SECURITIES EXCHANGE COMMISSION
  Washington, D.C. 20549

FORM 10 - KSB
  Annual Report Pursuant to Section 13 or 15(d)
  Of the Securities Exchange Act of 1934

For the Fiscal Year ended December 31, 2002
  Commission File Number 33 - 281888

STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (Exact name of registrant as specified in its charter)

|Colorado                 | 84 - 1116458       
|------------------------ | -------------------
|(State of Incorporation) | (I.R.S. Employer   
|                         | Identification No.)

650 West Georgia Street, Suite 450, Vancouver, B.C., Canada
  V6B 4N8(Address of Principal Executive Offices) (Postal Code)

Registrant's telephone number, including area code: (604) 684-8662

Securities registered pursuant to Section 12(b) of the Act:

Title of each class: None

Name of each exchange on which registered: None

Securities registered pursuant to Section 12(g) of the Act:

Title of each class: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to the filing requirements for at least the past 90 days.

Yes X        No

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10 - KSB or any amendment to this Form 10 - KSB.

X

State issuer's revenues for its most recent fiscal year:     Nil

Transitional Small Business Disclosure Format:      YES ___  
    NO _X_

Aggregate market value of the voting stock held by non-affiliates of the Registrant
  as of December 31, 2002:     475,637

Number of outstanding shares of the Registrant's No Par Value Common Stock,
  as at December 31, 2002:      15,205,596

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PART 1

Item 1 Description of Business

(a) Business History and Development

Jefferson Capital Corporation (the Company), a development
  stage company, was organized under the laws of the State of Colorado on February
  28, 1989. The Company is in the development stage as defined in Financial Standards
  Board Statement No. 7.

On January 4, 1990, the Company sold 10,000,000 units of no
  par value common stock in a "Blind Pool" public offering. The offering price
  for each unit was $.01. Each unit consisted of one share of the Company's no
  par value common stock and 25 Class A Common Stock Redeemable Purchase Warrants
  (Class A Warrants). The Class A Warrants are exercisable for 24 months from
  the effective date of the registration statement (October 30, 1989) and entitled
  the holder thereof to purchase 25 shares of common stock at a price of $.014
  per share. The Company received $72,730, net of offering costs, from the sale
  of common stock in the public offering.

Effective June 13, 1990, the Company entered into a merger
  agreement with Ohio & Southwestern Energy Company (OHIO). The Company issued
  80,000,000 shares of its common stock in exchange for all of the outstanding
  shares of OHIO. After the exchange of shares, OHIO's sole shareholder, Members
  Service Corporation (MSC), owned 80% of the Company's issued and outstanding
  common stock. The name of the corporation was changed to Ohio & Southwestern
  Energy Company (OHIO).

While the company commenced 1990 with a successful public
  offering, the subsequent merger agreement with Ohio & Southwestern Energy
  Corp. (OHIO) became an abortive transaction. The new management of OHIO never
  completed the merger with assets represented, and without authorization distributed
  the corporate funds to unauthorized parties or uses which resulted in a total
  write off of the capital of the Company.

The majority stockholder, MSC, failed to disclose to the minority
  stockholders the distribution of corporate funds during the year ended 1990.
  The Company recorded an extraordinary loss in the amount of $69,116 as a result
  of the unauthorized distribution of corporate funds in 1990.

The minority shareholders filed a complaint in Arapahoe County
  Colorado District Court, Civil Division, during April, 1991 alleging among other
  things that the majority shareholder, MSC, failed to disclose the distribution
  of corporate funds, failed to account for the operations of the corporation,
  transferred assets of the corporation without stockholder or board meetings
  and questioned the value of the corporations assets and operations.

On August 28, 1991, a Receiver was appointed and the court
  ordered the 80,000,000 shares of common stock issued to MSC to be canceled.
  On January 12, 1995, the minority shareholders filed a motion for supplemental
  orders requesting that the merger between Jefferson Capital Corporation and
  Ohio and Southwestern Energy Company be declared null and void and a bar date
  of April 15, 1995, be set within which any and all creditors must file a claim.

On May 23, 1995, the Receiver issued his final report stating
  that no claims of creditors had been filed by the bar date. The Receiver incurred
  $36,395 in costs during receivership. Certain of the costs had been advanced
  by the Receiver in the anticipation of issuance of shares of common stock by
  the Board of Directors after the dismissal of the Receivership.

On June 21, 1995, the Court ordered the merger null and void,
  approved the Receiver's final report and authorized the restoration of the name
  of the Company to Jefferson Capital Corporation. The Board has elected to retain
  the existing name for consistency. The Company engaged in no foreign operations
  or export sales to date.

On August 30, 1995 the shareholders of the company voted to
  approve a reverse split of up to one new share for 300 shares outstanding. On
  September 25, 1995, the directors effectuated a reverse split on a one for 300
  shares basis.

The Company was inactive in 1997.

On June 25, 1998, OHIO entered into a Purchase Agreement with
  CanArab Acquisitions Corp. under which Can Arab purchased 8,650,000 common shares
  of The Ohio & Southwestern Energy Company for $160,000, from GeoTech Management
  Services, Inc.

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The following shareholders of CanArab Acquisition Corp. own
  or control more than 5% of the total issued capital of CanArab:

|Cankaz Technology Systems Corp. | 10,000,000 shares | 41%
|------------------------------- | ----------------- | ---
|Arab-German Fisheries, Inc.     | 9,500,000 shares  | 39%

Gerab Investments is owned 80% by Abbas Salih and 20% is held
  by 2 German citizens. Cankaz Technology is owned 100% by Gerab Investments.
  Arab German-Fisheries is owned 80% by Gerab Investments Corp. and 20% by the
  Arab Group International for Investment and Acquisition. Abbas Salih would be
  considered as the control person of the aggregated entities and he therefore
  controls 80% of the Registrant.

OHIO entered into a Plan of Reorganization Agreement to acquire
  CanArab Technology Limited from shareholders in consideration of the issuance
  of Fourteen Million Six Hundred Fifty Thousand (14,650,000) shares of common
  stock of Registrant. CanArab has developed marine aquaculture designs for shrimp
  farming. Concurrent with the acquisition. CanArab Acquisitions Corp. was to
  surrender 8,650,000 shares to Registrant for cancellation. The acquisition was
  never completed because funding sufficient to implement the plan of business
  was never achieved.

The Company entered into an Agreement in October 1998 to acquire
  CanbauConstruction GMBH of Germany for one million shares of common stock of
  the Registrant. The Agreement required certain due diligence investigation and
  was based upon the representation of Canbau that it will have audited financial
  statements showing a four million dollar asset base. Canbau was retained to
  construct a shrimp processing plan in Germany with an estimated cost of $42
  million, subject to arrangement of financing which is not yet assured as of
  the date of the Agreement. The Agreement was never consummated due to lack of
  funding and has expired..

On July 31, 2000 the Company entered into an Agreement and
  Plan of Reorganization with Canarab Technology Limited ("CAT"), a Yukon Corporation,
  wherein the CAT shareholders agreed to exchange all of the issued and outstanding
  shares of CAT for a total of 5,280,907 shares in the common stock of the Company
  and, thereby, become a wholly owned subsidiary of the Company. CAT is the holder
  of a Letter Agreement to purchase certain interests in Strategic Profits Inc.
  ("SPI"), a British Columbia corporation, doing business as communitystorefronts.com.

Under the terms and conditions of the Letter of Intent with
  SPI, CAT can acquire a 40% interest in SPI by SPI issuing common escrow shares
  equal to 40% of the total issued and outstanding shares of SPI, in exchange
  for CAT issuing 2,475,000 common escrow shares. As a further share purchase
  option, SPI has granted to CAT the right to acquire an additional 35% of SPI's
  outstanding shares by the issuance of up to 2,400,000 common shares of CAT,
  which shares will both become part of the existing common escrow shares of SPI
  and CAT under the Agreement. The SPI escrow shares can be released to CAT on
  the basis of CAT providing funding to SPI, from any source, to assist in the
  implementation of its business plan dated April l, 2000. CAT must provide SPI
  with up to $2,400,000 in Canadian funds in order to have all the SPI escrow
  shares released to CAT. The formula for release of the SPI escrow shares provides
  that for every increment of $400,000 Cdn of funding provided by CAT to SPI 1/6
  of the SPI escrow shares are released to CAT. SPI has further granted to CAT
  the first right of refusal to acquire the remaining 25% of SPI shares.

SPI can earn the release of all or a portion of the CAT escrow
  shares by achieving certain minimum revenue generating projections over a three
  to five year period. If the maximum total funding to be provided by CAT of $2,400,000
  in the first year is not achieved then the amount of revenue needed to release
  1/3 of the Cantech escrow shares in each of the following three years, as stipulated
  in the Letter of Intent, will be prorated lower by the factor of the percentage
  of the total agreed funding ($2,400,000) achieved. Any CAT escrow shares not
  released by the end of the third year may be released at the end of year five
  by SPI generating combined revenue of $20,000,000 Cdn in years four and five.
  Any shares not released at the end of year five are subject to repurchase by
  Cantech for $0.001 per share.

In December, 2000 the Company secured short term financing
  sufficient to begin funding SPI as per its business plan and to secure the first
  release of the SPI escrow shares under the provisions of the CAT/SPI Letter
  of Intent which the Company assumed. In December, 2000, the Company completed
  a 1,133,334 unit private placement consisting of one share and one warrant,
  exercisable within one year at $2.00 per share, at a price of $0.30 US per unit
  for total proceeds of $340,000 . The final balance of this unit private placement
  of 533,333 shares was completed on February 14, 2001 for additional proceeds
  of $160,000.

On June 15, 2001 the Company held its Annual General Meeting
  of Shareholders. At the General Meeting the shareholders approved resolutions
  to change the name of the Company from The Ohio & Southwestern Energy Company
  to Strategic Internet Investments, Incorporated and to migrate the Company from
  its current State of Incorporation, Colorado, to the State of Delaware. The
  name change and change of

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domicile became effective on July 1, 2001. The Company commenced
  trading on the OTC Bulletin Board under the new trading symbol "SIII" effective
  October 8, 2001.

The shareholders also approved the Agreement and Plan of Reorganization
  between Canarab Technology Ltd. and the Company that will allow Canarab Technology
  Ltd. to become a wholly owned subsidiary of the Company.

On August 13, 2001 the Company completed a private placement
  to two placees in Europe for total proceeds of $105,000. Under the terms of
  the private placement agreements the Company issued a total of 350,000 common
  shares under Regulation S at a price of $0.30 per share with a warrant attached
  to each share entitling the placees to purchase one additional common share
  at a price of $0.70 within a one year period. To date, none of the warrants
  have been exercised.

On December 19, 2001 SPI initiated litigation by Writ of Summons
  in the Supreme Court of British Columbia, Canada against Telus Communications
  Inc., Telus Advanced Communications and Hewlett-Packard Canada Ltd.(the "Defendants")
  for damages for Breach of Contract under the binding agreement dated December
  11, 2000 between the parties. The litigation by SPI seeks damages for the failure
  of the Defendants to perform under the agreement or, in the alternative, the
  return of monies paid by SPI to the Defendants. As of December 31, 2001 the
  litigation is ongoing.

As at December 31, the Company had advanced a total of $606,337
  to Strategic Profits Inc. under the Agreement and Plan of Arrangement with Canarab
  Technology Limited.

Effective December 31, 2001 management of the Company has
  abandoned its plan of re-organization under the Agreement and Plan of Arrangement
  with Canarab Technology Limited and has written-off total advances to SPI of
  $606,337. Catherine Clarke-Luckhurst, the President of Strategic Profits Inc.,
  resigned as a director of the Company on January 24, 2002

On July 12, 2002 the Company entered into an agreement with
  Star Leisure & Entertainment Inc., a British Columbia based corporation
  controlled by Abbas Salih, a director and controlling shareholder of the Company,
  to acquire 80% of the outstanding shares of Bahrain incorporated Gulf Star World
  Developments W.L.L. Gulf Star holds 100% of the rights to develop the planned
  'Dream Island' leisure and entertainment resort facility in Manama, Bahrain.
  The 'Dream Island' resort will be an integrated real estate and tourism complex
  to be constructed off the north-east coast of Manama, Bahrain on a 41 acre man-made
  island connected to Bahrain by a quarter mile long causeway.

The agreement gives the Company the right to acquire 80% of
  the outstanding shares of Gulf Star by issuing to Star Leisure, in escrow, a
  total of five million (5,000,000) common shares of the Company to be earned
  out of escrow based on progressive stages of development of the "Dream Island'
  project over a three year period. The Company has agreed to reimburse Star Leisure
  for a portion of its start-up and development costs for 'Dream Island', initially
  to a total of $100,000 and thereafter upon verification of expenses by an independent
  audit. The payment of the $100,000 under the agreement is due as to $50,000
  on October 11, 2003 and $50,000 on January 11, 2004. Star Leisure will assign
  all agreements relating to the 'Dream Island' project including the 'Dredging
  and Reclamation Works Agreement' with Robodh Contracting of Manama, Bahrain(
  assigned on August 21, 2002) and the Planning, Consulting and Supervision agreement
  for 'Dream Island'. Under the agreement with Robodh Contracting, the Company
  has issued to Robodh 1,268,750 Series A Convertible Preferred shares of the
  Company with a face value of $5,075,000 USD, the total value of the contract,
  as full payment to carry out the necessary dredging and reclamation work to
  construct the island.

On July 10, 2002 the Company entered into an agreement with
  Crescent Fund, Inc. a private venture capital and management consulting firm
  with offices in Dallas, New York and Los Angeles, to assist the Company in raising
  equity capital as part of the financing for the planned 'Dream Island' project.
  The term of this agreement was six months, however, the agreement was terminated
  on October 28, 2002, by the Company, following an unsuccessful campaign by Crescent
  Fund to attract any significant investor interest or capital funding. Crescent
  Fund, Inc. was to receive a total of 500,000 restricted common shares with registration
  rights to be released pro-rata based upon levels of capital funding achieved
  or trading activity of the Company's shares. No shares were earned or released
  to Crescent Fund, Inc. during the term of the agreement and there are no remaining
  obligations by either party to the agreement.

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On July 30, 2002, the Company entered into a Letter of Understanding
  (LOU) with Aegis Systems Inc. of Vernon, British Columbia, to market the 'Skyhook
  ' suite of proprietary security software technology, developed by Aegis, in
  the region of the Middle East. Aegis 'Skyhook' products offer secure digital
  communications, data security and absolute user authentication. Pursuant to
  the LOU Aegis and the Company would create and jointly own a corporation to
  market the Aegis technologies with the Middle East by forming partnerships with
  selected businesses, located and operating in various Middle Eastern countries,
  with whom management of the Company has formed prior associations and is satisfied
  as to the credentials and strengths of these entities. The Company will provide
  initial funding for the jointly owned corporation and Aaegis will provide exclusive
  marketing rights in the selected areas, subject to mutually acceptable performance
  levels being maintained.

On August 20, 2002 the Company entered into a Letter of Intent
  agreement with Ultra Information Systems, Inc. ("UIS") and Skyhook Security
  Systems, Inc. whereby the Company had the right to acquire a 30% equity interest
  in UIS, pursuant to a Preferred Share Purchase Agreement and, additionally,
  would have the option, exercisable within twelve months, to acquire additional
  equity interest in UIS at fair market value up to a total of 51% if the option
  is fully exercised. As compensation for the UIS shares, the Company was to issue
  1,000,000 shares of its common stock to UIS, in escrow, and agree to provide
  $3,500,000 in funding, as per the terms and conditions of the Preferred Share
  Purchase Agreement. The escrow shares were to be released to UIS based upon
  UIS meeting its first year financial projections as contained in its Business
  Plan dated March 18, 2002.

On December 31, 2002 the Letter of Intent agreement with UIS
  was terminated by mutual written consent of the parties due to the fact that
  no source of equity funding had been completed sufficient to meet certain terms
  of the agreement. All rights and obligations of the Company under the UIS Letter
  of Intent have terminated.

(b) Business of Issuer

The Company's direction and efforts are now focused on the
  development of the planned 'Dream Island' project in the Kingdom of Bahrain,
  and, to a secondary extent, on other promising opportunities for successful
  entry and implementation of services or products in the Middle Eastern region
  including the marketing of the Ultra Information Systems, Inc. 'Skyhook' suite
  of software technology products.

This decision to move the Company's initiatives to the Middle
  East was made by management subsequent to the abandonment of the plan of re-organization
  under the Agreement and Plan of Arrangement with Canarab Technology Limited
  to acquire an equity interest in Strategic Profits Inc. The opportunity to acquire
  the controlling interest in Gulf Star World W.L.L. and, thereby, the right to
  develop the 'Dream Island' project and shift the Company's focus from North
  America to the Middle East was primarily due to the experience and knowledge
  gained by the Board of Directors and, in particular, the Chairman and Secretary,
  Mr. Abbas Salih, through numerous projects he has undertaken or been involved
  with in this area of the world over the past 20 years. Mr. Salih has extensive
  ties with businesses and investment groups in the Gulf States and other neighboring
  countries and it was from these associations that the 'Dream Island' project
  was presented to the Company.

The planning and feasibility stage of the 'Dream Island' project
  has required extensive research, investigation and analyses carried out over
  several years by international consulting firms, such as KPMG Consulting, with
  expertise in construction, tourism and financial analysis. The approval process
  to undertake this project was a cooperative effort among the Company and Jzala
  Group of Saudi Arabia, the Government of Bahrain and the major construction,
  consulting and investment participants, each playing key roles.

By description, the 'Dream Island' 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. It will be an
  all-inclusive residential and resort destination for local residents of Bahrain
  and the surrounding areas and for international travelers. When completed in
  approximately three years it will comprise 120 villas to be managed by an international
  hotel operator, 100 villas for sale, for rental and for timesharing, 85 apartments
  for sale and rent, a luxury hotel with 225 rooms and suites, a spa, health club
  and other personal treatment facilities, a restaurant, cafes, and a shopping,
  retail and entertainment center, a marina, water-park and other ocean-side recreational
  facilities.

4

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|The cost of the project, which
        is estimated to be $ 160,000,000 USD , will be shared among the major
        participants, banking and government institutions and through sales of
        the real estate to private investors.
      In the preliminary phase, the man-made island will be
        constructed by Robodh Contracting Establishment, a large construction
        company in Bahrain, under a Dredging and Reclamation Agreement signed
        August 2, 2002 for which Robodh will receive 1,268,750 Series A Convertible
        Preferred Shares of the Company with a face value of $5,075,000 in full
        settlement of their contract fees. Mobilization of dredging equipment
        to Bahrain has occurred and initial dredging and reclamation work was
        to begin during mid-March/2003 but was temporarily postponed due to the
        conflict in Iraq. With the major hostilities in Iraq now over, Robodh
        and the Company intend to announce a decision to commence dredging operations
        before the end of April/2003.
      Item 2 Description of Property
      SIII maintains an office in downtown Vancouver, British
        Columbia on a month to month basis. The total monthly rent is $535 including
        taxes and surcharges. Records are maintained and mail received at the
        offices of the corporate solicitor in Houston, Texas. The Company does
        not directly or indirectly own or otherwise have any interest in any other
        real estate properties.
      Item 3 Legal Proceedings
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|(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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Except as disclosed above management is not aware of any other
  legal proceedings pending or contemplated against the Company, its directors
  or officers or any of its affiliates. No director, officer or affiliate of the
  Company is (i) a party adverse to the Company in any legal proceeding or (ii)
  has an adverse interest to the Company in any legal proceeding.

Item 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.

PART II

Item 5 Market for Common Equity and
  Related Stockholder Matters

(a) Market Information

The 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 Bloomberg,
  was as follows:

|2002           | High  |  | Low   | 
|-------------- | ----- |  | ----- | 
|               |       |  |       | 
|First Quarter  | 0.250 |  | 0.130 | 
|Second Quarter | 0.230 |  | 0.070 | 
|Third Quarter  | 0.450 |  | 0.100 | 
|Fourth Quarter | 0.140 |  | 0.040 | 

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|               |       |  |       | 
|-------------- | ----- |  | ----- | 
|2001           |       |  |       | 
|               |       |  |       | 
|First Quarter  | 5.500 |  | 2.375 | 
|Second Quarter | 3.000 |  | 0.950 | 
|Third Quarter  | 1.070 |  | 0.300 | 
|Fourth Quarter | 0.150 |  | 0.350 | 

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

(b) Holders

As at December 31, 2002 there were approximately 55 holders of record of the common shares of SIII.

(c) Dividends

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.

Sales of Securities Without Registration Under the Securities
  Act of 1933

On November 15, 2002 the Company entered into a Convertible
  Loan Facility Agreement with Icon Management Ltd. of Vancouver, British Columbia
  in order to formalize an arrangement whereby the Company would, from time to
  time, borrow certain operating capital funds from Icon, at an agreed interest
  rate of ten percent (10%) and for which repayment the right would be given to
  Icon to convert all or part of the principal sum, plus interest or interest
  alone, into units each unit consisting of one common share of the Company and
  one non-transferable share purchase warrant, at the applicable conversion rate
  which is calculated at a discount to the average closing market price for ten
  days preceding a loan advance. For the fiscal year ended December 31, 2002 a
  total of $ 25,516 was advanced to the Company as principal sum by Icon with
  accrued interest of $ 378. The principal sum and any accrued interest under
  the Convertible Loan Facility are payable on or before December 31, 2004. As
  at December 31, 2002 Icon had not exercised, under its right of conversion,
  any amount of the principal sum or accrued interest.

On November 20, 2002 the Company issued 27,000 shares and
  60,000 shares, respectively, to Global Securities Corporation of Vancouver,
  British Columbia and Mr. Mudrik Saed, of Richmond, British Columbia, pursuant
  to Rule 144 of the Securities and Exchange Commission, in full settlement of
  amounts owed under Consulting Services Agreements with the recipients.

Item 6 Management's Discussion and Analysis or Plan of
  Operation

Statements made in this Annual 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.

(a) Plan of Operation

In the following discussion, management outline's its plan
  of operation for the next quarter and the balance of the fiscal year 2003. The
  discussion should be read in conjunction with the audited financial statements

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and notes for the year ended December 31, 2002 which are shown
  in Item 7 of this Annual Report. Certain matters discussed below are based on
  potential future circumstances and developments which the Company anticipates
  but which cannot be assured.

As at December 31, 2002 the Company had $ (19.00) cash on
  hand and a working capital deficiency of $ 365,424. Of this working capital
  deficiency $90,441 is due to related parties of which repayment will not be
  demanded until adequate resources become available. Management will also seek
  to settle certain outstanding debts by means of share issuances. The Company
  remains at the development stage as there were no revenues during the past fiscal
  year.

The 'Dream Island' project in Bahrain, the Company's principal
  business, 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 constsructed as part
  of the 'Dream Island' complex. Final arrangements and documentation are taking
  place at the present time with interested parties in Bahrain and Saudi Arabia
  for the commencement of these pre-sales during the second quarter of 2003. Pre-sale
  funds committed will be held in escrow in Bahrain financial institutions pursuant
  to the sales agreements and pending completion and release.

The first stage of the project, dredging and reclamation of
  the 41acre man-made island site, has been financed through the isssuance to
  Robodh Contracting Establishment, Manama, Bahrain, of 1,268,750 Series A Convertible
  Preferred Shares in the capital of the Company at a deemed price of $4.00 per
  share. The total value of the Dredging and Reclamation Works contract is $5,075,000
  USD. The Company is very pleased and encouraged that such a large and respectable
  firm as Robodh Contracting has chosen to accept Preferred Shares as payment
  for the Dredging and Reclamation Works contract. It is a strong statement of
  their endorsement and confidence in the project and the Company.

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 in Manama, Bahrain for the past two months
  to oversee the project, will be of immense value in completing other essential
  contracts during the course of this project. With the post-war focus on reparation
  and investment in the Middle East efforts will be made to attract interest and
  investment from North American and European sources as well.

The Company's plan during the next quarter and for the balance
  of 2003 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 and the full-time and temporary staff. Field
  operations and construction activities in Bahrain will be conducted through
  contracting and sub-contracting of work.

As required, any additional funding needed for general and
  administrative expenses will be raised by private placement or loans and debentures
  convertible into equity. The Company has the full allotment of stock award options
  available which can be used to raise up to $200,000 in immediate funds.

Off-Balance Sheet Arrangements

As 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.

Audit Committee

As of this Annual Report, the Company has not appointed members
  to an audit committee. The respective role of an audit committee has been conducted
  by the board of directors. When established, the audit

7

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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.

Audit Fees

During the fiscal year ended December 31, 2002, the Company
  incurred approximately $ 10,200 in fees to Amisano Hanson, Chartered Accountants,
  for professional services rendered in connection with the audit of the Company's
  financial statements and approximately $7,421 for review of the Company's financial
  statements for the quarters ended March 31, 2002, June 30, 2002 and September
  30, 2002.

Item 7        Financial Statements

(A Development Stage Company)

REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

(Stated in U.S. Dollars)

|Contents                                                  | Page  | 
|--------------------------------------------------------- | ----- | 
|                                                          |       | 
|Independent Auditor's Report                              | 9     | 
|                                                          |       | 
|Consolidated Balance Sheets                               | 10    | 
|As at December 31, 2002, 2001 and 2000                    |       | 
|                                                          |       | 
|Consolidated Statements of Operations                     | 11    | 
|For the years ended December 31, 2002, 2001 and 2000      |       | 
|                                                          |       | 
|Consolidated Statements of Stockholders' Deficiency       | 12-14 | 
|For the period from February 28, 1989 (Date of Inception) |       | 
|To December 31, 2002                                      |       | 
|                                                          |       | 
|Consolidated Statements of Cash Flows                     | 15-16 | 
|For the years ended December 31, 2002, 2001 and 2000      |       | 
|                                                          |       | 
|Notes to the Consolidated Financial Statements            | 17-27 | 

8

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|TERRY AMISANO
      LTD. | AMISANO HANSON       
|------------------------ | ---------------------
|KEVIN HANSON,
      CA   | CHARTERED ACCOUNTANTS

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying consolidated balance sheets
  of Strategic Internet Investments, Incorporated (A Development Stage Company)
  and subsidiaries as of December 31, 2002 and 2001 and the related consolidated
  statements of operations, stockholders deficiency and cash flows for each
  of the years in the three year period ended December 31, 2002 and for the period
  from inception of the development stage, February 28, 1989 to December 31, 2002.
  These financial statements are the responsibility of the Company's management.
  Our responsibility is to express an opinion on these financial statements based
  on our audits.

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

In our opinion, 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, 2002 and 2001, and the results of their operations and their cash flows
  for each of the years in the three year period ended December 31, 2002 and for
  the period from inception of the development stage, February 28, 1989 to December
  31, 2002, 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, and has no established source of revenue and is dependent
  on its ability to raise capital from shareholders or other sources to sustain
  operations. 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 this uncertainty.

|Vancouver, Canada | AMISANO HANSON     
|----------------- | ---------------------
|April 18, 2003    | 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

9

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STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  CONSOLIDATED BALANCE SHEETS
  December 31, 2002 and 2001(Stated in U.S. Dollars)

ASSETS

|                                   |   | 2002   |  |   | 2001  | 
|---------------------------------- | - | ------ |  | - | ----- | 
|Current                            |   |        |  |   |       | 
|Cash                               | $ | -      |  | $ | 56    | 
|Prepaid expense  Note 3           |   | 28,000 |  |   | -     | 
|                                   |   |        |  |   |       | 
|                                   |   | 28,000 |  |   | 56    | 
|                                   |   |        |  |   |       | 
|Capital assets  Note 4            |   | 1,356  |  |   | 1,937 | 
|Deferred investment costs  Note 5 |   | 65,000 |  |   | -     | 
|                                   |   |        |  |   |       | 
|                                   | $ | 94,356 |  | $ | 1,993 | 
|                                   |   |        |  |   |       | 

LIABILITIES

|Current                         |   |         |  |   |         | 
|------------------------------- | - | ------- |  | - | ------- | 
|Bank indebtedness               | $ | 19      |  | $ | -       | 
|Accounts payable  Note 7       |   | 203,247 |  |   | 265,442 | 
|Due to related parties  Note 7 |   | 49,314  |  |   | 56,580  | 
|Loans payable  Notes 8 and 12  |   | 86,950  |  |   | 70,687  | 
|                                |   |         |  |   |         | 
|                                |   | 339,530 |  |   | 392,709 | 
|Loans payable  Notes 8 and 12  |   | 25,894  |  |   | -       | 
|                                |   |         |  |   |         | 
|                                |   | 365,424 |  |   | 392,709 | 
|                                |   |         |  |   |         | 

STOCKHOLDERS' DEFICIENCY

|                                                                     |   |            |   |   |            |  
|-------------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|Capital Stock                                                        |   |            |   |   |            |  
|Class A Convertible Preferred stock,
      $0.001 par value          |   |            |   |   |            |  
|10,000,000 authorized, none outstanding                              |   |            |   |   |            |  
|Class B preferred stock, $0.001 par value                            |   |            |   |   |            |  
|10,000,000 authorized, none outstanding                              |   |            |   |   |            |  
|Common stock, $0.001 par value                                       |   |            |   |   |            |  
|100,000,000 authorized                                               |   |            |   |   |            |  
|15,205,596 outstanding (2001: 12,540,567
      outstanding)  Note 6 |   | 15,204     |   |   | 12,539     |  
|Additional paid-in capital                                           |   | 2,550,928  |   |   | 2,219,187  |  
|Contributed capital                                                  |   | 240,527    |   |   | 240,527    |  
|Deficit accumulated during the development stage                     |   | (3,077,727 | ) |   | (2,862,969 | )
|                                                                     |   |            |   |   |            |  
|                                                                     |   | (271,068   | ) |   | (390,716   | )
|                                                                     |   |            |   |   |            |  
|                                                                     | $ | 94,356     |   | $ | 1,993      |  
|                                                                     |   |            |   |   |            |  

Nature and Continuance of Operations  Note 1
  Commitments  Notes 6, 8 and 12
  Subsequent Events  Notes 6 and 12

SEE ACCOMPANYING NOTES

10

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STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENTS OF OPERATIONS
  for the years ended December 31, 2002, 2001 and 2000
  and the period from February 28, 1989 (Date of Inception) to December 31, 2002
  (Stated in U.S. Dollars)

|                                              |   |            |   |   |            |   |   |           |   |   | Cumulative       |  
|--------------------------------------------- | - | ---------- | - | - | ---------- | - | - | --------- | - | - | ---------------- | -
|                                              |   |            |   |   |            |   |   |           |   |   | from February    |  
|                                              |   |            |   |   |            |   |   |           |   |   | 28, 1989 (Date   |  
|                                              |   |            |   |   |            |   |   |           |   |   | of Inception) to |  
|                                              |   |            |   |   |            |   |   |           |   |   | December 31,     |  
|                                              |   | 2002       |   |   | 2001       |   |   | 2000      |   |   | 2002             |  
|General and Administrative Expenses           |   |            |   |   |            |   |   |           |   |   |                  |  
|Accounting and audit
      fees               | $ | 10,602     |   | $ | 18,892     |   | $ | 5,886     |   | $ | 44,157           |  
|Amortization                                  |   | 581        |   |   | 341        |   |   | -         |   |   | 1,672            |  
|Consulting fees 
      Note 7                |   | 161,901    |   |   | 1,349,563  |   |   | 165,840   |   |   | 1,693,504        |  
|Filing fees                                   |   | 2,563      |   |   | 3,448      |   |   | 5,189     |   |   | 11,500           |  
|Interest  Note
      7                       |   | 1,641      |   |   | 4,020      |   |   | -         |   |   | 5,661            |  
|Investor relations                            |   | -          |   |   | 50,502     |   |   | -         |   |   | 50,502           |  
|Legal fees                                    |   | 12,077     |   |   | 22,261     |   |   | 13,584    |   |   | 96,474           |  
|Management fees 
      Note 7                |   | -          |   |   | 63,000     |   |   | 42,000    |   |   | 112,000          |  
|Office and general
      expenses Note 7     |   | 8,087      |   |   | 15,716     |   |   | 6,572     |   |   | 101,499          |  
|Rent  Note 7                                 |   | 5,383      |   |   | 6,198      |   |   | 6,057     |   |   | 25,995           |  
|Telephone expense                             |   | 6,284      |   |   | 7,097      |   |   | 7,112     |   |   | 25,195           |  
|Transfer agent fees                           |   | 5,639      |   |   | 7,715      |   |   | 2,976     |   |   | 20,746           |  
|Travel and promotion                          |   | -          |   |   | 4,938      |   |   | 2,508     |   |   | 13,748           |  
|Non-cash compensation
      charge  Note 6   |   | -          |   |   | 136,378    |   |   | 78,707    |   |   | 215,085          |  
|                                              |   |            |   |   |            |   |   |           |   |   |                  |  
|Loss before the following:                    |   | (214,758   | ) |   | (1,690,069 | ) |   | (336,431  | ) |   | (2,417,738       | )
|Unauthorized distribution                     |   | -          |   |   | -          |   |   | -         |   |   | (69,116          | )
|Gain on settlement
      of debt              |   | -          |   |   | -          |   |   | -         |   |   | 15,464           |  
|Write-down of advances
      to related party |   |            |   |   |            |   |   |           |   |   |                  |  
|
      Note 6                                |   | -          |   |   | (606,337   | ) |   | -         |   |   | (606,337         | )
|                                              |   |            |   |   |            |   |   |           |   |   |                  |  
|Net loss for the period                       | $ | (214,758   | ) | $ | (2,296,406 | ) | $ | (336,431  | ) | $ | (3,077,727       | )
|                                              |   |            |   |   |            |   |   |           |   |   |                  |  
|                                              |   |            |   |   |            |   |   |           |   |   |                  |  
|Basic loss per share                          | $ | (0.02      | ) | $ | (0.19      | ) | $ | (0.03     | ) |   |                  |  
|                                              |   |            |   |   |            |   |   |           |   |   |                  |  
|Weighted average number of common shares      |   |            |   |   |            |   |   |           |   |   |                  |  
|Outstanding                                   |   | 13,050,725 |   |   | 12,193,953 |   |   | 9,986,330 |   |   |                  |  
|                                              |   |            |   |   |            |   |   |           |   |   |                  |  

SEE ACCOMPANYING NOTES

11

---



SEE ACCOMPANYING NOTES

12

---



SEE ACCOMPANYING NOTES

13

---



SEE ACCOMPANYING NOTES

14

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STRATEGIC INTERNET INVESTMENTS, INCORPORATED
  (A Development Stage Company)
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  for years ended December 31, 2002, 2001 and 2000
  and the period from February 28, 1989 (Date of Inception) to December 31, 2002
  (Stated in U.S. Dollars)

|                                                    |   |          |   |   |              |   |   |          |   |   | Cumulative      |  
|--------------------------------------------------- | - | -------- | - | - | ------------ | - | - | -------- | - | - | --------------- | -
|                                                    |   |          |   |   |              |   |   |          |   |   | from February   |  
|                                                    |   |          |   |   |              |   |   |          |   |   | 28, 1989        |  
|                                                    |   |          |   |   |              |   |   |          |   |   | (Date of Incep- |  
|                                                    |   |          |   |   |              |   |   |          |   |   | tion) to        |  
|                                                    |   |          |   |   |              |   |   |          |   |   | December 31,    |  
|                                                    |   | 2002     |   |   | 2001         |   |   | 2000     |   |   | 2002            |  
|Cash flows used in operating activities:            |   |          |   |   |              |   |   |          |   |   |                 |  
|Net loss                                            | $ | (214,758 | ) | $ | ( 2,296,406) |   | $ | (336,431 | ) | $ | ( 3,077,727)    |  
|Adjustments to reconcile net loss to
      net cash |   |          |   |   |              |   |   |          |   |   |                 |  
|used in operations:                                 |   |          |   |   |              |   |   |          |   |   |                 |  
|Amortization                                        |   | 581      |   |   | 341          |   |   | -        |   |   | 1,672           |  
|Consulting
      fees                               |   | -        |   |   | -            |   |   | -        |   |   | 6,200           |  
|Gain
      on settlement of debt                    |   | -        |   |   | -            |   |   | -        |   |   | (15,464         | )
|Issue
      of stock pursuant to a consulting       |   |          |   |   |              |   |   |          |   |   |                 |  
|Agreement                                           |   | 103,400  |   |   | 1,351,587    |   |   | -        |   |   | 1,454,987       |  
|Management
      fees                               |   | -        |   |   | -            |   |   | -        |   |   | 7,000           |  
|Non-cash
      compensation charge                  |   | -        |   |   | 136,378      |   |   | 78,707   |   |   | 215,085         |  
|Write-down
      of advance to related party        |   | -        |   |   | 606,337      |   |   | -        |   |   | 606,337         |  
|Changes in non-cash items:                          |   |          |   |   |              |   |   |          |   |   |                 |  
|Advance
      to related party                      |   | -        |   |   | (281,337     | ) |   | (325,000 | ) |   | (606,337        | )
|Accounts
      payable                              |   | 60,187   |   |   | 124,523      |   |   | 230,398  |   |   | 459,260         |  
|Due
      to related party                          |   | 8,358    |   |   | (15,899      | ) |   | 13,707   |   |   | 64,938          |  
|                                                    |   |          |   |   |              |   |   |          |   |   |                 |  
|Net cash used in operating activities               |   | (42,232  | ) |   | (374,476     | ) |   | (338,619 | ) |   | (884,049        | )
|                                                    |   |          |   |   |              |   |   |          |   |   |                 |  
|Cash flow used in investing activities              |   |          |   |   |              |   |   |          |   |   |                 |  
|Organization costs                                  |   | -        |   |   | -            |   |   | -        |   |   | (750            | )
|Acquisition of capital assets                       |   | -        |   |   | (2,278       | ) |   | -        |   |   | (2,278          | )
|                                                    |   |          |   |   |              |   |   |          |   |   |                 |  
|Net cash used in investing activities               |   | -        |   |   | (2,278       | ) |   | -        |   |   | (3,028          | )
|                                                    |   |          |   |   |              |   |   |          |   |   |                 |  
|Cash flows from financing activities:               |   |          |   |   |              |   |   |          |   |   |                 |  
|Bank indebtedness                                   |   | 19       |   |   | -            |   |   | -        |   |   | 19              |  
|Loans payable                                       |   | 42,157   |   |   | 70,687       |   |   | -        |   |   | 112,844         |  
|Proceeds from issuance of common stock              |   | -        |   |   | 304,742      |   |   | 340,000  |   |   | 776,042         |  
|Payment of offering costs                           |   | -        |   |   | -            |   |   | -        |   |   | (27,270         | )
|Contributed capital                                 |   | -        |   |   | -            |   |   | -        |   |   | 25,442          |  
|                                                    |   |          |   |   |              |   |   |          |   |   |                 |  
|Net cash provided by financing activities           |   | 42,176   |   |   | 375,429      |   |   | 340,000  |   |   | 887,077         |  
|                                                    |   |          |   |   |              |   |   |          |   |   |                 |  

SEE ACCOMPANYING NOTES

15

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Continued

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  for years ended December 31, 2002, 2001 and 2000
  and the period from February 28, 1989 (Date of Inception) to December 31, 2002(Stated in U.S. Dollars)

|                                     |   |       |   |   |        |   |   |       |  |   | Cumulative      | 
|------------------------------------ | - | ----- | - | - | ------ | - | - | ----- |  | - | --------------- | 
|                                     |   |       |   |   |        |   |   |       |  |   | from February   | 
|                                     |   |       |   |   |        |   |   |       |  |   | 28, 1989        | 
|                                     |   |       |   |   |        |   |   |       |  |   | (Date of Incep- | 
|                                     |   |       |   |   |        |   |   |       |  |   | tion) to        | 
|                                     |   |       |   |   |        |   |   |       |  |   | December 31,    | 
|                                     |   | 2002  |   |   | 2001   |   |   | 2000  |  |   | 2002            | 
|                                     |   |       |   |   |        |   |   |       |  |   |                 | 
|Net increase (decrease) in cash      |   | (56   | ) |   | (1,325 | ) |   | 1,381 |  |   | -               | 
|                                     |   |       |   |   |        |   |   |       |  |   |                 | 
|Cash, beginning of period            |   | 56    |   |   | 1,381  |   |   | -     |  |   | -               | 
|                                     |   |       |   |   |        |   |   |       |  |   |                 | 
|Cash, end of period                  | $ | -     |   | $ | 56     |   | $ | 1,381 |  | $ | -               | 
|                                     |   |       |   |   |        |   |   |       |  |   |                 | 
|Supplemental disclosure of cash flow |   |       |   |   |        |   |   |       |  |   |                 | 
|information:                         |   |       |   |   |        |   |   |       |  |   |                 | 
|Cash paid for:                       |   |       |   |   |        |   |   |       |  |   |                 | 
|Interest                             | $ | 1,641 |   | $ | 4,020  |   | $ | -     |  | $ | 5,661           | 
|                                     |   |       |   |   |        |   |   |       |  |   |                 | 
|Income
      taxes                   | $ | -     |   | $ | -      |   | $ | -     |  | $ | -               | 
|                                     |   |       |   |   |        |   |   |       |  |   |                 | 
|                                     |   |       |   |   |        |   |   |       |  |   |                 | 
|                                     |   |       |   |   |        |   |   |       |  |   |                 | 
|Non-Cash Transactions - Note 11      |   |       |   |   |        |   |   |       |  |   |                 | 

SEE ACCOMPANYING NOTES

16

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STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  December 31, 2002 and 2001
  (Stated in U.S. Dollars)



|Note 1 | Nature and Continuance of Operations
      The Company is in the development stage and is devoting
        its efforts to locating merger candidates.
      These financial statements have been prepared on a going
        concern basis. The Company has accumulated a deficit of $3,077,727 since
        inception and at December 31, 2002 has a working capital deficiency of
        $311,530. 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 year ended December 31, 2003
        by issuing equity securities. These financial statements do not include
        any adjustments to the amount and classification of assets and liabilities
        that may be necessary should the Company be unable to continue as a going
        concern.
      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.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Note 2 | Summary of Significant Accounting Policies
      The 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 judgement. Actual results could differ from
        those estimates.
      The financial statements have, in managements
        opinion, been properly prepared within reasonable limits of materiality
        and within the framework of the significant accounting policies summarized
        below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Note 2 | Summary of Significant Accounting Policies  (contd)
      Principles of Consolidation
      These consolidated financial statements included the
        accounts of the Company and its wholly-owned subsidiaries Strategic Internet
        Investment Canada and 8351630 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 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.
      Capital Assets and Amortization
      Capital assets are recorded at cost and consist of computer
        equipment. The Company provides for amortization using the declining balance
        method at the rate of 30% per annum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

SEE ACCOMPANYING NOTES

/Contd. 17

---

|       | 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.
      Income Taxes
      The Company follows Statement of Financial Accounting
        Standard, No. 109, Accounting for Income Taxes (FAS
        109) which requires the use of the asset and liability method of
        accounting of income taxes. Under the assets and liability method of FAS
        109, deferred tax assts 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.
      Basic Loss Per Share
      The Company reports basic loss per share in accordance
        with Statement of Financial Accounting Standards No. 128, Earnings
        Per Share. Basic loss per share is computed using the weighted average
        number of shares outstanding during the years. Diluted loss per share
        has not been provided as it would be antidilutive.
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Note 2 | Summary of Significant Accounting Policies  (contd)
      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 then date of the transaction, in accordance with Statement
        of Financial Accounting Standards 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.
      Fair Value of Financial Instruments
      The carrying value of cash, bank indebtedness, accounts
        payable, due to related parties and loans payable approximates fair value
        because of the short maturity of these instruments. The long-term portion
        of loans payable also approximates fair value. 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 has elected to account for stock-based compensation
        following APB No. 25, Accounting for Stock Issued to Employees,
        and provide the disclosures required under SFAS No. 123, Accounting
        for Stock-based Compensation (Note 5).                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Note 3 | Prepaid Expense
      Prepaid expense consists of $28,000 of prepaid consulting
        fees. These consulting fees were paid by way of the issuance of a total
        of 80,000 common shares at $0.35 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Note 4 | Capital Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

| |                    |   |       |  |   | 2002         |  |   |       |  |  |   | 2001  | 
| | ------------------ | - | ----- |  | - | ------------ |  | - | ----- |  |  | - | ----- | 
| |                    |   |       |  |   |              |  |   |       |  |  |   |       | 
| |                    |   |       |  |   | Accumulated  |  |   |       |  |  |   |       | 
| |                    |   | Cost  |  |   | Amortization |  |   | Net   |  |  |   | Net   | 
| | Computer equipment | $ | 2,278 |  | $ | 922          |  | $ | 1,356 |  |  | $ | 1,937 | 
| |                    |   |       |  |   |              |  |   |       |  |  |   |       | 

|Note 5 | Deferred Investment Costs Deferred investment
        costs consist of consultants fees with respect to the acquisition of Gulf
        Star World Development W.L.L. (Note 6).
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                
|Note 6 | Capital Stock  Notes 8 and 12
      Class A Convertible Preferred Shares                                                                                                      

18

---

| | On November 15, 2002, the Company filed a Certificate
        of Designation for Class A Convertible Preferred Shares with the State
        of Delaware. These Classs A shares have a par value of $0.001 and are
        convertible to common shares at either $4.00 per share or the average
        of twenty consecutive days closing prices which shall not be less than
        $1.50 per share or greater than $6.00 per share.
      Commitments
      Stock Option Plan
      The Companys board of directors approved an employees
        stock option plan. The plan allows for the granting of share purchase
        options 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
      Effective October 23, 2000, the Company granted stock
        options to officers, directors and employees of the Company and consultants
        to the Company to purchase common shares of the Company at the closing
        price of the Companys common stock on the date of the grant. Options
        are not granted to anyone other than the aforementioned individuals. The
        options have been granted with a term of 5 years. There are specific vesting
        requirements under the options discussed below.
      Presented below is a summary of the stock option activity for the years
        shown:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                             | December 31, 2002 |   | December 31, 2001 | 
| | --------------------------- | ----------------- | - | ----------------- | 
| |                             |                   |   |                   | 
| |                             |                   |   | Weighted          | 
| |                             | Number of         |   | Average           | 
| |                             | Stock             |   | Exercise          | 
| |                             | Options           |   | Price             | 
| | Outstanding at beginning of |                   |   |                   | 
| | year                        | 805,000           |   | $0.50             | 
| | Cancelled                   | (540,000          | ) | $0.50             | 
| |                             |                   |   |                   | 
| | Outstanding at end of year  | 265,000           |   | $0.50             | 
| |                             |                   |   |                   | 
| | Exercisable at end of year  | 265,000           |   | -                 | 
| |                             |                   |   |                   | 

|       | The Company grants stock options at exercise prices
        equal to the fair market value of the Companys stock at the date
        of the grant. Pursuant to APBO No. 25, the compensation charge associated
        with consultants options has been recorded in the financial statements.
        The compensation charge associated with employees options (officers,
        directors and employees) is not recognized in the financial statements
        but included in the pro-forma amounts.
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Note 6 | Capital Stock  Notes 8 and 12  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       | Commitments  (contd)
      Stock-based Compensation (contd)
      For the years ending December 31, 2001 and 2000, total
        non-cash compensation charge determined is $393,507. As the stock options
        have a graded vesting schedule, the total compensation cost is recognized
        on a straight-line basis over a 12 month period as follows:                                                                                                                                        

| |                             |   |      |  |   |         |  |   |         |  |   | Cumulative    | 
| | --------------------------- | - | ---- |  | - | ------- |  | - | ------- |  | - | ------------- | 
| |                             |   |      |  |   |         |  |   |         |  |   | from          | 
| |                             |   |      |  |   |         |  |   |         |  |   | February 28,  | 
| |                             |   |      |  |   |         |  |   |         |  |   | 1989 (Date of | 
| |                             |   |      |  |   |         |  |   |         |  |   | Inception)    | 
| |                             |   |      |  |   |         |  |   |         |  |   | December 31,  | 
| |                             |   | 2002 |  |   | 2001    |  |   | 2000    |  |   | 2002          | 
| | Total non-cash compensation |   |      |  |   |         |  |   |         |  |   |               | 
| | charge determined           | $ | -    |  | $ | 249,222 |  | $ | 144,285 |  | $ | 393,507       | 
| | Consultants non-cash       |   |      |  |   |         |  |   |         |  |   |               | 

| | compensation charge recognized |   | - |  |  | (136,378 | ) |   | (78,707 | ) |   | (215,085 | )
| | ------------------------------ | - | - |  |  | -------- | - | - | ------- | - | - | -------- | -
| | Employees non-cash            |   |   |  |  |          |   |   |         |   |   |          |  
| | compensation charge            | $ | - |  |  | 112,844  |   | $ | 65,578  |   | $ | 178,422  |  
| |                                |   |   |  |  |          |   |   |         |   |   |          |  

19

---

| | Under SFAS No. 123, if the Company elects to follow
        APBO No. 25, in respect to the employees stock options, it is required
        to present pro-forma information as to the effect on income and earnings
        per share as if the Company had accounted for its employee stock options
        under the fair value method of that statement. Had compensation cost been
        determined based on the fair value at the grant dates for those options
        issued to officers, directors and employees, the Companys net loss
        and loss per share would have been adjusted to the pro-forma amounts indicated
        below:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                      |             |   |          |   |   |            |   |   |          |   |   | Cumulative    |  
| | -------------------- | ----------- | - | -------- | - | - | ---------- | - | - | -------- | - | - | ------------- | -
| |                      |             |   |          |   |   |            |   |   |          |   |   | from          |  
| |                      |             |   |          |   |   |            |   |   |          |   |   | February 28,  |  
| |                      |             |   |          |   |   |            |   |   |          |   |   | 1989 (Date of |  
| |                      |             |   |          |   |   |            |   |   |          |   |   | Inception)    |  
| |                      |             |   |          |   |   |            |   |   |          |   |   | December 31,  |  
| |                      |             |   | 2002     |   |   | 2001       |   |   | 2000     |   |   | 2002          |  
| | Net loss             | As reported | $ | (214,758 | ) | $ | (2,296,406 | ) | $ | (336,431 | ) | $ | (3,077,727    | )
| |                      | Pro-forma   | $ | (214,758 | ) | $ | (2,409,250 | ) | $ | (402,009 | ) | $ | (3,256,149    | )
| |                      |             |   |          |   |   |            |   |   |          |   |   |               |  
| | Basic loss per share | As reported | $ | (0.02    | ) | $ | (0.19      | ) | $ | (0.03    | ) | $ | -             |  
| |                      | Pro-forma   | $ | (0.02    | ) | $ | (0.20      | ) | $ | (0.04    | ) | $ | -             |  

|Note 6 | Capital Stock  Notes 8 and 12  (contd)                                                                                                                              
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                        
|       | Commitments  (contd)
      Stock-based Compensation  (contd)
      The weighted average fair value at date of grant of the options granted
        were as follows:

| |                                         |   | 2000    | 
| | --------------------------------------- | - | ------- | 
| | Weighted average fair value             | $ | .49     | 
| | Total options granted                   |   | 805,000 | 
| | Total fair value of all options granted | $ | 393,507 | 

| | The fair value of each option grant was estimated
        on the date of the grant using the Black-Scholes option-pricing model
        with the following assumptions:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                         | 2000  | 
| | ----------------------- | ----- | 
| | Expected dividend yield | 0.0%  | 
| | Expected volatility     | 200%  | 
| | Risk-free interest rate | 5.00% | 
| | Expected term in years  | 5     | 

| | Share Purchase Warrants
        At December 31, 2002 there were 350,000 share purchase warrants outstanding
          entitling the holders thereof the right to purchase one common share
          at $0.70 per share for each warrant held. These options expire on September
          11, 2003.
        Acquisition of Gulf Star World Development W.L.L.
        By a letter of agreement dated July 11, 2002, amended October 10,
          2002 and May 10, 2003, 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.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20

---

|Note 6 | Capital Stock  Notes 8 and 12  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | Commitments  (contd)
      Acquisition of Gulf Star World Development W.L.L.  (contd)
      To acquire 80% of Gulf Star, the Company must issue
        five million common shares at a deemed price of $0.125 per share. The
        shares are to be issued over a three year period as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | v)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | In addition, the Company shall make two cash payments to
        Star Leisure totalling US$100,000 to cover a portion of hard costs accumulated
        by Star Leisure in progressing the Dream Island Project. The first $50,000
        will be paid on or before October 11, 2003. The second $50,000 will be
        paid on or before January 11, 2004. Subsequent to December 31, 2003, the
        Company paid US$35,200 as partial payment toward the October 11, 2003
        payment. The Company has also agreed to reimburse Star Leisure and Jzala
        Investment Group (20% shareholder of Gulf Star) for hard 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 will be obligated to issue
        $5,075,000 face value Class A Convertible Preferred shares as full payment
        (1,268,750 Class A Convertible Preferred Shares).
      Subsequent to December 31, 2002, the Company issued these shares in
        escrow which will be released in stages as the dredging contract progresses.
        An agents fee of 0.5% of the value of the shares released will be
        payable.
      Plan of Reorganization
      The Company by a plan of reorganization dated July 31, 2000 and amended
        March 31, 2001 intended to acquire 100% of Canarab Technology Limited
        (CAT), a Yukon corporation by issuing 5,280,907 common shares
        and pay $20,000 to CAT. CAT is related to the Company by virtue of a common
        director.
      Effective December 31, 2001, management of the Company abandoned its
        plan of reorganization and has written-off total advances at December
        31, 2001 of $606,337.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Note 7 | Related Party Transactions  Notes 6 and 8
      The Company was charged the following by a director
        of the Company, by companies with common directors or by a significant
        shareholder of the Company:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

| |                             |   |      |  |   |         |  |   |        |  |   | Cumulative    | 
| | --------------------------- | - | ---- |  | - | ------- |  | - | ------ |  | - | ------------- | 
| |                             |   |      |  |   |         |  |   |        |  |   | from          | 
| |                             |   |      |  |   |         |  |   |        |  |   | February 28,  | 
| |                             |   |      |  |   |         |  |   |        |  |   | 1989 (Date of | 
| |                             |   |      |  |   |         |  |   |        |  |   | Inception) to | 
| |                             |   |      |  |   |         |  |   |        |  |   | December 31,  | 
| |                             |   | 2002 |  |   | 2001    |  |   | 2000   |  |   | 2002          | 
| | Consulting fees             | $ | -    |  | $ | 29,470  |  | $ | -      |  | $ | 35,670        | 
| | Interest                    |   | 695  |  |   | -       |  |   | -      |  |   | 695           | 
| | Management fees             |   | -    |  |   | 63,000  |  |   | 42,000 |  |   | 112,000       | 
| | Office and general expenses |   | -    |  |   | 10,050  |  |   | 6,159  |  |   | 23,019        | 
| | Rent                        |   | -    |  |   | 6,198   |  |   | 6,057  |  |   | 20,612        | 
| |                             |   |      |  |   |         |  |   |        |  |   |               | 
| |                             | $ | 695  |  | $ | 108,718 |  | $ | 54,216 |  | $ | 191,996       | 
| |                             |   |      |  |   |         |  |   |        |  |   |               | 

21

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These charges were measured by the exchange amount, which is the amount agreed
  upon by the transacting parties.

At December 31, 2002, accounts payable includes $90,441 (2001: $134,022) due
  to directors of the Company and companies controlled by directors of the Company
  in respect to unpaid management fees.

At December 31, 2002 and 2001, due to related parties are comprised of expenses
  for operating costs paid on behalf of the Company by companies with common directors.
  These amounts are non-interest bearing, unsecured and there are no specific
  terms for repayment.

|Note 8 | Loanspayable  Note 12 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        |         |        |       
|------ | ---------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ------ | ------ | ------- | ------ | ------
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        | 2002    |        |       
|       | i)                     | Loan payable to
        a shareholder. This loan is unsecured, non-interest bearing and repayable
        on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                             |        |        |         |        |       
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $                                                                                                                                                           | 13,837 |        | $       | 13,837 |       
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        |         |        |       
|       | ii)                    | Loan payable to companies
        controlled by directors of the Company. $50,000 is unsecured, non-interest
        bearing and repayable no later than July 15, 2003. The balance of $15,693
        is unsecured, bears interest at 10% per annum and is repayable not later
        than July 16, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                             |        | 65,693 |         |        | 50,000
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        |         |        |       
|       | iii)                   | Loan payable to a shareholder
        including accrued interest of 1,385 (2001: $815).The loan is unsecured,
        bears interest at 8% per annum and is repayable upon demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                             |        | 7,420  |         |        | 6,850 
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        |         |        |       
|       | iv)                    | Loan payable to
        a shareholder pursuant to a Convertible Loan Agreement. Interest is calculated
        at 10% per annum. This loan matures not later than December 31, 2004.
        The lender may, at any time, convert the principal sum plusaccrued interest
        into units of the Company. Each unit will consist of one common share
        plus one common share purchase warrant. Any conversion by the Lender of
        the Loan and/or accrued interest into equity as contemplated under the
        Agreement shall occur at a discount, as specified below, to the ten (10)
        day average market closing price, calculated from the ten business days
        immediately preceding a loan draw date, (the Average Price),
        of the Borrowers common stock as quoted through the facilities of the
        OTC:BB. The Conversion Rate will be calculated as follows: |                                                                                                                                                             |        |        |         |        |       
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        |         |        |       
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        |         |        |       
|       |                        | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | The Conversion Rate will be deemed to
        be $0.05 per unit for all Loan Draws where the Average Price is less than
        or equal to $0.10 per share |        |        |         |        |       
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        |         |        |       
|       |                        | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Average Price less than or equal to
        $0.25 per share and more than $0.10 per share, discount is 40%;                                                 |        |        |         |        |       
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        |         |        |       
|       |                        | iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Average Price less than or equal to
        $0.50 per share and more than $0.25 per share, discount is 50%;                                                 |        |        |         |        |       
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        |         |        |       
|       |                        | iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Average price more than $0.50 per share
        discount will be 60%.                                                                                       |        |        | 25,894  |        |       
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        |         |        |       
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        | 112,844 |        |       
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Less: current portion                                                                                                                                       |        |        | (86,950 | )      |       
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        |         |        |       
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        | $      | 25,894  |        | $     
|       |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                             |        |        |         |        |       

22

---

|Note 9 | Deferred Tax Assets
      The following table summarizes the significant components of the Companys
        deferred tax assets:
|------ | ---------------------------------------------------------------------------------------------------------------------------------

| |                                            |   | Total      |  
| | ------------------------------------------ | - | ---------- | -
| | Deferred Tax Assets                        |   |            |  
| | Loss carryforwards                         | $ | 1,051,685  |  
| |                                            |   |            |  
| | Gross deferred tax assets                  | $ | 1,051,685  |  
| | Valuation allowance for deferred tax asset |   | (1,051,685 | )
| |                                            |   |            |  
| |                                            | $ | -          |  
| |                                            |   |            |  

|        | The amount taken into income as deferred tax assets must reflect that
      portion of the income tax loss carryforwards which is likely 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.                             
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                               
|Note 10 | Income Taxes                                                                                                                                                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                                               
|        | At December 31, 2002, the Company has net operating
        loss carryforwards which expire commencing in 2010 totalling approximately
        $3,093,000. The Company has a capital loss carryforward which expires
        in 2006, totalling approximately $606,000. The potential tax benefits
        of these losses have not been recorded in the financial statements.
|        |                                                                                                                                                                                                                                                                                                                                                                               
|Note 11 | Non-Cash Transactions                                                                                                                                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                                               
|        | Investing and financing activities that do not have
        a direct impact on cash flows are excluded from the statement of cash
        flows. The Company issued common shares for services provided to the Company
        during the following years:                                                                                                                    

| |      |  |               |  |           |  |         | 
| | ---- |  | ------------- |  | --------- |  | ------- | 
| |      |  |               |  | Average   |  |         | 
| |      |  | Number of     |  | Price     |  |         | 
| |      |  | Common Shares |  | Per Share |  | $       | 
| |      |  |               |  |           |  |         | 
| | 1995 |  | 50,000        |  | $0.03     |  | 1,500   | 
| | 1998 |  | 7,000,000     |  | $0.001    |  | 7,000   | 
| | 1998 |  | 620,000       |  | $0.01     |  | 6,200   | 
| | 2001 |  | 233,333       |  | $0.50     |  | 116,667 | 
| | 2002 |  | 680,886       |  | $0.12     |  | 138,006 | 
| | 2002 |  | 1,380,000     |  | $0.07     |  | 93,000  | 
| |      |  |               |  |           |  |         | 
| |      |  | 9,964,219     |  |           |  | 362,373 | 
| |      |  |               |  |           |  |         | 



| | These amounts have been excluded from the statement of
        cash flows. Note 12 Subsequent Events  Note 6
      Subsequent to December 31, 2002, the Company:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                  
| | i)                                                                                                                                                               
| |                                                                                                                                                                  
| | ii)                                                                                                                                                              
| |                                                                                                                                                                  

Item 8 Changes In and Disagreements With Accountants on
  Accounting and Financial Disclosure

Amisano Hanson, Chartered Accountants, of Vancouver, British
  Columbia, were appointed as auditors for the Company for the fiscal year 1998.
  Prior auditors for the Company for the fiscal years 1991 through 1997 were A.J.
  Robbins & Company, CPA's, of Denver, Colorado. The decision to change auditors
  was recommended and approved by the board of directors in the course of business
  as there was a change of control and new directors in 1998 who resolved to have
  the auditing services located in the Vancouver area where the Company was headquartered.

23

---

In connection with Audits of the two most recent fiscal years
  and any interim period preceding resignation, no disagreements exist with any
  former accountant or auditor on any matter of accounting principles or practices,
  financial statement disclosurre, or auditing scope of procedure, which disagreements
  if not resolved to the satisfaction of the former accountant or auditor would
  have caused him to make reference in connection with his report to the subject
  matter of the disagreements.

The principal auditor's report on the financial statements
  for any of the past two years contained no adverse opinion or a disclaimer of
  opinion nor was there any qualification as to uncertainty, audit scope or accounting
  principles except for the "going concern" qualification

PART III

Item 10 Directors, Executive Officers,
  Promoters and Control Persons; Compliance With Section 16(a) of the Exchange
  Act

(a) The directors and executive officers of the Company as at December 31, 2002 are as follows:

|Name           | Age | Position      
|-------------- | --- | --------------
|               |     |               
|Ralph Shearing | 46  | President, CEO
|               |     |               
|Abbas Salih    | 55  | Chairman      

Each director and executive officer of the Company is elected
  at the Annual Meeting of Shareholders to hold office until the next Annual Meeting
  of Shareholders and until his successor has been elected and qualified. Any
  director appointed to fill a vacancy on the board shall serve for the unexpired
  term of his predecessor. Officers of the Company are elected at the Annual Meeting
  of the Board of Directors to serve until the next Annual Meeting of the Board
  of Directors and until a successor has been duly elected and qualified. A vacancy
  in any office may be filled by the Board of Directors for the unexpired term
  of the departing officer.

Ralph Shearing was appointed as a Director and President in
  December, 1998 and Abbas Salih was appointed Chairman of the Board on October
  7, 1998.

RALPH E. SHEARING,B.Sc., P.Geol., Age 45,
  President and CEO

Mr. Shearing has been President and Director of the Company
  since December, 1998. Mr. Shearing graduated from the University of British
  Columbia in 1981 with a Bachelor of Science Degree in Geology and immediately
  began practicing his profession in Canada on numerous large scale mining projects.
  In 1985 he and a colleague founded Quest Canada Drilling Ltd., a very successful
  diamond drilling company, and, in 1986, he founded Soho Resources Corp., a petroleum
  exploration company currently listed on the Canadian Venture Exchange (symbol
  "SOH"). Mr. Shearing also serves on the Board of Mantle Minerals Corp., a Canadian
  diamond exploration company.

With over fourteen years of senior level public company management
  experience, Mr. Shearing is well qualified and competent to preside over the
  Board of Ohio.

ABBAS SALIH, Age 55 Chairman of the Board/Secretary

Mr. Salih has been a Director and Chairman of the Board since
  October, l998. Mr. Salih is a graduate of the Khartoum Technical Institute in
  the Sudan. He received his formal training while serving as a member of the
  Sudan Royal Air Force which included attendance at the British Royal Air Force
  Academy, Newton No. 9 in Nottingham, England, where he studied aircraft electronics
  and instrumentation.

After his British training, Mr. Salih received further aviation
  training in Kyrgyzstan, Southern Russia, as a guest of the Russian Air Force
  where he studied and maintained MIG - 21 jet aircraft.

Mr. Salih has conducted business in Europe and the Middle
  East, most extensively in Germany and the Sudan, prior to taking residence in
  Canada in l994. He and several associates formed Regions International Investment
  Company Limited (RIICO) in l989,

24

---

|the largest trucking company in the Sudan with
      a fleet of 125 tanker/cargo transport vehicles. As a Director of RIICO Mr.
      Salih was instrumental in securing a $20 Million financing for the company's
      initial capital requirements. Mr. Salih joined the Board of Directors of
      Arab Group International for Investment and Acquisitions (AGIIA) during
      1992 and was instrumental in arranging the acquisition of the controlling
      share interest in the Ohio & Southwestern Energy Company. Mr. Salih's
      Middle Eastern and European contacts plus his experience in arranging financing
      for large projects, allows Ohio access to significant foreign resources
      including people and potential capital.                                                                                                                                                                  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Compliance With Section 16(a) of the Exchange
        Act
      Section 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, 2002.
      Item 11 Executive Compensation
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

25

---



|              | 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 8 employees including
        directors and officers have been granted share purchase options to acquire
        a total of 380,000 common shares of the Company at a price of $0.20 per
        share. The President of the Company and the Chairman of the Board have
        been granted 95,000 share purchase options each under the Plan.
|------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(b)
      (1) | Summary Compensation Table                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

SUMMARY COMPENSATION TABLE OF EXECUTIVE OFFICERS

|                   |  |      |                     |        |              | Longterm Compensation | 
|------------------ |  | ---- | ------------------- | ------ | ------------ | --------------------- | 
|                   |  |      | Annual Compensation | Awards |             
|(a)                |  | (b)  | (c)                 | (d)    | (e)          | (f)                   | 
|Name and           |  | Year | Salary              | Bonus  | Other Annual | Restricted            | 
|Principal          |  |      |                     |        | Compensation | Stock                 | 
|Position           |  |      |                     |        |              | Awards                | 
|                   |  |      | $                   | $      | $            | $                     | 
|                  
|                   |  |      |                     |        |              |                       | 
|Ralph Shearing     |  | 2002 | 0                   | 0      | 0            | 0                     | 
|Director/President |  | 2001 | 0                   | 0      | 31,500       | 0                     | 
|                   |  | 2000 | 0                   | 0      | 21,000       | 0                     | 
|                   |  |      |                     |        |              |                       | 
|Abbas Salih        |  | 2002 | 0                   | 0      | 0            | 0                     | 
|Director/Chairman/ |  | 2001 | 0                   | 0      | 31,500       | 0                     | 
|Secretary          |  | 2000 | 0                   | 0      | 21,000       | 0                     | 

| | (b)
      (2)(iv) Other than the share purchase options detailed under column
        (g) there were no other long-term compensation awards or pay-outs in the
        last fiscal year ending December 31, 2002.
      (b)
      (2)(v) There was no other compensation for the fiscal year ended December
        31, 2002.
      (c) Option/SAR Grants Table
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|               |  | Option/SAR Grants in Last
      Fiscal Year |                      |  
|-------------- |  | ------------------------------------------- | -------------------- | -
|               |  |                                             |                      |  
|               |  |                                             | Individual Grants    |  
|(a)            |  | (b)                                         | (c)                  |  
|               |  |                                             |                      |  
|Name           |  | Number of                                   | % of Total Options/  |  
|               |  | Securities Underlying                       | Granted to Employees |  
|               |  | Options/SAR's Granted                       | in Fiscal Year       |  
|               |  |                                             |                      |  
|Ralph Shearing |  | 95,000                                      | 9.50                 | $
|(Director)     |  |                                             |                      |  
|               |  |                                             |                      |  
|Abbas Salih    |  | 95,000                                      | 9.50                 | $
|(Director)     |  |                                             |                      |  

26

---

| | (d)  Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR
      Value Table
| | -------------------------------------------------------------------------------------

|               |             |  | Aggregate Option/SAR Exercises
      in Last Fiscal Year and | 
|-------------- | ----------- |  | ------------------------------------------------------------ | 
|               |             |  | Fiscal Year-End Option/SAR
      Values                      | 
|(a)            | (b)         |  | (c)                                                          | 
|               |             |  |                                                              | 
|Name           | Shares      |  | Value                                                        | 
|               | Acquired on |  | Realized                                                     | 
|               | Exercise(#) |  | ($)                                                          | 
|               |             |  |                                                              | 
|               |             |  |                                                              | 
|               |             |  |                                                              | 
|Ralph Shearing | $0.00       |  | $0.00                                                        | 
|               |             |  |                                                              | 
|Abbas Salih    | $0.00       |  | $0.00                                                        | 

|(e) | Long-Term Incentive Plan ("LTIP") Awards
        Table
      None. Not Applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(f) | Compensation of Directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(g) | Employment Contracts and Termination of
        Employment and Change In Control Arrangements
        (1)Effective July 1, 2000 the Company entered into two Management Services
        Agreements, one with the Chairman of the Board of the Company, Abbas Salih,
        and one with CMB Investments Ltd., a company controlled by the President
        of the Company, Ralph Shearing.
      Both of the above Management Services Agreements were voluntarily terminated
        by written Notice of the Contractors, effective September 30, 2001.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(h) | Report on Repricing of Options/SAR's                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Item 12    Security Ownership of Certain Beneficial
  Owners and Management

(a) The following table sets forth information, as at December
  31, 2002, as to the names and addresses and the number of shares of common stock
  of the Company owned of record or beneficially owned by each individual known
  by the Company to be the beneficial owner of more than five percent of the outstanding
  common stock, the names and addresses of each officer and director and the number
  of shares controlled by the officers and directors as a group..

27

---

|Title of Class                    | Name and Address of | Beneficial Ownership |     | Percent  | 
|--------------------------------- | ------------------- | -------------------- | --- | -------- | 
|                                  | Beneficial Owner    |                      |     | of Class | 
|                                  |                    
|                                  |                     |                      |     |          | 
|Common                            | Ralph Shearing      | 0                    |     | 0%       | 
|                                  | President           |                      |     |          | 
|                                  | Suite 450, 650 West |                      |     |          | 
|                                  | Georgia Street,     |                      |     |          | 
|                                  | Vancouver, B.C.     |                      |     |          | 
|                                  |                     |                      |     |          | 
|Common                            | Abbas Salih         | 7,353,310            |     | 48%      | 
|                                  | Chairman/Secretary  |                      |     |          | 
|                                  | Suite 450, 650 West |                      |     |          | 
|                                  | Georgia Street      |                      |     |          | 
|                                  | Vancouver, B.C.     |                      |     |          | 
|                                  |                     |                      |     |         
|Officers and Directors as a group | 7,353,310           |                      | 48% |         

* The 7,353,310 shares controlled by the officers and directors
  as a group is beneficially owned by Canarab Acquisitions, a private company
  the majority of whose shares are controlled by Abbas Salih. Mr. Ralph Shearing
  is President of Canarab Acquisitions and a minority shareholder.

** The 5,000,000 common shares to be issued in escrow to Star
  Leisure & Entertainment Inc. under the agreement of July 12, 2002 will be
  beneficially owned by Abbas Salih, the sole director and shareholder of Star
  Leisure.

(c)  Changes in Control
  None

Item 13 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.

As at December 31, 2002, accounts payable includes $90,441
  due to directors of the Company and companies controlled by directors of the
  Company. Loans payable includes $50,000 due to a company controlled by the two
  directors of the Company, $15,695 due to a company controlled by one director
  of the Company $6,035 plus accrued interest of $1,384 due to a shareholder (this
  loan is unsecured, bears interest at 8% per annum and is repayable upon demand)
  and $13, 837 due to a second shareholder (this loan is unsecured, non-interest
  bearing and repayable upon demand).

As at December 31, 2002, Due to Related Parties comprises
  expenses for operating costs paid on behalf of the Company by companies with
  common directors. These amounts are non-interest bearing, unsecured and there
  are no specific terms for repayment.

Item 14 Controls and Procedures

The Company's executive officers have concluded that the Company's
  disclosure controls and procedures are effective based upon their evaluation
  of such controls and procedures as of a date within 90 days prior to the filing
  of this Annual Report. Tt There were no significant changes in the Company's
  internal control or in the other factors that could significantly affect the
  Company's internal controls subsequent to the date of their most recent evaluation.

Item 15      Exhibits and Reports on Form 8-K

The following documents are filed as part of this report:

|(1) | Reports on Form 8-K (Incorporated herein by reference):
      Filed February 6, 2002 - Resignation of Director
      Filed July 22, 2002 - Stock Option Plan
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

28

---

|(2) | Exhibits:
|--- | ---------

|Regulation |  | Exhibit                                 |  | Form 10-K Consecutive | 
|---------- |  | --------------------------------------- |  | --------------------- | 
|S-K Number |  |                                         |  | Page Number           | 
|           |  |                                         |  |                       | 
|           |  |                                         |  |                       | 
|3.1        |  | Articles of Incorporation               |  | *                     | 
|3.2        |  | Bylaws                                  |  | *                     | 
|3.3        |  | Certificate of Amendment                |  | *                     | 
|           |  |                                         |  |                       | 
|10.2       |  | Share Purchase Agreement                |  | (1)                   | 
|10.3       |  | Agreement and Plan of Reorganization    |  |                       | 
|           |  | Canarab Technology Limited and The Ohio |  |                       | 
|           |  | And Southwestern Energy Company         |  | (2)                   | 
|10.4       |  | Stock Award Plan                        |  | 30                    | 
|           |  |                                         |  |                       | 
|99.2       |  | Court Order dated August 23, 1991       |  | **                    | 
|99.3       |  | Court Order dated June21, 1995          |  | **                    | 

|* Incorporated by reference
      to Form 10-KSB Annual Report for the year ending December 31, 2001
|----------------------------------------------------------------------------------------------------
|                                                                                                    
|**                                                                                                  
|                                                                                                    
|(1)                                                                                                 
|                                                                                                    
|(2)                                                                                                 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
  Securities Exchange Act of 1934, the registrant has duly caused this report
  to be signed on its behalf by the undersigned, thereunto duly authorized.

|Date: May 22, 2003_ | STRATEGIC INTERNET INVESTMENTS,
|------------------- | -------------------------------
|                    | INCORPORATED(Registrant)       
|                    |                                
|                    | Ralph Shearing                 
|                    |                                
|                    | Ralph Shearing, President      

Pursuant to the Securities Exchange Act of 1934, this report
  has been signed below by the following persons on behalf of the Registrant and
  in the capacities and on the dates indicated.

|Date: May 22, 2003_                | STRATEGIC INTERNET INVESTMENTS,         
|---------------------------------- | ----------------------------------------
|                                   | INCORPORATED(Registrant)                
|                                   |                                         
|Ralph Shearing                     | Abbas Salih                             
|                                   |                                         
|Ralph Shearing, Director/President | Abbas Salih, Director/Chairman/Secretary

29

---

EXHIBIT 10.4

STOCK AWARD PLAN

2002 STOCK AWARD PLAN

OF

STRATEGIC INTERNET INVESTMENTS, INC.



---

The Plan was established on July 1, 2002, effective July 1, 2002, to offer
  directors, officers and selected key employees, advisors and consultants an
  opportunity to acquire a proprietary interest in the success of the Company
  to receive compensation, or to increase such interest, by purchasing Shares
  of the Company's common stock. The Plan provides both for the direct award or
  sale of Shares and for the grant of Options to purchase Shares. Options granted
  under the Plan may include Nonstatutory Options as well as IS0s intended to
  qualify under section 422 of the Code.

The Plan is intended to comply in all respects with Rule 16b-3 (or its successor)
  under the Exchange Act and shall be construed accordingly.

---

(A) "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company,
  as constituted from time to time.

(B) "CODE" shall mean the Internal Revenue Code of 1986, as amended.

(C) "COMMITTEE" shall mean a committee of the Board of Directors, as described
  in Section 3(a).

(D) "COMPANY" shall mean Strategic Internet Investments, Inc., a Colorado corporation,
  including its wholly owned subsidiary as they may come into existence.

(E) "EMPLOYEE" shall mean (i) any individual who is a common-law employee of
  the Company or of a Subsidiary, (ii) an Outside Director, (iii) an independent
  contractor who performs services for the Company or a Subsidiary and who is
  not a member of the Board of Directors including consultants and advisors that
  provide professional, technical, financial, accounting, capital markets related
  and other services. Service as an Outside Director or independent contractor
  shall be considered employment for all purposes of the Plan, except as provided
  in Subsections (a) and (b) of Section 4,

(F) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

(G) "EXERCISE PRICE" shall mean the amount for which one Share may be purchased
  upon exercise of an Option, as specified by the Committee in the applicable
  Stock Option Agreement.

(H) "FAIR MARKET VALUE" shall mean the market price of Stock, determined by
  the Committee as follows:

1 (i) If Stock was traded on a stock exchange on the date in question, then
  the Fair Market Value shall be equal to the closing price reported for such
  date by the applicable composite-transactions report;

(ii) If stock was traded over-the-counter on the date in question and was traded
  on the Nasdaq system or the Nasdaq National Market, then the Fair Market Value
  shall be equal to the last-transaction price quoted for such date by the Nasdaq
  system or the Nasdaq National Market;

(iii) If Stock was traded over-the-counter on the date in question but was
  not traded on the Nasdaq system or the Nasdaq National Market, then the Fair
  Market Value shall be equal to the mean between the last reported representative
  bid and asked

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prices quoted for such date by the principal automated inter-dealer quotation
  system on which Stock is quoted or, if the Stock is not quoted on any such system,
  by the "Pink Sheets" published by the National Quotation Bureau, Inc.; and,

(iv)  If none of the foregoing provisions is applicable, then the Fair
  Market Value shall be determined by the Committee in good faith on such basis
  as it deems appropriate.

In all cases, the determination of Fair Market Value by the Committee shall
  be conclusive and binding on all persons.

(I) "ISO" shall mean an employee incentive stock option described in section
  422(b) of the Code.

(J) "NONSTATUTORY OPTION" shall mean an employee stock option not described
  in sections 422(b) or 423(b) of the Code.

(K) "OFFEREE" shall mean an individual to whom the Committee has offered the
  right to acquire Shares under the Plan (other than upon exercise of an Option).

(L) "OPTION" shall mean an ISO or Nonstatutory Option granted under the Plan
  and entitling the holder to purchase Shares.

(M) "OPTIONEE" shall mean an individual who holds an Option.

(N) "OUTSIDE DIRECTOR" shall mean a member of the Board of Directors who is
  not a common-law employee of the Company or of a Subsidiary.

(O) COMMITTEE PROCEDURES. The Committee shall designate one of its members
  as chairman. The Committee may hold meetings at such times and places as it
  shall determine. The acts of a majority of the Committee members present at
  meetings at which a quorum exists, or acts reduced to or approved in writing
  by all Committee members, shall be valid acts of the Committee.

(P) COMMITTEE RESPONSIBILITIES. Subject to the provisions of the Plan, the
  Committee shall have the authority and discretion to take the following actions:

(i) To interpret the Plan and to apply its provisions;

(ii) To adopt, amend or rescind rules, procedures and forms relating to the
  Plan;

(iii) To authorize any person to execute, on behalf of the Company, any instrument
  required to carry out the purposes of the Plan;

(iv) To determine when Shares are to be awarded or offered for sale and when
  Options are to be granted under the Plan,

(v) To select the Offerees and Optionees;

(vi) To determine the number of Shares to be offered to each Offeree or to
  be made subject to each Option;

(vii) To prescribe the terms and conditions of each award or sale of Shares,
  including (without limitation) the Purchase Price, and to specify the provisions
  of the Stock Purchase Agreement relating to such award or sale;

(viii) To prescribe the terms and conditions of each Option, including (without
  limitation) the Exercise Price, to determine whether such Option is to be classified
  as an ISO or as a Nonstatutory Option, and to specify the provisions of the
  Stock Option Agreement relating to such Option;

(ix) To amend any outstanding Stock Purchase Agreement or Stock Option Agreement,
  subject to applicable legal restrictions and, to the extent such amendments
  adverse to the Offeree's or Optionee's interest, to the consent of the Offeree
  or Optionee who entered into such agreement;

(x) To prescribe the consideration for the grant of each Option or other right
  under the Plan and to determine the sufficiency of such consideration; and

(xi) To take any other actions deemed necessary or advisable for the administration
  of the Plan.

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All decisions, interpretations and other actions of the Committee shall be
  final and binding on all Offerees, all Optionees, and all persons deriving their
  rights from an Offeree or Optionee. No member of the Committee shall be liable
  for any action that he or she has taken or has failed to take in good faith
  with respect to the Plan, any Option, or any right to acquire Shares under the
  Plan.

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(A) GENERAL RULES. Only Employees (including, without limitation, independent
  contractors who are not members of the Board of Directors) shall be eligible
  for designation as Optionees or Offerees by the Committee. In addition, only
  Employees who are common-law employees of the Company or a Subsidiary shall
  be eligible for the grant of IS0s. Employees who are Outside Directors shall
  only be eligible for the grant of the Nonstatutory Options described in Subsection
  (b) below.

(B) OUTSIDE DIRECTORS. Any other provision of the Plan notwithstanding, the
  participation of Outside Directors in the Plan shall be subject to the following
  restrictions:

(i) Outside Directors shall receive no grants other than the Non-statutory
  options described in this Subsection (b).

(ii) All Non-statutory Options granted to an Outside Director under this Subsection
  (b) shall also become exercisable in fill in the event of the termination of
  such Outside Director's service because of death, Total and Permanent Disability
  or voluntary retirement at or after age 65.

(iii) The Exercise Price under all Nonstatutory Options granted to an Outside
  Director under this Subsection (b) shall be equal to 100 percent of the Fair
  Market Value of a Share on the date of grant, payable in one of the forms described
  in Subsection (a), (b), (c) or (d) of Section 8.

(iv) Non-statutory Options granted to an Outside Director under this Subsection
  (b) shall terminate on the earliest of (A) the 10th anniversary of the date
  of grant, (B) the date three months after the termination of such Outside Director's
  service for any reason other than death or Total and Permanent Disability or
  (C) the date 12 months after the termination of such Outside Director's service
  because of death or Total and Permanent Disability.

The Committee may provide that the Nonstatutory Options that otherwise would
  be granted to an Outside Director under this Subsection (b) shall instead be
  granted to an affiliate of such Outside Director. Such affiliate shall then
  be deemed to be an Outside Director for purposes of the Plan, provided that
  the service-related vesting and termination provisions pertaining to the Nonstatutory
  Options shall be applied with regard to the service of the Outside Director.

(C) ATTRIBUTION RULES. For purposes of Subsection (c) above, in determining
  stock ownership, an Employee shall be deemed to own the stock owned, directly
  or indirectly, by or for such Employee's brothers, sisters, spouse, ancestors
  and lineal descendants. Stock owned, directly or indirectly, by or for a corporation,
  partnership, estate or trust shall be deemed to be owned proportionately by
  or for its stockholders, partners or beneficiaries. Stock with respect to which
  such Employee holds an option shall not be counted.

(D) OUTSTANDING STOCK. For purposes of Subsection (c) above, "outstanding stock"
  shall include all stock actually issued and outstanding immediately after the
  grant. "Outstanding stock" shall not include shares authorized for issuance
  under outstanding options held by the Employee or by any other person.

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(A) BASIC LIMITATION. Shares offered under the Plan shall be authorized but
  unissued Shares or treasury Shares. The aggregate number of Shares which may
  be issued under the Plan (upon exercise of Options or other rights to acquire
  Shares) shall not exceed 15% of Shares outstanding, subject to adjustment pursuant
  to Section 9. The number of Shares which are subject to Options or other rights
  outstanding at any time under the Plan shall not exceed the number of Shares
  which then remain available for issuance under the Plan. The Company, during
  the term of the Plan, shall at all times reserve and keep available sufficient
  Shares to satisfy the requirements of the Plan.

(B) ADDITIONAL SHARES. In the event that any outstanding Option or other right
  for any reason expires or is cancelled or otherwise terminated, the Shares allocable
  to the unexercised portion of such Option or other right shall

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again be available for the purposes of the Plan. In the event that Shares
  issued under the Plan are reacquired by the Company pursuant to a forfeiture
  provision, a right of repurchase or a right of first refusal. such Shares shall
  again be available for the purposes of the Plan.

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(A) AGREEMENT. Each award or sale of Shares under the Plan (other than upon
  exercise of an Option) shall be evidenced by an Agreement between the Offeree
  and the Company. Such award or sale shall be subject to all applicable terms
  and conditions of the Plan and may be subject to any other terms and conditions
  which are not inconsistent with the Plan and which the Committee deems appropriate
  for inclusion in an Agreement. The provisions of the various Agreements entered
  into under the Plan need not be identical.

(B) DURATION OF OFFERS AND NONTRANSFERABILITY OF RIGHTS. Any right to acquire
  Shares under the Plan (other than an Option) shall automatically expire if not
  exercised by the Offeree within 30 days after the grant of such right was communicated
  to the Offeree by the Committee. Such right shall not be transferable and shall
  be exercisable only by the Offeree to whom such right was granted.

(C) PURCHASE PRICE. The Purchase Price of Shares to be offered under the Plan
  shall not be less than 90 percent of the Fair Market Value of such Shares. Subject
  to the preceding sentence, the Purchase Price shall be determined by the Committee
  at its sole discretion. The Purchase Price shall be payable in a form described
  in Section 8.

(D) WITHHOLDING TAXES. As a condition to the award, sale or vesting of Shares,
  the Offeree shall make such arrangements as the Committee may require for the
  satisfaction of any federal, state, local or foreign withholding tax obligations
  that arise in connection with such Shares. The Committee may permit the Offeree
  to satisfy all or part of his or her tax obligations related to such Shares
  by having the Company withhold a portion of any Shares that otherwise would
  be issued to him or her or by surrendering any Shares that previously were acquired
  by him or her. The Shares withheld or surrendered shall be valued at their Fair
  Market Value on the date when taxes otherwise would be withheld in cash. The
  payment of taxes by assigning Shares to the Company, if permitted by the Committee,
  shall be subject to such restrictions as the Committee may impose, including
  any restrictions required by rules of the Securities and Exchange Commission.

(E) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares awarded or sold under the
  Plan shall be subject to such special forfeiture conditions, rights of repurchase,
  rights of first refusal and other transfer restrictions as the Committee may
  determine. Such restrictions shall be set forth in the applicable Stock Purchase
  Agreement and shall apply in addition to any general restrictions that may apply
  to all holders of Shares.

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(A) STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall be
  evidenced by a Stock Option Agreement between the Optionee and the Company.
  Such Option shall be subject to all applicable terms and conditions of the Plan
  and may be subject to any other terms and conditions which are not inconsistent
  with the Plan and which the Committee deems appropriate for inclusion in a Stock
  Option Agreement. The provisions of the various Stock Option Agreements entered
  into under the Plan need not be identical.

(B) NUMBER OF SHARES. Each Stock Option Agreement shall specify the number
  of Shares that are subject to the Option and shall provide for the adjustment
  of such number in accordance with Section 9. The Stock Option Agreement shall
  also specify whether the Option is an ISO or a Non-statutory Option.

(C) EXERCISE PRICE. Each Stock Option Agreement shall specify the Exercise
  Price. The Exercise Price of an ISO shall not be less than 100 percent of the
  Fair Market Value of a Share on the date of grant, except as otherwise provided
  in Section 4(c). The Exercise Price of a Nonstatutory Option shall not be less
  than 85 percent of the Fair Market Value of a Share on the date of grant. Subject
  to the preceding two sentences, the Exercise Price under any Option shall be
  determined by the Committee at its sole discretion. The Exercise Price shall
  be payable in a form described in Section 8.

(D) WITHHOLDING TAXES. As a condition to the exercise of an Option, the Optionee
  shall make such arrangements as the Committee may require for the satisfaction
  of any federal, state, local or foreign withholding tax

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obligations that arise in connection with such exercise. The Optionee shall
  also make such arrangements as the Committee may require for the satisfaction
  of any federal, state, local or foreign withholding tax obligations that may
  arise in connection with the disposition of Shares acquired by exercising an
  Option. The Committee may permit the Optionee to satisfy all or part of his
  or her tax obligations related to the Option by having the Company withhold
  a portion of any Shares that otherwise would be issued to him or her or by surrendering
  any Shares that previously were acquired by him or her. Such Shares shall be
  valued at their Fair Market Value on the date when taxes otherwise would be
  withheld in cash. The payment of taxes by assigning Shares to the Company, if
  permitted by the Committee, shall be subject to such restrictions as the Committee
  may impose, including any restrictions required by rules of the Securities and
  Exchange Commission.

(E) EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify
  the date when all or any installment of the Option is to become exercisable.
  The vesting of any Option shall be determined by the Committee at its sole discretion.
  A Stock Option Agreement may provide for accelerated exercisability in the event
  of the Optionee's death, Total and Permanent Disability or retirement or other
  events. The Stock Option Agreement shall also specify the term of the Option.
  The term shall not exceed 10 years from the date of grant, except as otherwise
  provided in Section 4(c). Subject to the preceding sentence, the Committee at
  its sole discretion shall determine when an Option is to expire.

(F) NONTRANSFERABILITY. During an Optionee's lifetime, such Optionee's Option(s)
  shall be exercisable only by him or her and shall not be transferable, unless
  permitted by the Stock Option Agreement. In the event of an Optionee's death,
  such Optionee's Option(s) shall not be transferable other than by will, by a
  beneficiary designation executed by the Optionee and delivered to the Company,
  or by the laws of descent and distribution.

(G) TERMINATION OF SERVICE (EXCEPT BY DEATH). If an Optionee's Service terminates
  for any reason other than the Optionee's death, then such Optionee's Option(s)
  shall expire on the earliest of the following occasions:

(i) The expiration date determined pursuant to Subsection (e) above;

(ii) The date 90 days after the termination of the Optionee's Service for any
  reason other than Total and Permanent Disability; or,

(iii) The date six months after the termination of the Optionee's Service by
  reason of Total and Permanent Disability.

The Optionee may exercise all or part of his or her Option(s) at any time before
  the expiration of such Option(s) under the preceding sentence, but only to the
  extent that such Option(s) had become exercisable before the Optionee's Service
  terminated or became exercisable as a result of the termination. The balance
  of such Option(s) shall lapse when the Optionee's Service terminates. In the
  event that the Optionee dies after the termination of the Optionee's Service
  but before the expiration of the Optionee's Option(s), all or part of such Option(s)
  may be exercised (prior to expiration) by his or her designated beneficiary
  (if applicable), by the executors or administrators of the Optionee's estate
  or by any person who has acquired such Option(s) directly from the Optionee
  by bequest or inheritance, but only to the extent that such Option(s) had become
  exercisable before the Optionee's Service terminated or became exercisable as
  a result of the termination.

(H) LEAVES OF ABSENCE. For purposes of Subsection (g) above, Service shall
  be deemed to continue while the Optionee is on sick leave or other bona fide
  leave of absence (as determined by the Committee). The foregoing notwithstanding,
  in the case of an ISO granted under the Plan. Service shall not be deemed to
  continue beyond the first 90 days of such leave, unless the Optionee's reemployment
  rights are guaranteed by statute or by contract.

(I) DEATH OF OPTIONEE. If an Optionee dies while he or she is in Service, then
  such Optionee's Option(s) shall expire on the earlier of the following dates:

(i) The expiration date determined pursuant to Subsection (e) above; or

(ii) The date six months after the Optionee's death.

All or part of the Optionee's Option(s) may be exercised at any time before
  the expiration of such Option(s) under the preceding sentence by his or her
  designated beneficiary (if applicable), by the executors or administrators of
  the Optionee's estate or

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by any person who has acquired such Option(s) directly from the Optionee by
  bequest or inheritance, but only to the extent that such Option(s) had become
  exercisable before the Optionee's death or became exercisable as a result of
  the Optionee's death. The balance of such Option(s) shall lapse when the Optionee
  dies.

(J) NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an Optionee,
  shall have no rights as a stockholder with respect to any Shares covered by
  his or her Option until the date of the issuance of a stock certificate for
  such Shares. No adjustments shall be made, except as provided in Section 9.

(K) MODIFICATION. EXTENSION AND RENEWAL OF OPTIONS. Within the limitations
  of the Plan, the Committee may modify, extend or renew outstanding Options or
  may accept the cancellation of outstanding Options (to the extent not previously
  exercised) in return for the grant of new Options at the same or a different
  price. The foregoing notwithstanding, no modification of an Option shall, without
  the consent of the Optionee, impair such Optionee's rights or increase his or
  her obligations under such Option.

(L) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares issued upon exercise of
  an Option shall be subject to such special forfeiture conditions, rights of
  repurchase, rights of first refusal and other transfer restrictions as the Committee
  may determine. Such restrictions shall be set forth in the applicable Stock
  Option Agreement and shall apply in addition to any general restrictions that
  may apply to all holders of Shares.

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(A) GENERAL RULE. The entire Purchase Price or Exercise Price of Shares issued
  under the Plan shall be payable in lawful money of the United States of America
  at the time when such Shares are purchased, except as follows:

(i) In the case of Shares sold under the terms of a Stock Purchase Agreement
  subject to the Plan, payment shall be made only pursuant to the express provisions
  of such Stock Purchase Agreement. However, the Committee (at its sole discretion)
  may specify in the Stock Purchase Agreement that payment may be made in one
  or all of the forms described in Subsections (e), (f) and (g) below.

(ii) In the case of an ISO granted under the Plan, payment shall be made only
  pursuant to the express provisions of the applicable Stock Option Agreement.
  However, the Committee (at its sole discretion) may specify in the Stock Option
  Agreement that payment may be made pursuant to Subsections (b), (c), (d), (1)
  or (g) below.

(iii) In the case of a Nonstatutory Option granted under the Plan, the Committee
  (at its sole discretion) may accept payment pursuant to Subsections (b), (c),
  (d), (f) or (g) below.

(B) SURRENDER OF STOCK. To the extent that this Subsection (b) is applicable,
  payment may be made all or in part with Shares which have already been owned
  by the Optionee or his or her representative for more than 12 months and which
  are surrendered to the Company in good form for transfer, Such Shares shall
  be valued at their Fair Market Value on the date when the new Shares are purchased
  under the Plan.

(C) EXERCISE/SALE. TO THE EXTENT THAT THIS SUBSECTION (C) is applicable, payment
  may be made by the delivery (on a form prescribed by the Company) of an irrevocable
  direction to a securities broker approved by the Company to sell Shares and
  to deliver all or part of the sales proceeds to the Company in payment of all
  or part of the Exercise Price and any withholding taxes.

(D) EXERCISE/PLEDGE. To the extent that this Subsection (d) is applicable,
  payment may be made by the delivery (on a form prescribed by the Company) of
  an irrevocable direction to pledge Shares to a securities broker or lender approved
  by the Company, as security for a loan, and to deliver all or part of the loan
  proceeds to the Company in payment of all or part of the Exercise Price and
  any withholding taxes.

(E) SERVICES RENDERED. To the extent that this Subsection (e) is applicable,
  Shares may be awarded under the Plan in consideration of services rendered to
  the Company or a Subsidiary prior to the award. If Shares are awarded

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without the payment of a Purchase Price in cash, the Committee shall make a
  determination (at the time of the award) of the value of the services rendered
  by the Offeree and the sufficiency of the consideration to meet the requirements
  of Section 6(c).

(F) PROMISSORY NOTE. To the extent that this Subsection (f) is applicable,
  a portion of the Purchase Price or Exercise Price, as the case may be, of Shares
  issued under the Plan maybe payable by a full-recourse promissory note, provided
  that (i) the par value of such Shares must be paid in lawful money of the United
  States of America at the time when such Shares are purchased, (ii) the Shares
  are security for payment of the principal amount of the promissory note and
  interest thereon and (iii) the interest rate payable under the terms of the
  promissory note shall be no less than the minimum rate (if any) required to
  avoid the imputation of additional interest under the Code. Subject to the foregoing,
  the Committee (at its sole discretion) shall specify the term, interest rate,
  amortization requirements (if any) and other provisions of such note.

(G) OTHER FORMS OF PAYMENT. To the extent that this Subsection (g) is applicable,
  payment may be made in any other form approved by the Committee, consistent
  with applicable laws, regulations and rules.

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(A) GENERAL. In the event of a subdivision of the outstanding Stock, a declaration
  of a dividend payable in Shares, a declaration of a dividend payable in a form
  other than Shares in an amount that has a material effect on the value of Shares,
  a combination or consolidation of the outstanding Stock (by reclassification
  or otherwise) into a lesser number of Shares, a recapitalization, a spinoff
  or a similar occurrence, the Committee shall make appropriate adjustments in
  one or more of (i) the number of Shares available for future grants under Section
  5, (ii) the number of Nonstatutory Options to be granted to Outside Directors
  under Section 4(b), (iii) the number of Shares covered by each outstanding Option
  or (iv) the Exercise Price under each outstanding Option.

(B) REORGANIZATIONS. In the event that the Company is a party to a merger or
  other reorganization, outstanding Options shall be subject to the agreement
  of merger or reorganization. Such agreement may provide, without limitation,
  for the assumption of outstanding Options by the surviving corporation or its
  parent, for their continuation by the Company (if the Company is a surviving
  corporation), for payment of a cash settlement equal to the difference between
  the amount to be paid for one Share under such agreement and the Exercise Price,
  or for the acceleration of their exercisability followed by the cancellation
  of Options not exercised, in all cases without the Optionees' consent. Any cancellation
  shall not occur until after such acceleration is effective and Optionees have
  been notified of such acceleration. In the case of Options that have been outstanding
  for less than 12 months, a cancellation need not be preceded by acceleration.

(C) RESERVATION OF RIGHTS. Except as provided in this Section 9, an Optionee
  or Offeree shall have no rights by reason of any subdivision or consolidation
  of shares of stock of any class, the payment of any dividend or any other increase
  or decrease in the number of shares of stock of any class. Any issue by the
  Company of shares of stock of any class, or securities convertible into shares
  of stock of any class, shall not affect, and no adjustment by reason thereof
  shall be made with respect to; the number or Exercise Price of Shares subject
  to an Option. The grant of an Optionpursuant to the Plan shall not affect in
  any way the right or power of the Company to make adjustments, reclassifications,
  reorganizations or changes of its capital or business structure, to merge or
  consolidate or to dissolve, liquidate, sell or transfer all or any part of its
  business or assets.

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Shares shall not be issued under the Plan unless the issuance and delivery
  of such Shares complies with (or is exempt from) all applicable requirements
  of law, including (without limitation) the Securities Act of 1933, as amended,
  the rules and regulations promulgated thereunder, state securities laws and
  regulations, and the regulations of any stock exchange on which the Company's
  securities may then be listed.

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Neither the Plan nor any Option shall be deemed to give any individual a right
  to remain an employee, consultant or director of the Company or a Subsidiary.
  The Company and its Subsidiaries reserve the right to terminate the service
  of any employee,

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consultant or director at any time, with or without cause, subject to applicable
  laws, the Company's certificate of incorporation and by-laws and a written employment
  agreement (if any).

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(A) TERM OF THE PLAN. The Plan, as set forth herein, shall become effective
  as of July 1, 2002. The Plan shall terminate automatically 15 years after its
  initial adoption by the Board of Directors on July 1, 2017, and may be terminated
  on any earlier date pursuant to Subsection (b) below.

(B) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors may, subject
  to applicable law, amend, suspend or terminate the Plan at any time and for
  any reason. An amendment to the Plan shall require stockholder approval only
  to the extent required by applicable law.

(C) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or sold under
  the Plan after the termination thereof, except upon exercise of an Option granted
  prior to such termination. The termination of the Plan, or any amendment thereto
  shall not affect any Share previously issued or any Option previously granted
  under the Plan.

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To record the adoption of the Plan by the Board of Directors on July 1, 2002,
  the Company has caused its authorized officer to execute the same.

STRATEGIC INTERNET INVESTMENTS, INCORPORATED



By: /s/ Ralph Shearing 
  Ralph Shearing 
  President

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