Edgar Filing: AMERICAN LEISURE HOLDINGS INC

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

FORM 10-KSB/A
AMENDMENT NO. 2

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

For the fiscal year ended December 31, 2004

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from to
---- ----
Commission file number 333-48312

AMERICAN LEISURE HOLDINGS, INC.
-------------------------------
(Name of small business issuer in its charter)

Nevada 75-2877111
---------------------- ----------------------------------
(State of organization) (I.R.S. Employer Identification No.)

Park 80 Plaza East, Saddle Brook, NJ 07663
------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Issuer's telephone number (800) 546-9676 ext. 2076

Securities registered pursuant to Section 12(b) of the Exchange Act:

NONE

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter periods 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 [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]

The issuer's revenues for its most recent fiscal year were $6,419,320.

The aggregate market value of the issuer's voting and non-voting common equity
held by non-affiliates computed by reference to the average bid and ask price of
such common equity as of July 6, 2005, was approximately $5,860,137.

At July 6, 2005, there were 10,137,974 shares of the Issuer's common stock
outstanding.

TABLE OF CONTENTS

ITEM 1. DESCRIPTION OF BUSINESS 3

ITEM 2. DESCRIPTION OF PROPERTY 10

ITEM 3. LEGAL PROCEEDINGS 10

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 12

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 16

ITEM 7. FINANCIAL STATEMENTS 33

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE. 58

ITEM 8A. CONTROLS AND PROCEDURES. 59

ITEM 8B. OTHER INFORMATION. 60

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. 60

ITEM 10. EXECUTIVE COMPENSATION. 62

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS. 64

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 66

ITEM 13. EXHIBITS 68

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. 71

SIGNATURES 72

The registrant has restated the financial statements for the fiscal years ended
December 31, 2004 and 2003 to include the accrual of cumulative dividends on
various series of its preferred stock. This amended Form 10-KSB includes these
restated financial statements and revisions to the related disclosure in "Item
6. Management's Discussion and Analysis or Plan of Operation" including the
disclosure under the heading "Risk Factors." The financial information and
related disclosure is current through December 31, 2004, unless otherwise
stated. This report also includes other revised disclosure under each of the
other items, which is current through the filing of this report, unless
otherwise stated. Investors should read this report in its entirety along with
our amended Form 10-QSB for the quarterly period ended March 31, 2005, which we
are filing simultaneously with this filing.

PART I

FORWARD-LOOKING STATEMENTS

All statements in this discussion that are not historical are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. Statements preceded by, followed by or that
otherwise include the words "believes", "expects", "anticipates", "intends",
"projects", "estimates", "plans", "may increase", "may fluctuate" and similar
expressions or future or conditional verbs such as "will", "should", "would",
"may" and "could" are generally forward-looking in nature and not historical
facts. These forward-looking statements were based on various factors and were
derived utilizing numerous important assumptions and other important factors
that could cause actual results to differ materially from those in the
forward-looking statements. Forward-looking statements include the information
concerning our future financial performance, business strategy, projected plans
and objectives. These factors include, among others, the factors set forth
above under the heading "Risk Factors" in "Item 6. Management's Discussion and
Analysis or Plan of Operation." Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. Most of these
factors are difficult to predict accurately and are generally beyond our
control. We are under no obligation to publicly update any of the
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. Readers are
cautioned not to place undue reliance on these forward-looking statements.

ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT

American Leisure Holdings, Inc. is in the process of developing a large,
multi-national travel services, travel management and travel distribution
organization. We have established a Travel Division, a Resort Development
Division and a Communications Division. Through our subsidiaries, we manage and
distribute travel services, and develop, construct and will manage vacation home
ownership and travel destination resorts and properties , develop and operate
affinity-based travel clubs and own a call center in Antigua-Barbuda. Our
businesses are intended to complement each other and create cross-marketing
opportunities within our business. We intend to take advantage of the synergies
between the distribution of travel services and the development, marketing, sale
and management of vacation home ownership and travel destination properties.

On October 1, 2003, we acquired a 51% majority interest in Hickory Travel
Systems, Inc. as the first building block of our Travel Division. Hickory is a
travel management service organization that serves its network/consortium of
approximately 160 well-established travel agency members, comprised of over
3,000 travel agents worldwide that focus primarily on corporate travel. We
intend to complement our other businesses through the use of Hickory's 24-hour
reservation services, international rate desk services, discount hotel programs,
preferred supplier discounts, commission enhancement programs, marketing
services, professional services, automation and information exchange. We view
the members of Hickory as a resource for future acquisitions of viable travel
agencies as we intend to continue to add well-positioned travel agencies to our
Travel Division.

-3-

In December 2004, Caribbean Leisure Marketing, Ltd., a segment of our
company that is focused on telecommunications, entered into a joint venture with
IMA Antigua, Ltd. to operate a call center in Antigua that Caribbean Leisure
Marketing owns. The joint venture is operated through Caribbean Media Group,
Ltd., an International Business Corporation formed under the laws of Barbados.
We own 39.69% of the joint venture company that is currently operating the call
center.

On December 31, 2004, American Leisure Equities Corporation, one of our
wholly owned subsidiaries, acquired substantially all of the assets of Around
The World Travel, Inc. which included all of the tangible and intangible assets
necessary to operate the business including the business name "TraveLeaders". We
engaged Around The World Travel to manage the assets and granted Around The
World Travel a license to use the name "TraveLeaders" in doing so. TraveLeaders
is a fully integrated travel services distribution business that provides its
clients with a comprehensive range of business and vacation travel services in
both traditional and e-commerce platforms including corporate travel management,
leisure sales, and meeting, special event and incentive planning. TraveLeaders
is based in Coral Gables, Florida.

We were incorporated in Nevada in June 2000 as Freewillpc.com, Inc., and
until June 2002, operated as a web-based retailer of built-to-order personal
computers and brand name related peripherals, software, accessories and
networking products. In June 2002, we acquired American Leisure Corporation in a
reverse merger (discussed below). We re-designed and structured our business to
own, control and direct a series of companies in the travel and tourism
industries so that we can achieve vertical and horizontal integration in the
sourcing and delivery of corporate and vacation travel services.

On June 14, 2002, we entered into a stock purchase agreement with the
former stockholders of American Leisure Corporation pursuant to which we issued
to the former stockholders of American Leisure Corporation 4,893,974 shares of
our common stock and 880,000 shares of our Series A preferred stock having 10
votes per share. As part of this transaction, Vyrtex Limited, a UK company,
which owned 3,830,000 shares of our common stock, surrendered 3,791,700 of the
3,830,000 shares owned by them. The transaction was treated as a reverse merger
and a re-capitalization of American Leisure Corporation, which was considered
the accounting acquirer. The operations of Freewillpc.com prior to the
transaction were not carried over and were adjusted to $0. On July 9, 2002, we
changed our name to American Leisure Holdings, Inc.

Except as expressly indicated or unless the context otherwise requires,
"we," "our," or "us" means American Leisure Holdings, Inc. and its subsidiaries.

BUSINESS INTEGRATION

We are on a mission to develop a large, multi-national travel services,
travel management and travel distribution organization. We are in the process of
integrating the administrative operations of Hickory and TraveLeaders to
distribute, fulfill and manage our travel services.

Our business model for support between our divisions is to use the travel
distribution, fulfillment and management services of the combined resources of
Hickory and TraveLeaders to provide consumer bookings at our planned resorts, to
rent vacation homes that we plan to manage at these resorts, and to fulfill the
travel service needs of our affinity-based travel clubs. We intend to complement
our other businesses through the use of Hickory's 24-hour reservation services,
international rate desk services, discount hotel programs, preferred supplier
discounts, commission enhancement programs, marketing services, professional
services, automation and information exchange. TraveLeaders is a fully
integrated travel services distribution business that provides its clients with
a comprehensive range of business and vacation travel services in both
traditional and e-commerce platforms including corporate travel management,
leisure sales, and meeting, special event and incentive planning. TraveLeaders
currently fulfills travel orders produced by our affinity travel clubs. We plan
to develop, on average, a new club every two months for the next eighteen
months.

-4-

TRAVEL SERVICES

Travel Services Industry Overview
---------------------------------

The travel services industry is made up of two broad categories, corporate
business travel and individual leisure travel. According to preliminary
estimates by the Travel Industry Association of America, Americans spent over
$500 billion on domestic travel in 2004. TraveLeaders does the majority of their
business in the corporate travel management category, while Hickory provides
services to a variety of agencies that focus on business travel.

Corporate travel management became prevalent largely as a result of the
deregulation of the airline industry in 1978. Complex pricing strategies and
airline rules and the elimination of previously available commission
arrangements created an opportunity for travel management companies to assist
corporate clients in optimizing the value of their travel expenditures.

Travel is generally the second largest controllable expense, behind
personnel, for most companies. Corporate travel management companies like
TraveLeaders and most of Hickory's members reduce travel expenses for their
clients by creating and documenting travel policies, negotiating favorable
pricing directly with travel suppliers, and streamlining the reservation process
with customized profiles and client-selected technologies including on-line
booking tools.

The corporate travel management industry has changed significantly in the
last ten years. Elimination of airline commissions drove the industry to
fee-for-service arrangements, and rapid enhancements to technology allowed an
expansion of service offerings to clients. Successfully servicing those clients
requires significant technological, financial and operational resources, meaning
that larger corporate travel management companies like TraveLeaders and Hickory
may have a competitive advantage. We believe the corporate travel management
industry is undergoing a period of consolidation as a result and that
significant growth opportunity exists.

The industry's role and capacity as a distribution channel, and its
relationship with both clients and suppliers, is also undergoing significant
change as a result of the Internet and other technological innovations. We
believe these innovations offer opportunities for corporate travel management
companies to increase the efficiency of their distribution capacities and
enhance services provided to travelers and management.

The industry has faced numerous challenges since the September 11, 2001
terrorist attacks, including the decline in travel, volatility in the U.S.
economy and continued geopolitical instability. These challenges, in part, led
to bankruptcy filings by several major airlines, and along with more recent
phenomena like rising fuel prices continue to cause other airlines to experience
adverse economic pressure. These ongoing financial pressures are driving almost
daily renovations in travel reservation economics and process, which in turn
affects the traditional supplier-intermediary-corporation-traveler
relationships.

Our Travel Services
-------------------

We manage and distribute travel services through Hickory, our subsidiary,
and have contracted with Around the World Travel to manage TraveLeaders, a fully
integrated travel services distribution business based in Coral Gables, Florida.
We acquired Hickory in October 2003. On December 31, 2004, we acquired
substantially all of the assets of Around the World Travel, which included all
of the tangible and intangible assets necessary to operate TraveLeaders.

TraveLeaders
------------

We provide our clients with a comprehensive range of business and vacation
travel services, including corporate travel management (including reservations,
profiled service levels, financial and statistical reporting and supplier
negotiations), leisure sales (including sales to individuals and to travel and
vacation clubs), and meeting, special event and incentive planning. We provide

-5-

integrated solutions for managing corporate travel on a worldwide scale. We also
offer corporate travel services on a local and regional level. Our corporate
travel services provide our clients with a complete suite of travel services
that range from completely 'agent free' Internet booking tools to specialized
expert travel agent guidance. Our private label websites provide our corporate
clients with an exclusive portal for corporate and leisure travel planning and
booking. Our corporate-clients range in size from companies with as few as two
to three travelers to companies with several hundred travelers or more. We
develop corporate travel policies, manage corporate travel programs and design
and develop information systems tailored for our clients. The benefits derived
by our clients typically increase proportionately with the amount of spending,
in that we can obtain direct benefits for the clients by negotiating favored
terms with suppliers and provide the client with better management information
regarding their spending patterns through active, involved account management
and customized reporting capabilities.

We provide vacation travel services using destination specialists who have
first-hand knowledge of various destinations and the capability to handle a
client's specific vacation travel needs. We help our clients design and
implement vacations suited to their particular needs and try to do this in the
most cost-efficient manner. We provide meeting, special event and incentive
planning to corporate clients ranging from Fortune 500 companies with thousands
of travelers to smaller companies with more modest meeting requirements. We plan
events ranging in size from 10 to over 3,000 people. We have the capability to
coordinate all aspects of a client's conference or event including servicing
general travel needs, booking group airline tickets as well as meeting
supervision and the production of all collateral needs. Our meeting, special
event and incentive planning services include program development, promotion
support, site selection, contract negotiations, registration and on-site
management for corporate events in addition to fulfillment of travel service
requirements. We also provide discount airline ticket and hotel programs.

Hickory Travel Systems, Inc.
----------------------------

Hickory is a travel management service organization that serves its
network/consortium of approximately 160 well-established travel agency members,
comprised of over 3,000 travel agency locations worldwide, that focus primarily
on corporate travel. We intend to utilize Hickory's 24-hour reservation
services, international rate desk services, discount hotel programs, preferred
supplier discounts, commission enhancement programs, marketing services,
professional services, automation and information exchange.

American Travel & Marketing Group
---------------------------------

American Travel & Marketing Group, Inc., our subsidiary, develops and
operates affinity-based travel clubs. Highly advantageous travel benefits are
the key to distinguishing our affinity club creation and management from the
older model of single purpose clubs. In addition to travel benefits, we actively
promote cross-marketing strategies to engage non-traditional sponsors to provide
significant benefits to the members that would otherwise not be available to
them in a traditional affinity club. We utilize TraveLeaders to fulfill the
travel service needs of these affinity-based clubs.

Distribution of Our Travel Services
-----------------------------------

We provide our travel services to our clients through several distribution
channels, including traditional brick and mortar regional and branch offices,
dedicated on-site corporate travel departments, call centers and Internet based
technologies.

TraveLeaders has two large customer service operations in Coral Gables,
Florida and Irvine, California with eight branch offices as follows:

- Florida - Ft. Lauderdale, Boca Raton, Orlando, Tampa
- Pennsylvania - Philadelphia, Lancaster
- Ohio - Cincinnati
- California - San Francisco

-6-

These branch offices provide several corporate and vacation travel services
to our clients. These offices are primarily used by small companies as well as
vacation travelers seeking expertise in domestic and international destinations.
In addition, TraveLeaders has three leisure travel offices in Largo, Florida,
Mt. Laurel, New Jersey, and Sinking Springs, Pennsylvania.

We operate approximately fourteen on-site offices located at corporate
client premises, where we provide private label websites, customized trip
planning, reservation and ticketing services to the employees of such corporate
clients.

Hickory operates a 24-hour call center that we plan to use to service our
travel clients and provide travel marketing services.

We also maintain an online reservation and booking website at
www.traveleaders.com. This website permits both corporate and vacation clients
to book airline flights, hotel reservations, car rental reservations, cruises
and vacation specials. We currently operate over a dozen web sites dedicated to
specific types of travel planning.

Competition in the Travel Industry
----------------------------------

The travel services industry is highly competitive. We compete with a large
number of other providers of corporate and vacation travel services. Some of our
competitors include multi-national corporations that have significantly greater
resources than we have. These significantly larger competitors continue to
expand their size, which may give them access to new products and more
competitive pricing than we can offer. We also compete with Internet travel
service providers and directly with travel suppliers including, airlines, cruise
companies, hotels and car rental companies. We are faced with increasing use of
the Internet by both business and vacation travelers to purchase products and
services directly from travel suppliers that could result in bypassing us and
travel service providers similarly situated to us. To meet that competition, we
have developed and will continue to develop business models to enable
TraveLeaders to obtain a growing market share of the 'agent free' travel
business. We also compete by bundling our products in competitively priced tour
packages.

VACATION HOME AND TRAVEL RESORT OPERATIONS

Our vacation home and travel resort operations will be conducted within
three business segments. One will acquire tracts of real estate suitable for the
development of vacation resort properties, which will be subdivided, improved
and sold, typically on a retail basis as vacation home sales. The second
operation is planned to develop, market and sell vacation ownership interests in
our future resort properties primarily through vacation clubs. The third segment
is the ongoing hospitality management of the resorts built by us. While our
vacation home management programs will not be a condition of purchase at any of
our resorts, the consumer may elect to employ our management subsidiary to
handle all aspects of the care and economics of their vacation home, including
but not limited to the supervision of the home in a rental arrangement.

Vacation Homes and Travel Resorts
---------------------------------

We derive our expertise from our founding shareholders who have
successfully developed real estate abroad. Our first vacation home resort in
the United States will be developed through our subsidiary, Tierra Del Sol
Resort, Inc. We intend to develop additional high-quality vacation resort
properties comprised of vacation homes and extensive resort amenities. We seek
to acquire suitable land for this purpose in locations where the demand for
vacation properties is strong throughout the year, including Florida and the
Caribbean. We intend to create and promote our vacation and travel clubs to the
general public to provide revenue for our vacation home and travel resort
properties. In addition, we hope to derive additional revenues from vacation and
travel club membership dues, conversion of travel club members to vacation club
members, and travel commissions from the fulfillment of services by our Travel
Division. We plan to develop our vacation resort properties to include qualified
units so that the homeowners may include their homes in voluntary rental
arrangements.

-7-

We plan to provide qualifying vacation resort homeowners a comprehensive
set of vacation rental and property management and rental services. The services
will consist of marketing, reservations, guest services, basic resort services,
maintenance, repair and cleaning, management of home owner and condo
associations, record keeping and billing, and representation of homeowners'
interests with transient guests.

We have finished the planning stage for The Sonesta Orlando Resort at
Tierra del Sol, a 972-unit vacation home resort to be located just outside of
Orlando, Florida. On January 29, 2005, we entered into an operating agreement
with a subsidiary of Sonesta International Hotels Corporation of Boston,
Massachusetts, a nationally recognized luxury resort management company. We
retained the primary management responsibility, but we delegated substantially
all of the hospitality responsibilities within the management of the resort to
Sonesta.

We plan to construct The Sonesta Orlando Resort at Tierra del Sol in two
phases. Phase I is scheduled to include 430 residential units, a 126,000 square
foot clubhouse, and one of Central Florida's largest swimming and recreation
complexes which includes a combination pool and lazy river swimming feature, an
outdoor sports bar with food service, restroom facilities, showers, water
slides, beach volleyball and extensive sundecks. Phase II is scheduled to
include 542 residential units and additional amenities. The Phase II resort
amenities contemplated include miniature golf, a flow rider water attraction, a
wave pool, rapid river, and a children's multilevel interactive water park.
Phase II clubhouse improvements will include the finishing, equipping and
furnishing of banquet/meeting rooms, casual and fine dining restaurants, a full
service spa, a sales center and an owners' club. We estimate that the cost to
complete the construction of Phase I will be $156,500,000, of which $19,200,000
will be the cost of the horizontal construction, $24,900,000 will be for the
clubhouse and resort amenities, $67,600,000 will be for vertical construction on
430 units and $44,800,000 will be for other costs such as contingencies, closing
costs and soft costs such as architectural, engineering, and legal costs. We
plan to have the first phase of horizontal construction cost of $19,200,000
funded by the Westridge Community Development District via the sale by the
district of bonds issued on a non-recourse basis to the Company. The Westridge
Community Development District was initially created by the Company and enabled
by an order of the State District Court. The debt service on the bonds will be
paid by all of the owners of real property within the district as an additional
property tax assessment over thirty years as a quasi-public cost for the
community benefit provided by the infra-structure and green spaces that the
district will create and preserve. We are currently in the final stages of the
negotiations with a national banking institution for the provision of a
$96,600,000 conventional construction loan that we expect to close in the third
quarter of 2005. We have also given the same banking institution the
underwriting role in the sale of the bonds. We expect to close the first
offering of the bonds in August 2005. In June 2005, we began the earth moving
and clearing process on the land for the resort.

In November 2003, we entered into an exclusive sales and marketing
agreement with Xpress Ltd. to sell the vacation homes in The Sonesta Orlando
Resort at Tierra del Sol. Malcolm J. Wright, one of our founders and directors
and our Chief Executive Officer and Chief Financial Officer, and members of his
family are the majority shareholders of Xpress. As of June 15, 2005, Xpress has
pre-sold 720 vacation homes in a combination of contracts on town homes and
reservations on condominiums for total sales volume of over $243 million.

We are developing additional affinity clubs. Our launch schedule of clubs
in development calls for an average of 9 new clubs in the next 18 months. We
have developed a travel club system and travel incentive strategy that creates
and fulfills the travel and incentive needs of corporations, organizations and
associations with significant member bases. Typically, we identify a national
retail entity and propose to create a club to be comprised of persons in their
target demographic for the purpose of fostering loyalty to the entity's brands.
The incentives for membership are a rich assortment of discounted travel
opportunities that are tailored to the target demographic as well as a
significant array of special membership benefits that are provided by sponsors
of nationally known products and services. We derive revenues from membership
dues, sponsorship premiums and travel commissions. In addition to revenue
generation, we will also provide traffic to our vacation home and resort
properties. We believe that we will generate increased travel business through

-8-

the creation of additional clubs comprised of affinity-based travelers. We
believe that we are poised to secure a strong market share of the
affinity-travel marketing segment. we are the proprietor and manager of the
clubs that it creates. As such, we anticipate that we will generate substantial
revenue from annual membership fees and commissions earned on the sale of travel
services once our infrastructure has been finalized to enable our other
businesses to communicate and sell to the affinity-based club databases we
operate. We expect to derive revenue from sales opportunities to Hickory's
corporate clients, Hickory's bulk purchasing power and fulfillment capacity, and
access to vacation home and resort properties that we plan to develop. We
recently unveiled a vacation creation program, which enables consumers to employ
our proprietary budgeting and finance technique to enjoy annual vacations at
premier properties that would otherwise not be available to them at the pricing
that we are able to offer. We have contracted with premier properties to
enhance the properties' occupancy rates during their off-season and the few
weeks just before and after their prime season. We have received favored
pricing from these properties as a result.

COMMUNICATIONS SERVICES

In December 2004 we entered into a joint venture with IMA Antigua, Ltd., a
Barbados company, to operate a call center in Antigua that we own. The joint
venture is operated through Caribbean Media Group, Ltd., an International
Business Corporation formed under the laws of Barbados. We own 39.69% of this
joint venture which is currently operating the call center. The call center
provides in-bound and out-bound traffic for customer service, customer retention
and accounts receivable management. The clients of the call center are well
known national businesses with well-established credit and operational systems.

We opened the call center in Antigua due to the new demand for call centers
in the Caribbean. The call center business is in demand in the Caribbean as a
result of telecommunications deregulation in the islands, which has reduced
costs and caused companies in the United States to spread their growing overseas
call center business to lower-cost sites near the United States. Based on a news
release by Global Information, Inc. dated January 31, 2005, interpreting the
Zagada Institute's "Caribbean Call Center Report 2005: A CRM Market", persons
employed in Caribbean call centers have more than doubled to 25,000 over the
past two years and likely will double again by the end of 2006. Proximity means
U.S. managers can easily visit and troubleshoot. Plus, it means call-center
agents tend to be more familiar with U.S. culture than agents in more distant
lands such as India. Caribbean nations are pursuing the call-center business,
anxious to create jobs and nurture clean industry that complements their vital
tourism industry. Many islands offer tax breaks, training programs and other
incentives. Competition may be robust but at present we believe that the demand
continues to exceed the supply. We cannot provide any assurance as to how long
these market conditions may persist.

We also own telecommunications equipment such as switches, dialers and
telephone booths that may have application for a telecommunications program that
we are considering in the United States. Part of this equipment can be used to
serve as the switches for a telephone system that we plan to operate for The
Sonesta Orlando Resort at Tierra del Sol. We plan to begin using the dialers and
operator booths during 2005 for the travel fulfillment operations that
TraveLeaders provides to our affinity-based travel clubs.

PATENTS, TRADEMARKS & LICENSES

We do not own any patents, trademarks, copyrights or other forms of
intellectual property. We will register or apply to register our trademarks when
we believe registration is warranted, and important, to our ongoing business
operations.

GOVERNMENT REGULATION

The travel, real estate development and vacation ownership industries are
subject to extensive and complex regulation. We are, and may in the future be,
subject to compliance with various federal, state, and local environmental,
zoning, consumer protection and other statutes and regulations regarding the

-9-

acquisition, subdivision and sale of real estate and vacation ownership
interests. On a federal level, the Federal Trade Commission has taken an active
regulatory role through the Federal Trade Commission Act, which prohibits unfair
or deceptive acts or competition in interstate commerce. We are, or may be
subject to the Fair Housing Act and various other federal statutes and
regulations. In addition, there can be no assurance that in the future, vacation
ownership interests will not be deemed to be securities subject to regulation,
which could increase the cost of such products. We believe that we are in
compliance in all material respects with applicable regulations. However, the
cost of complying with applicable laws and regulations may be significant. Any
failure to comply with current or future applicable laws or regulations could
have a material adverse effect on us.

We are subject to various federal and state laws regarding our tele-service
sales and telemarketing activities. We believe we are in compliance in all
material respects with all federal and state telemarketing regulations. Our
practices and methods may be or become subject to additional regulation or
regulatory challenge.

The industries we will serve may also be subject to varying degrees of
government regulation. Generally, in these instances, we rely on our clients and
their advisors to develop and provide us with the scripts for their particular
purposes. We anticipate that our clients will indemnify us against claims and
expenses arising with respect to the scripts provided by our clients.

EMPLOYEES

We have approximately 30 employees, all of which are employed on a
full-time basis. There are no collective bargaining contracts covering any of
our employees. We believe our relationship with our employees is satisfactory.

ITEM 2. DESCRIPTION OF PROPERTY

Our corporate headquarters are located in Saddle Brook, New Jersey. Our
Saddle Brook facility is approximately 5,000 square feet, of which 250 square
feet houses our executive offices. This facility is leased by Hickory Travel
Systems, Inc. for approximately $178,056 per year. The lease expires on April
30, 2008.

Our subsidiary owns the land on which The Sonesta Orlando Resort at Tierra
del Sol will be situated. It purchased this land for $5,560,366 in February
2000. We have spent approximately $1,123,000 to entitle and create the
Westridge Community Development District. The land is currently subject to
mortgages in an amount equal to approximately $12,000,000 that represents
approximately a 35% loan to value ratio. As a developer of vacation resort
properties, we plan to also purchase additional parcels of land for resort
development.

The TraveLeaders assets are located in a building leased by Around The
World Travel, Inc. TraveLeaders occupies almost all of the 40,000 square feet at
1701 Ponce De Leon Boulevard, Coral Gables, Florida. We plan to move various
other subsidiaries into the available space. The lease expires in December of
2006. We have commenced our search for alternative leaseholds.

ITEM 3. LEGAL PROCEEDINGS

-10-

gravamen of the initial complaint is that the Smee Entities made financial
advances to Wright with some expectation of participation in a Wright real
estate enterprise. In general, the suit requests either a return of the Smee
Entities' alleged advances of $500,000 or an undefined ownership interest in one
or more of the defendant entities. Mr. Wright, American Leisure, Inc., and
Inversora Tetuan, S.A., have filed a counterclaim and cross complaint against
the Smee Entities and Mr. Smee denying the claims and such damages in the amount
of $10 million. If the court rules that Mr. Wright is liable under his
guarantee of the American Leisure, Inc. obligation to Smee, it is believed that
such a ruling would not directly affect American Leisure Holdings, Inc. The
litigation is in the discovery phase and is not currently set for trial. We
have been advised by our attorneys in this matter that Mr. Wright's position on
the facts and the law is stronger than the positions asserted by the Smee
Entities.

In March 2004, Manuel Sanchez and Luis Vanegas as plaintiffs filed a
lawsuit against American Leisure Holdings, Inc. American Access Corporation,
Hickory Travel Systems, Inc. Malcolm J. Wright and L. William Chiles, et al.,
seeking a claim for securities fraud, violation of Florida Securities and
Investor Protection Act, breach of their employment contracts, and claims for
fraudulent inducement. All defendants have denied all claims and have a
counterclaim against Manuel Sanchez and Luis Vanegas for damages. The litigation
commenced in March 2004 and will shortly enter the discovery phase and is not
currently set for trial. We believe that Manuel Sanchez' and Luis Vanegas'
claims are without merit and the claims are not material to us. We intend to
vigorously defend the lawsuit.

In February 2003, we and Malcolm J. Wright were joined in a lawsuit
captioned as Howard C. Warren v. Travelbyus, Inc., William Kerby, David Doerge,
DCM/Funding III, LLC, and Balis, Lewittes and Coleman, Inc. in the Circuit Court
of Cook County, Illinois, Law Division, which purported to state a claim against
us as a "joint venturer" with the primary defendants. The plaintiff alleged
damages in an amount of $5,557,195.70. On November 4, 2004, the plaintiff moved
to voluntarily dismiss its claim against us. Pursuant to an order granting the
voluntary dismissal, the plaintiff has one (1) year from the date of entry of
such order to seek to reinstate its claims.

On March 30, 2004, Malcolm Wright, was individually named as a third-party
defendant in the Circuit Court of Cook County, Illinois, Chancery Division,
under the caption: Cahnman v. Travelbyus, et al. On July 23, 2004, the primary
plaintiffs filed a motion to amend their complaint to add direct claims against
our subsidiary, American Leisure as well as Mr. Wright. On August 4, 2004, the
plaintiffs withdrew that motion and have not asserted or threatened any direct
claims against American Leisure, Mr. Wright or us.

In early May 2004, Around The World Travel, Inc. substantially all of the
assets of which we purchased, filed a lawsuit in the Miami-Dade Florida Circuit
Court against Seamless Technologies, Inc. and e-TraveLeaders, Inc. alleging
breach of contract and seeking relief that includes monetary damages and
termination of the contracts. They were granted leave to intervene as plaintiffs
in the original lawsuits against Seamless and e-TraveLeaders. On June 28, 2004,
the above named defendants brought suit against Around The World Travel and
American Leisure Holdings, Inc. in an action styled Seamless Technologies, Inc.
et al. v. Keith St. Clair et al. This suit alleges that Around The World Travel
has breached the contracts and also that American Leisure Holdings, Inc. and
Around The World Travel's Chief Executive Officer were complicit with certain
officers and directors of Around The World Travel in securing ownership of
certain assets for American Leisure Holdings, Inc. that were alleged to have
been a business opportunity for Around The World Travel. This lawsuit involves
allegations of fraud against Malcolm J. Wright. The lawsuit filed by Seamless
has been abated and consolidated with the original lawsuit filed by Around The
World Travel. In a related matter, Seamless' attorneys brought another action
entitled Peter Hairston v. Keith St. Clair et al. This suit mimics the
misappropriation of business opportunity claim, but it is framed within a
shareholder derivative action. The relief sought against American Leisure
Holdings, Inc. includes monetary damages and litigation costs. We intend to
vigorously support the original litigation filed against Seamless and defend the
counterclaim and allegations against us.

-11-

assets of TraveLeaders. The plaintiffs allege that that they have not been paid
for i) a subordinated promissory note in the principal amount of $3,550,000 plus
interest on such note which they allege was issued to them by Around The World
Travel in connection with their sale of 88% of the common stock of Around The
World Travel; and ii) subordinated undistributed retained earnings and accrued
bonuses in an aggregate amount of $1,108,806 which they allege were due to them
as part of the sale. The plaintiffs allege that the note was issued to them net
of $450,000 of preferred stock of Around The World Travel that they further
allege they never received. The plaintiffs also allege that in December 2004
they entered into a settlement agreement with the Company regarding these
matters. The plaintiffs are pursuing a claim of breach of the alleged settlement
agreement with damages in excess of $1,000,000, interest and costs as well as
performance under the alleged settlement agreement or, in the alternative, a
declaratory judgment that the promissory note, undistributed retained earnings
and accrued bonuses are not subordinated to the Galileo Debt and full payment of
the promissory note, undistributed retained earnings and accrued bonuses plus
prejudgment interest, stated interest on the note, costs and reasonable
attorney's fees. The plaintiffs are also pursuing a claim for breach of contract
regarding the preferred stock of Around The World Travel and seeking $450,000
plus interest, costs and reasonable attorney's fees. The plaintiffs are also
pursuing claims of fraudulent transfer regarding our acquisition of interests in
the debt and equity of Around The World Travel and seeking unspecified amounts.
We intend to vigorously defend the lawsuit. We have authorized our counsel to
file various motions including a motion to dismiss the complaint in its entirety
as against us and Malcolm J. Wright due to the failure by the plaintiffs to
comply with a provision in the underlying document that grants exclusive
jurisdiction to the courts located in Cook County, Illinois.

In the ordinary course of our business, we may from time to time become
subject to routine litigation or administrative proceedings that are incidental
to our business.

We are not aware of any proceeding to which any of our directors, officers,
affiliates or security holders are a party adverse to us or have a material
interest adverse to us.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

We did not submit any matters to a vote of security holders during the
fourth quarter of 2004.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock, $.001 par value per share, is traded on the
over-the-counter Bulletin Board (the "OTCBB") under the trading symbol "AMLH."

The following table sets forth the high and low bid prices for our common
stock for the periods indicated as reported on the OTCBB, except as otherwise
noted. The quotations reflect inter-dealer prices, without retail mark-up,
markdown or commission and may not represent actual transactions.

2004 (1) HIGH BID LOW BID
-------------- ----------------

Fourth Quarter $ 1.50 $ 1.25
Third Quarter $ 2.02 $ 1.30
Second Quarter $ 2.00 $ 0.45
First Quarter $ 0.60 $ 0.25

2003 HIGH BID LOW BID
-------------- ----------------
Fourth Quarter $ 0.75 $ 0.26
Third Quarter $ 0.40 $ 0.10
Second Quarter $ 0.27 $ 0.08
First Quarter $ 0.20 $ 0.10

(1) Our common stock was de-listed from the OTCBB during the period from
May 21, 2004 to January 26, 2005, as a result of one delinquent filing with
the Commission. The high and low bid prices for our common stock for the
second, third and fourth quarter of 2004, as listed above, were reported by
Pink Sheets, LLC. Our common stock was cleared for quotation on the OTCBB
on January 26, 2005.

-12-

As of July 6, 2005, the Company had 328 holders of record of the common
stock. The number of holders of the common stock includes nominees of various
depository trust accounts for an undeterminable number of individual
stockholders.

DIVIDEND POLICY

We have never declared or paid dividends on our common stock. We do not
anticipate paying dividend on our common stock in the foreseeable future. We
intend to reinvest in our business operations any funds that could be used to
pay dividends. Our common stock is junior in priority to our preferred stock
with respect to dividends.

Cumulative dividends on our issued and outstanding Series A preferred
stock, Series B preferred stock, Series C preferred stock and Series E preferred
stock accrue at a rate of $1.20, $12.00, $4.00, and $4.00, respectively, per
share per annum, payable in preference and priority to any payment of any cash
dividend on our common stock. We have authorized Series F preferred stock, which
accrues dividends at a rate of $1.00 per share per annum, payable in preference
and priority to any payment of any cash dividend on our common stock. Dividends
on our preferred stock accrue from the date on which such shares of preferred
stock are issued and outstanding and thereafter from day to day whether or not
earned or declared and whether or not there exists profits, surplus or other
funds legally available for the payment of dividends. We may authorize and/or
issue additional shares of preferred stock with dividends rights that are
superior to our common stock. We have never paid any cash dividends on our
preferred stock. We have never paid any cash dividends on our preferred stock.
We will be required to pay accrued dividends on our preferred stock before we
can pay any dividends on our common stock.

RECENT SALES OF UNREGISTERED SECURITIES

The Company has issued the following securities without registration under
the Securities Act of 1933 (the "Act" or the "Securities Act") during the period
covered by this report:

In January 2004, the Company issued warrants to purchase 390,000 shares of
the Company's common stock to Arvimex, Inc. ("Arvimex"). The warrants are
divided into two classes. The first class, comprised of 120,000 warrants, had
an exercise price of $0.001 per share of common stock and were exercisable until
December 31, 2008. Arvimex exercised these warrants in June 2005, as discussed
below. The second class, comprised of 270,000 shares, bears an exercise price
of $2.96 per share of common stock and are exercisable until December 31, 2008.
In March 2004, the Company reduced the exercise price of the warrants to
purchase 270,000 shares from $2.96 to $1.02 in connection with a reduction in
the exercise price of warrants that the Company had issued to Stanford Venture
Capital Holdings, Inc. ("Stanford") from $2.96 to $0.001 per share. The Company
claims an exemption from registration afforded by Section 4(2) of the Act since
the foregoing issuances did not involve a public offering, the recipient took
the warrants for investment and not resale and the Company took appropriate
measures to restrict transfer. No underwriters or agents were involved in the
foregoing issuances and no underwriting discounts or commissions were paid by
the Company.

In March 2004, the Company issued 340,000 shares of common stock to GCD
Acquisition Corp. as partial consideration for the purchase of $22,600,000 in
secured notes. The Company also assumed liability for a $5,000,000 promissory
note that GCD Acquisition Corp. had issued to acquire the secured notes. The
Company claims an exemption from registration afforded by Section 4(2) of the
Act since the foregoing issuance did not involve a public offering, the
recipient took the shares for investment and not resale and the Company took
appropriate measures to restrict transfer. No underwriters or agents were
involved in the foregoing issuance and no underwriting discounts or commissions
were paid by the Company.

-13-

In March 2004, the Company issued warrants to purchase 300,000 shares of
the Company's common stock to Stanford and warrants to purchase an aggregate of
300,000 shares of the Company's common stock equally to Daniel T. Bogar, William
R. Fusselmann, Osvaldo Pi, and Ronald M. Stein, employees of Stanford. The
warrants to purchase an aggregate of 600,000 shares that were issued to Stanford
and the Stanford employees had an exercise price of $0.001 per share of common
stock and were exercised as discussed below. Also in March 2004, the Company
issued warrants to purchase 675,000 shares of the Company's common stock to
Stanford and warrants to purchase an aggregate of 675,000 shares of the
Company's common stock to the Stanford employees. The warrants to purchase an
aggregate of 1,350,000 shares that were issued to Stanford and the Stanford
employees had an exercise price of $2.96 per share. The warrants were issued as
consideration for Stanford providing a $6,000,000 line of credit to the Company.
The Company issued a $6,000,000 promissory note to Stanford. In June 2004, the
Company reduced the exercise price of the warrants to purchase 1,350,000 shares
from $2.96 to $0.001 per share in connection with $4,000,000 of additional
financing provided by Stanford. The Company issued a promissory note for
$3,000,000 and a promissory note for $1,000,000 to Stanford for the additional
financing. In May 2004, the Company issued an aggregate of 600,000 shares of
common stock to Stanford and the Stanford employees upon their exercise of their
warrants at $0.001 per share of common stock (or an aggregate of $600). In June
2004, the Company also issued warrants to purchase 500,000 shares of the
Company's common stock to Stanford in connection with the additional $4,000,000
of financing. The warrants to purchase 500,000 shares had an exercise price of
$5.00 per share, but in November 2004, the Company reduced the exercise price to
$0.001 with respect to warrants to purchase 100,000 of the shares as
consideration for $1,605,000 of additional financing provided by Stanford. The
Company increased the principal amount of the $3,000,000 note and the $1,000,000
note to $4,250,000 and $1,355,000, respectively. In September 2004 and December
2004, the Company issued an aggregate of 1,350,000 shares and 100,000 shares of
common stock, respectively, to Stanford and the Stanford employees upon their
exercise of their warrants at $0.001 per share of common stock (or an aggregate
of $1,350 and $100, respectively). The Company claims an exemption from
registration afforded by Section 4(2) of the Act since the foregoing issuances
did not involve a public offering, the recipients took the warrants, the notes
and the shares for investment and not resale and the Company took appropriate
measures to restrict transfer. No underwriters or agents were involved in the
foregoing issuances and no underwriting discounts were paid by the Company.
However, the Company's relationship with Stanford includes the requirement that
the Company utilize services provided by US Funding Corporation, an investment
banking firm. US Funding Corporation received a fee of 5% for $6,000,000 of
financing provided by Stanford and a fee of 2.5% of an aggregate of $5,605,000
of additional financing provided by Stanford.

In March 2004, the Company issued warrants to L. William Chiles, a Director
of the Company, to purchase 168,672 shares of the Company's common stock at an
exercise price of $2.96 per share of common stock. Also, in March 2004, the
Company issued warrants to Malcolm J. Wright, a Director of the Company and the
Company's Chief Executive Officer and Chief Financial Officer, to purchase
347,860 shares of the Company's common stock at an exercise price of $2.96 per
share of common stock. The Company issued the warrants to Messrs. Chiles and
Wright as consideration for their personal guarantees of the Company's debt and
pledges of their shares of the Company's stock to Stanford as part of the
security for the financing that Stanford provided to the Company. In addition,
Mr. Wright has personally guaranteed the Company's indebtedness of $6,000,000 to
Stanford. The Company reduced the exercise price of the warrants from $2.96 to
$1.02 in connection with a reduction of the exercise price of warrants issued to
Stanford from $2.96 to $0.001. The Company claims an exemption from registration
afforded by Section 4(2) of the Act since the foregoing issuances did not
involve a public offering, the recipients took the warrants for investment and
not resale and the Company took appropriate measures to restrict transfer. No
underwriters or agents were involved in the foregoing issuances and no
underwriting discounts were paid by the Company.

In April 2004, the Company approved the issuance of 24,101 shares of Series
E preferred stock to The Shadmore Trust U/A/D 12/26/89 as part of the Company's
acquisition of the majority interest in the preferred stock of AWT. The Series E
preferred stock ranks senior to the Company's common stock as to dividends and
liquidation preference. Each share of Series E preferred stock is convertible,
at the option of the holder thereof, at any time and from time to time, into a
maximum of 6.666 fully paid and non-assessable shares of common stock. The
Company also issued an unsecured note in the original amount of $1,698,340 to
Shadmore Trust in connection with the acquisition of debt owed to Shadmore Trust
by AWT. The note bears interest at a rate of four percent (4%) per annum with
weekly payments in the amount of $5,000 until the note is fully paid or April 1,
2011, whichever is first. The Company claims an exemption from registration
afforded by Section 4(2) of the Act since the foregoing issuance did not involve
a public offering, the recipient took the shares and the note for investment and
not resale and the Company took appropriate measures to restrict transfer. No
underwriters or agents were involved in the foregoing issuance and no
underwriting discounts were paid by the Company.

-14-

In July 2004, the Company granted warrants to Malcolm J. Wright, L. William
Chiles, Thomas Cornish, David Levine and T. Gene Prescott for each of them to
purchase 100,000 shares of common stock at an exercise price of $1.02 per share
for services rendered. In February 2005, the Company granted warrants on the
same terms to Charles J. Fernandez. Messrs. Wright and Chiles currently serve as
Directors. Messrs. Fernandez and Prescott currently serve on the Company's
advisory board providing the Company with general corporate and business advice.
Messrs. Cornish and Levine have also served on the advisory board. Warrants to
purchase 50,000 shares vested immediately to each of them. Warrants to purchase
the remaining 50,000 shares would vest in equal amounts to each of them on their
next two anniversary dates as Directors or advisors provided they remain in such
position. They may exercise the warrants for a period of five years beginning on
such vesting dates. The Company claims an exemption from registration afforded
by Section 4(2) of the Act since the foregoing issuances did not involve a
public offering, the recipients took the warrants for investment and not resale
and the Company took appropriate measures to restrict transfer. No underwriters
or agents were involved in the foregoing issuances and no underwriting discounts
were paid by the Company.

In November 2004, the Company issued to Arvimex warrants to purchase 40,000
shares of the Company's common stock at an exercise price of $0.001 per share of
common stock in consideration for an unsecured loan for Around The World Travel,
Inc. in the principal amount of $500,000. Arvimex loaned the money to provide
funds to Around The World Travel while the Company conducted due diligence of
TraveLeaders and sought to secure an additional $1,250,000 of financing from
Stanford. The Company claims an exemption from registration afforded by Section
4(2) of the Act since the foregoing issuance did not involve a public offering,
the recipient took the warrants and the note for investment and not resale and
the Company took appropriate measures to restrict transfer. No underwriters or
agents were involved in the foregoing issuance and no underwriting discounts
were paid by the Company.

In November 2004, the Company exchanged 325 shares of its Series B
preferred stock with American Communications, LLC for equipment valued at
$32,640. The Company claims an exemption from registration afforded by Section
4(2) of the Act since the foregoing issuance did not involve a public offering,
the recipient took the shares for investment and not resale and the Company took
appropriate measures to restrict transfer. No underwriters or agents were
involved in the foregoing issuance and no underwriting discounts were paid by
the Company.

On December 22, 2004, the Company issued 120,000 shares of Series A
preferred stock, par value $0.001 per share, to Xpress Ltd. valued at
$1,200,000. The Series A preferred stock was issued to Xpress as partial payment
under its excusive sales and marketing agreement with us. Malcolm J. Wright, the
Company's Chief Executive Officer and Chief Financial Officer, is the beneficial
owner of Xpress. The Series A preferred stock ranks senior to the Company's
common stock as to dividends and liquidation preference. Each share of Series A
preferred stock is convertible, at the option of the holder thereof, at any time
and from time to time, into ten (10) fully paid and non-assessable shares of
common stock. The Company claims an exemption from registration afforded by
Section 4(2) of the Act since the foregoing issuance did not involve a public
offering, the recipient took the shares for investment and not resale and the
Company took appropriate measures to restrict transfer. No underwriters or
agents were involved in the foregoing issuance and no underwriting discounts
were paid by the Company.

In December 2004, the Company issued Steven Parker warrants to purchase
200,000 shares of the Company's common stock at an exercise price of $1.02 per
share of common stock in consideration for services rendered. The Company claims
an exemption from registration afforded by Section 4(2) of the Act since the
foregoing issuance did not involve a public offering, the recipient took the
warrants for investment and not resale and the Company took appropriate measures
to restrict transfer. No underwriters or agents were involved in the foregoing
issuance and no underwriting discounts were paid by the Company.

-15-

In December 2004, the Company issued Toni Palatto warrants to purchase
25,000 shares of the Company's common stock at an exercise price of $1.02 per
share of common stock in consideration for services rendered. The Company claims
an exemption from registration afforded by Section 4(2) of the Act since the
foregoing issuance did not involve a public offering, the recipient took the
warrants for investment and not resale and the Company took appropriate measures
to restrict transfer. No underwriters or agents were involved in the foregoing
issuance and no underwriting discounts were paid by the Company.

In December 2004, the Company issued 120,000 shares of common stock to
Xpress Ltd., of which Malcolm J. Wright, the Company's Chief Executive Officer
and Chief Financial Officer, is the beneficial owner, 10,000 shares of common
stock to James Leaderer, a director of the Company, 20,000 shares of common
stock to an entity and 10,000 shares of common stock to an employee of Hickory
(or an aggregate of 160,000 shares of common stock) for various services that
they provided to the Company. The Company claims an exemption from registration
afforded by Section 4(2) of the Act since the foregoing issuances did not
involve a public offering, the recipients took the shares for investment and not
resale and the Company took appropriate measures to restrict transfer. No
underwriters or agents were involved in the foregoing issuances and no
underwriting discounts were paid by the Company.

In March 2005, the Company cancelled an aggregate of 3,988,700 shares of
common stock, of which 3,791,700 shares had been returned to the Company by
Vyrtex Limited in June 2002 in connection with the reverse merger, and 197,000
shares had been authorized for issuance in June 2002, but never cancelled, in
connection with the reverse merger.

In June 2005, the Company issued to Arvimex an aggregate of 160,000 shares
of the Company's common stock upon the exercise of warrants at $0.001 per share
(or $160). The Company claims an exemption from registration afforded by Section
4(2) of the Act since the foregoing issuances did not involve a public offering,
the recipient took the shares for investment and not resale and the Company took
appropriate measures to restrict transfer. No underwriters or agents were
involved in the foregoing issuances and no underwriting discounts were paid by
the Company.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

OVERVIEW

We are in the process of developing an organization that will provide, on
an integrated basis, travel services, travel distribution as well as
development, sales, management and rentals of destination resorts. To that end
we have acquired or established businesses that manage and distribute travel
services, develop vacation home ownership and travel destination resorts and
develop and operate affinity-based clubs. There is a trend toward consolidation
in the travel industry, which has caused us to seek to create a vertically
integrated travel services organization that provides comprehensive services to
our clients and generates revenue from several sources. We believe that we have
a synergistic strategy that involves using our travel distribution, fulfillment
and management services to provide consumer bookings at our planned resorts,
selling and renting vacation homes that we plan to manage at these resorts, and
fulfilling the travel service needs of our affinity-based travel clubs. We also
own a call center in Antigua-Barbuda.

Malcolm J. Wright, our President, Chief Executive Officer, Chief Financial
Officer, a Director and one of our founders, has successfully developed vacation
properties in Europe. We are currently developing our first luxury vacation home
and destination resort, The Sonesta Orlando Resort at Tierra del Sol and relying
on Mr. Wright's experience to do so. This resort will include 540 town homes and
432 condominiums. As of June 15, 2005, we have pre-sold all of the town homes
and have accepted reservations on 41% of the condominiums, resulting in over
$243,000,000 in gross contract value. In June 2005, we began the earth moving
and clearing process on the land for the resort. Upon completion of these units,
we will offer our management services to certain purchasers to permit them to
voluntarily include their qualifying units in a rental program that we will
operate. In addition, we will retain a 45-day, right of first refusal to
repurchase the units in the resort that become available for resale.

-16-

Our TraveLeaders business is a fully integrated travel services
distribution business that provides its clients with a comprehensive range of
business and vacation travel services in both traditional and e-commerce
platforms including corporate travel management, leisure sales, and meeting,
special event and incentive planning. We acquired the assets of TraveLeaders
effective December 31, 2004, from Around The World Travel, Inc. Around The World
Travel is currently managing the assets for us. See the discussion below under
"Recent Events."

In October 2003, we acquired a 51% interest in Hickory. Hickory is a travel
management service organization that primarily serves its network/consortium of
approximately 160 well-established travel agency members, comprised of over
3,000 travel agents worldwide that focus on corporate travel. The services
provided by Hickory include a 24-hour reservation service, international rate
desk services, discount hotel programs, preferred supplier discounts, commission
enhancement programs and marketing services. Our business plan includes the
acquisition of additional travel agencies so that we can compete for greater
volume buying discounts and market share. We view the members of Hickory as a
resource for future acquisitions of viable travel agencies.

We are in the process of integrating the administrative operations of
Hickory and TraveLeaders. The integration process has been slower than we
anticipated because it has taken us longer than expected to identify those
operations that could be consolidated and determine the allocation and
re-assignment of the personnel best suited for the consolidated enterprise. In
addition, time has been required to analyze and determine the impact, if any, of
certain litigation commenced by Around the World Travel regarding its contracts
with Seamless Technologies, Inc. and others, as discussed in "Item 3. Legal
Proceedings." As such, expenditures have been higher than anticipated.

Our American Travel & Management Group business develops and operates
Internet structured clubs that specialize in using demographic affinities to
promote brand loyalty through the delivery of customized travel and other
benefits to a constituency that is built under the auspices of a national
retailer, publisher or national cause. A vital component to the benefits
provided to club members and the sponsors is the inclusion of a sophisticated
rewards program that will provide customer retention tracking data to those
sponsors while enabling the members to enjoy significant discounts and rewards
for their loyalty. We have recently entered into agreements with a prominent
sports media organization, a national publisher and an international retail food
service company. Based upon current agreements, we expect to launch a new club
on an average of one every other month for the next eighteen months. We fulfill
travel service orders produced by these clubs through TraveLeaders.

In December 2004, we entered into a joint venture with IMA Antigua, Ltd. to
operate a call center that we own located in Antigua. The joint venture is
operated through Caribbean Media Group, Ltd. We own 39.69% of this joint venture
company. The call center provides in-bound and out-bound traffic for customer
service, customer retention and accounts receivable management. The clients of
the call center are well known national businesses with well-established credit
and operational systems.

During the first quarter of 2005, we generated 41% of our revenue from the
sale of land held for development in Davenport, Florida. For that period, we
also recognized revenue from fees derived from Hickory's services and our
affinity-based travel clubs as well as revenue from the operations of
TraveLeaders.

Under our arrangement with Around The World Travel, which operates the
TraveLeaders assets on our behalf and from whom we acquired the assets, we
receive and recognize as income 90% of the net earnings of the TraveLeaders
assets before interest, taxes, depreciation and amortization. The balance is
retained by Around The World Travel as a management fee.

-17-

We also currently generate modest revenue from our call center joint
venture in Antigua. We expect revenues from our call center operations to
increase throughout the year based on indications from a major client that it
will require more seats in the third and fourth quarter.

As discussed in "Liquidity and Capital Resources," the capital requirement
for the first phase of the resort is approximately $122,600,000. We are
currently negotiating the final terms of a $96,600,000 construction loan with a
national construction lender. We expect to finance the balance of the
development budget, which includes infrastructure, retention, roads and green
space of approximately $26,000,000, through the sale of Westridge Community
Development District bonds. We intend to complete the capitalization process in
the third quarter of 2005 and begin the vertical construction during the fourth
quarter of 2005.

RECENT EVENTS

On January 29, 2005, we entered into an operating agreement with a
subsidiary of Sonesta International Hotels Corporation of Boston, Massachusetts,
a luxury resort hospitality management company. Pursuant to the operating
agreement, we sub-contracted to Sonesta substantially all of the hospitality
responsibilities for The Sonesta Orlando Resort at Tierra del Sol. We retain
primary management control of the resort. We had previously engaged Fugelberg
Koch to design the residential units of the resort, amenities and the clubhouse.
In February 2005, we held the official groundbreaking ceremony for the resort.

On March 7, 2005, we sold land located in Davenport, Florida that had been
held for commercial development. The land was acquired in 2002 for approximately
$1,975,359 and sold for $4,020,000 and paid-off secured debt on the property in
the amount of $1,300,000 plus accrued interest and other costs. We received
approximately $2,100,000 in net proceeds from the sale and realized a profit of
$1,100,000. We used the net proceeds for working capital and to pay $1,948,411
of notes payable to related parties attributable to the acquisition and
retention of the property.

We amended our agreement with Around The World Travel, Inc. effective March
31, 2005, to change the manner in which we will pay for the TraveLeaders assets
that we acquired on December 31, 2004. The purchase price of $17,500,000 was
determined by adding $1,500,000 to the fair value of the business as a going
concern as determined by an independent investment banking firm to be
$16,000,000. Pursuant to the terms of the original asset purchase agreement and
prior to the completion of the independent valuation, we were to assume
$17,306,352 in liabilities and issue 1,936 shares of our Series F preferred
stock valued at $193,648 in consideration for the assets. Under the amendment,
the liabilities assumed are reduced to $4,242,051, we will forgive certain
working capital loans that Around The World Travel owes to us and we will not
issue any Series F preferred stock. In addition, we will issue a 60 month, 6%
per annum balloon note in favor of Around The World Travel in the principal
amount of $8,483,330, which amount may be offset by any and all amounts payable
to us by Around The World Travel including any sums owed to us from the
management of the TraveLeaders assets.

In May 2005, we extended for six months the maturity dates of two notes
(payable to third parties) in the aggregate amount to $7,862,250 that matured on
March 31, 2005. These notes are not in default as the terms have been extended
for six months to September 30, 2005. Total accrued interest on the notes
amounted to $256,512 as of March 31, 2005.

KNOWN TRENDS, EVENTS, AND UNCERTAINTIES

We expect to experience seasonal fluctuations in our gross revenues and net
earnings due to higher sales volume during peak periods. Advertising revenue
from the publication of books by Hickory listing hotel availability is
recognized once per year in December when the books are published. This
seasonality may cause significant fluctuations in our quarterly operating
results and our cash flows. In addition, other material fluctuations in
operating results may occur due to the timing of development of resort projects
and our use of the completed contracts method of accounting with respect
thereto. Furthermore, costs associated with the acquisition and development of
vacation resorts, including carrying costs such as interest and taxes, are
capitalized as inventory and will be allocated to cost of real estate sold as
the respective revenues are recognized. We intend to continue to invest in
projects that will require substantial development and significant amounts of
capital funding during 2005 and in the years ahead.

-18-

CRITICAL ACCOUNTING ESTIMATES

Our discussion and analysis of our financial condition and results of
operations is based upon our financial statements, which have been prepared in
accordance with accounting principals generally accepted in the United States.
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of any contingent assets and liabilities. We
base our estimates on various assumptions that we believe to be reasonable under
the circumstances, the results of which form the basis for making judgments
about carrying values of assets and liabilities that are not readily apparent
from other sources. On an on-going basis, we evaluate our estimates. Actual
results may differ from these estimates if our assumptions do not materialize or
conditions affecting those assumptions change. For a detailed discussion of our
significant accounting policies, see Note 2, Summary of Significant Accounting
Policies to the Notes to our audited consolidated financial statements included
in "Item 7. Financial Statements."

We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our financial
statements:

Going Concern Considerations
------------------------------

We have incurred predictable losses during the development stage during our
existence, and we have negative retained earnings. We expect our travel
operations through the end of the current fiscal year to require additional
working capital of approximately $1,500,000. If we are unable to obtain these
funds, we may have to curtail or delay our travel business plan. In addition to
our ability to raise additional capital, our continuation as a going concern
also depends upon our ability to generate sufficient cash flow to conduct our
operations. If we are unable to raise additional capital or generate sufficient
cash flow to conduct our Travel Division operations, we may be required to delay
the acquisition of additional travel agencies and restructure or refinance all
or a portion of our outstanding debt. The accompanying financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

Revenue Recognition
--------------------

We recognize revenues on the accrual method of accounting. Revenues from
Hickory are recognized as earned, which is primarily at the time of delivery of
the related service, publication or promotional material. Fees from advertisers
to be included in the hotel book and web service operated by Hickory are
recognized upon the annual publication of the book. Revenue from the delivery of
services is recognized when it is invoiced to the recipient of the service.

One of our principal sources of revenue is associated with access to the
travel portals that provide a database of discounted travel services. Annual
renewals occur at various times during the year. Costs and revenue related to
portal usage charges are incurred in the month prior to billing. Customers are
charged additional fees for hard copies of the site access information.
Occasionally these items are printed and shipped at a later date, at which time
both revenue and expenses are recognized.

Revenues and expenses from our TraveLeaders business are not included in
our results as the same are borne by Around the World Travel, Inc., the third
party manager of the business. We recognize as revenue only the net operating
results of TraveLeaders after deducting the management fee paid to Around the
World Travel of 10% of net earnings before interest expense, taxes, depreciation
and amortization.

Revenues from our call center are recognized as generated by the joint
venture that operates the call center.

-19-

We have entered into 720 pre-construction sales contracts for units in The
Sonesta Orlando Resort at Tierra del Sol. We will recognize revenue when title
is transferred to the buyer.

Goodwill
--------

We adopted the provisions of Statement of Financial Accounting Standards
("SFAS") No. 142, "Goodwill and Other Intangible Assets." This statement
requires that goodwill and intangible assets deemed to have indefinite lives not
be amortized, but rather be tested for impairment on an annual basis.
Finite-lived intangible assets are required to be amortized over their useful
lives and are subject to impairment evaluation under the provisions of SFAS No.
144. In 2004, we recorded an impairment of $1,500,000 related to the acquisition
of the TraveLeaders assets in December 2004, based on our payment of more than
fair value as determined by an independent investment bank. Our remaining
goodwill of $14,425,437 has not been further impaired as of March 31, 2005, and
will be evaluated on a quarterly basis and whenever events or circumstances
indicate the carrying value of the goodwill may not be recoverable.

RESULTS OF OPERATIONS

Fiscal Year Ended December 31, 2004 Compared to Fiscal Year Ended December 31,
--------------------------------------------------------------------------------
2003
----

We had revenues of $6,419,320 for the fiscal year ended December 31, 2004,
as compared to $3,327,483 for the fiscal year ended December 31, 2003, which
represents a 93% increase in revenues. The increase in revenues was due to the
inclusion of revenues from Hickory for the full year of 2004 as compared to
three months of revenues from Hickory for the prior year beginning on the date
of acquisition, which was October 1, 2003.

Loss from operations increased $2,593,247 to $4,209,749 for the fiscal year
ended December 31, 2004, as compared to loss from operations of $1,619,502 for
the fiscal year ended December 31, 2003. Loss from operations consisted of
depreciation and amortization of $936,874, general and administrative expenses
of $8,192,195 and goodwill impairment loss of $1,500,000 for the fiscal year
ended December 31, 2004, as compared to depreciation and amortization of
$716,175, general and administrative expenses of $4,227,810 and goodwill
impairment loss of $0 for the fiscal year ended December 31, 2003. The increase
in loss from operations was due to the increase in depreciation and
amortization, general and administrative expenses and goodwill impairment loss.
We realized goodwill impairment loss during 2004 due to the write-down of our
investment in the purchase of assets of Around The World Travel, Inc., which
were valued by an independent third party at $16,000,000, and we wrote off
$1,500,000 from the purchase consideration of $17,500,000.

Loss from operations before minority interests was $7,131,825 for the
fiscal year ended December 31, 2004, as compared to loss from operations before
minority interests of $1,616,502 for the fiscal year ended December 31, 2003.
The increase in loss from operations before minority interests was directly
attributable to the increases in depreciation and amortization and general and
administrative expenses as well as the goodwill impairment loss on acquiring the
TraveLeaders assets and a loss of $ 2,185,278 on the write down of acquiring
Around The World Travel's preferred stock in April 2004.

We had $510,348 attributable to minority interests for the fiscal year
ended December 31, 2004 and the fiscal year ended December 31, 2003.

Loss before income taxes for the fiscal year ended December 31, 2004 was
$6,621,477 as compared to loss before income taxes of $2,126,850 for the fiscal
year ended December 31, 2003. The increase in net loss before income taxes was
directly attributable to the increases in depreciation and amortization and
general and administrative expenses as well as the goodwill impairment loss on
acquiring the TraveLeaders assets and a loss of $ 2,185,278 on the write down of
acquiring Around The World Travel's preferred stock in April 2004.

We recorded a benefit from income taxes of $(12,824) for the fiscal year
ended December 31, 2004, as compared to a provision for income taxes of $0 for
the fiscal year ended December 31, 2003.

-20-

We had a net loss of $6,634,301 for the fiscal year ended December 31,
2004, as compared to a net loss of $2,126,850 for the fiscal year ended December
31, 2003, which represents an 86% increase in net loss. The increase in net loss
resulted from the increased expenses and the impairment and write down described
above.

We accrued preferred stock dividend of $1,248,331 for the fiscal year ended
December 31, 2004, as compared to preferred stock dividend of $1,083,025 for the
fiscal year ended December 31, 2003.

We had a net loss available to common stockholders of $7,882,632 for the
fiscal year ended December 31, 2004, as compared to a net loss available to
common stockholders of $3,209,875 for the fiscal year ended December 31, 2003,
which represents a 146% increase in net loss. Basic and diluted net loss per
share available to common stockholders was $0.92 for the fiscal year ended
December 31, 2004, as compared to the basic and diluted net loss per share
available to common stockholders of $0.47 for the fiscal year ended December 31,
2003. The increase in net loss and net loss per share available to common
stockholders resulted from the increased expenses and the impairment and write
down described above.

Historically, Hickory has had seasonal losses during the first three
quarters, and net profits during the fourth quarter of each year.

We had an accumulated deficit of $12,295,121 as of December 31, 2004.

LIQUIDITY AND CAPITAL RESOURCES

We expect that we will require approximately $1,500,000 through the end of
the 2005 fiscal year for working capital for our travel management and services
businesses. We are in receipt of a term sheet offer and are currently
negotiating the final terms with a national banking institution to provide a
$96,600,000 construction loan for the first phase of The Sonesta Orlando Resort
at Tierra del Sol. We anticipate closing on the loan during the third quarter of
2005. In connection with this loan, we have also engaged the same banking
institution to underwrite the sale of $26,000,000 in bonds issued by Westridge
Community Development District. The underwriting on the bonds is completed and
the pre-sale bids have been received. We anticipate that the bond sale will be
consummated upon the completion of our final negotiations with our construction
lender. These bonds will be repaid by residential unit owners in the district
over a 30-year period, through a tax assessment by the district. Upon closing of
the loan, we expect to repay $7,862,250 of short-term debt plus accrued interest
of $256,512. This short-term debt originally matured on March 31, 2005, but in
May 2005 was extended for six months. The sum of the construction loan and the
bond sale proceeds will provide sufficient capital for the construction of the
first phase of The Sonesta Orlando Resort at Tierra del Sol.

In addition, to partially fund our development costs at The Sonesta Orlando
Resort at Tierra del Sol, we have used cash from buyers deposits, after
providing the disclosure required by Florida law, on the pre-sold town homes for
which the buyer has waived the requirements to maintain the funds in escrow. The
deposits on the town homes range from 10% to 20% of the purchase price. As of
June 15, 2005, approximately 90% of the buyers of town homes in the Sonesta
Orlando Resort have waived the escrow requirement and these funds have been
expended for our project related costs. Our contract for the condominiums
requires a 20% deposit. All of the deposits received on condominium contracts
are maintained in escrow. Provided the purchaser has waived escrow, we may use
any condominium contract deposit in excess of 10% to fund the hard costs of
construction of their unit. In the event we post a bond according to Florida
law, we will also be permitted to use the bonded portion of the deposits on the
condominiums for the projects development and construction costs.

We had total current assets of $6,000,365 as of December 31, 2004, which
consisted of accounts receivable of $3,539,387, cash of $2,266,042, note
receivable of $113,000, prepaid expenses and other of $51,460, and other current
assets of $30,476.

-21-

We had total current liabilities of $23,848,570 as of December 31 2005,
which consisted of current maturities of long-term debt and notes payable of
$9,605,235, accounts payable and accrued expenses of $5,618,973, customer
deposits of $2,752,535, other current liabilities of $2,332,886, current
maturities of notes payable to related parties of $1,910,629 of which
approximately $140,044 was owed to a director, accrued expenses to officers of
$1,355,000, and shareholder advances of $273,312 of which approximately $93,050
was owed to our CEO/director. We anticipate the closing of a construction and
land loan for The Sonesta Orlando Resort at Tierra del Sol during the third
quarter of 2005, of which there can be no assurance. In the event that we close
the loan as anticipated, we intend to pay off current maturities of long-term
debt and notes payable.

We had negative net working capital of $17,848,205 as of December 31, 2004.
The ratio of total current assets to total current liabilities was approximately
25% as of December 31, 2004. That ratio will improve upon the retirement of our
short-term debts as of the closing of the construction loan referred to above.

Net cash provided by operating activities was $9,108,807 for the fiscal
year ended December 31, 2004, as compared to net cash used in operating
activities of $2,339,445 for the fiscal year ended December 31, 2003. The change
from net cash used in operating activities to net cash provided by operating
activities was primarily due to an increase in deposits of $16,669,347
associated with deposits from presales for The Sonesta Orlando Resort at Tierra
del Sol, an increase in accounts payable and accrued expenses of $2,872,777 and
an adjustment for impairment loss of $3,685,278 that were offset by an increase
in prepaid commissions of $8,355,410, a decrease in receivables of $382,125, a
gain on the sale of American Vacation Resorts Inc.'s common stock of $145,614
and minority interests of $510,348.

Net cash used in investing activities was $14,858,640 for the fiscal year
ended December 31, 2004, as compared to net cash used in investing activities of
$4,282,067 for the fiscal year ended December 31, 2003. The increase in net cash
used in investing activities was due to the capitalization of real estate
carrying costs of $8,124,587, advances to AWT of $4,789,463 and the acquisition
of fixed assets of $3,511,881.

Net cash provided by financing activities was $7,281,023 for the fiscal
year ended December 31, 2004, as compared to net cash provided by financing
activities of $7,305,865 for the fiscal year ended December 31, 2004. Net cash
provided by financing activities for the fiscal year ended December 31, 2004 was
due to proceeds from debt of $8,860,943 and proceeds from notes payable to
related parties of $312,377, which were offset by payments of advances of
$757,571, payment of debt of $316,218 and payments to related parties of
$818,508.

Previously we have relied on loans from third parties and from related
parties to provide working capital and other funding needs. Our outstanding debt
includes three credit facilities totaling $11,605,000 in principal amount
provided by Stanford.

At December 31, 2004, we had outstanding principal balance of $11,505,000
under our three credit facilities with Stanford. Our $6,000,000 secured
revolving credit facility with Stanford bears interest at a fixed rate of 6% per
annum payable quarterly in arrears and matures on December 18, 2008. At the sole
election of the lender, any amount outstanding under the credit facility may be
converted into shares of our common stock at a conversion price of $15.00 per
share. The $6,000,000 credit facility is guaranteed by Malcolm Wright, our chief
executive officer and is secured by a second mortgage on our Sonesta Orlando
Resort property, including all fixtures and personal property located on or used
in connection with these properties, and all of the issued and outstanding
capital stock and assets of two of our subsidiaries, American Leisure Marketing
& Technology, Inc. and Caribbean Leisure Marketing Limited.

Our $4,250,000 secured revolving credit facility with Stanford bears
interest at a fixed rate of 8% per annum payable quarterly in arrears. The
credit facility is comprised of two tranches. The first tranche of $1,250,000
matures on September 30, 2005, may solely be used for the working capital of our
Hickory and TraveLeaders travel business and must immediately be repaid to the
extent that the borrowed amount together with accrued and unpaid interest
exceeds a borrowing base which is generally calculated as the lesser of
$1,250,000, or 50% of the dollar amount of TraveLeaders eligible accounts
receivable minus such reserves as the lender may establish from time to time in
its discretion. The second tranche of $3,000,000 matures on April 22, 2007. At
the sole election of the lender, any amount outstanding under the credit
facility may be converted into shares of our common stock at a conversion price
of $10.00 per share. The credit facility is secured by collateral assignments of
our stock in the active Travel Division subsidiaries as well as a collateral
assignment of our first lien security interest in the assets formerly owned by
Around The World Travel, Inc.

-22-

Our $1,355,000 secured revolving credit facility with Stanford bears
interest at a fixed rate of 8% per annum and matures April 22, 2007. The
proceeds of this facility may be used solely for our call center operations in
Antigua. Interest for the period from January 1, 2005 to March 31, 2006 is due
on April 3, 2006 and interest is due quarterly in arrears for periods after
April 1, 2006. At the sole election of the lender, any amount outstanding under
the credit facility may be converted into shares of our common stock at a
conversion price of $10.00 per share. The credit facility is secured by all of
the issued and outstanding stock of our subsidiary, Caribbean Leisure Marketing
Limited.

All of our credit facilities with Stanford contain customary covenants and
restrictions, including covenants that prohibit us from incurring certain types
of indebtedness, paying dividends and making specified distributions. Failure to
comply with these covenants and restrictions would constitute an event of
default under our credit facilities, notwithstanding our ability to meet our
debt service obligations. Upon the occurrence of an event of default, the lender
may convert the debt to the company's common stock, accelerate amounts due under
the applicable credit facility and may foreclose on collateral and/or seek
payment from a guarantor of the credit facility. At December 31, 2004, we
believe we were in compliance with the covenants and other restrictions
applicable to us under each credit facility.

Our ability to construct The Sonesta Orlando Resort at Tierra del Sol and
repay our current debt is contingent upon us closing the construction financing
and receiving the district bond sale proceeds. We have experienced delays in
closing the construction loan and bond financing as a result of various factors
including difficulty determining a guaranteed maximum price of construction
costs for phase one from our general contractor. We have now concluded the
determination of the guaranteed maximum price of the construction and we
anticipate receiving a firm commitment for the construction loan in July 2005.
If we are unable to obtain financing for our working capital needs or close the
construction loan or the community development district bond financing, we will
be required to find alternative sources of capital that may not be available
when needed or on terms satisfactory to us, if at all. In the past, most of our
working capital has been obtained through loans from or the purchase of equity
by our officers, directors, large shareholders and some third parties. At this
time, we do not have any written commitments for additional capital from any of
these parties. If we do not receive a sufficient amount of additional capital on
acceptable terms, we will have to consider the sale of assets or securities or
scale back some or all of our operations or we may be unable to continue as a
going concern.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any 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 is material to
investors.

RISK FACTORS

RISKS RELATING TO OUR CAPITAL AND LIQUIDITY NEEDS

WE HAVE A LIMITED HISTORY OF OPERATIONS AND WE HAVE A HISTORY OF OPERATING
LOSSES.

Since our inception, we have been assembling our Travel Division including
the acquisition of Hickory in October 2003 and TraveLeaders in December 2004,
planning The Sonesta Orlando Resort at Tierra del Sol, building travel club
membership databases, and assembling our management team. We have incurred net
operating losses since our inception. As of December 31, 2004, we had an
accumulated deficit of $12,295,121.

-23-

WE MAY NOT GENERATE ENOUGH OPERATING REVENUE OR CAPITAL TO MEET OUR OPERATING
AND DEVELOPMENT COSTS.

Our costs of establishing our business models for both the Travel Division
and the Resort Development Division, including acquisitions and the due
diligence costs of that process, together with the un-financed development costs
incurred in the Resort Development Division requires significant capital.
Historically, our sources for capital have been through loans from our founding
and majority shareholders as well as from loans from our capital partner,
Stanford. If we are unable to generate enough operating revenue to satisfy our
capital needs or we cannot obtain future capital from our founding and majority
shareholders or from Stanford, it will have a material adverse effect on our
financial condition and results of operation.

WE HAVE RECEIVED $11,605,000 MILLION OF CONVERTIBLE DEBT FINANCING FROM
STANFORD, WHICH IS SECURED BY MORTGAGES ON OUR PROPERTY AND LIENS ON OUR ASSETS.

We have received an aggregate of $11,605,000 million of convertible debt
financing from Stanford. The terms of our financial arrangements with Stanford
are secured by the following mortgages on our properties and liens on our
assets:

- Our $6,000,000 credit facility is secured by a second mortgage on
The Sonesta Orlando Resort at Tierra del Sol which we plan to develop,
including all fixtures and personal property to be located on or used
in connection with this property, and all of the issued and
outstanding capital stock and assets of two of our subsidiaries,
American Leisure Marketing & Technology, Inc. and Caribbean Leisure
Marketing Limited.
- Our $4,250,000 credit facility is secured by collateral
assignments of our stock in the active Travel Division subsidiaries as
well as a collateral assignment of our first lien security interest in
the assets formerly owned by Around The World Travel, Inc.
- Our $1,355,000 credit facility is secured by all of the issued
and outstanding stock of our subsidiary, Caribbean Leisure Marketing
Limited.

In addition, Malcolm J. Wright, our President, Chief Executive Officer, Chief
Financial Officer and a member of our board of directors provided a personal
guarantee for our $6,000,000 credit facility. If we fail to comply with the
covenants in our credit facility, Stanford can elect to accelerate the amounts
due under the credit facility and may foreclose on our assets and property that
secure the loans.

BUSINESS ACQUISITIONS OR JOINT VENTURES MAY DISRUPT OUR BUSINESS, DILUTE
SHAREHOLDER VALUE OR DISTRACT MANAGEMENT ATTENTION.

As part of our business strategy, we may consider the acquisition of, or
investments in, other businesses that offer services and technologies
complementary to ours. If the analysis used to value acquisitions is faulty,
the acquisitions could have a material adverse affect on our operating results
and/or the price of our common stock. Acquisitions also entail numerous risks,
including:

- difficulty in assimilating the operations, products and personnel
of the acquired business;
- potential disruption of our ongoing business;
- unanticipated costs associated with the acquisition;
- inability of management to manage the financial and strategic
position of acquired or developed services and technologies;
- the diversion of management's attention from our core business;
- inability to maintain uniform standards, controls, policies and
procedures;
- impairment of relationships with employees and customers, which
may occur as a result of integration of the acquired business;

-24-

- potential loss of key employees of acquired organizations;
- problems integrating the acquired business, including its
information systems and personnel;
- unanticipated costs that may harm operating results; and
- risks associated with entering an industry in which we have no
(or limited) prior experience.

If any of these occur, our business, results of operations and financial
condition may be materially adversely affected.

RISKS RELATED TO OUR RESORT DEVELOPMENT DIVISION

WE NEED TO CLOSE A $96,600,000 CONSTRUCTION LOAN FOR THE RESORT DEVELOPMENT
DIVISION IN ORDER TO BUILD THE SONESTA ORLANDO RESORT AT TIERRA DEL SOL.

We need to complete the process of complying with the terms of a term sheet
offer made to us by a national lender to provide the $96,600,000 of construction
financing for The Sonesta Orlando Resort at Tierra del Sol. Our compliance is
also necessary to trigger the issuance and sale of $26,000,000 of Westridge
Community Development District bonds. Proceeds from the sale of the bonds will
be used to construct the infrastructure of the resort and to acquire certain
lands from us for public dedication. Proceeds from the sale of the bonds are a
necessary component to the capital structure of the project to develop the
resort. If we cannot complete the compliance required by the term sheet offer,
it will cause a delay in the construction of the resort.

EXCESSIVE CLAIMS FOR DEVELOPMENT-RELATED DEFECTS IN ANY REAL ESTATE PROPERTIES
THAT WE PLAN TO BUILD THROUGH OUR RESORT DEVELOPMENT DIVISION COULD ADVERSELY
AFFECT OUR LIQUIDITY, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

We will engage third-party contractors to construct our resorts. However,
our customers may assert claims against us for construction defects or other
perceived development defects including, but not limited to, structural
integrity, the presence of mold as a result of leaks or other defects,
electrical issues, plumbing issues, or road construction, water or sewer
defects. In addition, certain state and local laws may impose liability on
property developers with respect to development defects discovered in the
future. To the extent that the contractors do not satisfy any proper claims as
they are primarily responsible, a significant number of claims for
development-related defects could be brought against us. To the extent that
claims brought against us are not covered by insurance, our payment of those
claims could adversely affect our liquidity, financial condition, and results of
operations.

MALCOLM J. WRIGHT, WHO SERVES AS OUR CHIEF EXECUTIVE OFFICER, PRESIDENT AND
CHIEF FINANCIAL OFFICER AND AS A DIRECTOR, IS INVOLVED IN OTHER BUSINESSES THAT
HAVE CONTRACTED WITH US AND IS ALSO INVOLVED WITH PROPERTY DEVELOPMENT PROJECTS
THAT MAY BE IN COMPETITION WITH US.

Malcolm J. Wright is the President of American Leisure Real Estate Group,
Inc., a real estate development company with which we have contracted for the
development of The Sonesta Orlando Resort at Tierra del Sol. Mr. Wright is an
officer of Xpress Ltd., with which we have contracted for exclusive sales and
marketing for The Sonesta Orlando Resort at Tierra del Sol. Mr. Wright is also
an officer of Innovative Concepts, Inc., which operates a landscaping business,
and M J Wright Productions, Inc., which owns our Internet domain names. Because
Mr. Wright is employed by us and the other party to these transactions, these
transactions may be or may be considered to be on terms that are not
arms'-length and may not be as advantageous to us as agreements with unrelated
third parties. From time to time, Mr. Wright pursues real estate investment and
sales ventures that may be in competition with ventures that we pursue or plan
to pursue.

-25-

BECAUSE MALCOLM J. WRIGHT, WHO SERVES AS OUR CHIEF EXECUTIVE OFFICER, PRESIDENT
AND CHIEF FINANCIAL OFFICER AND AS A DIRECTOR, IS INVOLVED IN A NUMBER OF OTHER
BUSINESSES, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME
TO OUR BUSINESS OPERATIONS.

Malcolm J. Wright is the President of American Leisure Real Estate Group,
Inc., Xpress Ltd., Innovative Concepts, Inc., M J Wright Productions, Inc.,
Resorts Development Group, LLC, Osceola Business Managers, Inc., Florida World,
Inc. and SunGate Resort Villas, Inc. It is possible that the demands on Mr.
Wright from these other businesses could increase with the result that he may
have less time to devote to our business. We do not have an employment agreement
with Mr. Wright and he is under no requirement to spend a specified amount of
time on our business. As a result, Mr. Wright may not spend sufficient time in
his roles as an executive officer and a director of our company to realize our
business plan. If Mr. Wright does not have sufficient time to serve our company,
it could have a material adverse effect on our business and results of
operations.

WE MAY PROVIDE THE EXECUTIVE OFFICERS OF OUR SUBSIDIARIES AN AGGREGATE BONUS OF
UP TO 19% OF THE PRE-TAX PROFITS OF THE SUBSIDIARY IN WHICH THEY SERVE AS OUR
EXECUTIVE OFFICERS, WHICH WOULD REDUCE ANY PROFITS THAT WE MAY EARN.

We may provide the executive officers of each of our subsidiaries an
aggregate bonus of up to 19% of the pre-tax profits, if any, of the subsidiaries
in which they serve as executive officers. Malcolm J. Wright would receive 19%
of the pre-tax profits of Leisureshare International Ltd, Leisureshare
International Espanola SA, American Leisure Homes, Inc., Advantage Professional
Management Group, Inc., Tierra Del Sol Resort, Inc., and American Leisure
Hospitality Group, Inc. We do not have any agreements with our officers
regarding the bonus other than with L. William Chiles. Mr. Chiles is entitled
to receive 19% of the profits of Hickory up to a maximum payment over the life
of his contract of $2,700,000. As Mr. Chiles' bonus is limited, it is not
subject to the buy-out by us described below. The executive officers of our
other subsidiaries would share a bonus of up to 19% of the pre-tax profits of
the subsidiary in which they serve as executive officers. We would retain the
right, but not have the obligation to buy out all of the above agreements after
a period of five years by issuing such number of shares of our common stock
equal to the product of 19% of the average after-tax profits for the five-year
period multiplied by one-third of the price-earnings ratio of our common stock
at the time of the buyout divided by the greater of the market price of our
common stock or $5.00. If we pay bonuses in the future, it will reduce our
profits and the amount, if any, that we may otherwise have available to pay
dividends to our preferred and common stockholders.

WE HAVE EXPERIENCED DELAYS IN OBTAINING SIGNATURES FOR AGREEMENTS AND
TRANSACTIONS, WHICH HAVE PREVENTED THEM FROM BEING FINALIZED.

We have experienced delays in obtaining signatures for various agreements
and transactions. In some cases, we have either disclosed the terms of these
agreements and transactions in our periodic and other filings with the SEC;
however, these agreements and transactions are not final. Until they are
finalized, their terms are subject to change although we do not have any present
intention to do so. If the terms of these agreements and transactions were to
change, we may be required to amend our prior disclosure and any revisions could
be substantial.

WE ARE RELIANT ON KEY MANAGEMENT AND IF WE LOSE ANY OF THEM, IT COULD HAVE A
MATERIAL ADVERSE AFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS.

Our success depends, in part, upon the personal efforts and abilities of
Malcolm J. Wright and L. William Chiles. Mr. Wright is a Director of the Company
and the Company's Chief Executive Officer, President and Chief Financial
Officer. Mr. Chiles is a Director of the Company and President of Hickory. Our
ability to operate and implement our business plan is dependent on the continued
service of Messrs. Wright and Chiles. We have entered into an employment
agreement with Mr. Chiles. We are in the process of entering into a written
employment agreement with Mr. Wright. If we are unable to retain and motivate
them on economically feasible terms, our business and results of operations will
be materially adversely affected.

-26-

IF WE DO NOT EVENTUALLY PAY MALCOLM J. WRIGHT, OUR CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER FOR HIS SERVICES AS AN EXECUTIVE OFFICER AND A DIRECTOR,
WE COULD LOSE HIS SERVICES.

We have not paid cash to Malcolm J. Wright for his services as an executive
officer and a director as of the filing of this report; however, he is entitled
to receive various forms of remuneration from us such as accrued salary of
$500,000 per year beginning in 2004 and accrued compensation of $18,000 per year
for serving as a director. We may pay Mr. Wright a bonus of up to 19% of the
pre-tax profits, if any, of various subsidiaries as discussed above. We have
made payments to entities controlled by Mr. Wright in consideration for
substantial services that those entities have provided to us for The Sonesta
Orlando Resort at Tierra del Sol. If we do not eventually pay cash to Mr.
Wright for his salary, director's compensation and bonus, he may determine to
spend less of his time on our business or to resign his positions as an officer
and a director.

RISKS RELATED TO OUR TRAVEL DIVISION

WE NEED APPROXIMATELY $1,500,000 OF CAPITAL THROUGH THE END OF THE 2005 FISCAL
YEAR FOR THE TRAVEL DIVISION THAT MAY NOT BE AVAILABLE TO US ON FAVORABLE TERMS,
IF AT ALL.

We need to raise approximately $1,500,000 through the end of the 2005
fiscal year for the working capital needs for the Travel Division which includes
Hickory's requirement through the third quarter of 2005 to cover its seasonal
losses, TraveLeaders' requirements during its reorganization to adopt our
business models, and our operating costs prior to closing a construction loan
(discussed below). If we do not receive a sufficient amount of additional
capital on acceptable terms, or at all, we may be unable to fully implement our
business plan. We have identified sources of additional working capital, but we
do not have any written commitments from third parties or from our officers,
directors or majority shareholders. Additional capital may not be available to
us on favorable terms, if at all. If we cannot obtain a sufficient amount of
additional capital, we will have to delay, curtail or scale back some or all of
our travel operations, any of which would materially adversely affect our travel
businesses. In addition, we may be required to delay the acquisition of
additional travel agencies and restructure or refinance all or a portion of our
outstanding debt.

OUR COMMISSIONS AND FEES ON CONTRACTS WITH SUPPLIERS OF TRAVEL SERVICES FOR OUR
TRAVEL DIVISION MAY BE REDUCED OR THESE CONTRACTS MAY BE CANCELLED AT WILL BY
THE SUPPLIERS BASED ON OUR VOLUME OF BUSINESS, WHICH COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS.

Our suppliers of travel services including airline, hotel, cruise, tour and
car rental suppliers may reduce the commissions and fees that we earn under
contract with them based on the volume of business that we generate for them.
These contracts generally renew annually and in some cases may be cancelled at
will by the suppliers. If we cannot maintain our volume of business, our
suppliers could contract with us on terms less favorable than the current terms
of our contracts or the terms of their contracts with our competitors, exclude
us from the products and services that they provide to our competitors, refuse
to renew our contracts, or, in some cases, cancel their contracts with us at
will. In addition, our suppliers may not continue to sell services and products
through global distribution systems on terms satisfactory to us. If we are
unable to maintain or expand our volume of business, our ability to offer travel
service or lower-priced travel inventory could be significantly reduced. Any
discontinuance or deterioration in the services provided by third parties, such
as global distribution systems providers, could prevent our customers from
accessing or purchasing particular travel services through us. If these
suppliers were to cancel or refuse to renew our contracts or renew them on less
favorable terms, it could have a material adverse effect on our business,
financial condition or results of operations.

OUR SUPPLIERS OF TRAVEL SERVICES TO OUR TRAVEL DIVISION COULD REDUCE OR
ELIMINATE OUR COMMISSION RATES ON BOOKINGS MADE THROUGH US BY PHONE AND OVER THE
INTERNET, WHICH COULD REDUCE OUR REVENUES.

We receive commissions paid to us by our travel suppliers such as hotel
chains and cruise companies for bookings that our customers make through us by
phone and over the Internet. Consistent with industry practices, our suppliers
are not obligated by regulation to pay any specified commission rates for
bookings made through us or to pay commissions at all. Over the last several
years, travel suppliers have substantially reduced commission rates. Our travel
suppliers have reduced our commission rates in certain instances. Future
reductions, if any, in our commission rates that are not offset by lower
operating costs could have a material adverse effect on our business and results
of operations.

-27-

FAILURE TO MAINTAIN RELATIONSHIPS WITH TRADITIONAL TRAVEL AGENTS FOR OUR TRAVEL
DIVISION COULD ADVERSELY AFFECT OUR BUSINESS AND RESULTS OF OPERATIONS.

Hickory has historically received, and expects to continue to receive, a
significant portion of its revenue through relationships with traditional travel
agents. Maintenance of good relationships with these travel agents depends in
large part on continued offerings of travel services in demand, and good levels
of service and availability. If Hickory does not maintain good relations with
its travel agents, these agents could terminate their memberships and use of
Hickory's products and services, which would have a material adverse effect on
our business and results of operations.

DECLINES OR DISRUPTIONS IN THE TRAVEL INDUSTRY COULD SIGNIFICANTLY REDUCE OUR
REVENUE FROM THE TRAVEL DIVISION.

Potential declines or disruptions in the travel industry may result from
any one or more of the following factors:

- price escalation in the airline industry or other travel related
industries;
- airline or other travel related strikes;
- political instability, war and hostilities;
- long term bad weather;
- fuel price escalation;
- increased occurrence of travel-related accidents; and
- economic downturns and recessions.

OUR TRAVEL REVENUES MAY FLUCTUATE FROM QUARTER TO QUARTER DUE TO SEVERAL FACTORS
INCLUDING ONES THAT ARE OUTSIDE OF OUR CONTROL, AND IF OUR REVENUES ARE BELOW
OUR EXPECTATIONS IT WOULD LIKELY HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS
OF OPERATIONS.

We may experience fluctuating revenues because of a variety of factors,
many of which are outside of our control. These factors may include, but are not
limited to, the timing of new contracts; reductions or other modifications in
our clients' marketing and sales strategies; the timing of new product or
service offerings; the expiration or termination of existing contracts or the
reduction in existing programs; the timing of increased expenses incurred to
obtain and support new business; changes in the revenue mix among our various
service offerings; labor strikes and slowdowns at airlines or other travel
businesses; and the seasonal pattern of TraveLeaders' business and the travel
agency members of Hickory. In addition, we make decisions regarding staffing
levels, investments and other operating expenditures based on our revenue
forecasts. If our revenues are below expectations in any given quarter, our
operating results for that quarter would likely be materially adversely
affected.

GLOBAL TRAVEL DISTRIBUTION SYSTEM CONTRACTS THAT WE MAY ENTER INTO GENERALLY
PROVIDE FOR FINANCIAL PENALTIES FOR NOT ACHIEVING PERFORMANCE OBJECTIVES.

We are seeking to enter into multi-year global distribution system
contracts. These contracts typically cover a five-year period and would require
us to meet certain performance objectives. If we do not structure a global
distribution system contract effectively, it may trigger financial penalties if
the performance objectives are not met. In the event that we enter into global
distribution system contracts and are unable to meet the performance objectives,
it would have a material adverse effect on our business, liquidity and results
of operations.

-28-

OUR CONTRACTS WITH CLIENTS OF THE TRAVELEADERS BUSINESS DO NOT GUARANTEE THAT WE
WILL RECEIVE A MINIMUM LEVEL OF REVENUE, ARE NOT EXCLUSIVE, AND MAY BE
TERMINATED ON RELATIVELY SHORT NOTICE.

Our contracts with clients of the TraveLeaders business do not ensure that
we will generate a minimum level of revenue, and the profitability of each
client may fluctuate, sometimes significantly, throughout the various stages of
our sales cycles. Although we will seek to enter into multi-year contracts with
our clients, our contracts generally enable the client to terminate the
contract, or terminate or reduce customer interaction volumes, on relatively
short notice. Although some contracts require the client to pay a contractually
agreed amount in the event of early termination, there can be no assurance that
we will be able to collect such amount or that such amount, if received, will
sufficiently compensate us for our investment in any canceled sales campaign or
for the revenues we may lose as a result of the early termination. If we do not
generate minimum levels of revenue from our contracts or our clients terminate
our multi-year contracts, it will have a material adverse effect on our
business, results of operation and financial condition.

WE RECEIVE CONTRACTUALLY SET SERVICE FEES AND HAVE LIMITED ABILITY TO INCREASE
OUR FEES TO MEET INCREASING COSTS.

Most of our travel contracts have set service fees that we may not increase
if, for instance, certain costs or price indices increase. For the minority of
our contracts that allow us to increase our service fees based upon increases in
cost or price indices, these increases may not fully compensate us for increases
in labor and other costs incurred in providing the services. If our costs
increase and we cannot, in turn, increase our service fees or we have to
decrease our service fees because we do not achieve defined performance
objectives, it will have a material adverse effect on our business, results of
operations and financial condition.

THE TRAVEL INDUSTRY IS LABOR INTENSIVE AND INCREASES IN THE COSTS OF OUR
EMPLOYEES COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, LIQUIDITY OR
RESULTS OF OPERATIONS.

The travel industry is labor intensive and has experienced high personnel
turnover. A significant increase in our personnel turnover rate could increase
our recruiting and training costs and decrease operating effectiveness and
productivity. If we obtain a significant number of new clients or implement a
significant number of new, large-scale campaigns, we may need to recruit, hire
and train qualified personnel at an accelerated rate, but we may be unable to do
so. Because significant portions of our operating costs relate to labor costs,
an increase in wages, costs of employee benefits, employment taxes or other
costs associated with our employees could have a material adverse effect on our
business, results of operations or financial condition.

OUR INDUSTRY IS SUBJECT TO INTENSE COMPETITION AND COMPETITIVE PRESSURES COULD
ADVERSELY AFFECT OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

We believe that the market in which we operate is fragmented and highly
competitive and that competition may intensify in the future. We compete with
small firms offering specific applications, divisions of large entities, large
independent firms and the in-house operations of clients or potential clients. A
number of competitors have or may develop greater capabilities and resources
than us. Additional competitors with greater resources than us may enter our
market. Competitive pressures from current or future competitors could cause our
services to lose market acceptance or result in significant price erosion, all
of which could have a material adverse effect upon our business, results of
operations or financial condition.

-29-

RISKS RELATED TO OUR COMMUNICATIONS DIVISION

WE MAY NOT BE ABLE TO KEEP UP WITH CURRENT AND CHANGING TECHNOLOGY ON WHICH OUR
BUSINESS IS DEPENDENT.

Our call center and communications business is dependent on our computer
and communications equipment and software capabilities. The underlying
technology is continually changing. Our continued growth and future
profitability depends on a number of factors affected by current and changing
technology, including our ability to

- expand our existing service offerings;
- achieve cost efficiencies in our existing call centers; and
- introduce new services and products that leverage and respond to
changing technological developments.

The technologies or services developed by our competitors may render our
products or services non competitive or obsolete. We may not be able to develop
and market any commercially successful new services or products. We have
considered integrating and automating our customer support capabilities, which
we expect would decrease costs by a greater amount than any decrease in
revenues; however, we could be wrong in these expectations. Our failure to
maintain our technological capabilities or respond effectively to technological
changes could have a material adverse effect on our business, results of
operations or financial condition.

A BUSINESS INTERRUPTION AT OUR CALL CENTER, WHETHER OR NOT PROLONGED, COULD HAVE
A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL
CONDITION.

Our call center business operations depend upon our ability to protect our
call center, computer and telecommunications equipment and software systems
against damage from fire, power loss, telecommunications interruption or
failure, natural disaster and other similar events. In the event we experience a
temporary or permanent interruption at our call center and our contracts do not
provide relief, our business could be materially adversely affected and we could
be required to pay contractual damages to some clients or allow some clients to
terminate or renegotiate their contracts with us. In the event that we
experience business interruptions, it would have a material adverse effect on
our business, results of operations and financial condition.

RISKS RELATING TO OUR COMMON STOCK

IF WE FAIL TO FILE OUR PERIODIC REPORTS AND REPORTS ON FORM 8-K WITH THE
COMMISSION IN A TIMELY MANNER, WE COULD RECEIVE AN "E" ON OUR TRADING SYMBOL OR
OUR COMMON STOCK COULD BE DE-LISTED FROM THE OTCBB.

We are in the process of integrating the business operations of Hickory and
TraveLeaders, which includes the financial accounting function. We face
increased pressure related to recording, processing, summarizing and reporting
consolidated financial information required to be disclosed by us in the reports
that we file or submit under the Exchange Act in a timely manner. We also face
increased pressure accumulating and communicating such information to our
management as appropriate to allow timely decisions regarding required
disclosure. We believe that until we have fully integrated our financial
accounting function, we will continue to face such pressure. If we are unable
to file our periodic reports with the Commission in a timely manner, we could
receive an "e" on our trading symbol, which could result in our common stock
being de-listed from the OTCBB. In addition, investors who hold restricted
shares of our common stock would be precluded from reselling their shares
pursuant to Rule 144 of the Securities Act until such time as we were able to
establish a history of current filings with the Commission. In the event that
our common stock is de-listed from the OTCBB, it is likely that our common stock
will have less liquidity than it has, and will trade at a lesser value than it
does, on the OTCBB.

OUR COMMON STOCK COULD AND HAS FLUCTUATED, AND SHAREHOLDERS MAY BE UNABLE TO
RESELL THEIR SHARES AT A PROFIT.

The price of our common stock has fluctuated since it began trading. The
trading prices for small capitalization companies like ours often fluctuate
significantly. Market prices and trading volume for stocks of these types of
companies including ours have also been volatile. The market price of our common
stock is likely to continue to be highly volatile. If revenues or earnings are
less than expected for any quarter, the market price of our common stock could
significantly decline, whether or not there is a decline in our consolidated
revenues or earnings that reflects long-term problems with our business. Other
factors such as our issued and outstanding common stock becoming eligible for
sale under Rule 144, terms of any equity and/or debt financing, and market
conditions could have a significant impact on the future price of our common
stock and could have a depressive effect on the then market price of our common
stock.

-30-

RE-PRICING WARRANTS AND ISSUING ADDITIONAL WARRANTS TO OBTAIN FINANCING HAS
CAUSED AND MAY CAUSE ADDITIONAL DILUTION TO OUR EXISTING STOCKHOLDERS.

In the past, to obtain additional financing, we have modified the terms of
our warrant agreements to lower the exercise price per share to $.001 from $5.00
with respect to warrants to purchase 100,000 shares of our common stock and to
$.001 from $2.96 with respect to warrants to purchase 1,350,000 shares of our
common stock. We are currently in need of additional financing and may be
required to lower the exercise price of our existing warrants or issue
additional warrants in connection with future financing arrangements.
Re-pricing of our warrants and issuing additional warrants has caused and may
cause additional dilution to our existing shareholders.

THERE MAY NOT BE AN ACTIVE OR LIQUID TRADING MARKET FOR OUR COMMON STOCK, WHICH
MAY LIMIT INVESTORS' ABILITY TO RESELL THEIR SHARES.

An active and liquid trading market for our common stock may not develop
or, if developed, such a market may not be sustained. In addition, we cannot
predict the price at which our common stock will trade. If there is not an
active or liquid trading market for our common stock, investors in our common
stock may have limited ability to resell their shares.

WE HAVE AND MAY CONTINUE TO ISSUE PREFERRED STOCK THAT HAS RIGHTS AND
PREFERENCES OVER OUR COMMON STOCK.

Our Articles of Incorporation, as amended, authorize our Board of Directors
to issue preferred stock, the relative rights, powers, preferences, limitations,
and restrictions of which may be fixed or altered from time to time by the Board
of Directors. Accordingly, the Board of Directors may, without approval from the
shareholders of our common stock, issue preferred stock with dividend,
liquidation, conversion, voting, or other rights that could adversely affect the
voting power and other rights of the holders of our common stock. The preferred
stock can be utilized, under certain circumstances, as a method of discouraging,
delaying, or preventing a change in our ownership and management that
shareholders might not consider to be in their best interests. We have issued
various series of preferred stock, which have rights and preferences over our
common stock including, but not limited to, cumulative dividends and preferences
upon liquidation or dissolution.

WE DO NOT EXPECT TO PAY DIVIDENDS IN THE NEAR FUTURE.

We have never declared or paid dividends on our common stock. We do not
anticipate paying dividends on our common stock in the near future. Our ability
to pay dividends is dependent upon, among other things, future earnings as well
as our operating and financial condition, capital requirements, general business
conditions and other pertinent factors. We intend to reinvest in our business
operations any funds that could be used to pay dividends. Our common stock is
junior in priority to our preferred stock with respect to dividends. Cumulative
dividends on our issued and outstanding Series A preferred stock, Series B
preferred stock, Series C preferred stock and Series E preferred stock accrue
dividends at a rate of $1.20, $12.00, $4.00, and $4.00, respectively, per share
per annum, payable in preference and priority to any payment of any cash
dividend on our common stock. We have authorized Series F preferred stock with
cumulative dividends that accrue at a rate of $1.00 per share per annum and are
also payable in preference and priority to any payment of any cash dividend on
our common stock. Dividends on our preferred stock accrue from the date on which
we agree to issue such preferred shares and thereafter from day to day whether
or not earned or declared and whether or not there exists profits, surplus or
other funds legally available for the payment of dividends. We have never paid
any cash dividends on our preferred stock. We will be required to pay accrued
dividends on our preferred stock before we can pay any dividends on our common
stock.

-31-

BECAUSE OF THE SIGNIFICANT NUMBER OF SHARES OWNED BY OUR DIRECTORS, OFFICERS AND
PRINCIPAL SHAREHOLDERS, OTHER SHAREHOLDERS MAY NOT BE ABLE TO SIGNIFICANTLY
INFLUENCE OUR MANAGEMENT.

Our directors, officers, and principal shareholders beneficially own a
substantial portion of our outstanding common and preferred stock. Malcolm J.
Wright, who serves as our President, Chief Executive Officer and Chief Financial
Officer and as a Director, and Roger Maddock, one of our majority shareholders,
own, directly and indirectly, an aggregate of 62.6% of the voting power in our
company. As a result, these persons control our affairs and management, as well
as all matters requiring shareholder approval, including the election and
removal of members of the Board of Directors, transactions with directors,
officers or affiliated entities, the sale or merger of the Company or
substantially all of our assets, and changes in dividend policy. This
concentration of ownership and control could have the effect of delaying,
deferring, or preventing a change in our ownership or management, even when a
change would be in the best interest of other shareholders.

-32-

ITEM 7. FINANCIAL STATEMENTS

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
American Leisure Holdings, Inc. and Subsidiaries
Orlando, Florida

We have audited the accompanying consolidated balance sheets of American Leisure
Holdings, Inc. and Subsidiaries as of December 31, 2004 and 2003, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the years ended December 31, 2004 and 2003. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about 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
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
American Leisure Holdings, Inc. and Subsidiaries as of December 31, 2004 and
2003, and the results of its operations and its cash flows for the years ended
December 31, 2004 and 2003, in conformity with accounting principles generally
accepted in the United States of America.

As discussed in Note 3 to the financial statements, the Company's recurring
losses from operations and the need to raise additional financing in order to
satisfy its vendors and other creditors and execute its Business Plan raise
substantial doubt about its ability to continue as a going concern. Management's
plans as to these matters are also described in Note 3. The 2004 consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

As discussed in Note 20, the consolidated financial statements as of December
31, 2004 and 2003 and for each of the years ended December 31, 2004 and 2003
have been restated.

Lopez, Blevins, Bork & Associates, LLP
Houston, Texas
March 30, 2005, except note 20, which is as of June 27, 2005

-33-

AMERICAN LEISURE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2004

Consolidated Consolidated
American American
Leisure Leisure
Holdings, Inc. Holdings, Inc.
2004 2003
------------ ------------
(Restated) (Restated)

ASSETS
CURRENT ASSETS:
Cash $ 2,266,042 $ 734,852
Accounts receivable 3,539,387 2,148,134
Note receivable 113,000
Prepaid expenses and other 51,460 40,867
Other Current Assets 30,476
------------ ------------
Total Current Assets 6,000,365 2,923,853

PROPERTY AND EQUIPMENT, NET 6,088,500 3,192,878

LAND HELD FOR DEVELOPMENT 23,448,214 15,323,627

OTHER ASSETS
Prepaid Sales Commissions 5,966,504 0
Prepaid Sales Commissions - affiliated entity 2,665,387 0
Investment-Senior Notes 5,170,000 0
Investment-Non-marketable securities 0 654,386
Goodwill 14,425,437 1,840,001
Trademark 1,000,000 0
Other 2,637,574 1,441,730
------------ ------------
Total Other Assets 31,864,902 3,936,117
------------ ------------

TOTAL ASSETS $67,401,981 $25,376,475
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term debt and notes payable $ 9,605,235 $ 5,048,025
Current maturities of notes payable-related parties 1,910,629 1,619,575
Accounts payable and accrued expenses 5,618,973 1,787,699
Accrued expenses - officers 1,355,000 500,000
Customer deposits 2,752,535 0
Other 2,332,886 0
Shareholder advances 273,312 1,030,883
------------ ------------
Total Current Liabilities 23,848,570 9,986,182

Long-term debt and notes payable 18,605,253 7,919,398
Deferred revenues 1,994,809 0
Notes payable-related parties 0 797,185
Mandatory redeemable preferred stock 0 2,718,900
Deposits on unit pre-sales 16,669,347 0
Minority interest 0 510,348
------------ ------------
Total liabilities 61,117,979 21,932,013

STOCKHOLDERS' EQUITY:
Preferred stock; 1,000,000 shares authorized; $.001 par value;
1,00,000 Series "A" shares issued and outstanding at
December 31, 2004 and December 31, 2003 10,000 8,800
Preferred stock; 100,000 shares authorized; $.01 par value;
2,825 Series "B" shares issued and outstanding at
December 31, 2004 and December 31, 2003 28 25
Preferred stock, 28,000 shares authorized;
$.01 par value; 27,189 Series "C" shares issued and outstanding at
December 31, 2004 and 2003 272 -
Preferred stock; 50,000 shares authorized; $.001 par value;
24,101 and 0 Series "E" shares issued and outstanding at
December 31, 2004 and 2003 24 -
Preferred stock; 150,000 shares authorized; $.01 par value;
1,936 and 0 Series "F" shares issued and outstanding at
December 31, 2004 and 2003 19 -

Common stock, $.001 par value; 100,000,000 shares authorized;
9,977,974 and 7,488,983 shares issued and outstanding at
December 31, 2004 and December 31, 2003 9,978 7,489

Additional paid-in capital 18,558,802 7,840,656

Accumulated deficit (12,295,121) (4,412,488)
------------ ------------
Total Stockholders' Equity 6,284,002 3,444,462
------------ ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $67,401,981 $25,376,475
============ ============

-34-

AMERICAN LEISURE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED PROFIT AND LOSS STATEMENT
YEARS ENDED DECEMBER 31, 2004 AND 2003

Consolidated Consolidated
American American
Leisure Leisure
Holdings, Inc. Holdings, Inc.
2004 2003
------------ ------------
(Restated) (Restated)

Revenue $ 6,419,320 $ 3,327,483

Operating Expenses:
Depreciation and amortization (936,874) (716,175)
General and administrative expenses (8,192,195) (4,227,810)
Goodwill Impairment Loss - Traveleaders (1,500,000) 0
------------ ------------

Loss from Operations (4,209,749) (1,616,502)

Other Income (Expense):
Interest Expense (736,798) 0
Unrealized Loss on Marketable
Securities(AWT) (2,185,278) 0
------------ ------------
(2,922,076) 0
------------ ------------

Loss Before Minority Interest in Subsidiary (7,131,825) (1,616,502)

Minority Interest (510,348) 510,348
------------ ------------

Loss before Income Taxes (6,621,477) (2,126,850)

PROVISIONS FOR INCOME TAXES (12,824) 0
------------ ------------

NET LOSS (6,634,301) (2,126,850)

Preferred Stock Dividend (1,248,331) (1,083,025)
------------ ------------

NET LOSS AVAILABLE TO COMMON
STOCKHOLDERS $(7,882,632) $(3,209,875)
============ ============

NET LOSS PER SHARE AVAILABLE
TO COMMON STOCKHOLDERS:
BASIC AND DILUTED $ (0.92) $ (0.47)
============ ============

WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC AND DILUTED 8,607,614 6,844,172
============ ============

-35-

AMERICAN LEISURE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2004 AND 2003 (Restated)

Preferred Stock Capital Stock Additional Retained Total
--------------- ------------- Paid-in Earnings/ Stockholders
Shares Amount Shares Amount Capital (Deficit) Equity
----------- ------------ --------- ---------- ----------- ------------ -----------

Balance-December 31, 2002 882,500 $ 8,825 6,524,983 $ 6,525 $ 6,329,975 $ (1,202,613) $5,142,712

Issuance of shares for equipment - - 114,000 114 130,986 - 131,100

Issuance of shares for 50.83 % of
Hickory Travel Systems, Inc. - - 850,000 850 296,650 - 297,500

Accrual of preferred stock dividend - - - - 1,083,025 (1,083,025) -

Net loss - - - - - (2,126,850) (2,126,850)
----------- ------------ --------- ---------- ----------- ------------ -----------

Balance-December 31, 2003 882,500 8,825 7,488,983 7,489 7,840,636 (4,412,488) 3,444,462

Issuance of common stock
to acquire senior debt of Around the
World Travel, Inc. 340,000 340 169,660 170,000

Issuance of common stock for
debt issue costs 600,000 600 329,400 330,000

Issuance of common stock for
debt issue costs 1,450,000 1,450 2,022,200 2,023,650

Issuance of warrants in connection
with debt 244,348 244,348

Reclassification of Series C
preferred stock 27,189 272 2,718,628 2,718,900

Issuance of Series E preferred stock in
Exchange for preferred stock of
Around the World Travel, Inc. 24,101 24 2,410,076 2,410,100

Issuance of common stock for services 98,991 99 120,456 120,555

Issuance of Series B preferred stock
for assets 325 3 62,637 62,640

Issuance of Series A preferred stock
for debt to an affiliated entity 120,000 1,200 1,198,800 1,200,000

Issuance of Series F preferred stock
in connection with the acquisition
of certain assets and assumption
of certain liabilities of Around the
World Travel, Inc. 1,936 19 193,629 193,648

Accrual of preferred stock dividend - - - - 1,248,331 (1,248,331) -

Net loss (6,634,301) (6,634,301)
----------- ------------ --------- ---------- ----------- ------------ -----------
1,056,051 $ 10,323 9,977,974 $ 9,978 $18,558,802 $(12,295,121) $6,284,002
=========== ============ ========= ========== =========== ============ ===========

-36-

AMERICAN LEISURE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2004 AND 2003

Year Year
Ended Ended
December 31, December 31,
2004 2003
------------- ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (6,634,301) $(2,126,850)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 936,874 716,175
Impairment loss (AWT) 3,685,278 -
Bad Debt Expense 21,864
Interest Expense 437,394
Common stock issued for services 150,555 -
Profit on Sale of AVR stock (145,614)
Minority interests (510,348) 510,348
Changes in assets and liabilities:
Decrease in receivables (382,125) (926,124)
Increase in prepaid and other assets 362,516 8,060
Increase in prepaid commissions (8,355,410) -
Increase in deposits 16,669,347
Increase in accounts payable and accrued expense 2,872,777 (521,054)
------------- ------------

Net cash provided by (used in) operating activities 9,108,807 (2,339,445)
------------- ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Security deposits and other - (18,500)
Acquisition of AWT Assets 767,291 196,444
Acquisition of fixed assets (3,511,881) (1,211,027)
Advances to AWT (4,789,463) -
Sale of AVR stock 800,000 -
Capitalization of real estate carrying costs (8,124,587) (3,248,984)
------------- ------------

Net cash used in investing activities (14,858,640) (4,282,067)
------------- ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of advances (757,571) -
Proceeds from debt 8,860,943 -
Payment of debt (316,218) -
Proceeds from notes payable - 6,116,670
Proceeds from notes payable - related parties 312,377 1,028,344
Payments to related parties (818,508) -
Proceeds from shareholder advances - 160,851
------------- ------------

Net cash provided by financing activities 7,281,023 7,305,865
------------- ------------

Net decrease in cash 1,531,190 684,353

CASH AT BEGINNING PERIOD 734,852 50,499
------------- ------------

CASH AT END OF PERIOD $ 2,266,042 $ 734,852
============= ============

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 1,052,308 $ 571,500
============= ============
Cash paid for income taxes $ - $ -
============= ============

NON-CASH TRANSACTIONS:
Issuance of Series B preferred stock for assets $ 4,209,749 $ 2,850,000
============= ============
Issuance of Series E preferred stock for investment
in debt and equity securities $ 2,410,100 $ -
============= ============
Stock issued in connection with acquisition $ - $ 297,500
============= ============
Exchange of 1913 Mercedes-Benz for debt to an
affiliated entity $ 500,000 $ -
============= ============
Issuance of warrants to acquire common stock for
debt issuance costs $ 2,597,998 $ -
============= ============
Issuance of Series A preferred stock for debt to an
affiliated entity $ 1,200,000 $ -
============= ============

-37-

AMERICAN LEISURE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - THE COMPANY

American Leisure Holdings, Inc. ("American Leisure" or "the Company"), a
Nevada corporation, was incorporated in May 2002. On June 14, 2002,
Freewillpc.com, Inc., a Nevada corporation, acquired American Leisure Holdings,
Inc., a Nevada corporation ("American Leisure") in exchange for the issuance of
880,000 shares of Series A preferred stock and 4,893,974 shares of common stock,
and changed its name to American Leisure Holdings, Inc. This transaction was
treated as an acquisition of Freewill and a recapitalization of American
Leisure.

On October 1, 2003, American Leisure acquired controlling interest in
Hickory Travel Systems, Inc. ("HTS"). American Leisure has consolidated HTS and
is included in its Statement of Operations and the Statement of Cash Flows the
activities of HTS for the calendar year 2004 and the period October 1, 2003
through December 31, 2003.

On December 31, 2004, American Leisure Equities Corporation (the
"Purchaser") a wholly-owned subsidiary of American Leisure, entered into an
Asset Purchase Agreement (hereinafter, referred to as "APA") with Around The
World Travel, Inc. (the "Seller"), pursuant to which the Seller agreed to sell
substantially all of its assets to the Purchaser. Under the terms of the APA,
the Seller conveyed to the Purchaser all of the assets necessary to operate the
Business, including substantially all of the Seller's tangible and intangible
assets and certain agreed liabilities. The assets and liabilities of the
Purchaser have been included in the consolidated balance sheet at December 31,
2004. There are no operating results and net cash flow activity since the
purchase occurred on December 31, 2004.

The purchase price for the assets transferred under the APA was 17,500,000
based upon an independent appraisal. The parties agreed that the purchase price
will be an amount equal to the fair value of the Business (calculated on a going
concern basis), plus $1,500,000, but in no event more than $29,000,000. The fair
value was determined to be $16,000,000 pursuant to a valuation from an
unaffiliated investment-banking firm.

American Leisure through its subsidiaries is involved in the development of
vacation real estate and the supplying of products related to the travel and
leisure business.

PRINCIPLES OF CONSOLIDATION

In determining whether American Leisure has a direct or indirect
controlling financial interest in affiliates, consideration is given to various
factors, including common stock ownership, possession of securities convertible
into common stock and the related conversion terms, voting rights,
representation on the board of directors, rights or obligations to purchase
additional ownership interests as well as the existence of contracts or
agreements that provide control features. Generally, when American Leisure
determines that its ownership, direct or indirect, exceeds fifty percent of the
outstanding voting shares of an affiliate, American Leisure will consolidate the
affiliate. Furthermore, when American Leisure determines that it has the ability
to control the financial or operating policies through its voting rights, board
representation or other similar rights, American Leisure will consolidate the
affiliate.

-38-

For those affiliates that American Leisure does not have the ability to
control the operating and financial policies thereof, the investments are
accounted for under the equity or cost method, as appropriate. American Leisure
applies the equity method of accounting when it has the ability to exercise
significant influence over operating and financial policies of an investee in
accordance with APB Opinion No. 18, "The Equity Method of Accounting for
Investments in Common Stock." In determining whether American Leisure has the
ability to exercise significant influence, consideration is given to various
factors including the nature and significance of the investment, the
capitalization structure of the investee, representation on the board of
directors, voting rights, veto rights and other protective and participating
rights held by investors and contractual arrangements.

Additionally, American Leisure applies accounting principles generally
accepted in the United States of America and interpretations when evaluating
whether it should consolidate entities. Typically, if American Leisure does not
retain both control of the assets transferred to the entities, as well as the
risks and rewards of those assets, American Leisure will not consolidate such
entities. In determining whether the securitization entity should be
consolidated, American Leisure considers whether the entity is a qualifying
special purpose entity, as defined by Statement of Financial Accounting
Standards ("SFAS") No. 140, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities-a replacement of FASB Statement No.
125."

The consolidated financial statements include the accounts of American
Leisure Holdings, Inc. and its subsidiaries owned and/or controlled by American
Leisure as follows:

Company Percentage
------- ----------

American Leisure Corporation, Inc. (ALC) and Subsidiaries 100.00%
Florida Golf Group, Inc.(FGG) 100.00%
American Leisure Equities Corporation 100.00%
American Leisure Homes, Inc. (ALH) 100.00%
I-Drive Limos, Inc. (ID) 100.00%
Orlando Holidays, Inc. (OH) 100.00%
Welcome to Orlando, Inc. (WTO) 100.00%
American Leisure, Inc. (ALI) 100.00%
Pool Homes Managers, Inc. (PHM) 100.00%
Advantage Professional Management Group, Inc. (APMG) 100.00%
Leisureshare International Ltd (LIL) 100.00%
Leisureshare International Espanola S.A. (LIESA) 100.00%
American Travel & Marketing Group, Inc. (ATMG) 81.00%
American Leisure Marketing and Technology, Inc. 100.00%
Tierra Del Sol Resort, Inc. 81.00%
Hickory Travel Systems, Inc. 50.83%
American Travel Club, Inc. 100.00%
American Access Telecommunications Corporation 100.00%
American Switching Technologies, Inc. 100.00%
Affinity Travel Club, Inc. 100.00%
AAH Kissimmee LLC 100.00%
Club Turistico Latinoamericano, Inc. 100.00%
Affinity Travel, Inc. 100.00%
Pool Homes, Inc. 100.00%
American Sterling Corp. 81.00%
American Sterling Motorcoaches, Inc. 81.00%
Caribbean Leisure Marketing, Ltd. 81.00%
Comtech Fibernet, Inc. 81.00%
Caribbean Media Group, Ltd 39.69%

-39-

No amounts for minority interests, except for Hickory Travel Systems, Inc.,
were reflected in the consolidated statement of operations since there were
losses applicable to those subsidiaries.

All significant inter-company accounts and transactions have been
eliminated in the consolidation.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of American Leisure
Holdings, Inc. (American Leisure) is presented to assist in understanding
American Leisure's financial statements. The financial statements and notes are
representations of American Leisure's management, which is responsible for their
integrity and objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles 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. Actual results could differ from those estimates.

CONCENTRATION OF RISK

American Leisure places its cash and temporary cash investments with
established financial institutions. At various times during the year, the
Company maintained cash balances in excess of FDIC insurable limits. Management
feels this risk is mitigated due to the longstanding reputation of these banks.

-40-

In the normal course of business, the Company extends unsecured credit to
the majority of its customers. Management periodically reviews its outstanding
accounts receivable and establishes an allowance for doubtful accounts based on
historical collection trends and other criteria.

LONG-LIVED ASSETS

Long-lived assets are stated at cost. Maintenance and repairs are expensed
as incurred. Depreciation is determined using the straight-line method over the
estimated useful lives of the assets, which is between three to seven years.

Where an impairment of a property's value is determined to be other than
temporary, an allowance for the estimated potential loss is established to
record the property at its net realizable value.

When items of land, building or equipment are sold or retired, the related
cost and accumulated depreciation are removed from the accounts and any gain or
loss is included in the results of operations. The Company does not have any
long-lived tangible assets that are considered to be impaired as of December 31,
2004.

INTANGIBLES WITH FINITE LIVES

In June 2001, the Financial Accounting Standards Board issued "Statement of
Financial Accounting Standards, ("FAS") No. 142 "Goodwill and Other Intangible
Assets", effective for fiscal years beginning after December 15, 2001. FAS No.
142 addressed the recognition and measurement of intangible assets acquired
individually or with a group of other assets and the recognition and measurement
of goodwill and other intangible assets subsequent to their acquisition. Under
these rules, goodwill and intangible assets with indefinite lives are no longer
amortized, but are subject to annual or more frequent impairment testing. Other
intangible assets deemed to have a finite life continue to be amortized over
their useful lives. The Company adopted the new rules on accounting for goodwill
and other intangible assets as of January 1, 2002.

The Company amortizes the following intangible assets with finite lives using
straight-line method.

Trademarks 20 Years
Customer List 5 Years

These intangible assets with finite lives are reviewed for potential
impairment whenever events or circumstances indicate that their carrying amounts
may not be recoverable. During 2004 management determined that no impairment
adjustment related to these intangibles was necessary.

INCOME TAXES

American Leisure accounts for income taxes using the asset and liability
method. The differences between the financial statement and tax basis of assets
and liabilities are determined annually. Deferred income tax assets and
liabilities are computed for those differences that have future tax consequences
using the currently enacted tax laws and rates that apply to the period in which
they are expected to affect taxable income. Valuation allowances are
established, if necessary, to reduce deferred tax asset accounts to the amounts
that will more likely than not be realized. Income tax expense is the current
tax payable or refundable for the period, plus or minus the net change in the
deferred tax asset and liability accounts.

-41-

GOODWILL

American Leisure adopted the provisions of SFAS No. 142, "Goodwill and
Other Intangible Assets". This statement requires that goodwill and intangible
assets deemed to have indefinite lives not be amortized, but rather be tested
for impairment on an annual basis. Finite-lived intangible assets are required
to be amortized over their useful lives and are subject to impairment evaluation
under the provisions of SFAS No. 144. The intangible assets relate to 1) the
acquisition goodwill for the controlling interest of HTS, and 2) the net assets
purchased from Around The World Travel, Inc. pursuant to the Asset Purchase
Agreement between Around The World Travel, Inc. and American Leisure Equities
Corporation.

CASH

American Leisure considers (if and when they have any) all highly liquid
investments with maturities of three months or less to be cash equivalents.

SHARES FOR SERVICES AND OTHER ASSETS

American Leisure accounts for non-cash stock-based compensation issued to
employees in accordance with the provisions of Accounting Principles Board
("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and complies
with the disclosure provisions of SFAS No. 123, Accounting for Stock-Based
Compensation, issued by the Financial Accounting Standards Board and EITF No.
96-18, Accounting for Equity (deficit) Investments That Are Issued to
Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services.
Under APB No. 25, compensation cost is recognized over the vesting period based
on the difference, if any, on the date of grant between the fair value of
American Leisure's stock and the amount an employee must pay to acquire the
stock. Common stock issued to non-employees and consultants is based upon the
value of the services received or the quoted market price, whichever value is
more readily determinable. Accordingly, no compensation expense has been
recognized for grants of options to employees with the exercise prices at or
above market price of the Company's common stock on the measurement dates.

Had compensation expense been determined based on the estimated fair value
at the measurement dates of awards under those plans consistent with the method
prescribed by SFAS No. 123, the Company's December 31, 2004 and 2003, net loss
would have been changed to the pro forma amounts indicated below.

December 31, December 31,
2004 2003
------------ ------------

Net loss:
As reported (6,634,301) $(2,126,850)
Stock based compensation under fair value method (671,560) -
Pro forma $(7,305,861) $(2,126,850)

Net income (loss) per share - basic and diluted:
As reported $ (0.77) $ (0.31)
Stock based compensation under fair value method (0.08) (0.00)
Pro forma $ (0.85) $ (0.31)
------------ ------------

-42-

The fair value of each option grant was estimated on the date of grant
using the Black-Scholes option pricing model with the following assumptions:
risk free rate of 3.5%; volatility of 161% for 2004 and 2003 with no assumed
dividend yield; and expected lives of five years.

REVENUE RECOGNITION

American Leisure recognizes revenues on the accrual method of accounting.
For the sales of units on the Orlando property, revenues will be recognized upon
the close of escrow for the sales of its real estate. Operating revenues earned
will be recognized upon the completion of the earning process.

Revenues from American Leisure's call center are recognized upon the
completion of the earning process from the completion of the travel of the
customer, the trip to the properties for the potential purchase, or the
appropriate event based on the agreement with American Leisure's client as to
the ability to be paid for the service.

Revenues from Hickory Travel Systems, Inc. are recognized as earned, which
is primarily at the time of delivery of the related service, publication or
promotional material. Costs associated with the current period are expensed as
incurred; those costs associated with future periods are deferred.

One of American Leisure's principal sources of revenue is associated with
access to the travel portal that provides a database of discounted travel
services. Annual renewals occur at various times during the year. Costs related
to site changes are incurred in the months prior to annual billing renewals.
Customers are charged additional fees for hard copies of the site access
information. Occasionally these items are printed and shipped at a later date,
at which time both revenue and expenses are recognized.

LOSS PER SHARE

American Leisure is required to provide basic and dilutive earnings (loss)
per common share information.

The basic net loss per common share is computed by dividing the net loss
applicable to common stockholders by the weighted average number of common
shares outstanding.

Diluted net loss per common share is computed by dividing the net loss
applicable to common stockholders, adjusted on an "as if converted" basis, by
the weighted average number of common shares outstanding plus potential dilutive
securities.

For the period ended December 31, 2004, potential dilutive securities had
an anti-dilutive effect and were not included in the calculation of diluted net
loss per common share.

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard No. 150 "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity" (the
"Statement"). The Statement establishes standards for how an issuer classifies
and measures certain financial instruments with characteristics of both
liabilities and equity. The Statement is generally effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15,
2003. The adoption of this Statement had no effect on our consolidated financial
statements.

-43-

In January 2003, the FASB issued Interpretation No. 46 ("FIN 46")
Consolidation of Variable Interest Entities, which addresses the consolidation
of variable interest entities ("VIEs") by business enterprises that are the
primary beneficiaries. A VIE is an entity that does not have sufficient equity
investment at risk to permit it to finance its activities without additional
subordinated financial support, or whose equity investors lack the
characteristics of a controlling financial interest. The primary beneficiary of
a VIE is the enterprise that has the majority of the risks or rewards associated
with the VIE. In December 2003, the FASB issued a revision to FIN 46,
Interpretation No. 46R ("FIN 46R"), to clarify some of the provisions of FIN 46,
and to defer certain entities from adopting until the end of the first interim
or annual reporting period ending after March 15, 2004. Application of FIN 46R
is required in financial statements of public entities that have interests in
structures that are commonly referred to as special-purpose entities for periods
ending after December 15, 2003. Application for all other types of VIEs is
required in financial statements for periods ending after March 15, 2004. We
believe we have no arrangements that would require the application of FIN 46R.
We have no material off-balance sheet arrangements.

American Leisure adopted FASB Interpretation No. 46 and 46R, "Consolidation
of Variable Interest Entities," effective December 31, 2002. Interpretation 46,
as revised in December 2003, changes the accounting model for consolidation from
one based on control through voting interests to one based on control through
economic interests. Whether to consolidate an entity now considers whether that
entity has sufficient equity at risk to enable it to operate without additional
subordinated financial support, whether the equity owners in that entity lack
the obligation to absorb expected losses or the right to receive residual
returns of the entity, or whether voting rights in the entity are not
proportional to the equity interest and substantially all of the entity's
activities are conducted for an investor with few voting rights. This
interpretation requires a Company to consolidate variable interest entities
("VIE"s") if the enterprise is a primary beneficiary of the VIE and the VIE
possesses specific characteristics. It also requires additional disclosure for
parties involved with VIE's. The adoption of this statement did not have a
material impact on the American Leisure's consolidated results of operations or
financial position because American Leisure does not invest or participate in
any entities, which would be considered VIE's under Interpretation 46.

The FASB issued Statement of Financial Accounting Standards ("SFAS") No.
123 (Revised 2004), Share-Based Payments. The new FASB rule requires that the
compensation cost relating to share-based payment transactions be recognized in
financial statements. That cost will be measured based on the fair value of the
equity or liability instruments issued. The adoption of this statement did not
have a material impact on the American Leisure's consolidated results of
operations or financial position because American Leisure has not incurred
share-based payments.

RECLASSIFICATIONS

Certain amounts in the December 31, 2003 financial statements have been
reclassified to conform to the December 31, 2004 financial statement
presentation.

NOTE 3 - FINANCIAL CONDITION AND GOING CONCERN

American Leisure's financial statements have been presented on the basis
that it is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. American Leisure
incurred a net loss of $6,634,301 during 2004 and has negative working capital
of $18,848,205. These factors raise substantial doubt as to American Leisure's
ability to obtain debt and/or equity financing and achieve profitable
operations.

-44-

American Leisure's management intends to raise additional operating funds
through equity and/or debt offerings. However, there can be no assurance
management will be successful in its endeavors. Ultimately, American Leisure
will need to achieve profitable operations in order to continue as a going
concern.

The Company expects that with the proceeds from the sale of its' Davenport,
Florida land, the cash received from the pre-sales of its' Orlando Resort units,
and positive cash flows from its' travel and leisure business through the first
five months of 2005, it will have adequate capital to maintain its operations
until the construction and permanent financing is obtained on the Orlando Resort
property.

The Company may need additional financing to support these operations
beyond the above expected and received cash flows and is currently preparing a
Board approved SB-2 filing to be submitted to the SEC for approval by June 30,
2005.

There are no assurances that American Leisure will be able to either (1)
achieve a level of revenues adequate to generate sufficient cash flow from
operations; or (2) obtain additional financing through either private placement,
public offerings and/or bank financing necessary to support American Leisure's
working capital requirements. To the extent that funds generated from operations
and any private placements, public offerings and/or bank financing are
insufficient, American Leisure will have to raise additional working capital. No
assurance can be given that additional financing will be available, or if
available, will be on terms acceptable to American Leisure. If adequate working
capital is not available, American Leisure may be required to curtail its
operations.

NOTE 4 - ACQUISITIONS

On December 31, 2004, American Leisure Equities Corporation (the
"Purchaser") a wholly-owned subsidiary of American Leisure, entered into an
Asset Purchase Agreement (hereinafter referred to as "APA") with Around The
World Travel, Inc. (the "Seller"), pursuant to which the Seller agreed to sell
substantially all of its assets to the Purchaser. Under the terms of the APA,
the Seller conveyed to the Purchaser all of the assets necessary to operate the
Business, including substantially all of the Seller's tangible and intangible
assets and certain agreed liabilities.

The purchase price for the assets transferred under the APA is $17,500,000
or the fair value plus $1,500,000. The fair value was determined by an
independent investment-banking firm.

The Purchaser has paid the Seller through a combination of the assumption
of certain liabilities of the Seller, and the reduction of certain amounts owed
by the Seller to AMLH; and the issuance of Series F preferred shares. Pursuant
to the terms of the APA, the Seller and the Purchaser have entered into a
Management Agreement, under which the Seller will manage the Business on behalf
of the Purchaser. The Seller and the Purchaser have also entered into a License
Agreement, under which the Purchaser will grant the Seller a non-exclusive
license to use certain trade names and related intellectual property in
connection with the performance of its duties under the Management Agreement.
The License Agreement will expire simultaneously with the Management Agreement.

-45-

The following table summarizes the estimated fair value of the net assets
acquired and liabilities assumed at the acquisition dates.

Total
=====

Current assets $ 1,850,109
Property and equipment 287,975
Deposits 276,481
Trademark 1,000,000
Goodwill 12,585,435
-----------
Total assets acquired 16,000,000

Notes Assumed 11,040,320
Accounts Payable & Accrued Expenses 6,266,032
-----------
Total liabilities assumed 17,306,352

Series F Preferred Stock issued 193,648
-----------
Consideration $17,500,000

The following summarized the estimated Statement of Operations as if the
acquisition had occurred as of January 1, 2004.

Proforma Combined Condensed Statement of Operations
For the Period of January 1, 2004 through December 31, 2004

Revenues $26,629,000
Depreciation & Amortization Expense $ 1,411,000
General & Administrative Expenses $31,788,000
-----------
Net Loss from Operations $ 6,570,000

NOTE 5 - PROPERTY AND EQUIPMENT, NET

At December 31, 2004, property and equipment consisted of the following:

Useful
Lives Amount

Computer equipment 3-5 $ 576,783
----------
Furniture & fixtures 5-7 60,374
Automobiles 5 63,230
Telecommunications equipment 7 6,782,110
----------
7,482,497
Less: accumulated depreciation and amortization 1,393,997
----------
$6,088,500
==========

Depreciation expense was $936,874 and $716,175 for 2004 and 2003, respectively.

NOTE 6 - LAND HELD FOR FUTURE DEVELOPMENT

American Leisure is planning to construct a 972-unit resort in Orlando,
Florida on 122 of its 163 acres of undeveloped land. Development is scheduled to
commence in the summer of 2005. Presales commenced in February 2004.

American Leisure owned 13.67 acres of commercial property in Polk County
Florida at the corner of U.S. Hwy. 27 and Sand Mine Road. In late 2003, American
Leisure received a letter of intent for the sale of the property and closed on
the sale March 8, 2005. American Leisure recorded an impairment charge of
$100,000 to record the property at its anticipated selling price for the year
ended December 31, 2002. No impairment was recorded at December 31, 2003 based
on an independent appraisal. The Company sold the property for a sales price of
$4,020,000, plus the reimbursement of expenses in the amount of $157,219.

-46-

NOTE 7 - OTHER ASSETS

Other assets include the following at December 31, 2004 and 2003:

2004 2003

Advances - Caribbean Leisure $ - $ 791,108
----------- ----------
Deposits and other 505,811 98,953
1913 Mercedes-Benz - 500,000
Deferred financing costs 2,131,763 51,669
----------- ----------
$ 2,637,574 $1,441,730
=========== ==========

NOTE 8 - INVESTMENT - 41.25% OF AMERICAN VACATION RESORTS, INC.

In November 2003 the Company and Mr. & Mrs. Wright entered into an
agreement with a Mr. Frederick Pauzar to sell their ownership interests in the
stock of American Vacation Resorts Inc. ("AVR") for $1,500,000. In April 2004
the sale was completed by the transfer of the ownership from Mr. Pauzar of a
company AAH Kissimmee LLC. which owned 17 Condo's in Kissimmee, Florida. Upon
the completion of the sale to Mr. Pauzar, the Company held 4 units in trust for
account of Mrs. Wright, 4 units in trust for the account of Mr. Wright and 9
units in trust for the account of Arvimex in return for a reduction of $800,000
of debt due to Arvimex. The company made a profit of $145,614 upon the sale of
its share of the stock in AVR to Mr. Pauzar. The Company will receive no
additional benefit from the sale or management of these units.

NOTE 9 - 1913 MERCEDES BENZ

I-Drive Limos is a wholly owned subsidiary of ALI as of December 31, 2003.
I-Drive Limos sole asset, acquired in December 1998, was an antique motor
vehicle, a 1913 Mercedes Benz. The asset was a one of a kind vehicle and was
shown at its cost of $500,000. The vehicle was originally purchased at auction
in May of 1990 for $434,732 and subsequently restored increasing its total cost
to $500,000. Antique Mercedes-Benz vehicles sold in the last seven years range
widely in price, from $1,700,000 to $22,500 for a 1928 Brevette and for a 1938
Sedan, respectively. Most of the antique Mercedes-Benz sold are dated from the
1930s are sold for approximately $200,000. The car was insured for $500,000. Per
FASB 93, paragraph 6 ("Consistent with the accepted practice for land used as a
building site, depreciation need not be recognized on individual works or art of
historical treasures whose economic benefit or service potential is used up so
slowly that their estimated useful lives are extraordinarily long") no
depreciation expense is assessed.

This asset was exchanged for a payable to Xpress, Ltd, a related party, for
$500,000 owed to it under a sales and marketing contract for the sales of its
Orlando property units.

NOTE 10 - LONG-TERM DEBT AND NOTE PAYABLE

Below is a summary of Long-term debt and notes payable as of December 31, 2004
and 2003:

Maturity Interest
Collateral Date rate 2004 2003
--------------------- ------------ ----- ------------ -----------

Assets of the
Company and
Note Payable, Personal
Bank Guarantees 8/04 8.75% $ 1,454 $ 101,253

Note Payable,
Lending Personal
Institution Guarantees 3/31/04 8% 250,000 250,000

Note Payable,
Lending
Institution Company Assets 11/04 12% 9,528 44,415

Assets of the
Note Payable, Company and
Lending Personal
Institution Guarantees 11/04 4% 375,900 375,900

Equipment,
Third Party
Entities Equipment 3/31/05 18% 28,097 57,148

1st lien on 163
Financial acres of
Institution undeveloped land 4/1/05 12% 6,000,000 6,000,000

1st lien on 13.5
acres commercial
Individual property 10/11/04 16% 1,300,000 1,300,000

Lien on property,
Financial assets and stock of
Institution the company 12/18/2008 6% 6,140,964 2,976,457

Note payable,
Third Party Lien on assets 2/23/09 5% 5,000,000 -

Secured by
common stock of
Note payable, Around the World
Third Party Travel, Inc. 4/1/2011 4% 1,698,340 -

Lien on property,
Financial assets and stock of
Institution the company 4/22/07 8% 4,000,000 -

Lien on property,
Financial assets and stock of
Institution the company 9/1/2005 8% 1,250,000 -

Lien on property,
Financial assets and stock of
Institution the company 4/22/07 6% 255,000 -

Auto Loan Vehicle 3/10/09 9.39% 38,955 -

3rd lien on 163
acres of
Individual undeveloped land 3/31/05 12% 1,862,250 1,862,250
------------ -----------
28,210,488 12,967,423
Less: current portion of long-term debt (9,605,235) (5,048,025)
------------ -----------
Long-term debt $18,605,253 $ 7,919,398
============ ===========

Principal repayments for the next years are as follows:

Amount
-----------------
2005 $ 9,605,235
2006 -
2007 5,505,000
2008 6,000,000
2009 5,000,000
Thereafter 2,100,253
-----------------
$ 28,210,488
=================

-47-

NOTE 11 - NOTES PAYABLE - RELATED PARTIES

Maturity Interest
Collateral Date rate 2004 2003
---------------- ------ ----- ---------- ------------

Related Party Unsecured Demand 12% $ 140,042 $ 193,815

Related Party Unsecured Demand 12% 659,000 484,000

Related Party Unsecured Demand 12% 180,000 180,000

Related Party Unsecured Demand 12% 20,000 20,000

Related Party Unsecured Demand 12% 531,232 741,760

Affiliated 2nd lien on
entity 13.5 acres 5/1/07 4.75% - -

3rd lien on
163 acres of
Shareholder undeveloped land 5/1/05 12% - -

3rd lien on
163 acres of
Shareholder undeveloped land 5/1/05 12% 380,353 797,185
---------- ------------

1,910,629 2,416,760
- (1,619,575)
---------- ------------
$1,910,629 $ 797,185
========== ============

Principal repayments for next years are as follows:

Amount
2005 $1,910,629
==========

NOTE 12 - SHAREHOLDER ADVANCES

American Leisure has shareholder advances totaling $273,312 that bear
interest at 12%. The advances are unsecured and are due upon demand.

NOTE 13 - STOCKHOLDERS EQUITY AND MANDATORILY REDEEMABLE PREFERRED STOCK

Common Stock and Mandatory Redeemable Preferred Stock

In March, 2003, American Leisure issued 27,189 Mandatory Redeemable Series
C preferred stock and 114,000 shares of common stock for telecommunications
equipment valued at $2,850,000.

-48-

In October 2003, American Liesure issued 850,000 shares of restricted
Common Stock in connection with the acquisition of 50.83% of Hickory travel
Systems, Inc.

In March 2004, we issued 340,000 shares of restricted Common Stock in
connection with the acquisition of the Senior Debt of Traveleaders.

In June 2004, 600,000 warrants were exercised by holders at par value of
$.001 per share.

In August 2004, 1,350,000 warrants were exercised by holders at par value
of $.001 per share.

In April 2004, 24,101 shares of the Company's Series "E" Preferred Stock
were issued for the acquisition of the controlling interest in the Preferred
Stock of Around the World Travel.

In 2004, 98,991 shares were issued for services at $1.50 per share.

In November 2004, 325 shares of the Company's Series "B" Preferred Stock
were issued for $32,460 of telecommunications equipment.

In December 2004, 120,000 shares of the Company's Series "A" Preferred
Stock were issued for $1,200,000 of payables to a related party for the sales
and marketing agreement of the Orlando property.

Preferred Stock

American Leisure is authorized to issue up to 10,000,000 shares in aggregate of
preferred stock:

Annual
Total Series Stated Dividends Conversion
Authorized Value Voting per Share Rate

Series A 1,000,000 $ 10.00 Yes $1.20 10 to 1
Series B 100,000 100.00 Yes 12.00 20 to 1
Series C 28,000 100.00 Yes 4.00 20 to 1
Series E 50,000 100.00 Yes 4.00 6.66 to 1
Series F 150,000 100.00 Yes 1.00 2 to 1

Series A have voting rights equal to 10 common shares to 1 Series A
preferred share.

Series A are redeemable at the American Leisure's option after 10 years if
not converted by the holder. The conversion period is 10 years from the date of
issue.

Conversion is at 10 for 1 or if the market price is below $1.00 then the
average daily market price for the 10 consecutive trading days prior to
conversion.

Dividends are payable if funds are available. Accrued but unpaid dividends
do not pay interest.

Series B have voting rights equal to 20 common shares to 1 Series B
preferred share.

Series B are redeemable at the American Leisure's option after 5 years if
not converted by the holder. The conversion period is 5 years from the date of
issue.

Conversion is not less than 20 for 1 nor more than 12.5 for 1 based on the
market price.

-49-

Dividends are payable if funds are available. Accrued but unpaid dividends
do not pay interest.

Series C are redeemable after 5 years if not converted by the holder. The
conversion period expires 5 years from the date of issue.

Conversion is not less than 20 for 1 nor more than 12.5 for 1 based on the
market price.

Dividends are payable if funds are available. Accrued but unpaid dividends
do not pay interest

Warrants

In March 2004, the Company issued warrants to Bill Chiles, a director of
the Company, to purchase 168,672 shares of the Company's common stock at an
exercise price of $2.96 per share of common stock. Also, in March 2004, the
Company issued warrants to Malcolm Wright, a director of the Company and the
Company's Chief Executive Officer and Chief Financial Officer, to purchase
347,860 shares of the Company's common stock at an exercise price of $1.02 per
share of common stock. The Company issued the warrants to Messrs. Chiles and
Wright as consideration for their personal guarantees of the Company's debt and
pledges of their shares of the Company's stock to Stanford as part of the
security for the financing that Stanford provided to the Company. In addition,
Mr. Wright has personally guaranteed the Company's indebtedness of $6,000,000 to
Stanford. The Company is under a continued obligation to issue warrants at $1.02
to Messrs Chiles and Wright for guarantees they may be required to give on the
Company's behalf going forward.

During its years ended December 31, 2004 and 2003, the Company accrued
$1,248,331 and $1,083,025 of dividends, respectively, which are included in the
carrying value of the preferred stock in the accompanying consolidated balance
sheet.

NOTE 14 - INCOME TAXES

Deferred taxes are determined based on the temporary differences between
the financial statement and income tax bases of assets and liabilities as
measured by the enacted tax rates which will be in effect when these differences
reverse.

The components of deferred income tax assets (liabilities) at December 31, 2004
and 2003, were as follows:

2004 2003

Net operating loss carryforwards $ 2,200,000 $ 661,000
Valuation allowance (2,200,000) (661,000)
------------ ----------
Net deferred tax assets $ - $ -
============ ==========

At December 31, 2004, American Leisure had a net operating loss
carryforward for Federal income tax purposes totaling approximately $6,500,000
which, if not utilized, will expire in the year 2024.

At December 31, 2003, American Leisure had a net operating loss
carryforward for federal income tax purposes totaling approximately $2,556,000
which, if not utilized, will expire in the year 2023.

In June 2002, American Leisure had a change in ownership, as defined by
Internal Revenue Code Section 382, which has resulted in American Leisure's net
operating loss carryforward being subject to certain utilization limitations in
the future.

-50-

NOTE 15 - COMMITMENTS AND CONTINGENCIES

Lease Commitments

American Leisure had leased office space located in Tamarac, Florida
Through November 2007. The monthly base rental payment was $17,708. In June of
2004, the Company was able to terminate the lease.

American Leisure leases office facilities and reservation service center
equipment under non-cancelable operating lease agreements for a monthly base
rent of $14,838 through April 2008, and the reservation service center equipment
leases call for a monthly base rent of $6,461 through December 2005. Future
minimum rental payments are as follows:

December 31,

2005 255,588
2006 178,056
2007 178,056
2008 59,352
-------
671,052
========

-51-

Rent expense totaled $382,316 and $293,728 for 2004 and 2003, respectively.

Employment Agreements

The Company has various employment agreements with select members of their
management. These agreements provide for a base salary plus bonuses of up to 19%
of the profits of each subsidiary company based upon the Company's operating
earnings as defined in each agreement. These are currently verbal agreements and
will be documented in the near future.

LITIGATION

In the ordinary course of its business, the Company may from time to time
become subject to claims or proceedings relating to the purchase, subdivision,
sale and/or financing of its real estate or its operations. The Company believes
that substantially all of the above are incidental to its business.

We are a party in an action that was filed in Orange County, Florida and
styled as Rock Investment Trust, P.L.C. and RIT, L.L.C. vs. Malcolm J. Wright,
American Vacation Resorts, Inc., American Leisure, Inc., Inversora Tetuan, S.A.,
Sunstone Golf Resort, Inc., and Sun Gate Resort Villas, Inc., Case No.
CIO-01-4874, Ninth Judicial Circuit, Orange County, Florida. In June, 2001,
after almost 2 years from receiving notice from Malcolm Wright that one Mr.
Roger Smee, doing business under the names Rock Investment Trust, PLC (a British
limited company) and RIT, LLC (a Florida limited liability company)
(collectively, the Smee Entities) had defaulted under various agreements to loan
or to joint venture or to fund investment into various real estate enterprises
founded by Mr. Wright, the Smee Entities brought the Lawsuit against Mr. Wright,
American Leisure, Inc. (ALI) and several other entities. The gravamen of the
initial complaint is that the Smee Entities made financial advances to Wright
with some expectation of participation in a Wright real estate enterprise. In
general, the suit requests either a return of the Smee Entities alleged advances
of $500,000 or an undefined ownership interest in one or more of the defendant
entities. Mr. Wright, American Leisure, Inc., and Inversora Tetuan, S.A., have
filed a counterclaim and cross complaint against the Smee Entities and Mr. Smee
denying the claims and such damages in the amount of $10 million. If the court
rules that Mr. Wright is liable under his guarantee of the American Leisure,
Inc. obligation to Smee, it is believed that such a ruling would not directly
affect American Leisure Holdings, Inc. The litigation is in the discovery phase
and is not currently set for trial. We have been advised by our attorneys in
this matter that Mr. Wrights position on the facts and the law is stronger than
the positions asserted by the Smee Entities.

In March 2004, Manuel Sanchez and Luis Vanegas as plaintiffs filed a
lawsuit against American Leisure Holdings, Inc. American Access Corporation,
Hickory Travel Systems, Inc. Malcolm J. Wright and L. William Chiles, et al.,
seeking a claim for securities fraud, violation of Florida Securities and
Investor Protection Act, breach of their employment contracts, and claims for
fraudulent inducement. All defendants have denied all claims and have a
counterclaim against Manuel Sanchez and Luis Vanegas for damages. The litigation
commenced in March 2004 and will shortly enter the discovery phase and is not
currently set for trial. We believe that Manuel Sanchez and Luis Vanegas claims
are without merit and the claims are not material to us. We intend to vigorously
defend the lawsuit.

In February 2003, we and Malcolm J. Wright were joined in a lawsuit
captioned as Howard C. Warren v. Travelbyus, Inc., William Kerby, David Doerge,
DCM/Funding III, LLC, and Balis, Lewittes and Coleman, Inc. in the Circuit Court
of Cook County, Illinois, Law Division, which purported to state a claim against
us as a joint venturer with the primary defendants. The plaintiff alleged
damages in an amount of $5,557,195.70. On November 4, 2004, the plaintiff moved
to voluntarily dismiss its claim against us. Pursuant to an order granting the
voluntary dismissal, the plaintiff has one (1) year from the date of entry of
such order to seek to reinstate its claims.

In early May 2004, Around The World Travel, Inc. substantially all of the
assets of which we purchased, filed a lawsuit in the Miami-Dade Florida Circuit
Court against Seamless Technologies, Inc. and e-TraveLeaders, Inc. alleging
breach of contract and seeking relief that includes monetary damages and
termination of the contracts. They were granted leave to intervene as plaintiffs
in the original lawsuits against Seamless and e-TraveLeaders. On June 28, 2004,
the above named defendants brought suit against Around The World Travel and
American Leisure Holdings, Inc.in an action styled Seamless Technologies, Inc.
et al. v. Keith St. Clair et al. This suit alleges that Around The World Travel
has breached the contracts and also that American Leisure Holdings, Inc.and
Around The World Travels Chief Executive Officer were complicit with certain
officers and directors of Around The World Travel in securing ownership of
certain assets for American Leisure Holdings, Inc.that were alleged to have been
a business opportunity for Around The World Travel. This lawsuit involves
allegations of fraud against Malcolm J. Wright. The lawsuit filed by Seamless
has been abated and consolidated with the original lawsuit filed by Around The
World Travel. In a related matter, Seamlesss attorneys brought another action
entitled Peter Hairston v. Keith St. Clair et al. This suit mimics the
misappropriation of business opportunity claim, but it is framed within a
shareholder derivative action. The relief sought against American Leisure
Holdings, Inc. includes monetary damages and litigation costs. We intend to
vigorously support the original litigation filed against Seamless and defend the
counterclaim and allegations against us.

On May 4, 2005, Simon Hassine, along with members of his family, filed a
lawsuit against us and Around The World Travel in the Circuit Court of Dade
County, Florida, Civil Division, Case Number 05-09137CA. The plaintiffs are the
former majority shareholders of Around The World Travel and former owners of the
assets of TraveLeaders. The plaintiffs allege that that they have not been paid
for i) a subordinated promissory note in the principal amount of $3,550,000 plus
interest on such note which they allege was issued to them by Around The World
Travel in connection with their sale of 88% of the common stock of Around The
World Travel; and ii) subordinated undistributed retained earnings and accrued
bonuses in an aggregate amount of $1,108,806 which they allege were due to them
as part of the sale. The plaintiffs allege that the note was issued to them net
of $450,000 of preferred stock of Around The World Travel that they further
allege they never received. The plaintiffs also allege that in December 2004
they entered into a settlement agreement with the Company regarding these
matters. The plaintiffs are pursuing a claim of breach of the alleged settlement
agreement with damages in excess of $1,000,000, interest and costs as well as
performance under the alleged settlement agreement or, in the alternative, a
declaratory judgment that the promissory note, undistributed retained earnings
and accrued bonuses are not subordinated to the Galileo Debt and full payment of
the promissory note, undistributed retained earnings and accrued bonuses plus
prejudgment interest, stated interest on the note, costs and reasonable
attorneys fees. The plaintiffs are also pursuing a claim for breach of contract
regarding the preferred stock of Around The World Travel and seeking $450,000
plus interest, costs and reasonable attorneys fees. The plaintiffs are also
pursuing claims of fraudulent transfer regarding our acquisition of interests in
the debt and equity of Around The World Travel and seeking unspecified amounts.
We intend to vigorously defend the lawsuit. We have authorized our counsel to
file various motions including a motion to dismiss the complaint in its entirety
as against us and Malcolm J. Wright due to the failure by the plaintiffs to
comply with a provision in the underlying document that grants exclusive
jurisdiction to the courts located in Cook County, Illinois.

We are not aware of any proceeding to which any of our directors,
officers, affiliates or security holders are a party adverse to us
or have a material interest adverse to us.

-52-

NOTE 16 - EMPLOYEE BENEFITS

The Company's subsidiary, HTS, maintains a qualified 401(k) profit sharing
plan covering substantially all of its full time employees who have completed
ninety days of service. Eligible employees may voluntarily contribute a
percentage of their compensation up to established limits imposed by the
Internal Revenue Service. At the discretion of the Board of Directors, the
Company may make a matching contribution equal to a percentage of each
employee's contribution. There were no matching contributions made for the year
ended December 31, 2004.

NOTE 17 - SELF-INSURED HEALTH INSURANCE

The Company's subsidiary, HTS, is partially self-insured for benefits
provided under an employee health insurance plan through Great West Life
Insurance Company. Benefits include medical, prescription drug, dental and group
term life insurance. The plan provides for self-insurance up to $25,000 per
employee per year. Accordingly, there exists a contingent liability for
unprocessed claims in excess of those reflected in the accompanying consolidated
financial statements.

NOTE 18 - OPERATING SEGMENTS

The Company has adopted the provisions of SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information". At December 31, 2003, the
Company's three business units have separate management teams and
infrastructures that offer different products and services. The business units
have been aggregated into three reportable segments.

As noted in Note 6, American Leisure is planning to construct a 971-unit
resort in Orlando, Florida on 122 of its 163 acres of undeveloped land.
Development is scheduled to commence in the summer of 2005. Presales commenced
in February 2004.

American Leisure's operates a call center and revenues are recognized upon
the completion of the earning process from the completion of the travel of the
customer, the trip to the properties for the potential purchase, or the
appropriate event based on the agreement with American Leisure's client as to
the ability to be paid for the service.

Hickory Travel Systems, Inc. ("HTS") provides travel related services.

For the year ending December 31, 2004:

In (000's) Am. Leisure Call Center HTS Other Elim. Consol.
----------- ----------- ------- ------- --------- ---------

Revenue $ - $ 200 $ 6,046 $ - $ - $ 3,328
Segment income (loss) $ (1,455) $ (264) $ (938) $ (1,168) $ - $ (2,127)
Total Assets $ 16,751 $ 264 $ 3,347 $ - $ (3,309) $ 25,376
Capital expenditures $ 3,354 $ 283 $ 30 $ - $ - $ 4,460
Depreciation $ 716 $ 190 $ 4 $ - $ - $ 644

For the year ending December 31, 2003:

In (000's) Am. Leisure Call Center HTS Other Elim. Consol.
----------- ----------- ------- ------- --------- ---------

Revenue $ - $ 496 $ 2,832 $ - $ - $ 3,328
Segment income (loss) $ (1,455) $ 12 $ 484 $(1,168) $ - $ (2,127)
Total Assets $ 16,751 $ 7,542 $ 4,392 $ - $ (3,309) $ 25,376
Capital expenditures $ 3,249 $ 1,181 $ 30 $ - $ - $ 4,460
Depreciation $ 2 $ 638 $ 4 $ - $ - $ 644

The accounting policies of the reportable segments are the same as those
described in Note 2. The Company evaluates the performance of its operating
segments based on income before net interest expense, income taxes, depreciation
and amortization expense, accounting changes and non-recurring items.

-53-

Note 19 - RELATED PARTY TRANSACTIONS

We accrue salaries payable to our Chief Executive Officer, President and
Chief Financial Officer, Malcolm J. Wright. As of December 31, 2004, the
aggregate amount of unpaid salaries payable to Mr. Wright was $1,000,000. The
Company accrues interest at a rate of 12% compounded annually on the salaries
payable to Mr. Wright. As of December 31, 2004, the aggregate amount of interest
accrued on salaries payable to Mr. Wright was $105,000.

In May 2004, we began accruing $100,000 per year as salaries payable to L.
William Chiles, the President of Hickory, for his services. Mr. Chiles also
receives paid compensation for his services from Hickory. As of December 31,
2004, the aggregate amount of salaries payable to Mr. Chiles was $66,400. The
Company does not accrue interest on the salaries payable to Mr. Chiles.

We pay or accrue directors' fees to each of our directors in an amount of
$18,000 per year for their services as directors. During the last two fiscal
years the Company paid an aggregate of $66,000 to directors and accrued an
aggregate of $114,000.

The Company entered into an agreement with Mr. Wright and Mr. Chiles
whereby the Company agreed to indemnify Mr. Wright and Mr. Chiles against all
losses, costs or expenses relating to the incursion of or the collection of the
Company's indebtedness against Mr. Wright or Mr. Chiles or their collateral.
This indemnity extends to the cost of legal defense or other such reasonably
incurred expenses charged to or assessed against Mr. Wright or Mr. Chiles. In
the event that Mr. Wright or Mr. Chiles make a personal guarantee for the
Company's benefit in conjunction with any third-party financing, and Mr. Wright
or Mr. Chiles elect to provide such guarantee, then Mr. Wright and/or Mr. Chiles
shall earn a fee for such guarantee equal to three per cent (3%) of the total
original indebtedness and two per cent (2%) of any collateral posted as
security. This fee is to be paid by the issuance of warrants to purchase the
Company's common stock at a fixed strike price of $1.02 per share, when the debt
is incurred. Mr. Wright personally guaranteed (the "Guarantees") the Company's
$6,000,000 Credit Facility from Stanford. In addition, Mr. Wright pledged to
Stanford 845,733 shares of the Company's common stock held by Mr. Wright. L.
William Chiles had personally guaranteed $2,000,000 of the $6,000,000 Credit
Facility and pledged to Stanford 850,000 shares of the Company's common stock
held by Mr. Chiles. Stanford released Mr. Chiles from the personal guarantee
and released his common stock from the pledge when the Company closed the
$6,000,000 Credit Facility. In March 2004, the Company authorized the issuance
of warrants to Mr. Wright and Mr. Chiles to purchase 347,860 shares and 168,672
shares, respectively, of our common stock at an exercise price of $2.96 per
share, which was subsequently reduced to $1.02 per share of common stock.

The Company has generally agreed to provide the executive officers of each
of its subsidiaries a bonus of up to 19% of the profits, if any, of the
subsidiary in which they serve as our executive officers. The bonus will be paid
for the five-year period beginning on the date that the Company enters into such
an agreement with the subsidiary. Pursuant to this general agreement, Malcolm J.
Wright is entitled to receive up to 19% of the profits of Leisureshare
International Ltd, Leisureshare International Espanola SA, TDSR, American
Leisure Homes, Inc., Advantage Professional Management Group, Inc., and American
Leisure Hospitality Group Inc. and any new company formed for the development
and sale of vacation homes, hospitality management, and vacation ownership . L.
William Chiles is entitled to receive 19% of the profits of Hickory up to a
maximum payment of $2,700,000. Although Mr. Chiles' bonus is limited, it is not
subject to the buy-out by the Company as discussed below as it will cease as
soon as the $2,700,000 amount has been paid to him . The executive officers of
other the Company's other subsidiaries are entitled to share a bonus of up to
19% of the profits of the subsidiary in which they serve as our executive
officers. The Company has the right to buy-out of these agreements after a
period of five years by issuing such number of shares of its common stock equal
to the product of 10% of the average after-tax profits for the five-year period
multiplied by one-third (1/3) of the P/E ratio of the Company's common stock at
the time of the buyout divided by the greater of the market price of the
Company's common stock or $5.0. The Company has not paid or accrued any bonus as
of the filing of this report.

-54-

Malcolm J. Wright is the President and 81% majority shareholder of American
Leisure Real Estate Group, Inc. (ALRG). On November 3, 2003 TDSR, entered into
an exclusive development agreement with ALRG to provide development services for
the development of the Sonesta Orlando Resort. Pursuant to this development
agreement, ALRG is responsible for all development logistics and TDSR is
obligated to reimburse ALRG for all of ALRG's costs and to pay ALRG a
development fee in the amount of 4% of the total costs of the project paid by
ALRG. During the fiscal year ended December 31, 2004, ALRG administered
operations and paid bills in the amount of $3,543,784 and received a fee of 4%
(or approximately $141,751) under the development agreement.

Malcolm J. Wright and members of his family are the majority shareholders
of Xpress. On November 3, 2003, TDSR entered into an exclusive sales and
marketing agreement with Xpress to sell the units being developed by TDSR. This
agreement provides for a sales fee in the amount of 3% of the total sales prices
received by TDSR plus a marketing fee of 1.5%. During the period since the
contract was entered into and ended December 31, 2004 the total sales made by
Xpress amounted to approximately $173,979,572. As a result of the sales, TDSR is
obligated to pay Xpress a total sales fee of $5,219,387 and a marketing fee of
$2,609,693. As of December 31, 2004, the Company has paid Xpress $2,103,534 of
cash, issued Xpress 120,000 shares of Series A Preferred Stock valued at
$1,200,000, and transferred to Xpress a 1913 Mercedes Benz valued at $500,000.
In February 2004, Malcolm J. Wright, individually and on behalf of Xpress, and
Roger Maddock, individually and on behalf of Arvimex, entered into contracts
with TDSR to purchase an aggregate of 32 townhomes for $8,925,120 and paid a
deposit of $892,512.

M J Wright Productions, Inc., of which Mr. Wright is the President, owns
our Internet domain names.

The Company and Mr. Wright have agreed to terms in principle of an
employment agreement pursuant to which Mr. Wright will serve as our Chief
Executive Officer and Chief Financial Officer. The Company will provide the
terms of a definitive employment agreement in a future filing with the
Commission.

Thomas Cornish, a director nominee, is the President of the Seitlin
Insurance Company. The Board of Directors has authorized Seitlin to place a
competitive bid to provide insurance for the Sonesta Orlando Resort. Mr.
Cornish has provided consulting services to the Company valued at $1,500.

David Levine, a director nominee, has provided consulting services to the
Company valued at $3,000.

Malcolm Wright and members of his family are the majority shareholders of
Xpress Ltd. ("Xpress") a shareholder of the Company. On November 3, 2003, TDSR
entered into an exclusive sales and marketing agreement with Xpress to sell the
units being developed by TDSR. This agreement provides for a sales fee in the
amount of 3% of the total sales prices received by TDSR plus a marketing fee of
1.5%. During the period since the contract was entered into and ended December
31, 2004 the total sales amounted to approximately $173,979,572. As a result
of the sales, TDSR is obligated to pay Xpress a fee of $2,609,694.

As of December 31, 2004, Xpress has been paid approximately $2,100,000 in
cash, and tendered the 1913 Mercedes-Benz for $500,000.

The Company also issued 120,000 shares of Series A preferred stock valued
at $1,200,000 for accounts payable and debt.

-55-

NOTE 20 - RESTATEMENT

American Leisure has corrected its financial statements to include the
accrual of dividends on its preferred stock. American Leisure increased the
carrying value of the preferred stock $2,922,480 and $1,674,148 and increased
the accumulated deficit $(2,922,480) and $(1,674,148) at December 31, 2004 and
2003, respectively. The preferred stock dividend increased the loss available
to common stockholders $(1,248,331) and $(1,083,025) for the year ended December
31, 2004.

A summary of the restatement is as follows:

As previously Increase As
reported (Decrease) Restated
------------ ------------ -------------

At December 31, 2004
Balance sheet:
Additional paid-in capital $15,636,322 $ 2,922,480 $ 18,558,802
Accumulated deficit $(9,372,641) $(2,922,480) $(12,295,121)

Year ended
December 31, 2004:
Statements of Operations:
Preferred stock dividend $ - $(1,248,331) $ (1,248,331)
Net loss available to
common stockholders $(6,634,301) $(1,248,331) $ (7,882,632)

At December 31, 2003
Balance sheet:
Additional paid-in capital $ 6,166,488 $ 1,674,148 $ 7,840,636
Accumulated deficit $(2,738,340) $(1,674,148) $ (4,412,488)

Year ended
December 31, 2003:
Statements of Operations:
Preferred stock dividend $ - $(1,083,025) $ (1,083,025)
Net loss available to
common stockholders $(2,126,850) $(1,083,025) $ (3,209,875)

-56-

NOTE 21 - SUBSEQUENT EVENTS

SALE OF LAND HELD FOR DEVELOPMENT
---------------------------------

The Company, as discussed in Note 6, owned 13.67 acres of commercial land
in Davenport, Polk County, Florida. The Company was holding this land for future
development.

On March 4, 2005, the Company sold this land for $4,020,000, plus
reimbursement of certain costs in the amount of $157,219.

The Company after paying certain closing costs, commissions, the first deed
of trust on the property, received $2,724,090 in cash from the sale of the
property.

JOINT VENTURE MARKETING AGREEMENT-ANTIGUA FACILITY
------------------------------------------------------

The Company in early 2005, signed a Joint Venture Operating Agreement for
its' Antigua state of the art call center and contact center facility.

The Company, through one of its' majority owned subsidiaries, formed an
Operating corporation to be known as Caribbean Media Group, Ltd, pursuant to the
Companies Act of Barbados. The Company's subsidiary will own 39.69% of this
joint venture company.

As part of the agreement, the Company provided $100,000 in start-up funding
and agreed to transfer another $100,000 into the joint venture operating account
when the account balance is less than $25,000. Additionally, it will maintain
the equipment it owns and maintain the facility that the Company currently
leases.

-57-

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Effective August 25, 2004, the client auditor relationship between us and
Bateman & Co., Inc., P.C. ceased as the former principal independent accountant
was dismissed. On that date, our Board of Directors approved a change of
accountants and the Company's management engaged Lopez, Blevins, Bork &
Associates, LLP as our principal independent public accountant for the fiscal
year ended December 31, 2004. Prior to that, we had engaged Bateman on August
16, 2004 and dismissed Malone & Bailey, PLLC as our principal independent
accountant on August 17, 2004. In both cases, the decision to change principal
independent accountants was approved by our Board of Directors. Bateman had
been engaged when the audit partner in charge of our account left Malone to join
Bateman. The audit partner left Bateman and joined Lopez. We reported the
change of auditors from Bateman to Lopez on Form 8-K filed with the Commission
on March 28, 2005. We reported the change of auditors from Malone to Bateman on
Form 8-K filed with the Commission on August 18, 2004.

Lopez is succeeding Bateman who succeeded Malone. Malone audited our
balance sheet as of December 31, 2002 and December 31, 2003, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the period from June 14, 2002 (Inception) through December 31, 2002, and the
fiscal year ended December 31, 2003. Malone's report on our financial statements
for the period from June 14, 2002 (Inception) through December 31, 2002, and the
fiscal year ended December 31, 2003, did not contain any adverse opinion or
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope or accounting principles except for concerns about our ability to continue
as a going concern.

In connection with the audit of our financial statements for the period
from June 14, 2002 (Inception) through December 31, 2002, and the fiscal year
ended December 31, 2003, and any later interim period, including the interim
period up to and including the date the relationship with Malone ceased, there
were no disagreements with Malone on any matters of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreement(s), if not resolved to the satisfaction of Malone would have caused
Malone to make reference to the subject matter of the disagreement(s) in
connection with its report on our financial statements. There were no reportable
events as defined in Item 304(a)(1)(iv)(B) of Regulation S-B during the period
from June 14, 2002 (Inception) through December 31, 2002, and the fiscal year
ended December 31, 2003, and any later interim period, including the interim
period up to and including the date the relationship with Malone ceased.

Bateman reviewed our interim financial statements included in the Form
10-QSB filed with the Commission on August 20, 2004. During the interim period
beginning August 16, 2004 (the date that we engaged Bateman) up to and including
the date that the relationship with Bateman ceased, there were no disagreements
with Bateman on any matters of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement(s), if
not resolved to the satisfaction of Bateman would have caused Bateman, if
Bateman had issued a report on our financial statements, to make reference to
the subject matter of the disagreement(s) in connection with such report. There
have been no reportable events as defined in Item 304(a)(1)(iv)(B) of Regulation
S-B during the interim period up to and including the date the relationship with
Bateman ceased.

We authorized Malone and Bateman to respond fully to any inquiries of any
new auditors hired by us relating to their engagement as our principal
independent accountant. We requested that Malone review the disclosure in the
report on Form 8-K filed with the Commission on August 18, 2004, and Malone was
given an opportunity to furnish us with a letter addressed to the Commission
containing any new information, clarification of our expression of its views, or
the respect in which it did not agree with the statements made by us therein.
Such letter was filed as an exhibit to such report on Form 8-K. We requested
that Bateman review the disclosure in the report on Form 8-K filed with the
Commission on March 28, 2005, and Bateman was given an opportunity to furnish us
with a letter addressed to the Commission containing any new information,
clarification of our expression of its views, or the respect in which it did not
agree with the statements made by us therein. Such letter was filed as an
exhibit to such report on Form 8-K.

-58-

We did not previously consult with Bateman regarding either (i) the
application of accounting principles to a specified transaction, either
completed or proposed; or (ii) the type of audit opinion that might be rendered
on our financial statements; or (iii) any matter that was either the subject
matter of a disagreement (as defined in Item 304(a)(1)(iv)(A) of Regulation S-B)
between us and Malone, our previous principal independent accountant, as there
were no such disagreements, or an other reportable event (as defined in Item
304(a)(1)(iv)(B) of Regulation S-B) during the period from June 14, 2002
(Inception) through December 31, 2002, and the fiscal year ended December 31,
2003, and any later interim period, including the interim period up to and
including the date the relationship with Malone ceased. Neither have we received
any written or oral advice concluding there was an important factor to be
considered by us in reaching a decision as to an accounting, auditing, or
financial reporting issue.

We did not previously consult with Lopez regarding either (i) the
application of accounting principles to a specified transaction, either
completed or proposed; or (ii) the type of audit opinion that might be rendered
on our financial statements; or (iii) any matter that was either the subject
matter of a disagreement (as defined in Item 304(a)(1)(iv)(A) of Regulation S-B)
between us and Bateman or Malone, our previous principal independent
accountants, as there were no such disagreements, or an other reportable event
(as defined in Item 304(a)(1)(iv)(B) of Regulation S-B) during the interim
period up to an including the date the relationship with Bateman ceased, or the
period from June 14, 2002 (Inception) through December 31, 2002, and the fiscal
year ended December 31, 2003, and any later interim period, including the
interim period up to and including the date the relationship with Malone ceased.
Neither have we received any written or oral advice concluding there was an
important factor to be considered by us in reaching a decision as to an
accounting, auditing, or financial reporting issue.

We requested Bateman review the disclosure in the report on Form 8-K before
it was filed with the Commission on August 18, 2004, and provided Bateman the
opportunity to furnish us with a letter addressed to the Commission containing
any new information, clarification of our expression of its views, or the
respects in which Bateman did not agree with the statements made by us in such
report. Bateman did not furnish a letter to the Commission. We requested Lopez
review the disclosure in the report on Form 8-K before it was filed with the
Commission on March 28, 2005, and provided Lopez an opportunity to furnish us
with a letter addressed to the Commission containing any new information,
clarification of our expression of its views, or the respects in which Lopez did
not agree with the statements made by us in such report. Lopez did not furnish a
letter to the Commission.

ITEM 8A. CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures. Our Chief Executive
Officer and Chief Financial Officer, after evaluating the effectiveness of the
Company's "disclosure controls and procedures" (as defined in the Securities
Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period
covered by this annual report (the "Evaluation Date"), has concluded that as of
the Evaluation Date, our disclosure controls and procedures are effective.
However, because we have not fully integrated our administrative operations, we
face increased pressure related to recording, processing, summarizing and
reporting consolidated financial information required to be disclosed by us in
the reports that we file or submit under the Exchange Act in a timely manner as
well as accumulating and communicating such information to our management,
including our Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure. We believe
that until we have fully integrated our administrative operations, we will
continue to face such pressure regarding the timeliness of our filings as
specified in the Commission's rules and forms which could lead to a future
determination that our disclosure controls and procedures are not effective as
of a future evaluation date.

Changes in internal control over financial reporting. There were no
significant changes in the Company's internal control over financial reporting
during the fourth fiscal quarter that materially affected, or are reasonably
likely to materially affect, the Company's internal control over financial
reporting.

-59-

ITEM 8B. OTHER INFORMATION.

Form 8-K, Item 5.03, Departure of Directors or Principal Officers; Election of
--------------------------------------------------------------------------------
Directors; Appointment of Principal Officers.
-------------------------------------------------

The Company filed a Form 8-K with the Commission on February 15, 2005,
which disclosed that the Company's Board of Directors appointed David Levine,
Thomas Cornish and Carlos "Charles" J. Fernandez as Directors of the Company to
fill vacancies on the Board of Directors created by the resignation of Gillian
Wright and an increase in the number of members on the Board of Directors from
four to nine. This disclosure under Item 8B is being provided to clarify that
Messrs. Levine, Cornish and Fernandez are director nominees and have not yet
accepted directorship. L. William Chiles continues to serve as Chairman of the
Board until Mr. Levine is inducted into such position, which induction is
anticipated by the Company.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

OFFICERS AND DIRECTORS

Our executive officers and directors, and their ages and positions are as
follows:

NAME AGE TITLE
------------------- --- ----------------------------------------------

Malcolm J. Wright 54 Chief Executive Officer, President, Secretary,
Chief Financial Officer and Director

L. William Chiles 63 Director

James Leaderer 51 Director

BIOGRAPHICAL INFORMATION

Current Directors
------------------

MALCOLM J. WRIGHT is the driving force behind our business model, has
served as our President, Secretary, Chief Executive Officer and Chief Financial
Officer and as a member of our Board of Directors since June 2002, and as our
Chief Executive Officer since May 2004. Prior to joining us, Mr. Wright
successfully developed vacation properties abroad that are similar to the ones
planned at The Sonesta Orlando Resort at Tierra del Sol. Since 1998, Mr. Wright
served as the President of American Leisure Inc, which we acquired in June 2002.
Mr. Wright currently serves as the President of American Leisure Real Estate
Group, Inc., a real estate development company with which we have contracted for
the development of the resort, Xpress Ltd., with which we contracted for the
exclusive sales and marketing for resort, Innovative Concepts, Inc., which
operates a landscaping business, M J Wright Productions, Inc., which owns our
Internet domain names, and Resorts Development Group, LLC, which engages in real
estate development. Mr. Wright is also the President of Osceola Business
Managers, Inc., Florida World, Inc. and SunGate Resort Villas, Inc. which do not
currently conduct any business operations. Since 1980, Mr. Wright has spent a
considerable amount of time and money in establishing a large and effective
marketing network in the United Kingdom and parts of Europe, that has been
responsible for the pre-sales at The Sonesta Orlando Resort at Tierra del Sol
Mr. Wright was admitted to Associate Membership of the Institute of Chartered
Accountants in England & Wales in 1974 and admitted to Fellowship of the
Institute of Chartered Accountants in England & Wales in 1978.

-60-

L. WILLIAM CHILES has served as a member of our board of directors since
June 2002. Mr. Chiles served as our Chief Executive Officer from August 2002 to
May 2004. Since August 1998, Mr. Chiles has served as the Chief Executive
Officer and President of Hickory Travel Systems, Inc., which we acquired in
October 2003. Mr. Chiles received a Masters degree in marketing and finance from
the University of Colorado and a Bachelors degree in business administration
from Colorado State University. Mr. Chiles has specialized education in
management. He is a Member of the Young Presidents Organization, the Chicago
Presidents Organization and the Minister ARC Advisory Board.

JAMES LEADERER has served as a member of our board of directors since May
2002, and served as our President, Chief Executive Officer, Treasurer and
Secretary from May 2002 to July 2002. From January 1999 to November 2003, Mr.
Leaderer served as the General Principal of Momentum Securities. Mr. Leaderer
received a Bachelor of Science degree in engineering from Syracuse University.

Our Advisory Board and Our Director Nominees
--------------------------------------------------

We have an advisory board consisting of Charles J. Fernandez and T. Gene
Prescott. The members of our advisory board provide us with general corporate
and business advice. Thomas Cornish and David Levine have served on our
advisory board. Our board of directors, via signed written consent, has
nominated Thomas Cornish, Charles J. Fernandez and David Levine to serve as
directors; however, they have not accepted directorship as of the filing of this
report and we do not currently have plans for them to come onto our board of
directors.

CHARLES J. FERNANDEZ, age 67, has been nominated as a director. He has
served on our advisory board since February 2005. Since June 2004, Mr.
Fernandez has been a self-employed Financial Consultant. Mr. Fernandez worked
for the public accounting firm of KPMG in various capacities for over 37 years.
From May 1994 until his second retirement in May 2004, Mr. Fernandez served KPMG
as Managing Director and held other responsibilities within the Audit,
Transaction Services and Forensic and Litigation Support groups. Mr. Fernandez
had previously been an audit partner with KPMG from July 1971 through October
1991, when he took voluntary early retirement. Mr. Fernandez is a Certified
Public Accountant licensed in Florida. Mr. Fernandez is a member of the AICPA,
FICPA, Florida International Bankers Association, Florida International
University Board of Trustees, International Center of Florida, Cuban Banking
Study Group, Dade Marine Institute, and Greater Miami Chamber of Commerce. Mr.
Fernandez received a Bachelors degree in accounting from the University of
Florida. We anticipate that Mr. Fernandez will serve as an audit committee
financial expert on an audit committee which we anticipate forming shortly after
Mr. Fernandez has been duly elected and qualified.

T. GENE PRESCOTT, age 62, has served on our advisory board since July 2004.
Mr. Prescott is Chairman and Owner of Seaway Two Corp, a hospitality business,
located in Coral Gables Florida, and has served in these capacities since 1979.
Mr. Prescott received a bachelor's degree in accounting from The University of
Ohio in 1965. Mr. Prescott attended Carnegie Mellon from 1965 to 1967. Mr.
Prescott is a director and the Treasurer of the Miami Dade Expressway Authority
and a director of Miami Children's Hospital. Mr. Prescott is a member of the
Orange Bowl Committee, various chambers of commerce and the Coral Gables
Foundation.

There are no family relationships among our directors, executive officers
or persons nominated to become directors or executive officers.

We are not aware of the occurrence during the last five years of any events
described in Item 401(d) of Regulation S-B under the Securities Act regarding
our directors, persons nominated to become directors, executive officers, or
control persons.

-61-

TERM OF OFFICE

Our directors are appointed for an initial term of three years followed.
Our officers are appointed by our board of directors and hold office until
they are removed by the board or they resign.

AUDIT COMMITTEE

We do not have an audit committee or an audit committee financial expert.
We expect the nomination and acceptance of several directorships in the future.
We anticipate that we will form an audit committee when new members join our
board of directors, and anticipate that one of them will serve as an independent
audit committee financial expert.

COMPENSATION COMMITTEE

We do not have a compensation committee. We expect the nomination and
acceptance of several directorships in the future. We anticipate that we will
form a compensation committee when new members join our board of directors.

COMPENSATION OF DIRECTORS

We pay or accrue $18,000 per year for each person who serves on the board
of directors. During the last two fiscal years we paid an aggregate of $66,000
to directors and accrued an aggregate of $114,000.

We granted to each of Malcolm J. Wright and L. William Chiles warrants to
purchase 100,000 shares (or an aggregate of 200,000 shares) of our common stock
at an exercise price of $1.02 per share for their services. Warrants to
purchase 75,000 shares have vested to each of them. Warrants to purchase the
remaining 25,000 shares will vest to each of them on their next anniversary
dates as Directors, provided that they are still serving as Directors. They may
exercise the warrants for a period of five years from the dates on which such
warrants vest.

CODE OF ETHICS

The Company has adopted a code of ethics that applies to the Company's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions. The Company
will provide to any person without charge, upon request, a copy of such code of
ethics. Persons wishing to make such a request should do so in writing to the
Secretary at American Leisure Holdings, Inc., Park 80 Plaza East, Saddle Brook,
New Jersey, 07663.

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth information regarding the compensation that
we paid to our Chief Executive Officer and each of our four other most highly
compensated executive officers during the three years ended December 31, 2004.
We refer to these officers in this report as the named executive officers.

SUMMARY COMPENSATION TABLE

Annual Compensation (1) Long Term Compensation (2)
Awards
Restricted Securities
Other annual Stock Underlying
Salary Bonus compensation award(s) Options/SARs
Name and Principal Position Year ($) ($) ($) ($) (#)

Malcolm J. Wright 2004 $578,000(3) -- -- -- 347,860 (5)
Chief Executive Officer, 2003 $313,000(3) -- -- -- --
President, Secretary, Chief 2002 $268,000(3) -- -- -- --
Financial Officer and Director

L. William Chiles 2004 $270,902(4) -- -- -- 168,672 (5)
Our Chairman and the Chief 2003 $168,579(4) -- -- -- --
Executive Officer of Hickory
Travel Systems, Inc.

-62-

(1) Does not include perquisites and other personal benefits in amounts
less than 10% of the total annual salary and other compensation.
(2) There are no stock option, retirement, pension, or profit sharing
plans for the benefit of our officers and directors; however, see Footnote
5 to this table, below.
(3) Includes $500,000, $250,000 and $250,000 of accrued salary for Mr.
Wright's services as an executive officer for 2004, 2003 and 2002,
respectively, $60,000 and $45,000 of accrued interest on salaries payable
in 2004 and 2003, respectively, at 12% per annum, compounded annually, and
$18,000 of accrued director compensation per year for Mr. Wright's services
as a director of the Company for 2004, 2003 and 2002. We pay $940 per month
and related expenses to provide Mr. Wright with business use of a motor
vehicle.
(4) Includes $152,902 and $150,579 of salary paid to Mr. Chiles for his
services as an executive officer of Hickory for 2004 and 2003,
respectively, $100,000 of accrued salary for 2004, and $18,000 of accrued
director compensation per year for his services as a director for 2004,
2003 and 2002. Mr. Chiles is provided a new insured automobile for his use
during the term of his employment with Hickory, which vehicle shall have an
approximate value of $80,000.
(5) In March 2004, pursuant to a debt guarantor agreement, we authorized
the issuance of warrants to Mr. Wright and Mr. Chiles to purchase 347,860
shares and 168,672 shares, respectively, of our common stock at an exercise
price of $2.96 per share, which was subsequently reduced to $1.02 per share
of common stock.

EMPLOYMENT AGREEMENTS

Mr. Wright and we are negotiating an employment agreement pursuant to which
Mr. Wright will serve as our President, Chief Executive Officer and Chief
Financial Officer.

On May 18, 2004, entered into a three-year employment agreement with L.
William Chiles to serve as Chairman of our board of directors and a separate
three-year employment agreement for him to serve as the President and Chief
Executive Officer of Hickory Travel Systems, Inc. The agreements provide that
Mr. Chiles will receive a base salary of $100,000 for his services as our
Chairman and $150,000 for his services as the President and Chief executive
Officer of Hickory. Under each agreement, Mr. Chiles is eligible to receive an
annual incentive-based bonus based on his achievement of goals and objectives
that he and our board of directors agree upon. Mr. Chiles is entitled to one
and one-half weeks of vacation at two times his base salary rate per week per
$50,000 of his base salary for his services as Chairman and $75,000 of his base
salary for his services as President and Chief Executive Officer of Hickory.
Mr. Chiles is also entitled to share in the profits of Hickory in an amount not
to exceed $2,700,000 over the life of his employment agreement with Hickory.
Hickory is required to provide Mr. Chiles with key man life insurance equal to
eight times his base salary; however, neither we nor Hickory have obtained such
policy as of the date of this report. Hickory is also required to provide Mr.
Chiles with one insured automobile having a value of $80,000 every year of his
employment agreement. If Mr. Chiles is terminated without cause, under each
agreement, he will receive thirty-six months' base salary and any
incentive-based bonus that otherwise would have been payable to him through the
date that we terminate his employment. We do not have an obligation to pay base
salary or incentive-based bonus to Mr. Chiles under either agreement if he
voluntarily terminates his employment or he is terminated for cause. For
purposes of these employment agreements, "cause" means the following activities:

- Use of alcohol, narcotics or other controlled substances that
prevent him from efficiently performing his duties;
- Disclosure of confidential information or competes against us in
violation of the employment agreements;

-63-

- Theft, dishonesty, fraud, or embezzlement from us or a violation
of the duty of loyalty to us;
- If Mr. Chiles is directed by a regulatory or governmental
authority to terminate his employment with us or engages in activities
that cause actions to be taken by regulatory or government
authorities, that have a material adverse effect on us;
- Conviction of a felony (other than a felony resulting in a
traffic violation) involving any crime of moral turpitude or any crime
involving us;
- Sexual harassment or sexually inappropriate behavior;
- Materially disregards duties under the employment agreements;
- Egregious misconduct or pattern of conduct;
- Entering into enforceable commitments on our behalf without
conforming to our policies and procedures or in violation of any of
our directives.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

The following table sets forth information as of July 6, 2005, with respect
to the beneficial ownership of our common stock by (i) each director and officer
of the Company, (ii) all directors and officers as a group and (iii) each person
known by the Company to own beneficially 5% or more of our common stock:

COMMON STOCK
BENEFICIALLY OWNED(1)
--------------------------------
NAME AND ADDRESS NUMBER PERCENT
------------------------------------------------ ---------------------- --------

Roger Maddock 7,767,616 (2) 50.3%

Arvimex, Inc. 7,122,268 (3) 47.0%

Malcolm J. Wright 6,015,841 (4) 41.3%

Stanford International Bank Limited 3,608,233 (5) 30.6%

Xpress, Ltd. 4,069,942 (6) 30.2%

L. William Chiles 1,093,672 (7) 10.3%

James Leaderer 10,000 *

Thomas Cornish 50,000 (8) *

Charles J. Fernandez 50,000 (9) *

David Levine 50,000 (8) *

All officers and directors as a group (3 people) 7,119,513 (4) (7)(10) 48.1%

*Less than 1%.

(1) The number of shares of common stock owned are those "beneficially
owned" as determined under the rules of the Commission, including any
shares of common stock as to which a person has sole or shared voting or
investment power and any shares of common stock which the person has the
right to acquire within sixty (60) days through the exercise of any option,
warrant or right. As of July 6, 2005, there were 10,137,974 shares of
common stock outstanding.

-64-

(2) Includes 345,348 shares of common stock and 30,000 shares of Series A
preferred stock, which are convertible into 300,000 shares of common stock,
owned directly by Mr. Maddock, 2,102,268 shares of common stock owned
directly by Arvimex, 475,000 shares of Series A preferred stock owned
directly by Arvimex which are convertible into 4,750,000 shares of common
stock, and a warrant to purchase 270,000 shares of common stock at an
exercise price of $1.02 per share owned by Arvimex and exercisable within
the next sixty days. Mr. Maddock is the President of Arvimex and
beneficially owns the shares of common stock, Series A preferred stock and
warrants owned by Arvimex.
(3) Includes 2,102,268 shares of common stock and 475,000 shares of Series
A preferred stock, which are convertible into 4,750,000 shares of common
stock, owned directly by Arvimex, and a warrant to purchase 270,000 shares
of common stock at an exercise price of $1.02 per share, which may be
exercised by Arvimex within the next sixty days. Roger Maddock is the
President of Arvimex and the beneficial owner of the securities owned by
Arvimex.
(4) Includes 845,733 shares of common stock and 55,000 shares of Series A
preferred stock, which are convertible into 550,000 shares of common stock,
owned directly by Mr. Wright, 719,942 shares of common stock owned directly
by Xpress Ltd., 335,000 shares of Series A preferred stock owned directly
by Xpress which are convertible into 3,350,000 shares of common stock,
27,306 shares of common stock and 10,000 shares of Series A preferred
stock, which are convertible into 100,000 shares of common stock, owned
directly by Mr. Wright's daughter who resides in the same household as Mr.
Wright, and warrants to purchase 422,860 shares of common stock at an
exercise price of $1.02 per share, which may be exercised by Mr. Wright
within the next sixty days. Mr. Wright is the President of Xpress and
beneficially owns the shares of common stock and Series A preferred stock
owned by Xpress. Mr. Wright has pledged 845,733 shares of common stock to
Stanford as collateral for an aggregate of $6,000,000 of financing that
Stanford has provided to us. Mr. Wright disclaims beneficial ownership of
302,000 shares of common stock owned directly by James Hay Trustees, Ltd.
as Mr. Wright does not have voting or investment power over these shares,
which the trust is holding for the benefit of Mr. Wright's children.
(5) Includes 1,125,000 shares of common stock and 23,850 shares of Series
C preferred stock which are convertible into 477,000 shares of common
stock, owned directly by Stanford, 200,000 shares of common stock issuable
upon the exercise of warrants at $5.00 per share, 960,500 shares issuable
upon conversion of convertible promissory notes and 845,733 shares pledged
by Malcolm J. Wright, but does not include the shares of common stock
directly owned by four Stanford employees or shares issuable upon exercise
of the warrants owned by them, as there are no contracts, agreements or
understandings pursuant to which Stanford has or shares voting power, which
includes the power to vote, or direct the voting of, or investment power,
which includes the power to dispose or direct the disposition of, in
connection with the shares of the four Stanford employees. Stanford
International Bank Limited received the securities of which it is the
beneficial owner from R. Allen Stanford who received them from Stanford
Venture Capital Holdings, Inc. as set forth in an Assignment and Assumption
Agreement, filed as Exhibit 10.1 to Schedule 13D by Stanford
International Bank Limited on July 15, 2005. A reference in this report
related to ownership of these securities by Stanford relates to Stanford
International Bank Limited.
(6) Includes 719,942 shares of common stock and 335,000 shares of Series A
preferred stock, which are convertible into 3,350,000 shares of common
stock, owned directly by Xpress. Malcolm J. Wright is the President of
Xpress and the beneficial owner of the securities owned by Xpress.
(7) Includes 850,000 shares of common stock owned directly by Mr. Chiles,
and warrants to purchase 243,672 shares of common stock at an exercise
price of $1.02 per share, which may be exercised by Mr. Chiles within the
next sixty days.
(8) The shares beneficially owned by each of Mr. Cornish and Mr. Levine
represent 50,000 shares of common stock issuable upon the exercise of a
warrant at $1.02 which has vested as of the date of this report. Mr.
Cornish and Mr. Levine are director nominees; however, they have not
accepted directorship as of the filing of this report and we do not
currently have plans for them to come onto our board of directors.
(9) The shares beneficially owned by Mr. Fernandez represent 50,000 shares
of common stock issuable upon the exercise of a warrant at $1.02 per share
which has vested as of the date of this report. Mr. Fernandez is a director
nominee; however, he has not accepted directorship as of the filing of this
report and we do not currently have plans for him to come onto our board of
directors.
(10) Does not include 50,000 shares of common stock beneficially owned by
each of the director nominees, Messrs. Cornish, Levine and Fernandez.

CHANGE IN CONTROL

We are unaware of any arrangement or understanding that may, at a
subsequent date, result in a change of control of our Company.

-65-

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We believe that all prior related party transactions have been entered into
upon terms no less favorable to us than those that could be obtained from
unaffiliated third parties. Our reasonable belief of fair value is based upon
proximate similar transactions with third parties or attempts to obtain the
services from third parties, if such transaction would be available from third
parties. All past, ongoing and future transactions with such persons, including
any loans from or compensation to such persons, have been or will in the future
be approved by a majority of disinterested members of the Board of Directors.

We accrue $500,000 per year as salary payable to Malcolm J. Wright, our
Chief Executive Officer. Prior to 2004, we accrued $250,000 per year as salary
payable to Mr. Wright. We accrue interest at a rate of 12% compounded annually
on the salary owed to Mr. Wright. As of December 31, 2004, the aggregate amount
of salary payable and accrued interest owed to Mr. Wright was $1,105,000. We
also accrue $100,000 per year as salary payable to L. William Chiles, a director
of the Company and the President of Hickory, for his services, and interest at a
rate of 12% compounded annually beginning in 2005. As of December 31, 2004, the
aggregate amount of salary payable to Mr. Chiles was $66,400.

We pay or accrue directors' fees to each of our directors in an amount of
$18,000 per year for their services as directors. During the last two fiscal
years, we paid an aggregate of $66,000 to directors and accrued an aggregate of
$114,000.

We entered into a debt guarantor agreement with Mr. Wright and Mr. Chiles
whereby we agreed to indemnify Mr. Wright and Mr. Chiles against all losses,
costs or expenses relating to the incursion of or the collection of our
indebtedness against Mr. Wright or Mr. Chiles or their collateral. This
indemnity extends to the cost of legal defense or other such reasonably incurred
expenses charged to or assessed against Mr. Wright or Mr. Chiles. In the event
that Mr. Wright or Mr. Chiles make a personal guarantee for our benefit in
conjunction with any third-party financing, and Mr. Wright or Mr. Chiles elect
to provide such guarantee, then Mr. Wright and/or Mr. Chiles shall earn a fee
for such guarantee equal to three per cent (3%) of the total original
indebtedness and two per cent (2%) of any collateral posted as security. This
fee is to be paid by the issuance of warrants to purchase our common stock at a
fixed strike price of $1.02 per share, when the debt is incurred. Mr. Wright
personally guaranteed $6,000,000 that we received from Stanford pursuant to a
convertible promissory note. In addition, Mr. Wright pledged to Stanford 845,733
shares of our common stock held by Mr. Wright. Stanford is currently in
possession of the shares of our common stock that Mr. Wright pledged; however,
Mr. Wright retained the power to vote (or to direct the voting) and the power to
dispose (or direct the disposition) of those shares. Mr. Chiles had personally
guaranteed $2,000,000 of the $6,000,000 received from Stanford and pledged to
Stanford 850,000 shares of our common stock held by Mr. Chiles. Stanford
released Mr. Chiles from the personal guarantee and released his common stock
from the pledge when we closed the $6,000,000 credit facility. Mr. Wright and
Mr. Chiles have each also given a personal guarantee regarding a loan in the
principal amount of $6,000,000 that was made to Tierra Del Sol Resort Inc. by
Grand Bank & Trust of Florida. We have authorized the issuance of warrants to
Mr. Wright and Mr. Chiles to purchase 587,860 shares and 168,672 shares,
respectively, of our common stock at an exercise price of $1.02 per share. We
are under a continued obligation to issue warrants at $1.02 to Messrs. Wright
and Chiles for guarantees that they may be required to give on our behalf going
forward.

We may provide the executive officers of each of our subsidiaries an
aggregate bonus of up to 19% of the pre-tax profits, if any, of the subsidiaries
in which they serve as executive officers. Malcolm J. Wright will receive 19% of
the pre-tax profits of Leisureshare International Ltd, Leisureshare
International Espanola SA, American Leisure Homes, Inc., APMG, TDSR, and
American Leisure Hospitality Group, Inc. We do not have any agreements with our
officers regarding the bonus other than with L. William Chiles. Mr. Chiles is
entitled to receive 19% of the profits of Hickory up to a maximum payment over
the life of his contract of $2,700,000. As Mr. Chiles' bonus is limited, it is
not subject to the buy-out by us (discussed below) as it will cease as soon as
the $2,700,000 amount has been paid to him. The executive officers of our other
subsidiaries would share a bonus of up to 19% of the pre-tax profits of the
subsidiary in which they serve as executive officers. We would retain the right,
but not have the obligation to buy-out all of the above agreements after a
period of five years by issuing such number of shares of our common stock equal
to the product of 19% of the average after-tax profits for the five-year period
multiplied by one-third of the price to earnings ratio of our common stock at
the time of the buyout divided by the greater of the market price of our common
stock or $5.00. We have not paid or accrued any bonus as of the filing of this
report.

-66-

Since the reverse merger in July of 2002, we have relied almost exclusively
upon Malcolm J. Wright for the experience and energy required to cultivate
opportunities for us in vacation real estate development. We have accrued salary
and other compensation to Mr. Wright up to this point. Therefore, we have
entered into agreements with entities owned or controlled by Mr. Wright to
secure advancement of our real estate development projects.

Malcolm J. Wright is the President and 81% majority shareholder of American
Leisure Real Estate Group, Inc. On November 3, 2003, we entered into an
exclusive development agreement with American Leisure Real Estate Group to
provide development services for the development of The Sonesta Orlando Resort
at Tierra del Sol. Pursuant to this development agreement, it is responsible for
all development logistics and we are obligated to reimburse it for all of its
costs and to pay it a development fee in the amount of 4% of the total costs of
the project paid by it. As of December 31, 2004, it had administered operations
and paid bills in the amount of $3,543,784 and received a fee of 4% (or
approximately $141,751) under the development agreement.

Malcolm J. Wright and members of his family are the majority shareholders
of Xpress Ltd., a company that has experience marketing vacation homes in
Europe. On November 3, 2003, we entered into an exclusive sales and marketing
agreement with Xpress to sell the units in The Sonesta Orlando Resort at Tierra
del Sol being developed by us. This agreement provides for a sales fee in the
amount of 3% of the total sales prices received by us plus a marketing fee of
1.5%. Pursuant to the terms of the agreement, one-half of the sales fee is
payable upon entering into a sales contract (with deposits paid as required by
the sales contract) for a unit in the resort and the other half is due upon
closing the sale. During the period since the contract was entered into and
ended December 31, 2004, the total sales made by Xpress amounted to
approximately $173,979,572. As a result of the sales, we were obligated to pay
Xpress a sales fee of approximately $2,609,694 and a marketing fee of
$2,609,694. We will be obligated to pay Xpress the remaining sales fee upon
closing the sales of the units. As of December 31, 2004, we had paid Xpress
$3,505,748 of cash, issued Xpress 120,000 shares of Series A Preferred Stock
valued at $1,200,000, and transferred to Xpress a 1913 Benz automobile valued at
$500,000.

In February 2004, Malcolm J. Wright, individually and on behalf of Xpress,
and Roger Maddock, individually and on behalf of Arvimex, Inc., entered into
contracts with us to purchase an aggregate of 32 town homes for $13,116,800. Mr.
Wright and Mr. Maddock paid an aggregate deposit of $1,311,680 and were given a
10% discount that we otherwise would have had to pay as a commission to a
third-party real estate broker. Roger Maddock is directly (and indirectly
through Arvimex) the beneficial owner of more than 5% of our common stock.

We granted warrants to each of Malcolm J. Wright and L. William Chiles for
their services as directors to purchase 100,000 shares (or an aggregate of
200,000 shares) of our common stock at an exercise price of $1.02 per share.
Warrants to purchase 75,000 shares have vested to each of them. Warrants to
purchase the remaining 25,000 shares will vest to each of them on the next
anniversary date of each of their terms as a director, provided they are then
serving in said capacity.

M J Wright Productions, Inc., of which Mr. Wright is the President, owns
our Internet domain names.

Mr. Wright and we are negotiating an employment agreement pursuant to which
Mr. Wright will serve as our President, Chief Executive Officer and Chief
Financial Officer. We will provide the terms of the employment agreement when it
is finalized. In June 2005, we entered into an indemnification agreement with
Mr. Wright.

-67-

In March 2005, we closed on the sale of 13.5 acres of commercial property
in Davenport, Polk County, Florida at the corner of U.S. Hwy. 27 and Sand Mine
Road. The property was sold for $4,020,000. We paid-off secured debt on the
property of $1,300,000 plus accrued interest and other costs. We used the net
proceeds for working capital and to pay $1,948,411 of notes payable to related
parties attributable to the acquisition and retention of the property.

Thomas Cornish is a director nominee and has served as a member of our
advisory board. He is the President of the Seitlin Insurance Company. Our board
of directors has authorized Seitlin to place a competitive bid to provide
insurance for The Sonesta Orlando Resort at Tierra del Sol. During 2004 and
2005, Mr. Cornish provided services on our advisory board in consideration for
$1,500 and $3,000, respectively. David Levine is a director nominee and has
served as a member of our advisory board. He provided services on our advisory
board during 2004 and 2005 in consideration for $3,000 and $1,500, respectively.
We reimbursed Mr. Levine for travel expenses in the amount of $1,613 and $8,521
during 2004 and 2005, respectively. Charles J. Fernandez, a member of our
advisory board and a director nominee, provided services on our advisory board
during 2005 for which he was paid $3,000. We authorized warrants to each of
Thomas Cornish, Charles J. Fernandez and David Levine to purchase 100,000 shares
(or an aggregate of 300,000 shares) of our common stock at an exercise price of
$1.02 per share in consideration for their services as advisors. The warrants
vested immediately with respect to the purchase of 50,000 shares by each of
them. Warrants to purchase the remaining 50,000 shares will vest to by each of
them in equal amounts on their next two anniversary dates as advisors or
Directors, provided they are then serving in one of said capacities.

ITEM 13. EXHIBITS

The exhibits listed below are filed as part of this annual report.

EXHIBIT NO. DESCRIPTION OF EXHIBIT

2.1 (1) Stock Purchase Agreement

3.1 (2) Articles of Incorporation

3.2 (3) Amended and Restated Bylaws

3.3 (3) Amended and Restated Articles of Incorporation filed July 24, 2002

3.4 (3) Certificate of Amendment of Amended and Restated Articles of
Incorporation filed July 24, 2002

4.1 (3) Certificate of Designation of Series A Convertible Preferred Stock

4.2 (5) Certificate of Designation of Series B Convertible Preferred Stock

4.3 (5) Certificate of Designation of Series C Convertible Preferred Stock

4.4 (10) Amended and Restated Certificate of Designation of Series C
Convertible Preferred Stock

4.5 (20) Corrected Certificate of Designation of Series E Convertible
Preferred Stock, which replaces the Form of Certificate of Designaion
of Series E Convertible PreferredStock, filed as Exhibit 1 to the
Registrant's Form 8-K on April 12, 2004

4.6 (18) Certificate of Designation of Series F Convertible Preferred Stock,
which replaces the Form of Certificate of Designat of Series F
Convertible Preferred Stock, filed as Exhibit 3.1 to the Registrant's
Form 8-K on January 6, 2005

10.1 (3) Stock Option Agreement with L. William Chiles Regarding Hickory
Travel Systems, Inc.

10.2 (5) Securities Purchase Agreement with Stanford Venture Capital Holdings,
Inc. dated January 29, 2003

10.3 (5) Registration Rights Agreement with Stanford dated January 29, 2003

10.4 (5) Securities Purchase Agreement with Charles Ganz dated January 29,
2003

10.5 (5) Asset Sale Agreement with Charles Ganz dated January 29, 2003

10.6 (5) Registration Rights Agreement with Charles Ganz dated January 29,
2003

10.7 (5) Securities Purchase Agreement with Ted Gershon dated January 29, 2003

10.8 (5) Asset Sale Agreement with Ted Gershon dated January 29, 2003

10.9 (5) Registration Rights Agreement with Ted Gershon dated January 29, 2003

10.10 (6) Confirmation of Effective Date and Closing Date of $6,000,000 Line of
Credit

10.11 (6) Credit Agreement with Stanford for $6,000,000 Line of Credit

-68-

10.12 (6) First Amendment to Credit Agreement with Stanford for $6,000,000 Line
of Credit

10.13 (6) Mortgage Modification and Restatement Agreement between Tierra Del
Sol Resort Inc., formerly Sunstone Golf Resort, Inc., formerly
Sunstone Golf Resort, Inc. ("TDSR") and Stanford dated December 18,
2003

10.14 (6) Registration Rights Agreement with Stanford dated December 18, 2003

10.15 (6) Florida Mortgage and Security Agreement securing the $6,000,000 Line
of Credit

10.16 (6) Second Florida Mortgage and Security Agreement securing the
$6,000,000 Line of Credit

10.17 (6) Security Agreement by Caribbean Leisure Marketing Limited and
American Leisure Marketing and Technology Inc. dated December 18,
2003, securing the $6,000,000 Line of Credit

10.18 (6) Warrants issued to Daniel T. Bogar to purchase 168,750 shares at
$2.96 per share

10.19 (7) Warrants issued to Arvimex, Inc. to purchase 120,000 shares at
$0.001 per share

10.20 (7) Warrant Purchase Agreement with Stanford to purchase 600,000
shares at $0.001 per share and 1,350,000 shares at $2.96 per share

10.21 (7) Warrants issued to Arvimex to purchase 270,000 shares at $2.96 per
share

10.22 (10) Credit Agreement with Stanford for $1,000,000 Credit Facility

10.23 (10) Credit Agreement with Stanford for $3,000,000 Credit Facility

10.24 (10) Instrument of Warrant Repricing to purchase 1,350,000 shares at
$0.001 per share

10.25 (10) Warrant Purchase Agreement with Stanford to purchase 500,000
shares at $5.00 per share

10.26 (10) Registration Rights Agreement with Stanford dated June 17, 2004

10.27 (9) Agreement and First Amendment to Agreement to Purchase Galileo
Notes with GCD Acquisition Corp. ("GCD"), dated March 19, 2004 and
March 29, 2004, respectively

10.28 (9) Assignment Agreement for Security for Galileo Notes

10.29 (18) Bridge Loan Note for $6,000,000 issued by Around The World
Travel, Inc. in favor of Galileo International, LLC and acquired by
the Registrant

10.30 (18) Third Amended and Restated Acquisition Loan Note for $6,000,000
issued by Around The World Travel, Inc. in favor of Galileo
International, LLC and acquired by the Registrant

10.31 (18) Amended and Restated Initial Loan Note for $7,200,000 issued by
Around The World Travel in favor of Galileo and acquired by the
Registrant

10.32 (18) Promissory Note for $5,000,000 issued by Around The World Travel,
Inc. in favor of CNG Hotels, Ltd. and assumed by the Registrant

10.33 (18) Promissory Note for $2,515,000 issued by TDSR in favor of Arvimex
and Allonge dated January 31, 2000

10.34 (18) Registration Rights Agreement with Arvimex dated January 23, 2004

10.35 (13) Development Agreement between TDSR and American Leisure Real
Estate Group, Inc.

10.36 (14) Exclusive Sales and Marketing Agreement between TDSR and Xpress Ltd.

10.37 (15) Asset Purchase Agreement with Around The World Travel, Inc. for
TraveLeaders

10.38 (16) Operating Agreement between American Leisure Hospitality Group,
Inc. and Sonesta Orlando, Inc., dated January 29, 2005

10.39 (17) Second Re-Instatement and Second Amendment to Contract of Advantage
Professional Management Group, Inc. to sale unimproved land in
Davenport, Florida to Thirteen Davenport, LLC

10.40 (17) Purchase Agreement between Advantage Professional Management
Group, Inc. and Paradise Development Group, Inc. to sale part of
unimproved land in Davenport, Florida

10.41 (17) First Amendment to Purchase Agreement between Advantage Professional
Management Group, Inc. and Paradise Development Group, Inc. to sale
part of unimproved land in Davenport, Florida

10.42 (17) Assignment of Purchase Agreement, as amended, to Thirteen Davenport,
LLC to sale part of unimproved land in Davenport, Florida

10.43 (20) Note and Mortgage Modification Agreement dated May 12, 2005,
regarding a Promissory Note in the original amount of $985,000 dated
January 31, 2000, issued by TDSR in favor of Raster Investments, Inc.
and a Mortgage in favor of Raster Investments, Inc.

10.44 (20) First Amendment to Asset Purchase Agreement with Around The World
Travel, Inc. for TraveLeaders dated March 31, 2005

10.45 (21) Management Agreement with Around The World Travel, Inc. dated
January 1, 2005

10.46 (21) License Agreement with Around The World Travel, Inc. dated
January 1, 2005

10.47 (21) Agreement with Shadmore Trust U/A/D dated April 1, 2004 to
acquire common stock, preferred stock and indebtedness of AWT

-69-

10.48 (21) Promissory Note for $1,698,340 issued by the Registrant in favor
of Shadmore Trust U/A/D and dated April 1, 2004

10.49 (21) Stock Purchase Agreement dated April 12, 2004 to acquire
preferred stock of Around The World Travel, Inc.

10.50 (21) Additional $1.25M issued by the Registrant in favor of Stanford
and dated November 15, 2004.

10.51 (21) Third Amendment to Credit Agreement with Stanford for $1,000,000
and Second Additional Stock Pledge Agreement dated December 13, 2004

10.52 (21) Second Renewal Promissory Note for $1,355,000 issued by the
Registrant in favor of Stanford and dated December 13, 2004

10.53 (21) Agreement dated March 17, 2005, to Terminate Right of First
Refusal Agreement and Amend Registration Rights Agreement with
Stanford

10.54 (22) Warrant Agreement and Warrants to Malcolm J. Wright to purchase
100,000 shares at $1.02 per share

10.55 (22) Warrant Agreement and Warrants to L. William Chiles to purchase
100,000 shares at $1.02 per share

10.56 (22) Warrant Agreement and Warrants to T. Gene Prescott to purchase
100,000 shares at $1.02 per share

10.57 (22) Warrant Agreement and Warrants to Charles J. Fernandez to
purchase 100,000 shares at $1.02 per share

10.58 (22) Warrant Agreement and Warrant to Steven Parker to purchase
200,000 shares at $1.02 per share

10.59 (22) Warrant Agreement and Warrants to Toni Pallatto to purchase
25,000 shares at $1.02 per share

10.60 (21) Employment Agreement, as amended, between L. William Chiles and
Hickory Travel Systems, Inc.

10.61 (21) Employment Agreement between L. William Chiles and the Registrant

10.62 (21) First Amendment to $3 Million Credit Agreement

10.63 (21) Instrument of Warrant Repricing to purchase 100,000 shares at
$0.001 per share

16.1 (3) Letter from J.S. Osborn, P.C. dated August 1, 2002

16.2 (4) Letter from J.S. Osborn, P.C. dated May 22, 2003

16.3 (11) Letter from J.S. Osborn, P.C. dated August 17, 2004

16.4 (11) Letter from Charles Smith

16.5 (11) Letter from Marc Lumer & Company

16.6 (11) Letter from Byrd & Gantt, CPA's, P.A.

16.7 (12) Letter from Malone & Bailey, PLLC

16.8 (19) Letter from Bateman & Co., Inc., P.C.

21 (18) Subsidiaries of American Leisure Holdings, Inc.

23.1(21) Consent of Lopez, Blevins, Bork & Associates, LLP

23.2 (23) Consent of David M. Loev, Attorney at Law

31* CEO and CFO Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

32* CEO and CFO Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

99.1 (6) Personal Guarantee by Malcolm J. Wright guaranteeing the $6,000,000
Line of Credit

99.2 (10) Letter to the Shareholders of Around The World Travel, Inc.

* Filed herein.
(1) Filed as Exhibit 2.1 to the Registrant's Form 8-K on June 28, 2002,
and incorporated herein by reference.
(2) Filed as Exhibit 3.1 to the Registrant's Form SB-1 on October 20,
2000, and incorporated herein by reference.
(3) Filed as Exhibits 3.4, 3.1, 3.2, 3.3, 10.2, and 16.1, respectively, to
the Registrant's Form 10-QSB on August 19, 2002, and incorporated herein by
reference.
(4) Filed as Exhibit 16.1 to the Registrant's Form 8-K on May 23, 2003,
and incorporated herein by reference.
(5) Filed as Exhibits 99.2, 99.1, 99.3, 99.5, 99.6, 99.7, 99.8, 99.9,
99.10 and 99.11, respectively, to the Registrant's Form 10-KSB on May 23,
2003, and incorporated herein by reference.

-70-

(6) Filed as Exhibits 99.1, 99.2, 99.3, 99.4, 99.7, 99.8, 99.9, 99.10,
99.11 and 99.5, respectively, to the Registrant's Form 8-K on April 1,
2004, and incorporated herein by reference.
(7) Filed as Exhibits 99.11, 99.12 and 99.13, respectively, to the
Registrant's Form 10-QSB on May 25, 2004, and incorporated herein by
reference.
(8) Filed as Exhibit 99.1 to the Registrant's Form 10-KSB on May 21, 2004,
and incorporated herein by reference.
(9) Filed as Exhibits 99.1 and 99.2, respectively, to the Registrant's
Form 8-K on April 6, 2004, and incorporated herein by reference.
(10) Filed as Exhibits 3.1, 10.1, 10.2, 10.3, 10.4, 10.5 and 99.2,
respectively, to the Registrant's Forms 8-K/A filed on August 6, 2004, and
incorporated herein by reference.
(11) Filed as Exhibits 16.2, 16.3, 16.4 and 16.5, respectively, to the
Registrant's Forms 8-K/A filed on August 18, 2004, and incorporated herein
by reference.
(12) Filed as Exhibit 16.1 to the Registrant's Form 8-K on August 18, 2004,
and incorporated herein by reference.
(13) Filed as Exhibit 10.6 to the Registrant's Form 10-QSB on August 20,
2004, and incorporated herein by reference.
(14) Filed as Exhibit 10.6 to the Registrant's Form 10-QSB/A on December 8,
2004, and incorporated herein by reference.
(15) Filed as Exhibit 10.1 to the Registrant's Form 8-K on January 6, 2005,
and incorporated herein by reference.
(16) Filed as Exhibit 10.1 to the Registrant's Form 8-K on February 2,
2005, and incorporated herein by reference.
(17) Filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to the
Registrant's Form 8-K on March 14, 2005, and incorporated herein by
reference.
(18) Filed as Exhibits 4.6, 10.29, 10.30, 10.31, 10.32, 10.33, and 10.34,
respectively, to the Registrant's Form 10-KSB on March 31, 2005, and
incorporated herein by reference.
(19) Filed as Exhibit 16.2 to the Registrant's Form 8-K on March 28, 2005,
and incorporated herein by reference.
(20) Filed as Exhibits 4.5, 10.43 and 10.44, respectively to the
Registrant's Form 10-QSB on May 23, 2005, and incorporated herein by
reference.
(21) Filed as Exhibits 10.45, 10.46, 10.47, 10.48, 10.49, 10.50, 10.51,
10.52, 10.53, 10.60, 10.61, 10.62, 10.63 and 23.1, respectively, to the
Registrant's Form SB-2 on June 30, 2005, and incorporated herein by
reference.
(22) To be filed as Exhibits 10.54, 10.55, 10.56, 10.57, 10.58 and 10.59,
respectively, to the Registrant's Form SB-2/A in the next few days. (23)
Included in Exhibit 5.1 filed with the Registrant's Form SB-2 on June 30,
2005, and incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

The audit and audit related fees billed for audit and review of the
Company's annual and quarterly financial statements were $21,000 and $42,500 for
the fiscal years ended December 31, 2004 and December 31, 2003, respectively.

AUDIT RELATED FEES

Lopez was not paid any additional fees by the Company for the years ended
December 31, 2004 and 2003 for assurance and related services reasonably related
to the performance of the audit or review of the Company's financials
statements.

-71-

TAX FEES

Lopez was not paid any fees for the years ended December 31, 2004 and 2003 for
professional services rendered for tax compliance, tax advice and tax planning.

ALL OTHER FEES

The Company's principal independent accountants did not bill the Company for any
services other than the foregoing for the fiscal years ended December 31, 2004
and December 31, 2003.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

AMERICAN LEISURE HOLDINGS, INC.

By: /s/ Malcolm J. Wright
--------------------------
Name: Malcolm J. Wright
Title: Chief Executive Officer and
Director
Date: July 22, 2005

In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

SIGNATURE TITLE DATE
------------------------- ---------------------------------- ------------
By: /s/ Malcolm J. Wright Chief Executive Officer, President,
------------------------- Secretary, Chief Financial Officer, July 22, 2005
Malcolm J. Wright and Director

By: /s/ L. William Chiles
-------------------------
L. William Chiles Director July 22, 2005

By: /s/ James Leaderer
-------------------------
James Leaderer Director July 22, 2005

-72-