Total third-party debt decreased by $0.3 million between December 31, 2005 and September 30, 2006, as principal repayments of $0.5 million were partially offset by additional borrowings used to pay refinancing fees. The balance of third-party debt at September 30, 2006 was $30.1 million. Going forward the Company will not have to refinance any of its third-party debt until the end of 2010, and regular monthly blended repayments of principal and interest should result in an annual reduction of approximately $1.0 million per annum.

The Company is subject to certain debt service ratio ("DSR") and other covenants pertaining to long-term demand loans. Management believes the Company is in compliance with all DSR covenants at this time. As discussed above, under real estate development, the Company is considering proceeding with a joint venture to develop lands adjacent to its Toronto hotel property. There is some concern that, at least during the early stages of construction, hotel income may be affected to such a degree that the Company could be in breach of its DSR. Management has held discussions with the Company’s lender regarding this issue, and has obtained an agreement in principle from its lender to postpone the DSR covenant during the first two years of construction. As of the date of this report the Company had not received written confirmation from its lender regarding this amendment to the DSR.

Total debt due to related parties at September 30, 2006 amounted to $13.9 million, a decrease from $15.5 million at December 31, 2005. Debt due to related parties had increased over the last two years as certain related parties advanced funds to the Company to cover operating shortfalls, and to partially finance the repayment of third-party debt. In the future, following sales of certain income-producing properties and repayment of the associated debt, the Company expects to be in a position to make principal repayments to these related parties. Of the total amount due at September 30, 2006, $6.0 million is due to the Company’s majority shareholder. This loan, which is due on demand, is unsecured and bears interest at a fixed rate of 9.0%. A further $7.9 million is due to a minority shareholder of the Company. This debt is secured by a general security agreement and bears interest at a rate of prime plus 0.75% (currently 6.75%).