Filed by Avantafile.com - Forum National Investments Ltd.

0001472375-12-000201.txt : 20121029 0001472375-12-000201.hdr.sgml : 20121029 20121026195620 ACCESSION NUMBER: 0001472375-12-000201 CONFORMED SUBMISSION TYPE: 20-F/A PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20110930 FILED AS OF DATE: 20121029 DATE AS OF CHANGE: 20121026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORUM NATIONAL INVESTMENTS LTD CENTRAL INDEX KEY: 0001065579 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MEMBERSHIP SPORTS & RECREATION CLUBS [7997] IRS NUMBER: 000000000 STATE OF INCORPORATION: A6 FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 20-F/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-29862 FILM NUMBER: 121165484 BUSINESS ADDRESS: STREET 1: SUITE 180A STREET 2: 13040 #2 ROAD CITY: RICHMOND STATE: A1 ZIP: V7E 2G1 BUSINESS PHONE: 604-275-2170 MAIL ADDRESS: STREET 1: SUITE 180A STREET 2: 13040 #2 ROAD CITY: RICHMOND STATE: A1 ZIP: V7E 2G1 FORMER COMPANY: FORMER CONFORMED NAME: INTRAVELNET COM INC DATE OF NAME CHANGE: 19990709 FORMER COMPANY: FORMER CONFORMED NAME: SNOWBIRD VACATIONS INTERNATIONAL INC DATE OF NAME CHANGE: 19980708 20-F/A 1 form20fa.htm AMENDMENT NO. 1 TO THE ANNUAL REPORT Filed by Avantafile.com - Forum National Investments Ltd. - Form 20-F/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F/A

(Mark One)

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

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

September 30, 2011

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

____ 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 its charter)

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

Suite 180, 13040, No 2 Road, Richmond, B.C. Canada V7E 2G1
(Address of principal executive offices)

Martin Tutschek
Tel: 778-588-7780 Fax 604-275-8745Info@foruminvestments.com
Suite 180, 13040, No 2 Road, Richmond, B.C. Canada V7E 2G1
(Name, Telephone, E-mail and or Facsimile number and Address of Company Contact Person)

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. 32,515,984

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

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

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

Indicate by check mark whether the registrant 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 X No ___

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

Large accelerated filer ___

Accelerated filer ___

Non-accelerated filerX

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 ___

OtherX

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 X Item 18 ___

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

iii

EXPLANATORY NOTE

Amendment No 1

Forum National Investments Ltd. (“we or the “Company”) is filing this Amendment No. 1 on Form 20-F/A (“Amendment No. 1”) to its annual report on Form 20-F for the year ended September 30, 2011 originally filed with the Securities and Exchange Commission on March 28, 2012 (the “original filing”) to reflect the following amendments:

1)	Item XV – Controls and procedures

Amended disclosure controls and procedures to clarify a material weakness affecting internal control over financial reporting.

2)	Part III – Item XVII Financial Statements

Amended to include the audit report by another auditor who expressed an unmodified opinion on those statements in their report dated May 14, 2010.

3)	Part III – Item XIX Exhibits

Amended Exhibit 9.1 Audited Financial Statements for the year ended September 30, 2009, due to reference to the audit report in Item XVII.

4)	New certifications of our principal executive and financial officer are included as exhibits to this amendment.

General

For the convenience of the reader, Amendment No. 1 sets forth the original Form 20-F as amended in its entirety. However, this Amendment No. 1 only amends the items specifically described above. No other information in the original Form 20-F as amended. In addition, pursuant to the rules of the SEC, the original Form 20-F has been amended to contain currently dated certifications from our Chief Executive Officer and Chief Financial Officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. This Amendment does not reflect events that have occurred after March 28, 2012, the date the Annual Report on Form 20-F was originally filed.

FORUM NATIONAL INVESTMENTS LTD.

TABLE OF CONTENTS

GENERAL.	1
NOTE REGARDING FORWARD-LOOKING STATEMENTS.	1
PART I.	2
ITEM I. IDENTITY OF DIRECTORS, SENIORMANAGEMENT AND ADVISORS.	2
ITEM II. OFFER STATISTICS AND EXPECTEDTIMETABLE.	2
ITEM III. KEY INFORMATION.	2
B) CAPITALIZATION AND INDEBTEDNESS.	3
C) REASONS FOR THE OFFER AND USE OFPROCEEDS.	4
D) RISK FACTORS.	4
ITEM IV. INFORMATION ON THE COMPANY.	8
A) HISTORY AND DEVELOPMENT OF THE COMPANY.	8
B) BUSINESS OVERVIEW.	9
C) ORGANIZATIONAL STRUCTURE.	13
ITEM V. OPERATING AND FINANCIAL REVIEW ANDPROSPECTS.	14
A) OPERATING RESULTS.	14
B) LIQUIDITY AND CAPITAL RESOURCES.	18
C) RESEARCH AND DEVELOPMENT, PATENTS ANDLICENSES, ETC.	20
D) TREND INFORMATION.	20
E) OFF-BALANCE SHEET ARRANGEMENTS.	21
F) TABULAR DISCLOSURE OF CONTRACTUALOBLIGATIONS.	21
G) SAFE HARBOR.	22
ITEM VI. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.	22
A) DIRECTORS AND SENIOR MANAGEMENT.	22
B) COMPENSATION.	23
C) BOARD PRACTICES.	24
D) EMPLOYEES.	25
E) SHARE OWNERSHIP OF MANAGEMENT.	25
ITEM VII. MAJOR SHAREHOLDERS AND RELATEDPARTY TRANSACTIONS.	26
A) MAJOR SHAREHOLDERS.	26
B) RELATED PARTY TRANSACTIONS.	27
ITEM VIII. FINANCIAL INFORMATION.	28
A) CONSOLIDATED STATEMENTS AND OTHERFINANCIAL INFORMATION.	28
B) SIGNIFICANT CHANGES.	29
ITEM IX. THE OFFER AND LISTING.	29
A) PRICE RANGE AND VOLUME OF SHARES OFCOMMON STOCK.	29
B) PLAN OF DISTRIBUTION.	29
C) MARKETS.	30
D) SELLING SHAREHOLDERS.	30
E) DILUTION.	30
F) EXPENSES OF THE ISSUE.	30
ITEM X. ADDITIONAL INFORMATION.	30

A) SHARE CAPITAL.	30
B) MEMORANDUM AND ARTICLES OF INCORPORATION	30
C) MATERIAL CONTRACTS.	32
D) EXCHANGE CONTROLS.	32
E) TAXATION.	33
F) DIVIDENDS AND PAYING AGENTS.	33
G) STATEMENTS BY EXPERTS.	38
H) DOCUMENTS ON DISPLAY.	38
I) SUBSIDIARY INFORMATION.	38
ITEM XI. QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK.	38
ITEM XII. DESCRIPTION OF SECURITIES OTHERTHAN EQUITY SECURITIES.	39
PART II.	39
ITEM XIII. DEFAULTS, DIVIDENDS, ARREARS ANDDELINQUENCIES.	39
ITEM XIV. MATERIAL MODIFICATIONS TO THERIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	39
MATERIAL MODIFICATION TO THE RIGHTS OFSECURITY HOLDERS.	39
USE OF PROCEEDS.	39
ITEM XV. CONTROLS AND PROCEDURES.	39
DISCLOSURE CONTROLS AND PROCEDURES.	39
MANAGEMENT’S ANNUAL REPORT ON INTERNALCONTROLS OVER FINANCIAL REPORTING.	39
REMEDIATION STEPS TO ADDRESS MATERIALWEAKNESS.	41
ITEM XVI. AUDIT COMMITTEE FINANCIAL EXPERT.	41
AUDIT COMMITTEE FINANCIAL EXPERT.	41
CODE OF ETHICS.	41
PRINCIPAL ACCOUNTANT FEES AND SERVICES.	42
EXEMPTIONS FROM THE LISTING STANDARDS FORAUDIT COMMITTEES.	43
PURCHASES OF EQUITY SECURITIES BY THEISSUER AND AFFILIATED PURCHASERS.	43
PART III.	43
ITEM XVII. FINANCIAL STATEMENTS.	43
ITEM XVIII. FINANCIAL STATEMENTS.	43
ITEM XIX. EXHIBITS.	43
FINANCIAL STATEMENTS.	43
SIGNATURES.	44

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, 2011.

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

NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

the effect of certain transactions, including marketing agreements on our revenues and results of operations in future periods;
our discussions with potential new marketing agents or membership based organizations and the status of these discussions;
our ability to secure additional financing and grow operating cash flow;
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.

PART I

ITEM I. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

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

ITEM II. OFFER STATISTICS AND EXPECTED TIMETABLE

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

ITEM III. KEY INFORMATION

A) SELECTED FINANCIAL DATA

Set forth below is certain selected financial data for the Company for the year-end fiscal periods 2007 to 2011. 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, 2011, one United States Dollar was equal to 1.017 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, 2011			Sep 30, 2010			Sep 30, 2009			Sep 30, 2008			Sep 30, 2007*
Current Assets	$	191,131		$	509,224		$	4,378,578		$	6,050,471		$	9,264,232
Capital Assets		7,767,783			8,994,166			9,562,321			17,850,031			9,100,127
Total Assets		11,091,999			12,506,220			18,475,423			29,481,590			20,035,886
Current Liabilities, ⁽¹⁾		3,913,637			3,875,415			5,272,867			12,422,360			1,015,552
Deferred Revenue ⁽¹⁾		182,472			751,868			1,482,092			2,404,163			1,389,678
Convertible Debentures		40,486			40,486			40,486			40,486			40,486
Long Term Debt		4,748,054			4,846,198			5,222,774			4,211,715			3,988,031
Share Capital		25,782,966			25,810,369			25,810,369			24,255,952			24,194,793
Contributed surplus		2,757,581			2,757,581			2,757,581			2,913,377			2,944,536
Deficit		(26,481,283	)		(25,535,211	)		(22,070,260	)		(16,725,977	)		(15,854,337	)
Net Revenue from Operations	$	3,380,691		$	3,941,297		$	3,516,417		$	3,717,154		$	2,572,638	)
Net Income (Loss) from Operations		(946,072	)		(3,464,951	)		(5,344,283	)		(871,640	)		(2,500,922	)

		Sep 30, 2011		Sep 30, 2010		Sep 30, 2009		Sep 30, 2008		Sep 30, 2007*
Earnings (Loss) per Share from Operations	⁽²⁾	(0.03	)	(0.12	)	(0.19	)	(0.03	)	(0.14	)
Fully Diluted Earnings per Share	⁽²⁾	(0.03	)	(0.12	)	(0.19	)	(0.03	)	(0.14	)
Weighted Average number of shares for calculating basic and	⁽²⁾	29,990,231		28,948,776		28,553,321		28,425,526		18,477,377
diluted Earnings (Loss) per share	⁽³⁾	29,990,231		28,948,776		28,553,321		28,425,526		18,477,377

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.

(3) In a loss year, common shares equivalents are excluded from the calculation of diluted earnings (loss) per share as the effect would be anti dilutive.

On December 31, 2011, the exchange rate for Canadian dollars was $1.00 (US) for $0.9833 (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, 2011. Daily average figures are not available from any major Canadian chartered bank.

	February	January	December	November	October	September
High	1.0016	1.0272	1.0406	1.0487	1.0604	1.0389
Low	0.9866	0.9986	1.0105	1.0126	0.9935	0.9752

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

	2011	2010	2009	2008	2007
Period End	0.9833	0.9946	1.0722	1.0599	1.0905
Average	0.9891	1.0299	1.1453	1.0660	1.0747
High	1.0604	1.0778	1.3066	1.2969	1.0905
Low	0.9449	0.9946	1.0251	0.9719	0.9215

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

B) CAPITALIZATION AND INDEBTEDNESS

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

C) REASONS FOR THE OFFER AND USE OF PROCEEDS

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

D) RISK FACTORS

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

The Company’s business is 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.

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. Most 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 3 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, 2011 the Company had a working capital deficiency of $3,710,892. The Company generates operating cash flow through its 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

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, 2011, the price per share of the Company’s common shares fluctuated (US dollar figures) from a low of $0.15 to a high of $0.48 and a current level of $0.17.

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.

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 had depended, in significant part, upon the continuing sales and marketing of its Travel Club products which it has sold subsequent to fiscal year end. 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 competitive. If the Company cannot successfully compete, its growth rate may stagnate or revenues may decline.

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;

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.

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.

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.

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 180, 13040 No 2 Road, Richmond, B.C. Canada V7E 2G1, the telephone number is (604) 778-588-7780 and fax number is (604) 275-8745. 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.SpiritOfTwoThousandTen.com, www.spirityachtcharters.com, www.americanlifesettlementsociety.com, and www.thealss.com,

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

The Company has completed the launch of the 120 foot 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 incurred additional capital expenditures of $410,872 in the fiscal year ending September 30, 2010, and $2,025 in fiscal year ending September 30, 2011.

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.

In2005, Forum began to investigate the business opportunities in the secondary Life Insurance market also known as “Life Settlements”. The Company began researching the strategy 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.

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 sources 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 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. 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).

In 2011, the Company raised capital backed by a secured interest in two of the life Settlement policies beneficial interest owned by the Company. The initial sale to accredit investors of a secured interest was done though a convertible debenture allowing payment to the debenture holder in cash or stock. In addition to a portion of the beneficial interest the debenture holder is responsible for a proportionate share of the insurance premiums. Capital raised under this program totaled $ 344,101 in fiscal 2011.

To expand beyond is present financial capabilities in the Life Settlement market, 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 investment. 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 operates in the hospitality and tourism business segment. Under this segment, the company operates a charter cruise vessels.

The Company owns a passenger carrying yacht the 120’ MV Spirit of 2010, an 18 foot tender, two jet skis, and ocean going kayaks. The equipment is for charter cruises to the Pacific Northwest, and Baja Mexico.

Excess funds on-hand, either from equity financing, borrowings, sales of assets or generated from operations, may from time-to-time be reinvested in marketable securities and/or life settlement contracts. Currently, the Company has paid $1,788,567 ($1,742,817 USD) to invest in life settlement contracts, which was funded by the recent Private Placements completed 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).

Real risks exist in investing in life settlement contracts. These risks may have a material adverse effect on the Company's investment 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).

Travel Club

The Company’s historical business is providing travel services for the members of its travel clubs. Subsequent to year end the Company sold its travel club and supporting operations.

Information regarding vacation membership:

		2011	2010	2009
Membership Sales	$	----	----	----
Membership Dues	$	1,694,693	1,928,687	2,192,932
Total	$	1,694,693	1,928,687	2,192,932

For the fiscal period 2011, a total for both travel clubs (Snowbird Vacations (Snowbirds) and Family Vacations Centers (FVC)) of Nil (2010 – Nil, 2009– Nil) travel club memberships were sold for a mean average non-refundable purchase price of $Nil (2010 - $Nil, 2009 - $Nil).

The Company had not actively sold travel club memberships:

		2011			2010			2009

Travel Club Memberships entered into for the period	$	–		$	–		$	–

Amount recognized as revenue during the year		–			–			–

Future years revenue to be earned from current year Membership agreements		–			–			–
Cash collected during the year related to future years revenue		(306,768	)		(346,845	)		(517,769	)
Amounts due to be received in subsequent years	$	–		$	–		$	–
from current period membership agreements

Charter Cruises

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 incurred additional capital expenditures of $410,872 in the fiscal year ending September 30, 2010, and $2,025 in fiscal year ending September 30, 2011.

Life Settlements

In 2005, Forum began to investigate the business opportunities in the secondary Life Insurance market also known as “Life Settlements”. The Company began researching the strategy 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 secondary market 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 and has completed a substantial amount of due-diligence and invested capital to create large channels of Life Settlement “policy flow”. The Company believes successful entrance and capture of market share in this emerging industry will dominate the future Company direction and the allocation of resources. The Company is currently sourcing Life Settlement policies through “Business to Business” (B2B) Channels and anticipates launching a “Business to Consumer” (B2C) Channel subject to additional financing.

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 2009.

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. New opportunities have encouraged the Company to expand and position itself for entry into the Life Settlement market.

Government Regulations

C) ORGANIZATIONAL STRUCTURE

As of December 31, 2011, the following is a list of all the Company’s subsidiaries, all of which are wholly owned and over which the Company holds 100% voting control:

		Incorporating	Date of Acquisition
Subsidiaries	Ownership	Jurisdiction	or Incorporation

American Life Settlement Society LLC	100%	State of Delaware, USA	November 15, 2007
Spirit Yacht Charters Ltd.	100%	British Columbia, Canada	August 7, 2008

Properties

Office Leases

The Company is headquartered at Suite 180, 13040, No 2 Road, Richmond, B.C. Canada V7E 2G1where it rents approximately 1000 sq. ft. office space housing its principal corporate, accounting, and yacht charter operations.

The Company believes that its current facilities are adequate for its current administrative operations for 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

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. The Company is marketing and promoting to many tourism based organizations the cruise experience in Sea of Cortez for Winter season and the Pacific Northwest for Summer Season 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 incurred additional capital expenditures of $410,872 in the fiscal year ending September 30, 2010, and $Nil in fiscal year ending September 30, 2011.

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, 2011 and September 30, 2010 and years ended September 30, 2009 and should be read in conjunction with the Consolidated Financial Statements of the Company for the years ended September 30, 2011 and September 30, 2010 and the year ended September 30, 2009. 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.

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, 2011. 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 historically generated 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 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
Convertible Debentures	Other liabilities
Loan from related parties	Other liabilities

Selected Annual Information

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

					Year End
		2011			2010			2009
Travel Club Memberships Sold	$	–		$	–		$	–

Amount Recognized as		–			–			–
Revenue during the year
Membership Dues	$	1,642,253		$	2,181,920		$	2,358,067
# Travel Club Memberships		–			–			–
Sold
Mean Average Membership	$	–		$	–		$	–
Price
Net Income (Loss) for the period	$	(946,072	)	$	(3,464,951	)	$	(5,344,283	)
Basic Income (Loss) per Share	$	(0.03	)	$	(0.12	)	$	(0.19	)
Diluted Income (Loss) per Share	$	(0.03	)	$	(0.12	)	$	(0.19	)

For the year ended September 30, 2011 Travel Club Memberships sales remained at $Nil compared to ($Nil – September 30, 2010, $Nil –September 30, 2009), with amount recognized as revenue during the year ended September 30, 2011 remaining at $Nil ($Nil September 30, 2010, $Nil September 30, 2009). Total revenue during the year ended September 30, 2011 decreased to $3,380,691 ($3,941,297 – year ended September 30, 2010, $3,516,417 –September 30, 2009) as a result of disposing of the Company’s wholly-owned subsidiary International Fitness Vacations during the year.

For the year ended September 30, 2011, cash flow used in operations decreased $731,431 to $66,103 due mainly to the decrease in net loss as a result of cost cutting measures during the year, compared to cash flows used in operating activities of $797,534 for the year ended September 30, 2010 and cash flows used in operating activities of $672,440 for the year ended September 30, 2009.

The Company recorded revenues from membership dues and travel club membership sold of $ 3,110,511 for the year ended September 30, 2011 compared to $3,821,772 for the year ended September 30, 2010 and $3,294,162 for the year ended September 30, 2009. Subsequent to fiscal year end, the Company sold the marketing sales and service operations as the membership faced natural attrition.

For the year ended September 30, 2011 a total of Nil travel club memberships were sold or acquired, (nil for year ended September 30, 2010, 123 for year ended September 30, 2009). For the year ended September 30, 2011 the mean average non-refundable travel club membership purchase price remained at $Nil ($Nil for year ended September 30, 2010, and $Nil for year ended September 30, 2009).

A net loss of $946,072 was recorded for the year ended September 30, 2011, as compared to the net loss of $3,464,951 for the year ended September 30, 2010, and a net loss of $5,344,283 for year ended September 30, 2009. The net loss of $946,072 was due largely as result of an impairment on the motor vessel recognized as at years’ end of $500,000. Basic loss-per-share was $0.03 for the year ended September 30, 2011 compared to a loss per share of $0. 12 for the year ended September 30, 2010; loss per share of $0.19 – for the year ended September 30, 2009.

There were 32,515,984 shares issued as of September 30, 2011 and 29,140,984 issued as of September 30, 2010 and 28,856,984 at September 30, 2009. 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 28,409,611 at September 30, 2007. On July 13, 2011, the Company completed a private placement issuing 2,000,000 common shares at $0.05 per share for gross proceeds of $100,000. Basic earnings-per-share is calculated using the weighted average number of common shares outstanding during the year.

The Series “A” preference convertible shares and the Series “B” preference convertible shares are not included in the calculation of basic earnings per share, because management considers these shares to have barriers to conversion, excluding them from the calculation of basic earnings per share.

For the year ended September 30, 2011, the weighted average number of shares outstanding was 29,990,231. The fully diluted weighted average number of shares outstanding, which assumes the conversion of all Series “A” preference convertible shares and Series “B” preference convertible shares was 89,880,427. However, in a loss year, common shares equivalents are excluded from the calculation of diluted earnings (loss) per share as the effect would be anti-dilutive.

For the year ended September 30, 2011 expenses decreased by 28% or $1,024,648 due to corporate cost cutting measures. The largest expense decrease was general and administration of $489,055 (2010 - $420,428) due to corporate restructuring and cost cutting measures.

For the year ended September 30, 2011, the second largest decrease in expenses of $427,752 occurred in wages expense to $1,070,953, (2010 - $1,498,705, 2009 - $1,689,385). The decrease was a direct result of streamlining the company’s staffing levels and disposing of the Company’s wholly-owned subsidiary, International Fitness Vacations Ltd. during the year.

For the year ended September 30, 2011, the third largest decrease in operating expenses of $72,341 occurred in bad debts expense to $8,954, (2010 - $81,295, 2009 – $212,364). The decrease was the result of recoveries of previous provisions for the allowance for doubtful accounts. The Company recognized an impairment of $500,000 on the motor vessel during the year ended September 30, 2011 ($825,000 – 2010, $2,348,595 – 2009).

For the year ended September 30, 2010 expenses decreased by 19% or $1,067,326 due to corporate cost cutting measures. The largest expense increase was amortization of property and equipment to $649,508 (2009 - $337,256) due to the full year of amortization of the 120 foot Motor Vessel .

General and Administration expense decreased 16% or $420,428 to $2,206,216 during fiscal 2010, compared to $2,626,644in fiscal 2009.

For the year ended September 30, 2010, the largest decrease in expenses of $684,738 occurred in amortization of purchased memberships to $nil, (2009 - $1,751,700, 2008 - $3,060,503). The decrease was a direct result of the impairment of the intangible asset acquired in the purchase of Family Vacations Center in a previous fiscal year.

B) LIQUIDITY AND CAPITAL RESOURCES

Liquidity

As of December 31, 2011 the Company had in excess of $90,873 cash on deposit.

In 2011 the working capital deficiency decreased to $3,722,506 primarily due to the reduction of current deferred revenue during the year, which decreased $200,903 to $876,165 as at September 30, 2011.

In 2010 the working capital surplus decrease to a deficiency of $3,366,191 primarily due to the sales the company’s marketable securities portfolio, which decreased $2,240,324 to $51 as at September 30, 2010.

For continuation and long-term growth specifically the development of the Life Settlement operations additional capital is required. The Company’s 120-foot motor vessel is completed and the vessel contributed some revenue in fiscal 2011.

Financing the work on the vessel to date had 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 incurred additional capital expenditures of $410,872 in the fiscal year ending September 30, 2010, and $2,025 in fiscal year ending September 30, 2011. The Company does not currently hedge against foreign exchange or interest rate fluctuations.

The Company’s total Revenues for the year ended September 30, 2011 decreased by $560,606 to $3,380,691 (2010 - $3,941,297, 2009 - $3,516,417). The decrease was the result of the disposal of the Company’s wholly-owned subsidiary International Fitness Vacations Ltd. during the year. Fair value changes on the investment in life settlements was recorded under “Other Income (expenses)”, totaling $(369,132) (2010 - $(1,582,464), 2009 - $775,207).

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, 2011, cash flow used in operations decreased $774,973 or 97% to $22,561 due to an corporate restructurings, dispositions of assets, and cost cutting measures, compared to cash flows used in operating activities of $797,534 for the year ended September 30, 2010 and cash flows used in operating activities of $672,440 for the year ended September 30, 2009.

with an interest rate of 7%. The Company incurred additional capital expenditures of $410,872 in the fiscal year ending September 30, 2010, and $Nil in fiscal year ending September 30, 2011. The Company does not currently hedge against foreign exchange or interest rate fluctuations.

The Company estimates that its cash and cash equivalents will not be sufficient to meet its capital requirements given its current business structure in 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 liquidate, delay, and or 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, 2011 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 was providing travel services for the members of its travel clubs. Subsequent to year end, the Company disposed if its travel club marketing and service operations.

The operating costs of the company decreased $1,024,648 for the year ended September 30, 2011 to $3,490,396, compared to the $4,515,044 for the year ended September 30, 2010, and $5,582,370 for the year ended September 30, 2009. The decrease in operating costs has been a direct result of managements’ cost savings measures and the disposal of the Company’s wholly-owned subsidiary International Fitness Vacations Ltd during the year.

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 15^th day of November 2007.

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 2009.

To expand beyond is present financial capabilities in the Life Settlement market, 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).

The Company owns and a 120 foot passenger carrying motor vessel MV Spirit of Two-Thousand-and-Ten. The vessel is for charter cruises to the Pacific Northwest, and Baja Mexico in addition to day and evening dinner cruises from its summer home port in Vancouver, B.C., and winter home port of Cabo San Lucas, Mexico. 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.. The Company is marketing and promoting to many tourism based organizations the cruise experience in Seat of Cortez for Winter season and the Pacific Northwest for Summer Season and has a web site www.spirityachtcharters.com to present the vessel and provide an overview of the yacht offering. The Company has begun 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. As a new business venture the Company generated $340,136 charter revenue from the marketing of the yacht in fiscal 2011 (2010 - $69,642, 2009 - $175,331) and is unable at this time to accurately project any revenue amounts to be generated in 2012 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.

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, 2011:

		Within 1 year	1-2 years	2-3 years	3-4 years	4-5 years	5 + years	Total
Accounts payable and accrued liabilities	$	567,439	–	–	–	–	–	567,439
Secured borrowing		51,064	–	–	–	–	–	51,064
Loans from related parties ***		137,872	–	–	–	–	–	137,872
Life settlement premiums**		466,890	490,235	514,747	540,484	567,508	2,590,806	5,170,670
Long-term debt *		141,276	149,584	4,598,158	–	–	–	4,889,018
Lease and Contracts		90,489	85,772	20,667	–	–	–	196,928
TOTAL	$	1,455,030	725,591	5,133,572	540,484	567,508	2,590,806	11,012,991

* 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 bearing interest at fixed rate of 7% per annum.

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

*** 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.

ITEM VI. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A) DIRECTORS AND SENIOR MANAGEMENT

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

Name and 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

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 2011, the Company paid $nil (September 30, 2010 $nil and September 30, 2009 $nil) in consulting fees to directors or companies controlled by directors of the Company. The Company also reimbursed $146,118 ($216,683 –September 30, 2010, September 30, 2009 - $138,717) 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 18^th 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.

C) BOARD PRACTICES

The Board of Directors communicates 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 March 25, 2010 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, 2011 are Mr. Mike Barrett, Mr. Chris Yergensen, and Mr. Kazunari Kohno. Messrs. Barrett, Yergensen, and Kohno during fiscal year 2011 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, 2011 and for the years ended September 30 2011, and 2010, and 2009.

	2011*	2011	2010	2009
Management	2	2	3	2
Administrative Staff	2	2	9	7
Customer Service Representatives	6	6	6	10
IT / e-Commerce Personnel	0	0	1	1
Fitness Club Personnel	0	7	8	8
Yacht Charter Personnel	2	2	4	-

Notes:
(*) as at January 15, 2012.

E) SHARE OWNERSHIP OF MANAGEMENT

The following table sets forth the share ownership of management as of December 31, 2011:

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	27.67	1,393,398	10.00	1,393,398	10.00
Jeffery Teeny⁽³⁾	6,250,000	19.22	1,393,398	10.00	1,393,398	10.00
Daniel Clozza	5,430,000	16.69	5,305,500	38.07	5,305,500	38.07
Martin Tutschek	1,620,789	4.98	1,399,500	10.04	1,399,500	10.94
Mike Barrett	100,000	0.30	-	-	-	-
Chris Yergensen	100,000	0.30	-	-	-	-
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

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 year ending September 30, 2011, $Nil, (December 31, 2006 $Nil, December 31, 2005 $Nil) of convertible debentures was repaid. There were no conversions during the year ended September 30, 2011, 2010, or 2009.

During the year, the Company offered a secured convertible debenture with a face value of up to $9,000,000 USD, secured by a 100% interest in two US Irrevocable Life Insurance Trusts (ILIT) with death benefits totaling $9,000,000 USD, and are subject to an escrow agreement. The Company issued seven units for a total face value of $3,150,000 USD, for cash proceeds of $253,541 plus common shares of the company valued at $134,101.

The debenture holders have the right to convert at any time in whole or in part, any outstanding amount paid to date on the debenture, into Common Shares of the Company at a 20% discount to the market trading price immediately prior to conversion. The fair value of these conversion rights was calculated using the Black-Scholes method. At issuance assumptions included the stock price of $0.17 with a maturity date of 9.3 years and an interest rate of 1.76%. At September 30, 2011 assumptions included a stock price of $0.48 with a maturity date of 8.7 years and an interest rate of 1.76%.

The fair value of the $3,150,000 convertible debentures was estimated by discounting the payments due at the time of maturity of the two underlying ILIT’s. This debt discount will be amortized as interest expense over the life of the debt. During the year ended September 30, 2011, the company recognized $188,572 of accretion interest expense on the debt.

Ten years from the date of subscription, the debenture is redeemable and/or callable by the holder or the Company, at 75% of the total face value of the debenture. The Company, or debenture holder, can force the Company to convert the debt and take the option of either receiving payment in cash or a conversion to common shares of the Company, at the stated conversion rate. The option of receiving either common shares or cash is at the sole discretion of the debenture holder.

Conflicts of Interest

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

ITEM VII. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A) MAJOR SHAREHOLDERS

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

The following persons hold, of record or beneficially, directly or indirectly, or are known by the Company to own beneficially, directly or indirectly, more than 5% of the issued shares of the Company as at December 31, 2011:

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	27.67	1,393,398	10.00	1,393,398	10.00
Scott McManus⁽³⁾	9,000,000	19.24	1,393,398	10.00	1,393,398	10.00
Daniel Clozza,	5,430,000	16.69	5,305,500	38.07	5,430,000	38.07

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, 2011. 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.

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.

During 2011, the Company paid $Nil (September 30, 2010 – $Nil and September 30, 2009 – $Nil) in consulting fees to directors or companies controlled by directors of the Company. The Company also reimbursed $146,118 ($216,683 –September 30, 2010, September 30, 2009 - $138,717) to directors for expenditures made on behalf of the Company.

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 September 30, 2011 were $137,872 (2010 – 92,033). 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, 2011 (2010 - $ nil, 2009 - $nil).

Interests of Experts and Counsel

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

ITEM VIII. FINANCIAL INFORMATION

A) CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

This Annual Report contains the consolidated financial statements for the Company for the fiscal year ended September 30, 2011, fiscal year ended September 30, 2010, and fiscal year ended September 30, 2009 which contain an Auditors' Report dated January XX, 2012 in connection with the fiscal year ended September 30, 2011, Consolidated Balance Sheets as at September 30, 2010 and September 30, 2009, Consolidated Statements of Operations, Comprehensive Income (Loss) and Deficit, and Consolidated Statements of Cash Flows for the fiscal year ended September 30, 2011 and year ended September 30, 2010 and fiscal year ended September 30, 2009, 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.

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.

ITEM IX. THE OFFER AND LISTING

A) PRICE RANGE AND VOLUME OF SHARES OF COMMON STOCK

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

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

		2011	2010	2009	2008	2007
High	$	0.70	1.39	4.26	18.00	17.30
Low	$	0.11	0.17	0.75	1.75	0.50

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):

			2011					2010
		Q1	Q2	Q3	Q4		Q1	Q2	Q3	Q4
High	$	0.40	0.70	0.70	0.48	$	1.39	1.00	0.90	0.65
Low	$	0.17	0.20	0.48	0.131	$	0.66	0.750	0.50	0.17

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):

		2012	2012	2011	2011	2011	2011
		Feb	Jan	Dec	Nov	Oct	Sep
High	$	0.15	0.22	0.23	0.30	0.48	0.48
Low	$	0.15	0.15	0.13	0.11	0.30	0.48

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

B) PLAN OF DISTRIBUTION

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

C) MARKETS

As of March 1, 2012 the shares of Forum National Investments Ltd. are publicly traded on the OTCBB under the trading symbol FMNL CUSIP Number 3498452067. The nature and extent of principal non-United States trading market is approximately 50% of all outstanding securities, which are held outside the United States and approximately 50% of all outstanding securities are held within the United States as of January 15, 2012.

D) SELLING SHAREHOLDERS

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

E) DILUTION

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

F) EXPENSES OF THE ISSUE

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

ITEM X. ADDITIONAL INFORMATION

A) SHARE CAPITAL

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

B) MEMORANDUM AND ARTICLES OF INCORPORATION

The information called for by this item is contained in an Exhibit to 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.

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.

The Company’s conversion rights relate to secured debentures which are convertible at any time in whole or in part, any outstanding amount paid to date on the debenture, into common shares of the Company at a 20% discount to the market trading price immediately prior to conversion. The Debenture is redeemable and callable by the holder or the Company after ten years from the date of Subscriptions at 75% of the Total face value of the debenture. Ten years from the date of subscription, the Company or debenture holder can force the Company to convert the debt and take the option of either receiving payment in cash or a conversion to Common Shares of the Company, at the stated conversion rate. The option of receiving either common shares or cash is at the sole discretion of the debenture holder.

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.

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

Subsequent to fiscal year end 2011, the Company’s travel clubs, related marketing and servicing operations were sold. The directors would like the core operations of the Company to be in the Life Settlement industry and the various opportunities within the industry.

In fiscal 2009, 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.

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 Tax Consequences

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.

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.

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.

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.

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.

Controlled 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.

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, #180, 13040 No. 2 Road, Richmond, British Columbia, Canada, V7E 2G1 during normal business hours.

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

I) SUBSIDIARY INFORMATION

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

ITEM XI. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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, 2010 entitled “Financial Instruments” and “Long Term Debt”, respectively.

Financial instruments

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.

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.

ITEM XII. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

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

PART II

ITEM XIII. DEFAULTS, DIVIDENDS, ARREARS AND DELINQUENCIES

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

ITEM XIV. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

MATERIAL MODIFICATION TO THE RIGHTS OF SECURITY HOLDERS

USE OF PROCEEDS

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

ITEM XV. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company reevaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of a date (the “Evaluation Date”) being September 30, 2011. Based on that evaluation, the management has concluded that there was a material weakness affecting our internal control over financial reporting, and as a result, our disclosure controls and procedures were not effective as of September 30, 2011.

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.

The Company’s 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 a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal controls over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

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.

Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of September 30, 2011 based on the criteria for effective internal control over financial reporting established in “Internal Control - Integrated Framework,” issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. In its evaluation, Management evaluated whether the Company had sufficient “preventative controls” which are controls that have the objective of preventing the occurrence of errors or fraud that could result in a misstatement of the financial statements. In its evaluation, Management considered whether there were sufficient internal controls over financial reporting, in the context of the Company’s control environment, financial risk assessment, internal control activities, monitoring, and communication to determine whether sufficient controls are present and functioning effectively.

Based upon this assessment, we have determined that there was a material weakness affecting our internal control over financial reporting and, as a result of that weakness, our internal control over financial reporting procedures was not effective as of September 30, 2011. The material weakness which has been disclosed to and reviewed with, our independent auditor, is as follows:

The Company initially filed a Form 20-F for the year ended September 30, 2011, without an audit report for the comparative income statement and statement of cash flows for the year ended September 30, 2009. Such failure to disclose an audit report for all financial statements presented impacted its conclusions regarding the effectiveness of internal controls and procedures as of the end of fiscal year 2011, with a resulting weakness. The failure to disclose an audit report for all periods presented within the Form 20-F became apparent to the Company, since the Company does not maintain a sufficient complement of personnel with an appropriate level of accounting knowledge, experience and training in the application of generally accepted accounting principles commensurate with our financial reporting requirements.

REMEDIATION STEPS TO ADDRESS MATERIAL WEAKNESS

Management had 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 in previous fiscal years. Management is committed to continually improve control policies and procedures.

The Company recognizes the importance of implementing and maintaining disclosure controls and procedures and internal controls over financial reporting and is working to implement an effective system of controls. Management is currently evaluating avenues for mitigating our internal controls weaknesses, but mitigating controls that are practical and cost effective based on the size, structure, and future existence of our organization. The Company is committed to identifying cost effective options for remediation efforts, therefore management, within the confines of its budgetary resources, will continue to develop & improve the Company’s internal controls over financial reporting on an on-going basis.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. 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.

ITEM XVI. AUDIT COMMITTEE FINANCIAL EXPERT

AUDIT COMMITTEE FINANCIAL EXPERT

The Company has an Audit Committee established by the Board of Directors. Our board has determined that we 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 MNP LLP, Chartered Accountants and Advisors, located at 2300 – 1055 Dunsmuir Street, Vancouver, British Columbia, Canada V7X 1J1.

For the periods ended September 30, 2011 the Company was invoiced by MNP LLP, for audit fees, audit-related fees, tax fees and all other fees as set forth below:

		Year Ended		Year Ended
		September		September
		30, 2011		30, 2010

Audit fees - auditing of our annual financial statements and preparation of auditors' report.	$	70,000	$	85,000


Audit-related fees - review of each of the quarterly financial statements.		-		-

Tax fees - preparation and filing of three major tax-related forms and tax planning.		-		-

All other fees - other services provided by our principal accountants.		-		-

Total fees paid or accrued to our principal accountants	$	70,000	$	85,000

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

The Audit Committee has adopted procedures requiring Audit Committee review and approval in advance of all particular engagements for services to be provided by Meyers Norris Penny 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, 2011. The Audit Committee reviews with Meyers Norris Penny 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, 2011 and September 30, 2010 and the consolidated statements of operations and deficit and cash flows for each of the year ended September 30, 2011, year ended September 30, 2010 and the year ended September 30, 2009 including the Auditors’ Report to Shareholders.

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

ITEM XVIII. FINANCIAL STATEMENTS

Not applicable.

ITEM XIX. EXHIBITS

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

FINANCIAL STATEMENTS

(i) Management’s Responsibility to Financial Reporting.

(ii) Auditors’ Report dated March 2, 2012.

(iii) Consolidated Balance Sheets as at September 30, 2011, and 2010.

(iv) Consolidated Statements of Operations and Deficit for the year ended September 30, 2011, year ended September 30, 2010 and year ended September 30, 2009.

(v) Consolidated Statements of Cash Flows for the year ended September 30, 2011, year ended September 30, 2010 and the year ended September 30, 2009.

(vi) Notes to the Consolidated Financial Statements for the year ended September 30, 2011, year ended September 30, 2010 and the year ended September 30, 2009. 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
4.9	Sales Agreement. International Fitness Vacations (BC) Ltd., date January 31, 2011⁽⁵⁾
4.10	Sales Agreement. Travel Club Purchase Agreement, dated December 1, 2011⁽⁵⁾
9.1	Audited Financial Statements for the year ended September 30, 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. (5) To be filed upon request.

SIGNATURES

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

Date: October 26, 2012	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 March 2, 2012	F-3
Consolidated Balance Sheets as at September 30, 2011 and September 30, 2010.	F-4
Consolidated Statements of Loss and Deficit for the years ended September 30, 2011 and 2010 and the year ended September 30, 2009.	F-5
Consolidated Statements of Cash Flows for the years ended September 30, 2011 and 2010 and the year ended September 30, 2009.	F-6
Notes to the Consolidated Financial Statements for years ended September 30, 2011 and 2010 and the year ended September 30, 2009.	F-7

FORUM NATIONAL INVESTMENTS LTD.

September 30, 2011 and 2010 and 2009

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, 2011 and for the year then ended have been audited by Myers Norris Penny, 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 year ended September 30, 2009 were audited by other auditors, who expressed an opinion without reservation on those statements in their report , and are attached as an exhibit to this Form 20-F/A annual report.

“Dan Clozza” (signed)

Dan Clozza
President

October 11, 2012

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of FORUM NATIONAL INVESTMENTS LTD.:

We have audited the accompanying consolidated financial statements of Forum National Investments Ltd. and its subsidiaries, which comprise the consolidated balance sheet as at September 30, 2011 and 2010, and the consolidated statements of operations, comprehensive income (loss) and deficit and cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Forum National Investments Ltd. and its subsidiaries as at September 30, 2011 and 2010, and the results of their operations and their cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.

Emphasis of Matter
Without qualifying our opinion, we draw attention to Note 1 to these financial statements, which states that Forum National Investments Ltd. incurred significant losses from operations, negative cash flows from operating activities and has an accumulated deficit. This, along with other matters as described in Note 1 indicate the existence of a material uncertainty which may cast doubt about the ability of Forum National Investments Ltd. to continue as a going concern. Our opinion is not qualified in respect of this matter.

Other Matter
The financial statements of Forum National Investments Ltd. for the year ended September 30, 2009 were audited by another auditor who expressed an unmodified opinion on those statements in their report, dated May 14, 2010.

Chartered Accountants

Vancouver, Canada
March 2, 2012

ACCOUNTING › CONSULTING › TAX
2300, 1055 DUNSMUIR STREET, BOX 49148, VANCOUVER, BC V7X 1J1
1.877.688.8408 P: 604.685.8408 F: 604.685.8594 mnp.ca

F-3

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

		September 30,		September 30,
		2011		2010
Assets

Current
Cash and cash equivalents	$	62,772	$	376,103
Short-term deposits		14,756		14,700
Marketable securities (note 3)		-		51
Amounts and notes receivable (notes 5 and 19)		81,527		85,515
Other receivables		5,144		14,360
Prepaid expenses		26,932		17,803
Discontinued current assets		-		692
Total Current Assets		191,131		509,224

Amounts and notes receivable(notes 5 and 19)		208,729		109,226
Investment in Life Settlement contracts(notes 5 and 6)		2,832,972		2,670,070
Property and Equipment(note 7)		7,767,783		8,994,166
Intangible assets(note 8)		91,384		116,307
Discontinued plant, property and equipment		-		107,227

Total Assets	$	11,091,999	$	12,506,220

Liabilities and Shareholders’ Equity

Current
Accounts payable and accrued liabilities	$	567,439	$	552,664
Due to broker (note 3)		-		97,146
Secured borrowing (note 10)		51,064		106,341
Deferred revenue, current portion (note 9)		876,166		1,077,068
Current portion of long-term debt (note 12)		140,968		177,128
Future Income taxes (note 14)		1,712,000		1,712,000
Convertible debentures (note 11)		40,486		40,486
Loans from related parties (note 18)		137,872		92,033
Conversion rights (note 11)		387,642		-
Discontinued current liabilities		-		20,549
Total Current Liabilities		3,913,637		3,875,415

Deferred Revenue(note 9)		182,472		751,868
Convertible Debentures (note 11)		188,572		-
Long-Term Debt(note 12)		4,748,054		4,846,198
Total Liabilities		9,032,735		9,473,481

Shareholders’ Equity

Capital Stock(note 13)		25,782,966			25,810,369
Contributed Surplus(note 13(e))		2,757,581			2,757,581
Deficit		(26,481,283	)		(25,535,211	)
Total Shareholders’ Equity		2,059,264			3,032,739
Total Liabilities and Shareholders’ Equity	$	11,091,999		$	12,506,220

Nature of operations and ability to continue as going concern (note 1)
Commitments (note 16)
Subsequent events (note 22)
Approved on behalf of the Board:

/s/ Dan Clozza	Director	/s/ Martin Tutschek	Director
Dan Clozza		Martin Tutschek

F-4

See accompanying notes to consolidated financial statements.

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

		Year Ended			Year Ended			Year Ended
		September 30,			September 30,			September 30,
		2011			2010			2009

Revenues
Membership and travel	$	3,110,511		$	3,821,772		$	3,294,162
Interest		25,990			49,883			46,924
Other		244,190			69,642			175,331
		3,380,691			3,941,297			3,516,417

Expenses
Wages (note 13)		1,070,953			1,498,705			1,689,385
General and administration (note 12)		1,717,161			2,206,216			2,626,644
Bad debt expense (note 5(a))		8,954			81,295			212,364
Commission costs		72,202			75,309			31,983
Amortization of property and equipment		596,203			649,508			337,256
Amortization of intangible assets (note 8)		24,923			4,011			684,738
		3,490,396			4,515,044			5,582,370
Loss before other income (expenses)		(109,705	)		(573,747	)		(2,065,953	)

Other income (expenses)
Net gain on investment in life settlement contracts (note 6)		(412,673	)		(1,582,464	)		775,207
Gain on settlement of debt by guarantor (note 18)		–			484,225			–
Other expenses		(3,768	)
Foreign exchange gain (loss)		(2,532	)		(139,100	)		977,041
Gain (loss) on disposal of capital assets		49,987			(41,319	)		–
Gain on the sale of International Fitness Vacations		89,144			–			–
Loss from discontinued operations		(56,525	)		(80,822	)		(94,576	)
Gain (loss) on marketable securities		–			(698,537	)		361,887
Unrealized gain (loss) on marketable securities		–			(8,187	)		–
Impairment of intangible assets (note 8)		–			–	)		(1,233,324	)
Impairment of property, plant & equipment (note 7)		(500,000	)		(825,000	)		(2,348,595	)
Total Non-operating Income (Expense)		(836,367	)		(2,891,204	)		(1,562,360	)

Income (Loss) Before Tax		(946,072	)		(3,464,951	)		(3,628,313	)
Income Tax Recovery (Expense) (note 14)		–			–			(1,715,970	)

Net Income (Loss) and Comprehensive Income (loss) for Period		(946,072	)		(3,464,951	)		(5,344,283	)


Deficit, Beginning of Period		(25,535,211	)		(22,070 ,260	)		(16,725,977	)

Deficit, End of Period	$	(26,481,283	)	$	(25,535,211	)	$	(22,070,260	)

Basic earnings (loss) per share	$	(0.03	)	$	(0.12	)	$	(0.19	)
Diluted earnings (loss) per share	$	(0.03	)	$	(0.12	)	$	(0.19	)

Weighted average number of common shares outstanding (note 13 (b))

See accompanying notes to consolidated financial statements.

F-5

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


		Year Ended			Year Ended			Year Ended
		September 30,			September 30,			September 30,
		2011			2010			2009
Operating Activities
Net income/(loss)	$	(946,072	)	$	(3,464,951	)	$	(5,344,283	)
Adjustments to reconcile net income (loss) to net cash Provided by (used in) operating activities:
Net gain on life settlement contracts		139,308			1,582,464			(775,207	)
Income tax expense		–			–			1,712,000
Accretion of interest expense on convertible debentures		188,572			–			–
Deferred vacation membership revenue		(770,299	)		(1,092,996	)		(404,303	)
Amortization of property and equipment		596,203			729,452			406,785
Amortization of intangible assets		24,923			4,011			684,738
Impairment on tangible assets		500,000			825,000			2,348,595
Impairment on intangible assets		–			–			1,233,324
Related party advance		–			(20,000	)		20,000
Loss on disposal of plant, property and equipment		49,987			41,319			–
Gain on sale of International Fitness Vacations Ltd.		89,144			–			–
Gain on settlement of debt		–			(484,225	)		–
Loss (gain) on marketable securities		–			698,537			(361,887	)
Unrealized Loss (gain) on marketable securities		–			8,187			–
Unrealized foreign exchange gain		215,630			144,447			–
Increase (decrease) in accounts, notes and other receivables		(98,130	)		174,070			371,253
Increase in short-term deposits		–			(15	)		(475	)
Increase (decrease) in prepaid expenses		(8,604	)		101,351			(113,940	)
Increase (decrease) in accounts payable and accrued liabilities		3,223			(44,185	)		(283,109	)
Increase (decrease) in deferred revenue		–			–			(165,931	)

Cash Used in Operating Activities		(66,103	)		(797,534	)		(672,440	)

Investing Activities
Purchase of property and equipment		(29,640	)		(1,134,843	)		(2,070,200	)
Payments for intangible property		–			(48,150	)		(72,168	)
Proceeds from the disposal of International Fitness Vacations Ltd.		12,000			–			–
Proceeds from disposal of property, plant and equipment		150,000			–			–
Proceeds from life settlement		–			–			5,371,606
Payment of life insurance premiums		(551,980	)		(344,761	)		(18,020	)
Realized proceeds on marketable securities		51			9,961,726			121,512
Purchase of marketable securities		–			(8,428,126	)		(2,000,000	)
Cash Used in Investing Activities		(419,569	)		5,846			1,332,730

Financing Activities
Net proceeds received on share issuance		106,698			–			195,344
Funds held in trust		–			–			79,493
Amounts due to (from) related parties (note 18)		45,839			314,879			(827,653	)
Borrowings (repayments) of Long-term debt		(122,304	)		(345,072	)		(62,544	)
Proceeds from Long-term debt		–			–			855,472
Secured borrowing		(55,277	)		(157,353	)		126,373
Due to broker		(97,146	)		(472,850	)		569,996
Proceeds from debenture issuance		253,541			–			–
Cash Provided by Financing Activities		131,351			(660,396	)		936,481

Increase (Decrease) in Cash		(310,779	)		(1,452,084	)		1,596,771
Cash and Cash Equivalents, Beginning of Period		373,551			1,825,635			228,864

Cash and Cash Equivalents, End of Period	$	62,772		$	373,551		$	1,825,635

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

F-6

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(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 theBusiness 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 its investments in life settlement contracts, the sale of travel services and monthly dues from the members of its travel clubs. As at September 30, 2011, the Company has an accumulated deficit of $26,481,283 and a working capital deficit of $3,722,506. 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 $62,772, 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 yacht charter operations 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 services, 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 Ltd.	100%	Ontario, Canada	July 25, 2003
ATM Travel Group Ltd. (“ATM”)	100%	British Columbia, Canada	April 3, 2000
Spirit Yacht Charters Ltd.	100%	British Columbia, Canada	August 7, 2008
American Life Settlement Society LLC	100%	State of Delaware, USA	November 15, 2007

F-7

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(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 22, 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 recognizes revenue at the time the charters are provided. 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

		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-8

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(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 is the membership database, which has an estimated useful life of 5 years. The database was completed and entered service during fiscal 2010.

F-9

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

2.	Significant Accounting Policies (continued)

	(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.

	(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.

F-10

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

2.	Significant Accounting Policies (continued)

	(i)	Earnings (loss) per share (continued)

		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 loss carry-forwards. Future income tax assets and liabilities are measured using substantively-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 substantive 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.

	(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.

F-11

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

2.	Significant Accounting Policies (continued)

	(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)	Accounts receivable

		The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of the reserve. Accounts receivable will be considered delinquent if payment is not received before the due dates established in the sales agreement with customers. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable, and known bad debts are written off against allowance for doubtful accounts when identified.

	(o)	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.

	(p)	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.

F-12

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

2.	Significant Accounting Policies (continued)

(p)

Financial instruments (continued)

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

		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.

		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	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

F-13

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

2.	Significant Accounting Policies (continued)

	(q)	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.

	(r)	Business Segment

		The Company operates in one reporting segment of hospitality and tourism. The Company’s hospitality and tourism operations, assets and employees are located in Canada.

		The Company also invests in life settlement contracts in the United States. As at September 30, 2011, the investment life settlements does not constitute a clearly identifiable business segment.

	(s)	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).

(t)

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.

F-14

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

2.	Significant Accounting Policies (continued)

	(t)	Adoption of future accounting standards (continued)

		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. 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 October 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended September 30, 2011. While the Company has begun assessing the adoption of IFRS for fiscal 2011, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time.

	(u)	Comparative balances

		Balances presented in comparative year’s financial statements may have been adjusted to conform with the current year’s presentation.

3.	Marketable Securities

Balances as at September 30, 2011

Number of shares held

Cost

Quoted Market price per share

Fair Value

Total

Balances as at September 30, 2010

Balances as at September 30, 2010	Number of shares held		Cost		Quoted Market price per share		Fair Value

SUNC2 Network Corp.	10,000	$	8,238	$	0.005	$	51

Total	10,000	$	8,238			$	51

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, 2011 the Company owed $Nil (2010: $97,146). 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.

F-15

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

4.	Segment reporting

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

		September 30, 2011			September 30, 2010
Identifiable Assets
Canada	$	8,259,027		$	9,833,600
United States of America		2,832,972			2,670,070
Total Assets	$	11,091,999		$	12,503,670
Revenue
Canada	$	3,380,691		$	3,941,297
United States of America		–			–
Total Revenue	$	3,380,691		$	3,941,297
Net Income (loss)
Canada	$	(533,399	)	$	(1,882,487	)
United States of America		(412,673	)		(1,582,464	)
Total net income (loss)	$	(946,072	)	$	(3,464,951	)

All membership and travel revenues are earned in Canada during the year ended September 30, 2011 (2010 – 100%, 2009 – 100%). There are no major customers that account for 10% or more of the Company’s revenue (2010: nil; 2009: nil). All losses on the investment in life settlement contracts are derived from life insurance policies held in the USA during the year ended September 30, 2011 (2010: 100%, 2009: 100%).

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
Long-term Convertible debentures		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
Conversion rights			X

F-16

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

5.	Financial Instruments (continued)

There was no change to the risks faced by the Company for the year ended September 30, 2011.

(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,
		2011		2010

Cash and cash equivalents	$	62,772	$	373,551
Short-term deposits		14,756		14,700
Marketable securities		–		51
Amounts and notes receivable		290,256		194,910
Investment in life settlement contracts		2,832,972		2,670,070
Other receivables		5,144		14,360
Total	$	3,205,900	$	3,267,642

	(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, 2011 the allowance for doubtful amounts and note receivables totaled $31,444 (2010 - $56,002).

Allowance for doubtful amounts, beginning of the year:	$	56,002
Net bad debts provisions (recovery)	$	(24,558	)
Allowance for doubtful amounts, end of year:	$	31,444

	(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:

F-17

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

5.	Financial Instruments (continued)

	(b)	Liquidity risk (continued)

Expected payments by period as at September 30, 2011

		Within 1 year	1-2 years	2-3 years	3-4 years	4-5 years	5 + years	Total
Accounts payable and accrued liabilities	$	567,439	–	–	–	–	–	567,439
Secured borrowing		51,064	–	–	–	–	–	51,064
Loans from related parties		137,872	–	–	–	–	–	137,872
Life settlement premiums*		466,890	490,235	514,747	540,484	567,508	2,590,806	5,170,670
Long-term debt		141,276	149,584	4,598,158	–	–	–	4,889,018
Lease and Contracts		90,489	85,772	20,667	–	–	–	196,928
TOTAL	$	1,455,030	725,591	5,133,572	540,484	567,508	2,590,806	11,012,991

* 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.

F-18

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

5.	Financial Instruments (continued)

	(c)	Market risk (continued)

		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 earnings			Net earnings
		September 30, 2011
Financial assets
Cash and cash equivalents	$	31	$	(3	)	$	3
Investment in life settlement contracts		2,832,972		(283,297	)		283,297
Financial liabilities
Long term debt – current		140,968		14,097			(14,097	)
Long term debt – non current		4,748,054		474,805			(474,805	)
Total (decrease) increase			$	205,602		$	(205,602	)

		Foreign Currency Risk(1)
					-10%(1)			+10%(1)
		Carrying amount			Net earnings			Net earnings
		September 30, 2010
Financial assets
Cash and cash equivalents	$	(475	)	$	48		$	(48	)
Marketable securities		51			(5	)		5
Investment in life settlement contracts		2,670,070			(267,007	)		267,007
Financial liabilities
Due to Broker		97,146			9,715			(9,715	)
Long term debt – current		131,685			13,169			(13,169	)
Long term debt – non current		4,846,198			484,620			(484,620	)
Total (decrease) increase				$	240,540		$	(240,540	)

	(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.

F-19

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

5.	Financial Instruments (continued)

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	$	4,889,023		$	5,123,119

* Fair values for long-term debt are determined with reference to market interest rates at September 30, 2011.

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	62,772	–	–
Short term deposits	14,756	–	–
Investment in life settlement contracts	–	–	2,832,972

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	$	2,670,070
Total gains or losses
In profit or loss (Note 6)		162,902
In other comprehensive income		–
Purchases		–
Sales		–
Transfers out of level 3		–
Closing balance	$	2,832,972

F-20

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(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% (2010: 5.0%) and a discount factor of 12% (2010: 12%) are used. If the life expectancies were increased or decreased by 10 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%	(2%)	+1%	(1%)
Investment in life settlements	$ 2,251,105	$ 3,567,373	$ 2,606,192	$ 3,117,253	$2,782,245	$2,880,894
Increase (Decrease)	$ (581,867)	$ 734,401	$ (226,780)	$ 284,281	$(50,727)	$ 47,922

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, 2011 and 2010 the Company has the following investment in life settlement contracts: The table below summarizes the attributes of outstanding life settlement contracts at September 30, 2011 and 2010:

	Number of		Estimated Fair		Face		Face
Year	contracts		value		value (CAD)		value (USD)

2010	4	$	2,670,070	$	16,309,972	$	15,838,000
2011	4	$	2,832,972	$	16,454,098	$	15,838,000

For the years ended September 30, 2011, 2010 and 2009, the investments experienced the following gains:

		Realized		Unrealized
Year		Gains (Losses)		Gains (Losses)

2009	$	–	$	775,207
2010	$	–	$	(1,582,464	)
2011	$	–	$	(369,132	)

F-21

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

6.	Investments in life settlement contracts (continued)

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, 2011		September 30, 2010

Average age of insured		83 years		82 years
Average life expectancy		9 years		10 years
Expected premium growth		5%		5%
Average maturity value	$	4,113,525	$	4,077,493
Mortality rates Discount rate		Standard Life Expectancy 12%		Standard Life Expectancy 12%

7.	Property and Equipment

				Accumulated				Net Book
September 30, 2011		Cost		Amortization		Impairment		Value

Motor vessels	$	14,641,625	$	1,480,570	$	5,473,595	$	7,687,460
Vehicles		57,000		14,250		–		42,750
Equipment		32,933		14,954		–		17,980
Computers		2,610		1,104		–		1,506
Leasehold improvements		35,415		17,327		–		18,088

	$	14,769,583	$	1,528,205	$	5,473,595	$	7,767,783

				Accumulated				Net Book
September 30, 2010		Cost		Amortization		Impairment		Value

Motor vessels	$	14,762,773	$	917,601	$	4,973,595	$	8,871,576
Vehicles		132,000		60,417		–		71,583
Equipment		32,933		8,364		–		24,569
Computers		1,823		552		–		1,271
Leasehold improvements		35,415		10,247		–		25,167

	$	14,964,943	$	997,182	$	4,973,595	$	8,994,166

F-22

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

7.	Property and Equipment(continued)

The value of property, plant & equipment not in use at September 30, 2011 are Motor Vessel $424,900 (2010: $398,073). 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 $Nil (2010: $14,583). The cost and accumulated amortization for the vehicles is $Nil and $Nil respectively (2010: $75,000 and $60,417).

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.

The Company recognized an impairment loss on the carrying value of the motor vessel during the year, in the amount of $500,000 (2010: $825,000, 2009: $2,348,595). Due to the current economic environment, the Company concluded that the vessel had a market value of $7,300,000 (2010: $8,250,000). 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 values.

8.	Intangible Assets

As of September 30, 2011, the Company had finite-lived intangible assets which totaled $91,384 (2010 – $116,307), net of accumulated amortization of $28,934 (2010 - $4,011). At September 30, 2011, the Company had one finite-lived intangible asset which consisted of a proprietary database for managing its membership and travel operations

Intangible assets		September 30,			September 30,
		2011			2010

Computerized membership database	$	120,318		$	72,168
Additions to computerized membership database		–			48,150
Accumulated amortization		(28,934	)		(4,011	)
Total intangible assets	$	91,384		$	116,307

9.	Deferred Revenue

		September 30,			September 30,
		2011			2010
Deferred membership sales	$	751,869		$	1,482,092
Additional deferred revenue		306,768			346,844
Current portion		(876,165	)		(1,077,068	)
	$	182,472		$	751,868

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 (2010 – 5 years, 2009 – 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 2011, the Company entered into travel club membership agreements with a total value of $Nil (2010 – $Nil, 2009 – $Nil). 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-23

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(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% (2010 – 15%).

As at September 30, 2011 the Company had an outstanding liability to the third party as set out below:

		September 30,			September 30,
		2011			2010

Balance, beginning of period	$	106,341		$	263,694
Amortization of discount		21,393			–
Collection of note receivable during the year		(76,670	)		(157,353	)

Balance, end of period	$	51,064		$	106,341

11.

Convertible 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, 2011 and 2010, accrued interest on the debentures amounted to approximately $6,176.

	During the year, the Company offered a secured convertible debenture with a face value of up to $9,000,000 USD, secured by a 100% interest in two US Irrevocable Life Insurance Trusts (ILIT) with death benefits totaling $9,000,000 USD, and are subject to an escrow agreement. The Company issued seven units for a total face value of $3,150,000 USD, for cash proceeds of $253,541 plus common shares of the company valued at $134,101.

	The debenture holders have the right to convert at any time in whole or in part, any outstanding amount paid to date on the debenture, into Common Shares of the Company at a 20% discount to the market trading price immediately prior to conversion. The fair value of these conversion rights was calculated using the Black-Scholes method. At issuance assumptions included the stock price of $0.17 with a maturity date of 9.3 years and an interest rate of 1.76%. At September 30, 2011 assumptions included a stock price of $0.48 with a maturity date of 8.7 years and an interest rate of 1.76%. The fair value of the $3,150,000 convertible debentures was estimated by discounting the payments due at the time of maturity of the two underlying ILIT’s. This debt discount will be amortized as interest expense over the life of the debt. During the year ended September 30, 2011, the company recognized $188,572 of accretion interest expense on the debt. Ten years from the date of subscription, the debenture is redeemable and/or callable by the holder or the Company, at 75% of the total face value of the debenture. The Company, or debenture holder, can force the Company to convert the debt and take the option of either receiving payment in cash or a conversion to common shares of the Company, at the stated conversion rate. The option of receiving either common shares or cash is at the sole discretion of the debenture holder.

F-24

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

12.

Long-Term Debts

The Company has a long-term loan related to the motor vessel.

		September 30,			September 30,
		2011			2010
Loan in US funds for vessel
at 7% per annum for a 5 year term	$	4,889,022		$	4,977,883
Lease financing against motor vehicle		-			45,443
Less: current portion		(140,968	)		(177,128	)
Long-term portion	$	4,748,054		$	4,846,198

	The Company has a loan with Caterpillar Financial Services for $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 expense of $348,335 related to long-term debt is included in General and administration during the year (2010 - $364,389, 2009 – $346,300).

	The expected repayments of long term debt for the five following twelve month periods ended September 30, 2011 are as follows:

		Total
2012	$	140,968
2013		149,584
2014		4,598,161
2015		–
2016		–
Thereafter		–

Total long term debt	$	4,889,022

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.

F-25

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

13.

Capital Stock(continued)

(a)

The authorized capital stock:

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 13,649,983 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 13,649,983 Series “B” preferred shares convertible for no consideration (2010 – 13,649,983) and common shares as follows:

	Number of
	Common		Share			Contributed
	Shares		Capital			Surplus

Balance, September 30, 2009	28,856,984	$	25,810,369		$	2,757,581
Conversion of Series B Preference shares	284,000		–			–

Balance, September 30, 2010	29,140,984	$	25,810,369		$	2,757,581
Common shares subscribed	20,000		6,698			–
Conversion of Series B Preference shares	1,355,000		–			–
Private placement	2,000,000		100,000			–
Common shares receivable	–		(134,101	)		–

Balance, September 30, 2011	32,515,984	$	25,872,966		$	2,757,581

	During the year ended September 30, 2011, the company completed an equity offering to members of its travel clubs, issuing 20,000 common shares for gross proceeds of $6,698.

	During the year ended September 30, 2011, the company completed a non-brokered private placement issuing 2,000,0000 common shares priced at $0.05 per common share, for gross proceeds of $100,000. No warrants or options were attached to the private placement.

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

	Year ended	Year ended	Year ended
	September 30,	September 30,	September 30,
	2011	2010	2009
Weighted average common shares	29,990,231	28,645,113	28,553,321
Series B preferred shares conversion	12,294,983	13,649,983	13,933,983
Weighted average fully diluted common stock	89,880,427	90,507,518	90,524,608

F-26

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

13.

Capital Stock (continued)

	For the years ended September 30, 2011, September 30, 2010 September 30, 2009, outstanding stock options and preferred shares were not included in the calculation of diluted earnings (loss) per share as their effect would be anti-dilutive.

	Diluted weighted average common stock includes common stock issuable if Series A and Series B preferred shares are converted and 2,655,000 (2010: 2,655,000, 2009: 2,655,000) 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 June 2012. No options were granted during the years ended September 30, 2011 and 2010.

	(d)	Stock-based compensation

		There was $Nil Stock-based compensation cost included in wages for the year ended September 30, 2011 (2010 - $Nil, 2009 - $Nil).

(d)

Stock-based compensation

The table below summarizes the outstanding and exercisable stock options as at September, 30 2011 and 2010:

	Number		Exercise
	of Options		Price (US $)

Balance, September 30, 2009	2,655,000	$	1.00

Balance, September 30, 2010	2,655,000	$	1.00

Balance, September 30, 2011	2,655,000	$	1.00

F-27

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

13.

Capital Stock (continued)

(d)

Stock-based compensation (continued)

The table below summarizes the attributes of the outstanding stock options as at September 30, 2011:

Options Outstanding

Options Exercisable

Exercise

Number

Remaining

Number

Exercise

Price (US $)

of Options

Contractual Life

of Options

Price (US $)

1.00

2,655,000

0.75 years
Expiry June 30, 2012

2,655,000

1.00

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

				September 30, 2007

		Dividend rate		–
		Expected volatility		209%
		Interest rate		4.88%
		Expected life		5 years

The weighted average grant date fair value was $1.04.

(e)

Contributed surplus

Balance, September 30, 2009		2,757,581

Balance, September 30, 2010	$	2,757,581

Balance, September 30, 2011	$	2,757,581

(f)

Common Shares Receivable

The table below summarizes the common shares receivable as at September, 30 2011 and 2010:

Balance, September 30, 2010	$	–

Balance, September 30, 2011	$	(134,101	)

Common shares receivable are common shares of the Company expected to be received in connection with subscriptions to Secured Debentures as described in Note 11, and are shown as a deduction from the Company’s share capital, as at September 30, 2011.

F-28

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(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:

		Year ended			Year ended			Year ended
		September 30,			September 30,			September 30,
		2011			2010			2009

Statutory income tax rate		27.6%			29.1%			30.1%

Statutory rate applied to income (loss) from
operations before income taxes	$	(193,000	)	$	(1,009,000	)	$	(1,086,500	)
Permanent differences		35,000			2,500			2,800
Difference in tax rates between foreign jurisdiction		–			–			61,000
Sale of subsidiary		76,000			–			–
Investment in life settlement contracts		38,000			460,900			327,800
Effect of reduction in statutory tax rate		14,000			77,000			199,900
Expense due to differences in tax jurisdictions		–			–			1,086,100
Others		–			52,600			105,370
Increase (decrease) in valuation allowance		30,000			416,000			1,019,500

Income tax expense	$	–		$	–		$	1,715,970
Comprising:

Income taxes (recovery) expense – current	$	–		$	1,715,970		$	1,715,970
Income taxes – future	$	–		$	–		$	–

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

		September 30,			September 30,
		2011			2000

Future income tax assets (liabilities):
Non-capital loss carry forwards	$	2,668,000		$	2,577,000
Cumulative eligible capital		346,000			372,000
Capital loss carry forwards		240,000			196,000
Excess (deficiency) of tax cost over book value
of property and equipment		1,000			82,000
Excess (deficiency) of tax cost over book value
of intangible assets		651,000			651,000
Marketable securities		–			(2,000	)

		3,906,000			3,880,000
Valuation allowance		(3,906,000	)		(3,880,000	)

Future income taxes, net	$	–		$	–

F-29

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

14.

Income Taxes (continued)

	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 is in arrears with filing its corporate tax returns since 2006. The Company has estimated Canadian non-capital income tax loss carry forwards of approximately $10,671,000 (2010 - $10,311,000, 2009 - $8,970,000) available to reduce future years’ taxable income expiring between 2012 and 2030.

	The Company has estimated capital loss carry-forwards of approximately $962,000 (2010 - $783,000, 2009: $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.

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.

F-30

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

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 $196,928 (2010 – 102,000). Payments due in each of the next five years are as follows:

2012	$	90,489
2013		85,772
2014		20,667
2015		–
2016		–

Total	$	196,928

(b)

The Company has commitments in respect of office leases with total aggregate payments due of approximately $Nil (2010 - $Nil).

17.

Related Party Transactions

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

	(a)	The Company reimbursed $146,118 (2010 – $216,683, 2009 - $138,717) to directors for expenditures made on behalf of the Company. Included in automotive expense is an amount of $24,000 (2010 - $24,000, 2009 - $22,185) for use of company assets by directors and officers of the Company.

	(b)	At September 30, 2011, directors and officers advanced $137,872 (2010 – $92,033, 2009 - $486,379) 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.

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.

18.

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%per annum (2010 – 9.9%) and an average maturity of 13 months (2010 – 25 months, 2009 – 37 months). The promissory notes are unsecured.

		2011		2010		2009
Current	$	81,527	$	85,683	$	160,920
Non-Current	$	208,729	$	109,226	$	205,136
	$	290,256	$	194,909	$	366,056
		2011		2010		2009
Past due Amounts and Notes Receivable	$	28,619	$	44,016	$	61,194

As of September 30, 2011 the allowance for doubtful amounts and note receivables totaled $31,444 (2010 – $56,002, 2009 - $210,923). At September 30, 2011 promissory note receivables of $29,671 (2010 – $106,341, 2009: $236,694) have been provided as security for the secured borrowing (see note 10).

F-31

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

19.

Acquisitions and dispositions

(a)

On January 31, 2011, the Company sold its wholly-owned subsidiary International Fitness Vacations Ltd. which operated a health and fitness center located in Richmond, British Columbia, for Gross proceeds of $200,000.

The disposition of the subsidiary consisted of the following:

Sales price of International Fitness Vacations Ltd.           $136,946 (net of $63,054 discount)
Less:
  Net book value, International Fitness Vacations Ltd.      $ 53,993
Plus:
  Accrued liabilities paid for by the Company                         6,191
Gain on disposal                                                               $   89,144

Miscellaneous closing costs of $16,957 associated with sale International Fitness Vacations Ltd. have been included in discontinued operations for the year ended September, 30, 2011.

20.

Supplemental Cash Flow Information

Cash flow information:

		Year ended		Year ended		Year ended
		September 30,		September 30,		September 30,
		2011		2010		2009

Interest paid	$	407,579	$	391,529	$	303,875

Taxes paid	$	3,761	$	3,678	$	3,675

Derecognition of financial liability (note 20(b))	$	–	$	–	$	7,602,530

Included in amounts and notes receivable is an amount receivable to be settled in common shares of the Company, in lieu of proceeds for the subscription to convertible debentures units issued during the year ended September 30, 2011. Three debenture units with a face value totaling $1,350,000 USD, were issued with the same terms as described in Note 12, with the initial purchase price valued at $134,101.

21.

Subsequent Events

	(a)	Subsequent to the year ended September 30, 2011, the Company sold its travel company operations, consisting of its travel clubs, websites, membership database, for net proceeds of $500,000.

	(b)	Subsequent to the year ended September, 30, 2011, the Company negotiated a loan modification arrangement where as the Company would pay interest only of $25,000 USD per month for the first six months, and then pay an additional monthly principal of $4,610 until the maturity of the loan.

F-32

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

22.

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, 2011.

F-33

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

22.

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, 2011 and 2010, 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 years ended at September 30, 2011 ,2010, and 2009, 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, 2011 and 2010, the application of US GAAP would result in an increase in capital stock and an increase in deficit of $695,681 for the years ended at September 30, 2011, 2010, and 2009.

		(iii)	During the years ended September 30, 2011, 2010, and 2009, the Company did not issue shares under its incentive share purchase plan (note 2(d)).

(c)

Income Taxes

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 ASC 740, “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 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 ASC 740 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, 2011 and 2010 and 2009, its tax position will more likely than not be sustained upon examination. 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. Interest and penalties are recognized as part of income tax expense.

F-34

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

22.

United States Generally Accepted Accounting Principles Reconciliation (continued)

(d)

Life settlement contracts

On March 27, 2006, FASB Staff Position No. FTB 85-4-1Accounting 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.

(e)

Derivative liability

On October 1, 2009, the Company adopted the provisions of Emerging Issues Task Force (“EITF”) 07-5 (now known as ASC 815-40), “Determining whether an instrument (or embedded feature) is indexed to an entity’s own stock”. The Company’s functional currency is the Canadian dollar and it had issued instruments that have an exercise price denominated in U.S. dollars and has determined that these instruments cannot be classified as equity-based on the evaluation of the instruments’ settlement provisions as they were not indexed to the Company’s common shares. As a result, these instruments are treated as derivative liabilities carried at fair value as determined by the Black-Scholes option pricing model, for U.S. GAAP purposes with changes in fair values recorded as gains or losses in the statements of operations. On adoption of ASC 815-40, the Company would have recorded a liability of $4,495,240, a reduction of contributed surplus of $2,757,581 and a charge to deficit of $1,737,659 to reflect the fair value of the options at October 1, 2009, determined in accordance with the Black-Scholes option pricing model. At September 30, 2010, the Company would have recognized a gain of $2,153,766 based on the decline in fair value of the options and the related derivative liability.

(f)

Recent accounting pronouncements

(i)

In January 2010, the FASB issued Accounting Standards Update ("ASU") 2010-06Fair Value Measurement and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.This guidance provides for the following new required disclosures related to fair value measurements: 1) the amounts of and reasons for significant transfers in and out of level one and level two inputs and 2) separate presentation of purchases, sales, issuances, and settlements on a gross basis rather than as one net number for level three reconciliations. The guidance also clarifies the existing disclosures as follows: 1) provide fair value measurement disclosures for each class of assets and liabilities and 2) provide disclosures about the valuation techniques and inputs used for both recurring and nonrecurring level two or level three inputs. The Company has adopted this standard, but it did not have a material effect on the Company's consolidated balance sheet or required financial statement disclosures.

F-35

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

22.

United States Generally Accepted Accounting Principles Reconciliation (continued)

(f)

Recent accounting pronouncements (continued)

(ii)

In April 2010, the FASB issued ASU 2010-13,Compensation-Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades. This update provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in currency of a market in which a substantial porting of the entity‟s equity securities trades should not be considered to contain a condition that is not a market, performance or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The Company‟s adoption of this ASU did not have a material impact on its consolidated financial statements.

(iii)

In December 2010, the FASB issued Accounting Standard Update 2010-28,Intangibles—Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. This ASU modified Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. For public entities, the amendments in the ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. The Company`s adoption of this ASU is not expected to have a material impact on its consolidated financial statements.

(iv)

In December 2010, the FASB issued Accounting Standard Update 2010-29,Business Combinations(Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. This ASU specifies that, if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. ASU 2010-29 is effective prospectively for business combinations where the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The Company`s adoption of this ASU is not expected to have a material impact on its consolidated financial statements.

(g)

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,	September 30,
		2011		2010	2009
Total Assets under Canadian GAAP	$	11,091,999	$	12,506,220	18,475,423
Deferred costs, net (note 23(f))		–		378,534	875,250

Total Assets under US GAAP	$	11,091,999	$	12,127,686	19,350,673

F-36

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

22.

United States Generally Accepted Accounting Principles Reconciliation (continued)

(g)

Reconciliation (continued)

(ii)

Total Liabilities

		September 30,		September 30,	September 30,
		2011		2010	2009
Total Liabilities, under Canadian GAAP	$	9,032,735	$	9,473,481	11,977,733
Derivative liability (note 23 (e))		2,341,474		2,341,474	–

Total Liabilities, under US GAAP	$	11,374,209	$	11,814,955	11,977,733

(iii)

Capital stock

		September 30,			September 30,		September 30,
		2011			2010		2009

Capital stock, under Canadian GAAP	$	25,782,966		$	25,810,369		25,810,369
Contributed surplus		2,757,581			2,757,581		2,757,581
Adjustment for stock-based compensation
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 for derivative liability (note 23 (e))		(2,757,581	)		(2,757,581	)	(2,757,581	)

Capital stock, under US GAAP	$	28,381,016		$	28,408,419		28,408,419

(iv)

Deficit

		Year ended			Year ended			Year ended
		September 30,			September 30,			September 30,
		2011			2010			2009

Deficit, under Canadian GAAP	$	(26,415,198	)	$	(25,582,731	)	$	(22,070,260	)
Adjustment for stock-based compensation
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		1,341,034			1,341,034			1,341,034
Adjustment for adoption of ASC 815-40 (note 23 (e))		(1,737,659	)		(1,737,659	)		–
Adjustment for change in fair value of derivative		2,153,766			2,153,766			–
Adjustment for amortization of deferred costs
(note 23(f))		(1,310,102	)		(931,568	)		(465,784	)

Deficit, under US GAAP	$	(28,566,209	)	$	(27,355,208	)	$	(23,793,060	)

F-37

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2011, and 2010, and 2009

(Expressed in Canadian dollars)

22.

United States Generally Accepted Accounting Principles Reconciliation (continued)

(f)

Reconciliation (continued)

(v)

Net income (loss) and earnings (loss) per share for:

		Year ended			Year ended			Year ended
		September 30,			September 30,			September 30,
		2011			2010			2009

Net income (loss) for the year,
under Canadian GAAP	$	(946,072	)	$	(3,464,951	)	$	(5,344,283	)
Adjustment for amortization of deferred costs (note 23(f))		(378,534	)		(465,784	)		(465,784	)
Adjustment for change in fair value of derivative		–			2,153,766			–
Adjustment for Intangibles, net		–			–			–
Net income (loss) for the year,
under US GAAP	$	(1,324,606	)	$	(1,776,969	)	$	(5,810,067	)

Basic earnings (loss) per share, under US GAAP	$	(0.04	)	$	(0.06	)	$	(0.20	)
Diluted earnings per share, under US GAAP	$	(0.04	)	$	(0.06	)	$	(0.20	)

EX-8.1 2 exhibit8-1.htm LIST OF SUBSIDIARIES Filed by Avantafile.com - Forum National Investments Ltd. - exhibit 8.1

LIST OF SUBSIDIARIES


Subsidiaries	Incorporating Jurisdiction

Intravelnet Ltd.	Ontario, Canada
ATM Travel Group Ltd. (“ATM”)	British Columbia, Canada
Spirit Yacht Charters Ltd.	Washington State, USA
American Life Settlement Society LLC	State of Delaware, USA

EX-9.1 3 exhibit9-1.htm AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2009 Filed by Avantafile.com - Forum National Investments Ltd. - Exhibit 9.1

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

“Dan Clozza” (signed)

Dan Clozza
President

May, 14 2010

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE SHAREHOLDERS OF FORUM NATIONAL INVESTMENTS LTD.

We have audited the consolidated balance sheets of Forum National Investments Ltd. as at September 30, 2009 and 2008, and the consolidated statements of operations, comprehensive income (loss) and deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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

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

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

/s/ BDO Canada LLP

Chartered Accountants

Vancouver, Canada
May 14, 2010

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

In the United States, reporting standards for auditors requires the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by conditions and events that cast substantial doubt on the Company’s ability to continue as a going concern, such as those described in Note 1 and by changes in accounting policy, such as those described in note 2 to the consolidated financial statements. Our report to the shareholders dated May 14, 2010 is expressed in accordance with Canadian reporting standards, which do not permit a reference to such events and conditions in the auditors’ report when these are adequately disclosed in the notes to the consolidated financial statements

/s/ BDO Canada LLP

Chartered Accountants

Vancouver, Canada
May 14, 2010

F-3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE SHAREHOLDERS OF FORUM NATIONAL INVESTMENTS LTD.

We have audited the consolidated balance sheet of Forum National Investments Ltd. as at September 30, 2007 and the consolidated statements of operations and deficit and cash flows for the nine month period ended September 30, 2007, and the year ended December 31, 2006. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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		5,738
Total Current Assets		4,378,578		6,050,471

Amounts and notes receivable (notes 5 and 19)		205,136		404,033
Investment in Life Settlement contracts (notes 5 and 6)		4,052,220		3,258,993
Related party advance (note 18)		205,000		-
Property and Equipment (note 7)		9,562,321		17,850,031
Intangible assets (note 8)		72,168		1,918,062

Total Assets	$	18,475,423	$	29,481,590

Liabilities and Shareholders’ Equity

Current
Accounts payable and accrued liabilities	$	614,847	$	897,956
Accounts payable – other (note 20(a))		–		1,203,277
Due to broker (note 3)		569,996		–
Secured borrowing (note 10)		263,694		137,321
Promissory note payable (note 20(b))		–		7,602,530
Deferred revenue, current portion (note 9)		1,439,840		1,088,003
Current portion of long-term debt (note 12)		145,625		363,756
Convertible debentures (note 11)		40,486		40,486
Loans from related parties (note 18)		486,379		1,089,031
Total Current Liabilities		3,560,867		12,422,360

Deferred Revenue (note 9)		1,482,092		2,404,163
Long-Term Debt (note 12)		5,222,774		4,211,715
Future income tax payable (note 14)		1,712,000		–
Total Liabilities		11,977,733		19,038,238

Shareholders’ Equity

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

Nature of operations and ability to continue as going concern (note 1)
Contingency and Commitments (notes 16 and 17)
Subsequent events (note 22)
Approved on behalf of the Board:

/s/ Dan Clozza	Director	/s/ Martin Tutschek	Director
Dan Clozza		Martin Tutschek

See accompanying notes to consolidated financial statements.

F-5

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

								Nine-month
		Year Ended			Year Ended			Period Ended
		September 30,			September 30,			September 30,
		2009			2008 (restated)			2007 (restated)
					(note 2r)			(note 2r)
Revenues
Membership and travel	$	3,514,525		$	3,593,847		$	2,320,916
Interest		50,702			106,364			149,275
Other		175,331			16,943			102,447
		3,740,558			3,717,154			2,572,638

Expenses
Wages (note 13)		1,751,700			3,060,503			3,437,026
General and administration (note 12)		2,813,517			2,367,823			1,171,197
Bad debt expense (note 5(a))		212,364			394,386			–
Commission costs		31,983			169,247			656,842
Amortization of property and equipment		406,785			86,078			68,106
Amortization of intangible assets (note 8)		684,738			684,738			–
		5,901,087			6,762,775			5,333,171
Loss before other income (expenses)		(2,160,529	)		(3,045,621	)		(2,760,533	)

Other income (expenses)
Net gain on investment in life settlement contracts (note 6)		775,207			5,447,464			–
Gain on settlement of debt by guarantor		–			46,673			–
Foreign exchange gain (loss)		977,041			(585,119	)		259,611
Loss on sale-lease back of vehicle		–			(45,040	)		–
Write off of access rights to wholesale priced
condo accommodation (note 8)		–			(27,052	)		–
Write-down of Needles project (note 7 and 20(b))		–			(1,619,163	)		–
Gains on marketable securities		361,887			–			–
Impairment of intangible assets (note 8)		(1,233,324	)		–			–
Impairment of property, plant & equipment (note 7)		(2,348,595	)		(1,800,000	)
Total Non-operating Income (Expense)		(1,467,784	)		1,417,763			259,611

Income (Loss) Before Tax		(3,628,313	)		(1,627,858	)		(2,500,922	)
Income Tax Recovery (Expense) (note 14)		(1,715,970	)		9,401			–

Net Income (Loss) before Non-controlling interest		(5,344,283	)		(1,618,457	)		(2,500,927	)
Net (Loss) attributable to Non-controlling Interest		–			(746,817	)		–
Net Income (Loss) and Comprehensive Income (loss) for Period		(5,344,283	)		(871,640	)		(2,500,922	)


Deficit, Beginning of Period		(16,725,977	)		(15,854,337	)		(13,353,415	)

Deficit, End of Period	$	(22,070,260	)	$	(16,725,977	)	$	(15,854,337	)

Basic earnings (loss) per share	$	(0.13	)	$	(0.02	)	$	(0.13	)
Diluted earnings (loss) per share	$	(0.13	)	$	(0.02	)	$	(0.13	)

Weighted average number of common shares outstanding (note 13 (b))

See accompanying notes to consolidated financial statements.

F-6

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

								Nine-month
		Year Ended			Year Ended			Period Ended
		September 30,			September 30,			September 30,
		2009			2008 (restated )			2007 (restated)
Operating Activities
Net income/(loss)	$	(5,344,283	)	$	(871,640	)	$	(2,500,922	)
Adjustments to reconcile net income (loss) to net cash Provided by (used in) operating activities:
Net gain on life settlement contracts		(775,207	)		(5,447,464	)		–
Future income tax expense		1,712,000			–			–
Non-controlling interest		–			(746,817	)		–
Deferred vacation membership revenue		(404,303	)		(973,426	)		(829,254	)
Amortization of property and equipment		406,785			86,078			68,106
Amortization of intangible assets		684,738			687,962			–
Gains on marketable securities		(361,887	)		–			–
Impairment on tangible assets		2,348,595			1,800,000			–
Impairment on intangible assets		1,233,324			27,052			–
Related party advance compensation (note 18)		20,000			–			–
Loss on sale-lease back of vehicle		–			45,040			–
Write down on Needles project		–			1,619,163			–
Accrued interest on loan from related party		–			53,820			–
Gain on settlement of debt		–			(46,673	)		–
Revenue recognized on advances against future revenue streams		–			–			(17,139	)
Stock-based compensation		–			–			2,944,536
Unrealized foreign exchange gain		–			–			(644,350	)
Increase (decrease) in accounts, notes and other receivables		371,253			321,290			171,663
Increase in short-term deposits		(475	)		–			–
Increase (decrease) in prepaid expenses		(113,940	)		(5,738	)		12,208
Increase (decrease) in accounts payable and accrued liabilities		(283,109	)		398,523			(177,763	)
Increase (decrease) in deferred revenue		(165,931	)		2,400,019			739,386

Cash Used in Operating Activities		(672,440	)		(652,811	)		(233,529	)

Investing Activities
Cash on-hand upon acquisition		–			814,003			–
Purchase of property and equipment		(2,070,200	)		(5,183,301	)		(1,882,212	)
Purchase of intangible property		(72,168	)		–			(32,425	)
Purchase of Family Vacation Centers		–			(1,849,589	)		–
Purchase of life settlement investments		–			(1,788,567	)		–
Proceeds from life settlement		5,371,606			–			–
Payment of life insurance premiums		(18,020	)		(1,118,127	)		–
Realized proceeds on marketable securities		121,512			–			–
Purchase of marketable securities		(2,000,000	)		–			–
Cash Used in Investing Activities		1,332,730			(9,125,581	)		(1,914,637	)

Financing Activities
Net proceeds received on share issuance		195,344			30,000			9,391,996
Additional contribution in Colorado River Resorts LLC		–			79,493			–
Funds held in trust		79,493			(79,493	)		–
Amounts due to (from) related parties (note 18)		(827,653	)		685,137			(42,047	)
Borrowings (repayments) of Long-term debt		(62,544	)		132,991			178,304
Proceeds from Long-term debt		855,472			226,882			602,866
Secured borrowing		126,373			137,321			–
Due to broker		569,996			–			–
Cash Provided by Financing Activities		936,481			1,212,331			10,131,119

Effect of foreign exchange on cash		-			170,720			–
Increase (Decrease) in Cash		1,596,771			(8,395,341	)		7,982,952	)
Cash and Cash Equivalents, Beginning of Period		228,864			8,624,205			641,253

Cash and Cash Equivalents, End of Period	$	1,825,635		$	228,864		$	8,624,205

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

F-7

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

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

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

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

2.	Significant Accounting Policies

	(a)	Basis of presentation

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

		Incorporating	Date of Acquisition
Subsidiaries	Ownership	Jurisdiction	or Incorporation

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

F-8

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 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 $228,455 to previously reported net loss for the fiscal period ended September 30, 2008, a $1,122,147 decrease in previously reported income for the period ended September 30, 2007, and a reduction to deficit at October 1, 2006 of $1,352,796. The impact on the balance sheet was to reduce total assets in 2008 by $1,599,590 (2007: $1,641,251) and increase the retained deficit by $1,599,590 (2007: $1,641,251). There were no income tax impact from these changes.

		Previously
		Reported 2008			Adjustments			Restated 2008
Assets
Deferred Organization Costs	$	258,556		$	(258,556	)	$	–
Deferred Costs, net		1,341,034			(1,341,034	)		–
Total Assets		31,081,180			(1,599,590	)		29,481,590

Shareholders’ Equity
Deficit		(15,126,387	)		(1,599,590	)		(16,725,977	)
Total Shareholders’ Equity		12,042,942			(1,599,590	)		10,443,352
Total Liabilities and Shareholders’ Equity	$	31,081,180		$	(1,599,590	)	$	29,481,590

Expenses
General and administration	$	2,340,578		$	27,245		$	2,367,823
Commission cost		319,488			(150,241	)		169,247
Total Expenses		6,885,771			(122,996	)		6,762,775
Foreign exchange gain (loss)		(503,784	)		(81,335	)		(585,119	)
Total Non-operating Income (Loss)		1,499,098			(81,335	)		1,417,763
Net Income (Loss) before non-controlling interest and income taxes		(1,669,519	)		41,661			(1,627,858	)
Net Income (Loss)	$	(913,301	)	$	41,661		$	(871,640
Basic earnings (loss) per share	$	(0.02	)	$	0.00		$	(0.02	)
Diluted earnings (loss) per share	$	(0.02	)	$	0.00		$	(0.02	)

F-16

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

2.	Significant Accounting Policies (continued)

(r)

Adoption of new accounting standards (continued)

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

		Previously
		Reported 2007			Adjustments			Restated 2007

Assets
Deferred Organization Costs	$	149,976		$	(149,976	)	$	–
Deferred Costs, net		1,491,275			(1,491,275	)		–
Total Assets		20,035,886			(1,641,251	)		18,394,635

Shareholders’ Equity
Deficit		(14,213,086	)		(1,641,251	)		(15,854,337	)
Total Shareholders’ Equity (c)		12,926,243			(1,641,251	)		11,284,992
Total Liabilities and Shareholders’ Equity	$	20,035,886		$	(1,641,251	)	$	18,394,635

Expenses
General and administration (c)	$	761,610		$	409,587		$	1,171,197
Commission cost		518,363			138,479			656,842
Total Expenses		4,785,105			548,066			5,333,171
Net Income (loss) before non-controlling interest and income taxes		(2,212,467	)		(548,066	)		(2,760,533	)
Foreign exchange loss		–			259,611			259,611
Net Loss	$	(2,212,467	)	$	(288,455	)	$	(2,500,922	)
Basic earnings (loss) per share	$	(0.11	)	$	(0.02	)	$	(0.13	)
Diluted earnings (loss) per share	$	(0.11	)	$	(0.02	)	$	(0.13	)

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

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

F-17

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

2.	Significant Accounting Policies (continued)

(s)

Adoption of future accounting standards

i. Business Combinations – 1582


		In January 2009, the CICA issued Section 1582 – Business Combinations, which replaces Section 1581 – Business Combinations, and Section 1601 – Consolidated Financial Statements and Section 1602 – Non-Controlling Interests, which replace Section 1600 – Consolidated Financial Statements. These new sections are effective for years beginning on or after January 1, 2011 with earlier adoption permitted. Sections 1582 and 1602 will require net assets, non-controlling interests and goodwill acquired in a business combination to be recorded at fair value and non-controlling interests will be reported as a component of equity. In addition, the definition of a business is expanded and is described as an integrated set of activities and assets that are capable of being managed to provide a return to investors or economic benefits to owners. As well acquisition costs are not part of the consideration and are to be expensed when incurred.

		ii. Accounting changes – 1506

		In June 2009, the CICA issued amendments to CICA Handbook Section 1506, Accounting Changes. Section 1506 was amended to exclude from its scope changes in accounting policies upon the complete replacement of an entity’s primary basis of accounting. The amendments were effective for annual and interim financial statements relating to fiscal years beginning on or after July 1, 2009. The adoption of International Financial Reporting Standards (“IFRS”) is not expected to qualify as an accounting change under CICA 1506.

		iii. Multiple Deliverable Revenue Arrangements – EIC175

		In December 2009, the CICA issued EIC175 – Multiple Deliverable Revenue Arrangements. This EIC required the Company to divide revenue arrangements with multiple deliverables to be divided into separate units accounting, with separate revenue recognition criteria. The Company does not expect the adoption of EIC175 to have a material impact on the financial statements.

		iv. International Financial Reporting Standards ("IFRS")

		In 2006, the Canadian Accounting Standards Board ("AcSB") published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over an expected five year transitional period. In February 2008 the AcSB announced that 2011 is the changeover date for publicly-listed companies to use IFRS, replacing Canada's own GAAP. The date is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. The transition date of January 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended December 31, 2010. While the Company has begun assessing the adoption of IFRS for 2011, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time.

F-18

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

3.	Marketable Securities

	Number of shares held	Cost	Quoted Market price per share	Fair Value

HSE Integrated	1,339,500	$622,625	$0.700	$937,650

Huntington Bancshares Inc.	250,000	$1,144,580	$5.0397	$1,259,925

SUNC2 Network Corp.	50,000	$77,242	$0.856	$42,800

Total	1,639,500	$1,844,447		$2,240,375

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

4.	Segment reporting

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

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

All membership and travel revenues are earned in Canada (2008 100%). There are no major customers that account for 10% or more of the Company’s revenue (2008: nil).

All gains on the investment in life settlement contracts are derived from life insurance policies held in the USA (2008: 100%). There are no insured parties that account for 10% or more of the Company’s revenue (2008: 1 insured party).

F-19

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

5.	Financial Instruments

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

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

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

(a)

Credit risk

		September 30,		September 30
		2009		2008

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

F-20

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

5.	Financial Instruments (continued)

	(a)	Credit risk (continued)

		Cash and cash equivalents and short term deposits: Credit risk associated with these assets is minimized substantially by ensuring that these financial assets are placed in debt instruments of well-capitalized financial institutions.

		Amounts and notes receivable and other receivables: Credit risk associated with these assets is minimized due to their nature. All notes receivable are carried at net after allowing for bad debts and unearned interest. The provision for doubtful amounts receivable is an estimate based on an assessment of individual accounts and the length of time balances have been outstanding. As of September 30, 2009 the allowance for doubtful amounts and note receivables totaled $328,361 (2008 - $ 340,474).

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

	(b)	Liquidity risk

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

Expected payments by period as at September 30, 2009

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

F-21

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

5.	Financial Instruments (continued)

(b)

Liquidity risk (continued)

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

Operating leases and contracts include property leases for the Company’s travel operations. The Company believes that it will not encounter difficulty in meeting the obligations associated with its’ financial liabilities and further believes that if necessary, it would be able to access the capital markets for additional financial resources at prevailing market rates.

	(c)	Market risk

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

		The following table sets out a sensitivity analysis of the effect of the Company’s financial instruments that are subject to foreign currency risk by applying reasonable possible changes in the USD foreign currency rates relative to the Company’s functional currency, the Canadian dollar


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

F-22

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

5.	Financial Instruments (continued)

(c)

Market risk (continued)


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

	(1)	Displayed is the effects on the Company’s US dollar denominated financial assets and liabilities if the value of the US $ increases or decreases by 10%:

		The Company is exposed to currency risk in relation to their US dollar financing referred to in note 12 and the investment in life settlement contracts (note 6) denominated in US dollars. The Company has not entered into any foreign currency contracts to mitigate this risk.

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)

Fair value (continued)

Fair Value Analysis

Level 1 fair value measurements are those derived from quoted prices (unadjusted ) in active markets for identical assets or liabilities;

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%	(2%)	+1%	(1%)
Investment in life settlement	$3,547,740	$5,474,583	$3,824,382	$4,404,380	$3,915,314	$4,295,937
Increase / (Decrease)	($504,480)	$1,422,363	($227,838)	$352,160	($136,906)	$243,717

6.	Investments in life settlement contracts

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

	Number of	Estimated Fair	Face	Face
Year	contracts	value	value (CAD)	value (USD)

2008	5	$ 3,258,993	$ 27,483,207	$ 25,930,000
2009	5	$ 4,052,220	$ 27,802,146	$ 25,930,000

F-25

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

6.	Investments in life settlement contracts (continued)

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

		Realized		Unrealized
Year		Gains (Losses)		Gains (Losses)

2007	$	–	$	–
2008	$	3,736,541	$	1,710,923
2009	$	–	$	775,207

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

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


	September 30, 2009	September 30, 2008

Average age of insured	80 years	79 years

Average life expectancy	10 years	10 years
Expected premium growth	5%	5%
Average maturity value	$5,200,000	$5,200,000
Mortality rates Discount rate	Standard Life Expectancy 12%	Standard Life Expectancy 10%

F-26

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

7.	Property and Equipment

				Accumulated				Net Book
September 30, 2009		Cost		Amortization		Impairment		Value

Motor vessels	$	13,726,249	$	307,313	$	4,148,595	$	9,270,342
Vehicles		75,000		35,417		–		39,583
Equipment		270,305		120,588		–		149,717
Computers		9,559		6,488		–		3,071
Leasehold improvements		183,207		83,599		–		99,608

	$	14,264,320	$	553,405	$	4,148,595	$	9,562,321

				Accumulated				Net Book
September 30, 2008		Cost		Amortization		Impairment		Value

Motor vessel	$	11,746,281	$	–	$	1,800,000	$	9,946,281
Vehicles		75,000		10,417		–		64,583
Equipment		217,311		76,955		–		140,356
Computers		7,737		5,629		–		2,108
Leasehold improvements		147,792		53,619		–		94,173
Land		9,221,693		–		1,619,163		7,602,530

	$	21,415,814	$	146,620	$	3,419,163	$	17,850,031

Accumulated amortization and write-downs includes a $2,348,595 (2008 - $1,800,000) impairment charge against motor vessels. For the year ended September 30, 2008, accumulated amortization and write-downs included impairment charge $1,619,163 against the Needles property.

The value of property, plant & equipment not in use at September 30, 2009 are $nil (2008: Motor vessel $9,946,281). Assets that are not in use have not been depreciated during the year.

The carrying value of items of Property Plant and Equipment that are under capital leases are vehicles with a carrying value of $39,583 (2008: $64,583). The cost and accumulated amortization for the vehicles is $75,000 and $35,417 respectively (2008: $75,000 and $10,417).

From time to time during the year, the Company has made property, plant and equipment, when not in use, available to management and employees for which management and employees reimburses the Company for all direct charges and sundry costs.

F-27

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

7.	Property and Equipment (continued)

The Company recognized an impairment loss on the carrying value of the motor vessel that was completed during the year, in the amount of $2,348,595 (2008: $1,800,000). Due to the current economic environment, and cost overruns associated with the construction of the vessel, the Company concluded that the vessel had a market value of $9,270,342 (2008: 9,946,281). As the motor vessel has not been in use, the Company was unable to prepare a discounted cash flow analysis to determine the value in use, As an alternative the fair value of the motor vessel was determined based on the amortized replacement cost. Under the amortized replacement cost method, the replacement costs for significant components of the motor vessel were obtained, and depreciated to current market value based on a review by an independent specialist marine surveyor.

On January 15, 2009 the Needles Property held by Colorado River Resorts was foreclosed. As a result of the foreclosure the land was returned to the promissory note holder in exchange for full and final settlement of the debt obligation. The Company has derecognized the land in 2009 resulting in a decrease to property plant and equipment of $7,602,529 (2008: 1,619,163) (see note 20(b)).

8.	Intangible Assets

As of September 30, 2009, the Company had finite-lived intangible assets which totaled $ Nil (2008 – $1,918,062), net of accumulated amortization of $1,369,476 (2008 - $684,738) and impairment of $1,233,324 (2008 - $nil). At September 30, 2008, the Company had one finite-lived intangible asset which consisted of vacation club memberships acquired from Family Vacation Centers on October 18, 2007 as discussed further in Note 20 to these consolidated financial statements.

During the year, the Company began to develop and create its own computerized membership database based on new technology, to replace the aging legacy membership database system the Company is currently employing. The database is expected to be completed & implemented in 2010. The cost of developing the database during 2009 was $72,168 (2008: $nil). The total unspent cost of developing the replacement database is approximately $30,000. As the computerized membership database is not completed at balance date, no amortization has been recognized.

F-28

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

8.	Intangible Assets (continued)

Intangible assets		September 30,			September 30,
		2009			2008

Purchased access rights to wholesale price condo	$	–		$	32,425
Accumulated amortization		–			(5,373	)
Impairment write-down		–			(27,052)
Vacation club membership (note 20(a))		2,602,800			2,602,800
Accumulated amortization		(1,369,476	)		(684,738	)
Impairment write-down (i)		(1,233,324	)		–
		–			1,918,062

Development of computerized membership database	$	72,168		$	–
Total intangible assets	$	72,168		$	1,918,062

(i)

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

9.	Deferred Revenue

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

The deferred membership sales and dues relates to the portion of revenue, which entitles members to use the Company’s vacation and travel club privileges at a future date. Management’s best estimate for life time memberships is that they are active for 5 years (2008 – 5 years, 2007 – 5 years). Management’s best estimate is based on historical data for all travel memberships. The revenue is recognized as indicated in note 2(b).

During 2009, the Company entered into travel club membership agreements with a total value of $Nil (2008 - $2,400,019; 2007 - $739,788). As described in note 2(b), the revenue from these memberships are recognized in the year of purchase evenly over the term of the membership.

Commission costs are expensed as incurred.

F-29

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

10.

Secured Borrowing

The factorization transaction is collateralized against the notes receivable. The effective interest rate of the secured borrowing is 15% (2008 – 15%).

As at September 30, 2009 the Company had an outstanding liability to the third party as set out below:

		September 30,			September 30,
		2009			2008

Balance, beginning of period	$	137,321		$	-
Sales of note receivables during the year		80,637			111,833
Amortization of discount		63,757			25,488
Collection of note receivable during the year		(18,021	)		-

Balance, end of period	$	263,694		$	137,321

11.

Debentures

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

F-30

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

12.

Long-Term Debt

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

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

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

	The construction loan was secured by the motor vessel and by a personal guarantee from two of the directors of the Company up to the value of the construction loan. Interest on the construction loan is capitalized in the Property and Equipment balance. The interest rate on the construction loan was LIBOR plus 3.25%.

	In February 2009, the Company converted its construction loan with Caterpillar Financial Services to a loan facility of $5 million US dollar with a 5 year term and a fixed 7% per annum. The loan is secured by the motor vessel and by a personal guarantee from two of the directors of the Company up to the value of the permanent loan. Interest of $120,819 was capitalized on the construction during the year (2008 – $307,917; 2007 – $361,376). Capitalization of interest ceased in February 2009.

	The Company lease financed a motor vehicle during the year September 30, 2008. The loan is in the form of a capital lease repayable in equal installments over 36 months and is secured by a guarantee over the motor vehicle. The minimum lease payment for the lease is $1,838 per month, interest rate at 8.5% per annum and the guaranteed residual value is $32,000. The imputed interest rate for the capital lease is 9.2% per annum, and has a maturity date of June 5, 2011. The carrying value of the motor vehicle is $39,583 (2008 – $64,583).

	Interest expense of $346,300 is included in General and administration during the year (2008 – $33,043; 2007 – $34,268).

	The expected repayments of long term debt for the five following twelve month periods ended September 30, 2009 are as follows:


	Permanent loan	Vehicle lease	Total
2010	$ 129,210	$ 16,415	$ 145,625
2011	137,107	39,936	177,043
2012	145,487	–	145,487
2013	139,784	–	139,784
2014	4,760,460	–	4,760,460
Thereafter	–	–	–

Total long term debt	$ 5,312,048	$ 56,351	$ 5,368,399

F-31

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

13.

Capital Stock

(a)

The authorized capital stock:

		Unlimited - Common shares without par value

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

		Unlimited - Series “B” - Preference convertible shares without par value (convertible to one common share for each preferred share held). Series “B” preference shareholders are not entitled to notice or to attend any meetings of common shareholders of the Company. Each Series “B” preference shareholder is entitled to one vote for each series A preference share held for any matters submitted to holders of preference shareholders for consideration. Series “B” preference shareholders are entitled to convert the shares into 13,933,983 shares at the holders discretion.

(b)

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

	Number of
	Common		Share		Contributed
	Shares		Capital		Surplus

Balance, September 30, 2007	28,360,867	$	24,194,793	$	2,944,536
Stock options exercised	30,000		61,159		(31,159)

Balance, September 30, 2008	28,390,867	$	24,255,952	$	2,913,377
Stock options exercised	150,000		351,238		(155,796)
Shares issued for business acquisition (note 20(a))	267,373		1,203,179		–

Balance, September 30, 2009	28,808,240	$	25,810,369	$	2,757,581

(i)

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

F-32

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

13.

Capital Stock (continued)

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

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

	For the years ended September 30, 2009, September 30, 2008 and the nine month period ended September 30, 2007, outstanding stock options and preferred shares were not included in the calculation of diluted earnings (loss) per share as their effect would be antidilutive.

	Diluted weighted average common stock includes common stock issuable if Series A and Series B preferred shares are converted and 2,655,000 (2008: 2,805,000) stock options outstanding that are in the money are exercised assuming that any proceeds would be used to purchase common stocks at the average market price during the period.

	(c)	Options

		On July 5, 2007, the Company’s board of directors adopted a stock option plan, subsequently approved by shareholders and adopted by the Company, under which the Company is authorized to grant options to directors, employees and consultants to acquire up to 10% of the issued and outstanding common stock. The exercise price of each option shall not be less than 80% of the market price of the Company’s stock on the date of grant. The options can be granted for a maximum term of five years and vest as determined by the board of directors. The Company’s shares are traded in United States dollars, and options granted to date have been denominated in Unites States funds or the Canadian equivalent thereof.

		The Company did not expand the stock option plan during the year under review after reserving 2,850,000 shares in the common stock of the Company for the nine month period ended September 30, 2007. The options vested immediately, exercisable at $1 per share and will expire in July 2012. No options were granted during the year ended September 30, 2009 and 2008.

	(d)	Stock-based compensation

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

F-33

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

13.

Capital Stock (continued)

(d)

Stock-based compensation

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

	Number			Exercise
	of Options			Price (US $)

Balance, October 1, 2007	2,835,000		$	1.00
Exercised during the year ended September 30, 2008	(30,000	)	$	1.00

Balance, September 30, 2008	2,805,000		$	1.00
Exercised during the year ended September 30, 2009	(150,000	)	$	1.00

Balance, September 30, 2009	2,655,000		$	1.00

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

Options Outstanding

Options Exercisable

Exercise

Number

Remaining

Number

Exercise

Price (US $)

of Options

Contractual Life

of Options

Price (US $)

$1.00

2,655,000

2.75 years
Expiry June 30, 2012

2,655,000

1.00

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


			September 30, 2007

	Dividend rate		–
	Expected volatility		209%
	Interest rate		4.88%
	Expected life		5 years

The weighted average grant date fair value was $1.04.

(e)

Contributed surplus

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

F-34

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

14.

Income Taxes

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

								Nine month
		Year ended			Year ended			period ended
		September 30,			September 30,			September 30,
		2009			2008			2007
					(Restated)			(Restated)
Statutory income tax rate		30.1%			31.5%			33.9%

Statutory rate applied to income (loss) from
operations before income taxes	$	(1,086,500	)	$	512,775		$	(847,813	)
Permanent differences		2,800			(1,484,509	)		1,007,468
Difference in tax rates between foreign jurisdiction		61,000			–			–
Non-capital losses not previously recognized		–			859,047			–
Investment in life settlement contracts		327,800			–			–
Effect of reduction in statutory tax rate		199,900			–			–
Expense due to differences in tax jurisdictions		1,086,100			–			–
Others		105,370			(96,845	)		(112,163	)
Increase (decrease) in valuation allowance		1,019,500			218,933			(47,492	)

Income tax expense	$	1,715,970		$	9,401		$	–
Comprising:

Income taxes (recovery) expense – current	$	3,970		$	9,401		$	–
Income taxes – future	$	1,712,000		$	–		$	–

F-35

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

14.

Income Taxes (continued)

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

		September 30,			September 30,
		2009			2008

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

Future income taxes, net	$	(1,712,000	)	$	–

	The ultimate realization of the future tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In assessing the reliability of future tax assets, management considers whether it is more likely than not that some or all of the future tax assets will be realized. Where management does not believe that realization is more likely than not, a valuation allowance is provided.

	The Company has Canadian non-capital income tax loss carry forwards of approximately $8,970,000 available to reduce future years’ taxable income expiring between 2009 and 2028. The tax benefits and the associated valuation allowance was decreased by $550,500, representing the tax effect of losses and other assets which were impacted by the foreclosure of the Needles Property held by Colorado River Resorts LLC (Note 7).

	The Company has a capital loss carry-forward of approximately $614,000 (2008: $614,000).

	The accounting estimates related to the liability for uncertain tax positions require the Company to make judgments regarding the sustainability of each uncertain tax position based on its technical merits. If the Company determines it is more likely than not a tax position will be sustained based on its technical merits, the Company records the impact of the position in its consolidated financial statements at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. These estimates are updated at each reporting date based on the facts, circumstance and information available. Changes in estimates are recognized in current and future periods as appropriate.

F-36

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

14.

Income Taxes (continued)

15	Capital Management Policy

Management determines the Company’s capital structure and makes adjustments to it based on funds available to the Company, in order to support the Company’s business and investments. Management has not established quantitative return on capital criteria for capital management.

The Company will be dependent in the future upon external financing to fund future acquisitions and its administrative costs. The Company will spend existing working capital and raise additional amounts as needed.

Management reviews its capital management approach on an ongoing basis and believes that its approach, given the relative size of the Company, is reasonable.

The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.

The Company considers the items included in shareholders’ equity as capital. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares through private placements, sell assets to reduce debt or return capital to shareholders. The Company is not subject to externally imposed capital requirements. There have been no changes made to the capital management policy during the year.

16.

Commitments

In addition to other obligations disclosed elsewhere:

(a)

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

2010	$	67,277
2011		22,007
2012		7,508
2013		4,803
2014		–

Total	$	101,595

F-37

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

16.

Commitments (continued)

(b)

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

2010	$	87,120
2011		54,000

Total	$	141,120

17.

Contingent liability

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

18.

Related Party Transactions

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

	(a)	The Company reimbursed $138,717 (2008 - $112,565 and nine month period ended September 30, 2007 $113,297) to directors for expenditures made on behalf of the Company.

	(b)	At September 30, 2009, directors and officers advanced $486,379 (2008 - $1,089,031) to the Company in the form of loans and short-term financing. The amounts advanced from directors and officers are unsecured, non-interest bearing and repayable on demand.

	(c)	During fiscal 2008 and 2007, a SUV 7 passenger limousine owned by a director and officer of the Company was sold to the Company for $115,000. The Company subsequently lease- financed the vehicle.

	(d)	Loans from related parties totaling $602,652 (2008 - $Nil) were repaid during the year.

	(e)	The Company advanced $225,000 to an Officer/ Director for the purchase of a 43’ motor vessel. However, as at September 30, 2009 the motor vessel ownership had not been transferred to the Company, and accordingly the amount has been recognized as a related party advance in the financial statements. The related party advance was fair valued at an interest rate of 9.9% at $205,000, with a $20,000 charge to Wages.

	All of the above transactions and balances are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

F-38

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

19.

Amounts and Notes Receivable

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

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

As of September 30, 2009 the allowance for doubtful amounts and note receivables totalled $210,923 (2008 - $ 150,557). At September 30, 2009 promissory note receivables of $236,637 (2008: $137,321) have been provided as security for the secured borrowing (see note 10).

During the year ended September 30, 2009 the Company entered into an agreement to purchase note receivables from a third party with a face value of $146,700 for cash consideration of $89,081. In accordance with HB 3855 these notes were initially recognized at a fair value of $141,516 with an initial gain recognized in interest income of $44,144. The notes receivable acquired are subsequently measured as loans and receivables at amortized cost.

20.

Acquisitions

(a)

Family Vacation Centers

Effective October 18, 2007, the Company completed a business acquisition of Family Vacation Centers (“The Vendor”), consisting of the notes receivable and vacation club memberships for an amount of $3,052,866. The Company did not purchase the outstanding capital stock of the Vendor and no debt or obligations of the Vendor were assumed.

Consideration given was cash payment in the amount of $1,849,589 and an amount $1,203,277 payable in the form of a fixed number of shares (267,373 shares) was to be issued in capital stock of the Company and had been accrued in accounts payable as at September 30, 2008. The Company settled the obligation in full by issuing 267,373 shares of the Company, by September 30, 2009.

Given the present economic condition, the Company has ceased actively selling new travel club memberships from this location in 2008. The Company continues to operate the vacation club and derive cash flow from the notes receivable.

F-39

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

20.

Acquisition (continued)

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


Purchase price	$	3,052,866

Purchase price allocation
Notes receivable		450,066
Vacation club membership		2,602,800

Total	$	3,052,866

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

(b)	Investment in Colorado River Resorts LLC

	During the year ended September 30, 2008, the Company acquired a 54% interest in the Colorado River Resorts, LLC, (the “LLC”) a real estate development project in Needles, California, in January 2008 for cash consideration of US $1.0 million. The project was for the acquisition of the property, the preparation, design and engineering studies for the subdivision and sale of paper lots.

	At the date of the acquisition, the net financial position of the LLC was a deficit; net liabilities were comprised substantially of cash and a deposit on the proposed property acquisition offset by a loan payable. As the LLC was in a net deficit position, the purchase price adjustment of $77,059 representing cumulative general and administrative expenses of the LLC was written off. As the LLC failed to secure the additional investment financing required to complete the project, the Company’s ownership interest in the LLC was 54%, resulting in the requirement to consolidate the LLC by including the land $9,221,692 and promissory note payable secured by the land $7,602,530.

	Subsequent to the investment by the Company and others, the LLC entered into a sale and purchase agreement to acquire land for future development. The acquisition was financed through cash of $2,108,032 (US$1,988,897), and a five year vendor take-back promissory note payable of $7,331,196 (US $6,916,875).

	The promissory note payable was an interest only note, payable quarterly and was secured solely by a first priority charge on the property. The note interest rate was 5% annually for years 1 to 4, and 7.5% in year 5, with no prepayment penalty for early repayment. During the year ended September 30, 2009, the Company received a ‘Notice of Default’ from the note holder, wherefore the note holder proceeded with foreclosure on the property in settlement of the note payable, which was approximately $7.3 million USD at the time of foreclosure.

F-40

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

20.

Acquisitions (continued)

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

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

21.

Supplemental Cash Flow Information

Cash flow information:

						Nine month
		Year ended		Year ended		period ended
		September 30,		September 30,		September 30,
		2009		2008		2007

Interest paid	$	303,875	$	34,268	$	9,496

Taxes paid	$	3,675	$	–	$	6,468

Derecognition of financial liability (note 20(b))	$	7,602,530	$	1,619,163	$	–

	During the year, the Company has derecognized the land in 2009 resulting in a decrease to property plant and equipment of $7,602,530 (2008 – $1,619,163) (see note 20(b)).

	During the year, the Company issued 267,373 common shares for a value of $1,203,179 in settlement of the full obligation accrued in the acquisition of the assets of Family Vacation Centers.

F-41

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

22.

Subsequent Events

(a)

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

23.

United States Generally Accepted Accounting Principles Reconciliation

(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

F-42

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

23.

United States Generally Accepted Accounting Principles Reconciliation (continued)

(b)

Valuation of stock issued for assets and services

		(i)	During the year ended December 31, 2000, the Company acquired Fitness Vacations for 992,000 common shares of the Company. Under Canadian GAAP, the acquisition was valued based on the estimated fair value of the assets acquired. For US GAAP purposes, the acquisition would be valued based on the market value of the shares given. Accordingly, as at September 30, 2009 and 2008, the application of US GAAP would result in an increase in capital stock of $1,217,705.

			During the year ended December 31, 2001, goodwill relating to the acquisition of Fitness Vacations was written down, and as such, the additional goodwill recorded on the acquisition under US GAAP was written off. Accordingly, for the year ended at September 30, 2009 and 2008, and the nine month period ended September 30, 2007, the application of US GAAP would result in a corresponding increase in deficit of $1,217,705.

		(ii)	During the years ended December 31, 2001 and 2000, the Company settled a number of accounts payable by the issuance of stock options and common shares. For Canadian GAAP purposes, the transactions were recorded at the carrying value of services received. For US GAAP purposes, the transactions would be valued based on the market value of the options or shares issued. Accordingly, as at September 30, 2009 and 2008, the application of US GAAP would result in an increase in capital stock and an increase in deficit of $695,681 for the year ended at September 30, 2009 and 2008, and the nine month period ended September 30, 2007.

		(iii)	During the year ended September 30, 2009 and 2008, and the nine-month period ended September 30, 2007, the Company did not issue shares under its incentive share purchase plan (note 2(d)).

(c)

Uncertain tax position

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

F-43

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

23.

United States Generally Accepted Accounting Principles Reconciliation (continued)

(c)

Uncertain tax position (continued)

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

(d)

Purchased intangibles

During the nine month period ended September 30, 2007 the Company acquired access rights to wholesale priced condo accommodation. For Canadian GAAP purposes, the license is treated as an intangible asset and amortized on a straight-line basis over 10 years. For US GAAP purposes, the acquisition of the license would be expensed in the year incurred. During the year ended September 30, 2008, the Company wrote-off the investment. The application of US GAAP would result in a decrease in Total Assets as at September 30, 2009 and 2008 of $Nil, a increase in net income for the year ended September 30, 2008 of $30,276 (for the nine-month ended September 30, 2007 – increase in net loss of $30,256) and an increase in deficit of $nil for the year ended 2008 (2007 - $ 30,276).

(e)

Life settlement contracts

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

F-44

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

23.

United States Generally Accepted Accounting Principles Reconciliation (continued)

(e)

Life settlement contracts (continued)

	(i)	SFAS 157, “Fair Value Measurements”. The provisions of this standard are to provide guidance for using fair value to measure assets and liabilities. The standard clarifies methods for measuring items not actively traded and the principles that fair value should be based upon when pricing an asset or liability. SFAS 157 is effective for financial statements for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not issued financial statements for that fiscal year. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

	(ii)	In February 2007, the FASB issued Statement No. 159 (“SFAS 159”), “The Fair Value Option for Financial Assets and Financial Liabilities – an Amendment of FASB Statement 115”, which permits entities to choose to measure many financial instruments and certain items at fair value. The fair value option established by SFAS 159 permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. Adoption is required for fiscal years beginning after November 15, 2007. Early adoption is permitted as of the beginning of the fiscal year that begins on or before November 15, 2007 provided the entity also elects to apply the provisions of SFAS 157. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

(f)

Deferred costs, net

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

F-45

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

23.

United States Generally Accepted Accounting Principles Reconciliation (continued)

(g)

Recent accounting pronouncements

(i)

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

(ii)

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

(h)

Reconciliation

(i)

Total Assets

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

Total Assets under US GAAP	$	19,350,673	$	30,822,624

F-46

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

23.

United States Generally Accepted Accounting Principles Reconciliation (continued)

(h)

Reconciliation (continued)

(ii)

Capital stock

		September 30,		September 30,
		2009		2008

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

Capital stock, under US GAAP	$	31,166,000	$	29,767,379

(iii)

Deficit

								Nine-month
		Year ended			Year ended			period ended
		September 30,			September 30,			September 30,
		2009			2008			2007

Deficit, under Canadian GAAP	$	(22,070,260	)	$	(16,725,977	)	$	(15,854,337	)
Adjustment for Intangibles, net		–			–			(30,276)
Adjustment for stock-based
compensation for non-employees
for non-employees (note 23(a))		(684,664	)		(684,664	)		(684,664	)
Adjustment for acquisition of Fitness
Vacations (note 23(b)(i))		(1,217,705	)		(1,217,705	)		(1,217,705	)
Adjustment for accounts payable settled
by share issuances (notes 23(b)(ii) and (iii))		(695,681	)		(695,681	)		(695,681	)
Adjustment to opening balance for deferred costs
(note 2(r))		–	)		1,341,034			1,491,275
Adjustment for amortization of deferred costs
(notes23(f))		(875,250	)		(547,662	)		(416,063	)

Deficit, under US GAAP	$	(25,543,560	)	$	(18,530,655	)	$	(17,407,451	)

F-47

FORUM NATIONAL INVESTMENTS LTD.

Notes to Consolidated Financial Statements

Year ended September 30, 2009, and 2008 and the nine month period ended

September 30, 2007

(Expressed in Canadian dollars)

23.

United States Generally Accepted Accounting Principles Reconciliation (continued)

(g)

Reconciliation (continued)

(iv)

Net income (loss) and earnings (loss) per share for:

					Nine-month
		Year ended			period ended			Year ended
		September 30,			September 30,			December 31,
		2009			2008			2007

Net income (loss) for the period,
under Canadian GAAP	$	(5,322,613	)	$	(871,640	)	$	(2,500,922	)
Adjustment for amortization of deferred costs (note 23(f))		(875,250	)		(547,662	)		(416,063	)
Adjustment for Intangibles, net		–			(30,276	)		(30,276	)
Net income (loss) for the period,
under US GAAP	$	(6,197,863	)	$	(1,449,578	)	$	(2,947,261	)

Basic earnings (loss) per share, under US GAAP	$	(0.15	)	$	(0.03	)	$	(0.15	)
Diluted earnings per share, under US GAAP	$	(0.15	)	$	(0.03	)	$	(0.15	)

F-48

EX-12.1 4 exhibit12-1.htm CERTIFICATION Filed by Avantafile.com - Forum National Investments Ltd. - Exhibit 12.1

SECTION 302 CERTIFICATION

I, Daniel Clozza, certify that:

I have reviewed this annual report on Form 20-F/A of Forum National Investments Ltd.;

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

The company's other certifying officers and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable supervision, 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.

Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluations; and

Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting: and

The company's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent function):

All significant deficiencies and material weakness in the design or operation of internal control of financial reporting which are reasonably likely to affect the registrant's ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: October 26, 2012	/s/ Daniel Clozza
	Daniel Clozza, Chief Executive Officer and Director

EX-12.2 5 exhibit12-2.htm CERTIFICATION Filed by Avantafile.com - Forum National Investments Ltd. - Exhibit 12.2

SECTION 302 CERTIFICATION

I, Martin Tutschek, certify that:

I have reviewed this annual report on Form 20-F/A of Forum National Investments Ltd.;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: October 26, 2012	/s/ Martin Tutschek
	Martin Tutschek, Chief Financial Officer and Director

EX-13.1 6 exhibit13-1.htm CERTIFICATION Filed by Avantafile.com - Forum National Investments Ltd. - Exhibit 13.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Forum National Investments Ltd. (the "Company") on Form 20-F/A for the period ended September 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Dan Clozza, Principal Executive and I, Martin Tutschek, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Dan Clozza
Dan Clozza, Principal Executive Officer
October 26, 2012

/s/ Martin Tutschek
Martin Tutschek, Principal Financial Officer
October 26, 2012

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