Edgar Filing: AMERICAN LEISURE HOLDINGS INC

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

FORM 10-KSB/A
Amendment No. 1

[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
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Commission file number 333-48312

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

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

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

Issuer's telephone number (201) 226-2060

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 March 29, 2005, was approximately
$12,460,502.31.

At March 31, 2005, there were 9,977,974 shares of the Issuer's common stock
outstanding.

This Amended Form 10-KSB is being filed to update financial information in
the audited financial statements and the Management's Discussion and
Analysis section, lease information, certain relationships and related
transactions, security ownership, legal proceedings and other business
matters.

TABLE OF CONTENTS

ITEM 1. DESCRIPTION OF BUSINESS 3
ITEM 2. DESCRIPTION OF PROPERTY 9
ITEM 3. LEGAL PROCEEDINGS 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 10
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 10
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 14
ITEM 7. FINANCIAL STATEMENTS 24
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE. 25
ITEM 8A. CONTROLS AND PROCEDURES. 26
ITEM 8B. OTHER INFORMATION. 26
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF
THE EXCHANGE ACT. 26
ITEM 10. EXECUTIVE COMPENSATION. 29
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. 30
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 31
ITEM 13. EXHIBITS 33
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. 35
SIGNATURES 35

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 "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. ("AMLH"), through its subsidiaries, manages
and distributes travel services, develops luxury vacation home ownership and
travel destination properties, and operates affinity-based travel clubs and call
centers that provide internal and external commercial and communications
services. 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 luxury vacation home ownership
and travel destination properties. We were incorporated in Nevada as
Freewillpc.com, Inc. ("Freewill"), 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. The Company has been
re-designed and structured to own, control and direct a series of companies in
the travel and tourism industries so that it 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 Merger Agreement (the "Merger") with
American Leisure Corporation and its subsidiaries (collectively referred to
herein as "American Leisure"). As consideration for the Merger, we issued to the
former American Leisure stockholders 4,893,974 shares of our common stock and
880,000 shares of 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. American Leisure was considered the accounting acquirer and
the results of its operations carried over. The operations of Freewill prior to
the Merger were not carried over and were adjusted to $0. On July 9, 2002, we
changed our name to American Leisure Holdings, Inc.

On October 1, 2003, we acquired a majority interest in Hickory Travel
Systems, Inc. ("Hickory"). Hickory is a travel management service organization
that primarily serves a 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. As a group, these members
have amassed approximately $17 billion in travel bookings (or gross sales) per
year over the past several years. 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.

On December 31, 2004, we acquired substantially all of the assets of Around
The World Travel, Inc. ("AWT") which included the business name "TraveLeaders"
and all of the tangible and intangible assets necessary to operate TraveLeaders,
a fully integrated travel services distribution business based in Coral Gables,
Florida. AWT began doing business in 1963 serving individuals and small
corporate clients in Coral Gables, Florida. AWT was incorporated in 1977 and
began operating as TraveLeaders in 2001. TraveLeaders provides its clients with
a comprehensive range of business and vacation travel services including
corporate travel management, leisure sales, and meeting, special event and
incentive planning.

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

RECENT DEVELOPMENTS

On January 29, 2005, we entered into an operating agreement with Sonesta
Orlando, Inc ("Sonesta"), a wholly-owned subsidiary of Sonesta International
Hotels Corporation, a luxury resort property management company. Pursuant to
the operating agreement, we delegated to Sonesta substantially all of the
hospitality responsibilities within our vacation resort development project now
known as Sonesta Orlando Resort at Tierra Del Sol ("Sonesta Orlando Resort").
Under the operating agreement, our subsidiary, American Leisure Hospitality
Group, Inc., retains primary management control of the resort. See "Vacation
Resort Development" for a more detailed description of this project.

On February 1, 2005, our Board of Directors (the "Board") nominated Messrs.
David Levine, Thomas Cornish and Carlos Fernandez to serve as members of the
Board. While they have accepted their nominations, Messrs. Levine, Cornish and
Fernandez have not yet commenced their appointments to the Board of Directors
and are considered nominees. The Company has no reason to believe that any of
them will be unable to serve or decline to serve as a director. The Company
anticipates that the nominees will commence directorship in the near term after
the filing of this Form 10-KSB, and that Mr. Levine will serve as Chairman of
the Board. The Company anticipates that Messrs. Cornish and Levine will serve on
the Compensation Committee being formed in the near future by the Board and that
Mr. Fernandez will serve on the Audit Committee being formed in the near future
by the Board. L. William Chiles will continue to serve as Chairman of the Board
until Mr. Levine is formally inducted to that position, which induction is
anticipated by the Company. Mr. Chiles will continue to serve on the Board as a
Director and will chair a New Initiatives Committee that our Board is in the
process of forming. The Company filed a Form 8-K with the Commission on February
15, 2005, which disclosed that the Company's Board of Directors nominated David
Levine, Thomas Cornish and Carlos 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 (4)
to nine (9). This disclosure is being provided to clarify that Messrs. Levine,
Cornish and Fernandez have not yet commenced their appointments to the Board of
Directors and are considered nominees. The Company has no reason to believe that
any nominee will be unable to serve or decline to serve as a director. 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. As
and when the Company and the director nominees complete the process of their
induction, the nominees are expected to be inducted as directors of the Company.

On February 4, 2005, we announced our joint venture with IMA, Ltd., a
Barbados company ("IMA"), to open a telecommunications center in Antigua-Barbuda
(the "Antigua Call Center"). We expect this call center to serve a variety of
large and small corporations by fulfilling customer service to their customers
in the United States and the United Kingdom.

On February 16, 2005, we announced the groundbreaking of the Sonesta
Orlando Resort, our vacation resort development project located just outside of
Orlando, Florida. See the heading entitled "Vacation Homes and Travel Resorts"
for a more detailed description of this project.

On March 8, 2005, we consummated the sale of unimproved land in Davenport,
Florida that was the sole asset of a subsidiary, Advantage Professional
Management Group, Inc. The property had been held for property for commercial
development. The land was acquired in 2002 for approximately $1,975,359 and
sold in 2005 for just over $4,000,000. We received approximately $2,730,000 in
net proceeds from the sale.

BUSINESS INTEGRATION

The Company is on a mission to develop a large, multi-national travel
services, travel management and travel distribution organization that has a
division that constructs luxury vacation home ownership and travel destination
properties. We are in the process of integrating the business operations of
Hickory and TraveLeaders to distribute, fulfill and manage our travel services
which will serve as the foundation of our business model. We are currently
in what we believe to be final negotiations for the financing to construct
the Sonesta Orlando Resort, a 972-unit vacation home resort to be located
just outside of Orlando, Florida. We will be affiliated with RCI, an
international vacation unit exchange facilitator, which will serve as our link
to other vacation resort properties. We operate six (6) affinity-based travel
clubs. In addition to Hickory's 24-hour call center, IMA, a company with
which we have entered into a joint venture, is currently operating our
Antigua Call Center and we own the equipment for another call center in
Coral Gables, Florida which is currently not being operated. Our planned
business model is to use the travel distribution, fulfillment and
management services of the combined business operations of Hickory and
TraveLeaders to, among their other pursuits, provide bookings for vacation
homes and travel resorts under our management and travel services to
our affinity-based travel clubs.

Hickory is a travel management service organization that primarily serves a
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. TraveLeaders is a fully integrated travel services
distribution business that provides its clients with a comprehensive range of
business and vacation travel services including corporate travel management,
leisure sales, and meeting, special event and incentive planning. In addition,
TraveLeaders currently fulfills travel orders produced by our subsidiary,
American Travel & Marketing Group, Inc. (discussed below under the heading
"Vacation Homes and Travel Resorts"). Hickory and TraveLeaders are in the
processes of negotiating joint arrangements with vendors to provide travel
services to their members and clients. We anticipate that the information
technology ("IT"), finance, accounting and account management departments of
Hickory and TraveLeaders will be the first departments to merge. Once Hickory
and TraveLeaders are integrated, we will have both brick-and-mortar and
Internet-based distribution capabilities in both corporate and leisure travel
planning and distribution.

The integration process has been slowed by factors including, but not
limited to, continued due diligence of TraveLeaders, litigation commenced by
TraveLeaders regarding its contracts with Seamless, as discussed in "Item 3.
Legal Proceedings," and world events such as the terrorist attack in the United
States on September 11, 2001, the war in Iraq and other uncertainties in the
Middle East that have negatively impacted corporate and leisure travel. We
believe that we have highly qualified travel and business professionals at AMLH,
Hickory and TraveLeaders who can complete the process of integration. We plan
to complete the integration process in time for the completion of the first
units of the Sonesta Orlando Resort which we expect to occur in the summer of
2006.

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 the Travel Industry
Association of America, Americans spent over $500 billion on domestic travel in
2004, of which we believe a significant portion was for business travel.
TraveLeaders does the majority of their business in the corporate travel
management category, while Hickory provides services to a variety of agencies
that compete in both business and leisure 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
client companies 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
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The Company manages and distributes travel services through Hickory, our
subsidiary, and TraveLeaders, a fully integrated travel services distribution
business based in Coral Gables, Florida. We acquired Hickory in October 2003.
On December 31, 2004, our wholly owned subsidiary American Leisure Equities
Corporation acquired substantially all of the assets of AWT which included all
of the tangible and intangible assets necessary to operate TraveLeaders.

TraveLeaders
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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
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 corporate 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 Web Sites
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. In addition, we focus our attention on servicing the
travel requirements of travel and vacation clubs to garner significant group
purchasing power. 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.
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American Travel & Marketing Group
-------------------------------------

American Travel & Marketing Group, Inc., our subsidiary, operates six (6)
affinity-based travel clubs, as discussed below under the heading "Vacation
Homes and Travel Resorts." 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

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 small primarily leisure offices in Largo,
Florida, Mt. Laurel, New Jersey, and Sinking Springs, Pennsylvania.

We operate approximately fourteen (14) on-site offices located at corporate
client premises, where we provide customized trip planning, reservation and
ticketing services to the employees of such corporate clients.

Hickory operates a 24-hour call center which 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

The Company's vacation home and travel resort operations will be conducted
within three business segments. One will acquire tracts of real estate suitable
for vacation resort properties, which will be subdivided, improved and sold,
typically on a retail basis to our range of clients as vacation home sales. The
other operation is planned to develop, market and sell vacation ownership
interests in the Company's future resort properties primarily through vacation
clubs. The third segment is the ongoing hospitality management of the resorts
built by the Company. While our vacation home management is not a condition of
a 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
-------------------------------------

Our first vacation home resort will be conducted through our subsidiary,
Tierra Del Sol Resort, Inc. ("TDSR"). We intend to develop high-quality
vacation resort properties comprised of vacation homes and other 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 services division.

We plan to develop our vacation resort properties to enable certain
qualifying vacation homeowners to include their homes in voluntary rental
arrangements. We plan to provide 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, a
972-unit vacation home resort to be located just outside of Orlando, Florida.
The Sonesta Orlando Resort will be our first property. On January 29, 2005, we
entered an operating agreement with Sonesta, a nationally recognized luxury
resort management company. While retaining the primary management
responsibility, we delegated substantially all of the hospitality
responsibilities within the management of the resort to Sonesta.

We plan to construct the Sonesta Orlando Resort in two phases. Phase I is
scheduled to include 430 residential units, an 84,000 square foot clubhouse
(approximate square footage under air), 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 and 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 $45,400,000 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 ("District") via the sale by the District of bonds issued
on a non-recourse basis to the Company ("CDD Bonds"). The District was initially
created by the Company and enabled by an order of the State District Court. The
debt service on the CDD Bonds will be paid by all of the owners of real
property within the District as a quasi-public cost for the community
benefit provided by the infra-structure and green spaces 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 May 2005. We
have also given the same banking institution the underwriting role in the
sale of the CDD Bonds. We expect to close the first offering of the CDD
Bonds in May 2005. We plan to begin construction of Phase I upon the closing
of the conventional construction loan and the sale of the first offering
of the CDD Bonds.

In November 2003, TDSR entered into an exclusive sales and marketing
agreement with Xpress Ltd. ("Xpress") to sell the vacation homes in the Sonesta
Orlando Resort. Malcolm J. Wright, a director of the Company and the Company's
Chief Executive Officer and Chief Financial Officer, and members of his family
are the majority shareholders of Xpress. As of March 30, 2005, Xpress has pre-
sold 648 vacation homes in a combination of contracts on Town Homes and
Reservations on condominiums in the Sonesta Orlando Resort for total sales
volume to date of over $216 million. All deposits required by the contracts and
reservations have been received by the Company as detailed elsewhere in this
report.

American Travel & Marketing Group, Inc. ("ATMG" and its d/b/a, "American
Affinity Clubs" or "AAC"), our subsidiary, operates six (6) affinity-based
travel clubs. American Affinity Clubs has 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, American Affinity Clubs identifies a national retail entity
and propose to create a club to be comprised of persons in their target
demographic, the purpose of which will be to foster loyalty to their brands. The
incentives for membership are a rich assortment of discounted travel
opportunities that are tailored to their target demographic as well as a
significant array of special membership benefits that are provided by sponsors
of nationally known products and services. American Affinity Clubs derives
revenues from membership dues, sponsorship premiums and travel commissions. In
addition to revenue generation, American Affinity Clubs will also provide
traffic to the Company's vacation home and resort properties. We believe that
American Affinity Clubs will generate increased travel business through the
creation of additional clubs comprised of affinity-based travelers. We believe
that AAC is poised to secure a strong market share of the affinity-travel
marketing segment. As the proprietor and manager of the clubs it creates, AAC
anticipates substantial revenue from annual membership fees and commissions
earned on the sale of travel services, once the infrastructure has been
finalized to communicate and sell to its affinity-based club databases. We
expect that American Affinity Clubs will derive revenue from sales opportunities
to Hickory's corporate clients, Hickory's bulk purchasing power and fulfillment
capacity, and access to our vacation home and resort properties.

Management of our vacation resorts will be conducted through our
subsidiary, American Leisure Hospitality Group, Inc. ("ALHG"). ALHG entered into
an operating agreement with Sonesta, which delegates to Sonesta substantially
all of the hospitality responsibilities for the Sonesta Orlando Resort. ALHG
retains primary responsibility for the management of the resort.

COMMUNICATIONS SERVICES

The Company's subsidiary, American Sterling Corp., ("AS") currently owns
the equipment necessary to operate two (2) call centers. In December 2004, we
entered into a joint venture with IMA, Ltd., a Barbados company, to open a
telecommunications center in Antigua-Barbuda (the "Antigua Call Center"). IMA,
Ltd. currently operates the Antigua Call Center. The other center, based in
Coral Gables, Florida is not yet operational. The Company is in negotiations
with another call center operator for the utilization of that center. The
services provided by the Antigua Call Center are both in-bound and out-bound
traffic for customer service and accounts receivable management. The clients of
the Antigua Call Center are well known national businesses with well-established
credit and operational systems. We expect this call center to serve a variety
of large and small corporations by contacting customers in the United States and
the United Kingdom.

The American Sterling subsidiary, Comtech Fibernet, Inc., specializes in
the design, installation and operation of Fiber To The Home Networks, a method
of delivering massive bandwidth and other telecommunications and video signals
to the home in a revolutionary way.

Almost from the conception of fiber-optic cable, fiber-to-the-home (FTTH),
or the passive optical network (PON), has been envisioned as the network of the
future. Single-mode fiber combines very low signal loss per kilometer with high
carrying capacity. On the surface, these traits make an ideal network
with very high bandwidth availability, ultra reliability, and the ultimate in
network future-proofing.

After 25 years of being considered the future of access networks, FTTH is
now being deployed on a large scale in the United States. For several years, the
ever-increasing number of FTTH deployments has been driven mainly by
nontraditional carriers such as utility companies, municipalities, and home
developers as well as a few competitive local exchange carriers ("CLECs").
Today, however, FTTH also has become the technology of choice for many
Independent local exchange carriers ("LECs") and at least one large incumbent,
both for new builds and overbuilds. The economic and technical reasons for this
change have much to do with outside plant (OSP) innovations that reduce the
labor and active electronics costs of an FTTH installation.

The Company expects significant growth from Comtech Fibernet, Inc.

Competition in the Communications Services Industry
--------------------------------------------------------

The Company opened the Antigua Call Center due to the new demand for call
centers in the Caribbean.

The call-center business is booming in the Caribbean, as telecom
deregulation in the islands slashes costs and U.S. companies spread their
growing overseas call-center business to lower-cost sites "near-shore." 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, according to a
report from Miami-based researcher Zagada Markets.

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 lures.

Competition may be robust but at present the Company believes demand
still exceeds the supply. The Company cannot guarantee how long it will
experience this favorable market condition.

PATENTS, TRADEMARKS & LICENSES WHAT ABOUT THE NAME TRAVELEADERS

The Company does 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. We have registered and own a number of Internet domain
names including americanleisureholdings.com and www.traveleaders.com.

GOVERNMENTAL 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
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
as such, which could have a material adverse effect. We believe that we are in
compliance in all-material respects with applicable regulations. However, no
assurance can be given that the cost of complying with applicable laws and
regulations will not be significant or that we are in fact in compliance with
all applicable laws. 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. There
can be no assurances, however, that our practices and methods would not be
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 each campaign. 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 75 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 Saddlebrook, New Jersey. Our
Saddlebrook facility is approximately 5,000 square feet, of which 250 square
feet houses AMLH's executive offices. This facility is leased by Hickory Travel
Systems for approximately $178,056 per year and AMLH does not pay any rent to
Hickory for the executive office. A reservation service center equipment lease
Calls for a monthly base rent of $6,461 through December 2005.

We leased office space located in Tamarac, Florida. The monthly base rental
Was $17,708. In the Spring of 2004, the Company was able to terminate the lease.

We own the land on which the Sonesta Orlando Resort will be situated. We
purchased this land for $5,560,366. It 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 may also
purchase additional parcels of land for resort development.

The Company's Traveleaders assets are located in a building leased by AWT
from a partnership comprised of AWT shareholders. TraveLeaders occupies almost
all of the 40,000 square feet at 1701 Ponce De Leon Boulevard, Coral Gables,
Florida. The Company plans to move various other subsidiaries into the available
space. The lease expires in December of 2006. The Company has commenced its
search for alternative leaseholds.

ITEM 3. LEGAL PROCEEDINGS

We are a defendant in an action that was filed in Orange County, Florida.
In June, 2001, Rock Investment Trust, P.L.C., a British limited liability
company, and RIT, L.C., a related Florida limited liability company, filed suit
against Malcolm J. Wright, American Vacation Resorts, Inc., American Leisure,
Inc., Inversora Tetuan, S.A., Sunstone Golf Resort, Inc., and SunGate Resort
Villas, Inc. (the "Defendants"), seeking either the return of an alleged
$500,000 investment or an ownership interest in one or more of the defendant
entities equivalent to the alleged investment amount. This lawsuit involves
allegations of fraud against Malcolm J. Wright, a director of the Company and
the Company's Chief Executive Officer and Chief Financial Officer. The
Defendants have denied all claims and have counterclaimed against Rock
Investment Trust and its principal, Roger Smee for damages. The Defendants are
seeking to recover deposits and costs on two real estate transactions totaling
approximately $440,000 plus damages. seeking damages in excess of $10
million, assuming success on all aspects of the litigation. The litigation is
in the discovery phase and is not currently set for trial. While many
depositions and other discovery of facts remain to be done, based on the status
of the record developed thus far, our counsel believes that Rock Investment
Trust's and RIT's claims are without merit and that the counterclaim will be
Successful, although damages are uncertain. This case has been inactive since
February 2002, although opposing counsel did file discovery documents in the
past year to keep the case from being dismissed for lack of prosecution.

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, L William Chiles, and
Walter Kolker, seeking a claim for securities fraud, violation of Florida
Securities and Investor Protection Act, breach of their employment contracts,
and claims for fraudulent inducement. 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. American Leisure believes that Manuel
Sanchez and Luis Vanegas claims are without merit and the claim is not
material to American Leisure. American Leisure does not believe that
Sanchez and Vanegas' claims have merit and intends to vigorously defend the
lawsuit.

In February 2003, American Leisure, Inc. and Malcolm Wright were joined in
a lawsuit filed by Howard Warren and captioned as Howard Warren v. Travelbyus,
Inc. William Kerby, David Doerge, DCM/Funding III, LLC, Balis Lewittes and
Coleman, Inc. We were included under a theory of joint venture liability with
the defendants. The plaintiff claims losses of $1.5 million from an alleged
breach of a promissory note as well as punitive damages for willful and gross
negligence. The litigation is in the discovery phase and is not currently set
for trial. An order was entered on November 1, 2004 following Plaintiff's Motion
To Dismiss that dismissed the case against ALI and Mr. Wright without prejudice.
The dismissal becomes irrevocable one year from the date that the order was
entered.

On March 30, 2004, the Company's President, 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. Additionally, on July 23, 2004, the primary plaintiffs filed a motion
to amend their complaint to add direct claims against the Company's subsidiary,
American Leisure, Inc. ("ALI") as well as Mr. Wright. On August 4, 2004, the
plaintiffs withdrew that motion and have not asserted or threatened any direct
claims against ALI, Mr. Wright or the Company.

In early May 2004, Around The World Travel, Inc. ("AWT"), from which on
December 31, 2004 we purchased substantially all of its assets, filed a lawsuit
with the clerk of the Miami-Dade 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. We 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 AWT and us in a lawsuit styled Seamless Technologies, Inc. et al v.
Keith St. Clair et al. This suit alleges that AWT has breached the contracts and
also that we and AWT's Chief Executive Officer were complicit with certain
officers and directors of AWT in securing ownership of certain assets for us
that were alleged to have been a business opportunity for AWT. This lawsuit
involves allegations of fraud against Malcolm J. Wright, a director of the
Company and the Company's Chief Executive Officer and Chief Financial Officer.
The lawsuit filed by Seamless has been abated and consolidated with the original
lawsuit filed by AWT. In a related matter, the attorneys for Seamless 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 the Company
includes monetary damages and litigation costs. All three suits have been
brought to the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade
County, Florida (the "Seamless Suit"). We have retained legal counsel regarding
these matters. We intend to vigorously support the original litigation filed
against Seamless and defend the counterclaim and allegations against us.

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

The Company is not aware of any proceeding to which any of its directors,
officers, affiliates or security holders are a party adverse to the Company or
have a material interest adverse to the Company.

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,
mark-down 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.

As of March 31, 2005, the Company had 331 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
(as the same may be amended from time to time) 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 and agreed to issue Series F Preferred Stock as currency for
the purchase of AWT assets valued at $193,260. The Series F Preferred Stock has
cumulative dividends that accrue 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. The Series F Preferred Stock has not been issued as of this filing.
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 have
never paid any cash dividends on our preferred stock. All dividends on preferred
stock accrue without interest until the Company declares a profit.

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, bears
an exercise price of $0.001 per share of common stock and are exercisable until
December 31, 2008. 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. 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 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 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. The Company also assumed the seller's
liability on a $5,000,000 promissory note to the Seller of said secured notes to
GCD.

In March 2004, the Company issued warrants to purchase 300,000 shares of
the Company's common stock to Stanford Venture Capital Holdings, Inc.
("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 ( collectively, the
"Stanford Employees"). 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
which in June 2004 were subsequently reduced to $0.001 per share. The warrants
discussed in this paragraph, above, were issued as consideration for Stanford
providing a $6,000,000 line of credit to the Company. The exercise price on
1,350,000 warrants was reduced, as discussed above, in connection with
$4,000,000 of additional financing provided by Stanford. 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 that were issued to Stanford had an exercise price of $5.00 per
share, but the exercise price was reduced to $0.001 as consideration for
additional financing with respect to warrants to purchase 100,000 of the shares
in November 2004. The exercise price was reduced in connection with $1,250,000
of additional financing provided by Stanford. In September 2004, the Company
issued an aggregate of 1,350,000 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 $1,350). In December 2004, the Company
issued an aggregate of 100,000 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 $100). 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 and 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 a certain investment banking firm (US Funding) and in this transaction
the Company paid $150,000 (2.5% is an agreed percentage) to that third party
agent for investment banking services.

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 $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 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. 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, par value $.001 per share, 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 Convertible 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 in connection with the
acquisition of debt owed to them 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.

In October 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 of AWT in the principal
amount of $500,000 that Arvimex made to the Company. Arvimex loaned the
money to AWT to provide funds to AWT 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 October of 2004, the Company authorized the issuance of warrants to
purchase 250,000 shares of the Company's common stock at an exercise price of
$1.02 per share to be issued to persons who serve on both the Company's board of
directors and the Company's advisory board to the board of directors at the rate
of 50,000 warrants per person. The Company claims an exemption from registration
afforded by Section 4(2) of the Act since the foregoing issuances will not
involve a public offering, the recipients have access to information that would
be included in a registration statement, will take the shares for investment and
not resale and the Company will take appropriate measures to restrict transfer.
No underwriters or agents were involved in the foregoing issuances and no
underwriting discounts will be 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 issuances did not involve a public offering,
the recipients had access to information that would be included in a
registration statement, 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.

On December 22, 2004, the Company issued 120,000 shares of Series A
Preferred Stock, par value $0.001 per share, to Xpress Ltd. ("Xpress") for
$1,200,000. The Series A Convertible 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 issuances 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 Mr. Parker entering into a contract
of employment with a subsidiary of the Company. 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 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 Ms. Palatto entering into a contract
of employment with a subsidiary of the Company. 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.

On December 31, 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 had access to information that would
be included in a registration statement, 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.

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

The information in the following discussion contains forward looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Such statements are based upon current expectations that involve risks and
uncertainties. Any statements contained herein that are not statements of
historical fact such as statements that refer to expectations, projections or
other characterization of future events or circumstances may be deemed to be
forward looking statement. For instance, those statements which include the
words "believes," "intends," "estimates," "anticipates," "expects," "plans," or
similar words or variations thereof, are likely to be forward-looking
statements, and as such, are likely to concern matters involving risk,
uncertainty, unpredictability and other factors that could materially and
adversely affect the outcome or results indicated by or inferred from the
statements themselves. Our actual results and the timing of certain events may
differ significantly from the results discussed in the forward-looking
statements. Therefore, the reader is advised that the following discussion
should be read in conjunction with the consolidated financial statements and
related notes contained elsewhere in this report and considered in light of the
discussion of risks and other factors contained in this report and in the
Company's other filings with the Securities and Exchange Commission, and that no
statements contained in the following discussion or in this report should be
construed as a guarantee or assurance of future performance or future results.
Factors that might cause such a discrepancy include, but are not limited to
those discussed below under the heading "Risk Factors." All forward looking
statements in this document are based on information available to us as of the
date hereof and we assume no obligation to update any such forward looking
statements.

OVERVIEW

Our results of operation are currently dependent on our travel services
business provided by Hickory and TraveLeaders, and pre-sale contracts of units
in the Sonesta Orlando Resort at Tierra Del Sol.

KNOWN TRENDS, EVENTS AND UNCERTAINTIES

The Company expects to experience seasonal fluctuations in its gross
revenues and net earnings. This seasonality may cause significant fluctuations
in the Company's operating results. In addition, other material fluctuations in
operating results may occur due to the timing of development of certain projects
and the Company's use of the percentage-of-completion 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. The Company's management
expects that the Company will continue to invest in projects that will require
substantial development and significant amounts of capital funding.

The Company believes that the terrorist attacks on September 11, 2001 in
the United States, the continuing hostilities in the Middle East including the
war in Iraq, and other world events have decreased the amount of vacation and
corporate air travel by Americans but have not required the Company to
materially change its business plan. There can be no assurances, however, that
a long-term decrease in air travel or increase in anxiety regarding actual or
possible future terrorist attacks, wars or other world events will not have a
material adverse effect on the Company's future results of operations.

RESULTS OF OPERATIONS

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

The Company 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 revenue from Hickory from a full year of 2004 as
compared to revenue from Hickory for a partial year of 2003.

Loss from operations increased $2,590,247 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 and general and administrative
expenses. The Company realized goodwill impairment loss during 2004 due to
the write-down of its investment in the common and preferred stock of AWT.
The Company paid approximately $17,500,000 for the investment which was
valued by an independent third party at approximately $16,000,000, and the
Company wrote off $1,500,000.

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
Traveleaders and a loss on the write down of acquiring AWT's preferred stock in
April 2004.

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

Net loss before income taxes for the fiscal year ended December 31, 2004
was $6,621,477 as compared to net 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 wells as the goodwill
impairment loss on acquiring Traveleaders and a loss on the write down of
acquiring AWT's preferred stock in April 2004.

The Company recorded a provision for 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.

The Company 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.

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

Basic and diluted net loss per share was $0.77 for the fiscal year ended
December 31, 2004, as compared to basic and diluted net loss per share of $0.31
for the fiscal year ended December 31, 2003.

LIQUIDITY AND CAPITAL RESOURCES

The Company 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.

The Company had total current liabilities of $24,848,570 as of December 31,
2004, which consisted of maturities on 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 of $2,332,886, current maturities of notes payable
to related parties of $1,910,629, accrued expenses of officers of $1,355,000 and
shareholder advances of $273,312.

The Company had negative net working capital of $18,848,205 as of December
31, 2004. The ratio of total current assets to total current liabilities was
approximately 25% as of December 31, 2004.

During the fiscal year ended December 31, 2004, the Company's working
capital decreased. This was due to administrative and financing costs incurred
as carrying costs of the Company's assets and to maintain its operations.
Additionally, the note on the TDSR property in the amount of $6,000,000 (due in
March 2005) is now a current liability. The Company and the lender have verbally
agreed to extend the repayment of the loan until such time as the Company closes
the construction loan for the Sonesta Orlando Resort which the Company
anticipates will occur in May 2005. In March 2005, the Company closed on the
sale of the 13.5 acres of commercial property in Polk County, Florida at the
corner of U.S. Hwy. 27 and Sand Mine Road. The Company sold the property for a
sales price of $4,020,000, plus the reimbursement of expenses in the amount of
$157,219. After paying certain closing costs, commissions, the first deed of
trust on the property, the Company received $2,474,090 in cash from the sale of
the property, which the Company used for working capital and to pay off current
maturities of notes payable to related parties of $1,910,629 and shareholder
advances of $273,312.

The Company has a history of generating net losses. The Company's primary
sources of cash have been the acceptance of deposits on presales of its TDSR
project, increases in its credit facilities from Stanford, increases in accounts
payable and accrued expenses, and increases in shareholder loans to the Company.

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 to net cash provided by operating activities was primarily
due to an increase in deposits of $16,669,347 associated with deposits from
presales of the TDSR project, 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 AVR 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. The
increase in net cash provided by financing activities was primarily 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 for the
fiscal year ended December 31, 2004.

Since the year end we have sold our land in Davenport, Florida and used the
sale proceeds of approximately $4,000,000 to repay current debt. The company
expects to close on its construction loan for TDSR with a banking institution in
May 2005 and repay an additional $8,100,000 of current debt.

The Company has limited liquidity and limited access to additional capital
resources. The Company does not expect to derive the capital to totally fund its
ongoing obligations from operating results until the end of 2006. The Company
owes certain shareholders and related parties approximately $2,000,000 of debt
that has already matured. These shareholders were repaid their debt in March
2005 from the sale proceeds of the unimproved land in Davenport, Florida. In
addition, the Company accrues salary to its chief executive officer and its
directors. As of December 31, 2004, the aggregate amount of salaries payable to
Malcolm J. Wright, the Company's Chief Executive Officer, 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, a director
of the Company and the President of Hickory, for his services. 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 need additional capital for Hickory, TraveLeaders, AMLH, AS and
AMTG. Even though the Company has obtained various credit facilities from
Stanford (discussed below), the Company will still have to obtain new sources
of capital until operations provide sufficient cash flow to finance our
business activities. Although obtaining additional capital is not guaranteed,
the Company's management believes it will be able to obtain the capital
required to meet the Company's current obligations and actively pursue the
Company's planned business activities.

The Company needs to raise approximately $4,500,000 to satisfy its cash
requirements for the next twelve (12) months. This money will be used for the
working capital needs of Hickory during the first three quarters of 2005,
TraveLeaders, AMLH, AS and ATMG. Based on Hickory's operating history, we expect
them to have sufficient cash flow during the fourth quarter of 2005. In
addition, the Company needs approximately $116 million in third-party capital to
begin the construction and development of Phase 1 of the Sonesta Orlando Resort.
The Company will have closed commitments for this capital prior to commencing
construction. The capital needed is in addition to capital that the Company
previously received as discussed below. During the period from December 2003 to
December 2004, the Company received an aggregate of $11.35 million of
convertible note financing from Stanford, $16,669,347 in deposits from the
presale of units for the Sonesta Orlando Resort and $2,050 from the exercise of
warrants. In March 2005, the Company received net proceeds of approximately
$2,730,000 from the sale of unimproved land in Davenport, Florida. The Company
intends to raise additional capital in one or more private placements of equity
or convertible debt financing, or through a sale-leaseback of its equipment. The
Company is currently in final negotiations with a banking institution to provide
a $96.6 million conventional construction loan for the Sonesta Orlando Resort
which the Company expects to close in May 2005. The Company has also engaged the
same banking institution to underwrite and place the sale of $26,000,000 of CDD
Bonds ($19,200,000 to be used for horizontal construction), the first round of
which the Company also expects to close in May 2005. If additional capital is
raised by issuing equity and/or convertible debt, the ownership interests of our
current stockholders may be diluted. Future investors may be granted rights
superior to those of existing stockholders. At this time, the Company does not
have any commitments for additional capital from third parties or from its
officers, directors or majority shareholders. There can be no assurance that
additional capital will be available to the Company from any of the sources
discussed in this paragraph, that any additional capital which may be received
will be sufficient, or that other arrangements will be available when needed or
on terms satisfactory to the Company. If we do not receive a sufficient amount
of additional capital on acceptable terms, we will have to delay, curtail or
scale back some or all of our operations.

RISK FACTORS

Risks Relating To Our Business
----------------------------------

WE NEED $4,500,000 MILLION OF ADDITIONAL CAPITAL, WHICH MAY NOT BE AVAILABLE TO
US ON FAVORABLE TERMS, IF AT ALL, TO FULLY IMPLEMENT OUR BUSINESS PLAN

We need to raise an aggregate of $4,500,000 million of additional capital
for Hickory, TraveLeaders and AMLH, AS and AMTG. 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 which includes, but is not
limited to, making additional acquisitions for cash, and satisfying on-going
cash requirements for our operations and material commitments. We do not have
any commitments or identified sources of additional capital 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 operations, which would have a materially adverse
effect upon our business and results of operations.

WE HAVE RECEIVED $11.355 MILLION OF CONVERTIBLE DEBT FINANCING FROM STANFORD
WHICH IMPOSES SUBSTANTIAL OBLIGATIONS ON US.

The Company received an aggregate of $11.355 million of credit facilities
from Stanford in three tranches during the period from September 2003 to
December 2004. The first tranche of $6 million was received during the period
from September 2003 to March 2004 in the form of a convertible note with a
conversion rate of $15 per share (the "$6 million Credit Facility"). The second
tranche of $4 million was received during the period April 2004 to August 2004
in the form of a convertible note for $3 million and a convertible note for $1
million, both of which notes have a conversion price of $10 per share (the "$4
Million Credit Facility"). The third tranche of $1.355 million was received
during the period October 2004 to December 2004 as an addition to the $4 Million
Credit Facility (the "$1.355 Million Credit Facility"). The convertible notes
and the documents related thereto are collectively referred to herein as the
"Credit Facilities." The Credit Facilities impose certain obligations on the
Company including, but not limited to, the issuance of warrants, some of which
were modified to provide for an exercise price of $.001 per share to secure the
additional $1.355 million, the registration under the Securities Act of the
shares of common stock that may be received upon conversion of the notes and
exercise of the warrants, and the issuance of a security interest in the
Company's assets including the Company's ownership interest in certain
subsidiaries and the requirement to file a Registration Statement with the
Commission to register the stock that is issuable upon conversion of the Credit
Facilities into common stock as well as the stock to be issued upon the exercise
of the warrants granted to Stanford and its associates by dates agreed to in the
original loan documents, as amended. If the Company fails to timely file such
Registration Statement with the Commission, the Company must issue to each
holder of the original warrants, additional warrants to purchase equal to 10% of
the warrants originally issuable to the holder, under the same terms and
conditions of the original grant of the warrants, for each calendar quarter of
the failure to file. In addition, the Company shall be required to issue to the
holders an additional 10% of the shares of common stock to which the Credit
Facility is convertible for each calendar quarter of the failure to file. As of
the filing of this report, the Company has not filed a registration statement
required by the Credit Facilities. The Company and Stanford have modified the
terms of the Credit Facilities to provide that the Company must file the
registration statement before June 30, 2005. The Company can also be found in
default of the Credit Facilities if, after registering a class of stock issuable
to Stanford et al, it fails to timely file "all reports and other documents
required to be filed with the Commission".

OUR CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHIEF FINANCIAL OFFICER IS INVOLVED
IN A NUMBER OF OTHER BUSINESSES ENGAGED IN TRAVEL LEISURE AND/OR PROPERTY
DEVELOPMENT THAT MAY CONFLICT WITH OUR BUSINESS

Malcolm J. Wright, who serves as the Company's Chief Executive Officer,
President and Chief Financial Officer and as a Director of the Company, is the
President of, or otherwise involved in, a number of other business that are
engaged in travel services distribution and/or property development that may
conflict with our business. Mr. Wright is the President of American Leisure Real
Estate Group, Inc., a real estate development company with which TDSR, our
subsidiary, has contracted for the development of the Sonesta Orlando Resort,
Xpress Ltd., with which TDSR has contracted for exclusive sales and marketing
for the Sonesta Orlando 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 will engage 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. From time to time, Mr. Wright pursues
real estate development, management, marketing and sales ventures that may be in
direct competition with such ventures that the Company pursues or plans to
pursue. If Mr. Wright becomes aware of such a venture and the Company does not
have adequate capital resources to pursue the venture, Mr. Wright may fund, and
otherwise pursue, the venture at the exclusion of the Company.

BECAUSE MALCOLM J. WRIGHT, OUR CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHIEF
FINANCIAL OFFICER, 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

Mr. Wright is the President of American Leisure Real Estate Group, Inc.,
Xpress Ltd., Innovative Concepts, Inc., Resorts Development Group, LLC, Osceola
Business Managers, Inc., Florida World, Inc. and SunGate Resort Villas, Inc.
The combined business activities of these companies require approximate 20% of
Mr. Wright's time. Mr. Wright spends 80% of his time on our business. It is
possible that the demands on Mr. Wright from these other businesses could
increase with the result that he may have to devote less time as an executive
officer and a director of our company. As a result, Mr. Wright may not possess
sufficient time to serve as an executive officer and a director of our company.
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 HAVE AGREED TO PROVIDE THE EXECUTIVE OFFICERS OF OUR SUBSIDIARIES A BONUS OF
UP TO 19% OF THE PRE-TAX PROFITS OF THE SUBSIDIARY IN WHICH THEY SERVE AS OUR
EXECUTIVE OFFICERS, WHICH WILL REDUCE OUR PROFITS

The Company has generally agreed to provide the executive officers of each
of its subsidiaries a bonus of up to 19% of the pre-tax profits, if any, of the
subsidiaries 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 pre-tax 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 the Company's other subsidiaries are entitled to share a
bonus of up to 19% of the pre-tax profits of the subsidiary in which they serve
as our executive officers. The Company has the right, but not that obligation 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 19% 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 $5.00. We have not
paid or accrued any bonus as of the filing of this report. 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. The Company believes that this program is an effective tool in
attracting and retaining qualified executives who will be motivated to enhance
earnings for the Company. Further, the Company believes that this program is a
viable form of profit sharing that promote long term commitment from its
executives.

OUR CONTRACTS WITH SUPPLIERS OF TRAVEL SERVICES GENERALLY RENEW ANNUALLY AND IN
SOME CASES MAY BE CANCELED AT WILL BY THE SUPPLIER; THEREFORE, ADVERSE CHANGES
OR INTERRUPTIONS IN OUR RELATIONSHIPS WITH THEM COULD REDUCE OUR REVENUE

We derive a portion of our travel division revenue from commissions and
fees that we receive pursuant to contracts that we have with suppliers of travel
services to provide their services to our customers. These contracts generally
renew annually and in some cases may be cancelled at will by the supplier. As
such, our ability to maintain or expand these contracts depends in large part on
our ability to maintain and expand good relationships with these and other
suppliers of travel services including airline, hotel, cruise, tour and car
rental suppliers. If we cannot maintain good relationships, 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 good relationships, our ability to offer and expand 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 cancel or do not renew the contracts, we would not have the range or
volume of services it will require to meet demand and its future revenue would
decline.

OUR SUPPLIERS OF TRAVEL SERVICES COULD REDUCE OR ELIMINATE OUR COMMISSION RATES
ON BOOKINGS MADE THROUGH US OVER THE INTERNET WHICH WOULD LIKELY 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 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 from
our Internet platforms could have a material adverse effect on our business and
results of operations.

FAILURE TO MAINTAIN RELATIONSHIPS WITH TRADITIONAL TRAVEL AGENTS COULD ADVERSELY
AFFECT OUR BUSINESS AND RESULTS OF OPERATION

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.

DECLINES OR DISRUPTIONS IN THE TRAVEL INDUSTRY COULD SIGNIFICANTLY REDUCE OUR
REVENUES

Potential declines or disruptions in the travel industry include:

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

THE COMPANY MAY NOT IDENTIFY OR COMPLETE ACQUISITIONS IN A TIMELY,
COST-EFFECTIVE MANNER IF AT ALL.

In the event of any future acquisitions, the Company could issue additional
stock that would further dilute current shareholders' percentage of ownership;
incur debt; assume unknown or contingent liabilities; or experience negative
effects on reported operating results from acquisition-related charges and
amortization of acquired technology, goodwill and other intangibles. In the
event that any of these events occur, it could have a material adverse effect on
shareholder value, or the Company's results of operation or financial condition.

IF WE DO NOT EFFECTIVELY MANAGE OUR GROWTH, THE QUALITY OF OUR SERVICES MAY
SUFFER

The Company plans to grow rapidly and will be subject to related risks,
including capacity constraints and pressure on its management, internal systems
and controls. The ability of AMLH to manage its growth effectively requires it
to continue to implement and improve its operational and financial systems and
to expand, train and manage its employee base. The inability of AMLH to manage
this growth would have a material adverse effect on its business, operations and
prospects.

EXCESSIVE CLAIMS FOR DEVELOPMENT-RELATED DEFECTS COULD ADVERSELY AFFECT OUR
FINANCIAL CONDITION AND RESULTS OF OPERATION

We will engage third-party contractors to construct our resorts and to
develop our communities. However, our customers may assert claims against us for
construction defects or other perceived development defects, including
structural integrity, the presence of mold as a result of leaks or other
defects, electrical issues, plumbing issues, road construction, water and sewer
defects, etcetera. In addition, certain state and local laws may impose
liability on property developers with respect to development defects discovered
in the future. A significant number of claims for development-related defects
could adversely affect our liquidity, financial condition, and operating
results.

THE COMPANY IS RELIANT ON KEY MANAGEMENT AND IF THE COMPANY LOSSES ANY OF ITS
KEY MANAGEMENT, IT COULD HAVE A MATERIAL ADVERSE AFFECT ON THE COMPANY'S
BUSINESS AND OPERATIONS

The success of the Company depends 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. The
Company's ability to operate and implement its business plan is heavily
dependent on the continued service of Messrs. Wright and Chiles. The Company has
not entered into an written employment agreement with Mr. Wright. Competition in
our industry for executive-level personnel such as Messrs. Wright and Chiles is
fierce and there can be no assurance that we will be able to motivate and retain
them, or that we can do so on economically feasible terms. The loss of Mr.
Wright or Mr. Chiles could have a material adverse effect on the Company's
business and operations. The Company is not the beneficiary of any life
insurance policies on any of its executive officers or directors.

Keith St. Clair is the Chief Executive Officer of AWT and a key person
regarding the business operations of TraveLeaders. The Company obtained a
$3,000,000 life insurance policy covering Keith St. Clair in connection with a
$3,000,000 Credit Facility that we received from Stanford. Stanford is the
named beneficiary of this insurance policy. $6,600,000 of our working capital
was dedicated to supporting AWT while we conducted due diligence leading to our
acquisition of its assets on December 31, 2004.

WE HAVE A VERY LIMITED HISTORY OF OPERATIONS AND CONTINUING OPERATING LOSSES

Since our inception, we have been engaged primarily in planning the
development of the Sonesta Orlando Resort, building travel club membership
databases, the acquisition of Hickory in 2003, the acquisition of TraveLeaders
on December 31, 2004, and the assembly of our management team. We have incurred
net operating losses since our inception. As of December 31, 2004, we had an
accumulated deficit of $9,882,989. Such losses have resulted primarily from
general and administrative costs associated with our operations since June 2002
and approximately $3,700,000 from losses incurred in connection with the
acquisition of Traveleaders.

UNCERTAINTY OF FUTURE PROFITABILITY

We have incurred losses since our inception and continue to require
additional capital to fund operations. Our fixed commitments, including
salaries and fees for current employees and consultants, equipment rental, and
other contractual commitments, are substantial and will increase if additional
agreements are entered into and additional personnel are retained. We intend
to generate the necessary capital to operate for the next twelve months by
achieving break-even cash flow from operations and subsequent profitability,
selling equity and/or debt securities and/or entering into a sale-leaseback
of our equipment. There can be no assurances that we will be successful in
its efforts. If we are unsuccessful in our efforts to achieve break-even
cash flow and subsequent profitability and raise capital through sales of
securities and/or entering into a sale-leaseback transaction, we will not be
able to continue our operations for the next twelve months, in which case you
will lose your entire investment in the Company.

ECONOMIC DOWNTURN

Our ability to enter into new multi-year contracts may be dependent upon
the general economic environment in which our clients and their customers
operate. A weak United States or global marketplace could cause us to have
longer sales cycles, delays in closing contracts for new business, and
slower growth under existing contracts. If an economic downturn frustrates our
ability to enter into new multi year contracts, it would have a material adverse
effect on our business and results of operations.

OUR CONTRACTS

Our contracts do not ensure that we will generate a minimum level of
revenues, and the profitability of each client campaign may fluctuate,
sometimes significantly, throughout the various stages of our sales campaigns.
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 the canceled campaign or for the revenues we may lose as a
result of the early termination. We are usually not designated as our
client's exclusive service provider; however, we believe that meeting our
clients' expectations can have a more significant impact on revenues generated
by us than the specific terms of our client campaign. 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.

COST AND PRICE INCREASES

Only a few of our contracts allow us to increase our service fees if and
to the extent certain cost or price indices increase; however, most of our
significant contracts do not contain such provisions. Some contracts require us
to decrease our service fees if, among other things, we do not achieve certain
performance objectives. Increases in our service fees that are based upon
increases in cost or price indices may not fully compensate us for increases
in labor and other costs incurred in providing 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 operation
and financial condition.

CHANGING TECHNOLOGY

Our business is highly dependent on our computer and communications
equipment and software capabilities. Our continued growth and future
profitability will be highly dependent on a number of factors affected by
technology, including our ability to (i) expand our existing service offerings;
(ii) achieve cost efficiencies in our existing call centers; and (iii) introduce
new services and products that leverage and respond to changing technological
developments. There can be no assurance that technologies or services developed
by our competitors will not render our products or services non competitive or
obsolete, that we can successfully develop and market any new services or
products, that any such new services or products will be commercially successful
or that our intended integration of automated customer support capabilities will
achieve intended cost reductions. 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.

LABOR FORCES

Our success will be largely dependent on our ability to recruit, hire,
train and retain qualified personnel. Our industry is very 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. Also, if we obtain several
significant new clients or implement several new, large-scale campaigns, we may
need to recruit, hire and train qualified personnel at an accelerated rate. We
may not be able to continue to hire, train and retain sufficient qualified
personnel to adequately staff new customer management campaigns or our call
centers. Because significant portions of our operating costs relate to labor
costs, an increase in wages, costs of employee benefits or employment taxes
could have a material adverse effect on our business, results of operations or
financial condition.

COMPETITIVE MARKET

We believe that the market in which we operate is fragmented and highly
competitive and that competition is likely to 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. Similarly, there can be no assurance
that additional competitors with greater resources than us will not enter our
market. In addition, competitive pressures from current or future competitors
also could cause our services to lose market acceptance or result in
significant price erosion, which could have a material adverse effect upon our
business, results of operations or financial condition.

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

As part of our business strategy, we may consider acquisition of, or
investments in, businesses that offer services and technologies complementary to
ours. Such acquisitions could materially adversely affect our operating results
and/or the price of our Common Stock. Acquisitions also entail numerous risks,
including: (i) difficulty in assimilating the operations, products and personnel
of the acquired business; (ii) potential disruption of our ongoing business;
(iii) unanticipated costs associated with the acquisition; (iv) inability of
management to manage the financial and strategic position of acquired or
developed services and technologies; (v) the diversion of management's attention
from our core business; (vi) inability to maintain uniform standards, controls,
policies and procedures; (vii) impairment of relationships with employees and
customers, which may occur as a result of integration of the acquired business;
(viii) potential loss of key employees of acquired organizations; (ix) problems
integrating the acquired business, including its information systems and
personnel; (x) unanticipated costs that may harm operating results; (xi) adverse
effects on existing business relationships with customers; and (xii) risks
associated with entering an industry in which we have no (or limited) prior
experience. Any of these risks could harm the Company's business, operating
results or financial condition.

BUSINESS INTERRUPTION

Our operations are dependent 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, through casualty, operating
malfunction or otherwise, our business could be materially adversely affected
and we may be required to pay contractual damages to some clients or allow
some clients to terminate or renegotiate their contracts with us. We
maintain property and business interruption insurance; however, such insurance
may not adequately compensate us for any losses we may incur. In the event that
we experience such interruptions and are not adequately compensated by
insurance, it would have a material adverse effect on our business, results of
operation or financial condition.

VARYING QUARTERLY RESULTS

We have experienced and could continue to experience quarterly variations
in operating results because of a variety of factors, many of which are outside
our control. Such factors may include, but not be 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; and the seasonal pattern of certain businesses
serviced by us. 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.

Risks Relating To Our Common Stock
---------------------------------------

RE-PRICING WARRANTS MAY CAUSE SUBSTANTIAL DILUTION TO OUR EXISTING SHAREHOLDERS

In the past, to obtain additional financing, we have modified the terms of
our warrant agreements to lower the exercise price per share from $5.00 and
$2.96 to $.001. We are currently in need of additional financing and may be
required to lower the exercise price of other warrants. The modified warrants
are valued at the market price at the date of modification and recorded as
deferred financing costs, which is included in other assets. The deferred
financing costs will be amortized over the life of the debt using the effective
interest method. Re-pricing of our warrant agreements may cause substantial
dilution to our existing shareholders.

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

The price of our common stock has fluctuated substantially 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 revenue 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 the
Company's consolidated revenue or earnings that are reflective of long-term
problems with the Company's 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.

ACTIVE TRADING MARKETS FOR OUR COMMON STOCK MAY NOT DEVELOP

An active and liquid trading market for our common stock may not develop or
be sustained. In addition, we cannot predict the price at which our common
stock will trade.

OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SECURITIES AND
EXCHANGE COMMISSION WHICH LIMITS THE TRADING MARKET IN OUR COMMON STOCK, MAKES
TRANSACTIONS IN OUR COMMON STOCK CUMBERSOME, AND MAY REDUCE THE VALUE OF AN
INVESTMENT IN OUR COMMON STOCK

Our common stock is considered a "penny stock" as defined in Rule 3a51-1
promulgated by the Securities and Exchange Commission (the "Commission" or the
"SEC") under the Exchange Act. In general, a security which is not quoted on
NASDAQ or has a market price of less than $5 per share where the issuer does not
have in excess of $2,000,000 in net tangible assets (none of which conditions
the Company meets) is considered a penny stock. The Commission's Rule 15g-9
regarding penny stocks impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally persons with net worth in excess
of $1,000,000 or an annual income exceeding $200,000 or $300,000 jointly with
their spouse). For transactions covered by the rules, the broker-dealer must
make a special suitability determination for the purchaser and receive the
purchaser's written agreement to the transaction prior to the sale. Thus, the
rules affect the ability of broker-dealers to sell our common stock should they
wish to do so because of the adverse effect that the rules have upon liquidity
of penny stocks. Unless the transaction is exempt under the rules, under the
Securities Enforcement Remedies and Penny Stock Reform Act of 1990,
broker-dealers effecting customer transactions in penny stocks are required to
provide their customers with (i) a risk disclosure document; (ii) disclosure of
current bid and ask quotations if any; (iii) disclosure of the compensation of
the broker-dealer and its sales personnel in the transaction; and (iv) monthly
account statements showing the market value of each penny stock held in the
customer's account. As a result of the penny stock rules the market liquidity
for our common stock may be adversely affected by limiting the ability of
broker-dealers to sell our common stock and the ability of purchasers to resell
our common stock.

In addition, various state securities laws impose restrictions on
transferring "penny stocks" and as a result, investors in our common stock may
have their ability to sell their shares of the common stock impaired.

THE COMPANY HAS AND MAY ISSUE PREFERRED STOCK THAT MAY ADVERSELY AFFECT THE
RIGHTS OF HOLDERS OF ITS COMMON STOCK.

The Company's Articles of Incorporation authorize its Board of Directors to
issue "blank check" 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 or the majority of the preferred stockholders.
Accordingly, the Board of Directors may, without approval from the shareholders
of 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 common stock. The preferred stock could be utilized,
under certain circumstances, as a method of discouraging, delaying, or
preventing a change in ownership and management of the Company 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.

WE DO NOT EXPECT TO PAY DIVIDENDS FOR THE FORESEEABLE FUTURE

We have not declared or paid dividends on our common stock in the last two
fiscal years. We do not anticipate paying dividend on our common in the
foreseeable future. Our ability to pay dividends is dependent upon, among other
things, our future earnings, if any, as well as our operating and financial
condition, capital requirements, general business conditions and other pertinent
factors. Furthermore, any payment of dividends by us is subject to the
discretion of our board of directors. Accordingly, dividends may not ever be
paid on our common stock. 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
(as the same may be amended from time to time) 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, but have not issued, Series F Preferred Stock with
cumulative dividends that accrue 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 have
never paid any cash dividends on our preferred stock.

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

Our directors, officers, and principal shareholders beneficially own a
substantial portion of our outstanding common and preferred stock. Malcolm J.
Wright, our President, Chief Executive Officer and Chief Financial Officer, and
Roger Maddock, one of our majority shareholders, have a mutual understanding
pursuant to which each of them vote their shares with the other. As a result,
these persons control the affairs and management of the Company, as well as all
matters requiring shareholder approval, including election and removal of
members of the board of directors, transactions with directors, officers or
affiliated entities, the sale or merger of the Company, and changes in dividend
policy. This concentration of ownership and control could have the effect of
delaying, deferring, or preventing a change in ownership and management of the
Company, even when a change would be in the best interest of other shareholders.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of
operations is based upon our audited 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. On an on-going basis, we evaluate our estimates. 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. Actual results may differ from these estimates under different
assumptions or conditions. For a detailed discussion of our significant
accounting policies, see Note 1, Summary of Significant Accounting Policies to
the Notes to Consolidated 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. The Company has incurred substantial losses
since inception, and has negative working capital. These factors among others
indicate that the Company may be unable to continue as a going concern,
particularly in the event that it cannot obtain additional debt and/or equity
financing to continue its operations or achieve profitable operations, as
discussed above under the headings "Liquidity and Capital Resources" and "Risk
Factors." The Company's continuation as a going concern depends upon its ability
to generate sufficient cash flow to conduct its operations and its ability to
obtain additional sources of capital and financing. The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty. Management recognizes that we must generate capital and
revenue resources to enable us to achieve profitable operations. We are planning
on obtaining additional capital by achieving break-even cash flow from
operations, selling equity and/or debt securities, and/or a sale-leaseback
transaction on our equipment. The realization of assets and satisfaction of
liabilities in the normal course of business is dependent upon us obtaining
additional revenues, additional equity or debt capital and ultimately achieving
profitable operations. However, no assurances can be made that we will be
successful in these activities. Should any of these events not occur, our
financial statements will be materially affected.

The Company recognizes revenues on the accrual method of accounting. For
the sales of units in the Sonesta Orlando Resort, 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 the Company'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 the Company's client as to the ability to be paid for the
service. Revenues from Hickory 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 the Company'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.

OFF BALANCE SHEET ARRANGEMENTS

The Company does not have any off balance sheet arrangements that have or
are reasonably likely to have a current or future effect on the Company's
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures, or capital resources
that is material to investors.

ITEM 7. FINANCIAL STATEMENTS

The Financial Statements required by Item 310 of Regulation S-B are stated
in U.S. dollars and are prepared in accordance with U.S. Generally Accepted
Accounting Principles.

AMERICAN LEISURE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2004 AND 2003

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.

Lopez, Blevins, Bork & Associates, LLP
Houston, Texas
March 30, 2005

F-1

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
------------ ------------

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 15,636,322 6,166,488

Accumulated deficit (9,372,641) (2,738,340)
------------ ------------
Total Stockholders' Equity 6,284,002 3,444,462
------------ ------------

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

F-2

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
------------ ------------

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)
============ ============

NET LOSS PER SHARE:
BASIC AND DILUTED $ (0.77) $ (0.31)
============ ============

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

F-3

AMERICAN LEISURE HOLDINGS, INC.

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

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 $ 5,738,852 $ (611,490) $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

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

Balance-December 31, 2003 882,500 8,825 7,488,983 7,489 6,166,488 (2,738,340) 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

Net loss (6,634,301) (6,634,301)
----------- ------------ --------- ---------- ----------- ------------ -----------
1,056,051 $ 10,323 9,977,974 $ 9,978 $15,636,322 $(9,372,641) $6,284,002
=========== ============ ========= ========== =========== ============ ===========

F-4

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 $ -
============= ============

F-5

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.

F-6

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, 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%
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%

F-7

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.

F-8

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.

F-9

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)
------------ ------------

F-10

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.

F-11

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.

F-12

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.

F-13

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.

F-14

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
=================

F-15

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.

F-16

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.

F-17

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.

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.

F-18

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
========

F-19

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.

In June 2001, Rock Investment Trust, P.L.C., a British limited liability
company, and RIT, L.C., a related Florida limited liability company, filed suit
against Malcolm J. Wright, American Vacation Resorts, Inc., Inversora Tetuan,
S.A., Sunstone Golf Resort, Inc., and Sun Gate Resort Villas, Inc., seeking
either the return of an alleged $500,000 investment or ownership interest in one
or more of the defendant entities equivalent to the alleged investment amount.
Defendants have denied all claims and Mr. Wright, American Leisure and Inversora
Tetuan have a counterclaim against Rock Investment Trust and its principal,
Roger Smee for damages. American Leisure is seeking to recover deposits and
costs on two real estate transactions totaling approximately $440,000 plus
damages. The litigation is in the discovery phase and is not currently set for
trial. American Leisure believes that Rock Investment Trust's and RITs claims
are without merit and the claim is not material to American Leisure.

In March 2004, Manuel Sanchez and Luis Vanegas, filed suit against American
Leisure Holdings, Inc. American Access Corporation, Hickory Travel Systems, Inc.
Malcolm J Wright, L William Chiles, and Walter Kolker, seeking a claim for
securities fraud, violation of Florida Securities and Investor Protection Act,
breach of their employment contracts, and claims for fraudulent inducement.
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. American
Leisure believes that Manuel Sanchez and Luis Vanegas claims are without merit
and the claim is not material to American Leisure.

F-20

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.

F-21

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.

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.

NOTE 20 - 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 49% 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.

F-22

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

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

Lopez is succeeding Bateman who succeeded Malone. Bateman reviewed the
Company's 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 the
Company 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 to make reference to the subject matter of
the disagreement(s) in connection with its report on the Company's financial
statements. 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.

Malone audited the balance sheet of the Company 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 the Company's 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, 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 the Company's ability to continue as a going concern.

In connection with the audit of the Company's 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 the Company's 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.

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

The Company 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 the Company's 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 the Company and Bateman or Malone, the Company's
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. The Company did not receive any written or oral
advice concluding there was an important factor to be considered by the Company
in reaching a decision as to an accounting, auditing, or financial reporting
issue.

Lopez reviewed the disclosure in the Form 8-K filed with the Commission on
March 28, 2005, before it was filed with the Commission and was provided an
opportunity to furnish the Company with a letter addressed to the Commission
containing any new information, clarification of the Company's expression of its
views, or the respects in which it did not agree with the statements made by the
Company in response to Item 304 of Regulation S-B. 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.

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.

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 nominated David Levine,
Thomas Cornish and Carlos 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 (4)
to nine (9). This disclosure under Item 8B is being provided to clarify that
Messrs. Levine, Cornish and Fernandez have not yet commenced their appointments
to the Board of Directors and are considered nominees. The Company has no
reason to believe that any nominee will be unable to serve or decline to serve
as a director. 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. As and when the Company and the director nominees complete the
process of compliance with Sarbanes-Oxley, the nominees are expected to be
inducted as directors of 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 62 Director

James Leaderer 51 Director

BIOGRAPHICAL INFORMATION

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

MALCOLM J. WRIGHT, 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. 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 TDSR, our subsidiary, has contracted
for the development of the Sonesta Orlando Resort, Xpress Ltd., with which TDSR
has contracted for sales and marketing for the Sonesta Orlando 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 will engage 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. 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.

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. Mr. Chiles has served as the Chairman of our board of directors since
June 2002. Since August 1998, Mr. Chiles has served as the Chief Executive
Officer and President of Hickory Travel Services, 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.

Nominees
--------

The Company's Board of Directors, via signed written consent, has nominated
David Levine, Thomas Cornish and Carlos Fernandez to serve as directors of the
Company. The Company will provide biographical and related party information for
the nominees in a Form 8-K at such time as they accept their directorship.

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

The Company is 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 a directors, executive
officers, or control persons.

TERM OF OFFICE

The Directors of the Company are appointed for an initial term of three (3)
years followed by periods of one (1) or two (2) years to permit a staggered
expiration schedule. The officers of the Corporation are appointed by our board
of directors and hold office until they are removed by the board.

AUDIT COMMITTEE

The Company does not have an audit committee or an audit committee
financial expert. The Company expects the acceptance of several directorships
in the near future. The Company anticipates that it will form an audit
committee when the new directors join the Board, and anticipates that one of the
new directors will serve as an independent audit committee financial expert.

COMPENSATION COMMITTEE

The Company does not have a compensation committee. The Company expects
the acceptance of several directorships in the near future. The Company
anticipates that it will form a compensation committee when the new directors
join the Board.

DIRECTORS' COMPENSATION

The Company pays or accrues $18,000 per year for each person who serves on
the board of 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 authorized the issuance of warrants to purchase 250,000 shares
of the Company's common stock at an exercise price of $1.02 per share
distributed in 50,000 warrant blocks to Malcolm J. Wright, L. William Chiles,
David Levine, Thomas Cornish, and Carlos Fernandez over a three-year period. The
Company will issue warrants for an aggregate of 250,000 of the shares shortly
after filing this Form 10-KSB, which issuances assume that each nominee accepts
directorship as anticipated by the Company. The Company will issue warrants to
purchase the remaining shares to each director in equal amounts on the next
three anniversary dates of each director's term as a director. Assuming that the
nominees accept directorship and that all directors serve for a three-year term,
each director will receive warrants to purchase an aggregate of 100,000 shares
of the Company's common stock during such three-year period.

The Company also authorized the issuance of warrants to purchase 50,000
shares of the Company's common stock at an exercise price of $1.02 per share to
Gene Prescott, who serves on the Company's advisory board. Similarly, the
Company will issue a warrant to purchase 100,000 shares to Mr. Prescott shortly
after filing this Form 10-KSB and warrants to purchase the remainder of the
shares in equal amounts on the next three anniversary dates of Mr. Prescott's
term as a member of the advisory board.

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, Saddlebrook,
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 year 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)
Chief Executive Officer of 2003 $168,579(4) -- -- -- --
Hickory Travel Systems

(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. 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, as discussed below under "Item
12. Certain Relationships and Related Transactions."
(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. The Company reimburses Mr.
Wright $940 per month and related expenses for business use of an H2
Hummer.
(4) Includes $152,902 and $150,579 of accrued salary for Mr. Chiles' 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 L. William Chiles' services as a director of the
Company for 2004, 2003 and 2002.
(5) 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.

Key Man Life Insurance
----------------------

We have obtained a $3,000,000 life insurance policy covering Keith St.
Clair in connection with a $3,000,000 Credit Facility that we received from
Stanford. Stanford is the beneficiary of this life insurance policy. Mr. St
Clair is the Chief Executive Officer of AWT and is in charge of TraveLeaders.
$6,600,000 of our working capital was dedicated to supporting AWT while we
conducted due diligence leading to our acquisition of its assets on December 31,
2004. Upon the retirement of the debt that the policy benefits secures, the
Company will become the beneficiary of the policy, if the Company retains it in
effect.

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

The following table sets forth information as of March 31, 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 13,278,457 (2) 68.5%

Malcolm J. Wright 13,278,457 (3) 68.5%

Stanford Venture Capital Holdings, Inc. 2,447,733 (4) 23.4%

L. William Chiles 1,018,672 (5) 10.0%

James Leaderer 10,000 *

David Levine -- 0%

Thomas Cornish -- 0%

Carlos Fernandez -- 0%

All officers and directors as a group
(3 people) 13,790,597 (3)(5) 73.2%

*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 60 days through the exercise of any option, warrant or
right. As of March 31, 2005, there were 9,977,974 shares of common stock
outstanding.
(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, 1,942,268 shares of common stock owned
directly by Arvimex, Inc. ("Arvimex"), and 475,000 shares of Series A
Preferred Stock owned directly by Arvimex which are convertible into
4,750,000 shares of common stock. Mr. Maddock is the President of Arvimex
and beneficially owns the shares of common stock and Series A Preferred
Stock owned by Arvimex. Mr. Maddock and Malcolm J. Wright have a mutual
understanding whereby they vote their shares together. Mr. Maddock's
beneficial ownership also includes the shares beneficially owned by Mr.
Wright.

(3) 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. ("Xpress"), 335,000 shares of Series A Preferred Stock owned
directly by Xpress which are convertible into 3,350,000 shares of common
stock, and 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 347,860 shares of common stock at
an exercise price of $2.96 per share, which were issued to Mr. Wright in
consideration of his personal guarantee of the Company's debt and pledges
of their shares of the Company's common stock to Stanford as part of the
security for the financing that Stanford provided to the Company (described
below). 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
the Company. Mr. Wright and Roger Maddock have a mutual understanding
whereby they vote their shares together. Mr. Wright's beneficial ownership
also includes the shares beneficially owned by Mr. Maddock.

(4) 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 and 845,733 pledged by Malcolm J. Wright. Does
not include an aggregate of 1,012,500 shares of common stock owned by the
Stanford Employees
(5) Includes warrants to purchase 168,672 shares of the Company's common stock
at an exercise price of $2.96 per share, which was issued to Mr. Chiles in
consideration for his personal guarantee of the Company's debt and the
pledge of his shares of the Company's common stock to Stanford as part of
the security for the financing that Stanford provided to the Company.

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.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED 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.

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 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.

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 19% 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.

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

The Company had unsecured, demand notes payable to related parties of
$1,910,629 as of December 31, 2004. Of the notes payable to related parties,
$140,042 was owed to L. William Chiles, a director of the Company, $859,000 was
owed to various officers, directors and shareholders of Hickory, $531,232 was
owed to Roger Maddock, who directly (and indirectly through Arvimex and Malcolm
J. Wright) beneficially owns more than 5% of the Company's common stock, and
$380,353 was owed to Arvimex, which directly owns more than 5% of the Company's
common stock. In addition, the Company had shareholder advances of $273,312 as
of December 31, 2004. Of the shareholder advances, approximately $95,000 was
owed to Mr. Wright and $178,312 was owed to L. William Chiles. In March 2005,
the Company 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 Company received $2,474,090 in cash from the sale of the property,
which the Company used for working capital and to pay off the notes payable to
related parties and the shareholder advances.

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

ITEM 13. EXHIBITS

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

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 (15) Form of Certificate of Designation of Series F Convertible Preferred
Stock
4.6 (18) Certificate of Designation of Series F Convertible Preferred Stock
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. ("Stanford") 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
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 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 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 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. ("AWT") in favor of Galileo International, LLC ("Galileo")
and acquired by the Registrant

10.30 (18) Third Amended and Restated Acquisition Loan Note for $6,000,000
issued by AWT in favor of Galileo and acquired by the Registrant
10.31 (18) Amended and Restated Initial Loan Note for $7,200,000 issued by AWT
in favor of Galileo and acquired by the Registrant
10.32 (18) Promissory Note for $5,000,000 issued by AWT in favor of CNG Hotels,
Ltd. and assumed by the Registrant
10.33 (18) Promissory Note for $2,515,000 issued by Tierra Del Sol Resort,
Inc., formerly Sunstone Golf Resort, Inc. ("TDSR"), in favor of
Arvimex, Inc. ("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 and Paradise Development
Group, Inc. ("Paradise") to sale part of unimproved land in
Davenport, Florida
10.41 (17) First Amendment to Purchase Agreement between Advantage and
Paradise 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
14 (8) Code of Ethics
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 Letter from Bateman & Co., Inc., P.C.
21 * Subsidiaries of American Leisure Holdings, Inc.
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.

(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.
(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 to the Registrant's Form 10-QSB on

(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 Exhibits 3.1 and 10.1, respectively, 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 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, to the
Registrant's Form 10-KSB on March 31, 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.

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: April 1, 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
---------------------
Malcolm J. Wright Chief Executive Officer, President, April 1, 2005
Secretary, Chief Financial Officer,
and Director

By: /s/L. William Chiles
--------------------
L. William Chiles Director April 1, 2005

By: /s/ James Leaderer
------------------
James Leaderer Director April 1, 2005