CanaDream Corporation

INTRODUCTION

CanaDream Corporation is a publicly traded company focused on the international tourism business. The Company is one

of the largest Recreational Vehicle ("RV") Rental Companies in Canada, catering to the needs of both an international and local clientele who want to realize their dream of experiencing, up-close and personal, Canada's vast unspoiled natural landscape and its magnificent Natural Park system in the comfort of a motorhome or the economy and convenience of a "Camper".

CanaDream is a Canadian tourism company that is utilizing its proprietary business-to-business web-enabled system, www.canadasbest.com, and its business-to-consumer on-line Internet reservation system, www.canadream.com, to operate and expand its network of RV rental locations in Canada.

The Company has a fleet of approximately 700 units that are offered to its clients from 10 gateway cities across Canada. Current rental locations offer exposure to an incredible variety of natural experiences and include Victoria, Vancouver and Kelowna, British Columbia; Calgary and Edmonton, Alberta; Toronto, Ontario; Montreal, Quebec; Halifax, Nova Scotia; St. John's, Newfoundland and Whitehorse, Yukon.

From a running start seven years ago, when they acquired an ailing company in the same business, CanaDream has developed into a market leader in the Canadian RV Rental Industry. Initially a private company, CanaDream went public on December 17, 1998.

COMPANY TECHNOLOGY

CanaDream Corporation's leadership position has been achieved through a combination of substantial investments in

proprietary technology related to its operations, continual investment, upgrading and maintenance of its rental fleet and investments in experienced and well-trained staff at all locations.

CanaDream's technological leadership covers all facets of the business, from its International Marketing Infrastructure to the Proprietary Software used in its booking, fleet management and general management and control systems. The Company's foresight in developing these various technological tools is now beginning to pay dividends, as its clients share the economies and the industry recognizes the extent of the competitive advantage afforded by these tools.

This technological leadership will fuel future growth of the Company in a number of areas, including:

Expansion of its existing business through the Associate Dealer Program.

Presently, CanaDream has four associate dealer franchisees in Edmonton, Alberta; St. John's, Newfoundland; Kelowna and Victoria, British Columbia.

(1) Internal Systems
CanaDream's custom enterprise resource planning (ERP) software, System Manager is the foundation for increased efficiencies through lowered operating expenses and growth with minimal scaling.

The principal behind System Manager is that once data is captured it is available to be leveraged. The process of leveraging involves flowing data through to the appropriate parties, eliminating the need for duplicate data entry and in the process reducing costly inefficiencies and points of liability. Through the elimination of these traditional bottlenecks CanaDrem is realizing decreased administration costs and is poised to grow while avoiding typical growth costs (e.g. increased administration staff, training, etc.).

System Manager will facilitate future growth into new markets through its custom nature. It is this very custom nature that has allowed for the adaptation of System Manager to CanaDream, not CanaDream to a piece of software. The flexible and modular nature of the application enables the adoption of disparate business processes without the need for re-engineering. This will ultimately allow for System Manager to accommodate new products and services with the additional potential as a commercial software product.

(2) External Systems
CanaDream markets itself through three distinct channels - wholesalers, travel agents and direct to retail. CanaDream has developed a suite of multi-language online tools to support and further grow these channels.

CanaDream Online Reservation Assistant (CORA) is the pricing, availability and reservations engine. CORA comes in multiple flavours to accommodate its target audience.

CORA Wholesale - This allows for online reservations between wholesalers and CanaDream.
CORA Retail - This is the direct-to-retail reservation that is used on www.canadream.com.
CORA Retail for Travel Agents/Wholesalers - This allows travel agents and wholesalers to embed CanaDream's reservation engine into their own site. The benefit to the travel agent/wholesaler is that they immediately have a reservation engine that is customized with their own specifics (e.g. contact information, terms & conditions, etc.). CanaDream does control the type of content featured thereby ensuring that only CanaDream product is featured.

Development of the "McFlight" Joint Venture with McFlight GMBH, a leading German flight consolidator.
Acquisitions in related tourism business.

MARKETING STRATEGY

CanaDream has quantifiable numbers that support its shift to online advertising in recent years. This has been recognized

and expanded upon by providing CanaDream's travel agents and wholesalers with online collateral in addition to traditional print media. CanaDream has facilitated this through the creation of Sitebuilder, a custom content management system. Upon registering, an authorized partner is allowed to customize pre-built web pages featuring CanaDream content. These updatable pages are then incorporated into the partner's site as part of their overall marketing strategy. These "brochure-ware" pages are often used in conjunction with a partner's personalized version of CORA Retail to present a complete CanaDream marketing package.

FINANCIAL STATUS

CanaDream Corporation has a solid financial status in 2003. Results from the Operational side of the business, reflected primarily in Earnings Before Income Taxes and Extraordinary Item, were particularly strong for 2003, increasing by almost $900,000 (118%) from the $762,000 last year. Operating results before gains on sales of land and buildings showed an even more impressive increase of $1.47 million.

Revenues were up almost 13% from last year to $11,838,144, primarily as a result of a number of improvements in the International travel scene. Foremost among those improvements was the recovery from September 11 and the improvement in European currencies relative to the US and Canadian dollars. The appreciation of European currencies caused their largely European clientele to proceed with and/or expand their travel plans. The Company continues to see ongoing increases in the more profitable Direct bookings through their retail web site, while wholesalers continue to increase their use of CORAR (CanaDream On-line Reservation Assistant), the Company's proprietary On-Line Internet booking engine.

OUTLOOK

With solid demand for CanaDream Corporation's product, a reasonable balance in the supply of competing rental product, continuing low interest rates, a stronger Balance Sheet and excellent marketing and management tools, CanaDream expects Fiscal 2004 to yield excellent results for its shareholders.

On March 17, 2004, CanaDream Corporation reported the net earnings of $1.69 million (10 cents/share) for the nine month period ended January 31, 2004. Continuing strong demand for their products resulted in revenue of $12.16 million compared with $11.57 million last year, an increase of $592,000 (5%). Net earnings declined slightly to $1.69 million compared to last year's $1.79 million. The $100,000 (5.5%) decrease in net earnings is attributable to a number of factors, primarily a 7% increase in the size of their fleet which resulted in higher direct costs and higher fleet costs, including interest and amortization. General and Administrative expenses combined with Sales and Marketing expenses increased by a nominal 4%.

On January 29, 2004, CanaDream Corporation announced that it has engaged Acumen Capital Finance Partners Limited ("Acumen") to act as agent to raise a minimum of $3,000,000 and up to $7,000,000 through the sale of convertible debentures (the "Debentures") by way of private placement. Maturing four years and one day from the closing date (the "Maturity Date"), the Debentures pay 10% per annum payable quarterly and are convertible at any time at the option of the holder into common shares of the Company at a conversion price of $0.40 per common share for two years from closing and $0.50 per common share for the subsequent two year period. At the end of three years, the subscriber may elect at that time to extend the term of the Debenture for an additional two years beyond the Maturity Date at the same interest rate and at an increased conversion price of $0.60 per common share.

On December 11, 2003, CanaDream Corporation reported the Company's financial results for the six months ended October 31, 2003. Continuing strong demand for our products resulted in revenue of $11.94 million compared with $11.4 million last year, an increase of $533,000 (4.7%). Net earning declined slightly to $2.49 million compared to last year's $2.63 million. The $134,000 (5%) decrease in net earnings is attributable to a number of factors, primarily a 7% increase in the size of our fleet which resulted in higher direct costs and higher fleet costs, including interest and amortization costs.

On October 01, 2003, CanaDream Corporation announced that it will purchase at market price up to 902,650 common shares, being approximately 10% of its public float, by way of a normal course issuer bid through the facilities of the TSX Venture Exchange.

On September 25, 2003, CanaDream Corporation reported the financial results for the first quarter ended July 31, 2003. Revenue of $6.1 Million compares with $5.6 Million last year, an increase of $455,000 or 8%, while earnings were $1.269 Million compared to $1.266 Million last year. Continued strong demand for the Company's product despite global and domestic events resulted in the increased revenues.