
  is marketed to the travel club membership. The Company has subsequently secured
  the condominium relationships directly and no longer requires or uses Price
  Shield Systems Inc., in any capacity. Price Shield Systems Inc incorporation
  has not been maintained and is defunct.

In the first quarter of 2007 the
  Company entered into a servicing agreement with an Ontario and BC registered
  travel wholesaler to assist in servicing the Snowbird Vacations Travel Club
  membership. The operators’ industry knowledge and experience in the wholesale
  travel market combined with their centralized call center and on-line presence
  have been valuable in assisting the continued serving and growth of the Travel
  Club membership. This servicing agreement has expanded to include the servicing
  of the recently acquired Family Vacation Centers members.

With the affiliation and
  contracting out of our travel services, it is unknown at this time as to the
  future status of the company’s subsidiary’s Intravelnet Inc., Intravelnet LTD.,
  and Snowbird travel Partners Inc. It is highly unlikely that the Company as the
  parent company will recoup inter-company loans and advances made to Intravelnet
  Inc and or other subsidiaries over the last several years totaling
  approximating $4.4 million. It is the opinion of

9

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management that the that any
  tax loss still remaining as a result of the above mentioned losses will
  ultimately be carried forward and applied to offset future year’s tax
  obligations.

On October 18, 2007, the Company
  purchased the notes receivable and vacation club memberships of Family Vacation
  Centers from an Ontario based Company for consideration of $3,052,866 in cash
  and stock. The Company marketed the Family Vacation Centers membership from its
  Burlington Ontario location until July 4, 2008 at which time a decision was
  made to cease marketing and sales operations from its Burlington Ontario office
  citing the downturn in the economic climate.

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

The Company has completed the rebuild on its 120 feet motor
  vessel MV Spirit of Two Thousand and Ten in 2009. The Company had established
  an initial construction credit facility with Caterpillar Financial Services
  for up to $3 million USD which had provided funding for the project. The Company
  subsequently had the credit facility increased to $4.3 million USD in spring
  of 2007. The construction loan has been converted to a 5 year term loan facility
  of $5 million USD with an interest rate of 7%. The Company spent $2,949,292
  in fiscal year ending September 30, 2008, $1,959,585 in fiscal year ending September
  30, 2009 and another $288,746 ,to December 31, 2009.

The Company formed a wholly owned
  subsidiary in August 2008 called Spirit Yacht Charters Ltd. Limited chartering
  operations began in summer of 2009 facilitated through the Spirit Yacht
  Charters subsidiary. Mechanical engine failure in the month of July limited the
  potential revenue for the charter operations its inaugural season.

In 2005, Forum began to
  investigate the business opportunities in the secondary Life Insurance market
  also known as “Life Settlements”. The Company is entering into the
  business of purchasing life insurance policies from consumers actively
  interested in selling their policies. Forum has invested in the purchasing of
  Life Insurance policies issued in the Unites States sold by the policy holders
  with life expectancies of 6 to 15 years. The Company then becomes the
  irrevocable beneficiary of these policies.

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

Since the Company began to
  research the Life Settlement industry it has completed a substantial amount of
  due-diligence and invested capital to create large channels of Life Settlement
  “policy flow”. The Company is currently sourcing Life Settlement policies
  through “Business to Business” (B2B) Channels and anticipates launching a
  “Business to Consumer” (B2C) model upon securing sufficient capital commitments.

The Company uses an industry
  standard Milliman Report (consultants for the health care insurance industry)
  along with recent purchases and sales of similar life insurance policies,
  financial standing of the insurer, changes in general economic conditions,
  standard, actuarially developed mortality tables and industry life expectancy
  reports to

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

Additionally the Company originally
  intended to acquire a 25% interest in a mixed use development property in
  Needles California for US$1,000,000. The 22 acre property with 850 feet of
  waterfront on the Colorado River has a marina with a 20,000 square foot storage
  facility for marine based activity. As the property is developed to various
  stages differing options to include condo / townhomes for either full
  ownership, fractional ownership of timeshare intervals will be explored. The
  Canadian travel club membership would be offered a product in a southern United
  States location that has an extended season of favorable weather conditions.
  Subsequent to fiscal year end 2008, the Company discovered that the investee
  had failed to raise the additional capital as planned. As a result, the
  ownership interest actually acquired by the Company was 54% instead of 25% as
  originally intended. Accordingly, the Company has restated the presentation of
  its investment to consolidate the net assets of Colorado River Resorts LLC (the
  “LLC”) as of September 30, 2008. .  Subsequent to the initial investment, the
  LLC entered into a sale and purchase agreement to acquire the development
  property. 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 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.

To expand beyond is present
  financial capabilities in the Life Settlement market and other business
  ventures, additional financing will be sought. There can be no assurances the
  Company will be able to generate sufficient investment from borrowing, the sale
  of equity, or a combination thereof to rapidly grow its life Settlement
  division and other business expansion. If additional financing is required,
  there is no certainty it will be available when and to the extent required or
  that if available, it will be on acceptable terms. If adequate funds are not
  available on acceptable terms, the Company may not be able to grow and expand
  its business at an accelerated rate. This could have a material adverse effect
  on the Company's planned growth. This and other risks related to operating in
  the Life Settlement industry could have a material adverse effect on the
  Company's operations and planned growth. (See Item 3 Risk factors, The Company
  May Require Additional Capital).

**B) BUSINESS OVERVIEW**

The Company has three lines of
  business at this time:

- The Company
    owns and operates travel clubs under the name of Snowbird Vacationsand Family Vacations Centers.In addition to accessing a full
    service travel agency and other travel benefits, travel club members are
    entitled to rent vacation ownership rentals from a broad variety of
    participating resorts at wholesale rates.
- The Company owns
    a passenger carrying yacht the 120’ MV Spirit of 2010, a 43 foot sunbridge
    cruiser a 18 foot tender and two jet skis. The equipment is for charter
    cruises to the Pacific Northwest, Alaska and Baja Mexico. I n addition to
    day cruises from its home port in Vancouver, B.C. Charters will be
    available to the general public in addition to the existing travel club
    membership.
- The Company
    has entered the Life Settlement market. A life settlement is the purchase
    of an existing life insurance policy by a third party. The third party
    then continues to make the premiums payments until the policy has matured
    and at that time receives the benefits. The Company sees this new market
    as a high growth opportunity in which to participate through its recently
    created American Life Settlement Society.

Real risks exist in operating a
  Travel Club and Life Settlement business. These risks may have a material
  adverse effect on the Company's Travel club and expansion in the Life
  Settlement marketplace. (See Item 3 Risk factors, The Markets in Which the
  Company Competes is Highly Competitive. If the Company Cannot Successfully
  Compete, its Growth Rate May Stagnate or Revenues May Decline).

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Travel Club

The Company’s historical business
  is providing travel services for the members of its travel clubs. A travel club
  membership entitles the member to access discount travel at rates marginally
  above the cost to the travel agency as well as vacation condominium rentals at
  discount rates through the Company’s wholesale network affiliation with the
  Cooperative Association of Resort Exchangers (C.A.R.E.) and other strategic
  relationships in the travel industry. The Company continues to develop products
  and services for its members, and seeks to expand its membership by securing
  and contracting licensed marketing agents, acquisitions and Internet marketing.

Information
  regarding vacation membership:

|                 |   | 2009      |  |  | 2008      |  |  | 2007*     | 
|---------------- | - | --------- |  |  | --------- |  |  | --------- | 
|Membership Sales | $ | ----      |  |  | 973,426   |  |  | 829,254   | 
|Membership Dues  | $ | 2,192,932 |  |  | 2,443,758 |  |  | 1,050,116 | 
|Total            | $ | 2,192,932 |  |  | 3,417,184 |  |  | 1,879,370 | 

* Fiscal period for September 30,
  2007 includes 9 months for comparison and does not include the October 18, 2007,
  purchase of Family Vacation Centers.

For the fiscal period 2009, a
  total for both travel clubs (Snowbird Vacations (Snowbirds) and Family Vacations
  Centers (FVC)) of Nil (2008 – 1,030, 2007 - 275) travel club memberships were
  sold for a mean average non-refundable purchase price of $Nil (2008 - $3,196,
  2007 - $2,996).

Both Snowbird and FVC Travel club
  memberships are due in full at the time of sale, and may either be paid in cash
  or financed by the Company (see Travel Club - this section). Traditional Travel
  club membership costs to the member range from $995 for a trial membership to
  $7,995 for a lifetime membership marketed through a bricks and mortar
  environment. The Company is seeking to foray into the Internet marketing of the
  travel club program with an initial membership fee far less than previously
  required.

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

The Snowbird and FVC membership
  entitles the members to vacation condominium rentals at discount rates through
  the Company’s wholesale network affiliation with the Cooperative Association of
  Resort Exchangers (“C.A.R.E.”), and discount travel at rates marginally above
  the cost to the travel agency. The Company has sold the following travel club
  memberships:

|                                                       |   | 2009     |   |   | 2008       |   |   | 2007*    |  
|------------------------------------------------------ | - | -------- | - | - | ---------- | - | - | -------- | -
|                                                       |   |          |   |   |            |   |   |          |  
|Travel Club Memberships entered into for the period    | $ | –        |   | $ | 2,400,019  |   | $ | 739,788  |  
|                                                       |   |          |   |   |            |   |   |          |  
|Amount recognized as revenue during the year           |   | –        |   |   | (297,532   | ) |   | (63,401  | )
|                                                       |   |          |   |   |            |   |   |          |  
|Future years revenue to be earned from current year    |   | –        |   |   |            |   |   |          |  
|Membership agreements                                  |   |          |   |   | 2,102,487  |   |   | 676,387  |  
|Cash collected during the year related to future years |   | (517,769 | ) |   | (1,687,304 | ) |   |          |  
|revenue                                                |   |          |   |   |            |   |   | (503,947 | )
|Amounts due to be received in subsequent years         | $ | –        |   | $ | 415,183    |   | $ | 172,440  |  
|from current period membership agreements              |   |          |   |   |            |   |   |          |  

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* Fiscal year for September 30,
  2007 includes 9 months for comparison and does not include the purchase of
  Family Vacation Centers on October 18 of 2007.

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

Additionally the Company originally intended to acquire a 25%
  interest in a mixed use development property in Needles California for US$1,000,000.
  The 22 acre property with 850 feet of waterfront on the Colorado River has a
  marina with a 20,000 square foot storage facility for marine based activity.
  As the property is developed to various stages differing options to include
  condo / townhomes for either full ownership, fractional ownership of timeshare
  intervals will be explored. The Canadian travel club membership would be offered
  a product in a southern United States location that has an extended season of
  favorable weather conditions. Subsequent to fiscal year end 2008, the Company
  discovered that the investee had failed to raise the additional capital as planned.
  As a result, the ownership interest actually acquired by the Company was 54%
  instead of 25% as originally intended. Accordingly, the Company has restated
  the presentation of its investment to consolidate the net assets of Colorado
  River Resorts LLC (the “LLC”) as of September 30, 2008. .  Subsequent
  to the initial investment, the LLC entered into a sale and purchase agreement
  to acquire the development property. 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 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. An impairment charge for the remaining balance of $7,602,529 was recognized
  in the year ending September 30, 2009. The impairment was offset by the derecognition
  of the promissory note to the same value upon the foreclosure of the property.

Travel Industry Overview

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

The travel industry has been
  challenged by a variety of negative drivers in the new millennium, including
  slowed economic growth, advances in technology and dramatically heightened
  concerns about security, war, terrorism, and disease. Between 2000 and 2003,
  domestic business travel fell by 15%, airline travel by 14%, and international
  travel to the U.S. was down by 21%. Since 2003, however, virtually all sectors
  of the travel industry have experienced growth. In late 2008 and in 2009, the
  economic meltdown along with restricted travel over swine flu fears and stiffer
  border policies between Canada and the U.S. caused tourism spending to drop
  dramatically.

Tourism spending in Canada fell
  0.8 percent in the second quarter of 2009 bringing the total decline to 2.9 per
  cent over the last 4 quarters according to Statistics Canada. The four-quarter
  decline marks the longest Canadian downturn in tourism numbers since the early
  1990’s.

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

1) Licensing Snowbird vacation
  travel club sales and marketing operations, acquisition of existing travel
  clubs, entering the Internet marketing marketplace to promote memberships.

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

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

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4) Increasing membership based
  operations in the active lifestyles market of health clubs or other “resort
  Lifestyle” offerings.

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

Charter Cruises

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

The Company had established an initial construction credit facility with Caterpillar
  Financial Services for up to $3 million USD which had provided funding for the
  project. The Company subsequently had the credit facility increased to $4.3
  million USD in spring of 2007. The construction loan has been converted to a
  5 year term loan facility of $5 million USD with an interest rate of 7%. The
  Company spent $2,949,292 in fiscal year ending September 30, 2008, $1,959,858
  in fiscal year ending September 30, 2009 and another $288,746 to December 31,
  2009.

Life Settlements

In 2005, Forum began to
  investigate the business opportunities in the secondary Life Insurance market
  also known as “Life Settlements”. The Company has entered into the
  business of purchasing life insurance policies from consumers actively
  interested in selling their policies. Forum has invested by purchasing a
  beneficial interest in Life Insurance policies issued in the Unites States sold
  by the policy holders with life expectancies of 6 to 15 years. The Company has
  becomes the irrevocable beneficiary of these policies.

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

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

The Company began to research the
  Life Settlement industry in 2005 and has completed a substantial amount of
  due-diligence and invested capital to create large channels of Life Settlement
  “policy flow”. The Company believes successful entrance and capture of market
  share in this emerging industry will dominate the future Company

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direction and
  the allocation of resources. The Company is currently sourcing Life Settlement
  policies through “Business to Business” (B2B) Channels and expects to launch a
  “Business to Consumer” (B2C) Channel.

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

Life Settlement Industry
  Overview

Following the theme of older
  adults and the growth of the group as a percentage of the population, the
  Company is entering the Life Settlement market. The exact size of the market is
  difficult to accurately quantify. In 2005, Sanford C. Bernstein & Co., LLC,
  a research unit of Alliance Bernstein L.P. estimated the market to be
  approximately $13 billion in face value of policies purchased from 1998 through
  2005. Data from the American
  Council of Life Insurers shows that the voluntary termination rates for
  individual policies has dropped steadily from 6.6% in 2002 to 5.1% in
  2007.  Because the decline in the lapse rate coincides with the
  increasing number of reported life settlement transactions, we believe this
  indicates that more policyholders are choosing to sell their policies in life
  settlement transactions rather than voluntarily terminating these
  policies.  We also believe this corroborates predictions that the
  life settlement market will continue to grow in size as these transactions
  become more familiar to policyholders.

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

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

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

Debt Crisis... Many seniors do not
  adequately save or plan financially for retirement. USA Today, Jan/07 “seniors
  are becoming the face of the indebted and the fastest population group
    seeking bankruptcy, many are having extreme difficulty paying mortgage,
  food and medical costs... we are just seeing the tip of the iceberg”.

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

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

The Company recognizes that it
  needs to be innovative and pioneer new avenues for business development.
  A key to the Company’s future development is the expansion and retention of its
  existing Travel Club membership base,

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adding other “Membership” based service
  and or product offerings to specific demographic groups. Additionally new
  opportunities have encouraged the Company to expand and position itself for
  entry into the Life Settlement market.

Government Regulations

On September 30, 2008 the
  Canadian governments “no call registry” went into effect. The new law allows
  consumers who do not wish to be “solicited” and receive telemarketing calls to
  register on the federal government’s nationwide list. The “no call list” is
  receiving millions of registrants. A similar law was enacted in the United
  States on October 1, 2003. These regulation effect the Companies historical
  method of direct marketing to consumers of its travel products.

In the 1990’s with the growth of
  the Life Settlement industry various states introduced legislation. The state
  legislative actions were designed to introduce consumer protection type
  regulations for policy holders and purchasers while the federal government with
  the Securities and Exchange Commission seeks to regulate the market for the
  protection of a purchaser. Many states require the licensing of life settlement
  brokers and providers, mandate disclosures to sellers or purchasers or both,
  require periodic reporting requirements, and set forth prohibited business
  practices. It is anticipated within the next 5 years that all states will have
  some form of regulation governing commerce in the Life Settlement industry.

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

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

There can be no assurance that
  unforeseen developments or introduction of legislation, laws, and other factors
  in Consumer, Securities or Insurance regulations at Federal or State level will
  not alter the Company’s ability to achieve it growth targets for marketing and
  selling Travel Club programs or entering and operating in the Life Settlement
  market.

**C) ORGANIZATIONAL STRUCTURE**

As of December 31, 2009, the following is a list of all the
  Company’s subsidiaries.

|Subsidiary                                | Incorporating Jurisdiction | **Ownership**
|----------------------------------------- | -------------------------- | -------------
|                                          |                            |              
|Intravelnet Limited.                      | Ontario, Canada            | 100%         
|InTRAVELnet Inc.                          | Alberta, Canada            | 100%         
|Snowbird Travel Partners Inc.             | British Columbia, Canada   | 100%         
|International Fitness Vacations (BC) Ltd. | British Columbia, Canada   | 100%         
|Spirit Yacht Charters Ltd.                | British Columbia, Canada   | 100%         
|American Life Settlement Society LLC      | Delaware, USA              | 100%         
|Colorado River Resorts LLC                | Nevada, USA                | 100%         

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Properties

Office Leases

The Company is headquartered at Suite 200, 550 Denman Street,
  Vancouver, B.C. Canada V6G where it rents 1500 sq. ft. office space housing
  its principal corporate, accounting, and yacht charter operations, space expires
  on August 1, 2012.

Administrative, customer
  services, IT department and Health club operations are operated from 180A –
  13040, #2 Road, Richmond, B.C. V7E 2G1, where the Company rents 11,881 square feet.

The Company operates its customer
  and travel services operations from an office it leases in Burlington Ontario,
  situated at Unit 1, 499 Brandt Street, Burlington, Ontario L7R 2G5. The
  Company's lease for this 660 sq. ft. space expires on September 30, 2010.

The Company believes that its
  current facilities are adequate for its current administrative and health club
  operations but may need expansion to accommodate the Spirit Yacht Charters and
  Life Settlement operations.

Motor Vessels

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

|Item                           | Qty | Description                                                                                            
|------------------------------ | --- | -------------------------------------------------------------------------------------------------------
|Spirit of Two Thousand and Ten | 1   | Type: 120 ft. motor vessel Overnight Accommodation: 12 passengers 
      Dinner cruise - 100 passengers
|Post Meeting                   | 1   | Type: 43 ft. motor vessel sunbridge cruiser of fiberglass
      construction                           

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

The Company has completed the rebuild on its 120 feet motor
  vessel MV Spirit of Two Thousand and Ten. The Company had established an initial
  construction credit facility with Caterpillar Financial Services for up to $3
  million USD which had provided funding for the project. The Company subsequently
  had the credit facility increased to $4.3 million USD in spring of 2007. The
  construction loan has been converted to a 5 year term loan facility of $5 million
  USD with an interest rate of 7%. The Company spent $2,949,292 in fiscal year
  ending September 30, 2008, $2,107,677 in fiscal year ending September 30, 2009
  and another $288,746 to December 31, 2009.

**ITEM V. OPERATING AND FINANCIAL REVIEW AND
  PROSPECTS**

The following discussion of the
  financial condition, changes in financial condition and results of operations
  of the Company for the years ended September 30, 2009 and September 30, 2008
  and period ended September 30, 2007 and should be read in conjunction with the
  Consolidated Financial Statements of the Company for the years ended September
  30, 2009 and September 30, 2008 and the period ended September 30, 2007. Except
  as otherwise indicated, all dollar amounts contained in this discussion and
  analysis and the Consolidated Financial Statements are in Canadian dollars. The
  financial information presented in the Consolidated Financial Statements was
  prepared in accordance with generally accepted accounting principles (GAAP) in
  Canada. Note 22 of these Consolidated Financial Statements of the Company set
  forth the material differences between Canadian and U.S. GAAP.

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**A) OPERATING RESULTS**

Critical Accounting Policies

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

The detailed accounting policies
  are listed in Note 2 to the Financial Statements for the year ended September
  30, 2009. Included below is a discussion of the accounting policies that are
  affected by the most significant judgments and estimates used in the
  preparation of the financial statements, how such policies are applied and how
  results differing from the estimates and assumptions would affect the amounts
  presented in the financial statements. Other accounting policies also have a
  significant effect on our financial statements, and some of these policies also
  require the use of estimates and assumptions.

Revenue Recognition

The Company
  generates revenues from yacht charter operations and the sale of memberships
  and dues. In accordance with CICA HB 3400, Revenue, the portion of revenue
  received from members, which entitles members to use the Company’s vacation and
  travel club privileges at a future date, is deferred and recognized in income
  evenly over the term of the member’s entitlements. For lifetime memberships,
  revenue is recognized over a period of five years, which is management’s best
  estimate of the period over which performance will be required.  Gains from
  matured life insurance policies and revaluation of life settlement investments
  are recorded as Other Income and are excluded from Operating Income.

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

Impairments of Long Lived
  Assets

Long-lived assets are reviewed
  for impairment whenever events or circumstances indicate that the carrying
  value of an asset may not be recoverable. An impairment loss is recognized when
  the carrying value of a long-lived asset intended for use exceeds the sum of
  the undiscounted cash flows is expected from its use and eventual disposition.
  The impairment loss is measured as the excess of the carrying value of the
  asset over its fair value.

Accounts Receivable

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

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

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are under no compulsion
  to act. Fair values of financial instruments are based on independent prices
  quoted in active markets. In the absence of an active market, fair values are
  determined based on valuation models such as discounted cash flows, which
  require the use of assumptions concerning the amount of timing of estimated
  future cash flows and discount rates. 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.

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 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 earnings to reflect impairments that are
  considered to be other than temporary.

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

The following table summarizes
  the Company’s selected financial instrument classifications based on its
  intentions:

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

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Selected
  Annual Information

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

|                                 |   |            |   |   | Year End  |   |   |            |  
|-------------------------------- | - | ---------- | - | - | --------- | - | - | ---------- | -
|                                 |   | 2009       |   |   | 2008      |   |   | 2007*      |  
|Travel Club Memberships Sold     | $ | –          |   | $ | 2,400,019 |   | $ | 739,788    |  
|                                 |   |            |   |   |           |   |   |            |  
|Amount Recognized as             |   | –          |   |   | 297,532   |   |   | 63,401     |  
|Revenue during the year          |   |            |   |   |           |   |   |            |  
|Membership Dues                  | $ | 2,358,067  |   | $ | 2,443,758 |   | $ | 1,050,116  |  
|# Travel Club Memberships        |   | –          |   |   | 1,030     |   |   | 275        |  
|Sold                             |   |            |   |   |           |   |   |            |  
|Mean Average Membership          | $ | –          |   | $ | 3,196     |   | $ | 2,996      |  
|Price                            |   |            |   |   |           |   |   |            |  
|Net Income (Loss) for the period | $ | (5,344,283 | ) | $ | (871,640  | ) | $ | (2,500,922 | )
|Basic Income (Loss) per Share    | $ | (0.13      | ) | $ | (0.02     | ) | $ | (0.11      | )
|Diluted Income (Loss) per Share  | $ | (0.13      | ) | $ | (0.02     | ) | $ | (0.11      | )

* Fiscal year for September 30,
  2007 includes 9 months for comparison and does not include the October 18, 2007,
  purchase of Family Vacation Centers.

For the year ended  September 30, 2009 Travel Club Memberships sales decreased by 100% to $Nil  compared to ($2,400,019 – September 30, 2008, $739,788 – nine month period  ended September 30, 2007), with amount recognized as revenue during the year  ended September 30, 2009 decreasing by 100% to $Nil_($297,532 September 30,  2008, $63,401 – nine month period ended September 30, 2007), as a direct result  of ceasing the marketing operations of the travel clubs in 2008. Total revenue increased  during the year ended September 30, 2009 by 0.63 % to $3,740,558 ($3,717,154 –  year ended September 30, 2008, $2,572,638 – nine month period ended September  30, 2007) as a result of taking into income deferred revenue built up in prior  periods.

For the year ended September 30, 2009, cash flow used in operations
  increased $19,629 or 3% to $672,440 due mainly to accrual for revenue from a
  matured life settlement contracts not yet received and increase in revenue and
  expenses due to acquisition of Family Vacation Centers, compared to cash flows
  used in operating activities of $652,811 for the year ended September 30, 2008
  and cash flows used in operating activities of $233,529 for the nine month period
  ended December 31, 2007.

The Company recorded revenues from membership dues and travel
  club membership sold of $3,514,525 for the year ended September 30, 2009 and
  $3,593,847 for the year ended September 30, 2008 and $2,320,916 for the nine
  month period ended September 30, 2007. The Company anticipates dues to decrease
  slightly from the level obtained in 2008 for the year ended September 30, 2009
  based on limited membership marketing levels achieved in 2009 and natural attrition.

For the year ended September 30, 2009 a total of 123 travel
  club memberships were sold or acquired, a decrease of 55.27 % (275 for year
  ended September 30, 2008, 202 for nine month period ended September 30, 2007).
  For the year ended September 30, 2009 the mean average non-refundable travel
  club membership purchase price decreased to $Nil ($3,196 for year ended September
  30, 2008, and $2,996 for the nine month period ended September 30, 2007).

A net loss of $5,344,283 was recorded for the year ended September
  30, 2009, as compared to $871,640 for year ended September 30, 2008 which included
  net Life Settlement income of $5,447,464. In 2007 a net loss of $2,500,922 occurred
  for the nine month period ended September 30, 2007 due largely as result of
  the stock-based compensation charges $2,944,536 included in wage expenses, from
  issuance of stock options during the fiscal period. Basic loss-per-share were
  $0.13 for the year ended September 30, 2009 compared to loss per share of $0.02
  for the year ended September 30, 2008; $0.11 – for the nine months ended
  September 30, 2007.

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There were 28,856,984 shares issued as of September 30, 2009
  and 28,439,611 issued as of September 30, 2008 and 28,409,611 at September 30,
  2007. In April 2007 the company completed a 3-for-1 forward split increasing
  the outstanding shares by 9,240,578 to 13,860,867. On June 29, 2007, the Company
  completed a private placement and issued 11,000,000 common shares of the Company
  at US $0.50 per share for gross proceeds of $5,773,918 (US $5,500,000). On July
  4, 2007, the Company completed a private placement and issued 3,500,000 common
  shares at US $1.00 per share for gross proceeds of $3,650,396 (US $3,500,000)
  increasing the issued and outstanding shares to 28,360,867 at September 30,
  2007. 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
  per share because management considers these shares substantially equivalent
  to common stock. For the year ended September 30, 2009, the weighted average
  number of shares outstanding, which assumes the conversion of all Series “B”
  Preference convertible shares for the calculation of basic and diluted loss-per-share
  is 42,487,304. In a loss year, common shares equivalents are excluded from the
  calculation of diluted earnings per share as the effect would be anti dilutive.

For the year ended  September 30, 2009 expenses decreased by 13% or $861,688 as a result of the  wind down of the sales and marketing offices. The largest expense increase was amortization  of property and equipment to $406,785 (2008 - $86,078, 2007 - $68,106) due to  the completion of the 120 foot Motor Vessel and the corresponding beginning of amortization.

General and  Administration expense increased $445,694 to $2,813,517 during fiscal 2009,  compared to $2,367,823 in fiscal 2008, and $1,171,197 for the nine month period  ended September 30, 2007.

For the year ended  September 30, 2009, the largest decrease in expenses of $1,308,803 occurred in  Wages to $1,751,700, (2008 - $3,060,503; nine months ended September 30, 2007 -  $3,437,026). The decrease was a direct result of the wind-up of the sales &  marketing operations of Family Vacations Center in the prior year.

For the year ended September 30, 2009, the second largest decrease
  in expenses of $182,022 occurred in Bad Debts to $212,364, (2008 – $394,386;
  nine months ended September 30, 2007 - $Nil). The decrease was the result of
  increased collection efforts related to note receivables during the fiscal period.

For the year ended  September 30, 2009, the third largest decrease in expenses of $137,264 occurred  in commission costs to $31,983, (2008 – $169,247; nine months ended September  30, 2007 - $656,842). The decrease was a direct result of the wind-up of the  sales & marketing operations of Family Vacations Center in the prior year.

For the year ended  September 30, 2008 the largest decrease in expenses of $487,595 occurred in  category Commission Expenses to $169,247. Commission related expenses for the  nine months ended September 30, 2007 totaled $656,842. The decrease was a  direct result of the wind-up of the sales & marketing operations of Family  Vacations Center in the prior year

The Company changed separate
  disclosure of direct selling expenses and discounts from January 01, 2007 in
  the expense section of the Consolidated Statements of Operations and Deficit to
  “Net” Membership Sales for the period. For the year ended September 30, 2009 - $142,558
  (nine months ended September 30, 2008 - $188,751 and $35,399 for the year ended
  December 31, 2007 direct selling expenses were offset against membership sales
  revenue. Prior year results were restated for comparison purposes.

During the year ended September
  30,2009, the Company recognized bad debt expense of $Nil (2008 – $394,386)
  related to other receivables as a result of termination of the third party
  agreement to sell the Company’s vacation club membership.

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**B) LIQUIDITY AND CAPITAL RESOURCES**

Liquidity

As of December 31, 2009 the
  Company had in excess of $1,134,398 cash on deposit.

In 2009, the working capital deficit decreased $7,189,600 to
  a surplus of $817,711 primarily due to settlement of debt for shares made in
  the acquisition of Family Vacation Centers, and the foreclosure of the property
  within Colorado River Resorts LLC, in full settlement of the promissory note
  payable.

In 2008, the working capital surplus decreased $13,904,188
  to a deficit of ($6,371,889) primarily due to investments made in Life Settlements,
  Family Vacation Centers and the corresponding short term obligations for the
  Colorado River property investment.

In 2007, the working capital surplus
  increased to $ 7,532,298. During the summer of 2007 the Company completed two
  private placements raising an aggregate total of $9 million USD and
  correspondingly issued 14,500,000 restricted common shares of the company. The
  terms of these private placements were as follows:

> (i) On June
>     29, 2007, the Company completed a private placement and issued 11,000,000
>     common shares of the Company at US $0.50 per share for gross proceeds of
>     $5,773,918 (US $5,500,000).
>   (ii) On July
>     4, 2007, the Company completed a private placement and issued 3,500,000 common
>     shares at US $1.00 per share for gross proceeds of $3,650,396 (US $3,500,000).

The Company
  continues to operate its travel club operations by continuously adjusting its
  operations accordingly and plans to generate sufficient operating capital for
  operations in the short-term. For rapid long-term growth specifically the
  development of the Life Settlement operations additional capital is required. The
  Company’s 120-foot motor vessel is completed its refit and the vessel is
  anticipated to contributed to revenue in fiscal 2010.

Financing the work on the vessel to date has been from operations,
  a credit facility from Caterpillar Financial Services, and funds raised. The
  credit facility with Caterpillar Financial Services Corporation was created
  in September of 2005 for $3.0 million USD. This credit facility was subsequently
  increased to a total of $4.3 million USD in spring of 2007. The construction
  loan has been converted to a 5 year term loan facility of $5 million USD with
  an interest rate of 7%. The Company spent $2,949,292 in fiscal year ending September
  30, 2008, $2,107,677 in fiscal year ending September 30, 2009 and another $288,746
  to December 31, 2009. The Company does not currently hedge against foreign exchange
  or interest rate fluctuations.

The Company’s total Revenues for
  the year ended September 30, 2009 increased by $23,404 to $3,740,558, the
  increase was the result of the initial operations of Spirit Yacht Charters,
  generating revenue of $175,331. Life settlement income was recorded under
  “Other Income”, totaling $775,207 ($5,447,464 for the year ended September 30,
  2008; $Nil for the nine month period ended September 30, 2007.

Capital Resources

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

For the year ended September 30, 2009, cash flow used in operations
  increased $19,629 or 3% to $672,440 due to an increase in revenue and expenses
  due to acquisition of Family Vacation Centers, compared to cash flows used in
  operating activities of $652,811 for the year ended September 30, 2008 and cash
  flows used in operating activities of $233,529 for the nine month period ended
  September 30, 2007.

22

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Financing the work on the vessel to date has been from operations,
  a credit facility from Caterpillar Financial Services, and funds raised. The
  credit facility with Caterpillar Financial Services Corporation was created
  in September of 2005 for $3.0 million USD. This credit facility was subsequently
  increased to a total of $4.3 million USD in spring of 2007. The construction
  loan has been converted to a 5 year term loan facility of $5 million USD with
  an interest rate of 7%. The Company spent $2,949,292 in fiscal year ending September
  30, 2008, $2,107,677 in fiscal year ending September 30, 2009 and another $288,746
  to December 31, 2009. The Company does not currently hedge against foreign exchange
  or interest rate fluctuations.

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

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

Quantitative
  and Qualitative Disclosures about Market Risk

The Company does not have any
  derivative financial instruments. The exposure to market risk is limited to
  interest and exchange rate sensitivity. The Company’s long term debt is
  denominated in US dollars with a fixed interest rate of 7%. The Company is
  therefore affected by changes in the Canadian dollar exchange rate. The primary
  strategy of the Company’s borrowing activities was to preserve principal by
  keeping funds in US dollars and converting to Canadian dollars when required. Given
  the fluctuation of the US Dollar for the year ended September 30, 2009 the
  Company did not receive any additional earnings related to exchange rate
  fluctuations. The Company does not currently hedge against either foreign
  exchange.

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

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

**D) TREND INFORMATION**

The Company’s historical business
  is providing travel services for the members of its travel clubs. A travel club
  membership entitles the member to access discount travel at rates marginally
  above the cost to the travel agency as well as vacation condominium rentals at
  discount rates. The Company is affected by the sales and marketing trends and
  uncertainties in the leisure-travel business. The Company can give no
  assurances that licensed marketing efforts or Internet marketing efforts will
  be successful in the future. In the alternative the Company is actively
  investigating other non-traditional marketing strategies that differ from the
  previous historical model the Company operated within.

On October 18, 2007, the Company
  purchased the notes receivable and vacation club memberships of Family Vacation
  Centers from an Ontario based Company for consideration of $3,052,866 in cash
  and stock. The Company marketed the Family Vacation Centers membership from its
  Burlington Ontario location until July 4, 2008 at which time a decision was
  made to cease marketing and sales operations from its Burlington Ontario office
  citing the downturn in the economic climate.

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

23

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As of December 31, 2009, the
  Company has 9,143 active family memberships, with 8,213 current and 930 in
  arrears in monthly membership dues or payments. During the last fiscal year the
  unit volume of new memberships of its vacation Travel Club memberships for the
  year ended September 30, 2009 was 95, compared to the year ended September 30,
  2008 – 1,030, and year ended September 30, 2007 – 275 memberships. The mean
  average sales price of a membership sold during the year ended September 30,
  2009 decrease to $Nil compared with $3,196 in year ended September 30, 2008 and
  $2,996 in year ended September 30, 2007. The Company is unable to project with
  accuracy sales totals for the period September 30, 2010. The Company is not
  marketing membership at that time. The Company is anticipating the launch of an
  Internet marketing effort but is unproven as of yet to the Company. Sales
  totals for the year ended September 30, 2009 were $Nil and for the nine month
  period ended September 30, 2007 they were $2,400,019 with the year ended
  September 30, 2007 been $739,788.

With the wind down of Family Vacation Centers marketing operations,
  the operating costs of the company decreased for the year ended September 30,
  2009 to $5,901,087 compared to the year ended September 30, 2008 - $6,762,775,
  and the nine month period ended September 30, 2007 - $5,333,171. The 13% decrease
  or $883,358 is a direct result of the inclusion of Family Vacation Centers operating
  costs during the prior fiscal year.

In addition to the core travel
  business the Company has entered the Life Settlement market. The Company
  believes successful development and capture of market share in this capital
  intensive emerging industry will dominate the future Company direction and the
  allocation of resources.

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

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

With the investments in Life
  Settlement in fiscal 2009, gains for the fiscal period amounted to $775,207
  and  capitalizing operating costs of policies for the fiscal period in the
  amount of $Nil. The Company projects revenue for fiscal 2010 to approximate the
  2009 income from Life Settlements without an early policy maturity.

To expand beyond is present
  financial capabilities in the Life Settlement market and other business
  ventures, additional financing will be sought. There can be no assurances the
  Company will be able to generate sufficient investment from borrowing, the sale
  of equity, or a combination thereof to rapidly grow its life Settlement
  division. If additional financing is required, there is no certainty it will be
  available when and to the extent required or that if available, it will be on
  acceptable terms. If adequate funds are not available on acceptable terms, the
  Company may not be able to grow and expand its business at an accelerated rate.
  This could have a material adverse effect on the Company's planned growth. This
  and other risks related to operating in the Life Settlement industry could have
  a material adverse effect on the Company's operations and planned growth. (See
  Item 3 Risk factors, The Company May Require Additional Capital).

24

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The Company has completed the rebuild on its 120 feet motor
  vessel MV Spirit of Two Thousand and Ten. The Company had established an initial
  construction credit facility with Caterpillar Financial Services for up to $3
  million USD which had provided funding for the project. The Company subsequently
  had the credit facility increased to $4.3 million USD in spring of 2007. The
  construction loan has been converted to a 5 year term loan facility of $5 million
  USD at a fixed interest rate of 7% per annum. The Company spent $2,949,292 in
  fiscal year ending September 30, 2008, $2,107,677 in fiscal year ending September
  30, 2009 and another $288,746 to December 31, 2009.

The Company is beginning the marketing and promotion too many
  tourism based organizations and has a web site www.spirityachtcharters.com to
  present the vessel and provide an overview of the yacht offering. As a new business
  venture the Company generated $175,331 charter revenue from the marketing of
  the yacht in fiscal 2009 and is unable at this time to accurately project any
  revenue amounts to be generated in 2010 season.

The Company believes the existing
  travel club membership will have minimal growth if any while projecting some growth
  in revenue from charter sales operations. The corporate growth is anticipated
  to arise from development and implementation of its business plan for the Life
  Settlement market.

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

**E) OFF-BALANCE SHEET ARRANGEMENTS**

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

**F) TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS**

The following table is a summary
  of our contractual obligations as of September 30, 2009:

| |                                |   |               | Expected payments by periodas
      at September 30, 2009 |  
| | ------------------------------ | - | ------------- | --------------------------------------------------------- | -
| |                                |   |               |                                                           |  
| |                                |   | Within 1 yr   |                                                           |  
| |                                |   |               |                                                           |  
| | Accounts payable and           |   |               |                                                           |  
| | accrued liabilities            | $ | 614,847       |                                                           |  
| | Due to broker                  |   | 569,996       |                                                           |  
| | Loans from related parties *** |   | 486,379       |                                                           |  
| | Secured borrowings             |   | 263,694       |                                                           |  
| | Convertible debentures         |   | 40,486        |                                                           |  
| | Long term debt *               |   | 145,625       |                                                           |  
| | Life settlement premiums **    |   | 248,734       |                                                           |  
| | Lease and contracts            |   | 154,397       |                                                           |  
| |                                |   |               |                                                           |  
| | Total                          | $ | **2,524,158** |                                                           | $
| |                                |   |               |                                                           |  

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

**Life insurance premiums are
  future payments required to keep the insurance policies in good standing.

25

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*** The amounts advanced by
  related parties are unsecured, non-interest bearing and does not form part of
  contractual obligations.

**G) SAFE HARBOR**

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

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

**A) DIRECTORS AND SENIOR MANAGEMENT**

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

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

26

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Family Relationships

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

Arrangements

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

**B) COMPENSATION**

Executive Compensation and
  Compensation of Directors

During 2009, the  Company paid $nil (September 30, 2008 $nil and September 30, 2007 – $nil) in  consulting fees to directors or companies controlled by directors of the  Company. The Company also reimbursed $138,717 ($112,565 –September 30, 2008,  (September 30, 2007 - $113,297) to directors for expenditures made on behalf of  the Company.

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

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

Stock Options

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

27

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**C) BOARD PRACTICES**

The Board of Directors meets
  formally approximately 4 to 6 times per year on an as needed basis to deal
  matters relating to the Company. Each Director serves for a term of one year or
  until the next annual meeting of the shareholders at which Directors are
  elected and qualified. The Company's last annual general meeting was held on June
  26, 2008 and the next meeting will be held subject to Board approval as
  specified in the Company's Articles. The Company's executive officers are
  appointed by and serve at the pleasure of the Board of Directors.

Audit Committee

The Company's Audit Committee is
  composed of three individuals all present directors. The Audit Committee
  members of the Company as at December 31, 2009 are Mr. Mike Barrett, Mr. Chris
  Yergensen, and Mr. Kazunari Kohno. Messrs. Barrett, Yergensen, and Kohno during
  fiscal year 2008 and currently:

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

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

Remuneration Committee

The Company does not have a
  Compensation Committee.

Service Contracts

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

**D) EMPLOYEES**

The following is a breakdown of
  Company employees as at December 31, 2009 and for the years ended September 30th 2008, and 2007 and December 31, 2006:

|                                 |  | 2009* |  |  | 2009 |  |  | 2008 |  |  | 2007 | 
|-------------------------------- |  | ----- |  |  | ---- |  |  | ---- |  |  | ---- | 
|Management                       |  | 3     |  |  | 3    |  |  | 2    |  |  | 2    | 
|Administrative Staff             |  | 9     |  |  | 9    |  |  | 7    |  |  | 6    | 
|Customer Service Representatives |  | 6     |  |  | 6    |  |  | 10   |  |  | 11   | 
|IT / e-Commerce Personnel        |  | 1     |  |  | 1    |  |  | 1    |  |  | 1    | 
|Fitness Club Personnel           |  | 8     |  |  | 8    |  |  | 8    |  |  | 8    | 
|Yacht Charter Personnel          |  | 3     |  |  | 4    |  |  | -    |  |  | -    | 

28

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Notes: 
  (*) as at December 31, 2009.

**E) SHARE OWNERSHIP OF MANAGEMENT**

The following table sets forth
  the share ownership of management as of December 31, 2009:

|Name             |  | Common    |  |  | Percent of |  |  | "A"       |  |  | Percent of |  |  | "B"       |  |  | Percent of | 
|---------------- |  | --------- |  |  | ---------- |  |  | --------- |  |  | ---------- |  |  | --------- |  |  | ---------- | 
|                 |  | Shares(1) |  |  | Class      |  |  | Preferred |  |  | Class      |  |  | Preferred |  |  | Class      | 
|                 |  |           |  |  |            |  |  | Shares(4) |  |  |            |  |  | Shares(5) |  |  |            | 
|Scott McManus(2) |  | 9,000,000 |  |  | 31.16      |  |  | 1,393,398 |  |  | 10.00      |  |  | 1,393,398 |  |  | 10.00      | 
|Jeffery Teeny(3) |  | 6,250,000 |  |  | 21.64      |  |  | 1,393,398 |  |  | 10.00      |  |  | 1,393,398 |  |  | 10.00      | 
|Daniel Clozza    |  | 5,430,000 |  |  | 18.84      |  |  | 5,305,500 |  |  | 38.07      |  |  | 5,305,500 |  |  | 38.07      | 
|Martin Tutschek  |  | 1,620,789 |  |  | 5.61       |  |  | 1,399,500 |  |  | 10.04      |  |  | 1,399,500 |  |  | 10.94      | 
|Mike Barrett     |  | -         |  |  | -          |  |  | -         |  |  | -          |  |  | -         |  |  | -          | 
|Chris Yergensen  |  | -         |  |  | -          |  |  | -         |  |  | -          |  |  | -         |  |  | -          | 
|Kazunari Kohno   |  | -         |  |  | -          |  |  | -         |  |  | -          |  |  | -         |  |  | -          | 

Notes:

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

Incentive Share Purchase Plan

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

The following table sets out
  detail regarding stock option grants made to our Named Executive Officers issued
  in our 2007 fiscal year.

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

29

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Notes:

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

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

Warrants

There are no warrants
  outstanding.

Other Dilutive Elements

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

Conflicts
  of Interest

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

**A) MAJOR SHAREHOLDERS**

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

The following  persons hold, of record or beneficially, directly or indirectly, or are known  by the Company to own beneficially, directly or indirectly, more than 5% of the  issued shares of the Company as at April 30, 2009:

|Identity of Person or Group | Common Shares(1) | Percent of Class | "A" Preferred Shares(4) | Percent of Class | "B" Preferred Shares(5) | Percent of Class
|--------------------------- | ---------------- | ---------------- | ----------------------- | ---------------- | ----------------------- | ----------------
|Jeffery Teeny(2)            | 6,250,000        | 21.64            | 1,393,398               | 10.00            | 1,393,398               | 10.00           
|Scott McManus(3)            | 9,000,000        | 31.16            | 1,393,398               | 10.00            | 1,393,398               | 10.00           
|Daniel Clozza,              | 5,430,000        | 18.84            | 5,305,500               | 38.07            | 5,430,000               | 38.07           
|Martin Tutschek             | 1,620,789        | 5.61             | 1,399,500               | 10.04            | 1,399,500               | 10.04           
|Jackie Dawydiuk             | 1,500,000        | 5.20             | 1,500,000               | 10.76            | 1,500,000               | 10.76           

30

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Notes:

> (1) Does not
>     include options owned by directors or officers. Options are disclosed
>     previously.
>   (2) Shares
>     beneficially owned or held by Mr Teeny are registered to Teeny Acquisitions,
>     LLC
>   (3) Shares
>     beneficially owned or held by Mr McManus are registered to Aliya Life
>     Settlement, LLC.
>   (4) On June
>     27, 2007 the record date, the Company issued 13,933,983 Series ”A” Preferred
>     shares to all the existing registered and beneficial common shareholders on a
>     one (1) for one (1) PRO RATA basis. The Series “A’ Preferred shares are
>     convertible, as a Series into common shares of the Company provided a majority
>     of the Series “A” Preferred shareholders vote in favour of converting the
>     entire Series. The Series will convert into a number of common shares that will
>     represent 50% of the number of fully diluted common shares after conversion.
>   (5) On June
>     27, 2007 the record date, the Company issued 13,933,983 Series ”B” Preferred
>     Shares to all the existing registered and beneficial common shareholders on a
>     one (1) for one (1) PRO RATA basis. The Series “B” Preferred shares are
>     convertible into common shares of the Company on a one for one basis by
>     shareholders of record as of June 27, 2007.

The nature and extent of
  principal non-United States trading market is approximately 50% of all
  outstanding securities, which are held outside the United States and
  approximately 50% of all outstanding securities are held within the United
  States as of December, 2009. The Company is not owned or controlled, directly
  or indirectly, by another corporation or by any foreign government.

**B) RELATED PARTY TRANSACTIONS**

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

The Company advanced $225,000 to a Director for the purchase  of a 43’ motor vessel.  The vessel is a 43 foot Sunbridge cruiser of  fiberglass construction complementing rental vessels available to prospective  charters. Consideration given was based on evaluation by an independent  Canadian registered marine surveyor. The related party advance was  fair valued at an interest rate of 9.9% for a fair value of $205,000, with a  $20,000 charge to wages.

31

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Canadian
  GAAP requires that any assets or liabilities acquired in a non-arms length
  transaction be recorded in the Company records at the carrying value of the
  vendor. The amounts above attributed to net identifiable assets approximate
  their carrying value. The amount attributed to "excess of purchase price
  over net identifiable assets acquired" has been charged to deficit.

During 2009, the  Company paid $nil (September 30, 2008 $nil and September 30, 2007 – $nil) in  consulting fees to directors or companies controlled by directors of the  Company. The Company also reimbursed $138,717 ($112,565 –September 30, 2008,  (September 30, 2007 - $113,297) to directors for expenditures made on behalf of  the Company.

During fiscal 2008 a 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 with the proceeds having been utilized by the Company’s
  general operating account.

From time to time during the year, the Company has made property
  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.

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

Indebtedness to Company of
  Directors and Senior Management

Amounts due to shareholders at
  the end of the fiscal period December 31, 2009 were $486,379. Directors of the
  Company are indebted to the Company in the amount of $nil and no director or
  senior management or have been indebted to the Company since the beginning of
  the last completed financial year of the Company other than as listed below.
  The Company reimburses Directors and Senior Management for expenses incurred in
  connection with Company’s ordinary course of business. To the extent these
  advances and expenses are offset, there exists an indebtedness to the Company
  of a net $nil as of September 30, 2009 (September 30, 2008 - $ nil, September
  30, 2007 - $nil).

Interests
  of Experts and Counsel

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

**A) CONSOLIDATED STATEMENTS AND OTHER FINANCIAL
  INFORMATION**

This Annual Report contains the consolidated financial statements
  for the Company for the fiscal year ended September 30, 2009, fiscal year ended
  September 30, 2008, and nine month period ended September 30, 2007 which contain
  an Auditors' Report dated May 14, 2010 in connection with the fiscal year ended
  September 30, 2009, an Auditors Report dated March 2, 2009 in connection with
  the year ended September 30, 2008 and fiscal year ended September 30, 2007,
  Consolidated Balance Sheets as at September 30, 2009 and September 30, 2008,
  Consolidated Statements of Operations, Comprehensive Income (Loss) and Deficit,
  and Consolidated Statements of Cash Flows for the fiscal year ended September
  30, 2009 and year ended September 30, 2008 and nine month period ended September
  30, 2007, and Notes to Consolidated Financial Statements.

Indebtedness to Company of
  Directors and Senior Management

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

Legal or Arbitration Proceedings

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

32

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Dividend Distribution Policy

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

**B) SIGNIFICANT CHANGES**

There has not been any
  significant change that has occurred since the date of the annual financial
  statements, and/or since the most recent interim financial statements, if any,
  included in the document.

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

The following table sets forth
  the price ranges of the Company’s shares when listed on the on the OTCBB and
  the Pink Sheet Exchange for each of the most current five years, each of the
  quarters for the most current two years and each of the most current six
  months:

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

|     |   | 2009 |  |  | 2008  |  |  | 2007  |  |  | 2006 |  |  | 2005 | 
|---- | - | ---- |  |  | ----- |  |  | ----- |  |  | ---- |  |  | ---- | 
|High | $ | 4.26 |  |  | 18.00 |  |  | 17.30 |  |  | 3.00 |  |  | 1.00 | 
|Low  | $ | 0.75 |  |  | 1.75  |  |  | 0.50  |  |  | 0.24 |  |  | 0.17 | 

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

|     |   |      |  |  | 2009 |  |  |      |  |  |      |  |   |       |  |  | 2008  |  |  |      |  |  |      | 
|---- | - | ---- |  |  | ---- |  |  | ---- |  |  | ---- |  | - | ----- |  |  | ----- |  |  | ---- |  |  | ---- | 
|     |   | Q1   |  |  | Q2   |  |  | Q3   |  |  | Q4   |  |   | Q1    |  |  | Q2    |  |  | Q3   |  |  | Q4   | 
|High | $ | 4.00 |  |  | 4.26 |  |  | 3.50 |  |  | 1.79 |  | $ | 18.00 |  |  | 11.50 |  |  | 5.00 |  |  | 4.50 | 
|Low  | $ | 2.05 |  |  | 0.75 |  |  | 1.50 |  |  | 0.75 |  | $ | 11.75 |  |  | 4.01  |  |  | 3.75 |  |  | 1.75 | 

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

|     |   | 2010 |  |  | 2009 |  |  | 2009 |  |  | 2009 |  |  | 2009 |  |  | 2009 | 
|---- | - | ---- |  |  | ---- |  |  | ---- |  |  | ---- |  |  | ---- |  |  | ---- | 
|     |   | Jan  |  |  | Dec  |  |  | Nov  |  |  | Oct  |  |  | Sept |  |  | Aug  | 
|High | $ | 1.02 |  |  | 1.25 |  |  | 1.35 |  |  | 1.79 |  |  | 2.30 |  |  | 3.10 | 
|Low  | $ | 0.66 |  |  | 0.75 |  |  | 1.20 |  |  | 1.28 |  |  | 1.50 |  |  | 2.00 | 

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

**B) PLAN OF DISTRIBUTION**

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

33

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**C) MARKETS**

As of February 1, 2010 the shares
  of Forum National Investments Ltd. are publicly traded on the OTCBB under the
  trading symbol FMNLF CUSIP Number 3498452067. The nature and extent of
  principal non-United States trading market is approximately 50% of all
  outstanding securities, which are held outside the United States and approximately
  50% of all outstanding securities are held within the United States as of February
  1, 2010.

**D) SELLING SHAREHOLDERS**

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

**E) DILUTION**

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

**F) EXPENSES OF THE ISSUE**

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

**A) SHARE CAPITAL**

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

**B) MEMORANDUM AND ARTICLES OF INCORPORATION**

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

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

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

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

34

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

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

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

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

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

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

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

At the Company’s AGM  on June 26, 2008, shareholders were asked to consider, and if deemed advisable,  to pass with or without variation, a special resolution to approve an amendment  to Article No. 10.3 of the Corporation to increase the quorum requirement for  shareholders meetings to 2 shareholders in person or by proxy representing not  less than 33.33% of the outstanding shares of the Corporation. The resolution  was passed and the directors have yet to enact the Amendment.

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

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

35

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

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

**C) MATERIAL CONTRACTS**

Additionally
  the Company originally intended to acquire a 25% interest in a mixed use
  development property in Needles California for US$1,000,000. The 22 acre
  property with 850 feet of waterfront on the Colorado River has a marina with a
  20,000 square foot storage facility for marine based activity. As the property
  is developed to various stages differing options to include condo / townhomes
  for either full ownership, fractional ownership of timeshare intervals will be
  explored. The Canadian travel club membership would be offered a product in a
  southern United States location that has an extended season of favorable
  weather conditions. Subsequent to fiscal year end 2008, the Company discovered
  that the investee had failed to raise the additional capital as planned. As a
  result, the ownership interest actually acquired by the Company was 54% instead
  of 25% as originally intended. Accordingly, the Company has restated the
  presentation of its investment to consolidate the net assets of Colorado River
  Resorts LLC (the “LLC”) as of September 30, 2008. .  Subsequent to the initial
  investment, the LLC entered into a sale and purchase agreement to acquire the
  development property. 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 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.

In September of 2005, the Company
  secured a credit facility with Caterpillar Financial Services for up to $3
  million USD. The Company subsequently had the credit facility increased to an
  amount of $4.3 million USD. Subsequent to fiscal year end September 30, 2008
  the Company converted its construction loan facility with Caterpillar Financial
  Services Corporation to a 5 year term loan facility of $5 million USD at a fixed
  APR rate of 7% with an 18 year amortization. The Company does not currently
  hedge against foreign exchange or interest rate fluctuations.

**D) EXCHANGE CONTROLS**

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

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

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

36

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

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

**E) TAXATION**

Material Canadian
  Federal Income TaxConsequences

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

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

Dividends

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

No dividends have ever been paid by us.

Capital Gains

Under the ITA, a taxpayer's capital gain or capital loss
  from a disposition of a share of our company is the amount, if any, by which
  his proceeds of disposition exceed (or are exceeded by) the aggregate of his
  adjusted cost base of the share and reasonable expenses of disposition.
   One half of a capital gain (the "taxable capital gain") is
  included in income, and one half of a capital loss in a year (the
  "allowable capital loss") is deductible from taxable capital gains
  realized in the same year.  The amount by which a shareholder's allowable
  capital loss exceeds his taxable capital gains in a year may be deducted from a
  taxable capital gain realized by the shareholder in the three previous or any
  subsequent year, subject to certain restrictions in the case of a corporate
  shareholder.

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

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

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

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

(b) the shares
  formed part of the business property of a "permanent establishment"
  or pertained to a fixed base used for the purpose of performing independent
  personal services that the shareholder has or had in Canada within the 12
  months preceding the disposition.

Material United States Federal
  Income Tax Consequences

The following is a discussion of
  material U.S. federal income tax consequences that may be relevant with respect
  to the acquisition, ownership and disposition of our common shares by a U.S.
  Holder (as hereinafter defined).  This discussion does not address all
  potentially relevant federal income tax matters and it does not address
  consequences peculiar to persons subject to special provisions of federal
  income tax law, such as those described below as excluded from the definition
  of a U.S. Holder.  In addition, this discussion does not cover any state,
  local or foreign tax consequences.  Accordingly, holders and prospective
  holders of our common shares are urged to consult their own tax advisors about
  the specific federal, state, local and foreign tax consequences to them of
  acquiring, holding and disposing of our common shares, based upon their
  individual circumstances.

The following discussion is based
  upon the sections of the Code, Treasury Regulations, published Internal Revenue
  Service (“IRS”) rulings, published administrative positions of the IRS
  and court decisions that are currently applicable, any or all of which could be
  materially and adversely changed, possibly on a retroactive basis, at any time
  and which are subject to differing interpretations. This discussion does not
  consider the potential effects, both adverse and beneficial, of any proposed
  legislation which, if enacted, could be applied, possibly on a retroactive
  basis, at any time.

U.S. Holders

As used in this annual report, a “U.S.
  Holder” means a holder of our common shares who is (i) a citizen or
  individual resident of the United States, (ii) corporation, or other entity
  treated as a corporation for U.S. tax purposes, created or organized in or
  under the laws of the United States or any state thereof (including the
  District of Columbia), (iii) an estate the income of which is subject to U.S.
  federal income taxation regardless of its source, or (iv) a trust if such trust
  was in existence on August 20, 1996 and validly elected to be treated as a
  United States person for U.S. federal income tax purposes or if (1) a court
  within the U.S. is able to exercise primary supervision over its administration
  and (2) one or more U.S. persons have the authority to control all of the
  substantial decisions of such trust.   This summary does not address
  the tax consequences to, and the term U.S. Holder does not include, persons
  subject to specific provisions of federal income tax law, such as tax-exempt
  organizations, qualified retirement plans, individual retirement accounts and
  other tax-deferred accounts, financial institutions, insurance companies, real
  estate investment trusts, regulated investment companies, broker-dealers,
  non-resident alien individuals, persons or entities that have a “functional
    currency” other than the U.S. dollar, shareholders subject to the
  alternative minimum tax, shareholders who hold common shares as part of a
  straddle, hedging or conversion transaction and shareholders who acquired their
  common shares through the exercise of employee stock options or otherwise as
  compensation for services.  This summary is limited to U.S. Holders who
  own common shares as capital assets, within the meaning of Section 1221 of the
  Code, and who own (directly and indirectly, pursuant to applicable rules of
  constructive ownership) no more than 10% of the value of our total outstanding
  stock.  This summary does not address the consequences to a person of the
  ownership, exercise or disposition of any options, warrants or other rights to
  acquire common shares.

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

Distributions on Our Common
  Shares

Subject to the discussion below
  under “Passive Foreign Investment Company,” U.S. Holders receiving
  dividend distributions (including constructive dividends) with respect to our
  common shares generally are required to include in gross income for U.S.
  federal income tax purposes the gross amount of such distributions (without
  reduction of any Canadian income or other tax withheld from such
  distributions), equal to the U.S. dollar value of such distributions on the
  date of receipt (based on the exchange rate on such date), to the extent that
  we have current or accumulated earnings and profits.  Such Canadian tax
  withheld may be credited, subject to certain limitations, against the U.S.
  Holder’s federal income tax liability or, alternatively, may be deducted in
  computing the U.S. Holder’s federal taxable income by those who itemize
  deductions (See more detailed discussion at “Foreign Tax Credit” below).
  Dividends paid on our common shares will not generally be eligible for the
  dividends received deduction provided to corporations receiving dividends from
  certain U.S. corporations.

For taxable years beginning before
  January 1, 2011, dividends received by U.S. Holders that are individuals,
  estates or trusts from “qualified foreign corporations,” as defined in Section
  1(h)(11) of the Code, generally are taxed at the same preferential tax rates
  applicable to long-term capital gains. Although not free from doubt, it appears
  that we are a “qualified foreign corporation,” as defined in Section 1(h)(11)
  of the Code if we are not, and have not been, a PFIC, as described below under
  “Passive Foreign Investment Company.” We have not determined whether or
  not we meet the definition of a PFIC for the current tax year and any prior tax
  years. A corporation that is a PFIC, along with other foreign corporations
  given special status under the Code, for its taxable year during which it pays
  a dividend, or for its immediately preceding taxable year, will not be treated
  as a “qualifying foreign corporation” and dividends received by U.S. Holders
  that are individuals, estates or trusts generally will be subject to U.S.
  federal income tax at ordinary income tax rates (and not at the preferential
  tax rates applicable to long-term capital gains).

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

Disposition of Our Common
  Shares

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

39

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Passive Foreign Investment
  Company

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

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

U.S. Holders owning shares of a
  PFIC are subject to a special tax and to an interest charge based on the value
  of deferral of U.S. tax attributable to undistributed earnings of a PFIC for
  the period during which the shares of the PFIC are owned.  This special
  tax would apply to any gain realized on the disposition of shares of a PFIC.
   In addition, the gain is subject to U.S. federal income tax as ordinary
  income, taxed at top marginal rates, rather than as capital gain income.
   The special tax would also be payable on receipt of excess distributions
  (any distributions received in the current year that are in excess of 125% of
  the average distributions received during the 3 preceding years or, if shorter,
  the shareholder’s holding period).  However, if the U.S. Holder makes for
  any tax year a timely election to treat a PFIC as a qualified electing fund (“QEF”)
  with respect to such shareholder’s interest therein, the above-described rules
  generally will not apply.  Instead, the electing U.S. Holder would include
  annually in his gross income his pro rata share of the PFIC’s ordinary earnings
  and any net capital gain regardless of whether such income or gain was actually
  distributed.  Special rules apply to U.S. Holders who own their interests
  in a PFIC through intermediate entities or persons.  Generally,
  shareholders do not make a QEF election unless they have sufficient information
  to determine their proportionate share of a corporation’s net capital gain and
  ordinary earnings. We have not calculated these amounts for any shareholder,
  and do not anticipate making these calculations in the foreseeable future. Therefore,
    U.S. Holders of our common shares should consult their own financial advisor,
    legal counsel or accountant regarding the QEF election before making this
    election.

U.S. Holders who hold, actually or
  constructively, marketable stock of a foreign corporation that qualifies as a
  PFIC may elect to mark such stock to the market (a “mark-to-market election”).
   If such an election is made, such U.S. Holder will not be subject to the
  special taxation rules of PFIC described above for the taxable years for which
  the mark-to-market election is made.  A U.S. Holder who makes such an
  election will include in income for the taxable year an amount equal to the
  excess, if any, of the fair market value of our common shares as of the close
  of such tax year over such U.S. Holder’s adjusted basis in such shares.
   In addition, the U.S. Holder is allowed a deduction for the lesser of (i)
  the excess, if any, of such U.S. Holder’s adjusted tax basis in the shares over
  the fair market value of such shares as of the close of the tax year or (ii)
  the excess, if any of (A) the mark-to-market gains for our common shares
  included by such U.S. Holder for prior tax years, including any amount which
  would have been included for any prior year but for Section 1291 interest on
  tax deferral rules discussed above with respect to a U.S. Holder, who has not
  made a timely QEF election during the year in which he holds (or is deemed to
  have held) our common shares and we are a PFIC (“Non-Electing U.S. Holder”)
  over (B) the mark-to-market losses for shares that were allowed as deductions
  for prior tax years.  A U.S. Holder’s adjusted tax basis in our common
  shares will be increased or decreased to reflect the amount included or
  deducted as a result of mark-to-market election.  A mark-to-market
  election will apply to the tax year for which the election is made and to all
  later tax years, unless the PFIC stock ceases to be marketable or the IRS
  consents to the revocation of the election.

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

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The PFIC and QEF election rules
  are complex.  U.S. Holders should consult a tax advisor regarding the
  availability and procedure for making the QEF election as well as the
  applicable method for recognizing gains or earnings and profits under the
  foregoing rules.

Foreign Tax Credit

A U.S. Holder who pays (or has
  withheld from distributions) Canadian or other foreign income tax with respect
  to the ownership of our common shares  may be entitled, at the option of
  the U.S. Holder, to either receive a deduction or a tax credit for U.S. federal
  income tax purposes with respect to such foreign tax paid or withheld. Complex
  limitations apply to the foreign tax credit, including the general limitation
  that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S.
  federal income tax liability that such U.S. Holder’s “foreign source” taxable
  income bears to such U.S. Holder’s worldwide taxable income. In applying this
  limitation, a U.S. Holder’s various items of income and deduction must be
  classified, under complex rules, as either “foreign source” or “U.S. source.”
  In addition, this limitation is calculated separately with respect to specific
  categories of income including “passive category income” and “general category
  income.”  Gain or loss recognized by a U.S. Holder on the sale or other
  taxable disposition of our common shares generally will be treated as “U.S.
  source” for purposes of applying the foreign tax credit rules.  Dividends
  received by U.S. Holders on our common shares generally will be treated as
  “foreign source” and generally will be categorized as “passive income” for
  purposes of applying the foreign tax credit rules.  The availability of
    the foreign tax credit and the application of the limitations with respect to
    the foreign tax credit are fact specific, and each U.S. Holder of our common
    shares should consult their own financial advisor, legal counsel or accountant
    regarding the foreign tax credit rules.

Cont rolled Foreign Corporation

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

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

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

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

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

41

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Information Reporting; Backup
  Withholding

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

**F) DIVIDENDS AND PAYING AGENTS**

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

**G) STATEMENTS BY EXPERTS**

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

**H) DOCUMENTS ON DISPLAY**

Any documents  referred to in this document may be inspected at the head office of the  Company, #200 – 550 Denman Street Road, Vancouver, British Columbia, Canada,  V6G 3H1 during normal business hours.

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

**I) SUBSIDIARY INFORMATION**

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

Other than described below, we
  are not a party to any market risk sensitive instruments other than instruments
  evidencing interest-bearing debt obligations as described in “Item 4 – History
  and Development of the Company, Material Events” and in Note 5 and Note 12 to
  our audited financial statements for the year ended September 30, 2008 entitled
  “Financial Instruments” and “Long Term Debt”, respectively.

Financial instruments

42

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Fair
  value of financial instruments

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

Concentration
  of credit risk

We grant credit to our members in
  the normal course of our sales and marketing of travel club memberships. The
  financial statements take into account an allowance for bad debts. Receivables
  from the proceeds of our Life Settlement operations are substantial. At
  September 30, 2008, one Life Settlement maturity represented 91% of total
  receivables.

Interest
  rate risk

The Company has no short term
  bank credit facilities. Our long term debt bears interest at a fixed rate. This
  is described in further detail in “Item 4 – History and Development of the
  Company” of this annual report and in Note 13 to our financial statements. We
  do not use derivative instruments to manage our exposure to interest rate risk.

Foreign
  exchange rate risk

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

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

**PART II**

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

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

**MATERIAL MODIFICATION TO THE RIGHTS OF SECURITY
  HOLDERS**

At the Company’s  AGM on June 26, 2008, shareholders were asked to consider, and if deemed  advisable, to pass with or without variation, a special resolution to approve  an amendment to Article No. 10.3 of the Corporation to increase the quorum  requirement for shareholders meetings to 2 shareholders in person or by proxy  representing not less than 33.33% of the outstanding shares of the Corporation.  The resolution was passed and the directors have yet to enact an Amendment.

43

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**USE OF PROCEEDS**

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

**DISCLOSURE CONTROLS AND
  PROCEDURES**

Under the supervision and with
  the participation of the Company’s management, including the Company’s Chief
  Executive Officer and Chief Financial Officer, the Company reevaluated the
  effectiveness of the design and operation of its disclosure controls and
  procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of
  1934, as amended) as of a date (the “Evaluation Date”) being September 30, 2009.
  Based on this evaluation these officers have concluded that as of the end of
  the period covered by this Annual Report on Form 20-F/A, our disclosure
  controls and procedures were ineffective and were not adequate to insure that
  the information required to be disclosed by the Company in reports it files or
  submits under the Exchange Act were recorded, processed, summarized and
  reported within the time period specified in the Commission's rules and forms.

**MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROLS
  OVER FINANCIAL REPORTING**

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

Our management, including our
  Chief Executive Officer and Chief Financial Officer, assessed the effectiveness
  of internal control over financial reporting as of September 30, 2009. Based on
  that assessment, our management concluded that there was a material weakness in
  our internal control relating to our controls over financial reporting, Specifically,
  the design of controls over the preparation and review of consolidated
  financial information was not sufficient to enable the Company to file these
  consolidated financial statements for the years ended September 30, 2009 and
  2008 in a timely manner.

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

**REMEDIATION STEPS TO ADDRESS MATERIAL WEAKNESS**

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

44

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

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

**AUDIT COMMITTEE FINANCIAL EXPERT**

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

We believe that the combined
  knowledge, skills and experience of the members of our Audit Committee enables
  them, as a group, to act effectively in the fulfillment of their tasks and
  responsibilities, including those under the Sarbanes-Oxley Act of 2002. Mr.
  Michael Barrett is chairman of the audit committee and is a member who would
  qualify as an audit committee financial expert.

**CODE OF ETHICS**

We have adopted a code of ethics
  for our Chief Executive Officer, Chief Financial Officer, principal accounting
  officer, controller and other persons performing similar functions. Our code of
  ethics complies with the SEC rules. The code of ethics addresses the following:

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

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

**PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The independent auditors of the Company are the firm of BDO
  Canada LLP, Chartered Accountants and Advisors, located at 600 Cathedral Place,
  925 west Georgia Street, Vancouver, British Columbia, Canada V6C 3L2

For the periods ended September 30, 2009 the Company was invoiced
  by BDO Canada LLP, for audit fees, audit-related fees, tax fees and all other
  fees as set forth below:

45

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|                                                               |   | Year Ended |  |   | Year Ended | 
|-------------------------------------------------------------- | - | ---------- |  | - | ---------- | 
|                                                               |   | September  |  |   | September  | 
|                                                               |   | 30, 2009   |  |   | 30, 2008   | 
|                                                               |   |            |  |   |            | 
|Audit fees - auditing of our annual financial statements and   |   |            |  |   |            | 
|preparation of auditors' report.                               | $ | 271,000    |  | $ | 131,400    | 
|                                                               |   |            |  |   |            | 
|                                                               |   |            |  |   |            | 
|Audit-related fees - review of each of the quarterly financial |   |            |  |   |            | 
|statements.                                                    |   | 20,850     |  |   | -          | 
|                                                               |   |            |  |   |            | 
|Tax fees - preparation and filing of three major tax-related   |   |            |  |   |            | 
|forms and tax planning.                                        |   | -          |  |   | -          | 
|                                                               |   |            |  |   |            | 
|All other fees - other services provided by our principal      |   |            |  |   |            | 
|accountants.                                                   |   | 59,200     |  |   | -          | 
|                                                               |   |            |  |   |            | 
|Total fees paid or accrued to our principal accountants        | $ | 351,050    |  | $ | 131,400    | 

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

The Audit Committee has adopted
  procedures requiring Audit Committee review and approval in advance of all
  particular engagements for services to be provided by BDO Canada LLP.
  Consistent with applicable laws, the procedures permit limited amounts of
  services, other than audit, review and attest services, to be approved by one
  or more members of the Audit Committee pursuant to authority delegated by the
  Audit Committee, provided the Audit Committee is informed of each particular
  service. The Audit Committee approved all of the engagements and fees during
  the period ended September 30, 2009. The Audit Committee reviews with BDO Canada
  LLP whether the non-audit services to be provided are compatible with
  maintaining the auditors' independence. The Board has determined that, beginning
  with January 1, 2006, fees paid to the independent auditors for non-audit
  related services in any year will not exceed the fees paid for audit services
  during the year. Permissible non-audit services will be limited to fees for tax
  services, accounting assistance or audits in connection with acquisitions, and
  other services specifically related to accounting or audit matters such as
  registration statements filings or private placements or public offerings.

**EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**

Not Applicable.

**PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
  AFFILIATED PURCHASERS**

Not Applicable.

**PART III**

**ITEM XVII. FINANCIAL STATEMENTS**

See the Financial Statements and
  Exhibits listed in Item XIX hereof and filed as part of this Annual Report.
  Included are audited consolidated balance sheets as at September 30, 2009 and
  September 30, 2008 and the consolidated statements of operations and deficit
  and cash flows for each of the year ended September 30, 2009, year ended
  September 30, 2008 and the year ended September 30, 2007 including the
  Auditors’ Report to Shareholders.

46

---



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

***A) CONSOLIDATED STATEMENTS AND OTHER FINANCIAL  INFORMATION***

This Annual Report  contains the consolidated financial statements for the Company for the fiscal  year ended September 30, 2009, fiscal year ended September 30, 2008, and the nine month period ended September  30, 2007 which contain an Auditors' Report dated May 14, 2010, in connection with the fiscal year  ended September 30, 2009, an Auditors Report dated May 13, 2009, except for notes 3 and 22, which is  as of April 24, 2010, in connection with the year ended September 30,  2008 and nine month period  ended September 30, 2007, Consolidated Balance Sheets as at September  30, 2009 and September 30, 2008, Consolidated Statements of Operations,  Comprehensive Income (Loss) and Deficit, and Consolidated Statements of Cash  Flows for the fiscal year ended September 30, 2009 and year ended September 30,  2008 and year ended September 30, 2007, and Notes to Consolidated Financial  Statements.

**ITEM XIX. EXHIBITS**

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

**FINANCIAL STATEMENTS**

(i) Management’s Responsibility
  to Financial Reporting.

(ii) Auditors’  Report dated May 14, 2010.

(iii)  Consolidated Balance Sheets as at September 30, 2009, and 2008.

(iv) Consolidated Statements of
  Operations and Deficit for the year ended September 30, 2009, year ended
  September 30, 2008 and the nine month period ended September 30, 2007.

(v) Consolidated Statements of Cash Flows for the year ended September 30, 2009,  year ended September 30, 2008 and the nine month period ended September 30, 2007.

(vi) Notes to the Consolidated
  Financial Statements for the year ended September 30, 2009, year ended
  September 30, 2008 and the nine month period ended September 30, 2007.
  Financial Statements Schedules are omitted because they are not applicable, not
  required or because the required information is included in the consolidated
  financial statement or notes thereto filed within.

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

Notes: (1) Incorporated by
  reference to Form 20-F filed with the SEC on November 3, 1998. (2) Incorporated
  by reference to Form 20-F filed with the SEC on August 15, 2003. (3)
  Incorporated by reference to Form 20-F filed with the SEC on August 29, 2007.
  (4) Incorporated by reference to Form 20-F filed with the SEC on December 29,
  2006.

47

---



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

|Date: May, 14 2010 | FORUM NATIONAL INVESTMENTS LTD.                     
|------------------ | ----------------------------------------------------
|                   |                                                     
|                   | /s/ Daniel Clozza                                   
|                   | Daniel Clozza, President and Chief Executive Officer
|                   |                                                     
|                   | /s/ Martin Tutschek                                 
|                   | Martin Tutschek, Chief Financial Officer            

---



INDEX TO FINANCIAL STATEMENTS

|                                                                                                                                                 |           
|------------------------------------------------------------------------------------------------------------------------------------------------ | ----------
|                                                                                                                                                 | Page      
|                                                                                                                                                 |           
|Management’s Responsibility for Financial
      Reporting                                                                                        | F-2       
|Auditors’ Report dated May 14, 2010.                                                                                                             | F-3       
|Consolidated Balance Sheets as at
      September 30, 2009 and September 30, 2008.                                                               | F-5       
|Consolidated
      Statements of Loss and Deficit for the years ended September 30, 2009 and 2008
      and the period ended September 30, 2007. | F-6       
|Consolidated
      Statements of Cash Flows for the years ended September 30, 2009 and 2008 and
      the period ended September 30, 2007.       | F-7       
|Notes
      to the Consolidated Financial Statements for years ended September 30, 2009
      and 2008 and the period ended September 30, 2007.  | F-8 - F-48

---



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 statements of operations, comprehensive income
  (loss) and deficit and cash flows for the nine-month ended September 30, 2007
  were audited by other auditors, who expressed an opinion without reservation
  on those statements, before the revision described in note 2(r), 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. We have audited the adjustments described
  in note 2(r) that were applied to revise the 2007 consolidated statements of
  operations, comprehensive income (loss) and deficit and cash flows to reflect
  the retrospective adoption of revised Canadian Institute of Chartered Accountant
  Handbook Section 1000, Financial Statement Concepts, In our opinion, such adjustments
  are appropriate and have been properly applied. We were not engaged to audit,
  review or apply any procedures to the 2007 consolidated financial statements
  of the Company other than with respect to the adjustments and, accordingly,
  we do not express an opinion or any other form of assurance on the 2007 consolidated
  financial statements taken as a whole.

/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

---



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       |  |   | 5,737                                      | 
|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                 | ) | $ | (0.11                 | )
|Diluted earnings (loss) per share                                        | $ | (0.13         | ) | $ | (0.02                 | ) | $ | (0.11                 | )
|                                                                         |   |               |   |   |                       |   |   |                       |  
|Weighted average number of common
      shares outstanding (note 13 (b)) |   |               |   |   |                       |   |   |                       |  

See accompanying notes to
  consolidated financial statements.

F-6

---



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                      |   |   | 602,865               |  
|Secured  borrowing                                                                                                          |   | 126,373       |   |   | 137,321                      |   |   | –                     |  
|Due to broker                                                                                                               |   | 569,996       |   |   | –                            |   |   | –                     |  
|Cash Provided by Financing Activities                                                                                       |   | 936,481       |   |   | 1,212,331                    |   |   | 10,131,118            |  
|                                                                                                                            |   |               |   |   |                              |   |   |                       |  
|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

---



|**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

---



|**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

---



|**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 $41,661 to previously reported net loss for
        the fiscal period ended September 30, 2008, a $228,455 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 September 30, 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                   | $ | 14,423,203              | $ | 20,850,991             
| | United States of America |   | 4,052,220               |   | 8,630,599              
| | Total Assets             | $ | 18,475,423              | $ | $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                   | $ | (6,045,762)             | $ | (4,242,830)            
| | United States of America |   | 701,479                 |   | 3,371,190              
| | Total net income (loss)  | $ | (5,344,283)             | $ | (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                |  |   | (405,223 | ) |   | 405,223  |  
| | 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                |  |   | (325,900 | ) |   | 325,900  |  
| | 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 considers the following
      factors in its fair value estimates: cost at date of purchase; recent purchases
      and sales of similar investments, financial standing of the issuer, changes
      in economic conditions affecting the issuer; standard actuarially developed
      mortality tables and industry life expectancy reports.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| |                                              |  |                                          |  |                                          | 
| | -------------------------------------------- |  | ---------------------------------------- |  | ---------------------------------------- | 
| |                                              |  | September 30, 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 |  | $ | 307,312      |  | $ | 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 |  | $ | 553,404      |  | $ | 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 $9,182,697 (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 $7,602,530 (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 interest rate of 7% per annum.
      The loan is secured by the motor vessel and by a personal guarantee from
      two of the directors of the Company up to the value of the permanent loan.
      Interest 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                         |  | 28,409,611 |  | $ | 24,194,793 | $ | 2,944,536  
| | Stock options exercised                             |  | 30,000     |  |   | 61,159     |   | (31,159)   
| |                                                     |  |            |  |   |            |   |            
| | Balance, September 30, 2008                         |  | 28,439,611 |  | $ | 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                         |  | 28,856,984 |  | $ | 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       |  | 28,553,321    |  |  | 28,425,526    |  |  | 18,477,377      | 
| | Series  B preferred shares conversion |  | 13,933,983    |  |  | 13,933,983    |  |  | 4,899,862       | 
| | Basic  and diluted common stock       |  | 42,487,304    |  |  | 42,359,509    |  |  | 23,377,239      | 

| | 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         |   |   | (458,959      | ) |   | 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                               | $160,920 | $345,579
| | Non-Current                           | $205,136 | $404,033
| |                                       | $366,056 | $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

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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)                                        
|                                                                       

|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

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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)                                        
|                                                                       

|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

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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)                                        
|                                                                       

|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     |   |   | 1,491,276     |   |   | 1,352,796     |  
| | Adjustment for amortization of deferred costs    |   |               |   |   |               |   |   |               |  
| | (notes23(f))                                     |   | (465,784      | ) |   | (150,240      | ) |   | (138,479      | )
| |                                                  |   |               |   |   |               |   |   |               |  
| | Deficit, under US GAAP                           | $ | (23,793,060   | ) | $ | (17,982,993   | ) | $ | (16,991,388   | )

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)
|--- | ---------------------------------------------------------------------------------------

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

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

| |                                                             |   |               |   |   |               |   |   | Nine-month    |  
| | ----------------------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------- | -
| |                                                             |   | Year ended    |   |   | Year ended    |   |   | period ended  |  
| |                                                             |   | September 30, |   |   | September 30, |   |   | September 30, |  
| |                                                             |   | 2009          |   |   | 2008          |   |   | 2007          |  
| |                                                             |   |               |   |   |               |   |   |               |  
| | Net income (loss) for the period,                           |   |               |   |   |               |   |   |               |  
| | under Canadian GAAP                                         | $ | (5,344,283    | ) | $ | (871,640      | ) | $ | (2,500,922    | )
| | Adjustment for amortization of deferred costs (note  23(f)) |   | (465,784      | ) |   | (150,249      | ) |   | 138,479       |  
| | Adjustment for Intangibles, net                             |   | –             |   |   | 30,276        |   |   | (30,276       | )
| | Net income (loss) for the period,                           |   |               |   |   |               |   |   |               |  
| | under US GAAP                                               | $ | (5,810,067    | ) | $ | (991,605      | ) | $ | (2,392,719    | )
| |                                                             |   |               |   |   |               |   |   |               |  
| | Basic earnings (loss) per share, under US GAAP              | $ | (0.14         | ) | $ | (0.02         | ) | $ | (0.10         | )
| | Diluted earnings per share, under US GAAP                   | $ | (0.14         | ) | $ | (0.02         | ) | $ | (0.10         | )

F-48

---