Audited Results for the period ended 31 Dec 2007

    RNS Number : 8492K
  American Leisure Group Limited
  29 December 2008
   

    

 Press Release   29 December 2008

    American Leisure Group Limited

    ("ALG" or "the Company")

    Publication of Audited Results for the period ended 31 December 2007


    American Leisure Group Limited (ALG.L), "the vacation resort company", announces today its audited results for the period from 16 May
2007 (date of inception) to 31 December 2007 (the "2007 Accounts"). The Company confirms that the Annual Report and Accounts for the year
ended 31 December 2007 are being posted to shareholders later today and will also be available to view on the Company's website at
www.americanleisuregroupltd.com later today.

    The Company's interim statement for the six months ended 30 June 2008 (the "Interim Statement") is also being released immediately after
this announcement.  Commentary on the period covered by Interim Statement is included within the 2007 Accounts.


    Continued suspension of trading in ALG Shares on AIM

    On 30 June 2008, ALG announced that it had not been possible to finalise the 2007 Accounts and, consequently, trading in the Company's
shares on AIM were suspended under AIM Rule 19 on 30 June 2008.  

    Even though the 2007 Accounts and the Interim Statement have been released today, the suspension of the trading of the Company's shares
on AIM has not been lifted by the London Stock Exchange ("LSE") pending further clarification of the financial position of the Group.

    Under AIM Rule 41, the LSE will cancel the admission of a company's shares to trading on AIM where such company's shares have been
suspended from trading for six months.  As ALG's shares were suspended from trading on AIM on 30 June 2008, the admission to trading of ALG
shares on AIM would therefore, as the suspension has not been lifted, normally have been cancelled automatically by the LSE at 7.00 a.m. on
31 December 2008. However, the LSE has agreed, pending further clarification of the Company's financial position, to extend the date for
such cancellation from 31 December 2008 to 16 January 2009,.

    A further announcement will be made in due course.


    For further information please contact:

 American Leisure Group Limited
 Malcolm Wright, Chief Executive Officer           Tel: [phone]
 David Mace, Chairman                     www.americanleisuregroupltd.com

 Collins Stewart Europe Limited
 Hugh Field                      Tel: [phone]

    Media enquiries:
 Abchurch Communications
 Henry Harrison-Topham / Stephanie Cuthbert  Tel: [phone]
 [e-mail]         www.abchurch-group.com 

      
    Chairman's statement

    Introduction

    I am pleased to report the financial results of American Leisure Group Limited (referred to as the "Company" or "ALG", which also refers
to ALG and its subsidiaries according to context) for the period from 16 May 2007 (Date of Inception) to 31 December 2007.  

    During this period, ALG completed a successful Initial Public Offering ("IPO") on AIM, the market operated by the London Stock Exchange,
on 13 August 2007, at which time we raised £75.0 million (before expenses) and combined two separate companies, American Leisure Holdings,
Inc. ("AMLH") and Azure Property Investments Inc. ("Azure") to form ALG.  

    ALG was established to create an integrated hospitality management, vacation club and related credit facility company, vacation resort
development, and travel services group. The acquired companies owned, between them, seven resort land sites near Orlando, Florida, covering
approximately 517 acres.  

    On 7 December 2007, ALG announced that, in order to reconcile with the 31 December accounting date of ALG's US subsidiary, AMLH, the ALG
accounting reference date would be changed to 31 December.  

    I sincerely apologise, on behalf of the Board, for the late completion of both the audited financial statements for the period ended 31
December 2007, which resulted in the Company's shares being suspended from trading on AIM since 30 June 2008, and the unaudited half-year
financial statements to 30 June 2008, which are being published simultaneously with these accounts.  This delay has been due to weaknesses
in our accounting functions mainly arising from many changes in its personnel and uncertainty to the resources available to the Company due
to the delay in being able to draw down on the Kennedy facility (see Current Position below). We continue our discussions with Kennedy and
are in the process of strengthening our financial team (see "People" below).  




    Current Position

    As shareholders know, the achievement of ALG's business model requires the development of substantial vacation resorts on ALG's land
assets. This development, in turn, is dependent on the securing of the required finance to build out the vacation resort. Indeed, a stated
key rationale for the IPO and the raising of the equity capital was to strengthen ALG's capital structure to assist in the securing of the
appropriate debt finance to advance the development of ALG's initial resort property portfolio and its business plan overall.  

    As has been widely reported, including by ALG in its trading updates of 7 December 2007, 25 March 2008, 9 June 2008 and 18 August 2008,
the period following ALG's admission to AIM has proven, primarily due to the growing and unprecedented difficulties in the international
debt market, extremely difficult for virtually all companies involved in the development of US property to raise further development
finance. ALG, due to the early stage of its business model, has been subject to these extreme difficulties, with the consequence that
funding has not been available to complete the build out of ALG's portfolio at the speed anticipated at the time of the IPO.  

    Despite the difficult financial and economic conditions, I am delighted that ALG's U.S. investment banker, Stanford Financial Group,
including Stanford International Bank, Limited, has continued to support ALG, initially through a working capital facility of $11m drawn
between the period February 2008 and June 2008 and latterly through a further working capital facility of $17.5 million granted in July
2008. This facility was fully drawn down on 22 December 2008.  

    On 20 August, it was announced that Kennedy Funding Inc. ("Kennedy") had also conditionally committed to provide up to a further $40
million of new additional credit facilities to the Company and that drawdown of this facility was subject, inter alia, to receipt of
satisfactory property valuations and customary general conditions and requirements. Unfortunately, the receipt of the required valuations
was delayed due to difficulties from the lack of comparable transactions caused by the current market conditions and as a result, Kennedy
has extended their August commitment letter to 15 January 2009.  However, we believe that any final Kennedy facility available for draw down
to the Group will be reduced from $40 million to a loan secured only on Bella Citta. As a result of the reduction in the facility, we
believe that that if the facility is granted the net amount of new working capital available for the Company (after the deduction of closing
costs, an interest reserve for 12 months and the repayment of the existing mortgage of $10 million on Bella Citta) may be only $4 million.  This will be required to finance the immediate working
capital requirements of the group and to help facilitate completion of ALG's first phase of 96 resort townhomes at the Sonesta Resort
Orlando at Tierra del Sol, which will be our first vacation destination resort. Opening of this resort and the continuation of the Company
as a going concern is still dependent on the Group securing further credit lines of $15 million to complete the first phase of the resorts
amenities and further vertical construction lines of $40 million to build its remaining presold townhomes.  Subject to the receipt of these
financings, it is currently anticipated that this resort will open during 2009. Initially, it will have 166 townhomes increasing to 490
units, and the first phase of the amenities, including check-in, lazy river and water slides, children's area, a double Flowrider, spas,
sundecks, bar and restaurant all with extensive landscaping. This resort will eventually encompass 283 acres, located within ten miles of Walt Disney World in Orlando, Florida, and it is intended, when
completed, to contain around 4,500 vacation residence units at the Sonesta Resort Orlando.  

    The Company is currently in preliminary discussions with several parties to secure further working capital to finance interest payments
on the outstanding mortgages on the Group's land bank and construction loan facilities to enable the build out of the next phase of resort
units.  As referred to in the Report of the Auditors and as further described in Note 3 to the Accounts, ALG will need to secure and draw
down very quickly, significant additional financing to continue through the first half of 2009. This has yet to be secured.  


    Financial Results

    ALG's turnover for the period 16 May 2007 through 31 December 2007 was $8,811,007 and its net loss was $8,532,284.  Turnover primarily
related to travel services revenues and the loss reflects the nature of our resort development activities as no unit sales were closed. 
Land and construction costs have been capitalized, whereas real estate, sales and marketing, general and administrative expenses incurred in
the period have been expensed in the Statement of Operations.  

    ALG's land bank was independently valued at the end of April 2008.  This report concluded that the value of the land, which had been
valued at $625 million at the time of the IPO, had fallen to between $500 million and $535 million.  This value is still substantially
higher than the book value of $282,860,548 million (excluding the CDD asset of $20,511,252) at which land was carried in ALG's balance sheet
at 31 December 2007.  

    ALG's land bank was independently valued again in September 2008.  This report concluded that the value of the land had fallen further
to between $423 million and $470 million. This value is still substantially higher than the book value of $308,294,583 million (excluding
the CDD asset of $20,181,175) at which land was carried in ALG's half year balance sheet at 30 June 2008.  

    These valuations were on a going concern basis as explained in Note 3 of the audited financial statements.  The continued reduction in
value of ALG's land bank reflects the weakened market for vacation and residential property resulting from the highly publicized global
economic and financial problems.  

    However, of importance for our long-term prospects, I am pleased to report that ALG has maintained pre-sale contracts for the delivery
of vacation homes to the value of more than $200 million as of the date of this report. These contracts provide, in the very difficult
market environment, support for of ALG's business plan.  


    Corporate developments

    On 25 March 2008, ALG announced the sale of Traveleaders Group, AMLH's travel agency, to Travel Acquisitions Group ("TAG") and the
related establishment of a Strategic Alliance Marketing Agreement with TAG. ALG was pleased with the terms of the sale of Traveleaders,
which was non-core to ALG's medium term business plan. The new enhanced marketing agreement with TAG will designate ALG as the preferred
family destination provider in Orlando for TAG's 1,700 owned and franchised travel agencies throughout the United States and Canada. This
should significantly increase our occupancy level and rental rates at the Sonesta Resort Orlando when it opens next year. On October 31,
2008, ALG's subsidiary AMLH, sold its interest in Hickory Travel Systems and established a Strategic Marketing Agreement with Hickory to
increase our occupancy level and rates at the Sonesta Resort Orlando.  

    On 28 March 2008, ALG announced the de-listing of its US public subsidiary, AMLH, from the OTC Bulletin Board. This step removed the
administrative burden of the listing, which was considered unnecessary in the light of ALG's ownership of in excess of 90% of the issued
common stock of AMLH.  

    On 30 June 2008, trading in the Company's shares on the AIM exchange was temporarily suspended as ALG was unable to meet the annual
financial statement reporting requirements, within the timetable, as outlined in Rule 19 of the AIM Rules.  
    On 30 July 2008, Collins Stewart Europe Limited, our Broker, also became our Nominated Advisor replacing Dawnay, Day Corporate Finance
Limited.  


    People

    ALG announced, on 3 January 2008, that Sir David Garrard had stepped down as Chairman of ALG, as a result of the increasing time
required in relation to his other commercial undertakings. Sir David remains on the Board as a non-executive director. Having been a
non-executive director of ALG at the time of the IPO, I was delighted to assume the Chair upon Sir David's transition. I would like to
commend Sir David for his efforts in successfully steering ALG through the complex IPO process.  

    From 1 July 2008, I increased my time commitment to the Company and have assumed the role of (part time) Executive Chairman. I am
devoting considerable effort into assisting management forge a successful path for the Company in these financially difficult times and as
part of this process, we have to continue to reassess ALG's on-going strategy, management and its cost base in the face of the severe
liquidity constraints in the Company and marketplace in which we are now operating.  

    The Company is presently at an advanced stage in the recruitment of a new Chief Operating Officer/Finance Director in order to
strengthen significantly and enhance the Company's management team.  

    Fred Pauzar, Director of Corporate Development, resigned as a director of ALG on 20 August 2008. The Board would like to thank Fred
Pauzar for all his hard work in helping bring the ALG concept into existence.

    In what has been, and continues to be, a challenging period for ALG, I am very grateful for the commitment and hard work of all the
Group's staff.


    Outlook

    At the time of writing, the effects of the general economic slowdown and "credit crunch" are continuing unabated and their duration is
uncertain. These market conditions are unprecedented and ALG is operating within the severest liquidity restraints caused by global credit
market conditions. ALG needs to secure and draw down very quickly significant additional financing to continue trading through 2009. The
Board, however, remains committed to ALG's business plan and continues to believe that ALG's land assets are in attractive locations on
which to develop future vacation resorts. I am particularly encouraged by the high standard and quality of construction to date and that we
have been able to continue development of the Sonesta Resort Orlando at Tierra del Sol, albeit in the current market environment at a
significantly reduced rate, and have retained a material level of pre-sale contracts.  

    Notwithstanding the unprecedented and very challenging conditions in which we find ourselves, the Directors of ALG remain confident in
the attractiveness of the original business plan and remain committed to its implementation, albeit over an extended timeframe.


    David Mace
    Executive Chairman 
    24 December 2008

    
     Chief Executive's Review

    Introduction
    In this, my first Chief Executive's Review, I set out how we intend to take our business forward in the face of the current very
difficult and extremely challenging market and global economic conditions. 
    At the same time as it commenced trading on AIM on 13 August 2007, ALG acquired more than 90% of the issued share capital of American
Leisure Holdings, Inc. ("AMLH") and 100% of the share capital of a closely held BVI company, Azure. AMLH, which was admitted to trading on
the NASD OTC Bulletin Board ("NASD BB") in July 2002, was voluntarily delisted from the NASD BB in March 2008.  
    During the decade preceding ALG's founding, AMLH and Azure assembled a resort-oriented land bank, brought together a key management
team, and organized a network of brokers that produced over US$300 million in resort housing unit pre-sales. I believe that ALG's decision
to concentrate its efforts in Central Florida with our development of the first truly "family vacation resort" in the area, will enable us
to weather the current economic storm better than many others, due to the billions of dollars that have been invested by the theme park
operators in the local infrastructure.  This encourages tens of millions of vacation visitors to return here each year.  
    The development of the ALG business model was based upon our years of direct involvement with resort property development businesses,
vacation club and timeshare sales and hospitality management. We believe that vacation property developers have previously been focused on
residential real estate development activities and the sale of completed home units.  ALG's business model includes the creation and
long-term operation of more diversified, stable and integrated profit centres that we intend to establish in the course of developing
"branded" or highly rated "Family Vacation Resorts".  

    This business plan includes resort development, sales and management as well as future vacation club or timeshare sales and the related
financing of such vacation club sales. ALG is also engaged through strong third-party marketing affiliations in providing travel services
with the intent of creating additional sales opportunities and increasing room and occupancy rates. Through ALG's resort development and
sales division, we are in the process of developing the Sonesta Resort Orlando at Tierra del Sol.  However, this development activity and
our sales of additional resort units slowed very considerably in late 2007 due to the subsequent unprecedented global economic conditions
and the resultant lack of availability of the necessary construction finance.  However, we are still slowly progressing with this
development with the intent of closing a significant number of sales in the coming months and opening the resort during 2009. The opening of
the resort is still subject to the Group obtaining the funding of $15m necessary to finish the first phase of the water park and further vertical construction lines of $40 million.  Progress at Tierra
del Sol can be monitored on the project's website at www.tierradelsolresort.com. The quality of the first phase of the resort is extremely
good and, we believe, will put us in a good position for unit closings and future sales once the marketplace returns to some semblance of
normality.  

    Operating Conditions
    As has been well publicised, economic conditions unexpectedly and dramatically deteriorated immediately after ALG's flotation in August
2007. Land loans, the traditional way of obtaining working capital from a land bank, have pretty much ceased, construction funding has dried
up due to the number of foreclosures and available end mortgages were reduced last Autumn to below 60% loan to value.  

    Our view of the marketplace subsequent to the AIM listing has, of necessity, therefore changed substantially. The collapse of confidence
in the housing market, and the tightened restrictions and availability of consumer finance for both primary and vacation residences, has, at
present, dramatically curtailed our whole ownership sales opportunities.  

    The strategy of ALG is largely based upon our ability to provide market-leading family resorts and to sell, develop and complete
vacation resort residential properties, thereby creating resort management income and once the resort is established vacation club sales and
financing programmes. The global credit crisis has undermined the stability in key contributing elements to our strategy which includes
decreases in real estate valuation, decreased consumer confidence and lack of demand for primary and vacation home residential units.  

    Prior to August 2007, we adopted a relatively passive selling position, focusing resources on securing financing for the construction of
the large number of units under contract.  By August 2007, ALG had contracted resort unit sales for over 700 units at a sales value in
excess of $300 million. The continued decline of the U.S. and global economy, lacklustre market conditions and the resultant lack of
substantial new sales opportunities, has precipitated a loss of a number of sales that were under contract. The value of such sales has
reduced to a current value that is still over $200 million.  As an example of the changing conditions, ALG's resort unit presales in 2007
were $9.35 million, and for the first nine months (January 2008 up to September 2008), additional sales amounted to only $1.9 million.  

    The lack of liquidity in the credit markets, based on the expectation of continued downward economic pressure, has caused significant
delays in obtaining financing for completion of the first resort at The Sonesta Orlando Resort. We have suffered and continue to suffer from
acute liquidity problems created by the current market conditions.  This includes financing for the vertical construction of residential
units, recreational amenities and developer-provided site improvements.  We currently anticipate that the Sonesta Resort Orlando at Tierra
del Sol will open during 2009 subject to receipt of the financings referred to in the Chairman's statement. ALG urgently needs to raise
these additional financing to accomplish this and to remain in operation as a going concern. Although we have been successful in 2008 to
date, in obtaining two additional credit facilities totalling $28.5 million from Stanford and a conditional commitment from Kennedy, ALG
needs additional working capital and additional long term debt financing in the first half of 2009 as well as short term construction financing to enable us to further advance our business
objectives.  A significant portion of our cash flow goes to financing the mortgages on our land bank which we can no longer afford to
finance without obtaining additional lines of credit. In the coming months, we therefore intend to strategically review all our land bank
and assets to ensure we maximize our shareholder's equity.  

    Most of our existing buyers at the Sonesta Resort Orlando at Tierra del Sol are from the UK and Ireland, and as such, have been affected
by restrictions imposed last autumn by US banks on foreign national borrowers. ALG has diligently pursued and has made possible attractive,
market rate mortgage financing for qualifying resort unit buyers through retail mortgage programs in order to allow for the sales of our
initially developed resort units to close in the near term. The recent substantial drop in the exchange rate of sterling relative to the US
Dollar has also caused difficulties for our UK buyers.

    The diligent efforts of our management have done their best to keep buyers informed and enthused about being part of the Sonesta Resort
Orlando despite the world's economic problems and the extremely high quality specifications of our resort development have greatly assisted
in the retention of sales. As a result, we have been encouraged by the level of sales contracts retained. Our two first closings were
achieved December 2008, with all 96 closings from units under construction expected to occur before March 31, 2009. Additional construction
of presold units will commence just as soon as new credit lines are in place.  Since we floated in August 2007, most other U.S. real estate
projects have suffered from an exodus of the majority of their buyers and many are now facing bankrupt projects.  By keeping our standards
high, we believe the values of our units will hold up well and will continue to provide good collateral for bank finance.  

    We have reviewed our offerings and our plans now include offering broader price and size ranges within our unit offerings. This is
reflective not only of economic factors but also consistent with our view as a responsible Company seeking to help address the challenges of
long term sustainability.  Our business model remains geared toward the realisation of economically stable turnover from our planned resort
operations and the expected future major impact of vacation club sales and financing activities.  

    We continue to believe that ALG benefits from the advantage of substantial, well-located resort land holdings in the world's primary
holiday destination, near the United States' most popular and successful major theme parks.  The current land portfolio comprises seven
sites for development as resorts, covering a total area of approximately 517 acres, all of which are located in Orlando's theme park region.
The sites were originally selected for large-scale resort development and, in the aggregate over 7,000 resort units were planned.  

    However, dependent on our liquidity, we believe it may not be possible to continue to pay the high interest costs on all of our land
loans from our limited working capital and we will strategically review all our land bank and assets.  Based upon current economic
conditions, full development of the Sonesta resort sites is not expected to be achieved until after the 2015 goal anticipated at the time of
the AIM flotation.  

    As noted in the Chairman's report, the current appraised Market Value of ALG's land portfolios based upon the Market Value Definition
excerpted from the Department of the Treasury, Office of Thrift Supervision, September 17, 1990, Federal Register Attachment of Transmittal
007, Section 564.2(f) (i.e. on a going concern basis) significantly exceeds our cost basis of those properties. However, due to current
market conditions and the lack of availability of land loans in the marketplace, the likelihood of quickly realizing liquidity from our
surplus land holdings is unlikely. Although ALG's projected build-out schedule for vacation club and vacation residential units will
continue to be impacted by the liquidity restraints in the marketplace, we believe the Sonesta project will position ALG in good stead when
the marketplace stabilizes again. 

    In addition to the development and sale of the resort units, ALG intends to provide resort management, the sale of "vacation club
memberships" and the financing thereof and other resort services and maintain a significant, ongoing role in the future of Sonesta Resort
Orlando at Tierra del Sol resort and its other Sonesta planned resort communities.  ALG's long term strategy is to add to its initial
portfolios by selective acquisitions, principally in the United States, whilst considering opportunistic purchases in a wider arena, either
individually or by way of a joint-venture with or acquisition from other partners.  

    Summary
    I extend warm thanks both to our existing and past valued clients for the loyalty and unprecedented support they have shown to our
Company and us.  They have demonstrated great support and patience over the years with our difficulties in preparing to open this unique
"family vacation resort", the first of its kind in Orlando, the "Vacation Capital of the World". 

    Due also to the liquidity constraints in the marketplace, we are going to have to develop new ideas and innovative ways to help some of
our clients close their units and qualify for their end mortgages including shared ownership and financial help with their closings.  

    I am grateful for the capabilities, professionalism and commitment of our staff, several of whom have been with me for many years.
During 2009 and the years ahead, I have no doubt that our staff will allow us to respond positively to the difficult challenges ahead. 

    Malcolm J. Wright
    Chief Executive Officer
    24 December 2008


      REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

    The Board of Directors
    American Leisure Group Limited and Subsidiaries

    We have audited the accompanying consolidated balance sheet of American Leisure Group Limited (a British Virgin Islands corporation) and
Subsidiaries (the "Company") as of 31 December 2007, and the related consolidated statements of operations, stockholders' equity, and cash
flows for the period from 16 May 2007 (Date of Inception) through 31 December 2007. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on
our audit.

    We conducted our audit in accordance with auditing standards generally accepted in the United States of America as established by the
American Institute of Certified Public Accountants. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over
financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.

    In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of American Leisure Group Limited and Subsidiaries as of 31 December 2007, and the results of its operations and its cash flows for the
period from 16 May 2007 (Date of Inception) through 31 December 2007 in conformity with accounting principles generally accepted in the
United States of America. 

    The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As
discussed in Note 3, the Company incurred negative cash flows from operations during the period from 16 May 2007 (Date of Inception) through
31 December 2007.  These factors, among others, as discussed in Note 3 to the consolidated financial statements, raise substantial doubt
about the Company's ability to continue as a going concern.  Management's plans in regard to these matters are also described in Note 3. 
The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.


    By: /s/ Grant Thornton LLP
    Grant Thornton LLP
    Orlando, Florida
    24 December 2008 




      
    American Leisure Group Limited and Subsidiaries

    Consolidated Balance Sheet
    As of 31 December 2007

                                                              Notes         2007
                                                                             US$

 Assets
 Cash                                                                  1,259,083
 Cash - restricted                                              2     10,214,794
 Accounts receivable, net                                       2      2,803,119
 Prepaid expenses and other                                            3,169,752
 Property and equipment, net                                    5     11,575,570
 Land and construction inventory                                6    303,371,800
 Prepaid sales commissions                                      2     16,557,079
 Deferred financing costs, net                                  2        580,343


 Total Assets                                                        349,531,540

 Liabilities and Stockholders' Equity
 Liabilities
 Accounts payable                                                      2,599,633
 Accrued expenses                                                     17,470,218
 Notes payable                                                  7     99,643,565
 Due to related parties                                        15     47,913,136
 Deposits                                                       2     44,124,455

 Total Liabilities                                                   211,751,007


 Stockholders' Equity
 Ordinary shares of no par value; 600,000,000 shares
 authorised;
 169,973,228 shares issued and outstanding                                     -
 Additional paid-in capital, net                                     146,312,817
 Accumulated deficit                                                 (8,532,284)

 Total Stockholders' Equity                                          137,780,533

 Total Liabilities and Stockholders' Equity                          349,531,540


    The accompanying notes are an integral part of these consolidated financial statements.



      American Leisure Group Limited and Subsidiaries

    CONSOLIDATED STATEMENT OF OPERATIONS
    Period from 16 May 2007 (Date of Inception) through 31 December 2007

                                           Notes         2007
                                                          US$

 Travel service revenues                     2     7,976,848 
 Hotel revenues                              2       461,070 
 Other revenues                                      373,089 

 Total Revenues                                     8,811,007

 Cost of travel services                            9,452,503
 Hotel operating expenses                             510,492
 Real estate sales and marketing expenses           1,537,284
 General and administrative expenses                5,982,017
 Depreciation                                2        157,047

 Total Operating Expenses                          17,639,343

 Loss from operations                             (8,828,336)

 Interest income                                      205,610
 Other income                                          90,442
 Interest expense                                         (-)

 Net Loss                                         (8,532,284)

 Net loss per share:
 Basic                                                 (0.06)

 Weighted average shares outstanding
 Basic                                            144,712,900


    The accompanying notes are an integral part of these consolidated financial statements.

      American Leisure Group Limited and Subsidiaries

    Consolidated Statement of Stockholders' Equity
    Period from 16 May 2007 (Date of Inception) through 31 December 2007

                                   Ordinary shares        Additional  Accumulated        Total
                                                             Paid In      Deficit
                                                             Capital
                                      Shares  Amount
                                                 US$             US$          US$          US$
 Balance at 16 May 2007 (Date              -       -               -           --            -
 of Inception)
 Issuance of Ordinary shares to  102,612,353       -           8,409            -        8,409
 Founders 
 Issuance of Ordinary shares at   62,500,000       -     134,521,647            -  134,521,647
 IPO, net of expenses
 Issuance of Ordinary shares in    4,860,875       -      11,782,761            -   11,782,761
 exchange for AMLH common stock

 Net loss                                  -       -               -  (8,532,284)  (8,532,284)

 Balance at 31 December 2007     169,973,228       -     146,312,817  (8,532,284)  137,780,533


    The accompanying notes are an integral part of these consolidated financial statements.




      American Leisure Group Limited and Subsidiaries

    Consolidated Statement of Cash Flow
    Period from 16 May 2007 (Date of Inception) through 31 December 2007

                                                             Notes          2007
                                                                             US$

 Cash flows from operating activities:
 Net loss                                                            (8,532,284)
 Adjustments to reconcile net loss to net cash used by
 operating activities:

 Depreciation                                                            157,047

 Changes in assets and liabilities:
 Change in accounts receivable                                       (1,049,074)
 Change in prepaid expenses and other                                  (487,594)
 Change in prepaid sales commissions                                    (87,179)
 Change in accounts payable                                            1,480,361
 Change in accrued expenses                                              938,466
 Change in due to related parties                                      (425,941)
 Change in deposits                                                  (6,543,818)

 Net cash used in operating activities                              (14,550,016)

 Cash flows from investing activities:
 Change in land and construction inventory                          (23,097,075)
 Change in restricted cash                                           (2,145,482)
 Net cash used in acquisitions                                       (2,366,925)
 Refund of bonds                                                       1,100,000
 Disposal of fixed assets                                                459,951
 Acquisition of fixed assets                                         (1,503,887)

 Net cash used in investing activities                              (27,553,418)

 Cash flows from financing activities:
 Proceeds from notes payable                                             737,593
 Proceeds from issuance of Founders' shares                                8,409
 Proceeds from Admission, net                                         58,510,428
 Payments of deferred financing costs                                (1,307,265)
 Payments of notes payable                                          (11,316,960)
 Payment of related party notes payable                              (3,269,688)

 Net cash from financing activities                                   43,362,517

 Net increase in cash                                                  1,259,083

 Cash at beginning of period                                                   -

 Cash at end of period                                                 1,259,083

 Supplemental cash flow information
 Cash paid during the period for:
 Taxes                                                                         -
 Interest                                                              1,008,057

 Supplemental disclosure of non-cash transactions
 Non-cash Admission transactions                              10
   Exchange of ALG Ordinary shares for notes payable                  52,176,750
   Exchange of ALG Ordinary shares for Azure common stock              4,108,443
   Exchange of ALG Ordinary shares for Arvimex common stock           12,241,027
   Exchange of ALG Ordinary shares for Admission related              10,970,624
 services
   Exchange of ALG Ordinary shares for AMLH preferred stock            7,485,000
   Exchange of ALG Ordinary shares for AMLH common stock              11,782,761

 Total non-cash Admission transactions                                98,764,605

 Non-cash purchase of Land and Construction inventory                  5,184,060
 through direct financing

    The accompanying notes are an integral part of these consolidated financial statements.
      
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

    NOTE 1 - THE COMPANY

    On 16 May 2007 ("Date of Inception"), American Leisure Group Limited ("ALG" or the "Company") was incorporated in the British Virgin
Islands ("BVI"). ALG was incorporated for the purpose of consolidating and incorporating a number of interests which, together, is expected
to create an integrated hospitality management, vacation club, vacation resort development and travel services group. There were no
significant operations between the Date of Inception and 13 August 2007. On 13 August 2007 ("Date of Commencement of Trading"), ALG, began
trading (the "Admission") on the Alternative Investment Market operated by the London Stock Exchange PLC in London, England (the "AIM
Exchange"). The Company effected a conversion of Founders shares on 13 August 2007. All share amounts reflected in these financial
statements have been restated to reflect the effects of the conversion (see Note 10 - Capital Structure). The consolidated financial
statements consist of ALG and its subsidiaries, American Leisure Holdings, Inc, ("AMLH"), Azure Property Investments, Inc, ("Azure") and Arvimex Inc ("Arvimex"). The consolidated entity is ALG (referred to as the
"Company" or "ALG" which also refers to ALG and its subsidiaries according to context).  


 Entities acquired by ALG as existing subsidiaries of American Leisure
 Holdings, Inc. and Azure Property Investments, Inc.


 AMLH                                                   

 AAH Kissimmee, LLC                                    Comtech Fibernet,
                                                       Inc.
 Advantage Professional Management Group, Inc.         Costa Blanca Real
                                                       Estate, Inc.
 Affinity Travel Club, Inc.                            Florida Golf Group,
                                                       Inc. 
 Affinity Travel, Inc.                                 Hickory Travel
                                                       Systems, Inc.
 American Access                                       I-Drive Limos, Inc.
 Telecommunications Corporation
 American Leisure Corporation,                         Leisureshare
 Inc.                                                  International
                                                       Espanola S.A.
 American Leisure Equities                             Leisureshare
 Corporation (ALEC)                                    International, Ltd.
 American Leisure Homes, Inc.                          Luxshare, Inc.
 American Leisure Marketing and                        Orlando Holidays,
 Technology, Inc.                                      Inc.
 American Leisure Travel Group,                        Pool Homes Managers,
 Inc.                                                  Inc.
 American Leisure, Inc.                                Pool Homes, Inc.
 American Sterling Corp.                               Reedy Creek
                                                       Acquisition Corp.
 American Sterling                                     South Beach Resorts,
 Motorcoaches, Inc.                                    LLC
 American Switching                                    TDS Amenities, Inc.
 Technologies, Inc.
 American Travel & Marketing                           TDS Clubhouse, Inc.
 Group, Inc.
 American Travel Club, Inc.                            Tierra Del Sol
                                                       Resort, Inc.
 Ameritel, Inc.                                        Vista Title &
                                                       Escrow, Inc.
 Caribbean Leisure Marketing,                          Welcome to Orlando,
 Ltd.                                                  Inc.
 Castlechart, Ltd.                                     Wright Resorts
                                                       Villas & Hotels,
                                                       Inc.
 Club Turistico
 Latinoamericano, Inc.


 Azure                                                  

 Bezar Finance, Inc.                                   Sherberth
                                                       Development
                                                       Partners, LLC
 Four Corners Development                              Sherberth
 Group, LLC                                            Investments
                                                       Associates, LLC
 Maingate Towers, Inc.                                 Speedo Property, SA
 Oleander International, Inc.                          Tortuga Cay Resort,
                                                       LLC
 Orlando Tennis Village, Inc.                          Tri County Road
                                                       Ventures, LLC
 Pharaoh Developments, Inc.                            West Villas, Inc.
 Ripley International, Inc.                            Weston International
                                                       Enterprises, Inc.


    American Leisure Group Limited

    ALG operates in three business segments: 1) real estate - developing vacation real estate in Orlando, Florida; 2) travel - providing
travel related services and products (ticketing, reservations, travel packages, corporate meetings and events) and 3) hospitality - hotel
management. The Company determines its operating segments based on several criteria including: assets, revenues, and managerial focus. 

    Real Estate - ALG, through its subsidiaries AMLH and Azure, is involved in the development of vacation real estate in Orlando, Florida.

    Travel - ALG, through its subsidiaries American Leisure Equities Corporation ("ALEC", doing business as "TraveLeaders") and Hickory
Travel Systems ("HTS"), provides clients with a comprehensive range of business and vacation travel services.  

    Hospitality - The hospitality division consists primarily of the operations of the Boulevard Hotel located in Miami Beach, Florida.  


    Purchase Accounting

    On 13 August 2007, ALG was admitted to the AIM Exchange when its shares began trading. The admission to trade followed a placing of
ALG's Ordinary shares raising approximately $151 million (£75.0 million) (the "Placement") before expenses of $16,963,554 (see Note 10 -
Capital Structure). The proceeds of the Placement were used to purchase the common and preferred stock of AMLH, to purchase the common stock
of Azure and Arvimex, recapitalise certain notes payable of AMLH and Azure, pay for certain expenses related to the Placement, and to
provide working capital to the newly purchased entities. The purchase of AMLH, Azure, and Arvimex was accounted for using the purchase
method of accounting in accordance with Statement of Financial Accounting Standards, ("SFAS") 141 Business Combinations ("SFAS 141"). Each
acquired company's operating results have been included in ALG's consolidated financial statements since 13 August 2007 (the "Date of
Acquisition"). The purchase price was allocated to tangible assets acquired and liabilities assumed as of the Date of Acquisition. 

    Amounts allocated to assets are based upon their fair values. Such valuations require management to make significant estimates and
assumptions, especially with respect to intangible assets. Management makes estimates of fair value based upon assumptions believed to be
reasonable. These estimates are based on historical experience and information obtained from the management of the acquired companies and is
inherently uncertain.

    Amounts allocated to liabilities assumed are based upon fair values of amounts to be paid determined at current market rates. 

    For any given acquisition, ALG may identify certain pre-acquisition contingencies. If the contingency is probable and can be reasonably
estimated within the purchase price allocation period, generally within one year after acquisition, an adjustment is recorded to the value
of assets and liabilities purchased. If the contingency is not probable or cannot be reasonably estimated at the end of the purchase price
allocation period, the adjustment is recorded in operating results in the period in which the adjustment is determined. 

    As part of the purchase of Azure, the Company agreed to certain future contingent items that could affect the overall price paid and the
ability to use Azure's assets as collateral for financing purposes.  (See Note 12 - Commitments and Contingencies).

    NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    This summary of significant accounting policies is presented to assist in understanding these consolidated financial statements. The
consolidated financial statements and notes are representations of management, which is responsible for their integrity and objectivity.
These consolidated financial statements have been prepared and consistently applied in accordance with accounting principles generally
accepted in the United States of America ("US GAAP"). 

    Principles of Consolidation

    In connection with Financial Accounting Standards Board ("FASB") Financial Interpretation No. ("FIN") 46(R) (Revised 2003) Consolidation
of Variable Interest Entities ("FIN 46(R)"), when evaluating an entity for consolidation, the Company first determines whether an entity is
within the scope of FIN 46(R) and if it is deemed to be a variable interest entity ("VIE"). If the entity is considered to be a VIE, the
Company determines whether it would be considered the entity's primary beneficiary. The Company consolidates those VIEs for which it has
determined that it is the primary beneficiary. The Company will consolidate an entity not deemed either a VIE or qualifying special purpose
entity ("QSPE") upon a determination that its ownership, direct or indirect, exceeds 50% of the outstanding voting shares of an entity
and/or that it has the ability to control the financial or operating policies through its voting rights, board representation or other
similar rights. For entities where the Company does not have a controlling interest (financial or operating), the investments in such entities are classified as available-for-sale securities or
accounted for using the equity or cost method, as appropriate. 

    The consolidated financial statements include the accounts of ALG and its direct and indirect wholly-owned subsidiaries.

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

     Use of Estimates

    The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("US
GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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 materially differ from those estimates. 

    Restricted Cash

    The restricted cash represents funds held in escrow for deposits received for condominium and some townhome unit sales. Also included in
restricted cash is the amount of $3,371,621 that is required to be maintained under certain debt agreements.

    Accounts Receivable, Net

    The majority of ALG's accounts receivable (non-interest bearing) is due from travel customers. Accounts receivable are due within 30
days and are stated at amounts due from customers net of an allowance for doubtful accounts. Accounts receivable that are outstanding longer
than the payment terms are considered delinquent. Accounts receivable, net of the allowance for doubtful accounts, represents management's
estimate of the amount that ultimately will be realised in cash. Management reviews the adequacy of the allowance for doubtful accounts on
an ongoing basis, using historical payment trends, the age of the receivable, and knowledge of the individual customers. If the financial
condition of the customers were to deteriorate, additional allowances may be required. As at 31 December 2007, the allowance for doubtful
accounts was $161,947.

    Revenue 

    Revenues from HTS are recognised as earned, which is primarily at the time of delivery of the related service, publication or
promotional material. Fees associated with access to travel portals and advertisements included on the web service operated by HTS are
deferred and recognised ratably over the contracted service period.

    Revenues from TraveLeaders are recognised as earned, which is primarily at the time of delivery of the related service. Specifically,
commission revenues for cruises, hotel and car rentals are recognised upon completion of travel, hotel stay or car rental. Commission fees
for airline ticketing are recognised at the time of reservation. Transactions that are not determined to be earned are deferred. ALG sold
substantially all of the assets of TraveLeaders on 21 March 2008 to an unrelated third party (See Note 16 - Subsequent Events).
    In recognising revenue from real estate transactions, ALG follows the provisions in SFAS No. 66, Accounting for Sales of Real Estate
("SFAS 66").  The specific timing of a sale is measured against various criteria in SFAS 66 related to the terms of the transaction and any
continuing involvement in the form of management or financial assistance associated with the property.  If the sales criteria are not met,
ALG defers recognition and accounts for the continued operations of the property by applying the deposit, finance, installment, or cost
recovery methods, as appropriate.  When the sale occurs within an ALG real estate development and ALG has not completed all infrastructure
development related to the total project, ALG will follow SFAS 66 and SFAS No. 67, Accounting for Costs and Initial Rental Operations of
Real Estate Projects ("SFAS 67"), to determine the appropriate cost of sales and the timing of recognition of the sale.  In calculating cost
of sales, ALG uses estimates and forecasts to determine total costs at completion of the development project.

    Resort Unit Pre-sales and Prepaid Sales Commissions

    Subsidiaries of ALG have entered into pre-construction sales contracts for units at certain Orlando developments. At 31 December 2007,
the total of the pre-construction contracts was approximately $280,741,000. Revenue on these contracts will be recognised when title is
transferred to the buyer and the ALG subsidiaries have no further continuing involvement. Subsidiaries of ALG pre-sell units and receive
deposits of between 10% and 20% of the sales price. In accordance with SFAS 66, a liability is recorded for the pre-sale deposit until the
construction process is completed and the sales contract is finalised. Certain amounts of deposits received are restricted and recorded in
restricted cash.  Subsequent to 31 December 2007, management revised its estimate of expected closings as a result of changes in market
conditions. As a result of these conditions, management recorded a reserve of $3,026,870 in the subsequent period. 

    Additionally, broker commissions of up to 8.5% are prepaid on the pre-sold units. ALG recognises the advance commission payments as a
deferred expense until the revenue related to the sales contract is recognised or the sales contract is cancelled. 

    Land and Construction Inventory

    ALG and its subsidiaries adhere to SFAS 67, as well as guidance provided by the American Institute of Certified Public Accountants
Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts in its application of
capitalising costs related to land acquisition, development, and construction.

    Land and construction inventory includes the initial cost of acquisition of the land and all subsequent capitalised construction and
development costs.

    Construction and development costs include all expenditures incurred in readying certain construction and development related assets of
ALG for their intended use. These expenditures consist of direct costs such as land, financing costs, interest, legal fees, consulting fees,
surveying, engineering, architects, contractors, real estate taxes, permits, licenses and fees. 

    Interest costs are capitalised during the construction period, which commences when i) expenditures for the asset have been made; ii)
activities that are necessary to get the asset ready for its intended use are in progress; and iii) interest cost is being incurred, and
continues as long as these three conditions are present. The amount capitalised in an accounting period is determined by applying an
interest rate(s) (the "capitalisation rate(s)") to the average amount of accumulated expenditures for the asset during the period. The
capitalisation rate(s) are based on the rates applicable to borrowings, both directly and indirectly associated with the subject asset,
outstanding during the period.

    For the period from 16 May 2007 (Date of Inception) through 31 December 2007, interest capitalised to land and construction inventory
totalled $5,908,166. As at 31 December 2007, $398,964 of interest was accrued and unpaid and included in accrued expenses on the
accompanying consolidated balance sheet. 

    All capitalised construction costs are subject to write-down in as much as ALG's construction and development assets are carried at the
lower of cost or net realisable value. As at 31 December 2007, ALG's management determined that no impairment was deemed necessary.

    Deferred Financing Costs, net

    Deferred financing costs consist of loan origination and related costs, which are being amortised on a straight-line basis over the term
of the related debt principal that approximates the effective interest method. Any remaining balance of deferred financing costs at the time
of an early debt retirement is written off at the time of the retirement. All amortized deferred financing costs were capitalized to land
and construction inventory as part of the interest capitalisation.




    Property and Equipment, net

    Property and equipment acquired in acquisitions that were accounted for as purchases are recorded at their estimated fair value at the
date acquired. Purchased property and equipment is stated at cost less accumulated depreciation and amortisation. Depreciation and
amortisation of property and equipment is computed using the straight-line method over the useful lives ranging from three to forty years.
Repair and maintenance costs are charged to operating expense as incurred, unless they are determined to extend the life of the fixed asset,
in which case the amount is capitalised and amortised over the useful life of the repair or the estimated useful lives or related lease
periods. 

    Impairment of Long-Lived Assets

    The Company follows the provisions of SFAS No 144, Accounting for the Impairment or Disposal of Long-Lived Assets, and reviews the
recoverability of long-lived assets whenever events or changes in circumstances indicate the carrying amount of an asset may not be
recoverable. An impairment loss is recognised when the estimated undiscounted future cash flows expected from the use of the assets are less
than carrying value of the assets. Assets to be disposed of are reported at the lower of their carrying amount or fair value less cost to
sell. Management is of the opinion that the carrying amount of its long-lived assets does not exceed the estimated recoverable amount.

    Community Development District Bonds

    Upon acquisition of AMLH by ALG, ALG assumed the responsibility for $25,825,000 in Community Development District ("CDD") bonds. The
bonds were issued to pay for infrastructure facilities for public purposes such as water supply and retention systems, roadways, green space
and nature recreation areas. The CDD supports these initiatives, through the provision of capital and maintenance, via a tax upon the
property owners of the district that utilises a low finance rate (5.8% per annum) and a long-term amortisation of the capital costs (30
years). The bonds are repaid from revenues obtained through the assessment of levies on the parcels that have specifically benefited from
the infrastructure improvements. As such, ALG is responsible for paying the levies until units are sold and title transfers to new owners.
To the extent that ALG is required to repay any portion of the CDD bond principal, the payment will remain capitalised as a permanent
development cost in land and construction inventory. However, once a unit closes, the proportionate share of the bond principal associated with that unit will be removed from the notes payable and land
and construction inventory balances in equal amounts.  

    A liability for $20,511,252 related to the CDD is recorded in notes payable in the accompanying consolidated balance sheet.  

    Income Taxes

    The Company follows the provisions in SFAS No. 109, Accounting for Income Taxes ("SFAS 109").  The Company recognises deferred tax
assets and liabilities using the asset and liability method, under which deferred tax assets and liabilities are calculated based upon the
temporary differences between the financial statement and income tax basis of assets and liabilities using currently enacted tax rates.
These differences are based upon estimated differences between the book and tax basis of the assets and liabilities for the Company as at 31
December 2007 (See Note 11 - Income Taxes).

    ALG's deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely
than not that some portion or all of the recorded deferred tax assets will not be realised in future periods. Decreases to the valuation
allowance are recorded as reductions to the Company's provision for income taxes and increases to the valuation allowance result in
additional provision for income taxes. The realisation of the Company's deferred tax assets, net of the valuation allowance, is primarily
dependent on estimated future taxable income. A change in the Company's estimate of future taxable income may require an addition to or
reduction from the valuation allowance.
    In accordance with FIN 48, Accounting for Uncertainty in Income Taxes-an Interpretation of FASB Statement No. 109 ("FIN 48"), if ALG or
its subsidiaries are required to pay any interest or penalty associated with income taxes, the Company will classify those expenses as
income taxes in its consolidated statement of operations.

    Concentration of Risk

    ALG places its cash and temporary cash investments with established financial institutions. At various times during the year, ALG
maintained cash balances in excess of Federal Deposit Insurance Corporation limits. Management feels this risk is mitigated due to the
longstanding reputation of these banks. No losses have been incurred by ALG related to this risk.

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

    Fair Value of Financial Instruments

    The fair value of financial instruments including cash, accounts receivable, and accounts payable approximate their carrying value due
to the short-term maturity of the instruments. The fair value of notes payable approximate their carrying values and are based on their
effective interest rates compared to current market rates.

    ALG does not hold or issue financial instruments for trading purposes nor does it hold or issue interest rate or leveraged derivative
financial instruments.
    
Loss Per Share

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

    In connection to services performed for the Admission, ALG entered into a warrant agreement dated 8 August 2007 with Stanford Group
Company, Collins Stewart, and Dawnay Day under which each was granted warrants to subscribe such number of Ordinary Shares equal to 1% of
the Ordinary shares placed at the Admission at the exercise price of £1.20 (Stanford (granted 625,000 warrants) Collins Stewart (granted
625,000 warrants) and Dawnay Day (granted 625,000 warrants)). The 1,875,000 Ordinary shares attributable to the exercise of outstanding
warrants under this warrant agreement were excluded from the calculation of diluted income per Ordinary share because the exercise price of
the warrants exceeded the average price of ALG's Ordinary shares during the period.




    Recent Accounting Pronouncements

    In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements ("SFAS 157"). SFAS 157 defines fair value, establishes a
framework for measuring fair value in accordance with US GAAP and expands disclosures about fair value measurements. SFAS 157 explains the
definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. SFAS 157 clarifies the principle that fair value should be based on the assumptions
market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritises the information
used to develop those assumptions. SFAS 157 will become effective for ALG on 1 January 2008. ALG believes the adoption of SFAS 157 will not
have a material impact on its consolidated financial statements. Additionally, the FASB Staff issued FASB Staff Position ("FSP") No. 157-2
which delayed the effective date of SFAS 157 as it relates to certain nonfinancial assets and nonfinancial liabilities until fiscal years beginning after November 15, 2008. This delay should not have
a material impact on ALG's consolidated financial statements.

    In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, including an
amendment of FASB Statement No. 115 ("SFAS 159"). SFAS 159 permits entities to choose to measure many financial instruments at fair value
that are not currently required to be measured at fair value. It also establishes presentation and disclosure requirements designed to
facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS 159
will become effective for ALG on 1 January 2008. ALG believes the adoption of SFAS 159 will not have a material impact on its consolidated
financial statements. 

    In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles ("SFAS 162"). SFAS 162 identifies
the sources of accounting principles and framework for selecting the principles used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with US GAAP. ALG adheres to the standards set forth in SFAS 162. There will not
be an impact on ALG's consolidated financial statements.

    NOTE 3 - FINANCIAL CONDITION AND GOING CONCERN 

    ALG's financial statements have been presented on the basis that it is a going concern, which contemplates the realisation of assets and
the satisfaction of liabilities in the normal course of business. ALG has sustained recurring negative cash flows from operations and has
not yet reached the point where it is closing on presold townhome units to generate cash from its real estate operations. Over the past
year, ALG's operations have been funded through a combination of funds raised on the AIM market and bank debt. As at 31 December, 2007, ALG
had approximately $1,259,083 of unrestricted cash. On 6 February 2008, the Company executed an agreement with Stanford International Bank
Limited. ("Stanford") whereby ALG was granted a facility of $10,945,000. Additionally, on 30 June 2008, the Company executed an agreement
with Stanford whereby ALG was granted a facility of $17,500,000. On 7 August 2008, ALG received a conditional commitment from Kennedy
Funding, Inc. ("Kennedy") for a new credit facility for an aggregate amount of up to $40 million.  Unfortunately, the receipt of the required valuations was delayed due to difficulties from the lack
of comparable transactions in the current market conditions and as a result, Kennedy has extended its August commitment letter to 15 January
2009.  However, ALG believes that the final Kennedy facility available for draw down to the Group will be reduced from $40 million to a loan
secured only on Bella Citta. As a result of this reduction in the facility, ALG believes that if the facility is granted, the net amount of
new working capital available for the Company (after the deduction of closing costs, an interest reserve for 12 months and the repayment of
the existing mortgage on Bella Citta of $10 million) may only be approximately $4 million.  These funds are required to finance the
immediate working capital of the Group and to help facilitate the completion of the first phase at Tierra Del Sol. ALG believes that, as a
result of the Stanford loans and if the prospective Kennedy loan is drawn down, closings on pre-sales of the first 96 townhome units, and the closing of new vertical construction lines that
it is currently negotiating, and the renewal of all existing loan facilities that will expire during 2009,  it will have sufficient cash and
financing commitments to reach the point where it will be able to build the remaining pre-sold townhome units and consequently to generate
cash from their closings and therefore meet its funding requirements over the next year. However, ALG has experienced and continues to
experience negative cash flows from operations, as well as an ongoing requirement for substantial additional capital investment. ALG will
need to raise substantial additional capital funding quickly and also over the next several years to accomplish its business plan. 

    In addition, ALG may wish to pursue selectively possible acquisitions of businesses, technologies, content, or products complementary to
those of ALG in the future in order to expand its presence in the marketplace and achieve operating efficiencies. ALG expects such
acquisitions would require additional funding. There can be no assurance as to the availability of, or the terms upon which such financing
and capital might be available. 

    The financial statements do not reflect any adjustments that would be required should the Company be unable to obtain the required
additional funding and be unable to continue as a going concern.

    NOTE 4 - ACQUISITIONS 

    Numerous entities were acquired by ALG under the ownership umbrellas of AMLH and Azure (collectively "the Acquisition") (see Note 1 -
The Company).

    Purchase of AMLH

    Concurrent with the offering on the Admission, ALG issued Ordinary shares to purchase more than 90% of AMLH. The transaction has been
recorded under the purchase accounting guidance of SFAS 141. The Admission triggered the effectiveness of certain Share Exchange and Share
Purchase Agreements and certain Preferred Share Purchase Agreements relating to shares of common and preferred stock of AMLH.  Several AMLH
shareholders exchanged an aggregate of 7,754,558 shares of their common stock and 2,331,016 warrants to purchase shares of AMLH common stock
for 4,860,875 ALG Ordinary shares.  Included in those shareholders exchanging shares of their common stock and warrants for Ordinary shares
in ALG were the following related parties:


        Shareholder                Shares of AMLH           AMLH Common Stock Purchase Warrants       Ordinary shares of
                                 Common Exchanged                                 Exchanged (A)         ALG Received in
                                                                                                           Exchange
 Roger Maddock (B)                        345,348                                             -                    188,686
 Malcolm J. Wright (C)                    845,733                                             -                    462,079
 Xpress Limited (D)                       719,942                                             -                    393,351
 Frederick Pauzar (E)                       1,000                                       100,000                     27,319
 Stanford International (F)             1,591,000                                       350,000                    962,968

    (A) Warrants exchanged had an exercise price of $1.02 per share.
    (B) Mr. Maddock is a non-executive member of the ALG Board of Directors.
    (C) Mr. Wright is the Chief Executive Officer and an executive member of the ALG Board of Directors.
    (D) Mr. Wright, Chief Executive Officer of ALG, serves as President of Xpress Limited.
    (E) Mr. Pauzar was an executive member of the ALG Board of Directors at 31 December 2007.
    (F) Stanford International Bank Limited is a significant shareholder in ALG.
    The Admission also triggered the consummation of certain Preferred Share Purchase Agreements with several AMLH's preferred stockholders,
pursuant to which such shareholders sold an aggregate of 525,000 shares of AMLH Series A Preferred Stock, 27,191 shares of AMLH Series C
Preferred Stock and 33,535 shares of AMLH Series E Preferred Stock to AMLH for aggregate consideration of $11,322,600 or $10 per Series A
Preferred Stock share, $100 per Series C Preferred Stock share, and $100 per Series E Preferred stock share.  Included in the shareholders
who entered into Preferred Share Purchase Agreements with ALG and sold shares of preferred stock to ALG, were the following related
parties:

 Shareholder     Consideration       Series A Preferred       Series C Preferred Stock Shares
                    Received            Stock Shares                     Exchanged
                                         Exchanged



                       $


 Malcolm J. Wright (G) (K)     550,000   55,000       -
 Roger Maddock (H) (K)         300,000   30,000       -
 Xpress Limited (I) (K)      3,350,000  335,000       -
 Stanford International (J)  2,385,000        -  23,850


    (G) Mr. Wright is the Chief Executive Officer and an executive member of the ALG Board of Directors.
    (H) Mr. Maddock is a non-executive member of the ALG Board of Directors.
    (I) Mr. Wright, Chief Executive Officer of ALG, serves as President of Xpress Limited.
    (J) Stanford International Bank Limited is a significant stockholder of ALG.
    (K) On 13 August, 2007, simultaneously with closing of the Admission, Messrs. Wright and Maddock and their affiliates loaned Barbieri
Commercial Corp. ("Barbieri"), the sum of $27.4 million to acquire 16,666,667 Ordinary shares of ALG secured by the shares. In addition,
Central Florida Ventures, LLC ("CFV") and Resorts Funding Group LLC ("RFG") loaned Barbieri $2.3 million and $10.7 million, respectively,
unsecured. Subsequently, Messrs. Wright and Maddock and their affiliates acquired the loans due to CFV and RFG. The beneficial owner of
Barbieri is Mr. Alan Meyer, Managing Member of Resorts Construction, LLC. Mr. Malcolm J. Wright, CEO and Director of ALG, and members of his
family are the majority shareholders of Auk Limited which owns Resorts Development Group, LLC which controls a 50% membership interest in
Resorts Construction, LLC (See Note 15 - Related Party Transactions).  

    As previously stated, the acquisition has been accounted for as a purchase under SFAS 141 and the acquisition cost of $23,034,861 has
been allocated to the assets acquired and liabilities assumed based on estimates of their respective fair values. ALG acquired an additional
$7,112,268 of AMLH's net assets through its acquisition of Arvimex. No goodwill was recorded as a result of the transaction. As at 13 August
2007, AMLH had the following assets and liabilities: 

    
                                                                     
 Cash                                 $         1,386,730            
 Cash * restricted                              7,915,708            
 Accounts receivable, net                       1,763,394            
 Prepaid expenses and other                       473,828            
 Property and equipment, net                   11,788,679            
 Land and construction inventory              183,866,709            
 Prepaid sales commissions, net                11,989,421            
                                                                     
 Total Assets                         $       219,184,469            
                                                                     
 Accounts payable                     $         4,283,235            
 Accrued expenses                              12,169,545            
 Notes payable                                 68,406,185            
 Due to related parties                        69,739,136            
 Deposits                                      34,439,239            
                                                                     
 Total Liabilities                    $       189,037,340            


    Purchase of Azure

    Concurrent with the ALG offering on the AIM exchange, ALG used Placement proceeds from the offering to purchase 100% of the common stock
of Azure. The acquisition has been accounted for as a purchase and the acquisition cost of $4,108,443 has been allocated to the assets
acquired and liabilities assumed based on estimates of their respective fair values. No goodwill was recorded as a result of the
transaction. At 13 August 2007, ALG acquired the following assets and assumed the following liabilities of Azure:  

    
                                                               
 Cash                                 $       2,365            
 Cash * restricted                          276,557            
 Land and construction inventory         90,177,897            
 Prepaid sales commissions, net           4,480,477            
                                                               
 Total Assets                         $  94,937,296            
                                                               
 Accrued expenses                     $   3,946,373            
 Notes payable                           33,543,219            
 Due to related parties                  35,567,013            
 Deposits                                17,772,248            
                                                               
 Total Liabilities                    $  90,828,853            

    Azure was primarily owned by Mr. Maddock.  

    Purchase of Arvimex

    Concurrent with the ALG offering on the AIM exchange, ALG used Placement proceeds from the offering to purchase 100% of the common stock
of Arvimex. The acquisition has been accounted for as a purchase and the acquisition cost of $12,241,027 has been allocated to the assets
acquired based on estimates of their respective fair values. No goodwill was recorded as a result of the transaction. At 13 August 2007, ALG
acquired the following assets of Arvimex:

 Investment in AMLH                       $   7,112,268          
 Notes receivable - related parties           3,590,811          
 Deposits                                     1,437,948          
 Other Assets                                   100,000       
                                                                 
 Total Assets                             $  12,241,027          

    Arvimex was primarily owned by Mr. Maddock.  

    NOTE 5 - PROPERTY AND EQUIPMENT, NET

    At 31 December 2007, property and equipment consisted of the following:

    
                                     Useful Lives               2007            
 Land (hotel building)                             $       2,600,000            
 Computer equipment                           3-5            552,994            
 Furniture and fixtures                   5-7                120,726            
 Automobiles                                5                148,223            
 Leasehold improvements                     5                 20,179            
 Hotel building                            40              8,290,495            
                                                          11,732,617            
 Less: accumulated depreciation                            (157,047)            
                                                   $      11,575,570            


      NOTE 6 - LAND AND CONSTRUCTION INVENTORY

    As at 31 December 2007, land and construction inventory included the following:

 Land held for development            $    176,362,480          
 Land and site development (A)              85,000,383          
 Construction in progress                   42,008,937          
  Total                                $   303,371,800          

    *     Included in Land and site development is $20,511,252 associated with ALG's liability to the CDD (See Note 7 - Notes Payable).  

    NOTE 7 - NOTES PAYABLE

    Certain of the loans below (as indicated) are personally guaranteed by Mr. Malcolm Wright, CEO and Executive Director of ALG.

    Land Loans

    Upon acquisition of AMLH, ALG assumed the following loans:

    Tierra del Sol

    *     Loan and Security Agreement with Kennedy Funding, Inc ("Kennedy") as agent for certain lenders. Pursuant to the Loan Agreement,
Kennedy agreed to make a loan to the Borrowers of up to $24,900,000 with a maturity of 19 April 2010. This loan bears an interest rate of
the greater of 12.0% or Prime + 3.75% (12.0% at 31 December 2007) and is secured by a first mortgage on certain parcels of Tierra Del Sol
("TDS") property. Interest is paid on a monthly basis and principal is due upon maturity. The total amount outstanding at 31 December 2007
was $21,657,000. This loan is personally guaranteed by Mr. Wright.
      
    *     A $4,450,000 Loan and Security Agreement and related agreements with Kennedy. The note bears an interest rate of the greater of
12.0% or Prime + 3.75% (12.0% at 31 December 2007) with a maturity of 25 June 2010. The note is secured by a first mortgage on certain
parcels of TDS property. Interest is paid on a monthly basis and principal is due upon maturity. The total amount outstanding at 31 December
2007 was $3,777,000. This loan is personally guaranteed by Mr. Wright.
      
    *     A promissory note in the amount of $5,000,000 with Central Florida Ventures, LLC ("CFV") (a company owned by Alan Meyer and John
Pratt and is also 50% owner of Resorts Construction LLC, a related party) . The CFV note was due and payable on 29 June, 2008, and any
amount outstanding on the CFV note bears interest at the rate of 13.0% per annum, compounded monthly until paid in full on the maturity
date. Immediately after the Placement, $2,700,000 of this loan was repaid. The remaining balance and accrued interest were repaid on 15
August 2007.

    Reedy Creek

    *     A $7,860,000 Amended and Restated Promissory Note with Bankers Credit Corporation which expired on 1 February 2008. On 1 February
2008 the note was extended until 1 February 2009. The note is secured by a first priority lien on the Reedy Creek property and has an
interest rate of Prime + 8.5% with a minimum of 15.0% (15.0% at 31 December 2007). Interest is paid on a monthly basis and principal is due
upon maturity. The total amount outstanding at 31 December 2007 was $7,860,000. This loan is personally guaranteed by Mr. Wright.

    Upon acquisition of Azure, ALG assumed the following loans:

    Los Jardines del Sol

    *     A $8,500,000 promissory note to Peninsula Bank which expired in June 2008. The note is secured by a first priority lien on the
land and any developments relating to the Los Jardines Del Sol project and bears interest at Prime +1% (8.25% at 31 December 2007). Interest
is paid on a monthly basis and principal is due upon maturity. The total amount outstanding at 31 December 2007 was $8,500,000. This note
was subsequently extended until 27 December 2008. The Company is currently in discussions with Peninsula Bank to extend the maturity of the
note through March 2009.This loan is personally guaranteed by Mr. Wright. 

    *     A $4,800,000 note with a private party. The agreement, which bears interest of 4.0%, is due in installments as Los Jardines del
Sol units or land is sold. Interest is accrued on a monthly basis. Principal and interest are to be paid on a pro-rata basis as residential
units are closed to a buyer. The total amount outstanding at 31 December 2007 was $4,800,000. This loan is personally guaranteed by Mr.
Wright.

    Preserve

    *     A $3,000,000 debt agreement with a private party. This agreement was amended on 19 June 2007 to increase the amount of the note to
$3,550,000. The note bears interest at the greater of Prime + 6.75% or 15.0% (15.0% at 31 December 2007) and is secured by a mortgage on the
Preserve property. On 3 August 2008, this note was extended to 1 July 2009. Interest is paid on a monthly basis and principal is due upon
maturity. The total amount outstanding at 31 December 2007 was $3,403,000. This loan is personally guaranteed by Mr. Wright.

    Tortuga Cay

    *     A $167,000 promissory note with Beeler Built Inc ("Beeler") which expired on 6 February 2008. The note was secured by a lien on
the Tortuga Cay property. The interest rate on the note was 12.0%. The total amount outstanding at 31 December 2007 was $166,000. This note
was repaid on 10 March 2008. This loan was personally guaranteed by Mr. Wright.

    *     A $333,000 promissory note with Beeler which expired on 8 September 2008. The note was secured by a lien on the Tortuga Cay
property. The interest rate on the note was 12.0%. The total amount outstanding at 31 December 2007 was $333,000. This note was repaid on 25
July 2008 at a 15.0% discount. This loan was personally guaranteed by Mr. Wright.

    *     A $3,000,000 promissory note to Private Funding Specialists which expired on 3 March 2008. On 3 March 2008, the note was extended
until 7 September 2008. The note is secured by a first priority lien on the Tortuga Cay property. The interest rate on the note is 12.0%.
Interest is paid on a monthly basis and principal is due upon maturity. The total amount outstanding at 31 December 2007 was $3,000,000. On
21 July 2008, ALG entered into an agreement to further extend the note to 7 September 2010, which required the interest rate to be increased
to 13.5%. This loan is personally guaranteed by Mr. Wright.

    *     A $6,000,000 promissory note to Private Funding Specialists which expired on 7 September 2008. The note is secured by a lien on
the Tortuga Cay property and is cross collateralised with the $3,000,000 loan listed above. On 21 July 2008, ALG entered into an agreement
to further extend the note to 7 September 2010. The interest rate on the note is 13.5%. Interest is paid on a monthly basis and principal is
due upon maturity. The total amount outstanding at 31 December 2007 was $6,000,000. This loan is personally guaranteed by Mr. Wright.

    Construction Loans

    Upon acquisition of AMLH, ALG assumed the following loans:

    *     A Construction Loan Agreement with Regions Bank to fund the construction of certain units of the Tierra del Sol development.
Pursuant to the Construction Loan Agreement, Regions Bank agreed to make a loan to the Borrowers of up to $12,142,000 with a maturity of 22
June 2008. This loan bears an interest rate of Prime + 1.25% (8.5% at 31 December 2007) and is secured by a first mortgage on certain
parcels and improvements of TDS property. Resorts Construction, LLC, a related party, is a co-borrower on this loan. This loan is personally
guaranteed by Mr. Wright, Mr. Alan Meyer (Manager and Co-owner of Resorts Construction LLC, through his ownership interest in CFV), and Mr.
John Pratt (Manager and Co-owner of Resorts Construction LLC, through his ownership interest in CFV). Interest is paid on a monthly basis
and principal is due upon maturity. The total amount outstanding at 31 December 2007 was $8,173,000.  This note was subsequently extended
until 31 December 2008.  The Company is currently in discussion with Regions Bank to extend the maturity of the note until March 2009

    *     A Construction Loan Agreement with Regions Bank to fund the construction of certain units of the Tierra del Sol development.
Pursuant to the Loan Agreement, Regions Bank agreed to make a loan to the Borrowers of up to $7,693,000 with a maturity of 1 June 2008. This
loan bears an interest rate of Prime + 1.25% (8.5% at 31 December 2007) and is secured by a first mortgage on certain parcels and
improvements of TDS property. Resorts Construction, LLC, a related party, is a co-borrower on this loan. This loan is personally guaranteed
by Mr. Wright, Mr. Meyer, and Mr. Pratt. Interest is paid on a monthly basis and principal is due upon maturity. The total amount
outstanding at 31 December 2007 was $1,657,000.  This note was extended until 31 December 2008.    The Company is currently in discussion
with Regions Bank to extend the maturity of the note until March 2009.

    Hotel Loan

    Upon acquisition of AMLH, ALG assumed the following loans:

    *     A $9 million loan agreement with LaSalle Bank National Association, as trustee of Structured Finance Fund, L.P.,
successor-in-interest to Marathon Structured Finance Fund L.P. ("LaSalle") that was to provide for the purchase and renovation of the
Boulevard Hotel. Effective 12 October 2007, ALG entered into the Second Amendment to Forbearance Agreement with LaSalle, whereby LaSalle
agreed to extend the terms of the Forbearance Agreement until 11 May 2008. On 14 May 2008, the note was extended until 11 May 2009. The
LaSalle loan bears interest at the rate of the greater of (a) 10.0% or (b) the London Interbank Offered Rate (LIBOR) plus 7.0% (12.5% at 31
December, 2007). Interest is paid on a monthly basis and principal is due upon maturity. The total amount outstanding at 31 December 2007
was $5,437,000. This loan is personally guaranteed by Mr. Wright and Mr. Pauzar.

    Community Development District Bonds

    Upon acquisition of AMLH by ALG, ALG assumed the responsibility for $25,825,000 in Community Development District ("CDD" or the
"District") bonds that were issued to pay for infrastructure facilities for public purposes such as water supply and retention systems,
roadways, green space, and nature recreation areas. The CDD supports these initiatives, through the provision of capital and maintenance,
via a tax upon the property owners of the district that utilises a low interest rate (5.8% per annum) and a long-term amortisation of the
capital costs (30 years). The bonds are repaid from revenues obtained through the assessment of levies on the parcels that have specifically
benefited from the infrastructure improvements. As such, ALG is responsible for paying the levies until units are sold and title transfers
to new owners. The liability recorded in notes payable on the accompanying consolidated balance sheet of $20,511,252 represents the CDD
funding received through 31 December 2007.

    Other Debt and Notes Payable

    Upon acquisition of AMLH and Azure, ALG assumed the following loans:

    *     Certain notes payable with interest rates ranging from 3.0% to 5.0% and the maturities ranging from 36 months to 60 months. At 31
December 2007, the total amount outstanding on the notes was $2,181,304. 

    *     A note payable with Regions Bank for $300,000. The loan was collateralised with a security interest in all inventory, equipment,
and intangibles of the subsidiary. The note bears interest at 8.0%, and is amortized through September 2012. The total amount outstanding at
31 December 2007 was $287,685. This note was included in the liabilities as part of the TraveLeaders transaction (see Note 16 - Subsequent
Events).

    *     A note payable with Sabre Inc. for $500,000. The note bears interest at 8%, and expired on December 2003, and is currently in
default status. The total amount outstanding at 31 December 2007 was $250,000.  

    *     A loan agreement with the U.S. Small Business Administration for $376,000. The loan bears interest at 4%, and expires in April,
2033. It is collateralised by a security interest in machinery and equipment. The total amount outstanding at 31 December 2007 was
$353,000.

    *     A debt arrangement with Harborage Leasing for approximately $1 million with no associated interest rate. At 31 December 2007, the
amount outstanding was $1 million. This debt is personally guaranteed by Mr. Wright.

    *     Certain notes payable with interest rates ranging from 0.0% to 10.0% and indefinite maturities. At 31 December 2007 the total
amount outstanding on the notes was approximately $263,000. 

    *     A loan for the purchase of a vehicle. The total amount outstanding for this loan at 31 December 2007 was $33,000 at an interest
rate of 9.75% with a remaining amortisation of approximately 42 monthly payments. 

    ALG and its subsidiaries have certain debt covenants associated with several loans to report financial information. If ALG does not meet
the terms of these debt covenants, it could be considered in default and these loans would become due.

    The weighted average annualised interest rate on long-term debt and notes payable (including related party debt) from 16 May 2007 (Date
of Inception) through 31 December 2007 was approximately 10.3%. The maximum amount outstanding (including related party debt) was
$130,601,782, and the average amount outstanding was approximately $119 Million. The effective interest rate, including the amortisation of
the deferred financing costs was 13.6%. 

    Principal repayments for the next 5 years are as follows:

                     Amount        
 2008            $    45,246,752   
 2009                    775,322   
 2010                 26,248,875   
 2011                   846,856    
 2012                    863,368
 Thereafter           25,662,392
                $    99,643,565    

    Guarantees

    In return for an ALG guarantee to be held harmless, upon the conclusion of the Admission, Mr. Wright agreed to extend his personal
guarantees on various loans to 31 March 2008 and ALG had agreed to extinguish them by this date. At 31 December 2007, based on liability
balances outstanding, these guarantees amounted to approximately $81,651,000 of notes payable and $21,535,000 of notes payable to related
parties.  In October 2008, Mr. Wright agreed to extend his personal guarantees beyond 31 March 2008 based upon the condition that Mr. Wright
can call the guarantees with 24 hours advance notice to ALG.


    NOTE 8 - EXCHANGE OF STOCK FOR NOTES PAYABLE AT ADMISSION

    Concurrent with the Admission, ALG issued Ordinary Shares to settle certain outstanding notes payable acquired during the purchase of
AMLH and Azure. As at 13 August 2007 (Date of Placement), the following notes payable were settled with Ordinary shares of ALG: 

 Related Party             Note payable balance     Ordinary shares of ALG
                                   US$               Received in Exchange

 Stanford                            33,305,854                    13,740,039 
 Resort Funding Group                10,179,662                      4,199,531
 Central Florida Ventures             2,700,000                      1,113,861
 Roger Maddock                        5,991,234                      2,471,631

 Total                               52,176,750                     21,525,062

    NOTE 9 - DIVIDEND LIABILITY 

    As a result of the acquisition of AMLH by ALG, a liability was recorded to reflect dividends on preferred stock of AMLH that became
payable upon ALG's purchase of the preferred stock. The cumulative and unpaid dividends as at 31 December 2007 in arrears were as follows:

                  2007             
 Series A     $  5,845,085             
 Series B          161,256             
 Series C          493,163             
 Series E          383,761             
              $   6,883,265         


    $6,184,644 of the above dividend liability has been recorded in due to related parties on the consolidated balance sheet. The remaining
balance has been recorded in accrued expenses in the accompanying consolidated balance sheet.

    NOTE 10 - CAPITAL STRUCTURE

    Ordinary Shares
    ALG was incorporated on 16 May 2007 (Date of Inception) and authorised a maximum of 50,000 shares of a single class, each with a par
value of $1.00. On 7 June 2007, ALG amended its articles to allow the issuance of a maximum of 450 million voting no par value shares
("Ordinary shares") and on 8 June 2007, ALG issued 45 million Ordinary shares (Founders Shares) for $4,500. On 22 June 2007, it further
authorised the issuance of a maximum of 150 million non-voting no par value shares ("Restricted Ordinary shares") and issued 114,855,194 of
its Restricted Ordinary shares for $1,609. On 11 July 2007 ALG issued 22,660,500 Restricted Ordinary shares for $2,269 and on 2 August 2007
issued 303,100 Restricted Ordinary shares for $31. 

    On 13 August 2007, ALG issued 62,500,000 Ordinary shares by means of a placing at £1.20 per Ordinary share, which raised approximately
$151,500,000 (the "Placement") and the Ordinary shares of ALG were admitted to trading on AIM. The Admission triggered the conversion of the
Founders and Restricted Ordinary shares into 23,496,428 and 79,115,925 Ordinary shares, respectively. In addition, any Restricted Ordinary
shares that were not issued at that time were converted to Ordinary shares. The Admission also triggered the execution of the Share for
Share Agreement between ALG and AMLH. Under the terms of the Share for Share Agreement, ALG issued 4,860,875 Ordinary shares to be used to
acquire in aggregate 7,754,558 shares of common stock and warrants to acquire 2,331,016 shares of common stock of AMLH (Note 4 -
Acquisitions). 

    The proceeds raised through the Placement were primarily used to purchase the assets and liabilities of Azure and Arvimex (Note 4 -
Acquisitions), acquire notes and other receivables (Note 8 - Acquisition of Notes and Other Receivables at Admission), payment of expenses
incurred from the Admission, and to provide working capital to ALG. The following table lists the use of proceeds from the Placement:  

                                                                 Amount         
 Proceeds from Placement                                 $      151,485,202   
 Shares issued for AMLH common stock                             11,782,761
 Total capitalization at the Date of  Placement                163,267,963 

 Admission related expenses                                 (    16,963,554   )
 Exchange of ALG Ordinary shares for Azure common stock     (     4,108,443   )
 Exchange of ALG Ordinary shares for Arvimex common         (    12,241,027   )
 stock
 Exchange of ALG Ordinary shares for AMLH preferred         (    7,485,000    )
 stock
 Exchange of ALG Ordinary shares for AMLH common stock      (    11,782,761   )
 Exchange of ALG Ordinary shares for debt acquired          (    52,176,750   )

 Net cash proceeds received by ALG                       $      58,510,428 

    ALG incurred approximately $16,963,554 in expenses related to the Admission to AIM. The expenses were primarily for brokerage
commissions, legal, accounting, and consulting services. In accordance with accounting standards, the proceeds from the Placement are shown
net of these expenses in the consolidated financial statements. $9,272,944 of the expenses were settled through the issue of 3,825,472
Ordinary shares. Of the $7,690,610 in expenses paid in cash, $1,697,680 was funded directly from the Placement proceeds, and $5,992,930 was
paid by ALG subsequent to the Placement.

    Put Option Agreement
    On 8 August 2007, AMLH entered into the Second Amendment to the Stock Purchase Agreement (Raster Agreement) with Raster Investments Inc.
(Raster) in which Raster has agreed to terminate a previously issued put option related to ALMH common stock. In exchange, AMLH has agreed
to grant a put option pursuant to which Raster will have the right to require AMLH to purchase any or all of the 282,365 ALG Ordinary shares
owned by Raster based at an exercise price of £1.6612 per share. The Raster Agreement allows Raster to exercise the option any time after
the date of the Placement. The Raster Agreement expires if Raster is able to sell the ALG Ordinary shares without restriction on the AIM
Exchange and the average closing price of the ALG Ordinary shares for any period of thirty consecutive trading days after the date of
Placement equals or exceeds £1.6612 per share. A put liability of $985,000 was recorded in accrued liabilities in the accompanying
consolidated balance sheet. The put option is guaranteed by Mr. Wright.

    Warrants
    In connection to services performed related to the Admission, ALG entered into a warrant agreement dated 8 August 2007 with Stanford,
Collins Stewart, and Dawnay Day under which each has been granted warrants to acquire 625,000 Ordinary shares (each equal to 1% of the
Ordinary shares placed at the Admission) and were recorded as a cost of equity at the time of the Admission. These warrants are exercisable
at any time within the period of three years at the placing price of £1.20 per Ordinary share.  

    As at 31 December 2007, the following warrants were outstanding:


                             Warrants Granted   Ordinary Share
                              For Number of    Exercise Price in   Expiration 
      Warrant Holders        Ordinary Shares                 £'s       Date
 Dawnay Day                           625,000               1.20  13 August 2010
 Collins Stewart                      625,000               1.20  13 August 2010
 Stanford Group Company (A)           625,000               1.20  13 August 2010
 Total                              1,875,000

    (A) Stanford Group Company is a significant shareholder in ALG

    NOTE 11 - INCOME TAXES

    Under SFAS No. 109, deferred tax assets and liabilities are recognised for the estimated future tax effects, based on enacted tax laws,
of temporary differences between the values of assets and liabilities recorded for financial reporting and for tax purposes and of net
operating loss and other carry-forwards. 

    The Company's deferred tax assets principally relate to net operating loss carry-forwards, allowance for doubtful accounts, accrued
expenses, and reserves. The deferred tax liabilities relate to tax versus book basis differentials in fixed assets and land. A full
valuation allowance has been established for the net deferred tax assets that management believes is less than more likely than not to be
realized in the future. As at 31 December 2007, the Company has a non-current deferred tax liability of approximately $1,720,000 which is
included in accrued expenses in the accompanying consolidated balance sheet.

    In June 2002 and August 2007, AMLH had a change in ownership, as defined by Internal Revenue Code Section 382, which has resulted in
AMLH's net operating loss carry-forward being subject to certain utilisation limitations in the future.

    NOTE 12 - COMMITMENTS AND CONTINGENCIES 

    Purchase Commitments

    In the normal course of business, the Company makes various commitments to purchase goods or services from specific suppliers, including
those related to development and other capital expenditures. The majority of the purchase commitments are with Resorts Construction LLC
("Resorts"), a related party. At 31 December 2007, estimated commitments for construction purchases on projects that are currently under
contract are as follows:

                 In (000's)    
 2008            $    41,861   
 2009                78,255    
 2010                88,738    
 2011                49,304    
 2012                47,088 
 Thereafter          25,044    
 Totals         $   330,290    

    In preparing the above schedule of construction purchase commitments, management was required to make certain assumptions and estimates
in timing and costs of construction. Actual construction purchases could materially differ from those estimates.

    Resorts Construction Amended Agreement

    On 8 August 2007, the Company entered into an amended agreement with Resorts Construction LLC ("Resorts") which provides that, from
Admission, (a) in the event that the Company or its subsidiaries requires construction services for a project not currently under contract
with Resorts, the relevant entity shall solicit a bid from Resorts and from other competitive bidders, (b) Resorts shall use commercially
reasonable efforts to provide a competitive bid in response to such request, and (c) in the event that (i) the bid received from Resorts is
no greater than the average of all bids received and (ii) the Company has been reasonably satisfied with the quality of work Resorts has
provided related to other construction projects, the Company will award such bid to Resorts subject only to final approval by the Company's
board of directors. If Resorts' bid is higher than the average bid, it shall be notified and invited to adjust its bid to the average. The
Company has agreed that if at any time after Admission that it does not award a construction contract to Resorts, the Company will indemnify Resorts for any ALG debt that is guaranteed by
Resorts, up to an aggregate amount of $36,063,000. At 31 December 2007, ALG had not indemnified Resorts under this provision as it had not
awarded new contracts.

    Construction Related Letters of Credit

    In the normal course of business, the Company makes commitments to certain government entities to complete or maintain certain
infrastructure in its developments. These commitments are backed by letters of credit which may be drawn against if the Company defaults in
its obligations. Currently, there is an outstanding letter of credit for infrastructure commitments for the Tierra Del Sol development. This
letter of credit has not been drawn against and has total availability of $991,217 which has been personally guaranteed by Mr. Wright.  

    Construction Liens

    During the normal course of business, ALG receives notices that liens may be filed on its properties to ensure that vendors and
contractors will be paid for products delivered and work performed on its developments. In the due course of payment, these liens are either
never filed or are released. As at 31 December 2007, due to cash constraints, ALG had a number of liens filed on certain developments by
Resorts and other vendors and contractors securing their interests. Some of these liens were subsequently released, and some placed by
Resorts were negotiated to be released at the time of closing of units and are still in place. The amounts relating to these liens are
recorded in either accounts payable, accrued expenses, or due to related parties in the accompanying consolidated balance sheet.

    Contingent Purchase Price of Azure

    As part of the agreement to purchase Azure, ALG agreed to pay additional cash payments to the parties from which ALG purchased Azure, on
a deferred basis (the ''Deferred Consideration''), in an amount equal to 50 percent of the net profit from the sale of each residential
resort unit developed on the Azure properties, and from the sale of commercial developments on the Azure properties (other than resort
amenities), and 50 percent of the net rental from such commercial developments. Azure properties consist of the developments of: the
Preserve, Los Jardines del Sol, Bella Citta, Tortuga Cay, and the Sherberth Road projects. In addition, ALG is restricted from selling any
part of the Azure properties (other than sales of units or sales of commercial land) for eight years from Admission without first offering
to accelerate all remaining payments of Deferred Consideration. If development has not commenced on any part of the Azure properties within
eight years of acquisition of Azure, ALG may be obligated to accelerate all remaining payments of Deferred Consideration or sell the land back to the parties from which ALG purchased Azure. As at 31
December 2007, ALG has not recorded any accrual associated with this commitment. Once sales begin to occur on the Azure properties, an
accrual will be recorded for each sale.

    The Deferred Consideration agreement also restricts ALG from borrowing more than 60% of the prevailing market value of the Azure
properties. Any additional funds received from new borrowings can only be used for the development or construction of the Azure properties.
As at December 2007, ALG had not exceeded this restriction.

    Settlement Agreement

    Upon acquisition of AMLH, ALG assumed an obligation related to a settlement agreement with a former executive of the subsidiaries.
According to the agreement, ALG has agreed to pay the former executive $5,000 for each unit sold at the Preserve development after 1 May
2006 up to a maximum of 203 total units and $2,400 for each unit sold at the Tortuga Cay development up to a maximum of 500 units. 

    Lease Commitments  

    The Company leases office facilities and office equipment under non-cancelable operating lease agreements. Future minimum rental
payments are as follows:

                                
 2008           $  1,554,494    
 2009              1,312,542    
 2010                712,129    
 2011                 598,823
 2012                 459,974
 Thereafter          161,760    
 Totals         $   4,799,722   

    Of the amounts above, $1,833,297 was related to TraveLeaders which was sold on 21 March 2008 (see Note 16 - Subsequent Events) 

    Rent expense totalled $751,806 for the period from 16 May 2007 (Date of Inception) through 31 December 2007.

    Pre-construction Sales Contracts

    Included in the purchase of AMLH and Azure, ALG acquired pre-construction contracts for the sale of townhome and condominium units. As
at 31 December 2007, the pre-construction contracts totalled approximately $280,741,000. Deposits received on these sales contracts totalled
$44,124,455 at 31 December 2007. These sales contracts require specific performance by ALG within a certain timeframe or the contracts will
expire. As at 31 December 2007, ALG had the obligation to refund approximately $3,405,222 for deposits from cancelled contracts. The
liability related to the refund obligation is included in accrued expenses in the accompanying consolidated balance sheet.  

    Certain of these pre-construction sales contracts contain addendums that will require continued involvement by ALG after construction is
complete and the sales contract is finalised. This continued involvement may include guaranteed rental revenues to the customer, the
repurchase of the unit by ALG, or to lease the customer's unit for a certain period of time.

    Employment Agreements  

    ALG and its subsidiaries have various employment agreements with select members of its management. These agreements provide for a base
salary plus bonuses based on the profits of each subsidiary company as defined in each agreement. At 31 December 2007, accrued management
bonuses were approximately $423,000 and accrued executive pension and benefits were approximately $235,500. During the period 16 May 2007
(Date of Inception) through 31 December 2007, $150,000 in management bonuses had been paid.  

    Litigation 

    Subsidiaries of ALG are currently defendants in several lawsuits related to the expiration of customer contracts. The Company has
recorded accrued liabilities to cover any refunds for these contracts. However, the Company has not accrued any related legal expenses as
those amounts are indeterminable with any reasonable accuracy.  

    In the ordinary course of its business, ALG and its subsidiaries 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. ALG believes these claims will not have a material
impact on its operations. 

    NOTE 13 - EMPLOYEE BENEFITS

    ALG's subsidiaries, HTS and TraveLeaders, maintain qualified 401(k) profit sharing plans covering substantially all of their 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, HTS and TraveLeaders may make a
matching contribution equal to a percentage of each employee's contribution. There were no matching contributions made for the period from
16 May 2007 (Date of Inception) through 31 December 2007.

    NOTE 14 - OPERATING SEGMENTS 

    The Company has adopted the provisions of SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information. At 31
December 2007, ALG'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. 

    For the period 16 May 2007 (Date of Inception) through 31 December 2007: 


 In (000's)                         Real Estate             Travel       Hospitality      Elimination     Consolidated   
 Revenue                            $        --            $   8,350     $       461      $        --     $      8,811   
 Land and construction              $   302,953            $      --     $       419      $        --     $    303,372   
 inventory                                            
 Total loss                         $    (6,909  )         $  (1,139  )  $      (484  )   $        --     $     (8,532  )
 Total assets                       $   343,143            $   3,923     $    11,329      $    (8,863  )  $    349,532   
 Capital expenditures               $    29,587            $     543     $       550      $        --     $     30,680   
 Depreciation                       $        25            $      64     $        68      $        --     $        157   

    Note 15 - RELATED PARTY TRANSACTIONS

    American Leisure Real Estate Group and Resorts Development Group 

    Mr. Wright is the President and significant shareholder of American Leisure Real Estate Group, Inc. ("ALRG") and Resorts Development
Group LLC ("RDG"). In November 2003, AMLH entered into an exclusive development agreement with ALRG and Azure entered into an exclusive
development agreement with RDG to provide development services for the development of their resorts. Pursuant to this development agreement,
ALRG and RDG were responsible for all development logistics, including processing construction billings received from Resorts Construction
LLC, a related party. In exchange, AMLH and Azure were obligated to reimburse ALRG and RDG for all costs incurred including overhead, and to
pay a development fee in the amount of 4.0% of the total costs. At the time of Admission, the development agreements were amended so that
AMLH and Azure were not obligated to use ALRG and RDG for these services. During the period from 13 August 2007 through 31 December 2007,
ALG's subsidiaries transitioned to performing these services in-house. At the time of ALG's acquisition of AMLH and Azure, the Company assumed liabilities in the amount of $3,527,213 and
$7,792,911 to ALRG and RDG, respectively. From the period 13 August 2007 (Date of Placement) through 31 December 2007. ALRG billed AMLH
$10,905,022 for the reimbursement of costs incurred (including $9,596,367 in construction billings from Resorts) and $436,200 for its 4.0%
development fee. Additionally, from the period 13 August 2007 (Date of Placement) through 31 December 2007, RDG billed Azure $1,853,493 for
the reimbursement of costs incurred (including $1,489,394 in construction billings from Resorts) and $74,139 for its 4.0% development fee.
At 31 December 2007, ALG's subsidiaries owed ALRG $13,000 and RDG $5,456,957, respectively, for past services rendered, and these amounts
are included in due to related parties in the accompanying consolidated balance sheet.  

    Xpress Limited

    Mr. Wright and members of his family are the majority shareholders of Xpress Limited ("Xpress"). In November 2003, AMLH and Azure
entered into exclusive sales and marketing agreements with Xpress to sell the units being developed. This agreement provides for a sales fee
in the amount of 3.0% of the total sales prices received by AMLH and Azure plus a marketing fee of 1.5% payable when the relevant units
close; 66.7% of which has been paid and 33.3% of which is due at closing. At the time of Admission, the agreements were amended so that AMLH
and Azure were not obligated to pay Xpress for these services except to existing brokers introduced by Xpress. During the period from 13
August 2007 through 31 December 2007, the Company's subsidiaries transitioned to performing these services in-house except for brokers
already established by Xpress. In connection with the acquisitions of AMLH and Azure by ALG, $9,572,635 in total commissions paid to Xpress
are included in the prepaid sales commissions in the accompanying consolidated balance sheet. There were no payments made to Xpress during the period of transition. 

    Resorts Construction

    In 2006 and 2007, AMLH and Azure entered into a contract with Resorts Construction, LLC to furnish construction administration and
management services. Mr. Malcolm J. Wright, CEO and Director of ALG, and members of his family are the majority shareholders of Auk Limited
which owns Resorts Development Group, LLC which controls a 50% membership interest in Resorts Construction, LLC (See Note 15 - Related Party
Transactions). These contracts include:

    *     a site work contract to provide all labor, materials, equipment and services necessary to prepare the Tierra del Sol property for
development
    *     a contract to provide professional planning and engineering consulting services for the development of Tierra del Sol.  
    *     a construction contract to provide all labor, materials, equipment and services necessary to construct 496 townhomes at Tierra del
Sol.
    *     a construction contract to provide all labor, materials, equipment and services necessary to construct the amenities, water park,
sports bar, and five condo buildings at Tierra del Sol
    *     a site work contract to provide all labor, materials, equipment and services necessary to prepare the Bella Citta property for
development
    *     a contract to provide professional planning and engineering consulting services for the development of Bella Citta.
    *     a site work contract to provide all labor, materials, equipment and services necessary to prepare the Los Jardines del Sol
property for development
    *     a contract to provide professional planning and engineering consulting services for the development of Los Jardines del Sol.
    *     a site work contract to provide all labor, materials, equipment and services necessary to prepare the Preserve property for
development
    *     a contract to provide professional planning and engineering consulting services for the development of the Preserve property.
    *     a contract to provide professional planning and engineering consulting services for the development of the Reedy Creek property
    *     a contract to provide professional planning and engineering consulting services for the development of the Tortuga Cay property.

    At the time of Admission, these contracts were assigned to ALG. At 31 December 2007, these contracts had a total contract value of
$389,457,087 with remaining balance of work to be performed of $330,290,283. At the time of ALG's acquisition of AMLH and Azure, the Company
assumed liabilities in the amount of $1,975 to Resorts. During the period from 13 August 2007 to 31 December 2007, total construction
billing on ALG's projects by Resorts was $21,220,361. Of this amount, $10,134,599 was directly billed to ALG and $11,085,762 was billed
through ALRG and RDG. At 31 December 2007, ALG's subsidiaries had payables balances (including retainage) to Resorts Construction totaling
$8,225,015 that is included in due to related parties in the accompanying consolidated balance sheet.  

    The contract for the construction to build 496 Tierra del Sol townhomes includes an amendment which allows Resorts to bill ALG monthly
for delays in the construction process caused by the Company's inability to obtain sufficient financing (the "Delay Fees"). During the
period from 13 August 2007 to 31 December 2007, the total Delay Fees charged to ALG was $1,673,745 which is included in land and
construction inventory in the accompanying balance sheet.  

    Randolph Partners, LLC

    In 2006, Azure entered into a note payable for $15.5 million with Randolph Partners, LLC, a related party that owns 20% of, and is the
operating manager of, Sherberth Development Partners, LLC to purchase the Sherberth Road property. The note bears interest at 13.0%, and
expired in February 2008. On 2 February 2008, a $1 million payment was made to extend the note due date until 31 July 2008. On 5 August
2008, $100,000 monthly payments of interest are made to extend the note until such time as ALG refinances the note. The note is secured by a
first priority lien on the land. The total amount outstanding on the note at 31 December 2007 was $15,535,000 and the accrued interest
payable was $3,911,424. The principal and interest are payable upon maturity. This loan is personally guaranteed by Mr. Wright. These
amounts are included in due to related parties in the accompanying consolidated balance sheet.  

    Stanford

    As a result of its purchase of AMLH, ALG assumed a note payable with Stanford, which is a significant shareholder in ALG, for
$6,000,000. This note has a maturity date of 31 December 2008. The note bears an annual interest rate of 6.0%. The principal and interest
are payable upon maturity. The total amount outstanding at 31 December 2007 was $6,000,000. Accrued interest payable on this note was
$457,000 at 31 December 2007. This loan is personally guaranteed by Mr. Wright. These amounts are included in due to related parties in the
accompanying consolidated balance sheet.

    Other 

    Mr. Wright was a 12.5% owner of Quorum, a real estate broker that receives fees and commissions for the sales and marketing of ALG
properties. In connection with the acquisitions of AMLH and Azure, ALG recorded $369,445 related to these services. During the period from
13 August 2007 through 31 December 2007, Quorum was paid commissions totaling $44,800. As at 31 December 2007, Quorum had been paid a total
of $414,245 in prepaid commissions which are included in the prepaid sales commissions in the accompanying consolidated balance sheet.

    As a result of its purchase of AMLH, ALG assumed several loans with HTS executives that were used to fund working capital requirements.
Mr. William Chiles, the CEO of HTS, loaned $155,000 to the subsidiary. Mr. Charles Seiberling, the CFO of HTS, loaned $603,000 to the
subsidiary. Both of these loans are due on demand and carry a 10.0% annual interest rate. They are included in due to related parties in the
accompanying consolidated balance sheet.

    Mr. Maddock, a non-executive member of the ALG Board of Directors, had signed pre-sale contracts to purchase two townhome units. The
$105,264 in deposits Mr. Maddock paid is included in due to related parties in the accompanying consolidated balance sheet.  

    NOTE 16 - SUBSEQUENT EVENTS 

    New Financings

    On 6 February 2008, ALG entered into a promissory note with Stanford for an aggregate amount of $10,945,000. The note is collateralised
by second priority mortgages on the Phase 2 TDS and Bella Citta properties. The interest on the note is 8.0% and it matures on 31 December
2008. The principal and interest are payable upon maturity. The note will be funded into tranches. The first tranche is for $7,105,000 with
$3,300,000 funding within three days of the closing date and the remaining balance was funded in six semi-monthly increments of
approximately $635,000 through 14 April 2008. The second tranche is for $3,840,000 and was funded in six $640,000 semi-monthly increments
through 14 July 2008. The terms of the note require ALG to issue Stanford and certain related parties warrants to purchase 300,000 Ordinary
shares in ALG at £1.20 per Ordinary share. The warrants expire on 6 February 2013. In addition, since ALG has received funding from the
second tranche, it is required to issue additional warrants to purchase 300,000 Ordinary shares in ALG at £1.20 per Ordinary share. These warrants also expire on 6 February 2013. The note allows for a
six month extension of the maturity date if ALG issues to Stanford a fee equal to 500,000 Ordinary shares. 

    On 9 July 2008, ALG entered into promissory notes with Stanford for an aggregate amount of $17,500,000. The loan has two parts, "Note A"
in the principal amount of $7,500,000 and "Note B" in the principal amount of $10,000,000. The notes are collateralised by mortgages on the
Phases 1 and 2 of TDS. The interest on the note(s) is 10.0% and they will initially mature on 31 December 2008. The principal and interest
are payable upon maturity. The first tranche of Note A was drawn for $750,000 on 4 August 2008 and is followed with nine bi-weekly tranches
immediately thereafter in equal amounts of $750,000 each, totaling $7,500,000. The first tranche of Note B was for $1,300,000 on 1 July 2008
and was followed by four additional weekly tranches of equal amounts of $1,300,000 immediately followed by five additional weekly tranches
of $700,000 each, totaling $10,000,000. The total of the combined notes is $17,500,000. The terms of the note require ALG to issue to
Stanford, and certain related parties, warrants to purchase up to 1,750,000 Ordinary shares in ALG at a price of £0.01 per Ordinary share; and, upon Stanford's exercise of warrants, would
entitle Stanford to receive added fees on prepayment, maturity or extension of the loan. The warrants expire on 9 July 2013.

    On 7 August 2008, ALG received a commitment from Kennedy Funding, Inc ("Kennedy") for a new credit facility for an aggregate amount of
up to $40 million subject to no more than 50% of the market value of the real estate collateral (the 80 acres forming Bella Citta and Los
Jardines del Sol). The loan term is for three years at varying increasing rates that begin with a 12.0% interest rate for the first year
that will be prepaid at loan closing. Thereafter, the interest is paid monthly with rate increases to the greater of 16.0% or Prime + 11.0%
for the second year, and the greater of 18.0% or Prime + 13.0% for the third year. A loan origination fee of 4% of the loan amount will be
paid out of loan closing proceeds. An additional loan commitment fee of $1.2 million was charged subject to adjustment to 3% of the final
loan amount, and all but $50,000 of it will be paid out of loan closing proceeds. The terms of the proposed note would allow for ALG to
obtain release of portions of the real estate collateral, provided that any principal and interest payments are current, by paying to Kennedy a release price of the greater of 80% of the net sales
price or 75% of the gross sales price of the parcel. Unfortunately, the receipt of the required valuations was delayed due to difficulties
from the lack of comparable transactions in the current market conditions and Kennedy has extended their August commitment letter to January
15, 2009.  However, ALG believes that the final Kennedy facility available for draw down to the Group will be reduced from $40 million to a
loan secured only on Bella Citta. As a result of the reduction in the facility, ALG believes that that if the facility is granted the net
amount available for the Company after the deduction of closing costs, an interest reserve for 12 months and the repayment of the existing
mortgage on Bella Citta will be approximately $4 million.  

    Warrants

    On 6 February 2008, ALG entered into a secured promissory note with Stanford for up to $10,945,000. The terms of the note require ALG to
issue Stanford and certain related parties warrants to purchase 750,000 Ordinary shares of stock at £1.20 per share. The warrants expire on
6 February 2013.  

    On 30 June 2008, ALG received a new credit facility commitment from Stanford for an aggregate amount of $17,500,000 (Note 16 -
Subsequent Events). The terms of the note require ALG to issue Stanford and certain related parties warrants to purchase up to 1,750,000
Ordinary shares of ALG stock at a price of £0.01 per Ordinary share. The warrants expire on 9 July 2013.

    Warrants outstanding and those issued subsequent to 31 December 2007 are shown below:

                                                     Warrants Granted   Ordinary Share
                                                           For         Exercise Price in    Expiration 
                                 Warrant Holders     Ordinary Shares                 £'s       Date
 Warrants outstanding at 31 December 2007:
 Dawnay Day                                                  625,000                1.20   13 August 2010
 Collins Stewart                                             625,000                1.20   13 August 2010
 Stanford Group and related parties (A)                      625,000                1.20   13 August 2010
 Total warrants outstanding at 31 December 2007             1,875,000

 Warrants issued subsequent to 31 December 2007:
 Stanford Group and related parties (A)                       750,000               1.20  6 February 2013
 Stanford Group and related parties (A)                     1,750,000               0.01      9 July 2013
 Total warrants issued subsequent to 31 December            2,500,000
 2007

 Total warrants outstanding                                 4,375,000

    (A) Stanford Group Company is a significant shareholder in ALG

    New Debt

    On 6 January 2008, subsidiaries of ALG issued a promissory note to Resorts for $10,000,000 used to secure all current and future
accounts payable to Resorts. The note is collateralised by a mortgage and security agreement encumbering all of the Bella Citta real
property, improvements thereto, and any personal property assigned. The interest on the note is 10.0% and there is no stated term.

    Sale of TraveLeaders

    On 21 March 2008, AMLH entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with TL Acquisition Group ("TAG") in
which AMLH agreed to sell substantially all of the assets and operations and certain of the liabilities of TraveLeaders. The total purchase
price was calculated as $6 million reduced for certain net liabilities assumed by TAG. As a result of the calculated purchase price, AMLH
received cash payments totaling $4,584,708. The Asset Purchase Agreement also allows for additional consideration to be paid to AMLH
contingent upon the future operations of TraveLeaders up to a maximum of an additional $8 million.

    Concurrent with the sale of TraveLeaders, AMLH and a subsidiary of TAG entered into a Strategic Alliance Agreement, pursuant to which
TAG agreed to offer its products to AMLH for resale to AMLH's customers and AMLH agreed to offer rooms in its resorts to TAG. AMLH and TAG
also agreed to work together to identify and develop co-marketing and joint marketing programs in the future. The Strategic Alliance
Agreement has an initial term of five years, and can be extended for three additional periods of five years each. 

    In addition, AMLH entered into a Non-Compete Agreement in connection with the transaction. The Non-Compete requires that for a period of
five years, AMLH would not directly or indirectly permit their name to be used by or participate in any business or enterprise that engages
or proposes to engage in the business of operating travel agents in the US, except as in connection with ALG's pre-existing operations of
Hickory Travel Systems, Inc and as otherwise provided in the Non-Compete Agreement. 

    Hickory Travel Services, Inc Stock Transfer Agreement

    On 31 October 2008, a Stock Transfer Agreement was executed between American Leisure Holdings, Inc. ("AMLH") and Hickory Travel Systems,
Inc. ("HTS") and L. William Chiles (CEO of HTS and former director of AMLH) whereby AMLH transferred its 50.83% interest in HTS to L.
William Chiles ("Chiles") for total consideration of $784,340. The transferred shares are pledged to AMLH and held as collateral (subject
the Pledge, Security and Voting Agreement between AMLH and Chiles) until a $1,340,000 Promissory Note due from HTS to AMLH is paid. The
Promissory Note between AMLH and HTS dated 15 November 2008 with an interest rate of the Wall Street Journal Prime Rate + 2% (6%) and
maturing on 1 January 2019.  

    Suspension of Trading on AIM

    ALG was unable to meet the annual financial statement reporting requirements as outlined in Rule 19 of the AIM Rules requiring its
accounts to be filed within six months of the accounting date. Consequently, trading in the Company's shares on AIM was temporarily
suspended on 30 June 2008.

    Liquidity Covenant Violation

    Subsequent to 31 December 2007, ALG was in violation of the liquidity commitment in its construction loan facility agreement with
Regions Bank.  As a consequence of this violation, ALG is to pay a guarantee fee of $840,000 to Messrs. Wright, Meyer, and Pratt for their
personal guarantees on the Regions Bank loan facility. 

    Executive Resignations

    On 22 July 2008, ALG entered into Memorandums of Understanding (the "Memorandums") with three of its executives (including Mr. Pauzar
and Mr. Ron Leventhal). The Memorandums clarify that upon the resignation of the executives, the Company will be required to pay the
executives severance pay and provide health benefits for one year. The estimated cost of these requirements is approximately $1.3 million
over the subsequent 12 months. In addition, the Memorandums state that if any of the executives subsequently procure a merger and
acquisition project to ALG, the executive that introduced the project will be paid 1% of the value of the transaction. These agreements were
modified on 21 August 2008 to delay severance payment for 30 days in exchange for continued salary payments to the executives. The Company
is not in compliance with the agreement modifications.

    -ENDS-

This information is provided by RNS
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