---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB /A

ANNUAL REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES
EXCHANGE ACT OF1934

For the fiscal year ended December 31, 2007

Commission File No. 033-28188

Strategic Internet Investments, Incorporated
  (Name of small business issuer in its charter)

State of incorporation:
      DelawareIRS Employer Identification:
      84-1116458Address of principal executive offices:
      Suite 250, 1090 West Georgia StreetVancouver, BCCanada V6E 3V7Issuers telephone number
      604-684-8662


Securities registered under Section 12(b) of the Exchange
Act:None

Securities registered under Section 12(g) of the Exchange
Act:None

Check whether the issuer (1) filed all reports required to be
filed by Section13 or 15(d) of the Exchange Act during the past 12
months, and (2) has beensubject to such filing requirements for the past
90 days.Yes ( X )No ( )

Check if there is no disclosure of delinquent filers in
response to Item 405 ofRegulation S-B is not contained in this form, and
no disclosure will becontained, to the best of registrants knowledge,
in definitive proxy orinformation statements incorporated by reference
in Part III of this Form10-KSB or any amendment to this Form
10-KSB.  (X )

Indicate by check mark whether the registrant is a shell
company (asdefined in Rule 12b-2 of the Exchange Act).Yes
( X )No ( )

Issuers revenues for its most recent fiscal year.Nil

Aggregate market value of the voting common equity held by
  non-affiliatesas of March 31, 2008:$1,707,515

Common shares outstanding as of March 31, 2008:26,860,326

Transitional Small Business Disclosure Format.Yes ( )No ( X )

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**EXPLANATORY NOTE**

Pursuant to a review in July 2008 of the Company’s Form 10-KSB for the period ended December 31, 2007, it was determined that the Company omitted certain information pertaining to the information required by Item 8A – Controls and Procedures. These omissions have now been corrected by this amended report dated October 23, 2008. The information contained in this amended report is the same as the information contained in the original 10-KSB report dated March 31, 2008, except for the amended information required under Item 8A.

Since the time the original 10-KSB report dated March 31, 2008 was prepared, Mr. Ralph Shearing resigned as President and Chief Executive officer of the Company and Mr. Abbas Salih was appointed to the position of President and Chief Executive Officer. These management changes were effective September 12, 2008; Mr. Shearing remains a director of the Company.

**FORWARD-LOOKING STATEMENTS**

Statements made in this report that are not historical or
current facts are "forward-looking statements" made pursuant to the Safe Harbor
Provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section
21E of the Securities Exchange Act of 1934. These statements often can be
identified by the use of terms such as "may", "will", "expect", "believe",
"anticipate", "estimate", "approximate" or "continue" or the negative
thereof.

The Company intends that such forward-looking statements be
subject to the Safe Harbors for such statements. The Company wishes to caution
readers not to place undue reliance upon any such forward-looking statement,
which speak only as of the date made. Any forward-looking statement represents
management's best judgment as to what may occur in the future. However,
forward-looking statements are subject to risks, uncertainties and important
factors beyond the control of the Company that could cause actual results and
events to differ materially from historical results of operations and events and
those presently anticipated or projected. The Company disclaims any obligation
to subsequently revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.

PART I

|**1.** | Description of Business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | The Company was incorporated in Colorado on February 28,
      1989 as Jefferson Capital Corporation. Effective June 13, 1990 the Company
      changed its name to Ohio & Southwestern Energy Company. Effective July
      1, 2001, the Company and Strategic Internet Investments, Incorporated
      (Strategic), an inactive Delaware corporation incorporated on March 2,
      2001, were merged. All common shares outstanding of the Company were
      converted into an equal number of common shares of Strategic. The purpose
      of this merger was to change the corporate jurisdiction of the Company
      from Colorado to Delaware and to change the name of the Company. The
      surviving corporation of the merger is Strategic, a Delaware
      corporation.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | The Company is in the development stage, accordingly
      certain matters discussed herein are based on potential future
      circumstances and developments, which the Company anticipates, but which
      cannot be assured.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | The Company is currently devoting its efforts to
      developing The Dream Island Resort project in Manama, Bahrain. The Dream
      Island Resort project will be an integrated resort, entertainment, hotel
      and real estate facility to be built on a 41 acre man-made island off the
      north eastern coast of Manama, Bahrain.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | In January 2008 the Company entered into a Letter of
      Intent to potentially acquire by option up to a 100% indirect interest in
      the Port Residence Project by purchasing the outstanding shares of a
      Turkish company. The Port Residence Project is a real estate development
      project that will be located on a 16.5 hectare parcel of land in Calkaya,
      near Antalya, Turkey.                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | (See Plan of Operationbelow)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2.     | Description of Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | The Company maintains an office in rented premises
      located in Vancouver, BC, Canada. The Companys equipment consists of
      computer equipment, which is generally located in the Companys office,
      but may be transported elsewhere as needed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | Except as described above, the Company does not directly
      or indirectly own or otherwise have any interest in any other real
      estate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3.     | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | Management is not aware of any legal proceedings pending
      or contemplated against the Company, its directors or officers or any of
      its affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|4.     | Submission of Matters to a Vote of Security
      Holders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | No matters were submitted during the fiscal year covered
      by this report to a vote of security holders of the Company, through the
      solicitation of proxies or otherwise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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Part II

|5. | Market for Common Equity and Related Stockholder
      Matters
|-- | --------------------------------------------------------------

Market informationThe
Company's common shares are quoted and traded on the US OTC Bulletin Board under
the symbol "SIII". The range of high and low bid quotations for each quarter
within the last two fiscal years, as reported by Yahoo Finance (www.yahoo.com),
was as follows:

Year
    Period
    High
    Low2008
    First quarter
    $0.10
    $0.052007
    First quarter
    $0.44
    $0.20Second quarter
    $0.44
    $0.17Third quarter
    $0.29
    $0.12Fourth quarter
    $0.20
    $0.072006
    First quarter
    $0.37
    $0.15Second quarter
    $1.03
    $0.15Third quarter
    $0.72
    $0.30Fourth quarter
    $0.52
    $0.25


These quotations reflect inter-dealer
prices, without retail mark-up, mark-down, or commission and may not represent
actual transactions.

Holders of common equityAs
at December 31, 2007 there were approximately 128 holders of record of the
common shares of Strategic.

DividendsOn March 11, 2005,
the Company issued 4,060,643 common shares, net of escrowed shares, pursuant to
a common stock dividend declared by the Board of Directors on February 14, 2005,
payable to the shareholders of record as of March 4, 2005. In connection with
this stock dividend, pursuant to the terms of stock option, convertible
debenture, and stock warrant agreements the number of units or shares issuable
under those agreements shall be increased by 20% and the exercise or conversion
price shall be decreased by 20%. These shares are restricted under Rule 144.

Except for the above mentioned stock
dividend, the Company has not declared or paid per share cash distributions or
dividends on its common stock in the last two fiscal years. Future distributions
or dividends on the common stock, if any, will be determined by the Company's
Board of Directors and will depend upon the Company's results of operations,
financial condition, capital requirements and other factors.

Securities authorized for issuance
under equity compensation plans

| | Equity
      Compensation Plan Information                       |                                                                                                     |                                                                                     |                                                                    
| | ---------------------------------------------------------------- | --------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | -------------------------------------------------------------------
| | Plan
      category                                              | Number of securities to be issued upon exercise of
      outstanding options, warrants, and rights. | Weighted average exercise price of outstanding
      options, warrants, and rights. | Number of securities remaining available for
      future issuance.
| |                                                                  |                                                                                                     |                                                                                     |                                                                    
| | Equity compensation plans approved by security
      holders     | -                                                                                                   | -                                                                                   | -                                                                  
| |                                                                  |                                                                                                     |                                                                                     |                                                                    
| | Equity compensation plans not approved by
      security holders | 2,087,000                                                                                           | $0.23                                                                               | 1,942,049                                                          
| |                                                                  |                                                                                                     |                                                                                     |                                                                    
| | Total                                                            | 2,087,000                                                                                           | $0.23                                                                               | 1,942,049                                                          

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2002 Stock Award Plan

In 2002, the Companys board of
directors approved a stock award plan. The plan provides both for the direct
award or sale of shares, and for the grant of options to purchase shares. Shares
may be awarded in consideration of services rendered to the Company. The Company
may also grant a 30-day right to purchase shares at a price of not less than 90%
of the fair market value of the shares.

Under the plan directors, employees and
consultants may be granted incentive stock options to purchase common stock of
the Company at a price of not less than 100% of the fair market value of the
stock. The total number of shares awarded under the plan must not exceed 15% of
the outstanding common stock of the Company. Certain changes in the capital
structure of the Company, such as a stock split or stock dividend, may result in
an appropriate adjustment to the number and/or the price of shares issuable
under the plan. The plan expires on July 1, 2017.

Sales of Securities Without
Registration Under the Securities Act of 1933

On March 11, 2005, the Company issued
4,060,643 common shares, net of escrowed shares, pursuant to a common stock
dividend declared by the Board of Directors on February 14, 2005, payable to the
shareholders of record as of March 4, 2005. In connection with this stock
dividend, pursuant to the terms of stock option, convertible debenture, and
stock warrant agreements the number of units or shares issuable under those
agreements shall be increased by 20% and the exercise or conversion price shall
be decreased by 20%. These shares are restricted under Rule 144.

On November 15, 2002 the Company
entered into a Convertible Loan Facility Agreement with Icon Management Ltd.
(Icon) whereby the Company would, from time to time, borrow operating funds
from Icon, at an interest rate of ten percent (10%), repayable on demand. The
lender has the right to convert all or part of the principal sum and interest
into units at a conversion rate which is calculated at a discount to the average
closing market price for ten days preceding a loan advance or conversion of
interest. Each unit consists of one common share of the Company and one
non-transferable share purchase warrant, expiring 2 years from the conversion
date, exercisable at the applicable conversion rate. Certain loans made under
this agreement had specific maturity dates, thereby limiting to 2 years the
lenders right to convert all or part of the principal sum into units. During
the year ended December 31, 2004, Icon converted $48,537 of the loan into
825,364 units of the Company, including warrants exercisable at an average price
of $0.06 per share, expiring at various dates between December 31, 2004 and
March 31, 2006. On December 31, 2004, Icon exercised warrants to purchase
643,715 shares. During the year ended December 31, 2005, Icon converted $227,140
of the loan plus accrued interest of $23,020, into 635,901 units of the Company,
including warrants exercisable at an average price of $0.39 per share, expiring
at various dates between April 1, 2005 and January 31, 2007. During the period
ended September 30, 2005, Icon also exercised warrants to purchase a further
420,107 shares for cash proceeds of $43,153. This transaction is with an
offshore non-U.S. person; accordingly, these securities are exempt from
registration pursuant to Regulation S.

On March 13, 2003 the Company completed
an offering of 650,000 units of its share capital to one accredited investor at
a price of $0.10 per unit, each unit consisting of one share of common stock and
one common stock share purchase warrant. Each common stock purchase warrant
gives the investor the right to purchase one additional share of common stock at
any time during the first two years at a price of $0.10 per share. Total cash
proceeds of $65,000 were allocated to working capital. In July 2004, 320,000 of
the warrants were exercised, and 320,000 shares were issued for cash proceeds of
$32,000. During the year ended December 31, 2005, the investor exercised the
remaining warrants to purchase a further 330,000 shares for cash proceeds of
$33,000. These shares were issued pursuant to an exemption from registration
under Section 4(6) of the Securities Act of 1933. Sale or transfer of the shares
by the investor shall be in accordance with the provisions of Regulation S, or
pursuant to registration under the Securities Act of 1933 or pursuant to an
available exemption from registration. This transaction is with an offshore
non-U.S. person; accordingly, these securities are exempt from registration
pursuant to Regulation S.

On August 10, 2003 the Company entered
into a Convertible Loan Facility Agreement with Star Leisure & Entertainment
Inc. (Star Leisure), a company controlled by a Director and Officer of
Strategic, whereby the Company would, from time to time, borrow operating funds
from Star Leisure, at an interest rate of ten percent (10%), repayable on
demand. The lender has the right to convert all or part of the principal sum
into units at a conversion rate which is calculated at a discount to the average
closing market price for ten days preceding a loan advance. Each unit consists
of one common share of the Company and one non-transferable share purchase
warrant, expiring 2 years from the conversion date, exercisable at the
applicable conversion rate. Certain loans made under this agreement had specific
maturity dates, thereby limiting to 2 years the lenders right to convert all or
part of the principal sum into units. At December 31, 2005, Star Leisure had
advanced a total of $103,206 and accrued interest of $25,100. During the year

---

ended December 31, 2005, $81,206 of the
loans matured, and the right to convert this principal amount into units
expired. On January 31, 2006 the right to convert the remaining loan principal
of $22,000 into units expired. Under the terms of the Convertible Loan Facility
Agreement, any loans that mature without being converted or repaid become due on
demand. At December 31, 2007, the Star Leisure loan principal was $49,700 and
had accrued interest of $9,018. The loan principal is convertible into 416,248
units at conversion price of $0.12 as set at the time the principal was
borrowed. Star Leisure has not converted any part of the principal sums advanced
or accrued interest into units as of December 31, 2007. This transaction is with
an offshore non-U.S. person; accordingly, these securities are exempt from
registration pursuant to Regulation S.

On November 30, 2003, the Company
issued 198,000 Class A Convertible Preferred Shares(1)at a deemed
value of $4.00 per share to settle a termination fee of $792,000. This
termination fee is to a former contractor who was to perform planning services
for the Company that were subsequently assigned to another contractor. This
transaction is with an offshore non-U.S. person; accordingly, these securities
are exempt from registration pursuant to Regulation S.

On January 31, 2004, the Company issued
1,137,500 Class A Convertible Preferred Shares(1) at a deemed value
of $4.00 per share, as payment for technical planning services to be performed
by the Arkan Group for Projects of Dammam, Saudi Arabia. The total value of the
technical planning services contract is $4,550,000. These shares were issued in
escrow and were to be released over time as work on the Dream Island Project
progressed. In December 2004 this contract was terminated, and the escrowed
shares were cancelled. For accounting purposes, these shares were not considered
issued and outstanding in 2004 as the escrow condition was never met during the
year. This transaction is with an offshore non-U.S. person; accordingly, these
securities are exempt from registration pursuant to Regulation S.

In May 2004, the Company issued 50,000
common shares at a deemed price of $0.30 per share, for a total deemed
consideration of $15,000 in settlement of a loan, pursuant to a Debt Settlement
Agreement. This transaction is with an offshore non-U.S. person; accordingly,
these securities are exempt from registration pursuant to Regulation S, however
they are restricted under Rule 144.

The Company also issued 300,000 common
shares in August 2004, at a deemed price of $0.38 per share, for a total deemed
consideration of $112,500, pursuant a Promotional and Capital Funding Agreement
for financial and investor relation services. These shares were held in escrow
and were to be released subject to the Company obtaining certain future
financial goals, however these goals were never achieved and the shares were
subsequently cancelled. This transaction is with an offshore non-U.S. person;
accordingly, these securities are exempt from registration pursuant to
Regulation S, however they are restricted under Rule 144.

The Company issued an additional
563,000 common shares in August 2004, as a $30,000 partial settlement of a loan
from Canarab Acquisitions Inc. (Canarab), a company controlled by a director. In
2001, Canarab secured a loan on behalf of the Company, and the lender received
as fees and collateral 563,000 shares of the Company that were owned by Canarab.
The lender subsequently applied the collateral shares as payment of the
outstanding loan. Accordingly, the Company issued 563,000 common shares to
Canarab as reimbursement for those shares forfeited to the lender. This
transaction is with an offshore non-U.S. person; accordingly, these securities
are exempt from registration pursuant to Regulation S, however they are
restricted under Rule 144.

In November 2004, the Company issued
350,000 common shares at a deemed price of $0.35 per share, for a total deemed
consideration of $122,500, pursuant a Promotional and Capital Funding Agreement
for financial and investor relation services. This transaction is with an
offshore non-U.S. person; accordingly, these securities are exempt from
registration pursuant to Regulation S, however they are restricted under Rule
144.

In August 2004, the Company issued
10,000 common shares at a deemed price of $2.00 per share, for a total deemed
consideration of $20,000, pursuant to a Consulting Services Agreement for
financial consulting. This transaction is with an offshore non-U.S. person;
accordingly, these securities are exempt from registration pursuant to
Regulation S, however they are restricted under Rule 144.

In January 2005, the Company issued
141,000 common shares at a deemed price of $.50 per share, for a total deemed
consideration of $70,500, pursuant to various consulting agreements for legal,
computer, and financial services. These transactions are with offshore non-U.S.
persons; accordingly, these securities are exempt from registration pursuant to
Regulation S.

The Company issued 50,000 common shares
in January 2005, at a deemed price of $0.84 per share, for a total deemed
consideration of $42,000, pursuant a Promotional and Capital Funding Agreement
for financial and investor relation

---

services. This transaction is with an
offshore non-U.S. person; accordingly, these securities are exempt from
registration pursuant to Regulation S, however they are restricted under Rule
144.

The Company also issued 400,000 common
shares in January 2005, at a deemed price of $0.25 per share, for a total deemed
consideration of $100,000, pursuant a Promotional and Capital Funding Agreement
for financial and investor relation services. Of these shares, 250,000 were held
in escrow and were to be released subject to the Company obtaining certain
future financial goals, however these goals were never achieved and the shares
were subsequently cancelled. This transaction is with an offshore non-U.S.
person; accordingly, these securities are exempt from registration pursuant to
Regulation S, however they are restricted under Rule 144.

In March 2005 the Company entered into
a Promotional and Capital Funding Agreement for financial and investor relation
services. Pursuant to this agreement, the Company issued 100,000 common shares
in May 2005, at a deemed price of $0.36 per share, for a total deemed
consideration of $36,000. This transaction is with an offshore non-U.S. person;
accordingly, these securities are exempt from registration pursuant to
Regulation S, however they are restricted under Rule 144.

In December 2005 the Company entered
into three Consulting Agreements for public relations and promotional services.
Pursuant to these agreements, the Company issued 800,000 common shares at a
deemed price of $0.25 per share, for a total deemed consideration of $200,000.
These transactions are with offshore non-U.S. persons; accordingly, these
securities are exempt from registration pursuant to Regulation S, however they
are restricted under Rule 144.

On May 5, 2006 the Company entered into
a Convertible Loan Facility Agreement with CMB Investments Ltd. (CMB), a
company controlled by a Director and Officer of Strategic, whereby the Company
would, from time to time, borrow operating funds from CMB, at an interest rate
of ten percent (10%), repayable on demand. The lender has the right to convert
all or part of the principal sum into units at a conversion rate which is
calculated at a discount to the average closing market price for ten days
preceding a loan advance. Each unit consists of one common share of the Company
and one share purchase warrant, expiring 2 years from the conversion date,
exercisable at the applicable conversion rate. At December 31, 2007, the CMB
loan principal was $135,866 and had accrued interest of $14,341. The loan
principal is convertible into 1,762,858 units. Conversion of this loan and
associated warrants to equity will be at a price ranging from $0.05 to $0.23.
This transaction is with an offshore non-U.S. person; accordingly, these
securities are exempt from registration pursuant to Regulation S.

On October 11, 2006 the Company
completed a private placement of 200,000 common shares at $0.40 per share for
total proceeds of $80,000. In connection with this financing, the Company paid
cash of $3,000 and issued 100,000 common shares as finders fees. This
transaction is with an offshore non-U.S. person; accordingly, these securities
are exempt from registration pursuant to Regulation S.

On April 23, 2007 the Company completed
a private placement of 200,000 common shares at $0.25 per share for total
proceeds of $50,000. This transaction is with an offshore non-U.S. person;
accordingly, these securities are exempt from registration pursuant to
Regulation S.

In May 2007 the Company entered into
two Consulting Agreements for financial consulting services for a period of 12
months. Pursuant to these agreements, the Company issued 700,000 common shares
at a deemed price of $0.20 per share, for a total deemed consideration of
$140,000. These transactions are with offshore non-U.S. persons; accordingly,
these securities are exempt from registration pursuant to Regulation S, however
they are restricted under Rule 144.

(1) Refer to the Notes of the
Consolidated Financial Statements for the Class A Convertible Preferred Shares
terms of conversion and rights.

|6. | Plan of Operation
|-- | -----------------

Plan of OperationThe Company
has an agreement to purchase 80% of the outstanding shares of Gulf Star World
Development W.L.L. (Gulf Star), a Bahrain corporation, from Star Leisure &
Entertainment Inc. (Star Leisure). Star Leisure is controlled by a director of
the Company and is based in British Columbia, Canada. Gulf Star is the 100%
owner and developer of the Dream Island Resort project.

To acquire 80% of Gulf Star, the
Company must issue five million common shares at a price of $0.125 per share.
The shares are to be issued over a three year period based on construction
progress. In addition, the Company shall make

---

cash payments to Star Leisure totaling
$100,000 to cover a portion of hard costs accumulated by Star Leisure in
progressing the Dream Island Project. At December 31, 2003 the Company had paid
$34,210, with the balance of $65,790 to be paid by August 31, 2008.

On March 13, 2006, the Ministry of
Finance, Bahrain (MOFB) notified Gulf Star that due to a lack of progress and
failure to advance the project in a timely basis, the MOFB intends to seek
termination of the lease contract for the Dream Island site. The Company, Gulf
Star, and Star Leisure intend to oppose the action by the MOFB. However, due to
the uncertainty of the future viability of the Dream Island project, management
has written-down the associated deferred development costs to a nominal value of
$1.00 at December 31, 2005.

The Dream Island project in Bahrain
will require, over the next twenty to twenty-four months, a significant amount
of investment capital to be secured to ensure that all stages of development can
proceed and be completed on schedule and on budget. The highest percentage of
the funding requirements will be met through senior debt instruments with
banking, investment and construction institutions and through government
financing incentives and concessions. Further financing will be achieved through
the pre-selling of the real estate units, villas and apartments, to be
constructed as part of the Dream Island complex.

The first stage of the project,
dredging and reclamation of the 41 acre man-made island site, is to be paid by
the issuance of 1,268,750 Class A Convertible Preferred Shares in the capital of
the Company at a deemed price of $4.00 per share to Robodh Contracting
Establishment, Manama, Bahrain. The total value of the Dredging and Reclamation
Works contract is $5,075,000.

In August 2004, limited construction
commenced on the Dream Island Project. This initial phase of work consists of
the construction of a temporary causeway to provide access from the coast to the
offshore site of the future island location. Large haulage trucks transported
and dumped quarry stone to create the temporary causeway from which access will
be gained to the island site. Once the temporary causeway has been completed,
work will commence on the creation of the Dream Island perimeter of the future
offshore island. Thereafter, reclamation dredging operations will commence to
move sand into the perimeter thereby creating the Dream Island site.

In January 2007 The Company has entered
into a Letter of Intent (LOI) with MEC-Narmont Grup Insaat San. Ve. Tic. Ltd.
(MEC-Narmont), Al Habeeb & Al Mokairesh Commercial Brokers LLC (Habeeb),
Mideast Development Company Inc. (MidDevCo) and certain property owners (the
Landowners), to potentially acquire by option up to a 100% indirect interest in
the Renaissance Residence Project (the Renaissance Project) in Antalya, Turkey
by purchasing the outstanding shares of a Turkish company (TurkCo) that will
be incorporated to hold and own 100% of the Renaissance Project, subject only to
certain payments to the landowners. MidDevCo is controlled by a director of the
Company.

The Renaissance Project is a real
estate development project that will be located on an 8.762 hectare parcel of
land near the Antalya Airport and Lara Beach in Antalya, Turkey. It will consist
of three multi-storey buildings with over 200 residential units. In recent
years, the Gulf of Antalya, with a coastal strip of some 200 km with bays and
coves of exceptional beauty filled with the crystal clear waters of the
Mediterranean, has become one of the most popular tourist resorts in Turkey.

The LOI contemplates that the Company
will assist in designing a financing plan for the Renaissance Project and the
Company will be granted two options to purchase up to 100% of the outstanding
shares of TurkCo. An Initial Option will allow the Company to purchase up to
thirty 30% of the outstanding shares of TurkCo. Upon full exercise of the
Initial Option, the Company shall be entitled to exercise a Second Optionto
purchase the remaining outstanding shares of TurkCo. Compensation to be paid to
the shareholders of TurkCo shall, at the choice of the Company, be paid either
in cash or by issuing common shares of the Company. Any issuance of common
shares of the Company would occur as of the date of the Option exercise notice,
under a Restricted Rule 144 Reg. S share issuance.

In June 2007 this LOI was terminated
and replaced with a second LOI with the same terms and conditions as the first
LOI, except some of the parties to the agreement changed. This second LOI was
also terminated; none of the parties provided nor fulfilled any terms of the
LOI, and no formal agreement was ever signed.

In January 2008 the Company entered
into a Letter of Intent (LOI) with certain property owners (Landowners), and
Al Habeeb & Al Mokairesh Commercial Brokers LLC (Habeeb), and G7
Entertainment Ltd. (G7) and Muzaffer Ataman (Ataman). The Company has the
potential to acquire by option up to a 100% indirect interest in the Port
Renaissance Project (the Port Residence Project) in Calkaya, near Kundu
Antalya, Turkey by purchasing the

---

outstanding shares of a Turkish company
(Calkaya TurkCo) that will be incorporated to hold and own 100% of the Port
Residence Project.

The Port Residence Project is a real
estate development project located on 16.5 acres of land and when completed will
consist of eleven multi-storey buildings with 396 residential units.
Construction of three of the buildings, Phase 1, has commenced and is expected
to be complete in one years time, subject to securing funding.

Under the LOI the Company will be
granted two options to purchase up to 100% of the outstanding shares of Calkaya
TurkCo. An initial optionwill allow the Company to purchase up to 30% of the
outstanding shares of Calkaya TurkCo. Upon full exercise of the initial option,
the Company shall be entitled to exercise a second optionto purchase the
remaining outstanding shares of Calkaya TurkCo.

Compensation to be paid to the
shareholders of Calkaya TurkCo shall, at the choice of the Company, will be paid
either in cash or by issuing common shares of the Company. Any issuance of
common shares of the Company would occur as of the date of the Option Exercise
Notice, under a Restricted Rule 144 Reg. S share issuance. The shares would be
issued at the higher value of either USD $2.00 per share, or the discounted
market price of the Company shares, as quoted on the OTC:BB whereby the
Discounted Market Priceis defined by calculating the previous 10 day average
closing share price from the exercise date in question, and reducing that price
by a 25% discount.

G7 is a related party to the Company.
Mr. Abbas Salih, Director and controlling shareholder of the Company, is also
the controlling shareholder of G7, owning a 51% interest in G7 and therefore,
the contemplated agreement outlined above is a non-arms length transaction.

The LOI is subject to the completion of
a formal agreement.

The financial statements have been
prepared on a going concern basis. The Company has accumulated a deficit of
$8,881,680 since inception and at December 31, 2007 has a working capital
deficiency of $721,828. Its ability to continue as a going concern is dependent
upon the ability of the Company to generate profitable operations in the future
and/or to obtain the necessary financing to meet its obligations and repay its
liabilities arising from normal business operations when they come due. The
outcome of these matters cannot be predicted with any certainty at this time.
The Company has historically satisfied its capital needs primarily by issuing
equity securities. Management plans to continue to provide for its capital needs
during the next twelve months by issuing equity securities, private placements,
loans, and debentures convertible into equity. Additional operating capital
could be obtained through the potential exercise of management and director
stock options and/or exercise of outstanding stock purchase warrants. The
Company remains at the development stage, as there were no revenues during the
past fiscal year.

Management believes that the close
connections and contacts it has made in the Middle East, especially the efforts
of its Chairman, Mr. Abbas Salih, who has been stationed predominately in Saudi
Arabia and Bahrain for the past year to oversee the project, will be of immense
value in completing other essential contracts during the course of this
project.

The Company's plan during the next
quarter and for the balance of 2007 is to maintain the size and staffing of its
Vancouver, British Columbia head office at the current levels. There are no
plans to hire additional employees as administrative requirements at head office
are now being adequately met by the efforts of the board members the full-time
and temporary staff and consultants. Field operations and construction
activities in Bahrain will be conducted through contracting and sub-contracting
of work.

Off-balance sheet
arrangementsAs of the date of this Annual Report, the Company does not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on the company's financial condition, change in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to investors. The
term "off-balance sheet arrangement" generally means any transaction, agreement,
or other contractual arrangement to which an entity unconsolidated with the
Company is a party under which the Company has (i) any obligation arising under
a guarantee contract, derivative instrument or variable interest; or (ii) a
retained or contingent interest in assets transferred to such entity or similar
arrangement that serves as credit, liquidity or market risk support for such
assets.

---

|**7.** | **Financial Statements**
|------ | ------------------------



STRATEGIC INTERNET INVESTMENTS, INCORPORATED

(A Developm ent Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007 AND 2006
  (Stated in U.S. Dollars)

---

|                      | BDO Dunwoody LLP              | #604 750 West Pender Street
|--------------------- | ----------------------------- | ----------------------------
|Chartered Accountants | Vancouver, BC, Canada V6C 2T7
|                      | Telephone: (604) 689-0188    
|                      | Fax: (604) 689-9773          

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders,
  Strategic Internet Investments, Incorporated
  (A Development Stage Company)

We have audited the accompanying consolidated balance sheet of
  Strategic Internet Investments, Incorporated (the Company, a Development
  Stage Company) and subsidiaries as of December 31, 2007 and the related consolidated
  statements of operations, cash flows and stockholdersdeficiency for the
  year then ended and for the period from the inception of the development stage,
  February 28, 1989 to December 31, 2007. These financial statements are the responsibility
  of the Company's management. Our responsibility is to express an opinion on
  these financial statements based on our audit. We did not audit the financial
  statements of the Company for the period from the inception of the development
  stage, February 28, 1989 to December 31, 2006. Such statements are included
  in the cumulative inception to December 31, 2007 totals of the statements of
  operations, cash flows and stockholders' deficiency and reflect a net loss of
  91% of the related cumulative totals. Those financial statements were audited
  by other auditors whose report has been furnished to us and our opinion, insofar
  as it relates to the amount for the period from the inception of the development
  stage, February 28, 1989 to December 31, 2006 included in the cumulative totals,
  is based solely upon the report of the other auditors.

We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States of America). Those
  standards require that we plan and perform an audit to obtain reasonable assurance
  about whether the financial statements are free of material misstatement. The
  Company is not required to have, nor were we engaged to perform, an audit of
  its internal control over financial reporting. Our audit included 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 and the
  report of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audit and the report of the other
  auditors, these consolidated financial statements referred to above present
  fairly, in all material respects, the financial position of Strategic Internet
  Investments, Incorporated and subsidiaries as of December 31, 2007 and the results
  of their operations and their cash flows for the year then ended and for the
  period from inception of the development stage February 28, 1989 to December
  31, 2007 in conformity with accounting principles generally accepted in the
  United States of America.

The accompanying financial statements referred to above have
  been prepared assuming that the Company will continue as a going concern. As
  discussed in Note 1 to the financial statements, the Company is in the development
  stage, has not yet achieved profitable operations and is dependent on its ability
  to raise capital from shareholders or other sources to meet its obligations
  and repay its liabilities arising from normal business operations when they
  come due. These factors, along with other matters as set forth in Note 1, raise
  substantial doubt that the Company will be able to continue as a going concern.
  The financial statements do not include any adjustments that might result from
  the outcome of these uncertainties.

(signed) BDO Dunwoody LLP

Chartered Accountants

Vancouver, Canada
  March 24, 2008

F-1

---

|A PARTNERSHIPOFINCORPORATED | AMISANOHANSON       
|--------------------------- | --------------------
|PROFESSIONALS               |                     
|                            | CHARTEREDACCOUNTANTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders,
  Strategic Internet Investments, Incorporated
  (A Development Stage Company)

We have audited the accompanying consolidated balance sheet of
  Strategic Internet Investments, Incorporated (A Development Stage Company) and
  subsidiaries as of December 31, 2006 and the related consolidated statements
  of operations, cash flows and stockholdersdeficiency for each of the years
  ended December 31, 2006 and for the period from inception of the development
  stage, February 28, 1989 to December 31, 2006. These financial statements are
  the responsibility of the Company's management. Our responsibility is to express
  an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States of America). Those
  standards require that we plan and perform an audit to obtain reasonable assurance
  about whether the financial statements are free of material misstatement. An
  audit includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the financial statements. An audit also includes assessing the
  accounting principles used and significant estimates made by management, as
  well as evaluating the overall financial statement presentation. We believe
  that our audit provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of
  Strategic Internet Investments, Incorporated and subsidiaries as of December
  31, 2006, and the results of their operations and their cash flows for the year
  ended December 31, 2006 and for the period from inception of the development
  stage, February 28, 1989 to December 31, 2006, in conformity with accounting
  principles generally accepted in the United States of America.

The accompanying consolidated financial statements referred to
  above have been prepared assuming that the Company will continue as a going
  concern. As discussed in Note 1 to the financial statements, the Company is
  in the development stage, has not yet achieved profitable operations and is
  dependent on its ability to raise capital from shareholders or other sources
  to meet its obligations and repay its liabilities arising from normal business
  operations when they come due. These factors, along with other matters as set
  forth in Note 1, raise substantial doubt that the Company will be able to continue
  as a going concern. The consolidated financial statements do not include any
  adjustments that might result from the outcome of these uncertainties.

|Vancouver, Canada | AMISANO HANSON     
|----------------- | ---------------------
|April 11, 2007    | Chartered Accountants

|750 WEST PENDER STREET, SUITE 604 | TELEPHONE: | 604-689-0188     
|--------------------------------- | ---------- | -----------------
|VANCOUVER CANADA                  | FACSIMILE: | 604-689-9773     
|V6C 2T7                           | E-MAIL:    | amishan@telus.net

F-2

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  CONSOLIDATED BALANCE SHEETS
  (Stated in U.S. Dollars)

|                                                            |   | December 31, |   |   | December 31, |  
|----------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                            |   | 2007         |   |   | 2006         |  
|                                                            |   |              |   |   |              |  
|ASSETS                                                      |   |              |   |   |              |  
|                                                            |   |              |   |   |              |  
|Current                                                     |   |              |   |   |              |  
|Cash                                                        | $ | 65           |   | $ | 10,822       |  
|Prepaid expenses Note 5                                    |   | 55,400       |   |   | -            |  
|                                                            |   |              |   |   |              |  
|                                                            |   | 55,465       |   |   | 10,822       |  
|                                                            |   |              |   |   |              |  
|Deferred
      investment costs Notes 3 and 5              |   | 1            |   |   | 1            |  
|                                                            |   |              |   |   |              |  
|                                                            | $ | 55,466       |   | $ | 10,823       |  
|                                                            |   |              |   |   |              |  
|                                                            |   |              |   |   |              |  
|LIABILITIES                                                 |   |              |   |   |              |  
|                                                            |   |              |   |   |              |  
|Current                                                     |   |              |   |   |              |  
|Accounts payable Note
      7                              | $ | 383,551      |   | $ | 153,202      |  
|Loans payable Note
      4                                 |   | 393,742      |   |   | 318,943      |  
|                                                            |   |              |   |   |              |  
|                                                            |   | 777,293      |   |   | 472,145      |  
|                                                            |   |              |   |   |              |  
|STOCKHOLDERSDEFICIENCY                                     |   |              |   |   |              |  
|                                                            |   |              |   |   |              |  
|Capital Stock Notes 4, 5,
      7 and 11                   |   |              |   |   |              |  
|Class A Convertible
      Preferred stock, $0.001 par value |   |              |   |   |              |  
|10,000,000 authorized, 198,000 outstanding                  |   | 198          |   |   | 198          |  
|Class B Preferred
      stock, $0.001 par value             |   |              |   |   |              |  
|10,000,000 authorized, none outstanding                     |   |              |   |   |              |  
|Common stock, $0.001
      par value                        |   |              |   |   |              |  
|100,000,000 authorized                                      |   |              |   |   |              |  
|26,860,326
      outstanding (2006: 25,960,326 outstanding) |   | 26,860       |   |   | 25,960       |  
|Additional paid-in capital                                  |   | 8,132,795    |   |   | 7,874,855    |  
|Deficit
      accumulated during the development stage      |   | (8,881,680   | ) |   | (8,362,335   | )
|                                                            |   |              |   |   |              |  
|                                                            |   | (721,827     | ) |   | (461,322     | )
|                                                            |   |              |   |   |              |  
|                                                            | $ | 55,466       |   | $ | 10,823       |  

Nature of Operations and Ability to Continue as a Going Concern
  Note 1 
  Commitments Notes 4, 5, 7, and 11 
  Subsequent Events Notes 5 and 11

SEE ACCOMPANYING NOTES AND 
  REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-3

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  CONSOLIDATED STATEMENTS OF OPERATIONS
  (Stated in U.S. Dollars)

|                                            |   |                          |   |   |              |   |   | Cumulative from |  
|------------------------------------------- | - | ------------------------ | - | - | ------------ | - | - | --------------- | -
|                                            |   |                          |   |   |              |   |   | February 28,    |  
|                                            |   |                          |   |   |              |   |   | 1989 (Date of   |  
|                                            |   |                          |   |   |              |   |   | Inception) to   |  
|                                            |   | Years ended December 31, |   |   | December 31, |  
|                                            |   | 2007                     |   |   | 2006         |   |   | 2007            |  
|                                            |   |                          |   |   |              |   |   |                 |  
|General and Administrative Expenses         |   |                          |   |   |              |   |   |                 |  
|Accounting and audit fees                   | $ | 35,230                   |   | $ | 40,271       |   | $ | 242,848         |  
|Amortization                                |   | -                        |   |   | 120          |   |   | 3,616           |  
|Communications                              |   | 1,674                    |   |   | 4,638        |   |   | 102,452         |  
|Consulting fees Note 7                     |   | 142,320                  |   |   | 168,901      |   |   | 2,576,093       |  
|Interest Notes 4
      and 7               |   | 70,345                   |   |   | 101,048      |   |   | 243,358         |  
|Investor relations                          |   | -                        |   |   | -            |   |   | 91,385          |  
|Legal fees                                  |   | -                        |   |   | 10,522       |   |   | 160,089         |  
|Management fees Note 7                     |   | 185,400                  |   |   | 50,615       |   |   | 389,387         |  
|Office and general Note
      7            |   | 1,255                    |   |   | 2,048        |   |   | 141,432         |  
|Regulatory fees                             |   | 3,447                    |   |   | 3,176        |   |   | 25,303          |  
|Rent Note 7                                |   | 22,120                   |   |   | 21,158       |   |   | 117,855         |  
|Transfer agent fees                         |   | 1,796                    |   |   | 3,615        |   |   | 43,393          |  
|Travel                                      |   | 6,553                    |   |   | -            |   |   | 110,031         |  
|Loss on disposal of equipment               |   | -                        |   |   | 1,481        |   |   | 1,481           |  
|Non-cash compensation charges
      Note 5 |   | 29,240                   |   |   | -            |   |   | 484,975         |  
|Write-down of advances to                   |   |                          |   |   |              |   |   |                 |  
|related
      party                         |   | -                        |   |   | -            |   |   | 606,337         |  
|                                            |   |                          |   |   |              |   |   |                 |  
|Operating loss                              |   | (499,380                 | ) |   | (407,593     | ) |   | (5,340,035      | )
|                                            |   |                          |   |   |              |   |   |                 |  
|Unauthorized distribution                   |   | -                        |   |   | -            |   |   | (69,116         | )
|Termination fee                             |   | -                        |   |   | -            |   |   | (792,000        | )
|Loss on foreign exchange                    |   | (19,965                  | ) |   | (3,831       | ) |   | (32,135         | )
|Gain on settlement of debt                  |   | -                        |   |   | 9,769        |   |   | 25,233          |  
|Write-down of deferred
      investment     |   |                          |   |   |              |   |   |                 |  
|costs Note 5                               |   | -                        |   |   | -            |   |   | (34,209         | )
|                                            |   |                          |   |   |              |   |   |                 |  
|                                            |   |                          |   |   |              |   |   |                 |  
|Net loss for the period                     | $ | (519,345                 | ) | $ | (401,655     | ) | $ | (6,242,262      | )
|                                            |   |                          |   |   |              |   |   |                 |  
|Basic loss per share                        | $ | (0.02                    | ) | $ | (0.02        | ) |   |                 |  
|                                            |   |                          |   |   |              |   |   |                 |  
|Weighted average number of common shares    |   |                          |   |   |              |   |   |                 |  
|outstanding                                 |   | 26,524,710               |   |   | 25,727,723   |   |   |                 |  

SEE ACCOMPANYING NOTES AND 
  REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-4

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  (Stated in U.S. Dollars)

|                                                            |   |                          |   |   |              |   |   | Cumulative from        |  
|----------------------------------------------------------- | - | ------------------------ | - | - | ------------ | - | - | ---------------------- | -
|                                                            |   |                          |   |   |              |   |   | February 28, 1989      |  
|                                                            |   |                          |   |   |              |   |   | (Date of Inception) to |  
|                                                            |   | Years ended December 31, |   |   | December 31, |  
|                                                            |   | 2007                     |   |   | 2006         |   |   | 2007                   |  
|Operating Activities                                        |   |                          |   |   |              |   |   |                        |  
|Net loss for the period                                     | $ | (519,345                 | ) | $ | (401,655     | ) | $ | (6,242,262             | )
|Adjustments to reconcile net loss to net cash
      used in |   |                          |   |   |              |   |   |                        |  
|operating
      activities:                                 |   |                          |   |   |              |   |   |                        |  
|Amortization                                                |   | -                        |   |   | 120          |   |   | 3,616                  |  
|Beneficial
      conversion feature on convertible debt     |   | 39,600                   |   |   | 77,800       |   |   | 117,400                |  
|Communications                                              |   | -                        |   |   | -            |   |   | 28,000                 |  
|Consulting
      fees                                       |   | 84,600                   |   |   | 141,667      |   |   | 2,371,154              |  
|Gain on settlement
      of debt                            |   | -                        |   |   | (9,769       | ) |   | (25,233                | )
|Interest
      accrued on loans                             |   | 22,912                   |   |   | 22,617       |   |   | 79,087                 |  
|Legal fees                                                  |   | -                        |   |   | -            |   |   | 25,000                 |  
|Loss
      on disposal of equipment                         |   | -                        |   |   | 1,481        |   |   | 1,481                  |  
|Management
      fees                                       |   | -                        |   |   | -            |   |   | 7,000                  |  
|Non-cash
      compensation charge                          |   | 29,240                   |   |   | -            |   |   | 484,975                |  
|Termination
      fees                                      |   | -                        |   |   | -            |   |   | 792,000                |  
|Write-down
      of deferred investment costs               |   | -                        |   |   | -            |   |   | 34,209                 |  
|Write-down
      of advances to related party               |   | -                        |   |   | -            |   |   | 606,337                |  
|Changes in non-cash item:                                   |   |                          |   |   |              |   |   |                        |  
|Accounts payable                                            |   | 230,349                  |   |   | (5,811       | ) |   | 521,495                |  
|                                                            |   |                          |   |   |              |   |   |                        |  
|Net cash used in operating
      activities                 |   | (112,644                 | ) |   | (173,550     | ) |   | (1,195,741             | )
|                                                            |   |                          |   |   |              |   |   |                        |  
|Investing Activities                                        |   |                          |   |   |              |   |   |                        |  
|Organization costs                                          |   | -                        |   |   | -            |   |   | (750                   | )
|Acquisition of capital assets                               |   | -                        |   |   | -            |   |   | (4,347                 | )
|Deferred investment costs                                   |   | -                        |   |   | -            |   |   | (34,210                | )
|Advances to
      related party                             |   | -                        |   |   | -            |   |   | (606,337               | )
|                                                            |   |                          |   |   |              |   |   |                        |  
|Net cash used in investing
      activities                 |   | -                        |   |   | -            |   |   | (645,644               | )
|                                                            |   |                          |   |   |              |   |   |                        |  
|Financing Activities                                        |   |                          |   |   |              |   |   |                        |  
|Loans payable                                               |   | 51,887                   |   |   | 106,791      |   |   | 668,121                |  
|Due to related parties                                      |   | -                        |   |   | -            |   |   | 15,526                 |  
|Proceeds from issuance of common stock                      |   | 50,000                   |   |   | 80,000       |   |   | 1,162,631              |  
|Payment of offering costs                                   |   | -                        |   |   | (3,000       | ) |   | (30,270                | )
|Additional paid-in capital                                  |   | -                        |   |   | -            |   |   | 25,442                 |  
|                                                            |   |                          |   |   |              |   |   |                        |  
|Net cash provided by financing activities                   |   | 101,887                  |   |   | 183,791      |   |   | 1,841,450              |  
|                                                            |   |                          |   |   |              |   |   |                        |  
|Increase (decrease) in cash during the period               |   | (10,757                  | ) |   | 10,241       |   |   | 65                     |  
|                                                            |   |                          |   |   |              |   |   |                        |  
|Cash, beginning of the period                               |   | 10,822                   |   |   | 581          |   |   | 0                      |  
|                                                            |   |                          |   |   |              |   |   |                        |  
|Cash, end of the period                                     | $ | 65                       |   | $ | 10,822       |   | $ | 65                     |  
|                                                            |   |                          |   |   |              |   |   |                        |  
|Supplementary disclosure of cash flows:                     |   |                          |   |   |              |   |   |                        |  
|Cash paid for
      Interest                                | $ | -                        |   | $ | -            |   | $ | 17,054                 |  

Non-cash Transactions Note 6

SEE ACCOMPANYING NOTES AND 
  REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-5

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  CONSOLIDATED STATEMENTS OF STOCKHOLDERSDEFICIENCY
  For the period from February 28, 1989 (Date of Inception) to December 31, 2007
  (Stated in U.S. Dollars)

|                                           |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   | Deficit     |   |   |         |  
|------------------------------------------ |  | --------- |  | --------------- |  | ------------ | --------- |  | ------- |  | - | ----------- |  | - | ---------- |  | - | ----------- | - | - | ------- | -
|                                           |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   | Accumulated |   |   |         |  
|                                           |  |           |  |                 |  |              |           |  |         |  |   |             |  |   | Additional |  |   | During the  |   |   |         |  
|                                           |  |           |  | Preferred Stock |  | Common Stock |           |  | Paid-In |  |   | Development |  |   |            | 
|                                           |  |           |  | Shares          |  |              | Par Value |  | Shares  |  |   | Par Value   |  |   | Capital    |  |   | Stage       |   |   | Total   |  
|                                           |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   |             |   |   |         |  
|Balance, February 28, 1989                 |  |           |  | -               |  | $            | -         |  | -       |  | $ | -           |  | $ | -          |  | $ | -           |   | $ | -       |  
|Issuance of stock to insiders on           |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   |             |   |   |         |  
|March 7, 1989                              |  | at $0.30 |  | -               |  |              | -         |  | 33,347  |  |   | 33          |  |   | 9,967      |  |   | -           |   |   | 10,000  |  
|                                           |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   |             |   |   |         |  
|Balance December 31, 1989                  |  |           |  | -               |  |              | -         |  | 33,347  |  |   | 33          |  |   | 9,967      |  |   | -           |   |   | 10,000  |  
|Issuance of stock during public            |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   |             |   |   |         |  
|offering for $3.00 per
      share, net of |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   |             |   |   |         |  
|offering costs of $27,270                  |  |           |  | -               |  |              | -         |  | 33,348  |  |   | 33          |  |   | 72,697     |  |   | -           |   |   | 72,730  |  
|Net loss                                   |  |           |  | -               |  |              | -         |  | -       |  |   | -           |  |   | -          |  |   | (84,159     | ) |   | (84,159 | )
|                                           |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   |             |   |   |         |  
|Balance, December 31, 1990                 |  |           |  | -               |  |              | -         |  | 66,695  |  |   | 66          |  |   | 82,664     |  |   | (84,159     | ) |   | (1,429  | )
|Net loss                                   |  |           |  | -               |  |              | -         |  | -       |  |   | -           |  |   | -          |  |   | (3,416      | ) |   | (3,416  | )
|                                           |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   |             |   |   |         |  
|Balance, December 31, 1991                 |  |           |  | -               |  |              | -         |  | 66,695  |  |   | 66          |  |   | 82,664     |  |   | (85,575     | ) |   | (4,845  | )
|Net loss                                   |  |           |  | -               |  |              | -         |  | -       |  |   | -           |  |   | -          |  |   | (2,713      | ) |   | (2,713  | )
|                                           |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   |             |   |   |         |  
|Balance, December 31, 1992                 |  |           |  | -               |  |              | -         |  | 66,695  |  |   | 66          |  |   | 82,664     |  |   | (90,288     | ) |   | (7,558  | )
|Net loss                                   |  |           |  | -               |  |              | -         |  | -       |  |   | -           |  |   | -          |  |   | (1,614      | ) |   | (1,614  | )
|                                           |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   |             |   |   |         |  
|Balance, December 31, 1993                 |  |           |  | -               |  |              | -         |  | 66,695  |  |   | 66          |  |   | 82,664     |  |   | (91,902     | ) |   | (9,172  | )
|Net loss                                   |  |           |  | -               |  |              | -         |  | -       |  |   | -           |  |   | -          |  |   | (1,863      | ) |   | (1,863  | )
|                                           |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   |             |   |   |         |  
|Balance December 31, 1994                  |  |           |  | -               |  |              | -         |  | 66,695  |  |   | 66          |  |   | 82,664     |  |   | (93,765     | ) |   | (11,035 | )
|Issuance of stock for services             |  |           |  |                 |  |              |           |  |         |  |   |             |  |   |            |  |   |             |   |   |         |  
|rendered                                   |  | at $0.03 |  | -               |  |              | -         |  | 50,000  |  |   | 50          |  |   | 1,450      |  |   | -           |   |   | 1,500   |  
|Contributed capital                        |  |           |  | -               |  |              | -         |  | -       |  |   | -           |  |   | 24,842     |  |   | -           |   |   | 24,842  |  
|Net loss                                   |  |           |  | -               |  |              | -         |  | -       |  |   | -           |  |   | -          |  |   | (16,735     | ) |   | (16,735 | )

Contd

SEE ACCOMPANYING NOTES AND 
  REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-6

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  CONSOLIDATED STATEMENTS OF STOCKHOLDERSDEFICIENCY
  For the period from February 28, 1989 (Date of Inception) to December 31, 2007
  (Stated in U.S. Dollars)

|                                    |  |                 |  |  |              |  |  |           |  |  |             |  |  |            |   |  | Deficit     |   |  |          |  
|----------------------------------- |  | --------------- |  |  | ------------ |  |  | --------- |  |  | ----------- |  |  | ---------- | - |  | ----------- | - |  | -------- | -
|                                    |  |                 |  |  |              |  |  |           |  |  |             |  |  |            |   |  | Accumulated |   |  |          |  
|                                    |  |                 |  |  |              |  |  |           |  |  |             |  |  | Additional |   |  | During the  |   |  |          |  
|                                    |  | Preferred Stock |  |  | Common Stock |  |  | Paid-In   |  |  | Development |  |  |            |  
|                                    |  | Par Value       |  |  | Shares       |  |  | Shares    |  |  | Par Value   |  |  | Capital    |   |  | Stage       |   |  | Total    |  
|                                    |  |                 |  |  |              |  |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
|Balance, December 31, 1995          |  | -               |  |  | -            |  |  | 116,695   |  |  | 116         |  |  | 108,956    |   |  | (110,500    | ) |  | (1,428   | )
|Net loss                            |  | -               |  |  | -            |  |  | -         |  |  | -           |  |  | -          |   |  | (9,068      | ) |  | (9,068   | )
|                                    |  |                 |  |  |              |  |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
|Balance December 31, 1996           |  | -               |  |  | -            |  |  | 116,695   |  |  | 116         |  |  | 108,956    |   |  | (119,568    | ) |  | (10,496  | )
|Issuance of stock for cash - $0.011 |  | -               |  |  | -            |  |  | 2,000,000 |  |  | 2,000       |  |  | 19,300     |   |  | -           |   |  | 21,300   |  
|Contributed capital                 |  | -               |  |  | -            |  |  | -         |  |  | -           |  |  | 600        |   |  | -           |   |  | 600      |  
|Net loss                            |  | -               |  |  | -            |  |  | -         |  |  | -           |  |  | -          |   |  | (22,261     | ) |  | (22,261  | )
|                                    |  |                 |  |  |              |  |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
|Balance, December 31, 1997          |  | -               |  |  | -            |  |  | 2,116,695 |  |  | 2,116       |  |  | 128,856    |   |  | (141,829    | ) |  | (10,857  | )
|Issuance of stock services          |  |                 |  |  |              |  |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
|- at $0.001                         |  | -               |  |  | -            |  |  | 7,000,000 |  |  | 7,000       |  |  | -          |   |  | -           |   |  | 7,000    |  
|- at $0.01                          |  | -               |  |  | -            |  |  | 620,000   |  |  | 620         |  |  | 5,580      |   |  | -           |   |  | 6,200    |  
|Net loss                            |  | -               |  |  | -            |  |  | -         |  |  | -           |  |  | -          |   |  | (52,308     | ) |  | (52,308  | )
|                                    |  |                 |  |  |              |  |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
|Balance, December 31, 1998          |  | -               |  |  | -            |  |  | 9,736,695 |  |  | 9,736       |  |  | 134,436    |   |  | (194,137    | ) |  | (49,965  | )
|Net loss                            |  | -               |  |  | -            |  |  | -         |  |  | -           |  |  | -          |   |  | (35,995     | ) |  | (35,995  | )
|                                    |  |                 |  |  |              |  |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
|Balance, December 31, 1999          |  | -               |  |  | -            |  |  | 9,736,695 |  |  | 9,736       |  |  | 134,436    |   |  | (230,132    | ) |  | (85,960  | )
|Issuance of stock for cash          |  |                 |  |  |              |  |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
|pursuant to a private placement     |  |                 |  |  |              |  |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
|at $0.30                           |  | -               |  |  | -            |  |  | 1,133,334 |  |  | 1,133       |  |  | 338,867    |   |  | -           |   |  | 340,000  |  
|Issue of stock for finders fee      |  | -               |  |  | -            |  |  | 50,000    |  |  | 50          |  |  | (50        | ) |  | -           |   |  | -        |  
|Net loss                            |  | -               |  |  | -            |  |  | -         |  |  | -           |  |  | -          |   |  | (336,431    | ) |  | (336,431 | )
|Non-cash
      compensation charge  |  | -               |  |  | -            |  |  | -         |  |  | -           |  |  | 78,707     |   |  | -           |   |  | 78,707   |  

Contd

SEE ACCOMPANYING NOTES AND 
  REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-7

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  CONSOLIDATED STATEMENTS OF STOCKHOLDERSDEFICIENCY
  For the period from February 28, 1989 (Date of Inception) to December 31, 2007
  (Stated in U.S. Dollars)

|                                               |  |             |  |  |                 |  |  |              |  |  |            |  |  |             |  |  |            |   |  | Deficit     |   |  |            |  
|---------------------------------------------- |  | ----------- |  |  | --------------- |  |  | ------------ |  |  | ---------- |  |  | ----------- |  |  | ---------- | - |  | ----------- | - |  | ---------- | -
|                                               |  |             |  |  |                 |  |  |              |  |  |            |  |  |             |  |  |            |   |  | Accumulated |   |  |            |  
|                                               |  |             |  |  |                 |  |  |              |  |  |            |  |  |             |  |  | Additional |   |  | During the  |   |  |            |  
|                                               |  |             |  |  | Preferred Stock |  |  | Common Stock |  |  | Paid-In    |  |  | Development |  |  |            |  
|                                               |  |             |  |  | Shares          |  |  | Par Value    |  |  | Shares     |  |  | Par Value   |  |  | Capital    |   |  | Stage       |   |  | Total      |  
|                                               |  |             |  |  |                 |  |  |              |  |  |            |  |  |             |  |  |            |   |  |             |   |  |            |  
|Balance December 31, 2000                      |  |             |  |  | -               |  |  | -            |  |  | 10,920,029 |  |  | 10,919      |  |  | 551,960    |   |  | (566,563    | ) |  | (3,684     | )
|Issuance of
      stock for services           |  | - at $0.50  |  |  | -               |  |  | -            |  |  | 328,356    |  |  | 328         |  |  | 163,851    |   |  | -           |   |  | 164,179    |  
|                                               |  | - at $1.55  |  |  | -               |  |  | -            |  |  | 13,383     |  |  | 13          |  |  | 20,731     |   |  | -           |   |  | 20,744     |  
|                                               |  | - at $3.50  |  |  | -               |  |  | -            |  |  | 366,667    |  |  | 367         |  |  | 1,282,964  |   |  | -           |   |  | 1,283,331  |  
|Issuance of stock for
      cash pursuant to a |  |             |  |  |                 |  |  |              |  |  |            |  |  |             |  |  |            |   |  |             |   | 
|private placement                              |  | - at $0.30  |  |  | -               |  |  | -            |  |  | 883,332    |  |  | 883         |  |  | 264,117    |   |  | -           |   |  | 265,000    |  
|Issuance of stock pursuant to
      the        |  |             |  |  |                 |  |  |              |  |  |            |  |  |             |  |  |            |   |  |             |   |  |            |  
|exercise of warrants                           |  | - at $2.00  |  |  | -               |  |  | -            |  |  | 28,800     |  |  | 29          |  |  | 57,571     |   |  | -           |   |  | 57,600     |  
|Less: Issue costs                              |  |             |  |  | -               |  |  | -            |  |  | -          |  |  | -           |  |  | (17,858    | ) |  | -           |   |  | (17,858    | )
|Net loss                                       |  |             |  |  | -               |  |  | -            |  |  | -          |  |  | -           |  |  | -          |   |  | (2,296,406  | ) |  | (2,296,406 | )
|Non-cash compensation charge                   |  |             |  |  | -               |  |  | -            |  |  | -          |  |  | -           |  |  | 136,378    |   |  | -           |   |  | 136,378    |  
|                                               |  |             |  |  |                 |  |  |              |  |  |            |  |  |             |  |  |            |   |  |             |   |  |            |  
|Balance, December 31, 2001                     |  |             |  |  | -               |  |  | -            |  |  | 12,540,567 |  |  | 12,539      |  |  | 2,459,714  |   |  | (2,862,969  | ) |  | (390,716   | )
|Issuance of stock for prepaid consulting       |  |             |  |  |                 |  |  |              |  |  |            |  |  |             |  |  |            | - |  |             |   | 
|                                               |  | - at $0.35  |  |  | -               |  |  | -            |  |  | 80,000     |  |  | 80          |  |  | 27,920     |   |  | -           |   |  | 28,000     |  
|Issuance of stock for deferred investment      |  |             |  |  |                 |  |  |              |  |  |            |  |  |             |  |  |            |   |  |             |   | 
|costs                                          |  | - at $0.05  |  |  | -               |  |  | -            |  |  | 1,300,000  |  |  | 1,300       |  |  | 63,700     |   |  | -           |   |  | 65,000     |  
|Issuance of stock for
      services           |  | - at $0.05  |  |  | -               |  |  | -            |  |  | 100,000    |  |  | 100         |  |  | 4,900      |   |  | -           |   |  | 5,000      |  
|                                               |  | - at $0.055 |  |  | -               |  |  | -            |  |  | 60,000     |  |  | 60          |  |  | 3,240      |   |  | -           |   |  | 3,300      |  
|                                               |  | - at $0.10  |  |  | -               |  |  | -            |  |  | 105,000    |  |  | 105         |  |  | 10,395     |   |  | -           |   |  | 10,500     |  
|                                               |  | - at $0.148 |  |  | -               |  |  | -            |  |  | 27,000     |  |  | 27          |  |  | 3,973      |   |  | -           |   |  | 4,000      |  
|                                               |  | - at $0.20  |  |  | -               |  |  | -            |  |  | 175,000    |  |  | 175         |  |  | 34,825     |   |  | -           |   |  | 35,000     |  
|                                               |  | - at $0.209 |  |  | -               |  |  | -            |  |  | 17,143     |  |  | 17          |  |  | 3,583      |   |  | -           |   |  | 3,600      |  
|                                               |  | - at $0.35  |  |  | -               |  |  | -            |  |  | 120,000    |  |  | 120         |  |  | 41,880     |   |  | -           |   |  | 42,000     |  
|Issuance
      of stock for debt               |  | - at $0.20  |  |  | -               |  |  | -            |  |  | 458,135    |  |  | 458         |  |  | 91,169     |   |  | -           |   |  | 91,627     |  
|                                               |  | - at $0.209 |  |  | -               |  |  | -            |  |  | 222,751    |  |  | 223         |  |  | 46,156     |   |  | -           |   |  | 46,379     |  
|Net loss                                       |  |             |  |  | -               |  |  | -            |  |  | -          |  |  | -           |  |  | -          |   |  | (214,758    | ) |  | (214,758   | )

Contd

SEE ACCOMPANYING NOTES AND 
  REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-8

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED

(A Development Stage Company)
  CONSOLIDATED STATEMENTS OF STOCKHOLDERSDEFICIENCY
  For the period from February 28, 1989 (Date of Inception) to December 31, 2007
  (Stated in U.S. Dollars)

|                                                          |  |            |   |  |                 |   |  |              |   |  |            |   |  |             |         |  |            |   |  | Deficit     |         |  |            |  
|--------------------------------------------------------- |  | ---------- | - |  | --------------- | - |  | ------------ | - |  | ---------- | - |  | ----------- | ------- |  | ---------- | - |  | ----------- | ------- |  | ---------- | -
|                                                          |  |            |   |  |                 |   |  |              |   |  |            |   |  |             |         |  |            |   |  | Accumulated |         |  |            |  
|                                                          |  |            |   |  |                 |   |  |              |   |  |            |   |  |             |         |  | Additional |   |  | During the  |         |  |            |  
|                                                          |  |            |   |  | Preferred Stock |   |  | Common Stock |   |  | Paid-In    |   |  | Development |         |  |            |  
|                                                          |  |            |   |  | Shares          |   |  | Par Value    |   |  | Shares     |   |  | Par Value   |         |  | Capital    |   |  | Stage       |         |  | Total      |  
|                                                          |  |            |   |  |                 |   |  |              |   |  |            |   |  |             |         |  |            |   |  |             |         |  |            |  
|Balance, December 31, 2002                                |  |            |   |  | -               |   |  | -            |   |  | 15,205,596 |   |  | 15,204      |         |  | 2,791,455  |   |  | (3,077,727  | )       |  | (271,068   | )
|Non-cash compensation charge                              |  |            | - |  |                 | - |  |              | - |  |            | - |  |             | 53,500  |  |            | - |  |             | 53,500  | 
|Issue of stock for services                               |  | at $0.14  |   |  | -               |   |  | -            |   |  | 1,450,000  |   |  | 1,450       |         |  | 201,550    |   |  | -           |         |  | 203,000    |  
|Issue of stock for cash pursuant to a private placement   |  |            |   |  |                 |   |  |              |   |  |            |   |  |             |         |  |            |   |  |             |         | 
|                                                          |  | at $0.10  |   |  | -               |   |  | -            |   |  | 650,000    |   |  | 650         |         |  | 64,350     |   |  | -           |         |  | 65,000     |  
|Net loss                                                  |  |            |   |  | -               |   |  | -            |   |  | -          |   |  | -           |         |  | -          |   |  | (1,208,941  | )       |  | (1,208,941 | )
|Issued for termination fee                                |  | - at $4.00 |   |  | 198,000         |   |  | 198          |   |  | -          |   |  | -           |         |  | 791,802    |   |  | -           |         |  | 792,000    |  
|                                                          |  |            |   |  |                 |   |  |              |   |  |            |   |  |             |         |  |            |   |  |             |         |  |            |  
|Balance, December 31, 2003                                |  |            |   |  | 198,000         |   |  | 198          |   |  | 17,305,596 |   |  | 17,304      |         |  | 3,902,657  |   |  | (4,286,668  | )       |  | (366,509   | )
|Non-cash compensation charge                              |  |            | - |  |                 | - |  |              | - |  |            | - |  |             | 161,450 |  |            | - |  |             | 161,450 | 
|Issue of stock for cash pursuant to the exercise
      of |  |            |   |  |                 |   |  |              |   |  |            |   |  |             |         |  |            |   |  |             |         | 
|share purchase warrants                                   |  | at $0.10  |   |  | -               |   |  | -            |   |  | 320,000    |   |  | 320         |         |  | 31,680     |   |  | -           |         |  | 32,000     |  
|                                                          |  | at $0.05  |   |  | -               |   |  | -            |   |  | 643,715    |   |  | 644         |         |  | 31,542     |   |  | -           |         |  | 32,186     |  
|Issue of stock for cash pursuant to the exercise of       |  |            |   |  |                 |   |  |              |   |  |            |   |  |             |         |  |            |   |  |             |         | 
|share purchase
      options                              |  | at $0.25  |   |  | -               |   |  | -            |   |  | 205,000    |   |  | 205         |         |  | 51,045     |   |  | -           |         |  | 51,250     |  
|Issue of stock for debt                                   |  | at $0.05  |   |  | -               |   |  | -            |   |  | 563,000    |   |  | 563         |         |  | 29,437     |   |  | -           |         |  | 30,000     |  
|                                                          |  | at $0.06  |   |  | -               |   |  | -            |   |  | 825,364    |   |  | 825         |         |  | 47,712     |   |  | -           |         |  | 48,537     |  
|                                                          |  | at $0.30  |   |  | -               |   |  | -            |   |  | 50,000     |   |  | 50          |         |  | 14,950     |   |  | -           |         |  | 15,000     |  
|Issuance of stock for services                            |  | at $2.00  |   |  | -               |   |  | -            |   |  | 10,000     |   |  | 10          |         |  | 19,990     |   |  | -           |         |  | 20,000     |  
|                                                          |  | at $0.35  |   |  | -               |   |  | -            |   |  | 350,000    |   |  | 350         |         |  | 122,150    |   |  | -           |         |  | 122,500    |  
|Cancellation of stock issued for deferred                 |  |            |   |  |                 |   |  |              |   |  |            |   |  |             |         |  |            |   |  |             |         |  |            |  
|Investment costs                                          |  | at $0.05  |   |  |                 |   |  |              |   |  | (1,300,000 | ) |  | (1,300      | )       |  | (63,700    | ) |  | -           |         |  | (65,000    | )
|Net loss                                                  |  |            |   |  | -               |   |  | -            |   |  | -          |   |  | -           |         |  | -          |   |  | (517,324    | )       |  | (517,324   | )

Contd

SEE ACCOMPANYING NOTES AND 
  REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-9

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENTS OF STOCKHOLDERSDEFICIENCY
  For the period from February 28, 1989 (Date of Inception) to December 31, 2007
  (Stated in U.S. Dollars)

|                                                              |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   |            |   |   | Deficit     |        |   |          |  
|------------------------------------------------------------- |  | --------- | - |  | --------------- | - | - | ------------ | - |  | ---------- | - | - | ----------- | ------ | - | ---------- | - | - | ----------- | ------ | - | -------- | -
|                                                              |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   |            |   |   | Accumulated |        |   |          |  
|                                                              |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   | Additional |   |   | During the  |        |   |          |  
|                                                              |  |           |   |  | Preferred Stock |   |   | Common Stock |   |  | Paid-In    |   |   | Development |        |   |            |  
|                                                              |  |           |   |  | Shares ue       |   |   | Par Val      |   |  | Shares     |   |   | Par Value   |        |   | Capital    |   |   | Stage       |        |   | Total    |  
|                                                              |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   |            |   |   |             |        |   |          |  
|Balance, December 31, 2004                                    |  |           |   |  | 198,000         |   | $ | 198          |   |  | 18,972,675 |   | $ | 18,971      |        | $ | 4,348,913  |   | $ | (4,803,992  | )      | $ | (435,910 | )
|Non-cash compensation charge                                  |  |           | - |  |                 | - |   |              | - |  |            | - |   |             | 25,700 |   |            | - |   |             | 25,700 |  
|Issue of stock for cash pursuant to the exercise
      of     |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   |            |   |   |             |        |  
|share purchase warrants                                       |  | at $0.07 |   |  | -               |   |   | -            |   |  | 75,820     |   |   | 76          |        |   | 5,232      |   |   | -           |        |   | 5,308    |  
|                                                              |  | at $0.10 |   |  | -               |   |   | -            |   |  | 357,760    |   |   | 358         |        |   | 35,417     |   |   | -           |        |   | 35,775   |  
|                                                              |  | at $0.11 |   |  | -               |   |   | -            |   |  | 299,724    |   |   | 300         |        |   | 31,270     |   |   | -           |        |   | 31,570   |  
|                                                              |  | at $0.21 |   |  | -               |   |   | -            |   |  | 16,803     |   |   | 17          |        |   | 3,483      |   |   | -           |        |   | 3,500    |  
|Issue of stock for debt                                       |  | at $0.39 |   |  | -               |   |   | -            |   |  | 635,901    |   |   | 636         |        |   | 249,524    |   |   | -           |        |   | 250,160  |  
|Issuance of stock for services                                |  | at $0.25 |   |  | -               |   |   | -            |   |  | 950,000    |   |   | 950         |        |   | 236,550    |   |   | -           |        |   | 237,500  |  
|                                                              |  | at $0.36 |   |  | -               |   |   | -            |   |  | 100,000    |   |   | 100         |        |   | 35,900     |   |   | -           |        |   | 36,000   |  
|                                                              |  | at $0.50 |   |  | -               |   |   | -            |   |  | 121,000    |   |   | 121         |        |   | 60,379     |   |   | -           |        |   | 60,500   |  
|                                                              |  | at $0.54 |   |  | -               |   |   | -            |   |  | 20,000     |   |   | 20          |        |   | 10,680     |   |   | -           |        |   | 10,700   |  
|                                                              |  | at $0.84 |   |  | -               |   |   | -            |   |  | 50,000     |   |   | 50          |        |   | 41,950     |   |   | -           |        |   | 42,000   |  
|Issuance of stock dividend                                    |  | at $0.65 |   |  | -               |   |   | -            |   |  | 4,060,643  |   |   | 4,061       |        |   | 2,635,357  |   |   | (2,639,418  | )      |   | -        |  
|Net loss                                                      |  |           |   |  | -               |   |   | -            |   |  | -          |   |   | -           |        |   | -          |   |   | (517,270    | )      |   | (517,270 | )
|                                                              |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   |            |   |   |             |        |   |          |  
|Balance, December 31, 2005                                    |  |           |   |  | 198,000         |   |   | 98           |   |  | 25,660,326 |   |   | 25,660      |        |   | 7,720,355  |   |   | (7,960,680  | )      |   | (214,467 | )
|                                                              |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   |            |   |   |             |        |   |          |  
|Issue of stock for cash pursuant to a private
      placement |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   |            |   |   |             |        |  
|                                                              |  | at $0.40 |   |  | -               |   |   | -            |   |  | 200,000    |   |   | 200         |        |   | 79,800     |   |   | -           |        |   | 80,000   |  
|Issue of stock for finders fee                               |  | at $0.40 |   |  | -               |   |   | -            |   |  | 100,000    |   |   | 100         |        |   | 39,900     |   |   | -           |        |   | 40,000   |  
|Share issue costs                                             |  |           |   |  | -               |   |   | -            |   |  | -          |   |   | -           |        |   | (43,000    | ) |   | -           |        |   | (43,000  | )
|Beneficial conversion feature
      on convertible debt       |  |           | - |  |                 | - |   |              | - |  |            | - |   |             | 77,800 |   |            | - |   |             | 77,800 |  
|Net loss                                                      |  |           |   |  | -               |   |   | -            |   |  | -          |   |   | -           |        |   | -          |   |   | (401,655    | )      |   | (401,655 | )

Contd

SEE ACCOMPANYING NOTES AND 
  REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-10

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENTS OF STOCKHOLDERSDEFICIENCY
  For the period from February 28, 1989 (Date of Inception) to December 31, 2007
  (Stated in U.S. Dollars)

|                                                              |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   |            |   |   | Deficit     |        |   |          |  
|------------------------------------------------------------- |  | --------- | - |  | --------------- | - | - | ------------ | - |  | ---------- | - | - | ----------- | ------ | - | ---------- | - | - | ----------- | ------ | - | -------- | -
|                                                              |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   |            |   |   | Accumulated |        |   |          |  
|                                                              |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   | Additional |   |   | During the  |        |   |          |  
|                                                              |  |           |   |  | Preferred Stock |   |   | Common Stock |   |  | Paid-In    |   |   | Development |        |   |            |  
|                                                              |  |           |   |  | Shares          |   |   | Par Value    |   |  | Shares     |   |   | Par Value   |        |   | Capital    |   |   | Stage       |        |   | Total    |  
|                                                              |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   |            |   |   |             |        |   |          |  
|Balance, December 31, 2006                                    |  |           |   |  | 198,000         |   |   | 198          |   |  | 25,960,326 |   |   | 25,960      |        |   | 7,874,855  |   |   | (8,362,335  | )      |   | (461,322 | )
|Issue of stock for cash pursuant
      to a private placement |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   |            |   |   |             |        |  
|                                                              |  | at $0.25 |   |  | -               |   |   | -            |   |  | 200,000    |   |   | 200         |        |   | 49,800     |   |   | -           |        |   | 50,000   |  
|Issuance of stock for services                                |  | at $0.20 |   |  | -               |   |   | -            |   |  | 700,000    |   |   | 700         |        |   | 139,300    |   |   | -           |        |   | 140,000  |  
|Non-cash compensation charge                                  |  |           |   |  | -               |   |   | -            |   |  | -          |   |   | -           |        |   | 29,240     |   |   | -           |        |   | 29,240   |  
|Beneficial conversion feature
      on convertible debt       |  |           | - |  |                 | - |   |              | - |  |            | - |   |             | 39,600 |   |            | - |   |             | 39,600 |  
|Net loss                                                      |  |           |   |  | -               |   |   | -            |   |  | -          |   |   | -           |        |   | -          |   |   | (519,345    | )      |   | (519,345 | )
|                                                              |  |           |   |  |                 |   |   |              |   |  |            |   |   |             |        |   |            |   |   |             |        |   |          |  
|Balance, December 31, 2007                                    |  |           |   |  | 198,000         |   | $ | 198          |   |  | 26,860,326 |   | $ | 26,860      |        | $ | 8,132,795  |   | $ | (8,881,680  | )      | $ | (721,827 | )

SEE ACCOMPANYING NOTES AND 
  REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-11

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|1. | Nature of Operations and Ability to Continue as a
        Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company is in the development stage and is devoting
        its efforts to developing real estate projects in the Middle East.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | These financial statements have been prepared in accordance
        with generally accepted accounting principles applicable to a going concern,
        which assumes that the Company will be able to meet its obligations and
        continue its operations for its next fiscal year. Realization values may
        be substantially different from carrying values as shown and these financial
        statements do not give effect to adjustments that would be necessary to
        the carrying values and classification of assets and liabilities should
        the Company be unable to continue as a going concern. At December 31,
        2007, the Company had not yet achieved profitable operations, has accumulated
        losses of $8,881,680 since its inception, has a working capital deficiency
        of $721,828 and expects to incur further losses in the development of
        its business, all of which casts substantial doubt about the Companys
        ability to continue as a going concern. The Companys ability to
        continue as a going concern is dependent upon its ability to generate
        future profitable operations and/or to obtain the necessary financing
        to meet its obligations and repay its liabilities arising from normal
        business operations when they come due. Management has no formal plan
        in place to address this concern but considers that the Company will be
        able to obtain additional funds by equity financing and/or related party
        advances, however there is no assurance of additional funding being available.
        The Company has historically satisfied its capital needs primarily by
        issuing equity securities. Management plans to continue to provide for
        its capital needs during the year ended December 31, 2008, by issuing
        equity securities.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company was incorporated in Colorado on February
        28, 1989 as Jefferson Capital Corporation. Effective June 13, 1990 the
        Company changed its name to Ohio & Southwestern Energy Company. Effective
        July 1, 2001, the Company and Strategic Internet Investments, Incorporated
        (Strategic), an inactive Delaware corporation incorporated
        on March 2, 2001, were merged. All common shares outstanding of the Company
        were converted into an equal number of common shares of Strategic. The
        purpose of this merger was to change the corporate jurisdiction of the
        Company from Colorado to Delaware and to change the name of the Company.
        The surviving corporation of the merger is Strategic, a Delaware corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The consolidated financial statements of the Company
        have been prepared in accordance with accounting principles generally
        accepted in the United States of America. Because a precise determination
        of many assets and liabilities is dependent upon future events, the preparation
        of financial statements for a period necessarily involves the use of estimates,
        which have been made using careful judgment. Actual results may differ
        from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The consolidated financial statements have, in managements
        opinion, been properly prepared within the framework of the significant
        accounting policies summarized below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Principles of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | These consolidated financial statements included the
        accounts of the Company and its wholly-owned subsidiaries Strategic Internet
        Investment Canada Inc. and 3851630 Canada Inc. Both of these subsidiary
        companies are dormant and were incorporated by the Company in March 2001.
        All significant inter-company transactions were eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Development Stage Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company is a development stage company as defined
        in Statement of Financial Accounting Standards (SFAS) No.
        7. The Company is devoting substantially all of its present efforts to
        establish a new business and none of its planned principal operations
        have commenced. All losses accumulated since inception have been considered
        as part of the Companys development stage activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-12

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|2. | Summary of Significant Accounting Policies(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Deferred Investment Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Deferred investment costs are recorded at cost and represent
        preliminary costs incurred with respect to the acquisition of an investment.
        These costs will be deferred until the Company completes the acquisition,
        at which time, the costs will be added to the cost of the investment.
        These costs will be written-off if the Company does not complete the acquisition
        or written down to its net realizable value if it is determined that there
        is an impairment of its value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company follows SFAS No. 109, Accounting for
        Income Taxeswhich requires the use of the asset and liability method
        of accounting of income taxes. Under the assets and liability method of
        SFAS No. 109, deferred tax assets and liabilities are recognized for the
        future tax consequences attributable to temporary differences between
        the financial statements carrying amounts of existing assets and liabilities
        and loss carry forwards and their respective tax bases. Deferred tax assets
        and liabilities are measured using enacted tax rates expected to apply
        to taxable income in the years in which those temporary differences are
        expected to be recovered or settled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In June 2006, the Financial Accounting Standards Board
        (FASB) issued FASB Interpretation No. 48, Accounting
        for Uncertainty in Income Taxes The interpretation clarifies the
        accounting for uncertainty in income taxes recognized in a companys
        financial statements in accordance with Statement of Financial Accounting
        Standards No. 109, Accounting for Income Taxes Specifically,
        the pronouncement prescribes a recognition threshold and a measurement
        attribute for the financial statement recognition and measurement of a
        tax position taken or expected to be taken in a tax return. The interpretation
        also provides guidance on the related derecognition, classification, interest
        and penalties, accounting for interim periods, disclosure and transition
        of uncertain tax position. The interpretation is effective for fiscal
        years beginning after December 15, 2006. The adoption of FIN 48 did not
        have a material impact on the Companys consolidated financial position,
        results of operations or cash flows.                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Basic Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company reports basic loss per share in accordance
        with the SFAS No. 128, Earnings Per Share Basic loss per share
        is computed using the weighted average number of shares outstanding during
        the period. Diluted loss per share is computed similar to basic loss per
        share except that the denominator is increased to include the number of
        additional common shares that would have been outstanding if the dilutive
        potential common shares had been issued. In addition, in computing the
        dilutive effect of convertible securities, the numerator is adjusted to
        add back any convertible preferred dividend and the after-tax amount of
        interest in the period associated with any convertible debt. The numerator
        is also adjusted for any other changes in income or loss that would result
        from the assumed conversion of these potential common shares. Common share
        equivalents represent the dilutive effect of the assumed exercise of the
        outstanding stock options and warrants, using the treasury stock method,
        at either the beginning of the respective period presented or the date
        of issuance, whichever is later, and only if the common stock equivalents
        are considered dilutive based upon the Companys net loss position
        at the calculation date. Diluted loss per share has not been provided
        as it would be antidultive.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Foreign currency transactions are translated into U.S.
        dollars, the functional and reporting currency, by the use of the exchange
        rate in effect at the date of the transaction, in accordance with SFAS
        No. 52, Foreign Currency Translation At each balance sheet
        date, recorded balances that are denominated in a currency other than
        U.S. dollars are adjusted to reflect the current exchange rate. Any exchange
        gains or losses are included in the Statements of Operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

F-13

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|2. | Summary of Significant Accounting Policies(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The carrying value of cash, accounts payable, due to
        related parties and loans payable approximates fair value because of the
        short maturity of such instruments. Unless otherwise noted, it is managements
        opinion that the Company is not exposed to significant interest, currency
        or credit risks arising from these financial instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company accounts for stock-based compensation using
        SFAS 123R which requires public companies to recognize the cost of services
        received in exchange for equity instruments, based on the grant-date fair
        value of those instruments. The Company uses the Black-Scholes option
        valuation model to calculate stock-based compensation at the date of the
        grant. Option valuation models require the input of highly subjective
        assumptions, including the expected price volatility. Changes in assumptions
        can materially affect the fair value estimate. Compensation expense for
        unvested options to non-employees is revalued at each period end and is
        being amortized over the vesting period of the options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Convertible Instruments and Beneficial Conversion
        Feature                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | When the Company issues convertible instruments with
        detachable instruments, the proceeds of the issuance are allocated between
        the convertible instrument and other detachable instruments based on their
        relative fair values pursuant to Emerging Issues Task Force (EITF)
        Issue No. 00-27 Application of Issue No. 98-5 to Certain Convertible
        Instruments. The resulting discount of the convertible instrument
        is amortized into income as interest expense over the term of the convertible
        instrument. As at December 31, 2007 and 2006, there were no convertible
        instruments with detachable instruments outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | When the Company issues convertible debt securities
        with a non-detachable conversion feature that provides for an effective
        rate of conversion that is below market value on the commitment date,
        it is known as a beneficial conversion feature (BCF). The
        Company first assessed the convertible debt securities to determine if
        the embedded conversion feature meets the exemption criteria of paragraph
        11(a) of SFAS No. 133 Accounting for Derivative Instruments and
        Hedging Activities For the convertible debt securities outstanding
        as at December 31, 2007 and 2006, the embedded conversion features met
        the exemption criteria to be classified as equity instruments. Pursuant
        to EITF Issue No. 98-5 Accounting for Convertible Securities with
        Beneficial Conversion Features or Contingently Adjustable Conversion Ratiosand
        EITF Issue No. 00-27, the conversion feature of the security that has
        characteristics of an equity instrument is measured at its intrinsic value
        at the commitment date and is recorded as additional paid in capital.
        A portion of the proceeds of the security issued is allocated to the conversion
        feature equal to its intrinsic value to a maximum of the amount allocated
        to the convertible instrument. The resulting discount of the debt instrument
        is amortized into income as interest expense using the effective interest
        rate over the term of the loan. However, due to demand nature of the convertible
        debt securities, the discount of the debt instrument was immediately expensed.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Recently Issued Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In September 2006, the FASB issued SFAS No. 157, Fair
        Value Measurements This Statement defines fair value as used in
        numerous accounting pronouncements, establishes a framework for measuring
        fair value in generally accepted accounting principles and expands disclosure
        related to the use of fair value measures in financial statements. The
        Statement is to be effective for the Companys financial statements
        issued in 2008 unless partially or fully deferred by the FASB. The Company
        is currently evaluating the timing of adoption and the impact that adoption
        might have on its financial position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-14

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|2. | Summary of Significant Accounting Policies(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Recently Issued Accounting Pronouncements(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In December 2006, the FASB issued FASB Staff Position
        (FSP) EITF 00-19-2, Accounting for Registration Payment
        Arrangements This FSP specifies that the contingent obligation to
        make future payments or otherwise transfer consideration under a registration
        payment arrangement should be separately recognized and measured in accordance
        with FASB No. 5, Accounting for Contingencies This FSP is
        effective immediately for registration payment arrangements and the financial
        instruments subject to those arrangements that re entered into or modified
        subsequent to December 31, 2006. For registration payment arrangements
        and financial instruments subject to those arrangements that were entered
        into prior to December 31, 2006, the guidance in the FSP is effective
        January 1, 2006 for the Company. This FSP did not have a material impact
        on the Companys financial position or results from operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On February 15, 2007, the FASB issued SFAS No. 159 The
        Fair Value Option for Financial Assets and Financial Liabilities
        This Statement establishes presentation and disclosure requirements designed
        to facilitate comparisons between companies that choose different measurement
        attributes for similar types of assets and liabilities. SFAS No. 159 is
        effective for the Companys financial statements issued in 2008.
        The Company is currently evaluating the impact that the adoption of SFAS
        No. 159 might have on the Companys financial position or results
        of operations.                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In December 2007, the FASB issued SFAS No. 141(R), Business
        Combinations The standard requires the acquiring entity in a business
        combination to recognize all (and only) the assets acquired and liabilities
        assumed in the transaction; establishes the acquisition date fair value
        as the measurement objective for all assets acquired and liabilities assumed;
        and requires the acquirer to disclose to investors and other users all
        of the information they need to evaluate and understand the nature and
        financial effect of the business combination. The Company is currently
        reviewing the guidance, which is effective for fiscal years beginning
        after December 15, 2008, to determine the potential impact, if any, on
        its consolidated financial statements.                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In December 2007, the FASB issued SFAS No. 160, Noncontrolling
        Interests in Consolidated Financial Statements The standard requires
        all entities to report noncontrolling (minority) interests as equity in
        consolidated financial statements. SFAS No. 160 eliminates the diversity
        that currently exists in accounting for transactions between an entity
        and noncontrolling interests by requiring they be treated as equity transactions.
        The Company is currently reviewing the guidance, which is effective for
        fiscal years beginning after December 15, 2008, to determine the potential
        impact, if any, on its consolidated financial statements.                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In March 2008, the FASB issued SFAS No. 161, Disclosures
        about Derivative Instruments and Hedging Activities  An Amendment
        of FASB Statement No. 133(SFAS 161). SFAS 161 requires
        enhanced qualitative disclosures about objectives and strategies for using
        derivatives, quantitative disclosures about fair value amounts of and
        gains and losses on derivative instruments, and disclosures about credit-risk-related
        contingent features in derivative agreements. SFAS 161 is effective for
        financial statements issued for fiscal years and interim periods beginning
        after November 15, 2008. The Company is currently evaluating the impact
        of SFAS 161 on its consolidated financial statements.                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3. | Deferred Investment CostsNote 5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Deferred investment costs consist of consultantsfees
        and payments to reimburse Star Leisure and Entertainment Inc. with respect
        to the acquisition of Gulf Star World Development W.L.L., net of a write-down
        to a nominal value of $1.00.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-15

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|4. | Loans Payable |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |              |  |   |             
|-- | ------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------------ |  | - | ------------
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |              |  |   |             
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   | December 31, |  |   | December 31,
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   | 2007         |  |   | 2006        
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |              |  |   |             
|   | a)            | Loan payable to a company
        controlled by a director of the Company including accrued interest of
        $2,605 (December 31, 2006: $1,556). The loan is unsecured, bearing interest
        at 12% per annum and is repayable on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | $ | 9,407        |  | $ | 8,358       
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |              |  |   |             
|   | b)            | Loans payable to companies
        controlled by directors of the Company. The loans are unsecured, non-interest
        bearing, and repayable upon demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |   | 19,217       |  |   | 24,527      
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |              |  |   |             
|   | c)            | Loans payable to a company
        controlled by a director of the Company including accrued interest of
        $53,123 (December 31, 2006: $38,420). The loans are unsecured, bearing
        interest at 10% per annum, and repayable upon demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |   | 156,329      |  |   | 141,626     
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |              |  |   |             
|   | d)            | Loans payable to a company
        controlled by a director of the Company, including accrued interest payable
        of $14,341 (December 31, 2006: $4,869), pursuant to Convertible Loan Agreements.
        The loan is unsecured, bearing interest at 10% per annum and is repayable
        on demand. The lender may at anytime convert the principal sum into units
        of the Company. Each unit will consist of one common share plus one common
        share purchase warrant. The principal sum of $135,730 may be converted
        into 1,762,858 units. Conversion of these loans and resulting associated
        warrants to equity will be based on the conversion price set at the time
        the principal amount was drawn ranging from $0.05 to $0.23. During the
        year ended December 31, 2007 an amount of $39,600 (December 31, 2006:
        $60,850) was recognized as the intrinsic value of the beneficial conversion
        feature of these loans and this amount was included in interest expense. |  |   | 150,071      |  |   | 91,236      
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |              |  |   |             
|   | e)            | Loan payable to a company controlled
        by a director of the Company, including accrued interest of $9,018 (December
        31, 2006: $3,496), pursuant to Convertible Loan Agreements. The loan is
        unsecured, bearing interest at 10% per annum and is repayable on demand.
        The lender may at anytime convert the principal sum into units of the
        Company. Each unit will consist of one common share plus one common share
        purchase warrant. The principal sum of $49,700 may be converted into 416,248
        units. Conversion of this loan and resulting associated warrants to equity
        will be based on the conversion price set at the time the principal amount
        was drawn at $0.12. During the year ended December 31, 2007 an amount
        of $NIL (December 31, 2006: $16,950) was recognized as the intrinsic value
        of the beneficial conversion feature of the loan and this amount was included
        in interest expense.                                         |  |   | 58,718       |  |   | 53,196      
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |              |  |   |             
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | $ | 393,742      |  | $ | 318,943     

F-16

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|5. | Capital StockNotes 4, 6, and 11                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | During the year ended December 31, 2007, the Company
        completed a private placement of 200,000 common shares at $0.25 per share
        for total proceeds of $50,000.                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | On May 24, 2007, the Company issued a total of 700,000
        shares to two consulting firms for investor relations consulting services
        to be provided over a twelve month period, valued at $140,000. The Company
        determined the fair value of the shares issued using the market price
        on the share issuance date. At December 31, 2007, $55,400 is recorded
        as prepaid.                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Class A Convertible Preferred Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Class A convertible preferred shares have a par
        value of $0.001 and are convertible to common shares at $4.00 per share
        during the first 180 days following issuance, and thereafter at the average
        of twenty consecutive days closing prices, but shall not be less than
        $1.50 per share or greater than $6.00 per share. The Company has the right
        to redeem its Class A convertible preferred stock at any time by paying
        to the holders thereof the sum of $4 per share.                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Stock Option Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Companys board of directors approved a stock
        option plan. Under the plan directors, employees and consultants may be
        granted options to purchase common stock of the Company at a price of
        not less than 100% of the fair market value of the stock. The total number
        of options granted must not exceed 15% of the outstanding common stock
        of the Company. The plan expires on July 1, 2017.                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company granted share purchase options to directors,
        employees, and consultants of the Company at the closing price of the
        Companys common stock on the date of the grants. The options have
        been granted with a term of 5 years. The stock options are exercisable
        at 20% on the date of grant, and then 20% every three months thereafter,
        such that they are fully exercisable after a period of one year from the
        date of grant.                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | During the year ending December 31, 2007, the Company
        granted consultants 125,000 stock options with a total fair value of $29,240.
        As the 125,000 stock options have a graded vesting schedule, the total
        non-cash compensation cost recognized during the year was $29,240 (2006
        - NIL). In accordance with EITF-96-18, the options issued to consultants
        have been re-measured at each balance sheet date until they are fully
        vested.                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The fair value of each option grant was estimated on
        the date of the grant using the Black-Scholes option valuation model.
        The Black-Scholes option valuation model requires the input of highly
        subjective assumptions including the expected price volatility. Changes
        in the subjective input assumptions can materially affect the fair value
        estimate and therefore the Black-Scholes model does not necessarily provide
        a reliable single measure of the fair value of the Companys share
        purchase options.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The weighted average fair value at the date of grant
        of the options was as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| |                                     |   | 2007    |  |  | 2006 | 
| | ----------------------------------- | - | ------- |  |  | ---- | 
| |                                     |   |         |  |  |      | 
| | Weighted average fair value         | $ | 0.41    |  |  | -    | 
| | Total options granted               |   | 125,000 |  |  | -    | 
| | Total fair value of options granted | $ | 51,090  |  |  | -    | 

F-17

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|5. | Capital StockNotes 4, 6, and 11 (contd)                                                                                                                               
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                          
|   | Commitments (contd)                                                                                                                                                    
|   |                                                                                                                                                                          
|   | Stock-based Compensation (contd)                                                                                                                                       
|   |                                                                                                                                                                          
|   | The fair value of each option grant was estimated on
        the date of the grant using the Black-Scholes option valuation model with
        the following assumptions:

| |                         |  | 2007  |  |  | 2006 | 
| | ----------------------- |  | ----- |  |  | ---- | 
| |                         |  |       |  |  |      | 
| | Expected dividend yield |  | 0.0%  |  |  | -    | 
| | Expected volatility     |  | 167%  |  |  | -    | 
| | Risk-free Interest Rate |  | 4.68% |  |  | -    | 
| | Expected term in years  |  | 5     |  |  | -    | 

The expected volatility is calculated
  based on the Companys historical share price.

During the previous two years ended December
  31, 2007, the change in share purchase options outstanding are as follows:

| |                                          |  |           |   | Weighted                |  |  | Weighted 
      Average      | 
| | ---------------------------------------- |  | --------- | - | ----------------------- |  |  | ---------------------------- | 
| |                                          |  |           |   | Average 
      Exercise |  |  | Remaining 
      Contractual | 
| |                                          |  | Shares    |   | Price                   |  |  | Life                         | 
| | Options outstanding at December 31, 2005 |  | 2,010,000 |   | $0.22                   |  |  | 2.76 years                   | 
| | Forfeited during the
      year          |  | (48,000   | ) | $0.21                   |  |  | 1.68
      Years             | 
| | Options outstanding at December 31, 2006 |  | 1,962,000 |   | $0.23                   |  |  | 1.76 years                   | 
| | Granted during the
      year            |  | 125,000   |   | $0.35                   |  |  | 4.00
      years             | 
| | Options outstanding at December 31, 2007 |  | 2,087,000 |   | $0.23                   |  |  | 0.96 years                   | 

| | At December
      31, 2007, the Company had share purchase options outstanding as follows: |               
| | ------------------------------------------------------------------------------------------ | --------------
| |                                                                                            |               
| | Number of Options                                                                          | Exercise Price
| |                                                                                            |               
| | 1,704,000                                                                                  | $ 0.21        
| | 120,000                                                                                    | $ 0.29        
| | 30,000                                                                                     | $ 0.53        
| | 108,000                                                                                    | $ 0.33        
| | 125,000                                                                                    | $ 0.35        
| | 2,087,000                                                                                  |               

At December 31, 2007, of the total outstanding
  share purchase options, 2,062,000 (2006: 1,962,000) were exercisable.

F-18

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|5. | Capital StockNotes 4, 6, and 11 (contd)
|-- | ------------------------------------------

Commitments (contd)

Stock-based Compensation (contd)

The unvested options will only vest and
  be exercisable at a future date as follows:

|Options | Vesting Date   
|------- | ---------------
|25,000  | January 2, 2008

Share Purchase Warrants

During the previous two years ended December
  31, 2007, the changes in share purchase warrants outstanding are as follows:

| |                                           |  |          |   | Weighted       | 
| | ----------------------------------------- |  | -------- | - | -------------- | 
| |                                           |  |          |   | Average        | 
| |                                           |  | Warrants |   | Exercise Price | 
| |                                           |  |          |   |                | 
| | Warrants outstanding at December 31, 2005 |  | 540,237  |   | $0.41          | 
| | Expired during the
      year             |  | (444,190 | ) | $0.45          | 
| |                                           |  |          |   |                | 
| | Warrants outstanding at December 31, 2006 |  | 96,047   |   | $0.24          | 
| | Expired during the year                   |  | (96,047  | ) | $0.24          | 
| |                                           |  |          |   |                | 
| | Warrants outstanding at December 31, 2007 |  | -        |   | -              | 

Acquisition of Gulf Star World Development
  W.L.L.

By a letter of agreement dated July 11,
  2002, amended October 10, 2002, May 10, 2003 and September 30, 2003, June 30,
  2004, July 11, 2005 and August 9, 2006, the Company agreed to purchase 80% of
  the outstanding shares of Gulf Star World Development W.L.L. (Gulf Star),
  a Bahrain corporation, from Star Leisure & Entertainment Inc. (Star
  Leisure). Star Leisure is controlled by a director of the Company and
  is based in British Columbia, Canada. Gulf Star is the 100% owner and developer
  of the residential and tourist project known as the Dream Island Resort, located
  on the north coast of Bahrain at Manama City.

To acquire 80% of Gulf Star, the Company
  must issue five million common shares at $0.125 per share. The shares are to
  be issued over a three-year period as follows:

| | a) | 1,000,000 allotted shares issued to Star Leisure upon
        completion of dredging works (estimated cost of dredging contract is $4,500,000);                                                 
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                 
| | b) | 1,000,000 allotted shares issued to Star Leisure upon
        completion of final planning and design works (estimated planning contract
        cost is $8,000,000);                           
| |    |                                                                                                                                                                                                 
| | c) | 1,000,000 allotted shares issued to Star Leisure upon
        the Company securing full funding in a combination of debt and/or equity
        that allows main resort construction to commence;
| |    |                                                                                                                                                                                                 
| | d) | 1,000,000 allotted shares issued to Star Leisure upon
        completion of 50% of resort construction; and                                                                                     
| |    |                                                                                                                                                                                                 
| | e) | 1,000,000 allotted shares issued to Star Leisure upon
        resort being opened for business at the start of operations.                                                                      

F-19

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|5. | Capital StockNotes 4, 6, and 11 (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Commitments (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Acquisition of Gulf Star World Development W.L.L. (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In addition, the Company shall make cash payments to
        Star Leisure totaling $100,000 to cover a portion of hard costs accumulated
        by Star Leisure in progressing the Dream Island Project. During the year
        ended December 31, 2003, the Company paid $34,210 as partial payment toward
        the $100,000 payment. The remaining balance of $65,790 is due on or before
        August 31, 2008. The Company has also agreed to reimburse Star Leisure
        and Jzala Investment Group (20% shareholder of Gulf Star) for costs to
        be verified that they may have incurred upon the project financing being
        fully secured and having released in sufficient amounts to commence the
        main construction.                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On August 9, 2002, the Company entered into an assignment
        agreement, whereby the Company was assigned all rights and obligations
        under a Dredging and Reclamation Contract entered into by Star Leisure
        pertaining to the construction of The Dream Island Resort project. Under
        the terms of the Dredging and Reclamation contract, the Company issued
        into escrow 1,268,750 Class A Convertible Preferred shares, with a deemed
        value of $5,075,000, as full payment due under this contract. These shares
        will be released from escrow in stages as the dredging contract progresses.
        No value was recorded for these shares due to the contingent nature of
        their release from escrow. During the year ended December 31, 2006, these
        shares were cancelled. At December 31, 2006, although work has commenced
        on the Dream Island Project, there has not yet been sufficient progress
        to warrant issuance of the shares. An agents fee of 0.5% of the
        value of the shares released will be payable.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On March 13, 2006, the Ministry of Finance, Bahrain
        (MOFB) notified Gulf Star that due to a lack of progress and
        failure to advance the project in a timely basis, the MOFB intends to
        seek termination of the lease contract for the Dream Island site and have
        Gulf Star pay all associated expenses incurred for the enforcement thereof.
        In addition, the MOFB has indicated that it reserves the right to claim
        damages towards all losses it has incurred and all gains denied. The Company,
        Gulf Star, and Star Leisure intend to oppose the action by the MOFB. However,
        due to the uncertainty of the future viability of the Dream Island project,
        management has written-down the associated deferred investment costs to
        a nominal value of $1.00.                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Acquisition of Renaissance Residence Project                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | A letter of intent dated June 20, 2007, in which the
        Company agreed to purchase 100% of the shares of a Turkish company, thereby,
        acquiring a 100% interest in the Renaissance Residence Project in Antalya,
        Turkey expired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-20

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|6. | Non-Cash Transactions                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                            
|   | Investing and financing activities that do not have
        a direct impact on cash flows are excluded from the statements of cash
        flows. The Company issued common shares for settlement of debts, convertible
        loans, and for services provided to the Company during the following years:

| |      |                                         | Number
      of | Number of     | Weighted        |                                 
| | ---- | --------------------------------------- | --------------- | ------------- | --------------- | --------------------------------
| |      |                                         | Preferred       | Common Shares | Average Price   |                                 
| |      |                                         | Shares          |               | Per
      Share | Total                           
| |      |                                         |                 |               |                 |                                 
| | 1995 | Consulting fee                          | -               | 50,000        | $0.03           | $                   
      1,500
| | 1998 | Management fee                          | -               | 7,000,000     | $0.001          | 7,000                           
| | 1998 | Consulting fee                          | -               | 620,000       | $0.01           | 6,200                           
| | 2000 | Finders fee                             | -               | 50,000        | $0.001          | 50                              
| | 2001 | Consulting fee                          | -               | 708,406       | $2.07           | 1,468,254                       
| | 2002 | Deferred investment cost                | -               | 1,300,000     | $0.05           | 65,000                          
| | 2002 | Consulting fee                          | -               | 684,143       | $0.19           | 131,400                         
| | 2002 | Debt settlement                         | -               | 680,886       | $0.20           | 138,006                         
| | 2003 | Consulting fee                          | -               | 1,450,000     | $0.14           | 203,000                         
| | 2003 | Termination fee                         | 198,000         | -             | $4.00           | 792,000                         
| | 2004 | Loan conversion                         | -               | 825,364       | $0.06           | 48,537                          
| | 2004 | Loan settlement                         | -               | 613,000       | $0.07           | 45,000                          
| | 2004 | Consulting fee                          | -               | 360,000       | $0.40           | 142,500                         
| | 2004 | Deferred investment cost (cancellation) | -               | (1,300,000)   | $0.05           | (65,000)                        
| | 2005 | Communications                          | -               | 56,000        | $0.50           | 28,000                          
| | 2005 | Consulting fees                         | -               | 1,135,000     | $0.29           | 333,700                         
| | 2005 | Legal fees                              | -               | 50,000        | $0.50           | 25,000                          
| | 2005 | Loan conversion                         | -               | 635,901       | $0.39           | 250,160                         
| | 2005 | Stock dividend                          | -               | 4,120,643     | $0.65           | 2,678,418                       
| | 2006 | Findersfee                             | -               | 100,000       | $0.40           | 40,000                          
| | 2007 | Consulting fees                         | -               | 700,000       | $0.20           | 140,000                         
| |      |                                         |                 |               |                 |                                 
| |      |                                         | 198,000         | 19,839,343    |                 | $6,478,725                      

These amounts have been excluded from
  the investing and financing activities of the statements of cash flows.

F-21

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|7. | Related Party TransactionsNotes 4 and
        5                                                                                                                                                     
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                      
|   | The Company was charged the following by shareholders,
        directors, by companies controlled by directors and/or shareholders of
        the Company, and by companies with directors in common:

| |                    |   |                         |  |   |              |  |   | Cumulative from | 
| | ------------------ | - | ----------------------- |  | - | ------------ |  | - | --------------- | 
| |                    |   |                         |  |   |              |  |   | February 28,    | 
| |                    |   |                         |  |   |              |  |   | 1989 (Date of   | 
| |                    |   |                         |  |   |              |  |   | Inception) to   | 
| |                    |   | Year ended December 31, |  |   | December 31, | 
| |                    |   | 2007                    |  |   | 2006         |  |   | 2007            | 
| |                    |   |                         |  |   |              |  |   |                 | 
| | Consulting fees    | $ | 29,150                  |  | $ | -            |  | $ | 64,820          | 
| | Interest           |   | 30,745                  |  |   | 22,890       |  |   | 95,593          | 
| | Management fees    |   | 185,400                 |  |   | 50,615       |  |   | 389,387         | 
| | Office and general |   | -                       |  |   | -            |  |   | 26,944          | 
| | Rent               |   | 22,120                  |  |   | 21,158       |  |   | 112,472         | 
| |                    |   |                         |  |   |              |  |   |                 | 
| |                    | $ | 267,415                 |  | $ | 94,663       |  | $ | 689,216         | 

At December 31, 2007, accounts payable
  includes $288,276 (2006: $57,915) due to directors of the Company and companies
  controlled by directors of the Company in respect of unpaid management fees
  and expenses incurred on behalf of the Company.

At December 31, 2007, accounts payable
  also includes $15,527 (2006: $15,527) expenses for operating costs paid on behalf
  of the Company by companies with directors in common.

The Company entered into two Management
  Services Agreements dated January 1, 2007 with a director and a company controlled
  by a director of the Company. Under the terms of these agreements they will
  each be paid $7,500 per month, plus taxes where applicable, for management services.
  These agreements are for a 24-month period expiring on December 31, 2008. If
  the Company is unable to pay for the services, the consultant may elect to settle
  any portion of outstanding amounts plus interest with units of the Company.
  Each unit shall consist of one common share and one share purchase warrant entitling
  the holder to purchase one additional common share of the Company. The price
  for the units and warrants will be determined based on a discount to the 10
  day average market price ranging from 50% to 60%, but no less than $0.05 per
  share.

The Company also entered into a Consulting
  Services Agreement with a company controlled by a director of the Company. Under
  the terms of this agreement, the Company will pay $5,500 per month, plus taxes
  where applicable, for consulting services. This agreement was suspended in May
  2007.

F-22

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|8. | Deferred Tax Assets                                                                                    
|-- | -------------------------------------------------------------------------------------------------------
|   |                                                                                                        
|   | The following table summarizes the significant components
        of the Companys deferred tax assets:

| |                                            |   | December 31, |  
| | ------------------------------------------ | - | ------------ | -
| |                                            |   | 2007         |  
| |                                            |   |              |  
| | Net tax operating loss carryforward        | $ | 2,580,000    |  
| | Net tax capital loss
      carryforward    |   | -            |  
| |                                            |   |              |  
| | Gross deferred tax assets                  |   | 2,580,000    |  
| | Valuation allowance for deferred tax asset |   | (2,580,000   | )
| |                                            |   |              |  
| |                                            | $ | -            |  

The amount taken into income as deferred
  tax assets must reflect that portion of the income tax loss carryforwards which
  is more likely than not to be realized from future operations. The Company has
  chosen to provide an allowance of 100% against all available income tax loss
  carryforwards, regardless of their time of expiry.

At December 31, 2007, the Company has
  accumulated non-capital losses of approximately $7,372,000 which may be carried
  forward to reduce taxation income in future years. The non-capital losses expire
  as follows:

Year
      
      Amount2010
      $
      15,0002011
      
      3,0002012
      
      3,0002013
      
      1,0002014
      
      2,0002015
      
      17,0002016
      
      9,0002017
      
      22,0002018
      
      68,0002019
      
      36,0002020
      
      258,0002021
      
      1,553,0002022
      
      214,0002023
      
      969,0002024
      
      352,0002025
      
      3,091,0002026
      
      328,0002027
      
      431,000$
      7,372,000


F-23

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|8. | Deferred Tax Assets(contd)                                                                                                                                                                                                                                                                                                                
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                             
|   | The potential benefits of the losses have not been recorded
        in the financial statements. As at December 31, 2007 the Company is in
        arrears on filing its statutory income tax returns and the amounts presented
        above are based on estimates. The actual losses available could differ
        from these estimates.
|   |                                                                                                                                                                                                                                                                                                                                             
|9. | Income Taxes                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                             
|   | The provision for income taxes differs from the result
        which would be obtained by applying the statutory income tax rate to the
        loss before income taxes as follows:                                                                                                                                                        

| |                                                          |   | December 31, |  
| | -------------------------------------------------------- | - | ------------ | -
| |                                                          |   | 2007         |  
| |                                                          |   |              |  
| | Loss for the year                                        | $ | 519,345      |  
| |                                                          |   |              |  
| | Statutory income tax rate                                |   | 35%          |  
| |                                                          |   |              |  
| | Statutory rate applied to loss before income
      taxes | $ | (182,000     | )
| | Increase in income taxes resulting from:                 |   |              |  
| | Beneficial
      Conversion feature on convertible debt  |   | 14,000       |  
| | Stock based compensation                                 |   | 10,000       |  
| | Change in valuation allowance                            |   | 158,000      |  
| |                                                          |   |              |  
| | Income tax expenses                                      | $ | -            |  

|10. | Comparative Figures                                                                                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                        
|    | Certain comparative figures for the year ended
        December 31, 2006, have been reclassified to conform to the financial
        statement presentation adopted for the year ended December 31, 2007.                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                        
|11. | Subsequent EventsNote 5                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                        
|    | Subsequent to the year ended December 31,
        2007 the Company;                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                        
|    | entered into a letter of intent dated January
        7, 2008, to purchase 100% of the outstanding shares of a Turkish company
        (TurkCo) to be formed and, thereby, acquiring a 100% interest in
        the Port Residence Project, a real estate development project, in Calkaya,
        Turkey, as follows:
|    |                                                                                                                                                                                                                                                                                                                        
|    | a)                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                        

F-24

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  December 31, 2007 and 2006
  (Stated in U.S. Dollars)

|11. | Subsequent EventsNote 5 (contd)
|--- | ----------------------------------
|    |                                   
|    | b)                                
|    |                                   
|    | c)                                
|    |                                   
|    |                                   
|    |                                   
|    |                                   

F-25

---

|8. | Changes In and Disagreements With Accountants on
      Accounting and Financial Disclosure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On January 21, 2008, Amisano Hanson. Chartered Accountant
      resigned as our independent accountant. Amisano Hanson recently entered
      into an agreement with BDO Dunwoody LLP, pursuant to which Amisano Hanson
      will merge its operations into BDO Dunwoody and certain of the
      professional staff and partners joined BDO Dunwoody either as employees or
      partners of BDO Dunwoody and will continue to practice as members of BDO
      Dunwoody.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The report of Amisano Hanson regarding our financial
      statements for the fiscal years ended December 31, 2006 and 2005 did not
      contain any adverse opinion or disclaimer of opinion and was not qualified
      or modified as to uncertainty, audit scope or accounting principles,
      except that such report on our financial statements for the years ended
      December 31, 2006 and 2005 contained an explanatory paragraph in respect
      to uncertainty as to our ability to continue as a going concern. During
      the years ended December 31, 2006 and 2005 and during the period from the
      end of the most recently completed fiscal year through January 21, 2008,
      the date of resignation, there were no disagreements with Amisano Hanson
      on any matter of accounting principles or practices, financial statement
      disclosure or auditing scope or procedures, which disagreements, if not
      resolved to the satisfaction of Amisano Hanson would have caused it to
      make reference to such disagreements in its reports.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | We provided Amisano Hanson with a copy of our Current
      Report on Form 8-K prior to its filing with the Securities and Exchange
      Commission and requested that Amisano Hanson furnish our company with a
      letter addressed to the Securities and Exchange Commission stating whether
      it agrees with the above statements and, if it does not agree, the
      respects in which it does not agree. A copy of such letter, dated February
      19, 2008, was filed as Exhibit 16.1 to our Current Report on Form 8-K
      filed with the Securities and Exchange Commission on February 22,
    2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Concurrent with the resignation of Amisano Hanson, we
      engaged BDO Dunwoody, as our independent accountant. Prior to engaging BDO
      Dunwoody, we did not consult with BDO Dunwoody regarding the application
      of accounting principles to a specific completed or contemplated
      transaction or regarding the type of audit opinion that might be rendered
      by BDO Dunwoody on our financial statements, and BDO Dunwoody did not
      provide any written or oral advice that was an important factor considered
      by our company in reaching a decision as to any such accounting, auditing
      or financial reporting issue. The engagement of BDO Dunwoody was approved
      by our board of directors.                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | 8A. Controls and procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Disclosure controls and procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Our Chief Executive Officer and Chief Financial Officer (collectively the “Certifying Officers”) performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this Annual Report. Disclosure controls and procedures are to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and such information is accumulated and communicated to our management, to allow timely decisions regarding required disclosure. Based on that evaluation, the Certifying Officers concluded that our disclosure controls and procedures were not effective due to a material omission in the preparation of this Annual Report.                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Specifically, the Annual Report was materially deficient as the Company failed to ensure that all the information required under this item 8A was properly disclosed in the original filing of this document. This error occurred despite the review, by both management and third party consultants, of the new Form 10-KSB disclosure requirements and the resulting Form 10-KSB as was originally filed with the Securities and Exchange Commission.  Management will endeavour to be more diligent when reviewing the rules and regulations relating to the preparation of reports, and the resulting report itself, to ensure that it conforms to the most current Securities and Exchange Commission requirements.                                                                                                                                                                                                                                                                                                                                                                     

---

| | Internal control over financial reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Our Certifying Officers are responsible for establishing and maintaining a system of internal controls over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, our Certifying Officers, and implemented by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Under the supervision and with the participation of our management, including our Certifying Officers, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, our Certifying Officers concluded that our internal control over financial reporting was not effective as of December 31, 2007, as a result of the material weaknesses noted below:                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | The Company believes these material weaknesses are mitigated by: the active involvement of senior management and the board of directors in all the affairs of the Company; open lines of communication within the Company; the present levels of activities and transactions within the Company being readily transparent; the thorough review of the Company’s financial statements by management, and the board of directors. However, these mitigating factors will not necessarily prevent the likelihood that a material misstatement will not occur as a result of the aforesaid weaknesses in the Company’s internal controls over financial reporting. A system of internal controls over financial reporting, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the internal controls over financial reporting are met.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only the management’s report in this Form 10-KSB.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | During the quarterly period ended December 31, 2007, there has been no change in internal controls over financial reporting that has materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 8B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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Part III

|9. | Directors, Executive Officers, Promoters and Control
      Persons
|-- | ------------------------------------------------------------------
|   |                                                                   
|   | Directors and Executive
Officers                                  

| | Name and        |               | Business
      experience        |                            
| | --------------- | ------------- | -------------------------------- | ---------------------------
| | position        | Term          | during
      past 5 years        | Other
      directorships  
| |                 |               |                                  |                            
| | Ralph Shearing  | March 7, 2001 | Director and officer of both the | Soho Resources Corp., a    
| | President, CEO, | to            | Company, and two natural         | reporting issuer in Canada.
| | Director        | Present       | resource exploration companies.  |                            
| |                 |               |                                  |                            
| | Abbas Salih     | March 7, 2001 | Director and officer of the      | None                       
| | Chairman,       | to            | Company.                         |                            
| | Secretary, CFO, | Present       |                                  |                            
| | Director        |               |                                  |                            

Significant
employeesNone

Family relationshipsThere
are no family relationships among directors, executive officers, officers or
significant employees and any nominees chosen to hold these positions.

Involvement in certain legal
proceedingsAs of the date of this Annual Report no director, executive
officer, promoter or control person or any nominee for these positions is or has
been the subject of any legal proceeding in any court of jurisdiction concerning
(i) any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer at the time of the bankruptcy,
or within two years prior to that time; (ii) any conviction in a criminal
proceeding or being subject to a pending criminal proceeding (excluding traffic
violations and other minor offences) within the past five years; (iii) being
subject to any order, judgment or decree permanently or temporarily enjoining,
barring, suspending or otherwise limiting involvement in any type of business,
securities or banking activity; or (iv) being found by a court, the Securities
and Exchange Commission or the Commodities Futures Trading Commission to have
violated a federal or state securities or commodities law (and the judgment has
not been reversed, suspended or vacated).

Compliance with Section 16(a) of the
Exchange ActSection 16(a) of the Exchange Act requires the Company's
directors and officers, and the persons who beneficially own more than ten
percent (10%) of Company's common stock, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Copies of all
filed reports are required to be furnished to the Company by each reporting
person. Based solely upon a review of Forms 3 and 4 (and amendments thereto) and
Forms 5 (and amendments thereto) and the written representations of the
reporting persons, it is the Company's belief and understanding that all such
persons have fully complied with the applicable filing requirements under the
Act during the fiscal year ended December 31, 2007.

|10. | Executive Compensation
|--- | ----------------------

On January 1, 2007 the Company entered
into two Management Services Agreements with a director and a company controlled
by a director of the Company. Under the terms of these agreements they will each
be paid $7,500 per month, plus taxes where applicable, for management consulting
services. These agreements are for a 24-month period expiring on December 31,
2008. If the Company is unable to pay for the services, the consultant may elect
to settle any portion of outstanding amounts plus interest with units of the
Company. Each unit shall consist of one common share and one share purchase
warrant entitling the holder to purchase one additional common share of the
Company. The price for the units and warrants will be determined based on a
discount to the 10 day average market price ranging from 50% to 60%, but no less
than $0.05 per share.

---

During the fiscal year ended December
31, 2007, directors and officers received compensation for acting in their
capacities as a director or officer, in the amounts as shown below (see Summary
compensation table). The directors and officers are reimbursed for any
out-of-pocket expenses incurred by them on behalf of the Company. The Company
currently has no pension plan, health plan, income profit sharing or other
similar plan. There are no compensatory plans or arrangements, with respect to
any former or present executive officer of the Company which result or will
result from the resignation, retirement or other termination of such officer's
employment with the Company or from a change of control of the Company or a
change in the officer's responsibilities following a change in control.

On July 1, 2002 the Company's Board of
Directors adopted and approved a Stock Award Plan. The plan provides both for
the direct award or sale of shares, and for the grant of options to purchase
shares. Shares may be awarded in consideration of services rendered to the
Company. The Company may also grant a 30-day right to purchase shares at a price
of not less than 90% of the fair market value of the shares.

Under the plan directors, employees and
consultants may be granted incentive stock options to purchase common stock of
the Company at a price of not less than 100% of the fair market value of the
stock. Outside directors may be granted non-statutory stock options to purchase
common stock of the Company at a price of not less than 85% of the fair market
value of the stock.

The total number of shares awarded
under the plan must not exceed 15% of the outstanding common stock of the
Company. Certain changes in the capital structure of the Company, such as a
stock split or stock dividend, may result in an appropriate adjustment to the
number and/or the price of shares issuable under the plan. The plan expires on
July 1, 2017.

The purpose of the Stock Option Plan is
to advance the interests of the Company and its shareholders by affording key
personnel in the Company an opportunity for investment in the Company and other
incentive advantages inherent in stock ownership in the Company. Pursuant to the
provisions of the Stock Option Plan, stock options will be granted only to key
personnel of the Company, generally defined as a person designated by management
upon whose judgment, initiative and efforts the Company may rely, including any
director, officer, employee or consultant of the Company.

As of the date of this Annual Report, a
total of 13 employees including consultants, directors and officers have been
granted share purchase options to acquire a total of 2,087,000 common shares of
the Company at a weighted average price of $0.23 per share. The President and
the Secretary of the Company have each been granted 720,000 share purchase
options each under the Plan.

Pursuant to the terms of the stock
award plan, the number of shares under option and their exercise price has been
adjusted as a result of the 20% stock dividend declared by the Board of
Directors on February 14, 2005.

Summary compensation table

| |                     |      | Annual
      Compensation | Long
      Term Compensation 
| | ------------------- | ---- | ------------------------- | -----------------------------
| | Name                | Year | Other annual compensation | Securities underlying options
| |                     |      |                           |                              
| | Ralph Shearing      |      |                           |                              
| | CEO,
      Director | 2007 | $95,400                   | -                            
| |                     | 2006 | $21,200                   | -                            
| |                     | 2005 | -                         | -                            
| |                     |      |                           |                              
| | Abbas
      Salih   |      |                           |                              
| | CFO, Director       | 2007 | $90,000                   | -                            
| |                     | 2006 | $29,415                   | -                            
| |                     | 2005 | $40,440                   | -                            

---

Aggregated fiscal year end option
values

| |                | Number
      of securities underlying |                                      
| | -------------- | ------------------------------------- | -------------------------------------
| |                | unexercised options at fiscal year    | Value of unexercised in-the-money    
| |                | end                                   | options fiscal year end exercisable /
| | Name           | exercisable / unexercisable           | unexercisable                        
| |                |                                       |                                      
| | Ralph Shearing |                                       |                                      
| | CEO, Director  | 720,000 / nil share options           | nil / nil                            
| |                |                                       |                                      
| | Abbas Salih    |                                       |                                      
| | CFO, Director  | 720,000 / nil share options           | nil / nil                            

|11. | Security Ownership of Certain Beneficial Owners and
      Management
|--- | --------------------------------------------------------------------

Security ownership of certain beneficial
owners

| |                |                                 | Amount
      and nature of | Percentage    
| | -------------- | ------------------------------- | -------------------------- | --------------
| | Title of class | Name
      of beneficial owners | beneficial ownership       | of
      class
| |                |                                 |                            |               
| | Common stock   | Cede & Co.                      | 8,548,765 (direct)         | 32%           
| |                | New York, N.Y., U.S.A.          |                            |               

Security ownership of
management

| |                |                                 | Amount
      and nature of     | Percentage
| | -------------- | ------------------------------- | ------------------------------ | ----------
| | Title of class | Name
      of beneficial owners | beneficial ownership           |           
| |                |                                 |                                |           
| | Common stock   | Ralph Shearing                  | Nil (indirect) (1)             | 14%       
| |                | Vancouver, BC, Canada           |                                |           
| |                |                                 |                                |           
| | Common stock   | Abbas Salih                     | 9,785,172 (indirect)
      (2) | 40%       
| |                | Vancouver, BC, Canada           |                                |           

| | (1) | The beneficial owner has the right to acquire 720,000
      shares through the exercise of stock options and 1,762,858 units through
      the conversion of outstanding loans into units, each unit consisting of
      one common share of the Company and one share purchase warrant.                   
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                            
| | (2) | The beneficial owner also has the right to acquire a
      further 720,000 shares through the exercise of stock options and 416,248
      units through the conversion of outstanding loans into units, each unit
      consisting of one common share of the Company and one share purchase
      warrant.

|12. | Certain Relationships and Related
    Transactions
|--- | --------------------------------------------------

The officers and directors of the
Company are engaged in other businesses, either individually or through
partnerships or corporations in which they may have an interest, hold an office
or serve on the Boards of Directors. Certain conflicts of interest may arise
between the Company and the respective officers and directors. Such conflicts
can be resolved through the exercise by such officers and directors of judgment
consistent with their fiduciary duties to the Company. It is the intent of the
officers and directors to resolve any such conflicts in the best interest of the
Company and to allocate sufficient of their time to the affairs of the Company
in order to fully and competently carry out their duties and responsibilities.
Certain financial related party transactions are adequately explained in items
5, 6, and 7 of this Annual Report.

---

|13. | Exhibits
|--- | --------

| | Table of Exhibit |                                               |                   
| | ---------------- | --------------------------------------------- | ------------------
| | Items            | Description                                   | Exhibit           
| |                  |                                               |                   
| | 601-3(i)         | Articles of Incorporation                     | Note 1            
| | 601-(3)(ii)      | Bylaws                                        | Note 1            
| | 601-(3)(iii)     | Certificate of Amendment                      | Note 1            
| | 601-(10)         | Stock Award Plan                              | Note 2            
| | 601-(31)         | Rule 13a-14(a)/15d-14(a)
      Certifications | Exhibit 31.1      
| | 601-(32)         | Section 1350 Certifications                   | Exhibit 32.1      
| | 601-(31)         | Rule
      13a-14(a)/15d-14(a) Certifications | Exhibit
      31.2
| | 601-(32)         | Section 1350 Certifications                   | Exhibit 32.2      



|Note 1: | Incorporated by reference to Form 10-KSB Annual
      Report for the year ending December 31, 2001
|------- | --------------------------------------------------------------------------------------------------
|Note 2: | Incorporated by reference to Form 10-KSB Annual
      Report for the year ending December 31, 2002

|14. | Principal Accountant Fees and
  Services
|--- | ----------------------------------------

Audit Fees

During the fiscal years ended December
31, 2007 and 2006, the Company incurred approximately $15,500 and $13,800
respectively in fees to Amisano Hanson (prior to its merge with BDO Dunwoody
LLP), Chartered Accountants, for professional services rendered in connection
with the audit of the Company's financial statements and approximately $13,770
(2006: $17,275) for review of the Company's quarterly financial statements.

Audit-Related Fees

NoneTax
FeesNoneAll Other Fees

None

Audit Committee

As of this Annual Report, the Company
has not appointed members to an audit committee. The board of directors has
conducted the respective role of an audit committee. When established, the audit
committee's primary function will be to provide advice with respect to the
Company's financial matters and to assist the board of directors in fulfilling
its responsibility to oversee finance, accounting, tax and legal compliance
matters. The audit committee will (i) serve as an independent and objective
party to monitor the Company's financial reporting process and internal control
systems; (ii) review and appraise the audit efforts of the Company's independent
accountants; (iii) evaluate the Company's quarterly financial performance as
well as its compliance with laws and regulations; (iv) oversee management's
establishment and enforcement of financial policies and business practices; and,
(v) provide an open avenue of communication among the independent accountants,
management and the board of directors.

---

SIGNATURES

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

|      |                  |  | Strategic Internet Investments,
      Incorporated
|----- | ---------------- |  | --------------------------------------------------
|      |                  |  |                                                   
|Date: | October 23, 2008 |  | /s/
      Ralph Shearing                          
|      |                  |  | Ralph Shearing, Director                          
|      |                  |  |                                                   
|Date: | October 23, 2008 |  | /s/
      Abbas Salih                             
|      |                  |  | Abbas Salih, CEO, CFO, Director                   

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